SECURITIES AND EXHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934.

    For the quarterly period ended March 31, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934.

    For the transition period from __________ to __________

                        Commission file number 000-25277


                       PACIFIC MAGTRON INTERNATIONAL CORP.
             (Exact Name of Registrant as Specified in Its Charter)


           Nevada                                                88-0353141
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


               1600 California Circle, Milpitas, California 95035
                    (Address of Principal Executive Offices)


                                 (408) 956-8888
              (Registrant's Telephone Number, Including Area Code)

     Indicate by check mark X whether the registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

                    Common Stock, $0.001 par value per share:
            10,100,000 shares issued and outstanding at May 11, 2001
<PAGE>
Part I. - Financial Information

     Item 1. - Consolidated Financial Statements

               Consolidated balance sheets as of March 31, 2001
               (Unaudited) and December 31, 2000                             1-2

               Consolidated statements of operations for the three months
               ended March 31, 2001 and 2000 (Unaudited)                       3

               Consolidated statements of cash flows for the three months
               ended March 31, 2001 and 2000 (Unaudited)                       4

               Notes to consolidated financial statements                    5-9

     Item 2. - Management's Discussion and Analysis of Financial
               Condition and Results of Operations                         10-13

     Item 3. - Quantitative and Qualitative Disclosures About
               Market Risk                                                    13

Part II - Other Information

     Item 6. - Exhibits and Reports on Form 8-K                               14

Signature                                                                     15
<PAGE>
                       PACIFIC MAGTRON INTERNATIONAL CORP.

                           CONSOLIDATED BALANCE SHEETS


                                                        March 31,   December 31,
                                                          2001          2000
                                                       -----------   -----------
                                                       (Unaudited)
ASSETS

Current Assets:
  Cash and cash equivalents                            $ 3,712,100   $ 4,874,200
  Accounts receivable, net of allowance for doubtful
    accounts of $200,000 in 2001 and $175,000 in 2000    5,029,600     5,629,200
  Inventories                                            4,721,900     3,917,900
  Prepaid expenses and other current assets                739,100       662,200
  Notes receivable from shareholders                       150,000       171,400
  Deferred income taxes                                     80,300        80,300
                                                       -----------   -----------

Total Current Assets                                    14,433,000    15,335,200

Property, Plant and Equipment, net                       4,739,200     4,752,300

Investment in Rising Edge                                  462,000       468,000

Investment in TargetFirst                                  250,000       250,000

Deposits and Other Assets                                   62,300        55,600
                                                       -----------   -----------
                                                       $19,946,500   $20,861,100
                                                       ===========   ===========

See accompanying notes to consolidated financial statements.

                                        1
<PAGE>
                       PACIFIC MAGTRON INTERNATIONAL CORP.

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                     March 31,         December 31,
                                                                       2001                2000
                                                                    -----------         -----------
                                                                    (Unaudited)
<S>                                                                 <C>                 <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Current portion of notes payable                                  $    52,500         $    51,400
  Floor plan inventory loans                                            193,200           1,329,500
  Accounts payable                                                    6,603,200           5,788,600
  Accrued expenses                                                      434,200             541,300
                                                                    -----------         -----------

Total Current Liabilities                                             7,283,100           7,710,800

Notes Payable, less current portion                                   3,272,900           3,286,200
Deferred Income Taxes                                                     6,300               6,300
                                                                    -----------         -----------
Total Liabilities                                                    10,562,300          11,003,300
                                                                    -----------         -----------

Commitments and Contingencies

Shareholders' Equity:
  Preferred stock, $0.001 par value; 5,000,000 shares
   authorized; no shares issued and outstanding                              --                  --
  Common stock, $0.001 par value; 25,000,000 shares
   authorized; 10,100,000 shares issued and outstanding at
   March 31, 2001 and December 31, 2000                                  10,100              10,100
  Additional paid-in capital                                          1,463,100           1,463,100
  Retained earnings                                                   7,911,000           8,384,600
                                                                    -----------         -----------
Total Shareholders' Equity                                            9,384,200           9,857,800
                                                                    -----------         -----------

                                                                    $19,946,500         $20,861,100
                                                                    ===========         ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2
<PAGE>
                       PACIFIC MAGTRON INTERNATIONAL CORP.

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                 Three Months Ended March 31,
                                                               --------------------------------
                                                                   2001                2000
                                                               ------------        ------------
                                                                (Unaudited)         (Unaudited)
<S>                                                            <C>                 <C>
SALES                                                          $ 19,956,500        $ 22,815,200

COST OF SALES                                                    18,576,500          21,033,400
                                                               ------------        ------------
GROSS MARGIN                                                      1,380,000           1,781,800

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                      2,090,100           1,661,500
                                                               ------------        ------------

(LOSS) INCOME FROM OPERATIONS                                      (710,100)            120,300
                                                               ------------        ------------
OTHER (EXPENSE) INCOME:
  Interest income on shareholder notes                                   --               2,300
  Interest income                                                    53,700              50,900
  Interest expense                                                  (73,900)            (72,100)
  Equity in loss in investment                                       (6,000)                 --
  Other income                                                        7,200                  --
                                                               ------------        ------------
TOTAL OTHER (EXPENSE)                                               (19,000)            (18,900)
                                                               ------------        ------------
(LOSS) INCOME BEFORE INCOME TAXES AND MINORITY INTEREST            (729,100)            101,400

INCOME TAX (BENEFIT) EXPENSE                                       (225,500)             40,600
                                                               ------------        ------------
(LOSS) INCOME BEFORE MINORITY INTEREST                             (503,600)             60,800

MINORITY INTEREST IN FRONTLINE NETWORK CONSULTING LOSS               30,000                  --
                                                               ------------        ------------
NET (LOSS) INCOME                                              $   (473,600)       $     60,800
                                                               ============        ============

Basic and diluted (loss) earnings per share                    $      (0.05)       $       0.01
                                                               ============        ============
Basic weighted average common shares outstanding                 10,100,000          10,100,000
                                                               ============        ============
Stock options                                                            --              79,700
                                                               ------------        ------------
Diluted weighted average common shares outstanding               10,100,000          10,179,700
                                                               ============        ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3
<PAGE>
                       PACIFIC MAGTRON INTERNATIONAL CORP.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                               Three Months Ended March 31,
                                                             -------------------------------
                                                                2001                2000
                                                             -----------         -----------
                                                             (Unaudited)         (Unaudited)
<S>                                                          <C>                 <C>
Cash Flows From Operating Activities:
  Net (loss) income                                          $  (473,600)        $    60,800
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Equity in loss in investment                                   6,000                  --
    Depreciation and amortization                                 67,100              51,200
    Provision for doubtful accounts                               25,000                  --
    Changes in operating assets and liabilities:
     Accounts receivable                                         574,600             755,600
     Inventories                                                (804,000)            154,900
     Prepaid expenses and other current assets                   (76,900)           (196,100)
     Accounts payable                                            814,600              79,800
     Accrued expenses                                           (107,100)           (128,200)
                                                             -----------         -----------

Net Cash Provided By Operating Activities                         25,700             778,000
                                                             -----------         -----------
Cash Flows From Investing Activities:
  Notes and interest receivable from shareholders                 21,400              (2,300)
  Deposits and other assets                                       (6,700)            250,700
  Acquisition of property and equipment                          (54,000)            (11,800)
                                                             -----------         -----------

Net Cash (Used In) Provided By Investing Activities              (39,300)            236,600
                                                             -----------         -----------
Cash Flows From Financing Activities:
  Net decrease in floor plan inventory loans                  (1,136,300)           (583,800)
  Principal payments on notes payable                            (12,200)            (11,300)
                                                             -----------         -----------

Net Cash Used In Financing Activities                         (1,148,500)           (595,100)
                                                             -----------         -----------

Net (Decrease) Increase In Cash And Cash Equivalents          (1,162,100)            419,500

Cash And Cash Equivalents, beginning of period                 4,874,200           4,416,300
                                                             -----------         -----------

Cash And Cash Equivalents, end of period                     $ 3,712,100         $ 4,835,800
                                                             ===========         ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        4
<PAGE>
                       PACIFIC MAGTRON INTERNATIONAL CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. ORGANIZATION

Pacific Magtron  International Corp. (formerly Wildfire Capital  Corporation,  a
publicly traded shell corporation) (the Company or PMIC), a Nevada  corporation,
was incorporated on January 8, 1996.

On  July  17,  1998  the  Company  completed  the  acquisition  of  100%  of the
outstanding  common  stock of Pacific  Magtron,  Inc.  (PMI),  in  exchange  for
9,000,000  shares of the Company's $.001 par value common stock.  For accounting
purposes,  the acquisition has been treated as the acquisition of the Company by
PMI with PMI as the acquirer (reverse acquisition).

PMI, a  California  corporation,  was  incorporated  on August 11,  1989.  PMI's
principal  activity  consists of the importation  and wholesale  distribution of
electronics  products,  computer  components,  and computer peripheral equipment
throughout the United States.

In May 1998, the Company  formed its Frontline  Network  Consulting  (Frontline)
division,  a corporate  information systems group that serves the networking and
personal computer requirements of corporate customers. In July 2000, the Company
formed  Frontline  Network  Consulting,  Inc.  (FNC), a California  corporation.
Effective  October 1, 2000, PMI  transferred  the assets and  liabilities of the
Frontline  division to FNC.  Concurrently,  FNC issued  20,000,000 shares to the
Company and became a  wholly-owned  subsidiary.  On January 1, 2001,  FNC issued
3,000,000  shares  of its  common  stock to  three  key FNC  employees  for past
services rendered pursuant to certain Employee Stock Purchase  Agreements.  As a
result of this transaction,  the Company's ownership interest in FNC was reduced
to 87%.

In May 1999, the Company  entered into a Management  Operating  Agreement  which
provided  for a 50%  ownership  interest in Lea  Publishing,  LLC, a  California
limited  liability  company ("Lea") formed in January 1999 to develop,  sell and
license  software  designed to provide  Internet users,  resellers and providers
advanced solutions and applications. On June 13, 2000, the Company increased its
direct and indirect interest in Lea to 62.5% by completing its investment in 25%
of the outstanding common stock of Rising Edge Technologies, the other 50% owner
of Lea. Lea is a development stage company.

In August 2000, PMI formed  Pacific  Magtron (GA),  Inc., a Georgia  corporation
whose principal activity is the wholesale  distribution of PMI's products in the
eastern United States market.

2. CONSOLIDATION AND UNCONSOLIDATED INVESTEES

The accompany  consolidated financial statements include the accounts of Pacific
Magtron International Corp. and its wholly-owned  subsidiaries,  PMI and Pacific
Magtron  (GA),  Inc.,  and  majority-owned   subsidiaries,   FNC  and  Lea.  All
intercompany  accounts and transactions have been eliminated in the consolidated
financial  statements.  Investments in companies in which financial ownership is
at least 20%, but less than a majority of the voting  stock,  are  accounted for
using  the  equity  method.  Investments  with  ownership  of less  than 20% are
accounted for on the cost method.

3. FINANCIAL STATEMENT PRESENTATION

The accompanying consolidated financial statements at March 31, 2001 and for the
three month periods ended March 31, 2001 and 2000 are unaudited.  However,  they
have been prepared on the same basis as the annual financial  statements and, in
the opinion of management,  reflect all  adjustments,  which include only normal

                                        5
<PAGE>
recurring  adjustments,  necessary  for  a  fair  presentation  of  consolidated
financial position and results of operations for the periods presented.  Certain
information  and  footnote   disclosures  normally  included  in  the  financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted.  These  consolidated  financial  statements should be read in
conjunction with the audited consolidated  financial statements and accompanying
notes for the year ended December 31, 2000 presented in the Company's Form 10-K.

4. NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  SFAS No.
133 requires  companies to recognize all derivatives  contracts as either assets
or  liabilities  in the  balance  sheet and to measure  them at fair  value.  If
certain  conditions  are met, a derivative may be  specifically  designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging  derivative  with the  recognition of (i) the changes in the fair
value of the hedged assets or liability that are attributable to the hedged risk
or  (ii)  the  earnings  effect  of the  hedged  forecasted  transaction.  For a
derivative  not  designated  as a  hedging  instrument,  the  gain  and  loss is
recognized  in income in the period of change.  SFAS No. 133, as amended by SFAS
No. 137, is effective for all fiscal  quarters of fiscal years  beginning  after
June 15, 2000. The Company has not entered into derivative  contracts  either to
hedge  existing risks or for  speculative  purposes.  Accordingly,  there was no
material impact on the Company's  financial  position,  results of operations or
cash flows from the adoption of this new standard on January 1, 2001.

In December 1999, the SEC staff  released  Staff  Accounting  Bulletin (SAB) No.
101, "Revenue Recognition in Financial Statements",  which provides interpretive
guidance  on  the  recognition,  presentation,  and  disclosure  of  revenue  in
financial  statements.  SAB No. 101 must be applied to financial  statements  no
later than the quarter ended  September 30, 2000.  There was no material  impact
from the application of SAB No. 101 on the Company's financial position, results
of operations or cash flows.

In March 2000, the FASB issued  Interpretation  No. 44 (FIN44),  "Accounting for
Certain  Transactions  Involving Stock  Compensation",  an interpretation of APB
Opinion No. 25. FIN44  clarifies the  application  of Opinion No. 25 for (a) the
definition  of an employee  for  purposes  of  applying  Opinion No. 25, (b) the
criteria for determining  whether a plan qualifies as a  non-compensatory  plan,
(c) the  accounting  consequences  of  various  modifications  to the terms of a
previously  fixed stock option or award,  and (d) the accounting for an exchange
of stock compensation awards in a business  combination.  FIN44 became effective
July 2, 2000, but certain  conclusions  cover  specific  events that occur after
either  December  15,  1998 or January 12,  2000.  FIN44 did not have a material
impact on the Company's financial position, results of operations or cash flows.

5. STOCK OPTIONS

During the three  months  ended March 31, 2001,  no  additional  options for the
Company's common stock were granted and no issued options were exercised.

On January  1,  2001,  under the terms of the 2000 FNC Stock  Option  Plan,  FNC
granted  3,905,000 options to purchase its common stock at $0.01 per share (fair
market value based upon an independent appraisal) to employees. Also in order to
preserve FNC's election to file consolidated tax returns, which require at least
an 80% ownership interest by the Company,  FNC granted to the Company 20,000,000
options to purchase  its common  stock at $0.01 per share.  No FNC options  were
exercised  and 55,000 FNC options were  cancelled  during the three months ended
March 31, 2001.

                                        6
<PAGE>
6. STATEMENTS OF CASH FLOWS

Cash was paid for:

                                                   Three Months Ending March 31,
                                                   -----------------------------
                                                     2001                 2000
                                                   --------             --------
        Income taxes                               $  1,500             $ 37,000
                                                   ========             ========
        Interest                                   $ 73,900             $ 72,100
                                                   ========             ========
7. INVESTMENTS

In May 1999, the Company and Rising Edge Technologies, Ltd., a corporation based
in  Taiwan  (Rising  Edge),   entered  into  an  Operating  Agreement  with  Lea
Publishing,  LLC, a California limited liability company (Lea) formed in January
1999. The objective of Lea is to provide internet users, resellers and providers
advanced  solutions  and  applications.   Lea  is  developing  various  software
products.  Prior to June 13, 2000,  the Company and Rising Edge each owned a 50%
interest in Lea. The brother of a director, officer and principal shareholder of
the Company is also a director,  officer and the majority  shareholder of Rising
Edge (Rising Edge Majority  Shareholder).  The Company has no commitment to fund
future  losses of Lea beyond its  investment  or guarantee any debt that Lea may
incur.  On June 13,  2000,  the Company  purchased a 25%  ownership  interest in
Rising Edge common stock for $500,000 from the Rising Edge Majority Shareholder.
As such, the Company has a 62.5% combined direct and indirect ownership interest
in Lea, which requires the consolidation of Lea with the Company. The Company is
accounting for its investment in Rising Edge by the equity method whereby 25% of
the equity interest in the net income or loss of Rising Edge  (excluding  Rising
Edge's portion of the results of Lea and all inter-company  transactions)  flows
through to the  Company.  During the three months ended March 31, 2001 and 2000,
Lea had no activity.  The Company's share of Rising Edge's loss during the three
months ended March 31, 2001 was $6,000.

In November 1999, Lea entered into a software  development  contract with Rising
Edge which calls for the development of certain internet software by Rising Edge
for a $940,000 fee. Of this amount,  the contract  specifies that $440,000 shall
be  applied  to  services  performed  in 1999 and  $500,000  shall be applied to
services  to be  performed  in 2000,  and the  Company  and Rising Edge are each
responsible  for $470,000 of the fee. During 1999, the Company paid $470,000 for
its portion of the total fee payable  under the  contract.  During 2000,  Rising
Edge performed  $100,000 worth of services as specified  under the contract.  In
January 2001, the contract was terminated by mutual agreement of the parties and
the Company's remaining portion of the software  development fees paid under the
contract, totaling $200,000, was refunded.

In January 2000, the Company acquired, in a private placement, 485,900 shares of
convertible preferred stock of an unrelated nonpublic company, TargetFirst, Inc.
(formerly  ClickRebates.com),for  approximately  $250,000  under  the terms of a
Series A  Preferred  Stock  Purchase  Agreement.  The  Company's  investment  in
TargetFirst Inc., which represents  approximately 8% of the $3 million preferred
stock offering, is being accounted for using the cost method.

8. SEGMENT INFORMATION

The Company has four reportable  segments:  PMI,  PMIGA,  Frontline and Lea. PMI
imports and distributes electronic products,  computer components,  and computer
peripheral  equipment to various  customers  throughout the United States,  with
PMIGA  focusing  on the east coast area.  Frontline  serves the  networking  and
personal  computer  requirements  of  corporate  customers.  Lea  is  developing
advanced solutions and applications for internet users, resellers and providers.
The accounting  policies of the segments are the same as those  described in the
summary of significant accounting policies presented in the Company's Form 10-K.
The Company  evaluates  performance based on income or loss before income taxes,

                                        7
<PAGE>
not including  nonrecurring  gains or losses.  Inter-segment  transfers  between
reportable segments have been insignificant.  The Company's  reportable segments
are strategic  business units that offer different  products and services.  They
are managed separately  because each business requires different  technology and
marketing strategies.

The following table presents  information  about reported segment profit or loss
for the three months ended March 31, 2001:

<TABLE>
<CAPTION>
                                          PMI         Frontline        PMIGA        Lea        Total
                                          ---         ---------        -----        ---        -----
<S>                                  <C>            <C>            <C>          <C>         <C>
Revenues external
customers                            $16,211,600    $  743,900(1)    $3,001,000    $   --   $19,956,500

Segment income or (loss) before
income taxes and minority interest      (219,300)     (276,300)        (228,800)       --      (724,400)
</TABLE>

The following table presents  information  about reported segment profit or loss
for the three months ended March 31,2000:

<TABLE>
<CAPTION>
                                          PMI         Frontline           Lea           Total
                                          ---         ---------           ---           -----
<S>                                  <C>            <C>                  <C>        <C>
Revenues from external
Customers                            $21,600,800    $ 1,214,400(1)       $  --      $22,815,200

Segment income or (loss) before
income taxes and minority interest       119,600        (18,200)            --          101,400
</TABLE>

----------
(1)  Includes  service  revenues  of  $49,300  and  $32,900  in 2001  and  2000,
     respectively.

The following is a  reconciliation  of reportable  segment  income before income
taxes and minority interest to the Company's consolidated total:

                                                          Three Months Ended
                                                     --------------------------
                                                     March 31,        March 31,
                                                       2001             2000
                                                     ---------        ---------
Total (loss) income before income taxes and
 minority interest for reportable segments           $(724,400)       $ 101,400
Equity in loss in investment in Rising Edge             (6,000)              --
Intercompany depreciation charge                         1,300               --
                                                     ---------        ---------
Consolidated (loss) income before income taxes
  and minority interest                              $(729,100)       $ 101,400
                                                     =========        =========

9. FLOOR PLAN INVENTORY LOANS AND LETTER OF CREDIT

As of December  31,  2000,  the Company had $7 million  (including  a $1 million
letter of credit  sub-limit)  auto-renewing  floor plan inventory loan available
from a financial institution which was collateralized by the purchased inventory

                                        8
<PAGE>
and any proceeds from its sale or  disposition.  The $1 million letter of credit
was being  maintained as security for inventory  purchased on terms from vendors
in Taiwan and required an annual commitment fee of $15,000. Borrowings under the
floor plan  inventory  loan totaled  $1,329,500 as of December 31, 2000 and were
subject to 45 day repayment terms, at which time interest began to accrue at the
prime rate.

In March 2001, the financial institution that provided this floor plan inventory
loan filed  bankruptcy.  The Company is currently  negotiating  a new floor plan
inventory loan with a different  financial  institution under  substantially the
same terms,  except borrowings will be subject to 30 day repayment.  As of March
31, 2001,  remaining  borrowings under the former floor plan inventory loan were
$193,200.

10. NOTES RECEIVABLES FROM SHAREHOLDERS

As of March 31, 2001 and December 31, 2000,  notes  receivable  from two officer
shareholders aggregated $150,000 and $171,400,  respectively.  In December 2000,
the  repayment  terms  of these  notes  were  renegotiated  to  require  monthly
principal payments,  without interest, to pay off the loan by December 31, 2001.
Also,  based  upon the  renegotiated  terms,  periodic  bonuses  are paid to the
officer shareholders, and the proceeds are used to repay the notes.

11. SUBSEQUENT EVENT

On May 7, 2001, the Company's Board of Directors  authorized a share  repurchase
program  whereby  up to  100,000  shares of the  Company's  common  stock may be
repurchased.  The  Company  plans to make these  repurchases  on the open market
during the remainder of 2001.

                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The accompanying  discussion and analysis of financial  condition and results of
operations is based on our consolidated financial statements, which are included
elsewhere in this Quarterly Report. The following discussion and analysis should
be read in conjunction  with the accompanying  financial  statements and related
notes thereto.  This discussion contains  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended. Our actual results could
differ  materially  from  those  set  forth in the  forward-looking  statements.
Forward-looking   statements,   by  their  very   nature,   include   risks  and
uncertainties.  Accordingly,  our actual  results could differ  materially  from
those discussed in this Report. A wide variety of factors could adversely impact
revenues,  profitability,  cash flows and capital needs.  Such factors,  many of
which are beyond our control,  include, but are not limited to, those identified
in our Form 10-K for the fiscal year ended  December  31, 2000 under the heading
"Cautionary  Factors  that May Affect  Future  Results",  such as  technological
changes,  diminished  marketability of inventory,  need for additional  capital,
increased  warranty costs,  competition,  recruitment and retention of technical
personnel,  dependence on continued  manufacturer  certification,  dependence on
certain suppliers, risks associated with the projects in which we are engaged to
complete,  the risks associated with our Lea venture,  risks associated with our
investments in Rising Edge and Target First, and dependence on key personnel.

GENERAL

We provide  solutions  to customers in several  synergetic  and rapidly  growing
segments  of the  computer  industry.  To capture  the  expanding  corporate  IT
infrastructure   market,  we  established  Frontline  Network  Consulting  (FNC)
division  in 1998 to  provide  professional  services  to  mid-market  companies
focused  on  consulting,   implementation   and  support  services  of  Internet
technology  solutions.  This division was incorporated as a separate  subsidiary
during 2000. In January 2001, FNC issued 3,000,000 of its shares to three of its
key employees  resulting in a decrease in our ownership  interest of FNC to 87%.
We also invested in a 50%-owned  joint software  venture,  Lea  Publishing,  LLC
(Lea), in 1999 to focus on Internet-based  software application  technologies to
enhance corporate IT services. Lea is a development stage company. In June 2000,
we increased our direct and indirect  interest in Lea to 62.5% by completing our
purchase of 25% of the outstanding common stock of Rising Edge Technologies, the
other 50% owner of Lea. Finally, our other subsidiaries,  Pacific Magtron,  Inc.
(PMI) and Pacific Magtron (GA), Inc. (PMIGA), provide the wholesale distribution
of computer  multimedia and storage peripheral  products and provide value-added
packaged  solutions  to a wide range of  resellers,  vendors,  OEM's and systems
integrators.  PMIGA commenced  operations in October 2000 and distributes  PMI's
products  in the  eastern  United  States  market.  As used  herein  and  unless
otherwise indicated, the terms "Company" "we" and "our" refer to Pacific Magtron
International Corp. and our subsidiaries.

RESULTS OF OPERATIONS

The following  table sets forth,  for the periods  indicated,  certain  selected
financial data as a percentage of sales:

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<PAGE>
                                                             Three Months Ended
                                                                  March 31,
                                                             ------------------
                                                              2001         2000
                                                             -----        -----
Sales                                                        100.0%       100.0%
Cost of sales                                                 93.1         92.2
                                                             -----        -----
Gross margin                                                   6.9          7.8
Operating expenses                                            10.5          7.3
                                                             -----        -----
(Loss) income from operations                                 (3.6)         0.5
Other income (expense), net                                   (0.1)          --
Income taxes (benefit) expense                                (1.1)         0.2
Minority interest in FNC loss                                  0.2           --
                                                             -----        -----
Net (loss) income                                             (2.4%)        0.3%
                                                             =====        =====

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

Sales for the three months ended March 31, 2001 were $19,956,500,  a decrease of
$2,858,700,  or approximately  13%, compared to $22,815,200 for the three months
ended March 31, 2000. There was a decrease in sales attributable to our computer
products  subsidiaries (PMI and PMIGA) for the three months ended March 31, 2001
of $2,388,200,  or approximately  11%, compared to the  corresponding  period of
2000. Sales recognized by PMIGA were  approximately  $3,001,000 during the three
months ended March 31, 2001. The decrease was due to the overall  decline in the
computer  component  market and the lack of any new and  innovative  high-demand
products  in the  multimedia  arena  during a period of  economic  slowdown.  In
addition,  we believe that the uncertainty regarding the economy depressed sales
during  the first  quarter  of 2001 as  customers  were  delaying  their  buying
decisions. Approximately $743,900 of the sales recognized by us during the first
quarter  of  2001  were  attributable  to  FNC,  a  decrease  of  $470,500,   or
approximately  39%,  compared to $1,214,400 for the three months ended March 31,
2000 as FNC has experienced pricing pressures and increased competition.

Gross margin for the three months ended March 31, 2001 was $1,380,000 a decrease
of $401,800,  or approximately  23%, compared to $1,781,800 for the three months
ended March 31, 2000.  The gross margin as a percentage of sales  decreased from
7.8% for the three  months  ended March 31, 2000 to 6.9%,  for the three  months
ended March 31, 2001.  Because our major  manufacturers  focused on lower margin
products, our computer products divisions sold more lower margin products during
the  first  quarter  of  2001.  Additionally,  our  computer  products  division
experienced  pricing pressures in selling its products.  We believe that because
of the economic slowdown, there was an excess supply of computer products during
the first quarter of 2001 which reduced  demand and increased  pressure on gross
margins.  Gross margin relating to FNC for the three months ended March 31, 2001
was  $81,400,  or 10.9% of FNC's  sales  during the same  period as  compared to
$158,700,  or 13.1% of FNC's sales during the three months ended March 31, 2000.
This  decrease in gross margin was  primarily a result of pricing  pressures and
weaker  demand for higher  margin  corporate IT planning  services.  Since FNC's
sales levels accounted for only 4% and 5% of our  consolidated  sales during the
first quarter of 2001 and 2000, respectively, the gross margin percentage earned
by FNC had only a minor  effect on our  overall  gross  margin in both  periods.
Gross  margin  relating to PMIGA for the three  months  ended March 31, 2001 was
$112,900, or 3.7% of PMIGA's sales.

Selling,  general and  administrative  expenses for the three months ended March
31,  2001  were  $2,090,100,  an  increase  of  $428,600,  or 26%,  compared  to
$1,661,500  for the three months ended March 31, 2000.  Although we  implemented
cost  cutting  measures  in  anticipation  of the  economic  slowdown,  expenses
increased  primarily  due to the  continued  ramp-up of our  Frontline and PMIGA
operations,  including among other things,  additional  expenses associated with

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<PAGE>
our new distribution  facility in Georgia.  We reduced our headcount by 4 people
during the first quarter of 2001 and again by 6 people in April 2001. During the
three months ended March 31, 2001, we also increased  spending for  professional
services to assist in the formation of an acquisition  strategy. As a percentage
of sales,  selling,  general and administrative  expenses increased to 10.5% for
the three  months  ended  March 31, 2001  compared to 7.3% for the three  months
ended March 31,  2000  resulting  from an  increase in our fixed cost  operating
expenses during a period of decreased sales.

For the three months ended March 31, 2001 we incurred a loss from  operations of
($710,100)  compared to income from  operations of $120,300 for the three months
ended March 31, 2000. As a percentage of sales,  loss from operations was (3.6%)
for the three months ended March 31, 2001 compared to income from  operations of
0.5% for the three months ended March 31, 2000. This change was primarily due to
the  decrease in sales and gross  margin  percentage  and  increase in operating
expenses during the period.

Interest  expense for the three  months  ended March 31,  2001 was  $73,900,  an
increase of $1,800,  or 2.5%,  compared to $72,100  for the three  months  ended
March 31,  2000.  Interest  income  increased  from $53,200 for the three months
ended March 31, 2000 to $53,700 for the three months  ended March 31,  2001,  an
increase  of $500,  or 1%,  which was  principally  due to higher  average  cash
balances outstanding during 2001.

LIQUIDITY AND CAPITAL RESOURCES

Since  inception,  we  have  financed  our  operations  primarily  through  cash
generated by operations and borrowings under our floor plan inventory loan.

At March  31,  2001,  we had  consolidated  cash and cash  equivalents  totaling
$3,712,100  and working  capital of  $7,149,900.  At December 31,  2000,  we had
consolidated cash and cash equivalents  totaling  $4,874,200 and working capital
of $7,624,400.

Net cash  provided by operating  activities  during the three months ended March
31,  2001 was  $25,700,  which  principally  reflected  an  increase in accounts
payable and a decrease in accounts receivable.  This was partially offset by the
net loss incurred during the period and an increase in inventories. The increase
in  accounts  payable  was  primarily  a function  of the timing of  payments to
vendors.

Net cash used in  investing  activities  during the three months ended March 31,
2001 was  $39,300,  primarily  resulting  from the  acquisition  of property and
equipment,  which was partially  offset by the repayment of the notes receivable
owed by certain shareholders.

Net cash used by financing  activities was $1,148,500 for the three months ended
March 31, 2001,  primarily from the decrease in the floor plan inventory loan as
well as payment of the mortgage loans for our facility. The floor plan inventory
loan was  terminated  during  the  three  months  ended  March  31,  2001 as the
creditor,  Finova  Capital  Corporation,  filed  for  bankruptcy.  We are in the
process of obtaining a commitment  for a floor plan  inventory loan from another
financial institution.  There can be no assurance, however, that we will be able
to obtain new financing on acceptable  terms,  or that we will be able to obtain
new financing at all.

On May 7, 2001,  our Board of Directors  authorized a share  repurchase  program
whereby up to 100,000  shares of our common stock may be  repurchased.  Based on
the current price of our common stock, we estimate that  approximately  $100,000
will be  required  to  repurchase  these  shares on the open  market  under this
program during the remainder of 2001 using available cash from operations.

We presently have  insufficient  working capital to pursue our long-term  growth
plans with  respect to  acquisitions  and  expansion  of our service and product
offerings.  Moreover, we expect that additional resources are needed to fund the

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<PAGE>
development and marketing of Lea's software. We believe,  however, that the cash
flow  from   operations  and  trade  credit  from  suppliers  will  satisfy  our
anticipated  requirements for working capital to support our present  operations
through  the next 12  months.  We are  currently  negotiating  with a  financial
institution to replace our floor plan lender who filed bankruptcy in March 2001.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  SFAS No.
133 requires  companies to recognize all derivatives  contracts as either assets
or  liabilities  in the  balance  sheet and to measure  them at fair  value.  If
certain  conditions  are met, a derivative may be  specifically  designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging  derivative  with the  recognition of (i) the changes in the fair
value of the hedged assets or liability that are attributable to the hedged risk
or  (ii)  the  earnings  effect  of the  hedged  forecasted  transaction.  For a
derivative  not  designated  as a  hedging  instrument,  the  gain  and  loss is
recognized  in income in the period of change.  SFAS No. 133, as amended by SFAS
no. 137 and 138, is effective for all fiscal  quarters of fiscal years beginning
after  June  15,  2000.  Historically,  we have  not  entered  into  derivatives
contracts   either  to  hedge  existing  risks  or  for  speculative   purposes.
Accordingly,  there was no material  impact from the application of SFAS 133, as
amended, on our financial position, results of operations or cash flows.

In December 1999, the SEC staff  released  Staff  Accounting  Bulletin (SAB) No.
101, "Revenue Recognition in Financial Statements",  which provides interpretive
guidance  on  the  recognition,  presentation,  and  disclosure  of  revenue  in
financial  statements.  SAB No. 101 must be applied to financial  statements  no
later than the quarter ended  September 30, 2000.  There was no material  impact
from the  application  of SAB No.  101 on our  financial  position,  results  of
operations, or cash flows.

In March 2000, the FASB issued  Interpretation  No. 44 (FIN44),  "Accounting for
Certain  Transactions  Involving Stock  Compensation",  an interpretation of APB
Opinion No. 25. FIN44  clarifies the  application  of Opinion No. 25 for (a) the
definition  of an employee  for  purposes  of  applying  Opinion No. 25, (b) the
criteria for determining  whether a plan qualifies as a  non-compensatory  plan,
(c) the  accounting  consequences  of  various  modifications  to the terms of a
previously  fixed stock option or award,  and (d) the accounting for an exchange
of stock compensation awards in a business  combination.  FIN44 became effective
July 2, 2000, but certain  conclusions  cover  specific  events that occur after
either  December  15,  1998 or January 12,  2000.  FIN44 did not have a material
impact on our financial position, results of operations, or cash flows.

INFLATION

Inflation has not had a material  effect upon our results of operations to date.
In the  event the rate of  inflation  should  accelerate  in the  future,  it is
expected  that  to the  extent  resulting  increased  costs  are not  offset  by
increased revenues, our operations may be adversely affected.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk for changes in interest  rates relates  primarily to
one of our bank mortgage loans with a $2,428,500  balance at March 31,2001 which
bears  fluctuating  interest  based on the bank's  90-day LIBOR rate. We believe
that fluctuations in interest rates in the near term would not materially affect
our consolidated operating results,  financial position or cash flow. We are not
exposed to material risk based on exchange rate  fluctuation or commodity  price
fluctuation.

                                       13
<PAGE>
                                     PART II

ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          None.

     (b)  Reports on Form 8-K

          None.

                                       14
<PAGE>
                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused this report on Form 10-Q to be signed on its behalf
by the undersigned, thereunto duly authorized, this 15th day of May, 2001.


                                        PACIFIC MAGTRON INTERNATIONAL CORP.,
                                        a Nevada corporation


                                        By /s/ Theodore S. Li
                                           -------------------------------------
                                           Theodore S. Li
                                           President and Chief Financial Officer

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