U.S. Securities and Exchange Commission
                             Washington, D.C. 20549


                                    Form 10-QSB

[x]    QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                    For the quarter ended September 30, 2001

--------------------------------------------------------------------------------

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

                   For the transition period from          to

Commission File No. 0-30118

EMPYREAN COMMUNICATIONS, INC.
--------------------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)

             NEVADA                                       88-0413417
     -------------------------------              ------------------------------
     (State or Other Jurisdiction of                (I.R.S. Employer I.D. No.)
      incorporation or organization)

                                    PMB 723, 250 "H" St.,
                                      Blaine,  WA 98230
                               -----------------------------
                          (Address of Principle Executive Offices)

                        Issuer's Telephone Number:  (604) 683-6648

Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Company was required to file such reports). And (2) has been
subject to such filing requirements for the past 90 days.

          (1) Yes   X       No          (2)  Yes   X       No
                   ----        ----               ----        ----


<PAGE>
Page 2


                       (APPLICABLE ONLY TO CORPORATE ISSUERS)

State the number of shares outstanding of each Issuer's classes of common
equity, as of the latest practicable date:

                  September 30, 2001:  Common Stock - 25,366,800

                       DOCUMENTS INCORPORATED BY REFERENCE

A description of any "Documents Incorporated by Reference" is contained in Item
6 of this report.

Transitional Small Business Issuer Format    Yes      No  X
                                                -----   -----



<PAGE>
Page 3


                              EMPYREAN COMMUNICATIONS INC.
                                     TABLE OF CONTENTS

PART I.     FINANCIAL INFORMATION                                           PAGE

Item 1.  Financial Statements:

Balance Sheets as of September 30, 2001 and
December 31, 2000                                                              5

Statements of Operations for the three months ended
September 30, 2001 and September 30, 2000 and the Nine months ended
September 30, 2001 and September 30, 2000 and from Inception through
September 30, 2001                                                             6


Statements of Cash Flow for the three months ended
September 30, 2001 and September 30, 2000 and the Nine months ended
September 30, 2001 and September 30, 2000 and from Inception through
September 30, 2001                                                             7


Notes to Financial Statements for the three months ended
September 30, 2001 and September 30, 2000 and the Nine months ended
September 30, 2001 and September 30, 2000 and from Inception through
September 30, 2001                                                            11

Item 2.  Management's Plan of Operations                                      12

PART II.     OTHER INFORMATION

Item 1.  Legal Proceedings                                                    13

Item 2.  Changes in Securities                                                13

Item 3.   Defaults upon Senior Securities                                     13

Item 4.   Submission of Matters to a Vote of Securities Holders               13

Item 5.   Other Information                                                   13

Item 6.   Exhibits and Reports on Form 8 - K                                  13

Signatures                                                                    13


<PAGE>
Page 4



PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes.  In the opinion of management, these Financial
Statements fairly present the financial condition of the Company, but should be
read in conjunction with the Financial Statements of the Company for the year
ended December 31, 2000 previously filed with the Securities and Exchange
Commission.

<PAGE>
Page 5

                       EMPYREAN COMMUNICATIONS INC.
                       (A DEVELOPMENT STAGE COMPANY)
                              BALANCE SHEETS
                   September 30, 2001 and December 31, 2000
                          (Stated in US Dollars)
                                Unaudited
                                ---------

                                 ASSETS
                                 ------

                                              September 30,2001     Dec 31,2000
                                              -----------------     -----------

Current
     Cash                                        $         781    $         121
     Prepaid Expenses                                     -              16,000
                                                 -------------    -------------
                                                           781           16,121

Bandwith Contract - (Empyrean Communications)       23,920,010             -
                                                 -------------    -------------
        Total Assets                             $  23,920,791    $      16,121
                                                 -------------    -------------

                               LIABILITIES
                               -----------

Current
     Accounts Payable                            $     770,391    $      50,639
                                                 -------------    -------------
        Total Current Liabilities                      770,391           50,639
                                                 -------------    -------------
        Total Liabilities                              770,391           50,639
                                                 -------------    -------------

                       STOCKHOLDERS' EQUITY (DEFICIENCY)
                       ---------------------------------

Share Capital

Authorized:
   50,000,000 common shares, $0.001 par value
   10,000,000 preferred shares, $0.001 par value

Issued:
   25,366,800 common shares                         24,639,156          695,745

Deficit Accumulated During The Development Stage    (1,488,756)        (730,263)
                                                 -------------    -------------
                                                    23,150,400          (34,518)
                                                 -------------    -------------
                                                 $  23,920,791    $      16,121
                                                 -------------    -------------

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

<PAGE>
Page 6

                       EMPYREAN COMMUNICATIONS INC.
                       (A DEVELOPMENT STAGE COMPANY)
                       STATEMENT OF LOSS AND DEFICIT

FOR THE THREE MONTHS AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND
SEPTEMBER 30, 2000 AND FOR THE PERIOD APRIL 30, 1998 (INCEPTION) THROUGH
                             SEPTEMBER 30, 2001.
                            (Stated in US Dollars)
                                 Unaudited
                                 ---------

<TABLE>
<CAPTION>
                         Three Months          Three Months        Nine Months          Nine Months         April 30, 1999
                            Ended                 Ended              Ended                Ended               (Date of
                         September 30,         September 30,      September 30,        September 30,        Inception) to
                            2001                  2000               2001                 2000              September 30,
                                                                                                                2001
                        --------------       --------------       --------------      --------------      --------------
<S>                     <C>                  <C>                  <C>                 <C>                 <C>
Sales                   $         -          $         -          $         -         $         -         $         -
Gross Profit                      -                    -                    -                   -                   -
Operating Expense              145,852               58,633              719,064             108,189           1,513,333
                        --------------       --------------       --------------      --------------      --------------
Loss before other items       (145,852)             (58,633)            (719,064)           (108,189)         (1,513,333)

Other Items
  Excess Value of Shares
  Issued On Investment            -                    -                    -                   -                 (1,048)
  Expense recoveries              -                    -                  29,577                -                 29,577

Share of Loss of
 Qiblah Tech. Ltd.                -                    -                    -                   -                 (3,952)
                        --------------       --------------       --------------      --------------      --------------

Net Loss for the Period       (145,852)             (58,633)            (689,487)           (108,189)         (1,488,756)

Deficit Beginning of
 Period                     (1,342,904)             (83,532)            (730,263)            (33,976)              -
                        --------------       --------------       --------------      --------------      --------------


Deficit End of Period   $   (1,488,756)      $     (142,165)      $   (1,419,750)     $     (142,165)     $   (1,488,756)
                        ==============       ==============       ==============      ==============      ==============

Loss Per Share          $        (0.00)      $        (0.00)      $        (0.00)     $        (0.00)     $        (0.00)
</TABLE>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS


<PAGE>
Page 7

                       EMPYREAN COMMUNICATIONS INC.
                       (A DEVELOPMENT STAGE COMPANY)
                         STATEMENTS OF CASH FLOWS

   FOR THE THREE MONTHS AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 2001 AND
   SEPTEMBER 30, 2000 AND FOR THE PERIOD APRIL 30, 1998 (INCEPTION) THROUGH
                            SEPTEMBER 30, 2001.
                          (Stated in US Dollars)
                                Unaudited
                                ---------
<TABLE>
<CAPTION>
                                 Three Months          Three Months        Nine Months          Nine Months         April 30, 1999
                                    Ended                 Ended              Ended                Ended               (Date of
                                 September 30,         September 30,      September 30,        September 30,        Inception) to
                                    2001                  2000               2001                 2000              September 30,
                                                                                                                        2001
                                --------------       --------------       --------------      --------------      --------------
<S>                             <C>                  <C>                  <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)                      $     (145,852)      $      (58,633)      $     (689,486)     $     (108,189)     $   (1,488,756)
Add:  Items Not
  Affecting Cash
   Share Of Qiblah
   Tech Ltd.  Loss                        -                    -                    -                   -                  3,952
   Excess Value Of Shares
   Issued On Investment                   -                    -                    -                   -                  1,048
   Shares issued to pay expenses          -                    -                    -                   -                  6,625
   Non-cash compensation charge           -                    -                    -                   -                519,120
   Expense recovery                       -                    -                  29,577                -                 29,577
                                --------------       --------------       --------------      --------------      --------------
                                      (145,852)             (58,633)            (719,063)           (108,189)           (987,588)
                                --------------       --------------       --------------      --------------      --------------

Changes In Non-Cash
Working Capital Items

   Prepaid Expenses                       -                  10,000               16,000             (46,000)               -
   Accounts Payable                    146,360               14,698              661,435              29,823             831,081
   Loans Payable                          -                  (8,500)                -                 (1,000)               -
   Inventory                              -                 (10,000)                -                (24,463)               -
                                --------------       --------------       --------------      --------------      --------------

Net Cash (Used) From
Operating Activities                       508              (52,435)             (41,628)           (149,829)           (156,507)
                                --------------       --------------       --------------      --------------      --------------

Cash Flow Used For Investing
Activities Acquisition of
License Fees                              -                    -                    -                   -                (50,000)
Acquisition of Empyrean
Communications                            -                    -                  19,888                -                 19,888
                                --------------       --------------       --------------      --------------      --------------
Net Cash Used For
Investment Activities                     -                    -                  19,888                -                (30,112)
                                --------------       --------------       --------------      --------------      --------------
</TABLE>

<PAGE>
Page 8

                       EMPYREAN COMMUNICATIONS INC.
                       (A DEVELOPMENT STAGE COMPANY)
                         STATEMENTS OF CASH FLOWS

   FOR THE THREE MONTHS AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 2001 AND
   SEPTEMBER 30, 2000 AND FOR THE PERIOD APRIL 30, 1998 (INCEPTION) THROUGH
                            SEPTEMBER 30, 2001.
                          (Stated in US Dollars)
                                Unaudited
                                ---------
<TABLE>
<CAPTION>
                                 Three Months          Three Months        Nine Months          Nine Months         April 30, 1999
                                    Ended                 Ended              Ended                Ended               (Date of
                                 September 30,         September 30,      September 30,        September 30,        Inception) to
                                    2001                  2000               2001                 2000              September 30,
                                                                                                                        2001
                                --------------       --------------       --------------      --------------      --------------
<S>                             <C>                  <C>                  <C>                 <C>                 <C>
Cash Flows From
0Financing Activities

Proceeds From Issuance
Of Common Shares                          -                   6,625               22,400             106,625             187,400

Share subscription                        -                  43,500                 -                 43,500                -
                                --------------       --------------       --------------      --------------      --------------

Net Cash Provided By
Financing Activities                      -                  50,125               22,400             150,125             187,400
                                --------------       --------------       --------------      --------------      --------------

Net Increase (Decrease)
In Cash                                    508               (2,310)                 660                 296                 781

Cash At Beginning
Of Period                                  273                2,620                  121                  14                -
                                --------------       --------------       --------------      --------------      --------------
Cash At End Of Period           $          781       $          310       $          781      $          310      $          781
                                ==============       ==============       ==============      ==============      ==============
</TABLE>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS


<PAGE>
Page 9

                          EMPYREAN COMMUNICATIONS INC.
                          (A Development Stage Company)
                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
     for the period April 30, 1998 (Date of Inception) to September 30, 2001
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------
<TABLE>
<CAPTION>
                                                                                            Deficit
                                                                                           Accumulated
                                                                          Additional        During the
                                      Common                               Paid-in         Development
                                      Shares            Par Value          Capital             Stage          Total
<S>                                <C>               <C>               <C>               <C>             <C>
Net loss for the period                  -           $       -         $       -         $       (850)   $       (850)
                                   ----------        ------------      ------------      ------------    ------------

Balance, as at December 31, 1998         -                   -                 -                 (850)           (850)
For cash:
Capital stock issued pursuant
to an offering at - $0.001          5,000,000               5,000              -                 -              5,000
Capital stock issued pursuant
to an offering memorandum
at - $0.50                             31,000                  31            15,469              -             15,500
For acquisition of Qiblah
Technologies Ltd.                   5,000,000               5,000              -                 -              5,000
Net loss for the year                    -                   -                 -              (33,126)        (33,126)
                                   ----------        ------------      ------------      ------------    ------------

Balance, as at December 31, 1999   10,031,000              10,031            15,469           (33,976)         (8,476)
For cash:
Capital stock subscribed
pursuant to a subscription
agreement at - $0.50                  200,000                 200            99,800              -            100,000
Pursuant to the exercise
of warrants at - $0.50                 89,000                  89            44,411              -             44,500
Shares issued as partial
payment of license fee
 at - $3.31                             2,000                   2             6,623              -              6,625
Non-cash compensation charge             -                   -              519,120              -            519,120
Net loss for the period                  -                   -                 -             (696,287)       (696,287)
                                   ----------        ------------      ------------      ------------    ------------

Balance, as at December 31, 2000   10,322,000        $     10,322      $    685,423       $  (730,263)   $    (34,518)
                                   ----------        ------------      ------------      ------------    ------------

For cash:
Pursuant to the exercise
of warrants at - $0.50                 44,800                  45            22,355              -             22,400
For acquisition of Empyrean
Communications                     15,000,000              15,000        23,906,011           (69,008)     23,852,003

Net loss for the year                    -                   -                 -             (543,633)       (543,633)
                                   ----------        ------------      ------------      ------------    ------------

Balance, as at September 30, 2001  25,366,800              25,367        24,613,789        (1,342,904)     23,296,252
                                   ==========        ============      ============      ============    ============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

<PAGE>
Page 10

                          EMPYREAN COMMUNICATIONS INC.
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001.
                              (Stated in US dollars)
                              ----------------------
                                     Unaudited
                                     ---------


Note 1     Interim Reporting
           -----------------

           While the information presented in the accompanying interim Nine
           months financial statements is unaudited, it includes all adjustments
           which are, in the opinion of management, necessary to present fairly
           the financial position, results of operations and cash flows for the
           interim periods presented.  All adjustments are of a normal recurring
           nature.  It is suggested that these interim financial statements be
           read in conjunction with the company's December 31, 2000 annual
           financial statements.


Note 2     Common Stock
           ------------

           Commitment

           Share Purchase Warrants

           At September 30, 2001, there are no share purchase warrants
           outstanding.

           Share Purchase Options

           At September 30, 2001, 800,000 share purchase options are
           outstanding.  Each option entitles the holder to purchase one
           additional share of the company at $0.75 per share until April 17,
           2010.


Note 3     Subsequent Events
           -----------------

           On October 17, 2001, the Company approved a Reverse Split of the
           issued and outstanding shares on a new share for twenty old shares
           basis.  Any fractional shares will be rounded up.  Effective date of
           the Reverse Split is October 31, 2001.

           The Board rescinded its previous decision of June 8, 2001 to spin off
           the communications assets to Empyrean International, Inc., a
           subsidiary of Empyrean Communications, Inc., in exchange for
           1,000,000 shares of Empyrean International, Inc., to be distributed
           in total as a dividend to registered shareholders of Empyrean
           Communications, Inc. as of  August 30, 2001.

           On November 1, 2001 the Company approved issuance of 1,000,000 shares
           of common stock to Mr. Tom McCrimmon for consulting services,
           1,000,000 shares of common stock to Mr. Robert Lee for consulting
           services and 5,000,000 shares of common stock to Empyrean
           International Inc., a subsidiary of Empyrean Communications, Inc, for
           agreeing to reverse the previous spin-off action of the broadband and
           basalt aspects of the company's business after having enhanced
           original bandwidth contract terms by approximately $5,000,000.

<PAGE>
Page 11

           On November 14, 2001 Director Ken Liebscher, representing a group of
           minority stockholders made a request of management to review the
           issuance of stock to Mr. McCrimmon and Mr. Lee, as approved by the
           Board in their meeting of November 1, 2001. Management has agreed to
           review the matter for content and purpose and upon completion of its
           review will present its recommendations at a Special Called Board
           Meeting.

           On November 15, 2001 Management met with and requested its SEC
           approved CPA Firm, Dickey, Rush, Duncan, Ansell & Co. P.C. to perform
           a complete review of its current financial status and its 2001 SEC
           filings.  In addition the Firm was employed to complete the year-end
           audit. Management is anticipating the review findings in sufficient
           time to review and incorporate all financial adjustments, if any
           should be required, for the year-end audit.


                            EMPYREAN COMMUNICATIONS, INC
 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS AND NINE MONTHS PERIODS
  ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000 AND FOR THE PERIOD APRIL 30,
                     1998 (INCEPTION) THROUGH SEPTEMBER 30, 2001.


1.  BASIS OF PRESENTATION

    In the opinion of management, the unaudited financial statements reflect all
    normally recurring adjustments necessary to fairly present the Company's
    financial position and results of operations for the periods indicated. The
    accompanying interim financial statements should be read in conjunction with
    the financial statements and related notes included in the Company's 10-KSB
    for the period ended December 31, 1999, which has been filed with the
    Securities and Exchange Commission. Certain information and footnote
    disclosures normally included in the Company's annual financial statements
    have been omitted from the quarterly financial statements based upon
    Securities and Exchange Commissions rules and regulations. Net loss per
    common and common equivalent share was computed based on the net loss
    divided by the weighted average number of common and common equivalent
    shares outstanding, unless antidilutive, during the year presented.

2.  FINANCING

                                         Common                    Additional
                                         Shares                      Paid-in
                                           #         Par Value       Capital
                                       ----------    ----------    ----------
    Balance, December 31, 1999               -       $     -       $     -
    Issuance of shares:
    - pursuant to offering memorandum
       for cash
    - at $0.50 per share                   31,000            31        15,469
    - at $0.001 per share               5,000,000         5,000          -
    - pursuant to acquisition of
       Qiblah Technologies Limited      5,000,000         5,000          -

    - pursuant to a Reg. S
       Investment for cash
            - At $0.50 per unit           200,000           200        99,800
    - pursuant to set up of
       company in UAE                       2,000             2         6,623
            - At $3 5/16 per share
                                       ----------    ----------    ----------

    Balance, September 30, 2001        10,233,000    $   10,233    $  121,892
                                       ==========    ==========    ==========

    The capital raised was used to fund operations. The Company anticipates
    needing additional capital to fund operations during the upcoming year. The
    Company intends to raise capital through a combination of the private
    placement of its securities, establishing operating lines of credit, and
    through the sale of product.

<PAGE>
Page 12

3.  RELATED PARTY TRANSACTIONS

    On January 12, 2000, the company acquired the shares of Qiblah International
    Industries Ltd. ("Qiblah").  Qiblah was a private company controlled by a
    significant shareholder of the Company.  On January 19, 2000, two directors
    of Qiblah became directors of the company.  Accounts payable at September
    30, 2001 includes $50,000 (1999:  $50,000) owing to E.T.C. Industries Ltd.,
    a company with a common director.  Loans payable at September 30, 2001
    includes $2,500 (2000:  $Nil) owing to directors of the Company.  During the
    third quarter, the Company approved to effect a "spin-off" of all assets
    pertaining to the Broadband and Basalt aspects of its business to Empyrean
    Enterprises, Inc. a company controlled by a Director of Empyrean
    Communications, Inc.  The stated assets and liabilities spun off will be
    exchanged for 1,000,000 shares of Empyrean Enterprises, Inc.  These shares
    will be escrowed and distributed pro-rata, total, to stockholders registered
    as of August 31, 2001.

4.  DESCRIPTION OF SECURITIES

    The Company has two class of securities authorized; 50,000,000 shares of
    $0.001 par value common voting stock and 10,000,000 of $0.001 par value
    preferred shares. The holders of the Company's Common Stock are entitled to
    one vote per share on each matter submitted to a vote at a meeting of
    stockholders. The shares of Common Stock carry cumulative voting rights in
    the election of directors.  There are no preferred shares issued.

    Stockholders of the Company have no pre-emptive rights to acquire additional
    shares of Common Stock or other securities. The Common Stock is not subject
    to redemption rights and carries no subscription or conversion rights. In
    the event of liquidation of the Company, the shares of Common Stock are
    entitled to share equally in corporate assets after satisfaction of all
    liabilities. All shares of the Common Stock now outstanding are fully paid
    and non-assessable.

    The Company has incentive options outstanding. The terms and conditions of
    the options granted were for the optionee to purchase a number of shares of
    the authorized $0.001 par value Common Stock of the Company, at the purchase
    price of $0.75 per share for a period of 5 years.

    The following options were granted:     Rolf Papsdorf            200,000
                                            Dieter Schindelhauer     200,000
                                            Ken Liebscher            200,000
                                            Dharcarium Ltda.         200,000
                                            Sundance Capital Group   200,000
                                            Bruce Haglund            200,000
                                            Maurice Jacquesson       100,000

    On March 8, 2001 Rolf Papsdorf, Dieter Schindelhauer and Maurice Jaquesson
    resigned from the company and their options were retired unexercised.

    There is no provision in the Company's Articles of Incorporation, as
    amended, or Bylaws that would delay, defer, or prevent a change in control
    of the Company.

Item 2.  Management's Plan of Operations

The Company is in its initial stages of development with no revenues or income
and is subject to all the risks inherent in the creation of a new business.
Since the Company's principal activities to date have been limited to
organizational activities, prospect development, and acquisition of interests,
it has no record of any revenue-producing operations.  Consequently, there is no
operating history upon which to base an assumption that the Company will be able
to achieve its business plans.

During the second quarter the Company purchased Empyrean Communications, Inc. on
a share for share basis and issued 15,000,000 of the company's common stock.
Subsequently the company divested itself of the Qiblah division  for one dollar.
The Directors of the company, Rolf Papsdorf and Dieter Schindelhauer resigned
from the Board of Directors of the company and Dale Renaud, George Burks, and
Robert Lee were added to the Board of Directors.  Dale Renaud was elected the
new President and George Burks as Secretary/Treasurer.


<PAGE>
Page 13

The company officially changed its name from Direction Technologies, Inc. to
Empyrean Communications, Inc.

PRINCIPAL PRODUCT.

One of the specific reasons the Company was founded is for the purpose of
entering into a world-wide license agreement with E.T.C. Industries Ltd. of
Vancouver, British Columbia, Canada to license certain technology, and obtain
advice in facilitating the production of electric vehicles using certain
technology developed by the licensor. The license agreement expired during the
quarter and will not be renewed as the company is now pursuing new interests.

The other specific reason for formation of the Company is to purchase certain
assets of Qiblah International Industries Ltd. a British Columbia corporation,
of Vancouver, British Columbia, Canada (a non-operational holding company).
Qiblah International Industries Ltd. owns 50% of Qiblah Technologies Ltd. a duly
registered non-reporting, non-listed South African public corporation.  This
firm had developed a state-of-the art electronic device called the Qiblah
Locator, a battery-operated hand-held device that indicates the direction of the
Muslim religious center Mecca from any location in the world. The Qiblah Locator
is designed to be of assistance to the more than 1.5 billion adherents of the
Muslim faith in the performance of their religious observations. This division
of the company was sold to the original developers of the product for a sum of
one dollar during the quarter.

<PAGE>
Page 13

The direction of Empyrean Communications, Inc. will now be the development of
broadband telecommunications capabilities through the agreements acquired with
the purchase of Empyrean. Empyrean Communications, Inc. is a broadband provider
capable of delivering fiber capacity to OC-192 levels. Empyrean intends to
direct its marketing efforts towards Multi-Media Broadcast & Content Delivery
markets via DSL users in a scalable manner. Empyrean's mission is to "light up"
the 29,000 miles of fiber-optical digital broadband it currently has under
contract. This would provide Empyrean's future clients with the ability to
purchase, rent lease or joint-venture smaller configurations of bandwidth such
as the OC-12, OC-3 and DS3 levels. These capacity levels have a greater demand
and could generate much higher revenue streams than the larger OC-48's.

During the third quarter, the Company approved to effect a "spin-off" of all
assets pertaining to the Broadband and Basalt aspects of its business to
Empyrean Enterprises, Inc. a company controlled by a Director of Empyrean
Communications, Inc.  The stated assets and liabilities spun off will be
exchanged for 1,000,000 shares of Empyrean Enterprises, IncThese shares will be
escrowed and distributed pro-rata, total, to stockholders registered as of
August 31, 2001.


LIQUIDITY.

During the next 12 months, the Company will need significant working capital to
fund its marketing efforts and to manufacture product. The Company intends to
obtain working capital from the sale of product and through private investments
made by third parties.  During the quarter, the Company approved the issuance of
15,000,000 shares as the purchase price of Empyrean Communications, Inc.  A
finders fee for this transaction will be paid to Sundance Capital Group and is
included in accounts payable.

PART II - OTHER INFORMATION

     Item 1.     Legal Proceedings.

                 None;

     Item 2.     Changes in Securities and Use of Proceeds.

               During the first quarter of 2001, the Company issued 15,000,000
restricted shares of common stock to the shareholders of record of the private
company purchased, Empyrean Communications, Inc.  The shares issued were:

--------------------------------------------------------------------------------
         STOCKHOLDERS                    EMPYREAN            DIRECTION SHARES
         ------------                    --------            ----------------
                                          SHARES                 RECEIVED
                                          ------                 --------
                                       SURRENDERED
                                       -----------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VNET INVESTMENT COMPANY                 12,500,000               12,500,000
12115 N 1-35 SERVICE ROAD
OKLAHOMA CITY, OKLAHOMA 73131
--------------------------------------------------------------------------------

<PAGE>
Page 14

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RENAUD FAMILY TRUST                      1,000,000                1,000,000
2920 SHADOWBRIAR DRIVE 31328
HOUSTON TEXAS 77082
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STARBRIGHT MMG LIMITED PARTNERSHIP         250,000                  250,000
2832 BELLEVUE AVE
W. VANCOUVER B.C.  CANADA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
QUADRANT FINANCIAL INC.                    250,000                  250,000
2107 DEEP COVE RD.
N. VANCOUVER B.C.  CANADA  V7G 1S8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VINTAGE INTERNATIONAL INC.                 250,000                  250,000
711-945 MARINE DRIVE
WEST VANCOUVER B.C. V7T 1A8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GEORGE J. RENAUD                           250,000                  250,000
1930 COLUMBUS
STUTTGART ARKANSAS 72160
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LANA M. CAMPBELL                           250,000                  250,000
14007 BRADLEY RD.
NORTH LITTLE ROCK, ARKANSAS 72113
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CHARLES KARPOWICZ                          250,000                  250,000
801 S. RODNEY PARHAM #34E
LITTLE ROCK ARKANSAS 72205-4877
--------------------------------------------------------------------------------


     Item 3.     Defaults Upon Senior Securities.

                 None;

     Item 4.     Submission of Matters to a Vote of Security Holders.

                 None;

     Item 5.     Other Information.

                 On March 3, 2000 the Company was cleared by the NASD for
                 trading on the OTC Bulletin Board.  The symbol was DRCG.
                 Subsequently the symbol was redesignated as EPYC.

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

                 (a)     Exhibits

                         None

                 (b)     Reports on Form 8-K.

                         March 8, 2001.

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Page 15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            EMPYREAN COMMUNICATIONS, INC.

Date:     11/19/01                          By: /s/ Dale Renaud
                                            President and Director


Date:     11/19/01                          By: /s/ Robert L. Lee
                                            Director



<PAGE>