FILER:

COMPANY DATA:COMPANY CONFORMED NAME:
          
          DOT COM ENTERTAINMENT GROUPCENTRAL INDEX KEY:
          
          0001079279STANDARD INDUSTRIAL CLASSIFICATION
          
          SERVICES-BUSINESS SERVICESIRS NUMBER:
          
          582466312STATE OF INCORPORATION
          
          FLFISCAL YEAR END
          
          1231FILING VALUES:FORM TYPE
          10QSBSEC ACT:SEC FILE NUMBER
          
          000-26597FILM NUMBER:BUSINESS ADDRESS:STREET 1:
          300 DELAWARE AVENUESTREET 2:CITY:
          BUFFALOSTATE:
          NYZIP:
          14202BUSINESS PHONE
          716-853-1964MAIL ADDRESS:STREET 1:
          300 DELAWARE AVENUESTREET 2:CITY:
          BUFFALOSTATE:
          NYZIP:
          14202






































UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION 
    WASHINGTON, D.C. 20549

FORM 10-QSB





(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, 2003

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: 0 - 26597

DOT COM ENTERTAINMENT GROUP, INC.
(Exact name of small business issuer as specified in its
charter)

Florida                                                                                                       58-2466312
(State or other jurisdiction of                                                          (I.R.S. Employer Identification
incorporation or organization)                                                                    Number)

150 Randall St., 
                Oakville, Ontario, Canada, L6J 1P4
                (Address of principal executive offices)

(905) 337-8524
Issuer's telephone number



Indicate by check mark 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_____

As of April 30, 2003, the registrant had 10,855,500 shares of Common Stock
outstanding.

Transitional Small Business Disclosure Format (check one);
                                                                              Yes_____ No__X__



This quarterly report contains forward-looking statements that involve
substantial risks and uncertainties. Any statement in this quarterly report and
any documents incorporated by reference into this quarterly report that is not a
statement of an historical fact constitutes a forward-looking statement within
the meaning of the Private Securities Litigation Reform Act of 1995. Further,
when we use the words "may", "expect", "anticipate", "plan", "believe", "seek",
"estimate" and similar words, we intend to identify statements and expressions
that may be forward-looking statements. We believe it is important to
communicate certain of our expectations to our investors. Forward-looking
statements are not guarantees of future performance. They involve risks,
uncertainties and assumptions that could cause dot com's future results to
differ materially from those expressed in any forward-looking statements. Many
factors are beyond our ability to control or predict. You are accordingly
cautioned not to place undue reliance on such forward-looking statements. We
have no obligation or intent to update publicly any forward-looking statements
whether in response to new information, future events or otherwise. Important
factors that may cause our actual results to differ from such forward-looking
statements include, but are not limited to, the risk factors discussed below
under Item 2 "MANAGEMENT'S DISCUSSION AND ANALYSIS", "RISKS AND UNCERTAINTIES"
and in dot com's Annual Report on Form 10-KSB.

Part I - Financial Information

Item 1. - Financial Statements.



|dot com ENTERTAINMENT GROUP, INC.                    
|-----------------------------------------------------
|AND SUBSIDIARIES                                     
|                                                     
|CONSOLIDATED BALANCE SHEETS                          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Current assets:                                      
|Cash and cash
    equivalents                        
|Accounts receivable:                                 
|                                                     
|                                                     
|                                                     
|Income taxes
    recoverable                         
|Prepaid expenses and
    deposits                    
|                                                     
|                                                     
|Deferred software
    development costs              
|                                                     
|Fixed assets - net                                   
|                                                     
|Patents - net                                        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Current liabilities:                                 
|Accounts payable and
    accrued liabilities         
|Restructuring reserve                                
|Legal settlement
    reserve                         
|Income taxes payable                                 
|Deferred revenue                                     
|                                                     
|                                                     
|Long-term
    liabilities:                           
|Deferred income taxes                                
|                                                     
|Total liabilities                                    
|                                                     
|Stockholders'
    equity:                            
|Common stock, $0.001
    par value, 50,000,000       
|shares authorized,
    10,855,500 shares issued      
|and outstanding
    (10,695,500 - 2002)              
|Additional paid in
    capital                       
|Retained earnings
    (accumulated deficit)          
|                                                     
|Unearned common stock
    and option
    compensation
|                                                     
|                                                     
|                                                     
|                                                     
|(see accompanying notes)                             
|                                                     

|                                                         
|---------------------------------------------------------
|dot com ENTERTAINMENT GROUP, INC.                        
|AND SUBSIDIARIES                                         
|                                                         
|CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS  
|(ACCUMULATED DEFICIT)                                    
|(Unaudited)                                              
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|Revenues:                                                
|Royalties                                                
|Installation fees                                        
|e-digital and support services                           
|Other income                                             
|                                                         
|                                                         
|Expenses:                                                
|Research, software development and support
      services
|General and administrative                               
|Sales, marketing and services to licensees               
|                                                         
|                                                         
|Income
    before income tax provision                   
|                                                         
|Income
    tax provision                                 
|Current                                                  
|Deferred                                                 
|                                                         
|                                                         
|Net
    income                                           
|                                                         
|Retained
    earnings (accumulated deficit),             
|beginning of period                                      
|                                                         
|Retained earnings (accumulated deficit),                 
|end
    of period                                        
|                                                         
|Net
    income per share:                                
|Basic                                                    
|                                                         
|Diluted                                                  
|                                                         
|Weighted average number of common                        
|shares outstanding:                                      
|Basic                                                    
|                                                         
|Diluted                                                  
|                                                         
|(see accompanying notes)                                 





|dot com ENTERTAINMENT GROUP, INC.             
|----------------------------------------------
|AND SUBSIDIARIES                              
|                                              
|CONSOLIDATED STATEMENTS OF CASH FLOWS         
|(Unaudited)                                   
|                                              
|                                              
|                                              
|                                              
|Cash flows from operating activities:         
|Net income                                    
|Adjustments to reconcile net income to        
|net cash used in operating activities:        
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Net cash used in operating activities         
|                                              
|Cash flows from investing activities:         
|Purchases of fixed assets                     
|Deferred software development costs           
|                                              
|Net cash used in investing activities         
|                                              
|Net decrease in cash during the period        
|                                              
|Cash and cash equivalents, beginning of period
|                                              
|Cash and cash equivalents, end of period      
|                                              
|                                              
|Supplemental cash flow activities             
|Income taxes paid / (received)                
|Interest paid                                 
|                                              
|(see accompanying notes)                      



dot com Entertainment Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - THREE-MONTH PERIOD ENDED MARCH
31, 2003





NOTE 1. - BASIS OF PRESENTATION



The accompanying unaudited consolidated financial statements
of dot com Entertainment Group, Inc. and its Subsidiaries (the "Company") have
been prepared in accordance with accounting principles generally accepted in the
U.S.A. for interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the U.S.A. for complete
financial statements. In the opinion of management, all adjustments considered
necessary for fair presentation have been included. Operating results for the
three-month period ended March 31, 2003 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2003. For further
information, refer to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2002, which includes audited financial statements and
footnotes as at and for the years ended December 31, 2002 and 2001.





NOTE 2. - DEFERRED SOFTWARE DEVELOPMENT COSTS



Software development costs are accounted for in accordance
with Statement of Financial Accounting Standard ("SFAS") 86, "Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed". All costs
incurred to establish the technological feasibility of a computer software
product are expensed as incurred. Software development costs, incurred
subsequent to the determination that the project is technically feasible, in the
amount of $55,791 have been deferred for the three-month period ended March 31,
2003. No software development costs were deferred for the three-month period
ended March 31, 2002. No amortization of deferred software development costs was
recorded in the three-month periods ended March 31, 2003 or 2002.





NOTE 3. - STOCK OPTIONS



During the three-month ended March 31, 2003, 285,000 options
were granted under this plan with exercise prices ranging from $0.19 to $0.21
per share. These options were granted to directors and employees. These options
vested immediately. During the three-month period ended March 31, 2003, 5,000
options issued to an employee were forfeited. During the three-month period
ended March 31, 2002, 155,000 options were granted under this plan with exercise
prices ranging from $0.81 to $1.08 per share. These options were granted to
employees. During the three-month period ended March 31, 2002 no stock options
were forfeited.





Exercise prices for the options outstanding at March 31, 2003
fall into the following ranges:

Number
      of Shares
      Under Option$0.01 - $0.20
      5,000$0.21 - $0.50
      1,655,000$0.51 - $1.00
      1,542,500$1.01 - $2.00
      132,500$2.01 - $3.00
      432,5003,767,500


































During the three-month period ended March 31, 2003, 25,000
non-qualified stock options were issued to a consultant for services to be
rendered throughout fiscal 2003. Pursuant to the provisions of SFAS 123, the
fair value of these options has been determined in the amount of $4,344 using
the Black-Scholes pricing model following the assumptions noted below. This
amount is being included in the determination of income on a straight-line basis
throughout fiscal 2003. The excess of the value ascribed to the consultant's
services over the amount included in the determination of income for the period
is included as a component of "Unearned common stock and option compensation"
included in Stockholders' Equity. No non-qualified options were issued to
consultants during 2002 or 2001. In years prior to 2001, 810,000 non-qualified
options had been issued to consultants.



Accordingly as at March 31, 2003, there are 835,000 non-qualified options
outstanding. 25,000 options are exercisable at $0.23 per share and expire in
2008, 50,000 options are exercisable at $2.50 per share and expire in 2005 and
760,000 options are exercisable at $3.00 per share and expire in 2004.



For stock options issued to employees, including directors
and officers, the Company has adopted the disclosure-only provisions of SFAS 123
and, accordingly, does not recognize compensation cost for stock option grants
under fixed awards. SFAS 148, "Accounting for Stock Based Compensation -
Transition and Disclosure," requires the Company to disclose in its interim
consolidated financial statements the impact if the Company had elected to
recognize compensation cost based on the fair value of the options granted at
the grant date as prescribed by SFAS 123. The impact on net income and income
per share for the three-month periods ended March 31, 2003 and 2002 would have
been as follows:





|                                                                                                                      |   | 2003     |   | 2002     
|--------------------------------------------------------------------------------------------------------------------- | - | -------- | - | ---------
|                                                                                                                      |   |          |   |          
|Net income - as reported                                                                                              | $ | 44,549   | $ | 229,504  
|Total stock based employee compensation expense
    determined under the fair value method for all awards, net of tax |   | (43,224) |   | (111,333)
|                                                                                                                      |   |          |   |          
|Net income - pro forma                                                                                                | $ | 1,325    | $ | 118,171  
|                                                                                                                      |   |          |   |          
|Income per share - as reported, basic and diluted                                                                     | $ | 0.00     | $ | 0.02     
|                                                                                                                      |   |          |   |          
|Income per share - pro forma, basic and diluted                                                                       | $ | 0.00     | $ | 0.01     







No compensation expense was recorded in the three-month period ended March
31, 2003 or 2002 for stock options granted to employees, directors or officers.



The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model based on the following
weighted-average assumptions:





|                                | 2003    |  | 2002
|------------------------------- | ------- |  | ----
|                                |         |  |     
|Expected dividend yield         | 0%      |  |     
|Expected stock price volatility | 100%    |  |     
|Risk-free interest rate         | 3.0%    |  |     
|Expected life of options        | 5 years |  |     







NOTE 4. - EARNINGS PER SHARE



In accordance with SFAS 128, "Earnings Per Share," the
Company has reported basic earnings per share and fully diluted earnings per
share. The Company determines the weighted average number of fully diluted
common shares outstanding by applying the treasury stock method. For the
three-month period ended March 31, 2003, under this method, none of the
4,822,500 outstanding stock options and warrants have been considered common
stock equivalents because their assumed exercise would be anti-dilutive for the
period. The diluted weighted average number of common shares outstanding at
March 31, 2002 includes the impact of the assumed exercise of 2,015,000 stock
options with exercise prices ranging from $0.75 to $0.89 per share. All other
securities, consisting of 2,005,000 stock options and warrants with exercise
prices ranging from $0.94 to $4.00, are anti-dilutive and have not been included
in the calculation.





NOTE 5. - CONCENTRATION OF CREDIT RISKS



At March 31, 2003 the Company had four customers, which
either represented in excess of 10% of trade accounts receivable at that date or
represented in excess of 10% of revenue for the three-month period then ended.
Comparative information is provided as at and for the year-ended December 31,
2002. The percentage of period-end trade accounts receivable is computed based
on trade accounts receivable net of any allowances for doubtful accounts:





|           |                                           | March 31, 
    2003 |  | December 31,
    2002
|---------- | ----------------------------------------- | ------------------- |  | ---------------------
|           |                                           |                     |  |                      
|Customer 1 | % of period end trade accounts receivable | 30%                 |  | 36%                  
|           |                                           |                     |  |                      
|           | % of period revenue                       | 16%                 |  | 13%                  
|           |                                           |                     |  |                      
|Customer 2 | % of period end trade accounts receivable | 11%                 |  | 17%                  
|           |                                           |                     |  |                      
|           | % of period revenue                       | 13%                 |  | 27%                  
|           |                                           |                     |  |                      
|Customer 3 | % of period end trade accounts receivable | 12%                 |  | 13%                  
|           |                                           |                     |  |                      
|           | % of period revenue                       | Less than 10%       |  | Less than 10%        
|           |                                           |                     |  |                      
|Customer 4 | % of period end trade accounts receivable | Less than 10%       |  | Less than 10%        
|           |                                           |                     |  |                      
|           | % of period revenue                       | 14%                 |  | Less than 10%        







NOTE 6. - CAPITAL STOCK









NOTE 7. - RECLASSIFICATIONS



Certain amounts and related disclosures in the financial
statements for the three-month period ended March 31, 2002 have been
reclassified to conform to the financial statement presentation for the
three-month period ended March 31, 2003.





Item 2. - Management's Discussion and Analysis

Management's Discussion and Analysis of Financial Condition and Results of
Operations

General

dot com Entertainment Group, Inc. ("dot com" or the "Company") is an Internet
software development company specializing in the creation and support of
Internet gaming products and related services.

dot com is not an Internet gaming company, in that it does not directly
accept wagers used to play games of chance on the Internet. Rather, it develops
and licenses the use of its commercial software products and other intellectual
property to independent third parties located in jurisdictions where Internet
gaming is regulated or tolerated.

The Company derives its revenues from several sources, including its
assessment of installation fees and royalties from the use of its software.
Additionally, the Company generates revenue on a fee for service basis by
providing licensees with e-digital and support services (such services included
web site design and integration, custom products, corporate branding, systems
consulting services and technical support, maintenance and software upgrades).

The United States dollar is the principal currency of the Company and
accordingly the financial statements of the Company are expressed in United
States dollars. The Company derives all of its revenues in United States
dollars. Certain of the Company's expenses are incurred in Canadian dollars and
these expenses are converted into United States dollars at the exchange rates on
the transaction dates. The Canadian dollar has increased in value against the
U.S. dollar by approximately 7.6% between December 31, 2002 and March 31, 2003.
As a consequence the Company has incurred additional cost from those expenses
denominated in Canadian dollars, which are higher when recorded in U.S. dollars
during the three-month period ended March 31, 2003. However, the Company
maintains certain monetary assets denominated in Canadian dollars. The Company
has recorded a gain on the conversion of these monetary assets to U.S. dollars
as at March 31, 2003. The net impact of these foreign exchange effects in the
three-month period ended March 31, 2003 has not been material. However,
increases in the value of the Canadian dollar will adversely impact on the
results of operations of the Company. For the three-month period ended March 31,
2003 the average exchange rate was Cdn. $ 1.00 equal to U.S. $0.6627. For the
three-month period ended March 31, 2002, the average exchange rate was Cdn. $
1.00 equal to U.S. $0.6279. Quarter over quarter, this represents a 5.5%
strengthening in the average value of the Canadian dollar. Since the end of the
fiscal quarter, the Canadian dollar has continued to strengthen against the U.S.
dollar and is a further 2.4% stronger between April 1, 2003 and April 30, 2003.

Critical Accounting Policies

The consolidated financial statements of the Company are prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP"). These accounting principles require that management make
certain estimates, judgments and assumptions. These estimates, judgments and
assumptions are subject to periodic evaluation. Management believes that the
estimates, judgments and assumptions upon which management relies are reasonable
based upon information available to management at the time these estimates,
judgments and assumptions are made. These estimates, judgments and assumptions
can affect the reported amounts of assets and liabilities as of the date of the
financial statements, as well as the reported amounts of revenue and expenses
during the periods presented. To the extent that there are material differences
between these estimates, judgments or assumptions and actual results, the
Company's consolidated financial statements will be affected. The significant
accounting policies that management believes are the most critical to aid in
fully understanding and evaluating the reported financial results include the
following:

| | • | Revenue Recognition                          
| | - | ---------------------------------------------
| | • | Accounting for Research and Development Costs
| | • | Accounts Receivable                          

Revenue Recognition

Revenue recognition rules for software development companies are very
complex. The Company follows very specific and detailed guidance in measuring
revenue. The Company's revenue recognition policies are in compliance with all
applicable accounting regulations, including the American Institute of Certified
Public Accountants (AICPA) Statement of Position (SOP) 97-2, "Software Revenue
Recognition," and SOP 98-9, "Modification of SOP 97-2 With Respect to Certain
Transactions." The Company's intention in complying with these accounting
regulations is to minimize the application of estimates, judgments and
assumptions in the revenue recognition process. The Company generates several
types of revenue in its operations.

Installation fees are recognized when the Company has delivered, installed
and integrated its software at the licensee's place of operation and collection
is assured. Delivery, installation and integration are confirmed by the receipt
of a Confirmation of Software Delivery certificate from the licensee.  The
Company uses the standard of assurance of cash collection as the Company
generally has limited ability to pursue the non-payment of amounts owed given
that the Company's customers operate in foreign jurisdictions. The assessment
that cash collection is assured at the financial reporting date is based on the
receipt of cash by the Company within the period subsequent to the financial
reporting date through the date that the Company takes to complete its
period-end financial reporting process. If collection is not assured, amounts
billed are classified as deferred revenue until they are subsequently collected.
Revenue attributable to undelivered elements, including the commitment for
technical support and future upgrades, is based on the average sales price of
those elements and is recognized ratably on a straight-line basis over the
license term. If the average sales price of the undelivered item is not readily
determinable, based on vendor specific objective evidence, the entire payment
received in advance is deferred and recognized ratably on a straight-line basis
over the license term.

Royalty fees are collected from licensees who license the Company's Internet
entertainment software. Royalty revenue is recognized as licensees earn revenues
from providing Internet services to their customers.

e-digital and support services revenue is recognized when the service has
been provided.

Deposits received from customers prior to revenue recognition are classified
as deferred revenue in the balance sheet.

Accounting for Research and Development Costs

The Company invests significant resources in the ongoing improvement of its
existing software products and the development of new and enhanced software
products. The Company has carefully reviewed the provisions of Statement of
Financial Accounting Standard ("SFAS") 86, "Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed" and had concluded through
December 31, 2002 that no material amounts would qualify for deferral under this
pronouncement and accordingly, all computer software development costs through
December 31, 2002 have been expensed as incurred. Based on the present maturity
of the Company's software products, all software development efforts would be
considered product enhancements rather then the creation of new software
products. The Company had previously noted that it expected that the
requirements for computer software development costs to be deferred could be met
in fiscal 2003. This expectation was based on two concurrent developments.
Firstly, the Company has enhanced its management processes with respect to
software development projects and second, the Company has implemented a third
party software tool to facilitate the tracking and assessment of development
projects. Accordingly, the Company has commenced deferring certain software
development costs during the three-month period ended March 31, 2003. Such
deferral of costs requires the definition of the attainment of technical
feasibility of development projects and the definition of completion of
development projects. With respect to the definition of the technical
feasibility of development projects, the Company has adopted a definition that
reflects its internal management processes as follows. A development project is
considered technically feasible when the Requirements Document has been
completed and when the Product Steering Committee of the Company has approved
the Requirements Document. The Requirements Document specifies the functionality
required from the software product and provides the detail that the software
engineers require to develop the final software product. The Product Steering
Committee of the Company is the highest level of management approval for
software development projects and its role is to ensure that the Company's
development processes have been followed, that the development project is
feasible and that the Company can expect an acceptable economic return from the
execution of the development project. Once the project is approved by the
Product Steering Committee, the Company has committed to complete the project
and to allocate sufficient resources to it. With respect to the definition of
the completion of development projects, a project in considered complete when
the software product has been beta tested and is available for release to
customers.

In addition, it will be necessary to undertake a periodic review of the
recoverability of deferred amounts against the net realizable value of such
deferred costs which will include an estimate of future revenues from certain
products. Aggregate anticipated software development project costs are compared
to anticipated marginal revenues from the software product over a three-year
period which is the anticipated life-cycle of the software product. With respect
to the calculation of anticipated marginal revenues, certain estimates have to
be derived resulting from the application of judgments and assumptions.
Estimates include the activity level to be generated by customers and the
enhancement to the Company's revenue from higher levels of customer activity.
Further, additional revenue from new customers is included in the estimate of
future revenue. Such customers must at least be at a letter of intent stage in
the sales process to be included in the revenue projections from the software
products under development. In deriving these estimates, management has adopted
an initial prudent approach with respect to anticipated revenue enhancements.

Accounts Receivable

The Company carries its accounts receivable at cost less an allowance for
doubtful accounts. On a periodic basis, the Company evaluates its accounts
receivable and establishes an allowance for doubtful accounts. The allowance is
based on the circumstances of each customer relationship, as direct
communication takes place with each customer where accounts are past due,
together with an assessment of the history of past write-offs and collections.
Typically under the Company's license agreements, amounts are due 15 days after
the invoice date. The Company generally has limited ability to pursue
non-payment of amounts owed given that the Company's customers operate in
foreign jurisdictions. The allowance for doubtful accounts generally relates to
unpaid royalty amounts, including amounts that may be owed under minimum royalty
obligations pursuant to the Company's license arrangements. The financial
condition of customers can deteriorate and, for that reason and others, cash
collections can be delayed. In such circumstances, additional allowances for
doubtful accounts may be required.

In addition, the Company has chosen to account for its stock option plans
utilizing the intrinsic value method specified under APB Opinion No. 25,
"Accounting for Stock Issued to Employees." As required under SFAS 123,
"Accounting for Stock-Based Compensation," and SFAS 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure", the pro-forma effects on
reported net income had the Company elected to recognize compensation costs
based on the fair value of the stock options at the grant date are disclosed in
note 3 to the consolidated interim financial statements along with the
assumptions used in the determination of the fair value of the options granted.
The Company does not presently intend to adopt the fair value method of
accounting for stock options granted to employees.

In many cases, the accounting treatment of a particular transaction is
prescribed by GAAP and, accordingly, management does not apply judgment in the
application of GAAP. There are also areas in which management's judgment in
selecting amongst available alternatives would not produce a materially
different result. The Company's senior management has reviewed these critical
accounting policies and related disclosures with the audit committee of the
board of directors of the Company. See Note 1 to the consolidated financial
statements of the Company included with the Company's Annual Report on Form
10-KSB for the year ended December 31, 2002 which contain further information
regarding the Company's accounting policies and other disclosures required by
GAAP.

The following tables set forth selected information from the statements of
income for the three months ended March 31, 2003 and 2002 and the balance sheets
as at March 31, 2003 and December 31, 2002.

|Selected Statement of Income Information |                                  |                      |   |                              
|---------------------------------------- | -------------------------------- | -------------------- | - | -----------------------------
|                                         | Three Months Ended
    March 31,
|                                         |                                  | 2003                 |   | 2002                         
|                                         |                                  |                      |   |                              
|Revenue                                  | $                                | 927,720              | $ | 1,234,035                    
|Expenses                                 |                                  | 853,473              |   | 851,529                      
|Net income                               |                                  | 44,549               |   | 229,504                      
|                                         |                                  |                      |   |                              
|Selected Balance Sheet Information       |                                  |                      |   |                              
|                                         |                                  | As at March 31, 2003 |   | As at 
    December 31,
 2002
|                                         |                                  |                      |   |                              
|Current assets                           | $                                | 1,526,420            | $ | 1,656,430                    
|Current liabilities                      |                                  | 280,711              |   | 393,592                      
|Stockholders' equity                     |                                  | 1,437,851            |   | 1,383,817                    

Review of the three months ended March 31, 2003 compared with the three
months ended March 31, 2002

Revenues decreased to $927,720 for the three-month period ended March 31,
2003 from $1,234,035 for the comparable 2002 quarter.

Royalty revenue increased to $733,250 for the three-month period ended March
31, 2003 from $663,545 for the comparable 2002 quarter reflecting the increased
number and revenue activity of the Company's licensees. The increase was
achieved notwithstanding that the royalty rates in effect for the three-month
period ended March 31, 2003 were lower than those in place for the comparable
2002 quarter. In mid fiscal 2002, the Company reduced the royalty rates for a
number of licensees. The objective of these royalty rate amendments in 2002 was
the standardization of royalty rates to market rates across the Company's
customers. A consequence of this competitive action was a general reduction in
royalty revenue by licensee and in aggregate. During the three-month period
ended March 31, 2003, the offset to this royalty revenue reduction from the
increased contribution from both the increased activity of existing customers
and the activity of new customers resulted in royalty for the three-month period
ended March 31, 2003 being only 5% less than the Company's record quarter for
royalty revenue, which is $766,977 which was earned for the three-month period
ended December 31, 2001. It is reasonably expected that royalty revenue for the
three-month period ended June 30, 2003 will establish a new quarterly record for
royalty revenue. Part of the reason for the revenue increase is the completion
of the process of installing a software upgrade at several client sites,
commenced in late fiscal 2002. This upgrade improved many aspects of the
performance of the software.

Installation fees were $155,770, as compared to $406,225 for the comparable
quarter in 2002, representing fees recognized on the delivery of the Company's
software to four licensee sites during the three-month period ended March 31,
2003. The first quarter of fiscal 2002 represents the present record quarter for
installation fees when seven new client sites were installed. While three of the
four new licensee sites derived royalty revenue in the three-month period ended
March 31, 2003, royalty revenue from one licensee site is expected to commence
in the second quarter of 2003. At December 31, 2002, $60,000 of installation
fees related to delivered software could not be recognized pursuant to the
Company's revenue recognition practices. Of this amount, $30,000 was recognized
in the three-month period ended March 31, 2003. It is anticipated the balance of
$30,000 will be recognized in the second quarter of fiscal 2003.

e-digital and support services revenue decreased to $31,200 for the
three-month period ended March 31, 2003 from $164,265 for the comparable 2002
quarter. As the Company no longer actively markets e-digital services, revenue
from this source has fallen as expected and as discussed in prior quarters.

During the three-month period ended March 31, 2003, three customers
represented revenues of 16%, 14% and 13%, respectively. For the three-month
period ended March 31, 2002, these customers represented the following
percentages of revenue, respectively, 7%, 5% and 28%. If the Company lost any of
these customers or any of them became insolvent and could not pay the balances
owed to the Company it would have a material negative impact on the financial
condition and results of operations of the Company.

Total expenses increased to $853,473 for the three-month period ended March
31, 2003 from $851,529 for the comparable 2002 quarter. While there has been a
decrease in the average staffing complement of approximately four employees for
the three-month period ended March 31, 2003 compared to the comparable quarter
in fiscal 2002, overall compensation costs have increased by approximately
$42,000. This increase reflects the appointment by the Company of several new
members of management, for whom the three-month period ended March 31, 2003 was
the first full fiscal quarter of employment, and compensation increases for
existing members of management. At March 31, 2003, there were 39 full-time
employees and consultants compared to 43 at March 31, 2002. Other cost
components increased, on a net basis, by approximately $12,000. An offset was
the reduction in expenses of approximately $56,000 from the deferral of certain
software development costs discussed further below.

Gross research, software development and support service expenses, before the
deferral of certain software development costs under the provisions of SFAS 86
as discussed in the next paragraph, increased to $382,490 for the three-month
period ended March 31, 2003 from $373,102 for the comparable 2002 quarter. This
increase resulted from the consequence of continuing to hire additional software
developers to improve and diversify the Company's products and services to
reflect the growing demand realized, and anticipated, for these products and
services. Compensation costs increased by approximately $104,000 in the
three-month period ended March 31, 2003 compared to the comparable 2002 quarter.
As an offset, in the three-month period ended March 31, 2002 research, software
development and support service expenses costs included a charge in the amount
of $90,000 for a one-time non-recurring buyout of an existing management
contract which would have otherwise have expired in December 2002. Gross
research, software development and support service expenses represented 41% of
revenues for the three-month period ended March 31, 2003 compared to 30% for the
comparable 2002 quarter.

As of March 31, 2003, $55,791 of software development costs have been
deferred under the provisions of SFAS 86 related to the development of
downloadable Flash versions of the Company's suite of casino games. It is
anticipated that the Company will incur approximately a further $120,000 of
expenses in developing these software products prior to the commercialization of
the software products. The release date for these products is anticipated to be
late in the second quarter of fiscal 2003 and the Company anticipates earning
marginal revenue from the licensing of these software products from both
existing and new clients in the third quarter of fiscal 2003. The Company
intends to amortize the deferred software development costs over a 36-month
period, which is the Company's general assessment of the economic life of its
software products. Accordingly, net research, software development and support
services expenses for the three-month period ended March 31, 2003 were $326,699
or 35% of revenue for the period.

General and administrative expenses increased to $376,769 for the three-month
period ended March 31, 2003 from $261,846 for the comparable 2002 quarter. The
increase primarily results from increased remuneration to employees and
consultants of approximately $62,000 and an increase in premises costs,
following an increase in the amount of rented space used by the Company in late
fiscal 2002, of approximately $20,000. Professional fees, for strategic
marketing services, directors' fees and other advisory fees were higher by
approximately $55,000 during the quarter and depreciation was higher by
approximately $10,000. As a partial offset, there was a $36,000 allowance for
doubtful accounts recorded in the three-month period ended March 31, 2002 which
did not recur in fiscal 2003. General and administrative expenses represented
41% of revenue for the three-month period ended March 31, 2003 compared to 21%
for the comparable 2002 quarter.

Sales, marketing and services to licensees expenses decreased to $150,005 for
the three-month period ended March 31, 2003 from $216,581 for the comparable
2002 quarter. The decrease reflects the Company's decision in the third quarter
of fiscal 2002 to curtail e-digital and systems consulting service activities to
reflect marketplace opportunities. As a consequence, compensation costs for
these activities have decreased by approximately $34,000 for the three-month
period ended March 31, 2003 compared to the comparable quarter in fiscal 2002
following the reduction in headcount in this area. In addition, there was a
$26,000 allowance for doubtful accounts recorded in the three-month period ended
March 31, 2002 which did not recur in fiscal 2003. Sales, marketing and services
to licenses expenses represented 16% of revenues for the three-month period
ended March 31, 2003 and 18% for the comparable 2002 quarter.

Net income decreased to $44,549 for the three-month period ended March 31,
2003 from $229,504 for the comparable 2002 quarter. As the Company increases the
number of its licensees and introduces new products it is anticipated that
profitability will improve. The income tax provision for the three-month period
ended March 31, 2003 decreased to $29,698 from $153,002 for the comparable 2002
quarter.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2003, the Company had cash and cash equivalents of $703,509
compared with $938,705 at December 31, 2002.

At March 31, 2003, the Company had working capital of $1,245,709 compared
with $1,262,838 at December 31, 2002. There was a decrease in income taxes
recoverable following the receipt of refunds with respect to the Company's 2002
and 2001 taxation years from the Internal Revenue Service in the amount of
$118,878 in addition to the U.S. income tax provision for the three-month period
ended March 31, 2003 of approximately $3,617. Trade accounts receivable
increased by $201,532 between December 31, 2002 and March 31, 2003. Of this
increase, approximately $75,000 reflects the increase in current accounts
receivable from increases in revenue and approximately $125,000 reflects a
deterioration in the ageing of accounts receivable. This deterioration relates
to a number of certain specific accounts. Management is pursuing payment in all
cases and does not believe that there is any need to increase the allowance for
doubtful accounts for any of these specific accounts. At March 31, 2003, there
were three customers which represented in excess of 10% of net trade accounts
receivable at 29%, 12% and 11%, respectively. At March 31, 2002, these customers
represented the following percentages of net trade accounts receivable,
respectively, 5%, 2% and 57%. If the Company lost any of these customers or any
of them became insolvent and could not pay the balances owed to the Company it
would have a material negative impact on the financial condition and results of
operations of the Company.

As discussed above, the Company deferred $55,791 of software development
costs during three-month period ended March 31, 2003.



At March 31, 2003, total assets decreased to $1,740,878 from $1,777,409 at
December 31, 2002.

At March 31, 2003, total liabilities decreased to $303,027 from $393,592 at
December 31, 2002. The decrease primarily represent the settlement during the
quarter of remaining obligations as at December 31, 2002 on the Company's
restructuring reserve and the Company's legal settlement reserve offset by the
increase in the deferred income tax liability. The Company anticipates that it
will continue to be able to deduct software development costs currently for
income tax return purposes. Accordingly, the ability to defer the costs of
software development expenses as at March 31, 2003 has resulted in the
recognition of a deferred income tax liability of $22,316.

Net cash used in operating activities was $120,853 for the three-month period
ended March 31, 2003 compared with net cash used in operating activities of
$11,759 for the comparable 2002 quarter. The use of cash in the quarter results
primarily from the increase in trade accounts receivable balances and the
settlement of certain reserves in place at December 31, 2002, offset by the
income tax refunds referred to above.

Cash of $58,552 was used to acquire fixed assets including $38,010 paid on
the purchase of a specific software tool to assist with the management of the
Company's software development projects. The balance represents ongoing
expenditures on enhancements to the Company's computer hardware and software. In
addition, as discussed above, the Company deferred $55,791 of software
development costs during the period.

On February 4, 2003, the Company issued 160,000 common shares
to directors for services rendered and to be rendered as part of the directors'
compensation package for 2003. The Company's common shares were trading at $0.21
per share on that day and, accordingly, a value of $33,600 has been ascribed to
this aspect of the directors' compensation package for fiscal 2003.



Management believes that the Company will have sufficient resources to
support its growth through continued revenue improvements, the collection of its
trade accounts receivable in the ordinary course of business and by continuing
to monitor its expenses in light of the cash resources of the Company.
Notwithstanding the above, there can be no assurance that management's plans can
be met.

There are presently no material commitments for capital expenditures. Due to
the nature of its business, the Company does not require significant outlays for
capital expenditures and, as a result, is not planning for any material capital
expenditures for the foreseeable future. However, the Company is committed to
providing its developers with the most current tools to assist in their efforts.
Accordingly, the Company will continue to enhance and upgrade its computer
hardware and software.

RISKS AND UNCERTAINTIES

The Company has identified that there is uncertainty in North America
relating to the lawfulness of Internet gaming. As such, notwithstanding the fact
that its licensees operate from countries where such business is lawful if
licensed, governments elsewhere, including the federal, state or any local
governments in the United States may take the position that the Company's
software and support systems are being played and or used unlawfully in their
jurisdiction. Accordingly, the Company may face criminal prosecution in any
number of jurisdictions for aiding and abetting others, such as its licensees,
in operating an illegal gaming operation. The Company has devoted only limited
resources to investigating the legal climate in which it operates. Many of the
issues facing the Company are the same as those facing all other e-commerce and
other Internet software providers and traditional software providers, as current
laws are not clear as to who, if anyone, has jurisdiction over Internet-based
commerce. A number of bills have been introduced in the United States House of
Representatives to expressly ban Internet gaming. To date all of these proposals
have been defeated. Although the Company intends to do business worldwide, any
enforceable ban on Internet gaming in the United States would have a material
adverse effect on the operations of the Company's licensees and, as a
consequence, could have a short-term and long-term impact on the scope and
growth of the Company's business including both its liquidity and its revenues
from operations.

IMPACT OF INFLATION

The Company believes that inflation has not had a material effect on its
business.

Item 3. - Controls and Procedures

Within 90 days before the filing date of this quarterly report (the
"Evaluation Date") the Company carried out an evaluation, under the supervision
and with the participation of the Company's management, including our Chief
Executive Officer and our Chief Financial Officer, of the effectiveness of the
design and operation of our "disclosure controls and procedures" (as defined in
Rule 13a-14(c) under the Securities Exchange act of 1934, as amended). 
Based upon that evaluation, our Chief Executive Officer and the Chief Financial
Officer concluded that, as of the Evaluation Date, the Company's disclosure
controls and procedures are effective to ensure that material information
relating to us and our consolidated subsidiaries is recorded, processed,
summarized and reported in a timely manner. Management will continue to review
this matter with particular emphasis on the documentation of the Company's
disclosure controls and procedures. There have been no changes in the system of
internal control or in other factors that could significantly affect such
controls since the Evaluation Date.

Part II - Other Information

Item 1. - N/A

Item 2. - Changes in Securities and Use of Proceeds

| | (a) | On February 4, 2003, the Company issued 160,000 shares of common stock
      to directors in compensation for services rendered as directors. The
      issuance of such shares was exempt from registration pursuant to Section
      4(2) as a transaction not involving a public offering.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Items 3. - 5. N/A

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

| | (a) | Exhibits.                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Exhibit No. 99.1 Certification of Chief
    Executive Officer Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.
| |     |                                                                                                                                                                   
| |     | Exhibit No. 99.2 Certification of Chief
    Financial Officer Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.
| |     |                                                                                                                                                                   
| | (b) | Reports on Form 8-K.                                                                                                                                              
| |     | None                                                                                                                                                              



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.

|DOT COM ENTERTAINMENT GROUP, INC. |                                                      
|--------------------------------- | -----------------------------------------------------
|(Registrant)                      |                                                      
|                                  |                                                      
|Date:  May 9, 2003                | /s/ DAVID OUTHWAITE                                  
|                                  | David
    Outhwaite
          Chief Executive Officer
|                                  |                                                      
|Date:  May 9, 2003                | /s/ DAVID CALLANDER                                  
|                                  | David
    Callander
          Chief Financial Officer

CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Outhwaite, certify that:



|1. | I have reviewed this
    quarterly report on Form 10-QSB for dot com Entertainment Group, Inc.;                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Based on my
    knowledge, this quarterly report does not contain any untrue statement of a
    material fact, or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such statements
    were made, not misleading with respect to the period covered by this
    quarterly report;                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | Based on my
    knowledge, the financial statements, and other financial information
    included in this quarterly report, fairly present in all material respects
    the financial condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this quarterly report;                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | The registrant's
    other certifying officer and I are responsible for establishing and
    maintaining disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant, and have:                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | The registrant's
    other certifying officer and I have disclosed, based on our most recent
    evaluation, to the registrant's auditors and the audit committee of
    registrant's board of directors:                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | The registrant's
    other certifying officer and I have indicated in this quarterly report
    whether or not there were significant changes in internal controls or in
    other factors that could significantly affect internal controls subsequent
    to the date of our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.



/s/ David Outhwaite
David Outhwaite
Chief Executive Officer
May 9, 2003

I, David Callander, certify that:



|1. | I have reviewed this quarterly
    report on Form 10-QSB of dot com Entertainment Group, Inc.;                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Based on my knowledge, this
    quarterly report does not contain any untrue statement of a material fact or
    omit to state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were made, not
    misleading with respect to the period covered by this quarterly report;                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | Based on my knowledge, the
    financial statements, and other financial information included in this
    quarterly report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the registrant as of, and
    for, the periods presented in this quarterly report;                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | The registrant's
    other certifying officer and I are responsible for establishing and
    maintaining disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant, and have:                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | The registrant's
    other certifying officer and I have disclosed, based on our most recent
    evaluation, to the registrant's auditors and the audit committee of
    registrant's board of directors:                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | The registrant's other
    certifying officer and I have indicated in this quarterly report whether or
    not there were significant changes in internal controls or in other factors
    that could significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.

/s/ David Callander
David Callander
Chief Financial Officer
May 9, 2003