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:    June 30, 2001

Or

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

For the transition period from                     to

Commission file number: 026597

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

Florida
(State or other jurisdiction of
incorporation or organization)

58-2466312
(I.R.S. Employer Identification Number)

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

L6J 1P4
(zip code)

(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 August 13, 2001, the registrant had 10,782,500 shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (check one);

Yes     NoX

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 OR PLAN OF OPERATION, including in the section entitled
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

`(Unaudited)
                                                    June 30,       December 31,
                                                      2001             2000
                                                    ---------       -----------
        ASSETS

Current assets:
     Cash and cash equivalents                    $  803,942        $  655,409
     Accounts receivable:
         Trade                                       676,721           464,061
         Other                                        36,377            16,274
     Prepaid expenses and other deposits              10,780                 -
                                                  ----------        ----------
              Total current assets                 1,527,820         1,135,744

Fixed assets - net                                    68,605            46,418
Deferred tax asset                                   159,000           260,000
                                                  ----------        ----------
                                                  $1,755,425        $1,442,162
                                                  ==========        ==========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses        $  100,779        $  105,521
     Accounts payable - officers                           -            75,805
     Deferred revenue                                205,550           164,167
     Income taxes payable                             73,703            15,532
                                                  ----------        ----------
              Total current liabilities              380,032           361,025

Stockholders' equity:
     Common stock, $0.001 par value, 50,000,000
     shares authorized, 10,780,000 shares issued
     and outstanding (10,730,000 - 2000)              10,780            10,730
     Additional paid in capital                    1,449,270         1,411,820
     Accumulated deficit                             (84,657)         (341,413)
                                                  ----------        ----------
                                                   1,375,393         1,081,137
                                                  ----------        ----------
                                                  $1,755,425        $1,442,162
                                                  ==========        ==========`

(see accompanying notes)

dot com ENTERTAINMENT  GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

`Three Months Ended June 30,     Six Months Ended June 30,
                                                2001              2000          2001              2000
                                                ----              ----          ----              ----
Revenues:
     Royalties                               $ 687,249      $   340,812      $1,247,802      $   562,722
     Installation fees                          76,392                -         235,617           17,000
     Support and maintenance                    70,225           95,500         155,283          162,500
                                              --------       ----------        --------       ----------
                                               833,866          436,312       1,638,702          742,222
Expenses:
     Marketing                                 182,873           38,421         329,245           72,300
     Research, software development and
        support services                       207,668          139,901         400,364          272,172
     General and administrative                254,984          190,270         481,166          288,635
                                            ----------       ----------      ----------       ----------
                                               645,525          368,592       1,210,775          633,107
                                            ----------       ----------      ----------       ----------
Net income before income tax expense           188,341           67,720         427,927          109,115
Income tax expense                              75,337           26,646         171,171           43,646
                                            ----------       ----------      ----------       ----------
Net income                                  $  113,004      $    41,074      $  256,756      $    65,469
                                            ==========       ==========      ==========       ==========
Net income per share:

     Basic                                  $     0.01      $      0.00      $     0.02      $      0.01
                                            ==========       ==========      ==========       ==========
     Diluted                                $     0.01      $      0.00      $     0.02      $      0.01
                                            ==========       ==========      ==========       ==========
Weighted average number of common
  shares outstanding:

     Basic                                  10,755,000       10,730,000      10,742,500       10,691,667
                                            ==========       ==========      ==========       ==========
     Diluted                                11,808,952       10,730,000      11,479,557       10,691,667
                                            ==========       ==========      ==========       ==========`

(see accompanying notes)

dot com ENTERTAINMENT  GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

`Three Months Ended June 30,   Six Months Ended June 30,
                                                      2001          2000            2001          2000
                                                      ----          ----            ----          ----
Cash flows from operating activities:

     Net income                                     $ 113,004    $  41,074        $ 256,756    $  65,469
     Adjustments to reconcile net income to
      net cash provided (used) by operating activities:
         Expenses satisfied via the issuance of
         common stock and stock options                     -            -                -       18,000
         Depreciation                                   5,573            -            9,163            -
         Deferred income tax expense                   44,500       26,646          101,000       43,646
         Changes in non-cash working capital items:
             Accounts receivable                     (119,800)     (56,837)        (232,763)    (126,095)
             Prepaid expenses and deposits              5,928            -          (10,780)           -
             Accounts payable and accrued expenses    (64,570)      (5,224)          (4,742)       2,554
             Accounts payable - officers              (66,000)           -          (75,805)           -
             Deferred revenue                          27,608            -           41,383            -
             Income taxes payable                      30,837            -           58,171            -
                                                     --------      -------         --------      -------
Net cash provided (used) by operating activities      (22,920)       5,659          142,383        3,574

Cash flows from investing activities:

     Purchases of fixed assets                        (28,611)           -          (31,350)           -
                                                     --------      -------         --------      -------
Net cash used in investing activities                 (28,611)           -          (31,350)           -

Cash flows from financing activities:

     Proceeds from issuance of common stock            37,500            -           37,500      455,000
                                                    ---------     --------        ---------     --------
         Net cash provided by financing activities     37,500            -           37,500      455,000
                                                    ---------     --------        ---------     --------

Net increase in cash and cash equivalents
  during the period                                   (14,031)       5,659          148,533      458,574

Cash and cash equivalents beginning of period         817,973      504,662          655,409       51,707
                                                    ---------     --------        ---------     --------
Cash and cash equivalents, end of period            $ 803,942     $510,281        $ 803,942    $ 510,261
                                                    =========     ========        =========     ========
Supplemental cash flow activities
      Income taxes paid                             $       -     $      -        $  12,000     $      -
                                                    =========     ========        =========     ========`

(see accompanying notes)

NOTES TO FINANCIAL STATEMENTS

NOTE 1. -  BASIS OF PRESENTATION

The accompanying unaudited financial statements of dot com Entertainment Group, Inc.
and Subsidiaries (the Company) have been prepared in accordance with
accounting principles generally accepted in the United States 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 United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six-month period ended June 30, 2001 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001. For further information, refer to the Companys Annual Report on Form
10-KSB for the year ended December 31, 2000, which includes audited financial
statements and footnotes as of and for the years ended December 31, 2000 and
1999.

NOTE 2. - PRONOUNCEMENTS ISSUED NOT YET ADOPTED

In July 2001, the Financial Accounting Standards Board issued two statements  Statement 141,
Business Combinations, and Statement 142, Goodwill and Other
Intangible Assets. The standards generally are required to be implemented by
the Company in its 2002 financial statements. The adoption of these standards
will not have a material impact on the Companys financial statements.

NOTE 3. - STOCK OPTIONS

During the quarter ended March 31, 2001, the Company granted 977,500 options to
directors and employees of the Company to purchase common stock of the Company
at an exercise price of $0.75, which will be accounted for under APB 25.
Accordingly, no compensation expense will be recognized in the statement of
operations, since the option price was greater or equal to the market value of
the Companys common stock at the time of grant.

NOTE 4. - EARNINGS PER SHARE

In  accordance  with  Statement of Financial  Accounting  Standards  No. 128,  "Earnings  Per Share," the
Company has reported basic earnings per share and diluted earnings per share. The diluted weighted average
common shares outstanding include the impact of the assumed exercise of
1,947,500 stock options with an exercise price of $0.75. The amount was
determined using the treasury stock method. All other securities, consisting of
1,620,000 stock options and 200,000 warrants with exercise prices ranging from
$2.50 to $4.00, are anti-dilutive and have not been included in the calculation.

NOTE 5.  RECLASSIFICATIONS

Certain amounts in the 2000 financial statements have been reclassified to conform with
the 2001 financial statement presentations.

Item 2. - Management's Discussion and Analysis or Plan of Operation

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.

The Company derives its revenues from several sources, including its assessment of installation fees and
royalties from the use of its software. Additionally, dot com generates revenue
by providing licensees with technical support, maintenance, software upgrades,
e-digital and systems consulting services.

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

The following tables set forth selected information from the statements of operations for the three and
six months ended June 30, 2001 and 2000 and the balance sheets as at June 30,
2001 and December 31, 2000.

Selected Statement of Operations Information

`Three Months Ended                Six Months Ended
                              June 30,                        June 30,
                        2001             2000           2001             2000
                       ----------------------          ----------------------

Revenues              $  833,866   $  436,312       $ 1,638,702     $ 742,222
Operating expenses       645,525      368,592         1,210,775       633,107
Net income               113,004       41,074           256,756        65,469`

Selected Balance Sheet Information

`June 30,                December 31,
                                       2001                     2000
                                       ----                     ----

Current assets                     $1,527,820               $ 1,135,744
Current liabilities                   380,032                   361,025
Stockholders' equity                1,375,393                 1,081,137`

Review of the three months ended June 30, 2001 compared with the three months ended June 30, 2000Revenues increased to $833,866 for the quarter ended June 30, 2001 from
$436,312 for the quarter ended June 30, 2000. The growth in revenues results
primarily from higher royalties and installation fees. The royalty revenue
increased to $687,249 for the 2001 quarter from $340,812 for the 2000 quarter
reflecting the increased number and activity of the Companys licensees.
Installation fees were $76,392 representing fees recognized on the delivery of
the Companys software to licensees during the quarter ended June 30, 2001.
Installation fees were nil for the similar period in 2000. Support and
maintenance revenue was $70,225 for the quarter ended June 30, 2001 resulting
from technical support, e-digital services and providing marketing and
promotional services to our licensees. In 2000, support and maintenance revenue
was $95,500. During the three months ended June 30, 2001, 74.1% (99.0% - 2000)
of the Companys revenue was provided by one customer. The loss of this
customer or its bankruptcy would have a material adverse impact on the
Companys financial condition and results of operations. This customer also
represents 80.2% of the trade accounts receivable at June 30, 2001 (94% at
December 31, 2000). If the customer became insolvent and could not pay the
balances owing to the Company, it would have a material adverse impact on the
financial condition and results of operations of the Company.

Operating expenses increased to $645,525 for the quarter ended June 30, 2001 as compared to
$368,592 for the same quarter in 2000. The increased operating expenses reflect
the significantly higher level of activity at the Company, including increased
staffing of approximately 25 employees over the prior year. Marketing expenses
were $182,873 for the second quarter of 2001 compared to $38,421 for the second
quarter in 2000. The increase reflects the Companys enhancement of its
e-digital division, Inferno Media, and the allocation of additional resources to
marketing, selling and front end product development to provide our licensees
with customization services. Development expenses grew to $207,668 for the three
months ended June 30, 2001 from $139,901 for the same quarter in 2000. The
increase in development expenses results from the hiring of software developers
to improve and diversify the Companys products and services. General and
administrative expenses increased to $254,984 for the quarter ended June 30,
2001 as compared to $190,270 for the similar period in the prior year. The
increase primarily results from the increased remuneration of its senior
management, the leasing of larger office space, professional fees, and the
incurrence of the related expenses associated with the higher level of activity
of the Company.

The Company had a net profit of $113,004 for the three months ended June 30, 2001 compared to $41,047
for the same quarter in 2000. As the Company increases the number of its
licensees and introduces new products it is anticipated that profitability will
continue to improve. There was a $75,337 tax provision recorded for the second
quarter of 2001 based on the profits for the period as compared to $26,646 in
the prior year period.

Review of the six months ended June 30, 2001 compared with the six months ended June 30, 2000Revenues increased to $1,638,702 for the six months ended June 30, 2001 as
compared to $742,222 for the six months ended June 30, 2000. The growth in
revenues results primarily from higher royalties and installation fees. The
royalty revenue increased to $1,247,802 for the 2001 quarter as compared to
$562,722 for the first half of 2000 reflecting the increased number and activity
of the Companys licensees. Installation fees were $235,617 representing
fees recognized on the delivery of the Companys software to licensees
during the six months ended June 30, 2001. Installation fees were $17,000 for
the similar period in 2000. Support and maintenance revenue was $155,283 for the
six months ended June 30, 2001 resulting from technical support, e-digital
services and providing marketing and promotional programs to our licensees. In
2000, support and maintenance revenue was $162,500. During the six months ended
June 30, 2001, 75.4% (99.0% - 2000) of the Companys revenue was provided
by one customer. The loss of this customer or its bankruptcy could have a
material adverse impact on the Companys financial condition and results of
operations.

Operating expenses increased to $1,210,775 for the six months ended June 30, 2001 as compared to
$633,107 for the same six months in 2000. The increased operating expenses
reflect the significantly higher level of activity at the Company, including
increased staffing of approximately 25 employees over the prior year. Marketing
expenses were $329,245 for the first half of 2001 compared to $72,300 for the
first half in 2000. The increase reflects the Companys enhancement of its
e-digital division, and the allocation of additional resources to marketing,
selling and front end product development to provide our licensees with
customization services. Development expenses grew to $400,364 for the six months
ended June 30, 2001 as compared to $272,172 for the same period in 2000. The
increase in development expenses results from the hiring of software developers
to improve and diversify the Companys products and services. General and
administrative expenses increased to $481,166 for the six months ended June 30,
2001 as compared to $288,635 for the similar period in the prior year. The
increase primarily results from the increased remuneration of its senior
management, the leasing of larger office space, professional fees, and the
incurrence of the related expenses associated with the higher level of activity
of the Company.

The Company had a net profit of $256,756 for the six months ended June 30, 2001 compared to $65,469
for the same period in 2000. As the Company increases the number of its
licensees and introduces new products it is anticipated that profitability will
continue to improve. There was a $171,171 tax provision recorded for the first
half of 2001 based on the profits for the period as compared to $43,646 in the
prior year period.

Subsequent to June 30, 2001 the Company has entered into three additional license agreements, one of which
is a play for fun agreement with the Hard Rock Hotel and Casino in Los Vegas,
Nevada.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2001, the Company had cash and cash equivalents of $803,942 as compared with $655,409 at
December 31, 2000.

At June 30, 2001, the Company had working capital of $1,147,788 as compared with $774,719 at December
31, 2000. The increase primarily reflects higher cash and cash equivalents
balances from cash derived from operating results. The Company intends to use
these funds to further develop its current products, create and develop new
products and to expand its sales and marketing efforts to increase the number of
licensees of its products. Also contributing to the improvement in working
capital is a higher balance of accounts receivable offset marginally by a higher
balance of current liabilities. The increase in accounts receivable reflects the
higher revenue activity of the Company as well as certain amounts due to the
Company for software installations made during 2001.

At June 30, 2001, total assets increased to $1,755,425 from $1,442,162 at December 31, 2000. The
increase is due primarily to the higher levels of cash and accounts receivable
as discussed above.

Total liabilities increased to $380,032 at June 30, 2001 from $361,025 at December 31, 2000. The increase is
partially related to the increase in deferred revenue resulting from the receipt
of deposits for installation fees from new licensees. The Companys revenue
recognition policy for installation fees requires the delivery and installation
of the Companys software and a determination that the collection of the
fee from the licensee is probable. The remainder of the increase relates to
higher taxes payable resulting from the profitability during the six months
ended June 30, 2001.

Net cash provided by operating activities was $142,383 for the six months ended June 30, 2001. This
compares to cash provided from operations of $3,574 for the same period in the
prior year. The improvement results primarily from the higher net income that
was earned in the current year.

During the second quarter of 2001 50,000 employee stock options were exercised for proceeds of $37,500.

The Company has a credit facility with The Toronto Dominion Bank. The credit facility has two portions, a
CDN $161,000 credit facility at bank prime plus 1⁄4 % and a U.S. $50,000
credit facility at the banks U.S. prime rate plus 1⁄4 %. Both credit
facilities are secured by cash deposits in money market funds and the Company
had not drawn on the facilities at June 30, 2001.

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, but there can be no assurance that
managements growth 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.

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. One of these bills was defeated in 2000 and has
not been introduced in 2001. 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 Companys business and both its
short-term and long-term liquidity and its results of operations.

IMPACT OF INFLATION

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

Part II - Other Information

Item 6 - Exhibits and Reports on Form 8-K



| | (a)  Exhibits.

      None.

(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)



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|August 13, 2001 | 





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|August 13, 2001 |