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:     September 30, 2002

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)



150 Randall St.,
Oakville, Ontario, Canada L6J 1P4
(Address of principal executive offices) (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 November 7, 2002, the registrant had 10,737,500 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 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                                                                                                                                                                                           
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|ASSETS                                                                                                                                                                                                                
|                                                                                                                                                                                                                      
|Current assets:                                                                                                                                                                                                       
|Cash and cash
    equivalents                                                                                                                                                                                         
|Accounts receivable:                                                                                                                                                                                                  
|Trade, less allowance of $39,000 ($25,000 - 2001)                                                                                                                                                                     
|Other                                                                                                                                                                                                                 
|Income taxes
    recoverable                                                                                                                                                                                          
|Prepaid expenses and
    deposits                                                                                                                                                                                     
|Deferred tax asset                                                                                                                                                                                                    
|Total current assets                                                                                                                                                                                                  
|                                                                                                                                                                                                                      
|Fixed assets - net                                                                                                                                                                                                    
|                                                                                                                                                                                                                      
|Deferred tax asset                                                                                                                                                                                                    
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                  
|                                                                                                                                                                                                                      
|Current liabilities:                                                                                                                                                                                                  
|Accounts payable and
    accrued expenses                                                                                                                                                                             
|Accounts payable -
    officers                                                                                                                                                                                       
|Restructuring reserve                                                                                                                                                                                                 
|Legal settlement
    reserve                                                                                                                                                                                          
|Liability for share
    repurchase                                                                                                                                                                                    
|Income taxes payable                                                                                                                                                                                                  
|Deferred revenue                                                                                                                                                                                                      
|Total current liabilities                                                                                                                                                                                             
|                                                                                                                                                                                                                      
|Stockholders' equity                                                                                                                                                                                                  
|Common stock,
    $0.001 par value, 50,000,000 
        shares authorized, 10,912,500 shares
    issued and 
        10,762,500 outstanding (December 31,
    2001 - 10,787,500
        shares issued and outstanding)
|Additional paid in
    capital                                                                                                                                                                                        
|Retained earnings
    (accumulated deficit)                                                                                                                                                                           
|                                                                                                                                                                                                                      
|Treasury stock - 150,000 shares (nil - 2001) at cost                                                                                                                                                                  
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      



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



|dot com
    ENTERTAINMENT GROUP, INC.
    AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) |                     
|--------------------------------------------------------------------------------------------------------------- | --------------------
|                                                                                                                |                     
|                                                                                                                |                     
|                                                                                                                |                     
|                                                                                                                |                     
|Cash flows from operating activities:                                                                           |                     
|Net income (loss)                                                                                               |                     
|Adjustments to reconcile net income (loss) to
       net cash provided by operating activities:                 |                     
|Expenses satisfied via the issuance 
            of warrants                                                    | 1,750               
|Depreciation                                                                                                    |                     
|Loss of contractual settlement                                                                                  | -                   
|Restructuring provision                                                                                         | 124,644             
|Legal settlement provision                                                                                      | 96,222              
|Deferred income tax provision                                                                                   | 85,561              
|Changes in non-cash working capital items:                                                                      |                     
|Accounts receivable                                                                                             | 259,000             
|Prepaid expenses and deposits                                                                                   | (27,507             
|Accounts payable and accrued expenses                                                                           | 73,861              
|Accounts payable - officers                                                                                     | (300                
|Income tax recoverable/payable                                                                                  | 63,840              
|Deferred revenue                                                                                                | (74,170             
|Net cash provided by operating
    activities                                                                   | 153,815             
|                                                                                                                |                     
|Cash flows from investing
    activities:                                                                       |                     
|Purchases of fixed assets                                                                                       | (7,063              
|Net cash used in investing
    activities                                                                       | (7,063              
|                                                                                                                |                     
|Cash flow from financing
    activities:                                                                        |                     
|Proceeds from issuance of common stock                                                                          | -                   
|Repurchase of common stock                                                                                      | (19,504             
|Net cash provided by (used in)
    financing activities                                                         | (19,504             
|                                                                                                                |                     
|Net increase in cash and cash
    equivalents                                                                   | 127,248             
|                                                                                                                |                     
|Cash and cash equivalents,
    beginning of period                                                              | 1,073,207           
|Cash and cash equivalents, end
    of period                                                                    | $          1,200,455
|                                                                                                                |                     
|Supplemental cash flow
    activities                                                                           |                     
|Income taxes paid                                                                                               |                     
|                                                                                                                |                     
|Interest paid                                                                                                   |                     
|                                                                                                                |                     

DOT COM ENTERTAINMENT GROUP, INC.



NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2002



NOTE 1. - BASIS OF PRESENTATION



The accompanying unaudited consolidated 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 of
America 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 of
America 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 nine-month
period ended September 30, 2002 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2002. For further
information, refer to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2001, which includes audited consolidated financial
statements and footnotes as of and for the years ended December 31, 2001 and
2000.



NOTE 2. - STOCK OPTIONS



During the nine-month period ended September 30, 2002, the
Company granted 820,000 options to directors and employees of the Company to
purchase common stock of the Company at exercise prices ranging from $0.46 to
$1.08 per share. These options will be accounted for under APB 25. Accordingly,
no compensation expense has been recognized in the statement of income (loss),
since the option price is greater or equal to the market value of the Company's
common stock at the measurement date. During the three-month period ended June
30, 2002, 125,000 employee stock options were exercised for proceeds of $93,751.
During the three-month period ended September 30, 2002 and the nine-month period
ended September 30, 2002, the number of employee and director stock options
which were forfeited was 655,000 and 810,000, respectively.



NOTE 3. - 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. For the three-month period ended September 30, 2002
and for the nine-month period ended September 30, 2002, all outstanding stock
options and warrants have not been considered common stock equivalents because
their assumed exercise would be anti-dilutive for those periods. At September
30, 2002, there were 3,755,000 stock options and warrants outstanding with
exercise prices ranging from $0.46 to $4.00. For the three-month period
September 30, 2001 and the nine-month period ended September 30, 2001, the
diluted weighted average common shares outstanding of 12,117,211 and 11,731,075,
respectively, included the assumed exercise of 2,060,000 stock options with
exercise prices ranging from $0.75 to $2.03 per share. These amounts were
determined using the treasury stock method.



NOTE 4. - LOSS ON CONTRACTUAL SETTLEMENT



During fiscal 2001, the Company signed a new license
agreement with its principal customer which provided for a base royalty of
$645,000 for fiscal 2001 together with a reduction in the royalty rate for the
term of the new license agreement. This new license agreement had a term through
2011. During the three-month period ended March 31, 2002, the Company entered
into an agreement with this customer whereby certain amounts owed under the new
license agreement would be paid pursuant to a deferred payment arrangement with
all amounts owed paid by September 30, 2002. The customer did not conform to
this deferred payment arrangement. On June 28, 2002, the Company entered into an
interim agreement with this customer which established the principles for
amending the license agreement entered into in 2001. Under the terms of this
interim agreement, aggregate accounts receivable owed as at May 31, 2002 in the
amount of $345,207 were not collected. This item is described as loss on
contractual settlement in the statement of income (loss). In addition, the
royalty rate on this customer's net sales has been further reduced commencing
June 1, 2002. Under this interim agreement, amounts aggregating to $184,405,
which were included in accounts receivable as at June 30, 2002, were required to
be paid and these payments were received on July 4, 2002. The remaining accounts
receivable under the interim agreement in the amount of $227,000 was scheduled
for payment by September 30, 2002. Of this latter amount, $80,000 was received
prior to September 30, 2002 and $147,000 was received on October 16, 2002. On
September 30, 2002, the Company completed the transfer of certain trademarks and
domain names to this customer and, as a consequence, has recognized revenue of
$50,000 which is included in other income. This amount is included in the
$147,000 cash receipt referred to above.



For the three-month period ended September 30, 2002 and the
nine-month period ended September 30, 2002, this customer represented 30% and
43% of the Company's revenue, respectively (65% and 71% for the comparable
periods in fiscal 2001). This customer represented 37% of the accounts
receivable balance as at September 30, 2002 and 77% as at December 31, 2001.



NOTE 5. - DEFERRED TAXES



At June 30, 2002, the Company had a recorded deferred tax
asset in the amount of $122,000 which represented the anticipated future income
tax deduction in the U.S. for non-qualified stock option expense related to
stock options issued in 1999. The tax deduction would be available if and when
the stock options were exercised. These stock options expire in February 2004
and are all-exercisable at $3.00 per share. In addition, the Company had also
reduced income taxes payable in Canada by approximately $138,000 with respect to
this item. Following an assessment of all the available evidence as at September
30, 2002, including such factors as the Company's internal forecasts, the
volatility in the Company's marketplaces, the Company's prevailing share price
and the general stock market opportunities for micro-cap companies, management
has determined that it is now more likely than not that the stock options will
not be exercised and, accordingly, a valuation allowance against the deferred
tax asset in the amount of $122,000 has been established as at September 30,
2002 and the previously recorded income tax deduction has been reversed.
Management will continue to monitor this matter quarterly and assess whether any
adjustment to the valuation reserve is appropriate.



NOTE 6. - SHARE REPURCHASE



On August 13, 2002, the Company announced a
share-repurchase program under which up to $500,000 may be spent to repurchase
up to 1 million shares of the Company's common stock. This repurchase program is
available until August 8, 2003. To September 30, 2002, 150,000 shares of common
stock have been repurchased for consideration of $47,954, including transaction
fees. These shares are categorized as treasury stock in the consolidated balance
sheets of the Company and are recorded at cost. The liability for the last
tranche of shares repurchased on September 27, 2002 in the amount of $28,450,
was settled by the Company on October 1, 2002 and accordingly, was accrued for
at September 30, 2002 and is not reflected as a cash payment during the
three-month period ended September 30, 2002. On November 4, 2002, a further
25,000 shares were repurchased for consideration of $7,250, including
transaction fees.



NOTE 7. - RESTRUCTURING PROVISION



During the three-month period ended September 30, 2002,
management undertook a review of the Company's scope of service and determined
that the Company would curtail e-digital and systems consulting service
activities to reflect present marketplace opportunities. The restructuring
provision recorded during the three-month period ended September 30, 2002
represents severance costs, including benefit costs, for seven individuals
involved in these activities all of whom left the Company's employment by
September 30, 2002.



NOTE 8. - CONTINGENT LIABILITY



On January 15, 2002, the Company commenced a legal action
against a third party for damages in the amount of $10,000,000 (Canadian) and
punitive damages in the amount of $500,000 (Canadian), alleging unauthorized use
of the Company's software. On February 19, 2002, the third party filed
counterclaim against the Company for damages in the amount of $10,000,000
(Canadian) and exemplary damages in the amount of $5,000,000 (Canadian).
Discussions between the parties have occurred and are ongoing with respect to
settlement of this matter. Management has recorded a provision of approximately
$96,000. Should the parties be unable to reach a settlement, the Company intends
to vigorously pursue its claim and defend the counterclaim.



NOTE 9. - ACCOUNTS RECEIVABLE



Statement of Position 01-6 "Accounting by Certain Entities
(Including Entities with Trade Receivables) That Lend to of Finance the
Activities of Others" requires certain disclosures with respect to the Company's
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.
It is not generally the practice of the Company to charge interest on delinquent
accounts receivable. If interest is charged on delinquent accounts receivable,
it would only be recognized in income when it is collected.



NOTE 10. - CASH AND CASH EQUIVALENTS

The Company's cash and cash equivalents are on deposit with two financial
institutions. The amounts deposited are substantially in excess of the amounts
that would be covered by deposit insurance should such insurance coverage become
required. Although cash accounts exceed insured deposit amounts, management does
not anticipate non-performance by the financial institutions.



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.

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 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. e-digital services include the production and maintenance of websites.
As discussed further below, the Company has curtailed its activities in this
latter area.

The following tables set forth selected information from the statements of
operations for the three-month and nine-month periods ended September 30, 2002
and 2001 and the balance sheets as at September 30, 2002 and December 31, 2001.

Selected Statement of Income (Loss) Information

|                                   |           | Three-Months Ended
    September 30, |              | Nine-Months Ended
    September 30,
|---------------------------------- | --------- | ------------------------------------ | ------------ | -----------------------------------
|                                   |           | 2002                                 |              | 2001                               
|                                   |           |                                      |              |                                    
|Revenues                           |           | $      716,798                       |              | $   1,103,513                      
|Operating expenses                 | 1,032,105 |                                      | 722,972      |                                    
|Net income (loss)                  | (460,557  | )                                    | 228,333      |                                    
|                                   |           |                                      |              |                                    
|Selected Balance Sheet Information |           |                                      |              |                                    
|                                   |           |                                      |              |                                    
|                                   |           |                                      |              | September 30,2002                  
|                                   |           |                                      |              |                                    
|Current assets                     |           |                                      | $  1,965,945 |                                    
|Current liabilities                |           |                                      | 600,850      |                                    
|Stockholders' equity               |           |                                      | 1,467,649    |                                    

Review of the three-month period ended September 30, 2002 compared with the
three-month period ended September 30, 2001

Revenues decreased to $716,798 for the three-month ended September 30, 2002
from $1,103,513 for the comparable 2001 quarter. Royalty revenue decreased to
$597,877 for the three-month period ended September 30, 2002 from $672,355 for
the comparable 2001 quarter. The decrease reflects the full impact for the
quarter of the royalty rate adjustments that were announced by the Company in
the second quarter of fiscal 2002. As previously announced, the royalty rate for
the Company's principal customer was reduced effective June 1, 2002 and the
royalty rates for a number of other licenses were reduced effective July 1,
2002. The objective of these royalty rate amendments was the standardization of
royalty rates to market rates across the Company's customers. The aggregate
impact of these amendments to the royalty structure resulted in royalty revenue
decreasing by approximately $405,000 for the three-month period ended September
30, 2002 compared to the comparable 2001 quarter. A substantial offset to this
reduction was the new royalty revenue generated by the increase in the number of
the Company's licensees and from the overall increase in the activity level of
licensees.

Installation fees, representing fees recognized on the delivery of the
Company's software to licensees, decreased to $4,771 during the three-month
period ended September 30, 2002 from $285,225 for the comparable 2001 quarter.
Although there was one new installation during the quarter, that installation
fee could not be recognized under the Company's revenue recognition practices.
The Company only recognizes installation fees to the extent that the cash
collection is considered assured. Accordingly, the installation fees recognized
during the three-month period ended September 30, 2002 represented amounts that
could not be recognized in earlier periods under the Company's revenue
recognition practices.

e-digital and support services revenue decreased to $64,150 for the
three-month period ended September 30, 2002 from $145,933 in the comparable 2001
quarter. e-digital and support service revenue will likely decrease further in
the future as a result of the restructuring actions discussed below. Other
revenue of $50,000 for the three-month period ended September 30, 2002
represented the transfer on September 30, 2002, of certain trademarks and domain
names to the Company's principal customer.

During the three-month period ended September 30, 2002, 30% (65% - 2001) of
the Company's revenue was provided by its principal customer. This customer also
represents 37% of the trade accounts receivable at September 30, 2002 (77% at
December 31, 2001). If the Company lost this customer, or it 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.

Total expenses increased to $1,032,105 for the three-month period ended
September 30, 2002 from $722,972 for the comparable 2001 quarter. The increase
primarily relates to the restructuring provision and legal settlement provision,
discussed further below, and the higher level of activity at the Company which
includes an increase in the average staffing complement of approximately eight
employees for the three-month period ended September 30, 2002 compared to the
comparable 2001 quarter.

Sales, marketing and services to licensees expenses increased marginally to
$177,297 for the three-month period ended September 30, 2002 from $175,334 for
the comparable quarter in 2001. Sales, marketing and services to licensees
expenses represented 25% of revenue for the three-month period ended September
30, 2002 compared to 16% for the comparable 2001 quarter.

Research, software development and support services expenses increased to
$343,246 for the three-month period ended September 30, 2002 from $273,601 for
the comparable 2001 quarter. The increase in expenses results from the hiring of
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. Research, software development and support services expenses
represented 48% of revenue for the three-month period ended September 30, 2002
compared to 25% for the comparable 2001 quarter.

General and administrative expenses increased to $289,659 for the three-month
period ended September 30, 2002 from $274,037 for the comparable quarter in
2001. The increase primarily results from increased compensation and benefit
costs offset by decreased professional fees. General and administrative expenses
represented 40% of revenue for the three-month period ended September 30, 2002
compared to 25% for the comparable 2001 quarter.

During the three-month period ended September 30, 2002, the
Company recorded a restructuring provision of $125,681. During the three-month
period ended September 30, 2002, management undertook a review of the Company's
scope of service and determined that the Company would curtail e-digital and
systems consulting service activities to reflect present marketplace
opportunities. While the Company will still offer these services, they will no
longer be actively marketed. The restructuring provision recorded during the
three-month period ended September 30, 2002, represents the severance costs,
including benefit costs, for the seven individuals involved in these activities
all of whom left the Company's employment by September 30, 2002.

In addition, during the three-month period ended September
30, 2002, the Company recorded a legal settlement provision of $96,222. On
January 15, 2002, the Company commenced a legal action against a third party for
damages in the amount of $10,000,000 (Canadian) and punitive damages in the
amount of $500,000 (Canadian), alleging unauthorized use of the Company's
software. On February 19, 2002, the third party filed counterclaim against the
Company for damages in the amount of $10,000,000 (Canadian) and exemplary
damages in the amount of $5,000,000 (Canadian). Discussions between the parties
have occurred and are ongoing with respect to settlement of this matter.
Management has recorded a provision of approximately $96,000. Should the parties
be unable to reach a settlement, the Company intends to vigorously pursue its
claim and defend the counterclaim.



The income tax provision recorded in the three-month period
ended September 30, 2002 was $145,250 compared to $152,208 recorded in the
comparable 2001 quarter. The deferred provision recorded in the three-month
period ended September 30, 2002 was $85,561 compared to a deferred tax provision
of $37,000 in the comparable 2001 quarter. At June 30, 2002, the Company had a
recorded deferred tax asset in the amount of $122,000 which represented the
anticipated tax deduction in the U.S. for non-qualified stock option expense
related to stock options issued in 1999. The tax deduction would be available if
and when the stock options were exercised. These stock options expire in
February 2004 and are all-exercisable at $3.00 per share. In addition, the
Company had also reduced income taxes payable in Canada by approximately
$138,000 with respect to this item. Following an assessment of all the available
evidence as at September 30, 2002, including such factors as the Company's
internal forecasts, the volatility in the Company's marketplaces, the Company's
prevailing share price and the general stock market opportunities for micro-cap
companies, management has determined that it is now more likely than not that
the stock options will not be exercised and, accordingly, the previously
recorded income tax deduction has been reversed and a valuation allowance
against the deferred tax asset in the amount of $122,000 has been established as
at September 30, 2002. Management will continue to monitor this matter quarterly
and assess whether any adjustment to the valuation reserve is appropriate.



The net loss for the three-month period ended September 30,
2002 was $460,557 compared to net income of $228,333 for the comparable 2001
quarter.



Review of the nine-month period ended September 30, 2002 compared with the
nine-month period ended September 30, 2001

Revenues increased to $2,780,122 for the nine-month period ended September
30, 2002 from $2,742,215 for the comparable period in 2001. Royalty revenue
increased to $1,945,615 for the nine-month period ended September 30, 2002 from
$1,920,157 for the comparable period in 2001. As discussed above, during the
six-month period ended June 30, 2002, the Company had reduced the royalty rate
for its principal customer and during the three-month period ended September 30,
2002, the Company has reduced the royalty rates for a number of other licensees.
The objective of the royalty rate amendments was the standardization of royalty
rates to market rates across the Company's customers. The aggregate impact of
these amendments to the royalty structure, resulted in royalty revenue
decreasing by approximately $577,000 for the nine-month period ended September
30, 2002 compared to the comparable 2001 period. A substantial offset to this
reduction was the new royalty revenue generated by the increase in the number of
the Company's licensees and from the overall increase in the activity level of
licensees.

Installation fees, representing fees recognized on the delivery of the
Company's software to licensees, decreased to $495,767 during the nine-month
period ended September 30, 2002 from $520,842 for the comparable 2001 period.
These installation fees represented the installation of the Company's software
to eight licensee sites during the nine-month period ended September 30, 2002.
Seven of these sites generated royalty revenue in the nine-month period ended
September 30, 2002. Although there was one new installation during the
three-month period ended September 30, 2002, that installation fee could not be
recognized under the Company's revenue recognition practices. The Company only
recognizes installation fees to the extent that the cash collection is
considered assured. e-digital and support services revenue decreased to $278,740
for the nine-month period ended September 30, 2002 compared with $301,206 for
the comparable 2001 period.

During the nine-month period ended September 30, 2002, 43% (71% - 2001) of
the Company's revenue was provided by its principal customer. If the Company
lost this customer or if it 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.

Total expenses increased to $3,024,117 for the nine-month period ended
September 30, 2002 from $1,933,767 for the comparable period in 2001. The
increase primarily relates to the restructuring provision and legal settlement
provision, discussed further above, and the higher level of activity at the
Company which including an increase in the average staffing complement of 15 for
the nine-month period ended September 30, 2002 compared to the comparable period
in 2001. At September 30, 2002, the Company had 34 full-time employees and
consultants compared to 38 at September 30, 2001.

Sales, marketing and services to licensees expenses increased to $599,224 for
the nine-month period ended September 30, 2002 from $504,579 for the comparable
period in 2001. The increase represented the additional costs of the e-digital
division the operations of which are being curtailed as discussed above. Sales,
marketing and services to licensees expenses represented 22% of revenue for the
nine-month period ended September 30, 2002 compared to 18% for the comparable
2001 period.

Research, software development and support services expenses increased to
$1,087,753 for the nine-month period ended September 30, 2002 from $673,985 for
the comparable period in 2001. The increase in development expenses results from
the hiring of 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. Research, software development and support
services also includes an amount of $22,500 representing the remaining marginal
cost from a one-time non-recurring buy-out of an existing management contract
due to expire in December 2002. Research, software development and support
services expenses represented 39% of revenue for the nine-month period ended
September 30, 2002 compared to 25% for the comparable 2001 period.

General and administrative expense increased to $770,030 for the nine-month
period ended September 30, 2002 from $755,203 for the comparable period in 2001.
The increase primarily results from an increase in depreciation expense,
accommodation costs and compensation and benefit costs offset by a decrease in
professional and legal fees. General and administrative expenses represented 28%
of revenue for both the nine-month period ended September 30, 2002 and September
30, 2001.

Loss on contractual settlement in the nine-month period ended
September 30, 2002 was $345,207. During fiscal 2001, the Company signed a new
license agreement with its principal customer which provided for a base royalty
of $645,000 for fiscal 2001 together with a reduction in the royalty rate for
the term of the new license agreement. This new license agreement had a term
through 2011. During the three-month period ended March 31, 2002, the Company
entered into an agreement with this customer whereby certain amounts owed under
the new license agreement would be paid pursuant to a deferred payment
arrangement with all amounts owed paid by September 30, 2002. The customer did
not conform to this deferred payment arrangement. On June 28, 2002, the Company
entered into an interim agreement with this customer which established the
principles for amending the license agreement entered into in 2001. Under the
terms of this interim agreement, aggregate accounts receivable owed as at May
31, 2002 in the amount of $345,207 were not collected. This item is described as
loss on contractual settlement in the statement of income (loss). In addition,
the royalty rate on this customer's net sales has been further reduced
commencing June 1, 2002. Under this interim agreement, amounts aggregating to
$184,405, which were included in accounts receivable as at June 30, 2002, were
required to be paid and these payments were received on July 4, 2002. The
remaining accounts receivable under the interim agreement in the amount of
$227,000 was scheduled for payment by September 30, 2002. Of this latter amount,
$80,000 was received prior to September 30, 2002 and $147,000 was received on
October 16, 2002. On September 30, 2002, the Company completed the transfer of
certain trademarks and domain names to this customer and, as a consequence, has
recognized revenue of $50,000 which is included in other income. This amount is
included in the $147,000 cash receipt referred to above.



As discussed above, the Company recorded two provisions in
the nine-month period ended September 30, 2002. A restructuring provision was
recorded in the amount of $125,681 and a legal settlement provision was recorded
in the amount of $96,222.



The income tax provision recorded in the nine-month period
ended September 30, 2002 was $189,919 compared to $323,379 for the comparable
period in 2001. The deferred provision recorded in the nine-month period ended
September 30, 2002 was $85,561 compared to a deferred tax provision of $138,000
in the comparable 2001 period. At June 30, 2002, the Company had a recorded
deferred tax asset in the amount of $122,000 which represented the anticipated
tax deduction in the U.S. for non-qualified stock option expense related to
stock options issued in 1999. The tax deduction would be available if and when
the stock options were exercised. These stock options expire in February 2004
and are all-exercisable at $3.00 per share. In addition, the Company had also
reduced income taxes payable in Canada by approximately $138,000 with respect to
this item. Following an assessment of all the available evidence as at September
30, 2002, including such factors as the Company's internal forecasts, the
volatility in the Company's marketplaces, the Company's prevailing share price
and the general stock market opportunities for micro-cap companies, management
has determined that it is now more likely than not that the stock options will
not be exercised and, accordingly, the previously recorded income tax deduction
has been reversed and a valuation allowance against the deferred tax asset in
the amount of $122,000 has been established as at September 30, 2002.



The net loss of $433,914 for the nine-month period ended
September 30, 2002 compares to net income of $485,069 for the comparable period
in 2001.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2002, the Company had cash and cash equivalents of
$1,200,455 as compared with $965,041 at December 31, 2001.

At September 30, 2002, the Company had working capital of $1,365,095 as
compared with $1,607,301 at December 31, 2001. 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. Within working capital, accounts receivable decreased
to $542,635 at September 30, 2002 from $1,306,931 as at December 31, 2001. The
decrease reflects the impact of the cash collections contemplated under the
interim agreement with the Company's principal customer notwithstanding that the
receipt of $147,000, included in accounts receivable and which was anticipated
to be received on September 30, 2002, was not received until October 16, 2002.
During the nine-month period ended September 30, 2002, the Company made
installments of $529,503 on account of its 2001 and 2002 taxation years. As a
result of the loss recorded for the nine-month period ended September 30, 2002,
the installments for the 2002 taxation year are in excess of requirements and
accordingly, at September 30, 2002, the Company has a net income taxes
recoverable of $101,055.

At September 30, 2002, total assets decreased to $2,068,499 from $2,534,628
at December 31, 2001. The decrease is due primarily due to the operating loss
for the nine-month period ended September 30, 2002.

Total liabilities decreased to $600,850 at September 30, 2001 from $700,213
at December 31, 2001. The decrease represents the remittance of taxation
obligations and the decrease in deferred revenue offset by the reserves for the
restructuring provision and legal settlement provision referred to above.

Net cash provided by operating activities was $191,052 for the nine-month
period ended September 30, 2002. This compares to cash provided by operating
activities of $298,865 for the same period in the prior year. The reduction in
cash generated from operations results from the net loss that was earned in the
current year offset by the net impact of the collection of accounts receivable,
the impact of recording non-cash provisions during the period and the
remittances to the taxation authorities of required installments.

During the nine-month period ended September 30, 2002, 125,000 employee stock
options were exercised for proceeds of $93,751. During the nine-month period
ended September 30, 2001, 57,500 employee stock options were exercised for
proceeds of $43,125.

On August 13, 2002, the Company announced a share-repurchase program under
which up to $500,000 may be spent to repurchase up to 1 million shares of the
Company's common stock. This repurchase program is available until August 8,
2003. To September 30, 2002, 150,000 shares of common stock have been
repurchased for consideration of $47,954. These shares are categorized as
treasury stock in the consolidated balance sheets of the Company and are
recorded at cost. The liability for the last tranche of shares repurchased on
September 27, 2002, in the amount of $28,450, was settled by the Company on
October 1, 2002 and accordingly, was accrued for at September 30, 2002 and is
not reflected as a cash payment during the three-month period ended September
30, 2002. On November 4, 2002, a further 25,000 shares were repurchased for
consideration of $7,250, including transaction fees.

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 and / or passed in the United
States House of Representatives to expressly ban Internet gaming and / or
curtail the use of credit cards and / or curtail other methods of electronic
commerce for the processing of internet gaming transactions. 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. Subsequent to the tragic events of September 11, 2001, the United
States House of Representatives has introduced sweeping anti-terrorist
legislation, which in its early stages also included provisions regarding money
laundering and Internet gaming. Although the provisions relating to Internet
gaming were removed from the legislation, should the legislation be
re-introduced and pass, it will have a significant negative impact on the
ability of the Company to generate revenues.

Item 4 - Controls and Procedures

Within 90 days before the filing date of this quarterly report (the
"Evaluation Date") we 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 the
Securities Exchange Act of 1934 Rules 13a-14(c)).  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 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:  November 7, 2002 |  | /s/ SCOTT WHITE
    Scott White
    President and Chief Executive Officer
|----------------------- |  | -------------------------------------------------------------------------
|                        |  |                                                                          
|Date:  November 7, 2002 |  | /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, Scott F. White, 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 registrants 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/ Scott F. White
Scott F. White
Chief Executive Officer
November 7, 2002

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 registrants 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
November 7, 2002