FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


[X]      Quarterly  report  pursuant  to section  13 or 15(d) of the  Securities
         Exchange Act of 1934 For the fiscal quarter ended August 31, 2000 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   0-8773
                       ----------

                                  CRESTED CORP.
--------------------------------------------------------------------------------
               (Exact Name of Company as Specified in its Charter)

                  Colorado                                      84-0608126
-------------------------------------------------       ------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

         877 North 8th West, Riverton, WY                         82501
-------------------------------------------------       ------------------------
(Address of principal executive offices)                       (Zip Code)

Company's telephone Number, including area code:              (307) 856-9271
                                                        ------------------------


                                      NONE
--------------------------------------------------------------------------------
      (Former name, address and fiscal year, if changed since last report)


         Indicate  by check mark  whether  the Company (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 Company
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. YES  X    NO
                                      ------    --------
         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

                Class                            Outstanding at October 12, 2000
--------------------------------------------     -------------------------------
        Common stock, $.001 par value                    10,381,664 Shares



<PAGE>

                                  CRESTED CORP.

                                      INDEX

<TABLE>
<S>             <C>                                                    <C>
                                                                       Page No.
PART I.         FINANCIAL INFORMATION

ITEM 1.         Financial Statements.

                Condensed Balance Sheets
                    August 31, 2000 and May 31, 2000.........................3-4

                Condensed Statements of Operations
                    Three Months Ended August 31, 2000 and 1999................5

                Condensed Statements of Cash Flows
                    Three Months Ended August 31, 2000 and 1999................6

                Notes to Condensed Financial Statements........................7

ITEM 2.         Management's Discussion and Analysis of
                Financial Condition and Results of Operations...............8-10

PART II.     OTHER INFORMATION

ITEM 1.         Legal Proceedings.............................................11

ITEM 6.         Exhibits and Reports on Form 8-K..............................12

                Signatures....................................................12


</TABLE>

                                        2

<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.      Financial Statements.

                                  CRESTED CORP.

                            Condensed Balance Sheets

                                     ASSETS
<TABLE>
<S>                                       <C>                   <C>

                                             August 31,               May 31,
                                               2000                    2000
                                          ---------------       ----------------
                                             (Unaudited)

CURRENT ASSETS:
    Cash and cash equivalents                     $2,600                 $3,000


INVESTMENTS IN AFFILIATES                       6,252,400             6,342,200

PROPERTIES AND EQUIPMENT                        1,354,400             1,354,400
    Less accumulated depreciation,
    depletion and amortization                 (1,205,900)           (1,205,900)
                                              ------------           -----------
                                                  148,500               148,500

OTHER ASSETS                                        2,000                 2,100
                                              ------------           -----------
                                               $6,405,500            $6,495,800
                                              ============           ===========

</TABLE>

            See notes to Condensed Consolidated Financial Statements.

                                        3

<PAGE>



                                  CRESTED CORP.

                            Condensed Balance Sheets

                      LIABILITIES AND SHAREHOLDERS' DEFICIT
<TABLE>
<S>                                             <C>                  <C>

                                              August 31,              May 31,
                                                2000                   2000
                                          ----------------       ---------------
                                             (Unaudited)

CURRENT LIABILITIES:
      Deferred GMMV purchase option               $2,000,000         $2,000,000
      Current portion of long-term debt to
         Affiliate                                 8,543,800          8,230,200
                                              --------------      --------------
TOTAL CURRENT LIABILITIES                         10,543,800         10,230,200

COMMITMENT TO FUND EQUITY INVESTEES                  215,600            215,600

RECLAMATION LIABILITY                                748,400            748,400

COMMITMENTS AND CONTINGENCIES

FORFEITABLE COMMON STOCK, $.001 par value
      65,000 shares issued, forfeitable until earned  43,900             43,900

SHAREHOLDERS' equity
      Preferred stock, $.001 par value;
         100,000 shares authorized;
         none issued or outstanding                     --                  --
      Common stock, $.001 par value;
         20,000,000 shares authorized;
         issued 10,316,664                            10,400             10,400
      Additional paid-in capital                   8,747,200          8,747,200
      Accumulated deficit                        (13,903,800)       (13,499,900)
                                              --------------      --------------
TOTAL SHAREHOLDERS' DEFICIT                       (5,146,200)        (4,742,300)
                                              --------------      --------------
                                                  $6,405,500          $6,495,800
                                              ==============      ==============

</TABLE>

            See notes to Condensed Consolidated Financial Statements.

                                        4

<PAGE>



                                  CRESTED CORP.

                       Condensed Statements of Operations
<TABLE>
<S>                                             <C>                     <C>

                                                      Three Months Ended
                                                           August 31,
                                            ------------------------------------
                                                  2000                   1999
                                                  ----                   ----
                                              (Unaudited)            (Unaudited)
REVENUES:
    Mineral revenue                              $16,700                $17,100
    Interest                                        --                      600
    Other                                           --                    5,000
                                             ------------           ------------
                                                  16,700                 22,700

COSTS AND EXPENSES:
    General and administrative                    79,700                 43,600
                                             ------------           ------------

                                                  79,900                 43,600
                                             ------------           ------------

INCOME (LOSS) BEFORE
EQUITY LOSS AND
    TAX PROVISION                                (63,000)               (20,900)

EQUITY IN LOSS OF AFFILIATES                    (340,900)              (470,500)
                                             ------------           ------------

(LOSS) GAIN BEFORE
    PROVISION FOR INCOME TAXES                  (403,900)              (491,400)

PROVISION FOR
    INCOME TAXES                                    --                     --
                                            -------------          -------------

NET (LOSS) GAIN                                 $(403,900)            $(491,400)
                                             ============           ============

NET (LOSS) GAIN PER SHARE,
    BASIC AND DILUTED                              $(0.04)               $(0.05)
                                             ============           ============

BASIC WEIGHTED AVERAGE
    SHARES OUTSTANDING                         10,316,664            10,349,664
                                             ============           ===========

DILUTED WEIGHTED AVERAGE
    SHARES OUTSTANDING                         10,381,664             10,349,664
                                             ============           ============


</TABLE>




            See notes to Condensed Consolidated Financial Statements.

                                        5

<PAGE>



                                  CRESTED CORP.

                       Condensed Statements of Cash Flows
<TABLE>
<S>                                                     <C>           <C>

                                                          Three Months Ended
                                                               August 31,
                                                     ---------------------------
                                                            2000         1999
                                                            ----         ----
                                                        (Unaudited)  (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                     $(403,900)    $(491,400)
  Adjustments to reconcile net (loss) income to net cash
      (used in) provided by operating activities:
         Equity in loss of affiliates                     340,900        470,500
         Non cash compensation                             73,900         41,100
         Decrease in other assets                             100            -
                                                       -----------     ---------

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES        11,000         20,200
                                                       -----------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions  from affiliate                             5,600          1,000
                                                       -----------     ---------
NET CASH (USED IN) PROVIDED BY  INVESTING ACTIVITIES        5,600          1,000
                                                       -----------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net activity on debt to affiliate                       (17,000)         1,500
                                                       ------------    ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       (17,000)         1,500
                                                       ------------    ---------

NET (DECREASE) INCREASE IN
  CASH AND CASH EQUIVALENT                                   (400)        22,700

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                                       3,000         45,000
                                                       ------------    ---------

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                            $2,600        $67,700
                                                       ============    =========

SUPPLEMENTAL DISCLOSURES:
  Interest paid                                            $  --         $   --
                                                       ============    =========

  Noncash investing and financing activities:

  Net noncash distribution from affiliate                 $84,200       $168,200
                                                       ============    =========

  Net noncash borrowings from affiliate                  $330,600       $211,300
                                                       ============    =========



</TABLE>


            See notes to Condensed Consolidated Financial Statements.

                                        6

<PAGE>



                                  CRESTED CORP.

                     Notes to Condensed Financial Statements


     1) The  Condensed  Balance  Sheet as of  August  31,  2000,  the  Condensed
Statements  of  Operations  and Cash Flows for the three months ended August 31,
2000 and 1999,  have been prepared by the Company  without audit.  The Condensed
Balance  Sheet at May 31,  2000,  has been  derived  from the audited  financial
statements  included in the  Company's  Annual Report on Form 10-K filed for the
year then  ended.  In the opinion of the  Company,  the  accompanying  financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals)  necessary to fairly present the financial position of the Company and
its affiliate as of August 31, 2000,  the results of  operations  and cash flows
for the three months ended August 31, 2000 and August 31, 1999.

     2) Certain  information  and  footnote  disclosures  normally  included  in
financial statements prepared in accordance with accounting principles generally
accepted in the United  States have been  condensed or omitted.  It is suggested
that these  financial  statements be read in conjunction  with the Company's May
31, 2000 Form 10-K.  The results of operations  for the periods ended August 31,
2000 and 1999 are not  necessarily  indicative of the operating  results for the
full year.

     3) Debt at August 31, 2000 and May 31,  2000,  consists of the balance on a
note payable to USE of $8,543,800 and $8,230,200, respectively.

     4) The reclamation  liability of $748,400 represents the Company's share of
the  liability at the Sheep  Mountain  Mines in the Crooks Gap Mining  District.
This  reclamation  work may be  performed  over  several  years  and will not be
commenced  until such time as all the uranium  mineralization  contained  in the
properties is produced or the properties are abandoned.  It is anticipated  that
neither of these events will occur for sometime into the future.

     5) Certain  reclassifications  have been made in the May 31, 2000 financial
statements to conform to the classifications used in August 31, 2000.

     6) The Company  adopted  EITF 00-01,  "Balance  Sheet and Income  Statement
Display  Under the Equity Method for  Investments  in Certain  Partnerships  and
Other  Unincorporated  Joint  Ventures,"  effective June 1, 2000.  This standard
requires  the  Company to account for its  investment  in USECC using the equity
method of  accounting.  The Company  previously  consolidated  its  proportional
ownership in the joint  venture  (50%) for  financial  reporting  purposes.  The
adoption of this  standard did not impact the net income  (loss) of the Company,
but did have a material effect on the financial position and the presentation of
the Company's financial statements.


                                        7

<PAGE>



ITEM 2   Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations.
         -------------

     The  following  is  Management's  Discussion  and  Analysis of  significant
factors  which have  affected the  Company's  liquidity,  capital  resources and
results of operations during the periods included in the accompanying  financial
statements. For a detailed explanation of the Company's Business Overview, it is
suggested that Management's  Discussion and Analysis of Financial  Condition and
Results  of  Operations  for  the  quarter  ended  August  31,  2000  be read in
conjunction with the Company's Form 10K for the year ended May 31, 2000.

Overview of Business

     The Company is engaged in the mineral development and extraction  business.
The Company has interests in a uranium mine and mill in Southern  Utah,  uranium
mines in  Central  Wyoming,  a gold  property  in  California,  coalbed  methane
properties  in Wyoming  and Montana in the Powder  River Basin and various  real
estate operations  including a motel operation near Lake Powell, Utah. All these
business are operated in  conjunction  with the Company's  parent,  U.S.  Energy
Corp. ("USE") through a joint venture between the two companies, the USECB Joint
Venture ("USECB").

     The Company adopted EITF 00-01, "Balance Sheet and Income Statement Display
Under the  Equity  Method for  Investments  in  Certain  Partnerships  and Other
Unincorporated  Joint Ventures,"  effective June 1, 2000. This standard requires
the Company to account for its  investment  in USECC using the equity  method of
accounting.  The Company previously  consolidated its proportional  ownership in
the joint venture (50%) for financial reporting  purposes.  The adoption of this
standard  did not impact the net income  (loss) of the  Company,  but did have a
material effect on the financial  position and the presentation of the Company's
financial statements.

Liquidity and Capital Resources

     The  Company's  working  capital  deficit  at May 31,  2000 of  $10,227,200
increased to a working  capital  deficit of $10,541,200 at August 31, 2000. This
increase of $314,000 in the working capital deficit was caused by increased debt
to USE of $313,600. USE continues to fund a significant portion of the Company's
obligations on the various ventures in which they operate jointly.

     During the three months ended August 31,  2000,  operations  and  investing
activities generated $11,000 and $5,600, respectively while financing activities
consumed $17,000 for a net decrease in cash of $400.

Capital Resources

     The Company and USE entered  into a  settlement  agreement  with  Kennecott
Energy  ("Kennecott")  on September  11, 2000.  This  settlement  agreement  was
entered into to resolve all issues in a legal  dispute  among the  companies who
were partners in the Green Mountain Mining Venture ("GMMV").  As a result of the
settlement,  the Company and USE received $1,375,000 five days after the closing
and will receive  $1,625,000 in January 2001.  Kennecott assumed the reclamation
liabilities  on the Sweet water uranium mill and mining  properties of the GMMV.
The Company and USE are  responsible  for the  reclamation  clean up of the GMIX
plant which had been used in the recovery of uranium by other companies.


                                        8

<PAGE>


     The Company  and USE have a  $1,000,000  line of credit  with a  commercial
bank.  The line of credit  is  secured  by  various  real  estate  holdings  and
equipment  belonging  to the Company and USE.  At August 31,  2000,  the line of
credit  had been drawn  down by  $850,000.  The line of credit is being used for
short term working capital needs associated with operations. The Company and USE
also have a $500,000 line of credit through their affiliate  Plateau  Resources.
This line of credit is for the  development of the Ticaboo town site in southern
Utah. Plateau has drawn down this financing facility $300,000 which is repayable
over a period of 10 years.

     The  Company,  through  USECB also has  receivables  being  collected  from
contract  construction  and drilling  operations.  Projected  equity or industry
partner financing of coalbed methane affiliate Rocky Mountain Gas, Inc. ("RMG");
sale of mine,  construction and drilling  equipment;  sale of partial  ownership
interest in mineral  properties,  proceeds under the line of credit;  receipt of
cash from Kennecott in the GMMV  settlement;  potential  settlement  discussions
with  Phelps  Dodge  regarding  a dispute on a  molybdenum  property,  and final
determination of the SMP  arbitration/litigation  will also potentially  provide
cash.  The Company also will continue to receive  revenues  from its  commercial
operations  in  southern  Utah  and from  the  rental  and  fixed  base  airport
operations in Wyoming.

     The  Company  believes  that these cash  resources  will be  sufficient  to
sustain operations during fiscal 2001. The capital resources at August 31, 2000,
will  not  be  sufficient,   however,  to  provide  funding  for  the  Company's
maintenance and development of its coalbed methane gas business.  RMG is seeking
additional  equity financing or an industry  partner  arrangement to develop its
coalbed methane leases.

Capital Requirements

     The Company and USE jointly  fund the holding  costs of the Sheep  Mountain
uranium  mines;  the  Plateau  uranium  mine and mill,  real  estate  commercial
operations and the development of the coalbed methane gas properties.

     In  September  2000,  the  Company  and USE  determined  that the  contract
drilling  and  construction  work that they had been doing in the  Powder  River
Basin of Wyoming and Montana in the coalbed methane business for others were not
profitable  and the payment for services  performed was too slow. As a result of
this decision,  all operations on a contract basis were stopped. The Company and
USE are currently in the process of evaluating which equipment will be needed to
develop  the RMG  properties.  Any  surplus  equipment  is being sold or will be
auctioned.   This  decision  to  curtail  operations  has  dramatically  reduced
personnel and operational expenses.

     The Company and USE through RMG, have  requirements  for their cash to make
delay rental  payments on RMG's portion of coalbed  methane  leases.  During the
balance  of fiscal  2001,  the  Company,  USE and RMG will be  required  to fund
$285,300 in delay rentals. In addition,  RMG is committed to pay Quantum Energy,
L.L.C.  ("Quantum")  one final payment of  $1,300,000 on or before  December 31,
2000.  If RMG  does not make  this  final  payment,  it must  assign  12% of its
undivided 50% working interest in the properties to Quantum. Quantum at its sole
opinion,  may  elect to have RMG  drill and  complete  additional  wells for the
equivalent cost of $1,300,000. If Quantum exercises this option, RMG would own a
50% working  interest  (40%NRI) in the wells drilled with those funds,  but only
after Quantum has received $1,300,000 in net revenues from those wells.


                                        9

<PAGE>


     The Company owes USE  $8,543,800 as a result of USE funding  operations and
capital  expansion  expenses.  The Company does not have the  resources to repay
this debt and must negotiate  continued  terms with USE or find some other means
of retiring the debt. To date, USE has not called the debt.

     The Company has attended  appeals  hearings with the IRS in Denver Colorado
to discuss  resolving  issues raised in audits for fiscal 1995 and 1996. A final
settlement  agreement  has not yet been  approved  but it is  believed  that the
settlement will not have a material affect on the Company.

     It is anticipated  that none of the Company's  working capital will be used
in fiscal 2001 for the reclamation of any of its mineral property interests. The
future reclamation costs on the Sheep Mountain properties and the GMIX plant are
covered  by a  reclamation  bond  which is secured by a pledge of certain of the
Company  and USE's real  estate  assets and a cash bond on the GMIX  plant.  The
reclamation bond amount is reviewed annually by State regulatory agencies.

Results of Operations

     Revenues  for the quarter  ended  August 31,  2000,  decreased  $6,000 from
revenues for the same period of the previous year to $16,700.  This decrease was
primarily as a result of a  settlement  of a easement  dispute  during the first
three months of the previous year.

     Costs and  expenses  increased  by $36,100  during the three  months  ended
August 31, 2000 over the same period of the prior year.  This  increase was as a
result of work done in the coalbed  methane  business.  The  increased  activity
increased the Company's obligations to retirement benefits.

     Due to the  adoption of EITF  00-01,  "Balance  Sheet and Income  Statement
Display  under the Equity Method for  Investments  in Certain  Partnerships  and
Other  Unincorporated  Joint Ventures," the Company recorded an equity loss from
USECC in the amounts of $340,900  and $470,500 for the three months ended August
31, 2000 and August 31, 1999, respectively.

     Operations  for the three months ended August 31, 2000,  resulted in a loss
of $403,900 as compared to a loss of $491,400  for the same three  months in the
previous year.

     As a result of the settlement  agreement with  Kennecott,  the Company will
recognize  its portion of the cash  payments  from  Kennecott  in the second and
third  quarters of fiscal  2001.  In  addition,  the Company  will be allowed to
record the Deferred GMMV Option of $2,000,000 as income in the second quarter of
fiscal 2001.


                                       10

<PAGE>



                           PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings

     Dennis Selley et al vs U.S.  Energy Corp.,  Crested Corp. et al. On May 14,
1999, Dennis Selley  personally and as personal  representative of the Estate of
Hannah Selley and his wife Mary B. Selley, filed a civil action No. 30869 in the
Ninth Judicial  District Court of Fremont  County,  Wyoming  against U.S. Energy
Corp. and Crested Corp.,  Plateau Resources Limited and USECC the joint venture,
alleging that the  defendants  were  negligent as a landlord in renting a double
wide  trailer  (converted  to a bunkhouse)  near  Ticaboo,  Utah to  plaintiffs'
daughter Hannah Selley and sought various unspecified damages. Hannah Selley was
employed by U.S. Energy Corp. ("USE") at the Ticaboo Lodge in June 1998. Because
no housing was available for employees,  she and five other USE employees rented
rooms in the  bunkhouse  provided  by USE.  At about 4:00 a.m. in the morning of
June 6, 1998, a fire started in the  bunkhouse.  All occupants were awakened and
left the living  quarters  during the fire except Ms. Selley who perished in the
fire.

     On September  19,  2000,  after a mediation  hearing,  the insurers of U.S.
Energy Corp.,  Crested Corp.  et al.  agreed to settle the  litigation  with the
plaintiffs, the Selleys.

     Declaratory  Judgment  Action.  The Workers  Compensation  Fund of Utah had
filed a complaint for declaratory  relief on or about July 26, 1999 against U.S.
Energy Corp., Crested Corp.,  Plateau Resources Limited,  Dennis and Mary Selley
and others in civil action No. 99090 7500 before the Utah Third  Judicial  Court
of Salt Lake County,  Utah. Insurers of U.S. Energy,  Crested Corp. et al agreed
to settle the above Selley case on September 19, 2000 and agreed to dismiss this
Declaratory Judgment Action.

GMMV LITIGATION

     On November  10,  1999,  Kennecott  Uranium  Company and  Kennecott  Energy
Company ("Kennecott") filed a civil action against defendants U.S. Energy Corp.,
Crested Corp. and USECC in the Sixth Judicial  District Court,  Campbell County,
Wyoming,  No.  22406.  Kennecott  was seeking to dissolve the GMMV joint venture
with USECC and  judicial  approval of a plan to sell the GMMV or  liquidate  its
assets plus attorney fees and costs.  Defendants  filed a motion to change venue
to the District Court in Fremont County, Wyoming and the Sixth Judicial District
Court granted the motion.  The case was then  transferred  to the Ninth Judicial
District Court of Fremont County,  Wyoming in Civil Action No. 31322. USECC file
answers,  counterclaims  and a cross complaint against Kennecott and Kennecott's
parent, Rio Tinto plc.

     The parties entered into settlement negotiations and on September 11, 2000,
the  parties  executed a  settlement  agreement  and related  documentation  and
releases  (the  "Settlement").  Under  the  Settlement,  USECC  sold  all of its
interests  in the  GMMV  and the  GMMV  properties,  including  those  within  a
described  Area  of  Interest  to  an  affiliate  of  Kennecott.   The  purchase
consideration  was $3,250,000 in cash and a 4% net profits  royalty  interest in
certain of the mining claims at the Big Eagle and Jackpot Mines.  USECC retained
certain  mining  equipment  and supplies,  and has the right to receive  certain
mining  claims  that  may be  abandoned  by  Kennecott.  Kennecott  assumes  the
reclamation  obligations  (to  the  extent  required  by  applicable  regulatory
authority) on the GMMV properties and USECC retains liabilities  relating to its
activities  only as a  contractor  to the GMMV.  The  Settlement  provides  that
Kennecott  is  under no  obligation  to  develop  any of the  properties  or the
underlying claims and may instead choose to sell the properties and claims or to
abandon  the claims as they are no longer  required.  USECC,  Kennecott  and Rio
Tinto plc dismissed the case with prejudice on September 12, 2000.


                                       11

<PAGE>



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

     (a)  Exhibits.  None.

     (b)  Reports on Form 8-K.  The Company did not file any Reports on Form 8-K
          during the quarter ended August 31, 2000.


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Company  has duly  caused  this  report to be  signed on its  behalf by the
undersigned, there unto duly authorized.

                                                   CRESTED CORP.
                                                     (Company)



Date:  October 15, 2000                   By:     /s/ Max T. Evans
                                                  ------------------------------
                                                  MAX T. EVANS,
                                                  President



Date:  October 15, 2000                   By:     /s/ Robert Scott Lorimer
                                                  ------------------------------
                                                  ROBERT SCOTT LORIMER,
                                                  Principal Financial Officer
                                                  and Chief Accounting Officer


                                       12
<PAGE>