Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB


[X]  Annual Report under Section 13 Or 15(d) of the Securities Exchange Act of
     1934
     For the fiscal year ended September 30, 2003

[ ]  Transition  report under Section 13 or 15(d) of the Securities Exchange
     Act of 1934

Commission File Number: 0-26958


                       Rick's Cabaret International, Inc.
                 (Name of Small Business Issuer in Its Charter)

                Texas                                            76-0458229
  (State or Other Jurisdiction of                              (IRS Employer
  Incorporation or Organization)                            Identification No.)

                            505 North Belt, Suite 630
                              Houston, Texas 77060
                    (Address of Principal Executive Offices)

                                 (281) 820-1181
                           (Issuer's Telephone Number)

         Securities Registered Under Section 12(b) Of The Exchange Act:

                           Title Of Each Class     n/a
                Name Of Each Exchange On Which Registered     n/a

          Securities Registered Pursuant to 12(g) of the Exchange Act:

                               Title Of Each Class
                          Common Stock, $.01 Par Value

     Check  whether  the  issuer:  (i) filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act during the past 12 months (or for such
shorter  period that the registrant was required to file such reports), and (ii)
has  been subject to such filing requirements for the past 90 days.      Yes [X]
No  [ ]

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of Regulation S-B contained herein, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information statement
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [X]


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     The  Issuer's  revenues  for  the  year  ended  September  30,  2003  were
$15,059,569.

     The  aggregate  market  value of Common Stock held by non-affiliates of the
registrant at December 9, 2003, based upon the last reported sales prices on the
NASDAQ  SmallCap  Market,  was  $6,512,260.

     As of December 9, 2003, there were approximately 3,700,148 shares of Common
Stock  outstanding  (this  amount  excludes  treasury  shares).


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<PAGE>
                                TABLE OF CONTENTS


PART I                                                                     Page

Item 1.   Business                                                            1

Item 2.   Properties                                                          7

Item 3.   Legal Proceedings                                                   8

Item 4.   Submission of Matters to a Vote of Security Holders                11

PART II

Item 5.   Market for Registrant's Common Equity and
          Related Stockholder Matters                                        11

Item 6.   Management's Discussion and Analysis or
          Plan of Operation                                                  14

Item 7.   Financial Statements                                               20

Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosures                            20

Item 8A.  Controls and Procedures                                            20

PART III

Item 9.   Directors, Executive Officers, Promoters and
          Control Persons; Compliance with Section 16(a) of
          The Exchange Act                                                   20

Item 10.  Executive Compensation                                             23

Item 11.  Security Ownership of Certain Beneficial
          Owners and Management and
          Related Stockholder Matters                                        24

Item 12.  Certain Relationships and Related Transactions                     26

Item 13.  Exhibits and Reports on Form 8-K                                   26


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                                     PART I

ITEM  1.     BUSINESS

INTRODUCTION

     Our  name  is  Rick's  Cabaret  International,  Inc.  We  currently own and
operate  seven  adult nightclubs under the names "Rick's Cabaret" and "XTC" that
offer  live  adult entertainment, restaurant and bar operations.  Our nightclubs
are  in  Houston, Austin and San Antonio, Texas, and Minneapolis, Minnesota.  We
also  own  and  operate an adults only "couples" night club called "Encounters,"
which  is  a  club  for  adult  couples who enjoy the swingers' lifestyle, and a
sports  bar  under  the  name  of  "Hummers" in Houston.  We also own or operate
premiere  adult  entertainment  Internet  websites.

     Our  online  entertainment  sites  are  xxxPassword.com,  CouplesTouch.com,
OthersTouch.com,  and  NaughtyBids.com.  The site xxxPassword.com features adult
content licensed through Voice Media, Inc.  CouplesTouch.com is a personals site
for  those  in  the swinging lifestyle.  OthersTouch.com is a personals site for
gays,  lesbians,  and  bisexuals.  Naughtybids.com  is  our online adult auction
site.  It  contains  consumer-initiated auctions for items such as adult videos,
apparel, photo sets, adult paraphernalia and other erotica.  There are typically
approximately  10,000  active  auctions  at  these  sites at any given time.  We
charge  the  seller  a  fee  for  each successful auction.  All of our sites use
proprietary  software  platforms written by us to deliver the best experience to
the  user  without  being  constrained  to  off-the-shelf  software  solutions.

     Our  website address is www.ricks.com. We make available free of charge our
                             -------------
Annual  Report on Form 10-KSB, Quarterly Reports on Form 10-QSB, Current Reports
on  Form  8-K,  and  all  amendments  to  those  reports  as  soon as reasonably
practicable  after  such  material  is  electronically  filed with the SEC under
Securities  Exchange Act of 1934. Information contained in the website shall not
be  construed  as  part  of  this  Form  10-KSB.

     References  to  us in this Form 10-KSB include our 100%-owned and 51%-owned
subsidiaries.

BUSINESS  ACTIVITIES--NIGHTCLUBS

     Prior to the opening of the first Rick's Cabaret in 1983 in Houston, Texas,
the  topless  nightclub  business  was  characterized  by  small  establishments
generally  managed  by  their owner.  Operating policies of these establishments
were  often  lax,  the sites were generally dimly lit, standards for performers'
personal appearance and personality were not maintained and it was customary for
performers  to  alternate  between dancing and waiting tables.  The quantity and
quality  of  bar service was low and food was not frequently offered.  Music was
usually "hard" rock and roll, played at a loud level by a disc jockey.  Usually,
only  cash  was  accepted.  Many  businessmen  felt  uncomfortable  in  such
environments.  Recognizing  a  void  in  the  market  for  a  first-class  adult
nightclub,  we  designed  Rick's Cabaret to target the more affluent customer by
providing  a unique quality entertainment environment.  The following summarizes
our  areas  of  operation  that  distinguish  us:


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     FEMALE  ENTERTAINMENT.  Our  policy  is to maintain high standards for both
personal appearance and personality for the topless entertainers and waitresses.
Of equal importance is a performer's ability to present herself attractively and
to  talk  with  customers.  We prefer that the performers we hire be experienced
dancers.  We  make  a  determination  as  to  whether  a particular applicant is
suitable  based  on  such  factors of appearance, attitude, dress, communication
skills  and  demeanor.  At  all  clubs,  except  for our Minnesota location, the
entertainers  are  independent contractors. We do not schedule their work hours.

     MANAGEMENT. We often recruit staff from inside the topless industry, in the
belief that management with experience in the sector adds to our ability to grow
and  attract  quality  entertainers. Management with experience is able to train
new  recruits  from  outside  the  industry.

     COMPLIANCE  POLICIES/EMPLOYEES.  We  have  a  policy  of  ensuring that our
business  is  carried  on  in  conformity with local, state and federal laws. In
particular,  we have a "no tolerance" policy as to illegal drug use in or around
the premises. Posters placed throughout the nightclubs reinforce this policy, as
do  periodic unannounced searches of the entertainers' lockers. Entertainers and
waitresses who arrive for work are not allowed to leave the premises without the
permission  of management. If an entertainer does leave the premises, she is not
allowed  to  return  to  work  until  the  next  day. We continually monitor the
behavior  of  entertainers,  waitresses  and  customers  to  ensure  that proper
standards  of  behavior  are  observed.

     COMPLIANCE POLICIES/CREDIT CARDS. We review all credit card charges made by
our  customers.  We have in place a formal policy requiring that all credit card
charges  must  be  approved,  in  writing,  by management before any charges are
accepted. Management is trained to review credit card charges to ensure that the
only  charges  approved  for  payment  are  for  food,  drink and entertainment.

     FOOD  AND  DRINK. We believe that a key to the success of our branded adult
nightclubs  is a quality, first-class bar and restaurant operation to compliment
our  adult  entertainment.  We  employ  service  managers  who recruit and train
professional  waitstaffs  and  ensure  that  each  customer  receives prompt and
courteous  service. We employ chefs with restaurant experience. Our bar managers
order inventory and schedule bar staff. We believe that the operation of a first
class  restaurant  is a necessary component to the operation of a premiere adult
cabaret, as is the provision of premium wine, liquor and beer in order to ensure
that  the  customer  perceives and obtains good value. Our restaurant operations
provide  business  lunch buffets and full lunch and dinner menu service with hot
and  cold appetizers, salads, seafood, steak and lobster. An extensive selection
of  quality  wines  is  available.

     CONTROLS.  Operational  and  accounting  controls  are  essential  to  the
successful  operation  of  a  cash intensive nightclub and bar business. We have
designed and implemented internal procedures and controls designed to ensure the
integrity  of  our  operational and accounting records. Wherever practicable, we
separate  management  personnel  from  all  cash  handling so that management is
isolated  from  and does not handle any cash. We use a combination of accounting
and  physical inventory control mechanisms to maintain a high level of integrity
in  our accounting practices. Computers play a significant role in capturing and


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analyzing  a  variety  of information to provide management with the information
necessary  to efficiently manage and control the nightclub. Deposits of cash and
credit  card  receipts  are  reconciled  each  day  to a daily income report. In
addition,  we  review  on a daily basis (i) cash and credit card summaries which
tie  together all cash and credit card transactions occurring at the front door,
the  bars  in  the  club  and  the  cashier station, (ii) a summary of the daily
bartenders'  check-out  reports,  and  (iii)  a daily cash requirements analysis
which  reconciles  the  previous  day's cash on hand to the requirements for the
next  day's  operations.  These  daily  computer reports alert management of any
variances  from expected financial results based on historical norms. We conduct
a  monthly  independent  overview  of  our  financial condition and have engaged
independent  accountants  to  conduct  an  annual  audit.

     ATMOSPHERE. We maintain a high design standard in our facilities and decor.
The  furniture  and  furnishings  in  the  nightclubs are designed to create the
feeling  of  an  upscale  restaurant.  The  sound  system is designed to provide
quality  sound  at  levels  where  conversations  can  still  take  place.  The
environment is carefully monitored for music selection, entertainer and waitress
appearance  and  all  aspects  of  customer  service  on  a  continuous  basis.

     VIP  ROOM.  In  keeping  with  our emphasis on serving the upper-end of the
businessmen's  market,  some of our nightclubs include a VIP room, which is open
to  individuals  who purchase memberships. A VIP room provides a higher level of
service  and  luxury.

     ADVERTISING  AND  PROMOTION. Our consumer marketing strategy is to position
Rick's  Cabarets  as  premiere entertainment facilities that provide exceptional
topless  entertainment  in a fun, yet discreet, environment. We use a variety of
highly targeted methods to reach our customers: hotel publications, local radio,
cable  television,  newspapers,  billboards,  taxi-cab  reader  boards,  and the
Internet,  as well as a variety of promotional campaigns. These campaigns ensure
that  the  Rick's  Cabaret  name  is  kept  before  the  public.

     Rick's Cabaret has received a significant amount of media exposure over the
years  in  national  magazines such as Playboy, Penthouse, Glamour Magazine, The
Ladies  Home  Journal, Time Magazine, and Texas Monthly Magazine. Segments about
Rick's  have aired on national and local television programs such as "Extra" and
"Inside Edition", and we have provided entertainers for Pay-Per-View features as
well.  Business  stories  about  Rick's Cabaret have appeared in The Wall Street
Journal,  Los  Angeles  Times,  Houston  Business  Journal,  and  numerous other
regional  publications.

     NIGHTCLUB  LOCATIONS.  We  have  three Rick's Cabaret locations in Houston,
Texas  and  one  Rick's  Cabaret  in  Minneapolis,  Minnesota. We also own three
nightclubs  in  San  Antonio,  Austin, and Houston, Texas that operate under the
name  XTC.  We  also  own  a  controlling interest in and operate an adults only
"couples"  night  club in Houston called "Encounters," which is a club for adult
couples  who  enjoy  the  swingers' lifestyle, and a sport bar called "Hummers".

     On  February  19,  2003,  we acquired 51% control of the Wild Horse Cabaret
adult  nightclub  near Hobby Airport, Houston, Texas and will operate it as part
of  our  popular XTC Cabaret group. Goodwill of $79,842 was recorded as a result
of  this  acquisition.


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<PAGE>
     In  April  2003,  we  organized  RCI  Ventures,  Inc.  to acquire Nocturnal
Concepts,  Inc.,  which operates as an addition to our XTC Cabaret group, called
"XTC  Galleria".  As  part  of this transaction, we transferred our ownership of
Tantric  Enterprises,  Inc.  (our  subsidiary  that  operates Encounters) to RCI
Ventures,  Inc.  As  a result of these transactions we own a 51% interest in RCI
Ventures,  Inc.

     In May 2003, we opened a sports bar called "Hummers", which is located next
to  Wild  Horse  Cabaret,  in  Houston,  Texas.

     We  sold  our  New Orleans nightclub in March 1999, but it continues to use
our  name  under  a  licensing  agreement.  We  continually  explore  expansion
opportunities  to  open  or  acquire  more  nightclubs in strategically valuable
locations  in  the  United  States.

     On  June  12, 2003, we entered into an Asset Purchase Agreement with Taurus
Entertainment Companies, Inc. ("Taurus"), whereby we acquired all the assets and
liabilities  of  Taurus  in  exchange  for  3,752,008  shares  of  Taurus of the
4,002,008  that  we  owned  plus  $20,000  in  cash.  We  also  executed  an
Indemnification  and Transaction Fee Agreement with Taurus for which we received
$270,000 in cash, with $140,000 payable at closing, $60,000 due on July 15, 2003
and  $70,000  due  on  August 15, 2003. We have received the $60,000 payment and
have  restructured  the  remaining balance originally due August 15, 2003, to be
payable  on  February  17,  2004  with  interest due thereon at the rate of 18%.

BUSINESS  ACTIVITIES--INTERNET  ADULT  ENTERTAINMENT  WEB  SITES

     In  1999, we began adult Internet Web site operations.  Our xxxPassword.com
website  features  adult  content  licensed  through Voice Media, Inc.  We added
CouplesTouch.com  in  year  2002  and  OthersTouch.com  in  year  2003.
CouplesTouch.com caters to those in the swinging lifestyle.  It is essentially a
dating site for couples.  OthersTouch.com is a similar site catering to the gay,
lesbian, and bisexual lifestyles.  Our Internet traffic is generated through the
purchase  of  traffic from third-party adult sites or Internet domain owners and
the  purchase  of  banner  advertisements  or  "key word" searches from Internet
search  engines.  In  addition,  the  bulk  of our traffic now comes from search
engines  on  which  we  don't pay for preferential listings.  There are numerous
adult  entertainment  sites  on  the  Internet  that  we  compete  with.

     In May 2002, we purchased 700,000 shares of our own common stock from Voice
Media, Inc. for an aggregate price of $918,700 (or $795,302 adjusted for imputed
interest)  that  equals  approximately $1.32 per share.  That purchase price was
below  market  value  on  the date of the purchase.  Voice Media, Inc. presently
owns  none  of  our  shares of common stock.  These shares are presently held as
treasury shares.  We may cancel these shares at a later date. The control person
of  Voice  Media,  Inc.  is  Ron Levi, who was a director until June 2002.   The
terms of this transaction were the result of arms-length negotiations between us
and Voice Media, Inc.  We believe the transaction was favorable to us in view of
the  market  value  of  our  common  stock  and  the  payment terms, although no
appraisal  or  fairness  opinion  was done.  All management contracts previously
signed  relating  to  the  management  of xxxPassword.com will remain in effect.
Pursuant  to  the  transaction,  the  payment  schedule  is  as  follows:


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<PAGE>
     (a)  The amount of $229,675 due on January 10, 2003;
     (b)  The amount of $229,675 due on January 10, 2004;
     (c)  The amount of $229,675 due on January 10, 2005; and
     (d)  A final payment in the amount of $229,675 due on January 10, 2006.

BUSINESS  ACTIVITIES--INTERNET  ADULT  AUCTION  WEB  SITES

     Our  adult auction site features erotica and other adult materials that are
purchased  in  a bid-ask method.  We charge the seller a fee for each successful
auction.  Where  previously we operated 6 individual auctions sites, now we have
combined  these  into one main site, NaughtyBids.com, to maximize our brand name
recognition  of  this  site.  The  site  contains  new  and  used adult oriented
consumer  initiated auctions for items such as adult videos, apparel, photo sets
and adult paraphernalia.  NaughtyBids has approximately 10,000 items for sale at
any given time.  NaughtyBids.com offers third party webmasters an opportunity to
create  residual  income  from  web  surfers  through  the NaughtyBids Affiliate
Program, which pays third party webmasters a percentage of every closing auction
sale  in  which  the  buyer originally came from the affiliate webmaster's site.
There  are  numerous auction sites on the Internet that offer adult products and
erotica.

COMPETITION

     The  adult  topless  club entertainment business is highly competitive with
respect  to  price,  service and location.  All of our nightclubs compete with a
number  of  locally  owned  adult  clubs,  some  of  whose  names  may have name
recognition  that  equals  that  of  Rick's  Cabaret or XTC.  While there may be
restrictions  on the location of a so-called "sexually oriented business", there
are  no  barriers  to  entry  into  the adult cabaret entertainment market.  For
example,  there  are  approximately  50  adult nightclubs located in the Houston
area,  all  of  which are in direct competition with our three Houston cabarets.
In Minneapolis, Rick's Cabaret is favorably located downtown and is a short walk
from  the  Metrodome  Stadium  and  the  Target  Center. There is only one adult
nightclub  in  Minneapolis  in  direct  competition  with  us.

     The  names "Rick's" and "Rick's Cabaret" and "XTC Cabaret" are proprietary.
We  believe  that the combination of our existing brand name recognition and the
distinctive  entertainment  environment  that  we  have created will allow us to
compete  effectively  in  the  industry  and within the cities where we operate.
Although  we  believe that we are well positioned to compete successfully, there
can  be  no  assurance  that  we will be able to maintain our high level of name
recognition  and  prestige  within  the  marketplace.

GOVERNMENTAL  REGULATIONS

     We  are  subject  to  various  federal,  state and local laws affecting our
business  activities. In particular, in Texas the authority to issue a permit to
sell  alcoholic beverages is governed by the Texas Alcoholic Beverage Commission
(the  "TABC"),  which  has  the  authority,  in  its  discretion,  to  issue the
appropriate  permits.  We presently hold a Mixed Beverage Permit and a Late Hour
Permit  (the  "Permits").  These Permits are subject to annual renewal, provided
we  have complied with all rules and regulations governing the permits.  Renewal
of a permit is subject to protest, which may be made by a law enforcement agency
or  by  the  public.  In  the event of a protest, the TABC may hold a hearing at
which  time  the  views  of  interested parties are expressed.  The TABC has the


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authority  after  such hearing not to issue a renewal of the protested alcoholic
beverage permit.  Rick's has never been the subject of a protest hearing against
the  renewal  of  Permits.  Minnesota  has  similar  laws  that  may  limit  the
availability  of  a  permit  to sell alcoholic beverages or that may provide for
suspension  or  revocation  of  a  permit to sell alcoholic beverages in certain
circumstances.  It  is  our  policy,  prior to expanding into any new market, to
take  steps  to ensure compliance with all licensing and regulatory requirements
for  the  sale  of  alcoholic  beverages  as  well  as  the  sale  of  food.

     In  addition  to  various  regulatory  requirements  affecting  the sale of
alcoholic  beverages,  in  Houston,  and in many other cities, the location of a
topless  cabaret is subject to restriction by city ordinance. Topless nightclubs
in Houston, Texas are subject to "The Sexually Oriented Business Ordinance" (the
"Ordinance"),  which  contains prohibitions on the location of an adult cabaret.
The  prohibitions deal generally with distance from schools, churches, and other
sexually oriented businesses and contain restrictions based on the percentage of
residences  within the immediate vicinity of the sexually oriented business. The
granting  of  a  Sexually  Oriented  Business  Permit ("Business Permit") is not
subject  to  discretion;  the  Business  Permit  must be granted if the proposed
operation  satisfies  the  requirements  of  the  Ordinance.  See Item 3. "Legal
Proceedings".

     In  Minneapolis,  we  are  required to be in compliance with state and city
liquor  licensing laws. Our location in Minneapolis is presently zoned to enable
the  operation  of  a  topless  cabaret. We were a plaintiff in civil litigation
against  the  defendant City of Minneapolis. On September 16, 2003, the suit was
settled mainly on the basis that the City of Minneapolis will enact a late hours
operation ordinance and allows qualifying liquor establishments, including us at
our  current  location,  to operate until 3:00 a.m. We believe that, in the long
run,  the restoration of late hours operation on a permanent basis is preferable
to  going  forward  with  the  litigation  and in our best interest. See Item 3.
"Legal  Proceedings".

     In  San Antonio and Austin we are required to be in compliance with city or
county  sexually  oriented  business  ordinances.

TRADEMARKS

     Our  rights to the trademarks "Rick's" and "Rick's Cabaret" are established
under  common  law,  based  upon  our  substantial  and  continuous use of these
trademarks  in  interstate  commerce  since  at  least as early as 1987. We have
registered  our  service mark, 'RICK'S AND STARS DESIGN", with the United States
Patent  and  Trademark  Office. We have also obtained service mark registrations
from  the  Patent  and  Trademark  Office for the "RICK'S CABARET" service mark.
There  can  be  no assurance that the steps we have taken to protect our service
marks  will  be  adequate  to  deter  misappropriation.

EMPLOYEES  AND  INDEPENDENT  CONTRACTORS

     As of September 30, 2003 we had approximately 680 employees of which 48 are
in  management  positions,  including corporate and administrative operation and
approximately  632  of  which  are  engaged  in entertainment, food and beverage
service,  including  bartenders  and  waitresses.  None  of  our  employees  are
represented  by  a  union  and  we  consider  our employee relations to be good.


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Additionally,  we  have  independent contractor relationships with more than 600
entertainers,  who  are  self-employed  and  perform  at  our  locations  on  a
non-exclusive basis as independent contractors. Our entertainers in Minneapolis,
Minnesota  act  as  commissioned  employees.

SHARE  REPURCHASES

     As of December 9, 2003 we owned 908,530 treasury shares of our common stock
that  we  acquired  in  open  market purchases and from investors who originally
acquired  the shares from us in private transactions. We may use these shares to
acquire assets in the future although we have no definitive arrangements at this
time  to  acquire  any  assets.

ITEM  2.     PROPERTIES

     Our principal executive office is located at 505 North Belt, Houston, Texas
77060  in  leased  facilities consisting of a total of 3,680 square feet. We pay
rent  of  approximately  $3,284  per  month  for this space. We believe that our
offices  are  adequate  for  our  present  needs and that suitable space will be
available  to  accommodate  our  future  needs.

     We  own  the  three  locations of Rick's Cabaret (two in Houston and one in
Minneapolis)  and  the  two  locations  of  XTC  (one  in  Austin and one in San
Antonio).  We lease the South Houston location, formerly known as the Chesapeake
Bay  Club.  We  own  the location of our Encounters couples club in Houston.  We
lease  XTC  Wildhorse  and  Hummers  locations.

     The  Rick's Cabaret located on Bering Drive in Houston has aggregate 12,300
square  feet of space.  The balance as of September 30, 2003, that we owe on the
mortgage  is $331,364 and the interest rate is prime plus 1%.  Currently, we pay
$4,289  in monthly principal and interest payments. The last mortgage payment is
due  in  2004  with  a  balloon  payment  of  $297,893.

     The Rick's Cabaret located on North Belt Drive in Houston has 12,000 square
feet  of  space.  This  property  is  owned  by  us  free  and  clear.

     The  Rick's Cabaret located in Minneapolis has 15,400 square feet of space.
The  balance as of September 30, 2003, that we owe on the mortgage is $2,198,734
and  the  interest  rate is 9%. We pay $22,732 in monthly principal and interest
payments.  The  last  mortgage  payment  is  due  in  2018.

     The  XTC  nightclub in Austin has 8,600 square feet of space, which sits on
1.2  acres  of land. The balance of the mortgage that we owe as of September 30,
2003  is  $186,841 and the interest rate of 11%. Currently the monthly principal
and  interest  payment  is  $9,822.  The  last  payment  is  due  in  June 2005.

     We  own XTC nightclub in San Antonio, which has 7,800 square feet of space.

     Our  Encounters  club  has  8,000  square feet of space. The balance of the
mortgage  as of September 30, 2003, that we owe is $43,097 and the interest rate
is  7%. Currently, we pay $1,500 in monthly principal and interest payments. The
last  mortgage  payment  is  due  in 2004 with a balloon payment of $23,140.

     Our  Citation Land LLC owns a 350-acre ranch in Brazoria County, Texas, and
approximately  50  acres  of  raw  land  in  Wise  County,  Texas.


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     The  balance  as  of  September 30, 2003 that we owe on the Brazoria County
ranch mortgage is $296,795 and the interest rate is 9%. We pay $2,573 in monthly
principal  and  interest  payments. The last mortgage payment is due in February
2006  with  a  balloon  payment  of  $287,920.

     The  balance  as  of  September 30, 2003 that we owe on the Wise County raw
land mortgage is $143,559 and the interest rate is 12%. We pay $1,537 in monthly
principal and interest payments. The last mortgage payment is due in March 2026.

     We  lease  the property in Houston, Texas, where our Chesapeake Bay Cabaret
is  located.  We acquired the operations of the Chesapeake Bay Club in May 2000.
The  lease  term  is  for  ten  years,  with an additional ten-year lease option
thereafter.  The  initial  lease  terms  are  $12,000  monthly  plus 4% of gross
revenues  that  are  in excess of $125,000 per month (excluding payments that we
make  to  dancers), with the total monthly rent not to exceed $20,000 per month.

     We  lease  the  property  in  Houston,  Texas,  where  our XTC Wildhorse is
located.  The  lease  term is for five years, with an additional five-year lease
option thereafter. The initial base rent is $4,845 monthly for year one and two,
with  an  annual  increase  of  $570  thereafter.

     We  lease the property in Houston, Texas, where the Hummers is located. The
lease  term  is  for  five  years,  with  an  additional  five-year lease option
thereafter.  The  initial  base  rent is $2,762.50 monthly for year one and two,
with  an  annual  increase  of  $325  thereafter.

     We lease the property in Houston, Texas, where our XTC Galleria is located.
The  lease  term  is for three years, with an additional three-year lease option
thereafter.  The  monthly  rent  is  $8,500.

ITEM  3.     LEGAL  PROCEEDINGS

SEXUALLY  ORIENTED  BUSINESS  ORDINANCE  OF  HOUSTON,  TEXAS

     In  January  1997,  the  City  Council  of  the  City  of  Houston passed a
comprehensive  new  Ordinance  regulating the location of and the conduct within
Sexually  Oriented  Businesses.  The  new  Ordinance  established  new  minimum
distances  that  Sexually  Oriented  Businesses  may  be  located  from schools,
churches,  playgrounds  and  other  sexually oriented businesses.  There were no
provisions  in  the  Ordinance  exempting previously permitted sexually oriented
businesses from the effect of the new Ordinance.  In 1997, we were informed that
one  of  our  Houston  locations  at  3113  Bering  Drive  failed  to  meet  the
requirements  of  the  Ordinance  and  accordingly  the  renewal of our Business
License  at  that  location  was  denied.

     The  Ordinance  provided  that a business which was denied a renewal of its
operating  permit  due  to  changes in distance requirements under the Ordinance
would  be  entitled  to  continue  in  operation  for  a  period  of  time  (the
"Amortization Period") if the owner were unable to recoup, by the effective date
of  the  Ordinance, its investment in the business that was incurred through the
date  of  the  passage  and  approval  of  the  Ordinance.


                                        8
<PAGE>
     We filed a request with the City of Houston requesting an extension of time
during  which  operations at our north Houston facility could continue under the
Amortization  Period  provisions of the Ordinance since we were unable to recoup
our  investment  prior to the effective date of the Ordinance. An administrative
hearing  was  held  by  the  City  of  Houston  to  determine  the  appropriate
Amortization  Period  to  be  granted  to us. At the Hearing, we were granted an
amortization period that has since been reached. We have the right to appeal any
decision  of  the  Hearing official to the district court in the State of Texas.

     In  May  1997,  the  City  of Houston agreed to defer implementation of the
Ordinance  until  the  constitutionality  of the entire Ordinance was decided by
court trial. In February 1998, the U.S. District Court for the Southern District
of  Texas,  Houston  Division,  struck down certain provisions of the Ordinance,
including  the  provision  mandating  a  1,500  foot distance between a club and
schools,  churches  and  other  sexually  oriented  business, leaving intact the
provision  of  the  750  foot distance as it existed prior to the Houston, Texas
Ordinance.

     The  City  of  Houston  has  appealed the District Court's rulings with the
Fifth  Circuit  Court  of  Appeals.  In  the  event  that the City of Houston is
successful  in  the  appeal,  we  could be out of compliance and such an outcome
could  have  an adverse impact on our future. Our nightclub in our south Houston
location  has  a  valid  permit/license  that  will expire in December 2005. The
permits  for  our  north  Houston  location  and  our Bering Drive location have
expired.

     There  are  other  provisions  in  the  Houston,  Texas  Ordinance, such as
provisions  governing the level of lighting in a sexually oriented business, the
distance between a customer and dancer while the dancer is performing in a state
of  undress  and provisions regarding the licensing of dancers and club managers
that  were  upheld by the court which may be detrimental to our business. We, in
concert  with other sexually oriented businesses, are appealing these aspects of
the  Houston,  Texas  Ordinance.

     In  November,  2003,  a  three  judge panel from the Fifth Circuit Court of
Appeals  published  their  opinion  which  affirmed  the  Trial  Court's  ruling
regarding  lighting  levels,  customer  and  dancer  separation  distances  and
licensing  of  dancers and staff.  The Court of Appeals, however, did not follow
the Trial Court's ruling regarding the distance from which a club may be located
from  a church or school.  The Court of Appeals held that a distance measurement
of  1,500  feet  would  be upheld upon a showing by the City of Houston that its
claims  that  there  were  alternative  sites available for relocating the clubs
could  be  substantiated.  The  case  was remanded for trial on the issue of the
alternative  sites.

     There  are  other  technical  issues which could additionally bear upon the
location  of  the  clubs  which  were  not decided at the trial level during the
initial  phase  of the case.  It is anticipated that these technical issues will
be  joined  in the Trial Court after the appellate remedies have been exhausted.
The  City  has  not  sought to modify any of the terms of the injunction against
enforcement  of  any  location  provision  of  the ordinance while the appellate
process  continues.  The  parties  have asked for a rehearing from the appellate
panel  and  will  ask  that the case be heard and considered by the entire Fifth
Circuit.  If  an  unfavorable ruling is again issued by the Court of Appeal then
the  parties  will  request  review  by the United States Supreme Court.  In the
event  that  our  court  appeal  is  unsuccessful, such an outcome could have an
adverse  impact  on  us.


                                        9
<PAGE>
     In  April 1998, the City of Houston began enforcing certain portions of the
Ordinance,  including  the  distance requirement between a customer and a dancer
while  dancing,  and  the  requirement  that  dancers  be  licensed. The City of
Houston's  enforcement  of  the  Ordinance  could  have an adverse impact on the
Rick's  locations  in  Houston,  Texas.  The current requirement of a three-foot
distance  between a dancer and a customer could reduce customer satisfaction and
could  result in fewer customers at the Houston location. The requirement that a
dancer  be  licensed  could result in fewer dancers working, which could have an
adverse  impact  on  the  Houston location. It is unknown what future impact the
enforcement  of  the  Ordinance  may  have  our  Houston  locations.

CITY  OF  MINNEAPOLIS  AFTER  HOURS  ORDINANCE

     In  December  1999, we filed a lawsuit against the City of Minneapolis in a
case  named  RCI  Entertainment  (Minnesota),  Inc.  v. City of Minneapolis. No.
0-362,  in  the  Hennepin  County  District  Court. We are the Plaintiff in this
matter.  We  claim that the city violated our constitutional and other rights by
the  city  not  taking  any  action  on  our application for a permit to conduct
after-hours  entertainment  operations  at  our Minneapolis location.  The court
granted  our  motion for a temporary injunction pursuant to which we now conduct
after-hours  adult  entertainment  operations  in our Minneapolis location until
3:00  a.m.  daily.

     The  City  of Minneapolis took no appeal from the temporary injunction, the
appeal  time  has  expired, and the injunction remains in full force and effect.
Also included in the lawsuit was a claim for damages from having wrongfully been
denied  the  right  to  conduct  after-hours entertainment for over one year. In
September  2000,  the  city moved for summary judgment, seeking dismissal of the
suit  in its entirety. That motion was denied, and the city appealed that denial
to  the Minnesota Court of Appeals. The Minnesota Court of Appeals dismissed the
City  of  Minneapolis's  appeal  for lack of appellate jurisdiction. The City of
Minneapolis  has  also repealed the ordinance that permits liquor establishments
in the central business district to remain open from 1:00 a.m. to 3:00 a.m., for
the  purpose  of  conducting  entertainment. Liquor establishments having such a
license will be required to cease operating from 1:00 a.m. until 3:00 a.m. as of
December  31,  2001.  However,  we remained open, not pursuant to a license, but
pursuant  to  the  temporary injunction, until 3 a.m. On September 16, 2003, the
lawsuit  was  settled  on  the  following  basis:
     1.   The  City  of  Minneapolis will enact a late hours operation ordinance
          that  complies  with  the First Amendment and allows qualifying liquor
          establishments, including us at our current location, to operate until
          3:00  a.m.  daily.
     2.   Upon  issuance  of  a  license  to  us,  the  present  lawsuit will be
          dismissed  with  prejudice,  except  that  in the event the City would
          again  repeal  its late night hours license, we would retain the right
          to  sue  the  City.

We  believe  that, in the long run, the restoration of late hours operation on a
permanent  basis  is  preferable to going forward with the litigation and in our
best  interest.


                                       10
<PAGE>
OTHER  LEGAL  MATTERS

     In April 2003, a suit was filed in the United States District Court for the
Western  District  of  Texas,  San  Antonio division, as a result of the City of
having  previously  adopted  a  new ordinance, which, among other things, banned
nude  dancing.  This  suit  asked  the  Court  to  declare  the  ordinance
unconstitutional  and  enjoin the City from enforcing it. It is probable that we
will  proceed to trial if we elect to continue our present entertainment format.

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     We  held  our  Annual  Meeting of Shareholders on August 28, 2003.  Eric S.
Langan,  Robert  L.  Watters, Steven L. Jenkins, Alan Bergstrom and Travis Reese
were  nominated  and elected as Directors with the following vote results at the
shareholder  meeting:

<TABLE>
<CAPTION>
                                For     Against  Abstain
                             ---------  -------  -------
<S>                          <C>        <C>      <C>
          Eric S. Langan     2,399,183   16,585      -0-
          Robert L. Watters  2,399,183   16,585      -0-
          Steven L. Jenkins  2,399,183   16,585      -0-
          Alan Bergstrom     2,399,183   16,585      -0-
          Travis Reese       2,399,183   16,585      -0-
</TABLE>

     At  the  Annual  Meeting,  the  Shareholders  ratified  Whitley Penn as the
Company's  Independent  Auditors,  with  the  following  vote  results:

           2,398,978      VOTES  FOR  RATIFICATION
       -------------
              12,175      VOTES  AGAINST  RATIFICATION
       -------------
                 960      ABSTAIN
       -------------

     While  no other matters were presented at the Annual Meeting, the following
votes  were  submitted by Shareholders with respect to any other business coming
before  the  Annual  Meeting  of  Shareholders:

           2,383,832      VOTES  FOR  OTHER  BUSINESS
       -------------
              26,423      VOTES  AGAINST  OTHER  BUSINESS
       -------------
               5,113      ABSTAIN
       -------------

   The meeting was adjourned when all matters of business had been discussed.

                                     PART II

ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
             STOCKHOLDER  MATTERS

     Our  common  stock is quoted on the NASDAQ SmallCap Market under the symbol
"RICK."  The  following  table  sets  forth  the quarterly high and low of sales
prices per share for the common stock. Our fiscal year ended September 30, 2003.


                                       11
<PAGE>
COMMON  STOCK  PRICE  RANGE



                HIGH     LOW
Fiscal 2002
-----------

First Quarter.  $3.40  $2.61
Second Quarter  $3.15  $2.70
Third Quarter.  $2.99  $2.46
Fourth Quarter  $2.82  $2.01

Fiscal 2003
-----------

First Quarter.  $2.35  $2.00
Second Quarter  $2.48  $1.45
Third Quarter.  $1.65  $1.11
Fourth Quarter  $1.75  $1.25

     On  December 9, 2003, the last sales price for the common stock as reported
on  the  NASDAQ  SmallCap  Market  was  $1.76.  On  December 9, 2003, there were
approximately  800  stockholders  of  record  of  the  common  stock.

TRANSFER  AGENT  AND  REGISTRAR

     The  transfer  agent  and  registrar for our common stock is American Stock
Transfer  &  Trust  Company.

DIVIDEND  POLICY

     We  have not paid, and do not currently intend to pay cash dividends on our
common  stock  in  the  foreseeable  future. Our current policy is to retain all
earnings,  if any, to provide funds for operation and expansion of our business.
The  declaration  of dividends, if any, will be subject to the discretion of the
Board of Directors, which may consider such factors as our results of operation,
financial  condition,  capital  needs  and  acquisition  strategy, among others.

     During  2002,  we  purchased  700,000 shares of our common stock from Voice
Media,  Inc.  for $795,302 (adjusted for the imputed interest).  Also, under the
stock buy-back program approved in June 2001, we purchased 120,330 shares of our
common  stock  at  an average price of $2.55 per share, or an aggregate purchase
price  of $306,210.  During 2003, we purchased 57,500 shares at an average price
of  $2.07  per  share,  or  an  aggregate  purchase  price  of  $118,649.

     On  September  16, 2003, our board of directors authorized us to repurchase
up  to  $500,000  worth  of  our  common  stock.


                                       12
<PAGE>
RECENT  SALES  OF  UNREGISTERED  SECURITIES

     During  the  quarter  ended  September  30,  2003,  we  had  no  sales  of
unregistered  shares  of  our  common  stock.

<TABLE>
<CAPTION>
EQUITY  COMPENSATION  PLAN  INFORMATION
                                                                                                      NUMBER OF SECURITIES
                                                                                                    REMAINING AVAILABLE FOR
                                 NUMBER OF SECURITIES TO BE                                       FUTURE ISSUANCE UNDER EQUITY
                                  ISSUED UPON EXERCISE OF         WEIGHTED-AVERAGE EXERCISE            COMPENSATION PLANS
                               OUTSTANDING OPTIONS, WARRANTS    PRICE OF OUTSTANDING OPTIONS,   (EXCLUDING SECURITIES REFLECTED
                                         AND RIGHTS                  WARRANTS AND RIGHTS                 IN COLUMN (a))

    PLAN CATEGORY                           (a)                              (b)                              (c)
-----------------------------  ------------------------------  -------------------------------  --------------------------------
<S>                            <C>                             <C>                              <C>
Equity compensation plans
approved by security holders                          423,000  $                          2.44                            77,000
-----------------------------  ------------------------------  -------------------------------  --------------------------------
Equity compensation plans not
approved by security holders                           75,000  $                          1.87                           225,000
-----------------------------  ------------------------------  -------------------------------  --------------------------------
TOTAL                                                 498,000  $                          2.35                           302,000
-----------------------------  ------------------------------  -------------------------------  --------------------------------
</TABLE>

DIRECTOR  COMPENSATION

     We  do  not currently pay any cash directors' fees, but we pay the expenses
of  our  directors  in  attending board meetings.   In September 2003, we issued
10,000 options to each Director who is a member of our audit committee and 5,000
options  to  our other Directors. These options have a strike price of $1.40 per
share  and  expire  in  September  2008.

EMPLOYEE  STOCK  OPTION  PLANS

     While  we  have  been  successful  in  attracting  and  retaining qualified
personnel,  we  believe  that  our  future  success  will  depend in part on our
continued ability to attract and retain highly qualified personnel. We pay wages
and  salaries  that  we  believe  are  competitive.  We also believe that equity
ownership  is  an  important factor in our ability to attract and retain skilled
personnel.  We have adopted a stock option plans (the "Plans") for employees and
directors.  The  purpose  of  the  Plans  is  to  further  our  interests,  our
subsidiaries  and  our stockholders by providing incentives in the form of stock
options  to key employees and directors who contribute materially to our success
and  profitability.  The  grants  recognize  and  reward  outstanding individual
performances and contributions and will give such persons a proprietary interest
in  us,  thus  enhancing  their  personal  interest in our continued success and
progress.  The  Plans  also  assist  us  and  our subsidiaries in attracting and
retaining  key  employees and directors. The Plans are administered by the Board
of  Directors.  The  Board  of  Directors  has the exclusive power to select the
participants in the Plans, to establish the terms of the options granted to each
participant,  provided  that all options granted shall be granted at an exercise
price equal to at least 85% of the fair market value of the common stock covered
by  the  option  on  the  grant date and to make all determinations necessary or
advisable  under  the  Plans.


                                       13
<PAGE>
     In 1995 we adopted the 1995 Stock Option Plan (the "1995 Plan"). A total of
300,000  shares  may  be granted and sold under the 1995 Plan. As of December 9,
2003  a  total  of  167,500  stock options had been granted under the 1995 Plan,
92,500  of  which  were  not  exercised and have expired and 75,000 of which are
presently outstanding. None of the options granted under the 1995 Plan have been
exercised.  We  do not plan to issue any additional options under the 1995 Plan.

     In  August  1999 we adopted the 1999 Stock Option Plan (the "1999 Plan"). A
total  of  500,000  shares  may  be  granted and sold under the 1999 Plan. As of
September  30,  2003,  423,000 stock options are presently outstanding under the
1999  Plan,  none  of  which  have  been  exercised.

EMPLOYMENT  AGREEMENT

     We  have a three-year employment agreement with Eric S. Langan (the "Langan
Agreement").  The  Langan Agreement extends through January 1, 2004 and provides
for  an  annual  base salary of $260,000. The Langan Agreement also provides for
participation  in all benefit plans maintained by us for salaried employees. The
Langan  Agreement  contains a confidentiality provision. We have not established
long-term  incentive  plans or defined benefit or actuarial plans. Under a prior
employment  agreement, Mr. Langan received options to purchase 125,000 shares at
an  exercise price of $1.87 per share, which vested in August 1999. We intend to
enter  into a new Employment Agreement with Mr. Langan at the end of the current
term.

ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

     The  following  discussion  should  be read in conjunction with our audited
consolidated  financial  statements  and  the  related  notes  to  the financial
statements  included  in  this  annual  report.

FORWARD  LOOKING  STATEMENT  AND  INFORMATION

     We  are including the following cautionary statement in this Form 10-KSB to
make  applicable  and take advantage of the safe harbor provision of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
by  us  or  on  behalf  of  us.  Forward-looking  statements  include statements
concerning  plans,  objectives,  goals, strategies, future events or performance
and underlying assumptions and other statements, which are other than statements
of historical facts.  Certain statements in this Form 10-KSB are forward-looking
statements.  Words  such  as  "expects,"  "believes,"  "anticipates," "may," and
"estimates"  and  similar  expressions  are intended to identify forward-looking
statements.  Such  statements  are subject to risks and uncertainties that could
cause  actual  results to differ materially from those projected. Such risks and
uncertainties  are  set  forth below.  Our expectations, beliefs and projections
are  expressed  in  good faith and we believe that they have a reasonable basis,
including  without  limitation,  our examination of historical operating trends,
data  contained  in  our  records  and  other data available from third parties.
There  can  be  no  assurance that our expectations, beliefs or projections will
result,  be  achieved,  or  be  accomplished.  In  addition to other factors and
matters  discussed  elsewhere  in  this Form 10-KSB, the following are important
factors  that  in our view could cause material adverse affects on our financial
condition  and results of operations: the risks and uncertainties related to our
future  operational  and financial results, the risks and uncertainties relating
to  our  Internet operations, competitive factors, the timing of the openings of
other  clubs,  the  availability  of  acceptable  financing  to  fund  corporate
expansion  efforts,  our  dependence  on  key  personnel,  the ability to manage
operations  and  the  future  operational  strength  of management, and the laws
governing  the  operation  of  adult  entertainment  businesses.  We  have  no
obligation  to  update or revise these forward-looking statements to reflect the
occurrence  of  future  events  or  circumstances.


                                       14
<PAGE>
GENERAL

     We  operate  in  two  businesses  in  the  adult  entertainment  industry:

1.   We  own  and operate upscale adult nightclubs serving primarily businessmen
     and  professionals.  Our  nightclubs  offer  live  adult  entertainment,
     restaurant  and  bar  operations. We own and operate seven adult nightclubs
     under  the  name  "Rick's  Cabaret"  and  "XTC"  in Houston, Austin and San
     Antonio,  Texas,  and  Minneapolis,  Minnesota.  We also own and operate an
     adult-themed  club  called  "Encounters"  that  serves  the  couples  or
     "swingers'"  market  and  a  sport  bar called the "Hummers" in Houston. No
     sexual  contact  is  permitted  at  any  of  our  locations.

2.   We  have  extensive  Internet  activities.

     a)   We  currently  own  three  adult  Internet  membership  Web  sites  at
          www.couplestouch.com, www.otherstouch.com, and www.xxxpassword.com. We
          --------------------  -------------------
          acquire  xxxpassword.com  site  content  from  wholesalers.

     b)   We  operate  an  online  auction  site  www.naughtybids.com. This site
                                                  -------------------
          provides our customers with the opportunity to purchase adult products
          and  services  in an auction format. We earn revenues by charging fees
          for  each  transaction  conducted  on  the  automated  site.

     Our  nightclub  revenues  are  derived from the sale of liquor, beer, wine,
food,  merchandise,  cover  charges,  membership  fees, independent contractors'
fees,  commissions  from  vending  and  ATM  machines,  valet  parking and other
products  and  service.  Our Internet revenues are derived from subscriptions to
adult  content  Internet  websites,  traffic/referral  revenues, and commissions
earned  on the sale of products and services through Internet auction sites, and
other  activities.  Our  fiscal  year  end  is  September  30.

     In  fiscal 2002, we took a one time charge of $2,532,384 as a result of the
cumulative  effect  of  the  change in accounting for goodwill. We performed our
annual evaluation as of September 30, 2003. No impairment losses were identified
as  a  result  of  this  evaluation.

     Beginning  in  fiscal  2002  and continuing through fiscal 2003, we greatly
reduced  our  usage  of  promotional  pricing  for membership fees for our adult
entertainment  web  sites.  This  reduced  our  revenues  from  these web sites.

CRITICAL  ACCOUNTING  POLICIES

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management  to  make  estimates  and  assumptions  that  affect certain reported
amounts  in  the  financial  statements  and  accompanying notes.  Estimates and


                                       15
<PAGE>
assumptions  are  based  on  historical experience, forecasted future events and
various  other  assumptions  that  we  believe  to  be  reasonable  under  the
circumstances.  Estimates  and  assumptions may vary under different assumptions
or  conditions.  We  evaluate our estimates and assumptions on an ongoing basis.
We  believe  the  accounting policies below are critical in the portrayal of our
financial  condition  and  results  of  operations.

Accounts  Receivable

     Accounts  receivable  trade  is comprised of credit card charges, which are
generally  converted  to cash in two to five days after a purchase is made.  The
accounts  receivable  other  is  comprised  of  employee  advances  and  other
miscellaneous  receivables.  We recognize allowances for doubtful accounts when,
based  on our judgment, circumstances indicate that accounts receivable will not
be  collected.

Inventories

     Inventories  include  alcoholic  beverages,  food, and Company merchandise.
Inventories are carried at the lower of cost or average cost, which approximates
actual  cost  determined  on  a  first-in,  first-out  ("FIFO") basis or market.

Marketable  Securities

     Marketable securities at September 30, 2003 consist of common stock.  As of
September  30,  2003,  we  classify  the  Company's  marketable  securities  as
available-for-sale  securities, which are carried at fair value, with unrealized
gains  and  losses  reported  as  other  comprehensive  income (loss) within the
stockholders'  equity  section  of  the  balance  sheet.  The cost of marketable
equity  securities  sold  is determined on a specific identification basis.  The
fair  value  of  marketable  equity securities is based on quoted market prices.

Property  and  Equipment

     Property  and equipment are stated at cost.  Depreciation is computed using
the  straight-line  method  over  the  estimated  useful lives of the assets for
financial  reporting  purposes.  Buildings  have  estimated useful lives between
31-40  years.  Furniture,  equipment  and  leasehold improvements have estimated
useful  lives  between five and seven years. Expenditures for major renewals and
betterments  that  extend  the  useful  lives are capitalized.  Expenditures for
normal  maintenance  and  repairs  are expensed as incurred.  The cost of assets
sold  or  abandoned and the related accumulated depreciation are eliminated from
the accounts and any gains or losses are charged or credited in the accompanying
statement  of  operations  of  the  respective  period.

Goodwill

     In  June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangibles
Assets, which addresses the accounting for goodwill and other intangible assets.
Under  SFAS No. 142, goodwill and intangible assets with indefinite lives are no
longer  amortized,  but  reviewed  on an annual basis for impairment. We adopted
SFAS  effective  October  1,  2001.


                                       16
<PAGE>
Revenue  Recognition

     We  recognize  revenue at the point-of-sale upon receipt of cash, check, or
credit  card  charge.  This includes VIP Room Memberships, since the memberships
are non-refundable and we have no significant obligation for future performance.

Advertising  and  Marketing

     Advertising  and  marketing expenses is primarily composed of costs related
to public advertisements and giveaways, which are used for promotional purposes.
Advertising  and marketing expenses are expensed as incurred and are included in
operating  expenses.

Income  Taxes

     Deferred  tax  assets  and  liabilities  are  recognized for the future tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the years in which those temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets  and  liabilities of a change in tax rates is recognized in income in the
period  that  includes the enactment date. In addition, a valuation allowance is
established  to reduce any deferred tax asset for which it is determined that it
is  more likely than not that some portion of the deferred tax asset will not be
realized.

RESULTS  OF  OPERATIONS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003 AS COMPARED
TO  THE  FISCAL  YEAR  ENDED  SEPTEMBER  30,  2002

     For  the  fiscal  year  ended September 30, 2003, we had consolidated total
revenues  of $15,059,569, compared to consolidated total revenues of $15,557,302
for  the  year  ended  September  30,  2002.  This was a decrease of $497,733 or
3.20%.  While  we  had  an  increase  in  total revenues in our existing and new
nightclub  operations  of $561,902, the decrease in total revenues resulted from
our  Internet businesses was $1,059,635.  Revenues from nightclub operations for
same-location  same-period  increased  by  2.30%,  while  revenues  of  Internet
businesses for same-sites same-period decreased by 50.16%.  The overall decrease
was  primarily  due  to  the decrease in our Internet activities and the general
decrease  in  revenues  in  the  entertainment industry post September 11, 2001.

     Our  net  income  before  minority  interest  and  cumulative  effect of an
accounting change for the year ended September 30, 2003 was $403,936 compared to
$262,552  for  the year ended September 30, 2002. The increase in net income was
primarily  due to the gain from the sales of our subsidiary Taurus Entertainment
Companies,  Inc.  Our  net  income  from operations for nightclub operations was
$1,934,574  for  the  year ended September 30, 2003 compared with $2,121,642 for
the  year  ended  September  30,  2002.  Our  net income from operations for our
Internet  businesses  was $36,421 for the year ended September 30, 2003 compared
with  $169,793  for  the  year  ended September 30, 2002. Our net income for our
nightclub  operations  for the same-location-same-period increased by 1.94%. Our
net  income  for  our  Internet  operations  for  the  same-web-site-same-period
decreased  by  78.55%.  We  had  a  net  loss  of  $2,271,180 for the year ended
September  30,  2002  as  a result of the cumulative effect of the change in the
accounting  for  goodwill  of  $2,532,384.


                                       17
<PAGE>
     Our  cost of goods sold for the year ended September 30, 2003 was 14.58% of
total  revenues  compared  to  19.09  %  of  related revenues for the year ended
September  30, 2002.  The decrease was due primarily to decrease in costs of our
Internet  activities.  Our  cost  of goods sold for the nightclub operations for
the  year  ended  September  30, 2003 was 14.40% of our total revenues from club
operations  compared  to  15.36%  for  the  year  ended  September 30, 2002.  We
continued  our  efforts  to achieve reductions in cost of goods sold of the club
operations  through  improved inventory management.  We are continuing a program
to  improve margins from liquor and food sales and food service efficiency.  Our
cost of sales from our Internet operations for the year ended September 30, 2003
was  17.41%  compared to 43.08% of related revenues for the year ended September
30,  2002.  We  have  implemented  measures  to  reduce expenses in our Internet
operations.

     Our  payroll  and  related costs for the year ended September 30, 2003 were
$5,393,708  compared  to  $5,143,549 for the year ended September 30, 2002.  The
increase  was  primarily  due to the increase in payroll in opening new club and
corporate  activities.  Our  payroll  for  our  nightclub  operations  for
same-location-same-period  increased  by  1.15%.  Our  payroll  for
same-site-same-period  Internet  operations increased by 32.92%. We believe that
our  labor  and  management  staff  levels  are  at  appropriate  levels.

     Our  other general and administrative expenses for the year ended September
30, 2003 were $7,112,974 compared to $6,819,634 for the year ended September 30,
2003.  The  increase  was primarily due to the increase in taxes & permit, rent,
insurance,  utilities,  and  advertising  &  marketing expenses from opening new
locations.  Other  selling,  general  and  administrative  expenses  for
same-location-same-period for the nightclub operations increased by 6.91%, while
the same expenses for same-site same-period for Internet operations decreased by
31.61%.

     Our  interest  expense  for  the year ended September 30, 2003 was $384,221
compared  to  $370,401  for the year ended September 30, 2002.  The increase was
primarily  due to the increase in debt related to our purchase of 763,830 of our
shares in a private transaction (these share are now treasury shares).  However,
we  have  decreased  our  long  term debt to $4,026,335 as of September 30, 2003
compared  to  debt  of  $4,607,353  as  of  September  30,  2002.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  September  30,  2003,  we  had  working  capital of $52,305 compared to
working  capital  deficit  of  $32,997 as of September 30, 2002.  Because of the
large  volume  of cash we handle, stringent cash controls have been implemented.
At  September  30, 2003, our cash and cash equivalents were $604,865 compared to
$733,366  at  September  30,  2002.

     Our  net  cash provided by operating activities in the year ended September
30,  2003  was  $586,326 compared to $1,285,545 for the year ended September 30,
2002. The decrease in cash provided by operating activities was primarily due to
the increase in net changes in operating assets and liabilities, and decrease in
impairment  of  goodwill.


                                       18
<PAGE>
     Our  depreciation  for  the  year  ended  September  30,  2003 was $531,561
compared  to  $490,021  for  the  year  ended  September  30,  2002.

     In  our  opinion,  working capital is not a true indicator of our financial
status.  Typically,  businesses  in  our  industry  carry current liabilities in
excess  of  current  assets  because  businesses  in  our  industry  receive
substantially  immediate  payment  for  sales,  with  nominal receivables, while
inventories  and  other current liabilities normally carry longer payment terms.
Vendors  and  purveyors  often  remain  flexible  with  payment terms, providing
businesses  in  our industry with opportunities to adjust to short-term business
down  turns.  We  consider  the primary indicators of financial status to be the
long-term trend of revenue growth, the mix of sales revenues, overall cash flow,
and  profitability  from  operations  and  the  level  of  long-term  debt.

     We  have  not  established  lines  of  credit  or  financing other than our
existing  debt.  There  can  be  no  assurance  that  we  will be able to obtain
additional  financing  on  reasonable terms in the future, if at all, should the
need  arise.

     We  believe  that  the  adult  entertainment  industry standard of treating
entertainers  as independent contractors provides us with safe harbor protection
to  preclude payroll tax assessment for prior years. We have prepared plans that
we  believe  will  protect our profitability in the event that sexually oriented
business  industry  is  required  in  all  states to convert dancers who are now
independent  contractors  into  employees.

     The  sexually oriented business industry is highly competitive with respect
to  price,  service  and  location,  as  well  as  the  professionalism  of  the
entertainment.  Although  we  believe  that  we  are  well-positioned to compete
successfully  in  the  future, there can be no assurance that we will be able to
maintain our high level of name recognition and prestige within the marketplace.

SEASONALITY

     Our  nightclub  operations  are significantly affected by seasonal factors.
Historically,  we have experienced reduced revenues from April through September
with the strongest operating results occurring during October through March. Our
experience  indicates  that  there  are no seasonal fluctuations in our Internet
activities.

GROWTH  STRATEGY

     We  believe  that our nightclub operations can continue to grow organically
and through careful entry into markets and demographic segments with high growth
potential.  Upon  careful market research, we may open new clubs. We may acquire
existing  clubs  in  locations  that  are  consistent with our growth and income
targets,  and  which  appear  receptive  to  the  upscale  club  formula we have
developed.  We  may  form  joint ventures or partnerships to reduce start-up and
operating  costs,  with us contributing equity in the form of our brand name and
management expertise. As is the case of our Encounters couples club, we may also
develop  new club concepts that are consistent with our management and marketing
skills.  We  may  also  acquire  real estate in connection with club operations,
although  some  clubs  may  be  in  leased  premises.


                                       19
<PAGE>
     We  also expect to continue to grow our Internet profit centers. We plan to
focus  on  high-margin  Internet  activities  that leverage our marketing skills
while  requiring  a  low  level  of  start-up  cost and ongoing operating costs.

ITEM  7.     FINANCIAL  STATEMENTS

     The  information  required  by  this  Item  7  is  included  in this report
beginning  on  page  F-1.


ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
             ACCOUNTING  AND  FINANCIAL  DISCLOSURE

There  have  been  no changes in or disagreements with accountants on accounting
and  financial  disclosure.

ITEM  8A.     CONTROLS  AND  PROCEDURES

     Eric  Langan,  our Chief Executive Officer and Chief Financial Officer, has
concluded  that  our  disclosure  controls  and  procedures  are appropriate and
effective.  He  has  evaluated these controls and procedures as of a date within
90  days  of  the  filing  date  of  this  report on Form 10-KSB.  There were no
significant  changes  in  our  internal  controls or in other factors that could
significantly  affect these controls subsequent to the date of their evaluation,
including  any  corrective  actions  with regard to significant deficiencies and
material  weaknesses.

                                    PART III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL
             PERSONS;  COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

DIRECTORS  AND  EXECUTIVE  OFFICERS

     Directors  are  elected  annually  and  hold  office  until the next annual
meeting of our stockholders or until their successors are elected and qualified.
Officers  are  elected  annually  and  serve  at  the discretion of the Board of
Directors.  There  is  no  family  relationship  between  or  among  any  of our
directors  and  executive  officers.  Our  Board  of  Directors consists of five
persons.

Name                     Age                      Position
------------------------------------------------------------------------------

Eric S. Langan            35  Director, Chief Executive Officer, President and
                              Chief Financial Officer
Travis Reese              34  Director and V.P.-Director of Technology
Robert L. Watters         52  Director
Alan Bergstrom            57  Director
Steven Jenkins            47  Director


                                       20
<PAGE>
     Eric  S.  Langan  has  been our Director since 1998 and our President since
March  1999.  Mr. Langan is also our acting Chief Financial Officer. He has been
involved  in  the  adult  entertainment business since 1989. Mr. Langan has also
served  as  the  President  and Director of Taurus Entertainment Companies, Inc.
since November 1997. Mr. Langan resigned as President of Taurus in June 2003 and
as  Director  in  September  2003. From January 1997 through the present, he has
held  the  position  of  President of XTC Cabaret, Inc. From November 1992 until
January 1997, Mr. Langan was the President of Bathing Beauties, Inc. Since 1989,
Mr.  Langan  has  exercised  managerial  control  over  more  than a dozen adult
entertainment  businesses. Through these activities, Mr. Langan has acquired the
knowledge  and  skills  necessary  to  successfully  operate adult entertainment
businesses.

     Robert  L. Watters is our founder and has been our Director since 1986. Mr.
Watters  was our President and our Chief Executive Officer from 1991 until March
1999.  He was also a founder in 1989 and operator until 1993 of the Colorado Bar
&  Grill,  an  adult  club  located in Houston, Texas and in 1988 performed site
selection,  negotiated  the  property  purchase  and  oversaw  the  design  and
permitting  for  the  club that became the Cabaret Royale, in Dallas, Texas. Mr.
Watters  practiced  law  as  a  solicitor in London, England and is qualified to
practice  law  in  New  York  State. Mr. Watters worked in the international tax
group  of the accounting firm of Touche, Ross & Co. (now succeeded by Deloitte &
Touche)  from  1979  to  1983  and was engaged in the private practice of law in
Houston,  Texas  from  1983  to  1986,  when he became involved in our full-time
management.  Mr.  Watters  graduated  from  the  London  School of Economics and
Political  Science,  University  of  London,  in  1973  with  a Bachelor of Laws
(Honours)  degree and in 1975 with a Master of Laws degree from Osgoode Hall Law
School,  York  University.

     Steven  L.  Jenkins  has  been  a Director since June 2001. Since 1988, Mr.
Jenkins  has  been  a  certified  public  accountant  with  Pringle  Jenkins  &
Associates,  P.C.,  located  in Houston, Texas. Mr. Jenkins is the President and
owner  of Pringle Jenkins & Associates, P.C. Mr. Jenkins has a BBA Degree (1979)
from  Texas  A&M University. Mr. Jenkins is a member of the AICPA and the TSCPA.

     Alan  Bergstrom  became our Director in 1999. Since 1997, Mr. Bergstrom has
been  the  Chief  Operating  Officer of Eagle Securities, which is an investment
consulting  firm.  Mr.  Bergstrom  is  also a registered stockbroker with Rhodes
Securities,  Inc.  From  1991  until  1997,  Mr.  Bergstrom  was  a  Vice
President--Investments  with  Principal Financial Securities, Inc. Mr. Bergstrom
holds  a  B.B.A.  Degree  in  Finance,  1967,  from  the  University  of  Texas.

     Travis  Reese  became our Director and V.P.-Director of Technology in 1999.
From 1997 through 1999, Mr. Reese had been a senior network administrator at St.
Vincent's  Hospital  in  Sante  Fe,  New  Mexico.  During  1997, Mr. Reese was a
computer  systems  engineer  with  Deloitte  & Touche. From 1995 until 1997, Mr.
Reese  was  Vice  President with Digital Publishing Resources, Inc., an Internet
service  provider.  From 1994 until 1995, Mr. Reese was a pilot with Continental
Airlines.  From  1992  until  1994, Mr. Reese was a pilot with Hang On, Inc., an
airline company. Mr. Reese has an Associates Degree in Aeronautical Science from
Texas  State  Technical  College.

     There  is  no family relationship between or among any of our directors and
executive  officers.


                                       21
<PAGE>
COMMITTEES  OF  THE  BOARD  OF  DIRECTORS

     We  have  no  compensation committee and no nominating committee. Decisions
concerning  executive officer compensation for fiscal 2003 were made by the full
Board  of Directors.  Eric S. Langan and Travis Reese are our only directors who
are  also  our  officers.

     We  have  an  Audit  Committee  of  independent directors whose members are
Robert L. Watters, Alan Bergstrom and Steven Jenkins. The primary purpose of our
Audit  Committee  is to oversee our financial reporting process on behalf of the
Board  of  Directors. The activities and responsibilities of our Audit Committee
include:  the nomination or selection of the independent auditors; the review of
the  results  of  the  audit;  and  a  detailed, overall corporate review of the
adequacy  of  our  internal  controls.

     Our  Board  of Directors has adopted a Charter for our Audit Committee. The
Charter  establishes  the independence of our Audit Committee and sets forth the
scope  of our Audit Committee's duties. The purpose of our Audit Committee is to
conduct  continuing  oversight  of  our  financial  affairs. Our Audit Committee
conducts  an  ongoing  review  of  our  financial  reports  and  other financial
information  prior  to  their  being  filed  with  the  Securities  and Exchange
Commission,  or  otherwise  provided  to  the  public.  Our Audit Committee also
reviews  our  systems,  methods and procedures of internal controls in the areas
of:  financial  reporting,  audits,  treasury  operations,  corporate  finance,
managerial,  financial  and  SEC  accounting,  compliance  with law, and ethical
conduct.  Our Audit Committee is objective, and reviews and assesses the work of
our  independent  accountants  and  our  internal  audit  department.

     All  of our Audit Committee members are independent Directors. The Board of
Directors  elects the Members of our Audit Committee annually. The Members serve
until  their  successors  are  duly  elected  and  qualified.  Unless  our Audit
Committee  Chairperson  is  elected  by the full Board, the Members of our Audit
Committee  designate  a  Chairperson  by  majority  vote of the all Members. All
Members  are  free  from  any  relationship  that  could  conflict with Member's
independent  judgment.  All  Members are able to read and understand fundamental
financial statements, including a balance sheet, income statement, and cash flow
statement.  At  least  one  Member  has past employment experience in finance or
accounting,  requisite  professional  certification  in  accounting,  or  other
comparable  experience  or background, including a current or past position as a
chief  executive  or  financial  officer  or other senior officer with financial
oversight  responsibilities.

CERTAIN  SECURITIES  FILINGS

     Based  on  a review of the forms submitted to the Company during the fiscal
year  ended  September  30, 2003, we believe that all persons subject to Section
16(a)  of  the  Exchange  Act in connection with their relationship with us have
complied  on  a  timely  basis.

CODE  OF  ETHICS

     The  Company  has  adopted a code of ethics for its Principal Executive and
Senior  Financial  Officers  which  is  attached  hereto  as  Exhibit  14.


                                       22
<PAGE>
ITEM  10.     EXECUTIVE  COMPENSATION

     The  following  table reflects all forms of compensation for services to us
for  the  fiscal  years  ended  September  30,  2003,  2002  and 2001 of certain
executive  officers.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

             Annual  Compensation                                      Long  Term  Compensation
                                                             Awards          Payouts

                                          Other                  Securities
Name and                                  Annual    Restricted   Underlying             All Other
Principal                                Compen-       Stock      Options/      LTIP     Compen-
Position      Year    Salary    Bonus   sation (1)    Awards        SARs      Payouts    sation
                        ($)      ($)      ($)          ($)          (#)         ($)       ($)
--------------------------------------------------------------------------------------------------
<S>           <C>    <C>        <C>     <C>         <C>          <C>          <C>       <C>
Eric Langan
               2003  $ 260,000     -0-         -0-          -0-        5,000       -0-        -0-
               2002  $ 260,000     -0-         -0-          -0-          -0-       -0-        -0-
               2001  $ 239,600     -0-         -0-          -0-        5,000       -0-        -0-

Mr.  Langan  is our Chairman, a Director, Chief Executive Officer, President and Acting  Chief
Financial  Officer.

Travis Reese
               2003  $ 158,855     -0-         -0-          -0-        5,000       -0-        -0-
               2002  $ 137,500     -0-         -0-          -0-          -0-       -0-        -0-
               2001  $ 102,000     -0-         -0-          -0-        5,000       -0-        -0-

 Mr.  Reese  is  a  Director  and  V.P.-Director  of  Technology

<FN>
__________________________________

(1)  We  provide certain executive officers certain personal benefits. Since the
     value  of  such  benefits  does  not exceed the lesser of $50,000 or 10% of
     annual  compensation,  the  amounts  are  omitted.
</TABLE>

            OPTION/SAR GRANTS IN LAST FISCAL YEAR (Individual Grants)

<TABLE>
<CAPTION>
              Number of         Percent of Total
              Securities        Options/SARs
              Underlying        Granted To
              Options/SARs      Employees In        Exercise of  Expiration
Name          Granted           Fiscal Year         Base Price   Date
              #                 %                   $/share
-----------------------------------------------------------------------------
<S>           <C>               <C>                 <C>          <C>

Eric Langan   5,000 shares (1)                -0-%  $      1.40  9/10/2008

Travis Reese  5,000 shares (1)                -0-%  $      1.40  9/10/2008

<FN>
___________________________________

(1)  There  were no exercises of options by these persons during the fiscal year
     ended  September  30,  2003
</TABLE>


                                       23
<PAGE>
<TABLE>
<CAPTION>
                      AGGREGATED  OPTION/SAR  EXERCISES  IN
               LAST  FISCAL  YEAR  AND  FY-END  OPTION/SAR  VALUES


                                     Number Of Unexercised
                                     Securities Underlying  Value of Unexercised
                                     Options/SARs           In-The-Money Options/
              Shares                 At FY-End              SARs At FY-End
              Acquired On  Value     Exercisable/           Exercisable/
Name          Exercise     Realized  Unexercisable          Unexercisable
              #            $         #                      $
---------------------------------------------------------------------------------
<S>           <C>          <C>       <C>                    <C>

Eric Langan       -0- (1)       -0-        200,000/-0-      $1,750  /  $-0-

Travis Reese      -0- (1)       -0-         50,000/-0-      $1,750  /  $-0-
<FN>

___________________________________

(1)     There  were  no  exercises  of  options  by these persons during the fiscal year ended
         September  30,  2003
</TABLE>


DIRECTOR  COMPENSATION

     We  do  not currently pay any cash directors' fees, but we pay the expenses
of  our  directors  in  attending  board meetings.  In September 2003, we issued
10,000 options to each Director who is a member of our audit committee and 5,000
options  to  our other Directors. These options have a strike price of $1.40 per
share  and  expire  in  September  2008.

ITEM  11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
              RELATED  STOCKHOLDER  MATTERS

     The  following  table  sets  forth certain information at December 9, 2003,
with  respect  to the beneficial ownership of shares of Common Stock by (i) each
person  known to us who owns beneficially more than 5% of the outstanding shares
of  Common  Stock,  (ii)  each  of  our  directors,  (iii) each of our executive
officers and (iv) all of our executive officers and directors as a group. Unless
otherwise  indicated, each stockholder has sole voting and investment power with
respect  to  the  shares  shown.


                                       24
<PAGE>
<TABLE>
<CAPTION>
Name and Address                       Number         Title        Percent
                                     of Shares      of Class     of Class (8)
-----------------------------------------------------------------------------
<S>                                 <C>           <C>            <C>

Eric S. Langan
505 North Belt, Suite 630
Houston, Texas 77060                1,021,200(1)  Common Stock      27.6%


Robert L. Watters
315 Bourbon Street
New Orleans, Louisiana 70130           35,000(2)  Common Stock      0 .9%

Steven L. Jenkins
16815 Royal Crest Drive, Suite 160
Houston, Texas 77058                   20,000(3)  Common Stock       0.5%

Travis Reese
505 North Belt, Suite 630
Houston, Texas 77060                   55,475(4)  Common Stock       1.5%

Alan Bergstrom
707 Rio Grande, Suite 200
Austin, Texas 78701                    35,000(2)  Common Stock       0.9%

E. S. Langan. L.P.
505 North Belt, Suite 630
Houston, Texas 77060                    578,632   Common Stock      15.6%

Ralph McElroy
1211 Choquette
Austin, Texas, 78757                  817,147(5)  Common Stock      22.1%

William Friedrichs
16815 Royal Crest Dr., Suite 260
Houston, Texas 77058                  401,850(6)  Common Stock      10.9%

All of our Directors and
Officers as a
Group of five persons               1,166,675(7)  Common Stock      31.5%

<FN>
_____________________________

(1)  Mr. Langan has sole voting and investment power for 242,568 shares that he
owns  directly.  Mr.  Langan  has shared voting and investment power for 578,632
shares  that  he  owns  indirectly through E. S. Langan, L.P.  Mr. Langan is the
general  partner  of  E.  S.  Langan, L.P.  This amount also includes options to
purchase  up  to  200,000 shares of common stock that are presently exercisable.

(2)  Includes  options  to purchase up to 35,000 shares of common stock that are
presently  exercisable.

(3)  Includes  options  to purchase up to 20,000 shares of common stock that are
presently  exercisable.

(4)  Includes  options  to purchase up to 50,000 shares of common stock that are
presently  exercisable.

(5)  Includes  66,545  shares  of  common  stock  that  would  be  issuable upon
conversion of a convertible debenture held by Mr. McElroy.  Also includes 52,135
shares  of  common stock that would be issuable upon conversion of a convertible
promissory  note  held  by  Mr.  McElroy.


                                       25
<PAGE>
(6)  Includes 170,000 shares owned by WMF Investments, Inc.  Mr. Friedrichs is a
control  person  of  WMF  Investments,  Inc.

(7)  Includes  options to purchase up to 340,000 shares of common stock that are
presently  exercisable.

(8)  These  percentages exclude treasury shares in the calculation of percentage
of  class.
</TABLE>

     We  are  not  aware  of  any  arrangements that could result in a change of
control.

     The  disclosure  required  by Item 201(d) of Regulation S-B is set forth in
ITEM  5  herein.

ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Our  Board of Directors has adopted a policy that our business affairs will
be  conducted  in  all  respects  by  standards  applicable  to  publicly  held
corporations  and  that  we  will  not enter into any future transactions and/or
loans  between  us  and  our  officers, directors and 5% shareholders unless the
terms  are  no  less  favorable  than  could be obtained from independent, third
parties  and will be approved by a majority of our independent and disinterested
directors.  In  our  view,  all  of  the  transactions described below meet this
standard.

     In  May  2002, we loaned $100,000 to Eric Langan who is our Chief Executive
Officer.  The  promissory  note  is  unsecured,  bears  interest  at  11% and is
amortized over a period of ten years.  The note contains a provision that in the
event Mr. Langan leaves the Company for any reason, the note immediately becomes
due  and  payable in full.  The balance of the note was $92,626 at September 30,
2003  and  is  included  in  other  assets  in  our  balance  sheet.

ITEM  13.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits

     Exhibit  14  -  Code  of  Ethics.

     Exhibit  21  -  Subsidiaries  of  the  Registrant.

     Exhibit  31.1  -  Certification  of  Chief  Executive  Officer  of  Rick's
Cabaret International, Inc. Corporation required by Rule 13a-14(1) or Rule 15d -
14(a)  of  the  Securities  Exchange  Act  of  1934,  as  adopted  pursuant  to
Section  302  of  the  Sarbanes-Oxley  Act  of  2002.

     Exhibit  31.2  -  Certification  of  Chief  Financial  Officer  of  Rick's
Cabaret  International,  Inc.  Corporation   required  by Rule 13a-14(1) or Rule
15d-14(a)  of  the Securities  Exchange  Act  of  1934,  as  adopted pursuant to
Section  302  of  the  Sarbanes-Oxley  Act  of  2002.


                                       26
<PAGE>
     Exhibit  32.1  - Certification of Chief Executive Officer of Rick's Cabaret
International,  Inc.  Corporation  pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002  and  Section  1350  of  18  U.S.C.  63.

     Exhibit  32.2  - Certification of Chief Financial Officer of Rick's Cabaret
International,  Inc.  Corporation  pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002  and  Section  1350  of  18  U.S.C.  63.

(b)     Reports  on  Form  8-K.

          The  Company  filed  Form  8-K  relating  to  the  sale  of  Taurus
     Entertainment  Companies,  Inc.  containing  Item  2  -  Acquisition  and
     Disposition of Assets and Item 7 - Financial Statement and Exhibits on June
     12,  2003.


                                       27
<PAGE>
                                   SIGNATURES

     In  accordance with the requirements of Section 13 of 15(d) of the Exchange
Act,  the  Registrant  has  caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized,  on  December  29,  2003.


                                    Rick's  Cabaret  International,  Inc.

                                    /s/  Eric  S.  Langan
                                    ------------------------------------
                                    By:  Eric  S.  Langan
                                    Director,  Chief  Executive  Officer,
                                    President  and  Chief  Financial  Officer

     Pursuant  to  the  requirements  of  the Exchange Act, this report has been
signed  below  by  the  following  persons  in  the  capacities and on the dates
indicated:

Signature                  Title                               Date

/s/  Eric  S.  Langan      Director, Chief Executive Officer,  December 29, 2003
-------------------------  President  and  Chief Financial
Eric  S.  Langan           Officer

/s/  Travis  Reese         Director and                        December 29, 2003
-------------------------  V.P.-Director  of  Technology
Travis  Reese


/s/  Robert  L.  Watters   Director                            December 29, 2003
-------------------------
Robert  L. Watters




/s/  Alan  Bergstrom       Director                            December 29, 2003
-------------------------
Alan  Bergstrom



/s/  Steven  Jenkins       Director                            December 29, 2003
-------------------------
Steven  Jenkins


                                       28
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                       RICK'S CABARET INTERNATIONAL, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                    YEARS ENDED SEPTEMBER 30, 2003 AND 2002



                                TABLE OF CONTENTS



<S>                                                                     <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . .   F-2

Audited Consolidated Financial Statements:

        Consolidated Balance Sheets  . . . . . . . . . . . . . . . . .   F-3

        Consolidated Statements of Operations  . . . . . . . . . . . .   F-4

        Consolidated Statements of Changes in Stockholders' Equity  .    F-5

        Consolidated Statements of Cash Flows   . . . . . . . . . . .    F-6

        Notes to Consolidated Financial Statements  . . . . . . . . .    F-7
</TABLE>


                                      F - 1
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS


To  the  Board  of  Directors  and  Stockholders  of
Rick's  Cabaret  International,  Inc.


We  have  audited the accompanying consolidated balance sheets of Rick's Cabaret
International, Inc. and subsidiaries, as of September 30, 2003 and 2002, and the
related  consolidated  statements  of operations, stockholders' equity, and cash
flows  for  the  years  then  ended.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  consolidated financial position of Rick's Cabaret
International,  Inc.  as  of  September  30, 2003 and 2002, and the consolidated
results  of  their  operations  and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.


Whitley  Penn
Dallas,  Texas
November  21,  2003


                                      F - 2
<PAGE>
<TABLE>
<CAPTION>
                       RICK'S CABARET INTERNATIONAL, INC.

                           CONSOLIDATED BALANCE SHEETS

                                                            SEPTEMBER 30,
                                                          2003          2002
                                                     ------------  ------------
<S>                                                  <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                          $   604,865   $   733,366
  Accounts receivable:
    Trade                                                 45,319        35,749
    Other, net                                           213,886       190,888
  Marketable securities                                  135,000             -
  Inventories                                            230,451       210,802
  Prepaid expenses                                        83,647        63,897
                                                     ------------  ------------
Total current assets                                   1,313,168     1,234,702

Property and equipment, net                            8,777,057     9,122,253

Other assets:
  Goodwill                                             1,962,848     1,883,007
  Other                                                  202,439       197,358
                                                     ------------  ------------
                                                       2,165,287     2,080,365
                                                     ------------  ------------

Total assets                                         $12,255,512   $12,437,320
                                                     ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                   $   189,208   $   274,659
  Accrued liabilities                                    622,216       533,068
  Current portion of long-term debt                      449,439       459,972
                                                     ------------  ------------
Total current liabilities                              1,260,863     1,267,699

Long-term debt, less current portion                   3,576,896     4,147,381
                                                     ------------  ------------

Total liabilities                                      4,837,759     5,415,080

Commitments and contingencies                                  -             -

Minority interests                                        36,032        80,164

Stockholders' equity:
  Preferred stock, $.10 par, 1,000,000 shares
    authorized, none outstanding                               -             -
  Common stock, $.01 par, 15,000,000 shares
    authorized, 4,608,678 shares issued at
    September 30, 2003 and 2002, respectively             46,087        46,087
  Additional paid-in capital                          11,273,149    11,273,149
  Accumulated other comprehensive income                 120,000             -
  Accumulated deficit                                 (2,763,735)   (3,202,029)
                                                     ------------  ------------
                                                       8,675,501     8,117,207
  Less 908,530 and 851,030 shares of stock held in
    treasury at cost in 2003 and 2002, respectively    1,293,780     1,175,131
                                                     ------------  ------------
Total stockholders' equity                             7,381,721     6,942,076
                                                     ------------  ------------

Total liabilities and stockholders' equity           $12,255,512   $12,437,320
                                                     ============  ============
</TABLE>


                                      F - 3
<PAGE>
<TABLE>
<CAPTION>
                         RICK'S CABARET INTERNATIONAL, INC.

                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                                          YEAR ENDED SEPTEMBER 30,
                                                             2003          2002
                                                         ------------  ------------
<S>                                                      <C>           <C>
Revenues
  Sales of alcoholic beverages                           $ 6,671,498   $ 6,380,914
  Sales of food and merchandise                            1,661,358     1,583,433
  Service revenues                                         5,333,889     5,210,950
  Internet revenues                                        1,053,188     2,112,823
  Other                                                      339,636       269,182
                                                         ------------  ------------
                                                          15,059,569    15,557,302

Operating expenses
  Cost of goods sold                                       2,194,940     2,970,139
  Salaries and wages                                       5,393,708     5,143,549
  Other general and administrative:
    Taxes and permits                                      2,074,067     1,978,360
    Charge card fees                                         254,953       261,952
    Rent                                                     336,592       219,209
    Legal and professional                                   714,250       665,677
    Advertising and marketing                                817,328       653,884
    Impairment of goodwill                                         -       325,776
    Other                                                  2,915,784     2,714,776
                                                         ------------  ------------
                                                          14,701,622    14,933,322
                                                         ------------  ------------

Income from operations                                       357,947       623,980

Other income (expense)
  Interest income                                             16,875        22,245
  Interest expense                                          (384,221)     (370,401)
  Gain (loss) on sale or disposition of assets               345,820       (14,037)
  Other                                                       67,515           765
                                                         ------------  ------------

Income before the following items:                           403,936       262,552

Minority interests                                            34,358        (1,348)
Cumulative effect of accounting change                             -    (2,532,384)
                                                         ------------  ------------

Net income (loss)                                        $   438,294   $(2,271,180)
                                                         ============  ============

Basic and diluted earnings (loss) per share:
  Income before cumulative effect of accounting change   $      0.12   $      0.06
                                                         ============  ============
  Net income (loss)                                      $      0.12   $     (0.54)
                                                         ============  ============

Weighted average number of common shares outstanding       3,729,167     4,241,483
                                                         ============  ============
</TABLE>


                                      F - 4
<PAGE>
<TABLE>
<CAPTION>
                                          RICK'S CABARET INTERNATIONAL, INC.

                              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                                  SEPTEMBER 30, 2003

                                                                               ACCUMULATED                   TREASURY
                                                COMMON STOCK                      OTHER                       STOCK
                                             ------------------                                              ---------
                                              NUMBER               PAID-IN    COMPREHENSIVE    ACCUMULATED    NUMBER
                                             OF SHARES  AMOUNT     CAPITAL        INCOME         DEFICIT     OF SHARES
                                             ---------  -------  -----------  --------------  -------------  ---------
<S>                                          <C>        <C>      <C>          <C>             <C>            <C>
Balance at September 30, 2001                4,598,678  $45,987  $11,257,449  $            -  $   (930,849)     30,700

    Net loss                                         -        -            -               -    (2,271,180)          -
    Shares issued for cash                      10,000      100       15,700               -             -           -
    Purchases of treasury stock                      -        -            -               -             -     820,330
                                             ---------  -------  -----------  --------------  -------------  ---------

Balance at September 30, 2002                4,608,678   46,087   11,273,149               -    (3,202,029)    851,030

    Net income                                       -        -            -               -       438,294           -
    Change in available-for-sale securities          -        -            -         120,000             -           -

    Comprehensive income for year

    Purchases of treasury stock                      -        -            -               -             -      57,500
                                             ---------  -------  -----------  --------------  -------------  ---------

Balance at September 30, 2003                4,608,678  $46,087  $11,273,149  $      120,000  $ (2,763,735)    908,530
                                             =========  =======  ===========  ==============  =============  =========

                                              TREASURY
                                                STOCK          TOTAL
                                             ------------   STOCKHOLDERS'
                                                AMOUNT         EQUITY
                                             ------------  ---------------
<S>                                          <C>           <C>
Balance at September 30, 2001                $   (73,619)  $   10,298,968

    Net loss                                           -       (2,271,180)
    Shares issued for cash                             -           15,800
    Purchases of treasury stock               (1,101,512)      (1,101,512)
                                             ------------  ---------------

Balance at September 30, 2002                 (1,175,131)       6,942,076

    Net income                                         -          438,294
    Change in available-for-sale securities            -          120,000
                                                           ---------------
    Comprehensive income for year                                 558,294
                                                           ---------------
    Purchases of treasury stock                 (118,649)        (118,649)
                                             ------------  ---------------

Balance at September 30, 2003                $(1,293,780)  $    7,381,721
                                             ============  ===============
</TABLE>


                                      F - 5
<PAGE>
<TABLE>
<CAPTION>
                              RICK'S CABARET INTERNATIONAL, INC.

                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                     YEAR ENDED SEPTEMBER 30,
                                                                        2003         2002
                                                                     ----------  ------------
<S>                                                                  <C>         <C>
OPERATING ACTIVITIES
  Net income (loss)                                                  $ 438,294   $(2,271,180)
  Adjustments to reconcile net income (loss) to
      net cash provided by operating activities:
      Depreciation                                                     531,561       490,021
      Impairment of goodwill                                                 -       325,776
      Minority interests                                               (34,358)        1,348
      (Gain) loss on sale of subsidiary                               (342,251)            -
      (Gain) loss on sale or disposition of property and equipment      (3,569)        6,240
      Change in accounting principle                                         -     2,532,384
      Changes in operating assets and liabilities:
        Accounts receivable                                             37,432       153,015
        Inventories                                                    (19,649)      (14,502)
        Prepaid expenses and other assets                              (24,831)       17,580
        Accounts payable and accrued liabilities                         3,697        44,863
                                                                     ----------  ------------
Net cash provided by operating activities                              586,326     1,285,545

INVESTING ACTIVITIES
  Acquisitions                                                        (150,000)            -
  Proceeds from disposition of subsidiary                              180,000             -
  Purchases of property and equipment                                 (162,220)     (933,472)
  Proceeds from sale of property and equipment                          47,718         7,900
                                                                     ----------  ------------
Net cash used in operating activities                                  (84,502)     (925,572)

FINANCING ACTIVITIES
  Purchases of treasury stock                                         (118,649)     (156,211)
  Proceeds from long-term debt                                               -       150,000
  Payments on long-term debt                                          (511,676)     (325,024)
                                                                     ----------  ------------
Net cash used in financing activities                                 (630,325)     (331,235)
                                                                     ----------  ------------

Net increase (decrease) in cash and cash equivalents                  (128,501)       28,738
Cash and cash equivalents at beginning of year                         733,366       704,628
                                                                     ----------  ------------

Cash and cash equivalents at end of year                             $ 604,865   $   733,366
                                                                     ==========  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the year for interest                             $ 374,270   $   370,401
                                                                     ==========  ============

  Cash paid during the year for income taxes                         $       -   $         -
                                                                     ==========  ============
<FN>
NON-CASH TRANSACTIONS
     During the year ended September 30, 2003, the Company transferred a Company
     vehicle  and  the related note to an individual. The remaining note payable
     was $69,342 which approximated the fair value of the vehicle on the date of
     transfer.

     During  the  year  ended September 30, 2002, the Company issued $945,301 in
     notes  payable  to  two  individuals  to acquire 763,830 shares of treasury
     stock.
</TABLE>


                                      F - 6
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          SEPTEMBER 30, 2003 AND 2002


A.   NATURE  OF  BUSINESS

Rick's  Cabaret  International,  Inc.  (the  "Company")  is  a Texas corporation
incorporated  in  1994.  The Company currently owns and operates nightclubs that
offer  live  adult  entertainment,  restaurant,  and  bar  operations.  These
nightclubs  are  located  in  Houston, Austin and San Antonio, Texas, as well as
Minneapolis,  Minnesota.  The  Company  also  owns  and  operates  several adult
entertainment  Internet  websites.  The  Company's  corporate  headquarters  is
located  in  Houston,  Texas.


B.   ACCOUNTING  POLICIES

A  summary of the Company's significant accounting policies consistently applied
in  the  preparation  of  the  accompanying  consolidated  financial  statements
follows:

BASIS OF ACCOUNTING

The  accounts are maintained and the consolidated financial statements have been
prepared  using  the  accrual  basis of accounting in accordance with accounting
principles  generally  accepted  in  the  United  States  of  America.

PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial  statements include the accounts of the Company and
its  subsidiaries.  Significant intercompany accounts and transactions have been
eliminated  in  consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and assumptions that affect certain reported amounts in the financial
statements  and  accompanying  notes.  Actual  results  could  differ from these
estimates  and  assumptions.

CASH  AND  CASH  EQUIVALENTS

The  Company  considers  all  highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.  At September 30, 2003 and
2002, the Company had no such investments included in cash and cash equivalents.
The Company maintains deposits primarily in one financial institution, which may
at  times  exceed  amounts  covered  by  insurance  provided by the U.S. Federal
Deposit  Insurance  Corporation  ("FDIC").  At  September 30, 2003 and 2002, the
uninsured  portion  of  these  deposits  approximated  $95,000  and  $211,000,
respectively.  The  Company  has  not  incurred  losses  related  to its cash on
deposit  with  banks.


                                      F - 7
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


B.   ACCOUNTING  POLICIES  -  CONTINUED

ACCOUNTS  RECEIVABLE

Accounts  receivable  trade  is  comprised  of  credit  card  charges, which are
generally  converted  to cash in two to five days after a purchase is made.  The
Company's  accounts receivable other is comprised of employee advances and other
miscellaneous  receivables.  The  Company  recognizes  allowances  for  doubtful
accounts  when,  based  on  management  judgment,  circumstances  indicate  that
accounts  receivable  will  not be collected.  Accordingly, accounts receivables
other  are  shown net of the allowance for doubtful accounts of approximately $0
and  $7,300  as  of  September  30,  2003  and  2002,  respectively.

MARKETABLE SECURITIES

Marketable  securities at September 30, 2003 consist of common stock.  Statement
of  Financial  Accounting  Standards  ("SFAS")  No.  115, Accounting for Certain
Investments  in  Debt  and  Equity  Securities,  requires certain investments be
recorded at fair value or amortized cost.  The appropriate classification of the
investments  in  marketable  equity  is  determined  at the time of purchase and
re-evaluated at each balance sheet date. As of September 30, 2003, the Company's
marketable  securities  were classified as available-for-sale, which are carried
at  fair value, with unrealized gains and losses reported as other comprehensive
income  (loss)  within  the  stockholders'  equity section of the balance sheet.
The  cost  of  marketable  equity  securities  sold  is determined on a specific
identification  basis.  The  fair value of marketable equity securities is based
on  quoted  market  prices.

INVENTORIES

Inventories  include  alcoholic  beverages,  food,  and  Company  merchandise.
Inventories are carried at the lower of cost or average cost, which approximates
actual  cost  determined  on  a  first-in,  first-out  ("FIFO") basis or market.

PROPERTY  AND  EQUIPMENT

Property  and  equipment are stated at cost.  Depreciation is computed using the
straight-line method over the estimated useful lives of the assets for financial
reporting  purposes.  Buildings have estimated useful lives between 31-40 years.
Furniture,  equipment  and  leasehold  improvements  have estimated useful lives
between  five  and  seven years. Expenditures for major renewals and betterments
that  extend  the  useful  lives  are  capitalized.  Expenditures  for  normal
maintenance  and  repairs  are expensed as incurred.  The cost of assets sold or
abandoned  and  the  related  accumulated  depreciation  are eliminated from the
accounts  and  any  gains  or losses are charged or credited in the accompanying
statement  of  operations  of  the  respective  period.


                                      F - 8
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


B.   ACCOUNTING  POLICIES  -  CONTINUED

GOODWILL

In  June  2001,  the  FASB  issued  SFAS No. 142, Goodwill and Other Intangibles
Assets, which addresses the accounting for goodwill and other intangible assets.
Under  SFAS No. 142, goodwill and intangible assets with indefinite lives are no
longer  amortized,  but reviewed on an annual basis for impairment.  The Company
adopted  SFAS  effective  October  1,  2001.

REVENUE RECOGNITION

The Company recognizes revenue at the point-of-sale upon receipt of cash, check,
or  credit  card  charge.  This  includes  VIP  Room  Memberships,  since  the
memberships are non-refundable and the Company has no significant obligation for
future  performance.

ADVERTISING AND MARKETING

Advertising  and  marketing  expenses are primarily composed of costs related to
public  advertisements  and  giveaways, which are used for promotional purposes.
Advertising  and marketing expenses are expensed as incurred and are included in
operating  expenses.

INCOME TAXES

Deferred  income  taxes  are determined using the liability method in accordance
with  SFAS  No.  109,  Accounting  for  Income  Taxes.  Deferred  tax assets and
liabilities  are  recognized  for  the  future  tax consequences attributable to
differences  between the financial statement carrying amounts of existing assets
and  liabilities  and  their  respective  tax  bases.  Deferred  tax  assets and
liabilities  are  measured  using enacted tax rates expected to apply to taxable
income  in  the  years  in  which those temporary differences are expected to be
recovered  or  settled.  The  effect on deferred tax assets and liabilities of a
change  in  tax  rates  is  recognized in income in the period that includes the
enactment  date. In addition, a valuation allowance is established to reduce any
deferred  tax  asset  for which it is determined that it is more likely than not
that  some  portion  of  the  deferred  tax  asset  will  not  be  realized.

COMPREHENSIVE  INCOME

The  Company  reports  comprehensive income in accordance with the provisions of
SFAS  No. 130, Reporting Comprehensive Income.  Comprehensive income consists of
net income and gains (losses) on available-for-sale marketable securities and is
presented  in  the  consolidated  statements of changes in stockholders' equity.


                                      F - 9
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


B.   ACCOUNTING  POLICIES  -  CONTINUED

EARNINGS  PER  COMMON  SHARE

The  Company computes earnings (loss) per share in accordance with SFAS No. 128,
Earnings  Per  Share.  SFAS  No.  128  provides for the calculation of basic and
diluted  earnings  per share.  Basic earnings per share includes no dilution and
is  computed by dividing income available to common stockholders by the weighted
average  number  of  common shares outstanding for the period.  Diluted earnings
per  share  reflect the potential dilution of securities that could share in the
earnings  of  the  Company.  Because the Company's potential dilutive securities
are  anti-dilutive,  the accompanying presentation is only of basic earnings per
share.

Stock  options of 498,000 and 643,500 for the years ended September 30, 2003 and
2002,  respectively, have been excluded from earnings per share due to the stock
options  being  anti-dilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with the reporting requirements of SFAS No. 107, Disclosures About
Fair  Value  of  Financial Instruments, the Company calculates the fair value of
its  assets  and  liabilities  which qualify as financial instruments under this
statement  and  includes  this  additional  information  in  the  notes  to  the
consolidated  financial  statements  when  the  fair value is different than the
carrying value of these financial instruments.  The estimated fair value of cash
equivalents,  accounts  receivable,  accounts  payable  and  accrued liabilities
approximate their carrying amounts due to the relatively short maturity of these
instruments.  The  carrying  value of short and long-term debt also approximates
fair value since these instruments bear market rates of interest.  None of these
instruments  are  held  for  trading  purposes.

STOCK OPTIONS

At  September  30,  2003,  the  Company has stock options outstanding, which are
described more fully in Note H. The Company accounts for its stock options under
the  recognition  and  measurement  principles  of  Accounting  Principles Board
("APB")  Opinion  No.  25, Accounting for Stock Issued to Employees, and related
Interpretations.  The  following  table illustrates the effect on net income and
earnings  per  share  if  the  Company  had  applied  the fair value recognition
provisions  of  SFAS  No.  123,  Accounting  for  Stock-Based  Compensation,  to
stock-based  employee  compensation.


                                     F - 10
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


B.   ACCOUNTING  POLICIES  -  CONTINUED

STOCK  OPTIONS  -  CONTINUED

The  following  presents  pro forma net income (loss) and per share data as if a
fair  value  accounting  method  had  been  used  to  account  for  stock-based
compensation:

<TABLE>
<CAPTION>
                                                     YEAR ENDED SEPTEMBER 30,
                                                        2003         2002
                                                     ---------  ------------
<S>                                                  <C>        <C>
      Net income (loss), as reported                 $438,294   $(2,271,180)
      Less total stock-based employee compensation
           expense determined under the fair value
           based method for all awards                (98,882)     (198,077)
                                                     ---------  ------------
      Pro forma net income (loss)                    $339,412   $(2,469,257)
                                                     =========  ============

      Earnings (loss) per share:
           Basic and diluted  - as reported          $   0.12   $     (0.54)
                                                     =========  ============

           Basic and diluted  - pro forma            $   0.09   $     (0.58)
                                                     =========  ============
</TABLE>


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In  May  2003, the Financial Accounting Standards Board ("FASB") issued SFAS No.
150,  Accounting  for Certain Financial Instruments with Characteristics of both
Liabilities  and  Equity.  SFAS  No.  150  requires  that  certain  financial
instruments,  which under previous guidance could be accounted for as equity, be
classified  as  liabilities  in  the accompanying balance sheet. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  is  otherwise  effective  for  the  Company  in the fourth quarter of 2003.
Adoption  of  SFAS  No.  150  did not have an impact on the Company's results of
operations  or  financial  condition.

In  January  2003,  the  FASB  issued  Interpretation  No.  46, Consolidation of
Variable  Interest  Entities-an  interpretation  of  ARB  No. 51, which provides
guidance  on the identification of and reporting for variable interest entities.
Interpretation  No.  46  expands  the  criteria for consideration in determining
whether a variable interest entity should be consolidated. Interpretation No. 46
was  effective  immediately for variable interest entities created after January
31,  2003,  and  to variable interest entities in which an enterprise obtains an
interest after that date. Interpretation No. 46 was effective for the Company in
the  second  quarter  of  2003  for  variable  interest entities acquired before
February  1,  2003.  Adoption of Interpretation No. 46 did not have an impact on
the  Company's  results  of  operations  or  financial  condition.


                                     F - 11
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


B.   ACCOUNTING  POLICIES  -  CONTINUED

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year
presentation.


C.   MARKETABLE  SECURITIES

The  cost  and  fair  value  of  available-for-sale  marketable securities as of
September  30,  2003  is  as  follows:

<TABLE>
<CAPTION>
                                UNREALIZED    UNREALIZED     FAIR
2003                    COST       GAINS        LOSSES      VALUE
---------------------  -------  -----------  -----------  --------
<S>                    <C>      <C>          <C>          <C>

Marketable securities  $15,000  $   120,000  $         -  $135,000
                       =======  ===========  ===========  ========
</TABLE>


D.   PROPERTY  AND  EQUIPMENT

Property  and  equipment  consisted  of  the  following:

<TABLE>
<CAPTION>
                                    SEPTEMBER 30,
                                  2003         2002
                               -----------  -----------
<S>                            <C>          <C>
Buildings and land             $ 8,970,743  $ 8,981,741
Leasehold improvements             311,411      153,289
Furniture                          595,743      625,101
Equipment                        1,322,624    1,456,834
                               -----------  -----------
Total property and equipment    11,200,521   11,216,965
Less accumulated depreciation    2,423,464    2,094,712
                               -----------  -----------

Property and equipment, net    $ 8,777,057  $ 9,122,253
                               ===========  ===========
</TABLE>


E.   GOODWILL

During  fiscal  2002  the  Company  adopted  SFAS  No.  142,  Goodwill and Other
Intangibles  Assets,  under  which  goodwill is no longer amortized, but instead
tested  for  impairment  at least annually.  The Company's annual evaluation was
performed  as  of September 30, 2003.  No impairment losses were identified as a
result  of  this  evaluation.


                                     F - 12
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


E.   GOODWILL  -  CONTINUED

The  Company  performed  a  transitional  impairment  test of its goodwill as of
October  1,  2001  and  determined  there  should  be  an impairment of goodwill
recorded,  relating  to  portions of the Company's goodwill.  In accordance with
SFAS  No. 142, a write-off of approximately $2,532,000 has been accounted for as
a  change  in  accounting  principle, increasing the Company's loss for the year
ended  September  30,  2002.  Additionally,  goodwill  additions  amounting  to
approximately  $326,000  during  the  year  ended  September  30, 2002 were also
written  off  during  the  year  ended September 30, 2002.  All of the Company's
goodwill  as  of  September  30,  2003  and  2002, related to the Company's club
segment.


F.  LONG-TERM  DEBT

Long-term  debt  consisted  of  the  following:
<TABLE>
<CAPTION>
                                                    SEPTEMBER 30,
                                                  2003         2002
                                              ------------  ----------
<S>                                 <C>           <C>
          Note payable at prime (as
              determined by the Wall Street
              Journal) plus 1%, matures
              December 2004                   * $  331,364  $  364,167
          Notes payable at 9%, matures
              February 2018                   *  2,198,734   2,270,095
          Notes payable at 12%, matures
              March 2026                      *    143,559     144,709
          Note payable at 9%, matures
              March 2006                      *    296,795     300,052
          Note payable at 10%, matures
              August 2010, unsecured               210,260     230,365
          Note payable with imputed interest
              at 7%, matures January 2006,
              unsecured                            602,739     795,301
          Note payable at 11%, matures June
              2005                            *    186,843     278,590
          Other notes payable ranging from
              7% to 10%, maturing
              September 2005                  *     56,041     224,074
                                              ------------  ----------
          Total debt                             4,026,335   4,607,353
          Less current portion                     449,439     459,972
                                              ------------  ----------

          Total long-term debt                  $3,576,896  $4,147,381
                                              ============  ==========
<FN>
* Collateralized by real estate
</TABLE>


                                     F - 13
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


F.   LONG-TERM  DEBT  -  CONTINUED

Future  maturities  of  long-term  debt  consist  of  the  following:

<TABLE>
<CAPTION>
<S>                                           <C>
          2004                                $  449,439
          2005                                   460,782
          2006                                   673,533
          2007                                   377,665
          2008                                   148,260
          Thereafter                           1,916,656
                                              ----------

          Total maturities of long-term debt  $4,026,335
                                              ==========
</TABLE>


G.   INCOME  TAXES

Income  tax  expense for the years presented differs from the "expected" federal
income  tax  expense computed by applying the U.S. federal statutory rate of 34%
to earnings before income taxes for the years ended September 30, as a result of
the  following:

<TABLE>
<CAPTION>
                                            2003       2002
                                          --------  ----------
<S>                                       <C>       <C>
          Computed expected tax expense
               (benefit)                  $149,020  $(772,201)
          Deferred tax asset valuation
               allowance                  (149,020)   772,201
                                          --------  ----------
          Total income tax expense        $      -  $       -
                                          ========  ==========
</TABLE>

The significant components of the Company's deferred tax assets and liabilities
at September 30, are as follows:

<TABLE>
<CAPTION>
                                                    2003        2002
                                                 ----------  ----------
<S>                                              <C>         <C>
          Deferred tax assets (liabilities):
               Goodwill                          $ 501,606   $ 739,130
               Property and equipment               51,179      23,565
               Net operating losses                223,097     158,896
                  Unrealized gain on marketable
                    securities                     (40,800)          -
                  Valuation allowance             (735,082)   (921,591)
                                                 ----------  ----------
                                                 $       -   $       -
                                                 ==========  ==========
</TABLE>

The  Company has established a valuation allowance to fully reserve the deferred
tax  assets  at September 30, 2003 and 2002 due to the uncertainty of the timing
and  amounts of future taxable income.  At September 30, 2003, the Company had a
net operating loss carryforwards of approximately $656,000, which expire in 2011
through  2018.


                                     F - 14
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


H.   STOCK  OPTIONS

In  1995,  the  Company adopted the 1995 Stock Option Plan (the "1995 Plan") for
employees  and  directors.  In  August  1999  the Company adopted the 1999 Stock
Option  Plan (the "1999 Plan") (collectively, "the Plans").  The options granted
under the Plans may be either incentive stock options, or non-qualified options.
The  Plans  are  administered  by  the  Board  of Directors or by a compensation
committee  of  the Board of Directors.  The Board of Directors has the exclusive
power  to  select  individuals  to receive grants, to establish the terms of the
options  granted to each participant, provided that all options granted shall be
granted  at  an exercise price equal to at least 85% of the fair market value of
the  common  stock  covered  by  the  option  on  the grant date and to make all
determinations  necessary  or  advisable  under  the  Plans.

Following  is  a  summary  of  options  for  the  years  ended  September  30:

<TABLE>
<CAPTION>
                                               WEIGHTED             WEIGHTED
                                                AVERAGE              AVERAGE
                                               EXERCISE             EXERCISE
                                     2003        PRICE      2002      PRICE
                                  -------------------------------------------
<S>                               <C>          <C>        <C>       <C>
Outstanding at beginning of year     643,500   $    2.40  604,500   $    2.39
Granted                               40,000        1.40   64,000        2.56
Expired                             (185,500)       2.33  (25,000)       2.52
Exercised                                  -           -        -           -
                                  -----------             --------
Outstanding at end of year           498,000        2.35  643,500        2.40
                                  ===========             ========
Exercisable at end of year           458,000   $    2.41  582,000   $    2.37
                                  ===========             ========
Weighted-average remaining
     contractual life             1.58 years
                                  ===========
</TABLE>

The  Company  has  elected  to  follow APB No. 25 and related interpretations in
accounting  for  its  employee  stock options because the alternative fair value
accounting  provided  for  under  SFAS  No.  123,  Accounting  for  Stock  Based
Compensation,  requires  the  use  of  option  valuation  models  that  were not
developed for use in valuing employee stock options.  See footnote B for related
disclosures.

Under APB No. 25, no compensation expense is recorded when the exercise price of
the  Company's  employee  stock  option  equals the fair value of the underlying
stock  on  the  date  of  grant.  Compensation  equal  to the intrinsic value of
employee  stock  options is recorded when the exercise price of the stock option
is  less  than the fair value of the underlying stock on the date of grant.  Any
resulting  compensation  is  amortized  to  expense  over  the remaining vesting
periods  of the options on a straight-line basis.  For the years ended September
30,  2003  and 2002, no amounts were recorded to compensation expense related to
stock  options  issued  to  employees.


                                     F - 15
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


H.   STOCK  OPTIONS  -  CONTINUED

Information regarding pro forma net income is required by SFAS 123, and has been
determined  as if the Company had accounted for its employee stock options under
the  fair  value  method  of  SFAS  No. 123. The fair value of these options was
estimated  at the date of grant using a Black-Scholes option-pricing model using
the  following  assumptions:

<TABLE>
<CAPTION>
                                                         2003
                                                      ----------
<S>                                                   <C>
          Volatility                                        165%
          Weighted-average expected lives             3.0 years
          Expected dividend yield                             -
          Weighted-average risk free rates                  3.0%
</TABLE>

The  options  granted  in  the  year  ended September 30, 2002 were granted near
year-end, and just after year-end were cancelled.  No proforma expense for these
options  was  calculated  as  the  impact  was  not  deemed  material.

The Black-Scholes option valuation model was developed for use in estimating the
fair  value  of traded options, which have no vesting restrictions and are fully
transferable.  In  addition, option valuation models require the input of highly
subjective  assumptions  including  the expected stock price volatility. Because
changes in the subjective input assumptions can materially affect the fair value
estimate,  in  management's  opinion,  the  existing  models  do not necessarily
provide  a  reliable  single  measure  of  the  fair value of its employee stock
options.


I.   COMMITMENT  AND  CONTINGENCIES

LEASES

The  Company  leases certain equipment and facilities under operating leases, of
which  rent  expense was approximately $301,000 and $219,000 for the years ended
September  30,  2003  and  2002,  respectively.

Future minimum annual lease obligations as of September 30, 2003 approximate the
following:

<TABLE>
<CAPTION>
<S>                                               <C>
          2004                                    $  364,000
          2005                                       348,000
          2006                                       315,000
          2007                                       252,000
          2008                                       170,000
          Thereafter                                 228,000
                                                  ----------

          Total future minimum lease obligations  $1,677,000
                                                  ==========
</TABLE>


                                     F - 16
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


I.   COMMITMENT  AND  CONTINGENCIES  -  CONTINUED

EMPLOYMENT  AGREEMENT  -  RELATED  PARTY

The  Company  has  a  three-year  employment  agreement with Eric S. Langan (the
"Langan  Agreement").   The Langan Agreement extends through January 1, 2004 and
provides  for  an  annual  base  salary  of  $260,000. The Langan Agreement also
provides  for  participation  in all benefit plans maintained by the Company for
salaried  employees.


J.   SEGMENT  INFORMATION

The  following  information  is  presented  in  accordance  with  SFAS  No. 131,
Disclosures  about  Segments  of  an  Enterprise  and  Related Information.  The
Company  is  engaged  in  adult  night  clubs  and  adult entertainment websites
("Internet").  The  Company  has  identified  such  segments based on management
responsibility  and  the  nature  of the Company's products, services and costs.
There  are  no major distinctions in geographical areas served as all operations
are  in the United States.  The Company measures segment profit (loss) as income
(loss)  from  operations.  Total  assets  are  those  assets  controlled by each
reportable  segment.

The  following  table  sets  forth  certain  information  about  each  segment's
financial  information  for  the  years  ended  September  30:

<TABLE>
<CAPTION>
                                            2003             2002
                                        ------------     ------------
<S>                                     <C>              <C>
Business segment sales:
 Night clubs                            $14,006,381      $13,444,479
 Internet                                 1,053,188        2,112,823
                                        ------------     ------------

                                        $15,059,569      $15,557,302
                                        ============     ============

Business segment operating income:
 Night clubs                            $ 1,934,574      $ 2,121,642
 Internet                                    36,421          169,793
 General corporate                       (1,613,048)      (1,667,455)
                                        ------------     ------------

                                        $   357,947      $   623,980
                                        ============     ============

Business segment capital expenditures:
 Night clubs                            $   110,198      $   495,043
 Internet                                    35,310          357,500
 General corporate                           16,712           80,929
                                        ------------     ------------

                                        $   162,220      $   933,472
                                        ============     ============
</TABLE>


                                     F - 17
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


J.   SEGMENT INFORMATION - CONTINUED

<TABLE>
<CAPTION>
                                            2003             2002
                                        ------------     ------------
<S>                                     <C>              <C>
Business segment depreciation:
 Night clubs                            $    420,312     $   385,944
 Internet                                     40,960          35,600
 General corporate                            70,289          68,477
                                        ------------     ------------

                                        $    531,561     $   490,021
                                        ============     ============

Business segment assets:
 Night clubs                            $ 10,452,764     $10,086,465
 Internet                                    143,365         200,456
 General corporate                         1,659,383       2,150,399
                                        ------------     ------------

                                        $ 12,255,512     $12,437,320
                                        ============     ============
</TABLE>


K.   RELATED  PARTY  TRANSACTIONS

In May 2002, the Company loaned $100,000 to Eric Langan, Chief Executive Officer
of  the  Company.  The note is unsecured, bears interest at 11% and is amortized
over a period of ten years.  The note contains a provision that in the event Mr.
Langan  leaves  the Company for any reason, the note immediately becomes due and
payable  in full.  The balance of the note was approximately $93,000 and $99,000
at September 30, 2003 and 2002, respectively, and is included in other assets in
the  accompanying  consolidated  balance  sheet.


L.   EMPLOYEE  RETIREMENT  PLAN

The  Company  sponsors  a  Simple IRA plan (the "Plan"), which covers all of the
Company's  corporate  employees.  The  Plan  allows  the  corporate employees to
contribute  up  to  the maximum amount allowed by law, with the Company making a
matching  contribution of 3% of the employee's salary.  Expenses related to this
Plan approximated $24,000 and $27,000 for the years ended September 30, 2003 and
2002,  respectively.


M.   ACQUISITIONS  AND  DISPOSITIONS

On February 19, 2003, the Company acquired 51% control of the Wild Horse Cabaret
adult  nightclub  near Hobby Airport, Houston, Texas and will operate it as part
of  the  Company's popular XTC Cabaret group. The purchase price was $150,000 of
which  approximately $70,000 was allocated to property and equipment and $80,000
was  allocated  to  goodwill.


                                     F - 18
<PAGE>
                       RICK'S CABARET INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


M.   ACQUISITIONS  AND  DISPOSITIONS  -  CONTINUED

On  June  12,  2003,  the  Company entered into an Asset Purchase Agreement with
Taurus  Entertainment  Companies,  Inc. ("Taurus"), whereby the Company acquired
all  the  assets  and  liabilities of Taurus in exchange for 3,752,008 shares of
Taurus  of  the  4,002,008  that  the  Company  owned plus $20,000 in cash.  The
Company  also  executed  an  Indemnification  and Transaction Fee Agreement with
Taurus  for  which  the  Company received $270,000, payable $140,000 at closing,
with  $60,000  due  on  July  15,  2003,  and  $70,000  due  on August 15, 2003.
Subsequent to year-end then maturity of the $70,000 was extended to February 17,
2004  at  a  rate  of  18%,  and is included in other accounts receivable in the
accompanying  balance  sheets.


                                     F - 19
<PAGE>