SECURITIES AND EXCHANGE COMMISSION **
                             WASHINGTON, D.C.  20549
                                   FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
         OF  1934  FOR  THE  FISCAL  YEAR  ENDED:  SEPTEMBER  30,  2000
                                       OR
[ ] TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(D) OF  THE  SECURITIES
                             EXCHANGE  ACT  OF  1934

                       COMMISSION  FILE  NUMBER:  0-26958

                       RICK'S CABARET INTERNATIONAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED 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, INCLUDING ZIP CODE)

                                 (281) 820-1181
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
     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

Indicate by check mark whether the registrant (i) has 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  [ ]

Indicate  by  check  mark  if  disclosure  of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.      [X]

Issuer's  revenues  for  the  year  ended  September  30, 2000 were $12,739,316.
The  aggregate  market  value  of  Common  Stock  held  by non-affiliates of the
registrant  at  December  4,  2000, based upon the last reported sales prices on
the  Nasdaq  SmallCap Market, was $2,757,435. As of December 4, 2000, there were
approximately  4,595,495  shares  of  Common  Stock  outstanding.


<PAGE>
TABLE OF CONTENTS


PART I

Item 1.   Business                                                            3

Item 2.   Properties                                                         11

Item 3.   Legal Proceedings                                                  13

Item 4.   Submission of Matters to a Vote of Security Holders                15

PART II

Item 5.   Market for Registrant's Common Equity
          and Related Stockholder Matters                                    16

Item 6.   Management's Discussion and Analysis
          of Financial Condition and Results of Operations                   17

Item 7.   Financial Statements                                               22

Item 8.   Changes in and Disagreements With Accountants
          on Accounting and Financial Disclosure                             22

PART III

Item 9.   Directors, Executive Officers, Promoters and Control
          Persons; Compliance with Section 16(a)
          of The Exchange Act                                                22

Item 10.  Executive Compensation                                             25

Item 11.  Security Ownership of Certain Beneficial Owners
          And Management                                                     28

Item 12.  Certain Relationships and Related Transactions                     30

Item 13.  Exhibits and Reports on Form 8-K                                   32


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<PAGE>
PART  I

ITEM  1.     BUSINESS

INTRODUCTION

     Rick's Cabaret  International,  Inc.  currently owns and operates  premiere
adult    entertainment     Internet    web    sites    at    www.dancerdorm.com,
www.amateurdan.com,  and  www.xxxpassword.com.   These  web  sites  contain  our
exclusive   adult  content.   DancerDorm.com   features   exclusive  live  adult
entertainment.  AmateurDan.com  features  exclusive  adult photo  entertainment.
XXXpassword.com. features adult content licensed through Voice Media Inc.

     We also own and operate adult  nightclubs  under the name "Rick's  Cabaret"
and "XTC" which offer live adult  entertainment,  restaurant and bar operations.
We own  and  operate  our  Internet  content  production  studio  and  web  site
operations center, and three adult nightclubs in Houston, Texas. We also own and
operate adult  nightclubs  in Austin and San Antonio,  Texas,  and  Minneapolis,
Minnesota.

     References to us in this Form 10-KSB include our  100%-owned  subsidiaries,
and our 93%-owned subsidiary, Taurus Entertainment Companies, Inc.

     Our company was  organized  as a Texas  corporation  in 1994 and became the
successor to a private business that operated Rick's Cabaret since the 1980's.

HISTORY

     Until 1996,  we had one adult  nightclub  location.  In January,  1997,  we
purchased  a facility  in  Minneapolis,  Minnesota,  where we opened a new adult
nightclub,  which began  operations in March 1998. In August,  1998, we acquired
approximately  93% of the  outstanding  common  stock  of  Taurus  Entertainment
Companies,  Inc., a Colorado corporation  ("Taurus") in a private stock exchange
transaction with certain  principal  stockholders of Taurus.  The Stock Exchange
Agreement provided that we exchange one share of our common stock for each three
and  one-half  shares  of  Taurus  common  stock  owned  by  certain   principal
shareholders  of Taurus.  As a result of the  Exchange,  we exchanged a total of
571,713  shares  (post-reverse  split) of our  common  stock  for  approximately
4,002,006  shares of common  stock of Taurus,  giving us control of Taurus.  The
terms and conditions of the Exchange were determined by the parties through arms
length negotiations.  However, no appraisal was conducted. The financial results
of Taurus have been consolidated into our financial statements since the date of
acquisition.

     Taurus is a publicly  owned  company  traded on the OTCBB  under the symbol
"TAUR". In a transaction  simultaneous to the acquisition of Taurus, we acquired
certain real estate in San Antonio, Texas from one of the principal stockholders
of Taurus.  We acquired the property from a principal  stockholder of Taurus for
the same price that the principal stockholder paid for the property. We financed
the purchase of the property by the issuance of a six year $366,000  Convertible
Debenture, secured by the real estate acquired.

     In a transaction simultaneous to the acquisition of Taurus, Taurus acquired
certain real estate in Houston,  Texas from Mr. Ralph McElroy.  Taurus  acquired
the property from Mr.  McElroy for the same price that Mr.  McElroy paid for the
property.  Taurus financed the purchase of the property by the issuance of a six
year $286,744 Convertible Debenture, secured by the real estate acquired. We are
a  guarantor  of  this  Convertible  Debenture.  The  Convertible  Debenture  is
convertible  into our shares at any time  prior to  maturity  at the  Conversion
Price of $5.50.

     On March 29, 1999, Robert L. Watters,  one of our Directors,  purchased RCI
Entertainment  Louisiana,  Inc.  ("RCI  Louisiana"),  our  subsidiary,  for  the
purchase price of $2,200,000  consisting of $1,057,327 in cash, the  endorsement
over  to us  of a  $652,744  secured  promissory  note  (the  "McElroy  Note"),a
guaranteed  promissory  note in the amount of $326,773 made by Mr.  Watters (the
"Watters   Note"),   and  the  cancellation  by  Mr.  Watters  of  our  $163,156
indebtedness  to him.  The  McElroy  Note,  which is due July  31,  2004,  bears
interest at the rate of twelve  percent (12%) per annum with interest being paid
monthly.  The principal of the McElroy Note is due in one lump sum payment.  The
McElroy  Note  is  secured  by (i) our  convertible  debenture  in the  original
principal amount of $366,000,  which we issued on August,  11, 1998, in favor of
Mr. McElroy (the  "Convertible  Debenture") and (ii) a promissory note of Taurus
Entertainment Companies, Inc. (our subsidiary) and guaranteed by us (which has a
conversion  feature) in the  original  principal  amount of  $286,744.61,  dated
August 11, 1998, in favor of Mr. McElroy,  (the "Convertible  Promissory Note").
Both the Convertible  Debenture and the Convertible  Promissory Note are secured
by certain of our real estate  holdings.  The Watters Note is  guaranteed by RCI
Louisiana,  which  operates  a Rick's  Cabaret  in New  Orleans,  Louisiana.  In
connection with the acquisition of the stock of RCI Louisiana,  Mr. Watters also


                                        3
<PAGE>
assumed RCI Louisiana's liabilities of approximately  $1,400,000. As a condition
of this  transaction,  Mr.  Watters  arranged for the release by a lender of our
liability  of  $763,199  owed  to the  lender  by RCI  Louisiana,  which  we had
guaranteed. We obtained an opinion from Chaffe & Associates, Inc., a New Orleans
investment banking firm, stating that the purchase price paid by Mr. Watters for
RCI Louisiana was fair from a financial point of view to our  shareholders.  The
terms of this transaction were the result of arms length negotiations between us
and Mr. Watters. In connection with the sale of RCI Louisiana,  Mr. Watters, and
Erich Norton White,  our former  director,  entered into  agreements  with us to
terminate  their  Employment  Agreements  and to cancel all stock options on our
common  stock  which  they held.  Further,  in  connection  with the sale of RCI
Louisiana,  we entered into an Exclusive  Licensing  Agreement  with Mr. Watters
which granted Mr. Watters the right to the use of the name "Rick's  Cabaret" and
all logos,  trademarks and service marks attendant thereto for use in the states
of Louisiana, Florida, Mississippi and Alabama.

     In March, 1999, we had a 2:1 reverse stock split.

     From time to time, we enter into agreements to operate adult clubs owned by
others.

BUSINESS  ACTIVITIES--INTERNET  WEB  SITES

     In  October, 1999, we began premiere  adult Internet  web site  operations.
DancerDorm.com  features  live web cam feeds of our  dancers  who  reside in our
dormitory.  There are 32 web cams in the  dormitory  which  provide  voyeuristic
views of the lives of our dancers.  DancerDorm.com  also features an interactive
online  "chat and look"  experience  for our  members to chat with our  dancers.
Members may also visit our nightclubs to meet our dancers in person. Our members
pay a  monthly  fee to  visit  our  DancerDorm.com.  We own  the  DancerDorm.com
Internet  production  facility,  which  contains 8,000 square feet of studio and
production space. Our  AmateurDan.com  web site is also a pay site that features
exclusive  photos  of our  dancers  in  provocative  poses and  activities.  Our
www.xxxpassword.com web site features adult content licensed through Voice Media
Inc.

     Our e-commerce includes our efforts to generate Internet traffic to our web
sites.  Internet  traffic is  generated  through the  purchase  of traffic  from
third-party adult web sites or Internet domain owners and the purchase of banner
advertisements or "key word" searches from Internet search engines.

     There are numerous  adult web sites on the Internet.  Our web sites feature
exclusive live adult  entertainment and photos.  Many of our competitors feature
non-live, non-exclusive entertainment.

BUSINESS  STRATEGY--NIGHTCLUBS

     Prior to Rick's  Cabaret  opening in 1983 in  Houston,  Texas,  the topless
nightclub business was characterized by small  establishments  generally managed
by their owner. Such  establishments  were often dimly lit and the standards for
performers'  personal  appearance and personality  were not  maintained.  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
who frequently  interrupted  the music to make general  announcements.  Usually,
only  cash  was  accepted  and  businessmen   felt   uncomfortable  in  such  an
environment.  Recognizing a void in the market for a first-class  adult cabaret,
we designed Rick's Cabaret to target the businessmen's  segment of the market by
providing a unique quality  entertainment  environment.  The following summarize
our areas of operation which distinguish us:

     FEMALE  ENTERTAINMENT.  We have  followed  a  policy  of  maintaining  high
standards  in the  areas of both  personal  appearance  and  personality  of the
topless entertainers and waitresses. Though a performer's physical appearance is
very  important,   of  equal  importance  is  her  ability  to  present  herself
attractively and to converse  intelligently  with customers.  We prefer that the
performers  we hire  are  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.

     MANAGEMENT.  We recruit  staff from both  inside and  outside  the  topless
industry,  in the belief that  management  with vast years of  experience in the
adult  entertainment  industry  adds to our  ability  to grow  and  attract  top
entertainers  from within the industry.  Management  with  experience is able to
train our new recruits  from  outside the industry  with skills that can only be
learned primarily from prior experience in our industry.


                                        4
<PAGE>
     COMPLIANCE  POLICIES.  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 entertainer's  lockers.  Entertainers and waitresses
who arrive for work are not allowed to leave the premises without the permission
of management.  Once an entertainer does leave the premises,  she is not allowed
to return to work until the next day. We  continually  monitors  the behavior of
entertainers,  waitresses  and  customers  to ensure  that proper  standards  of
behavior are observed.

     We also review all credit card charges made by our customers. Specifically,
we have in place a formal  policy  which  provides  that all credit card charges
must be approved,  in writing,  by  management  before any charges are accepted.
Management is particularly  trained to review credit card charges to ensure that
the only  credit card  charges  approved  for  payment  are for food,  drink and
entertainment at Rick's Cabaret.

     FOOD AND DRINK.  We believe  that a key to the success of a premiere  adult
nightclub is a quality,  first-class bar and restaurant  operation to compliment
our  adult  entertainment.  We  employ  service  managers  who are in  charge of
recruiting  and  training  a  professional  wait  staff and  ensuring  that each
customer receives prompt and courteous service. We employs chefs with restaurant
experience  and bar  managers,  who are in  charge  of  ordering  inventory  and
scheduling  of 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 in
all of the topless cabarets are full service  operations which provides business
lunch  buffets and a full-scale  lunch and dinner menu service  offering hot and
cold appetizers,  salads,  seafood, steak and lobster. An extensive selection of
premiere  wines  are  offered  to  compliment  any  customer's  lunch or  dinner
selection.

     CONTROLS.   Operational  and  accounting  controls  are  essential  to  the
successful  operation of a cash  intensive  nightclub and bar business.  We have
implemented internal procedures and controls designed to ensure the integrity of
our operational and accounting records.  We separate  management  personnel from
all cash handling to ensure that management is isolated from and does not handle
any cash. We use a  combination  of accounting  and physical  inventory  control
mechanisms  to ensure a high level of  integrity  in our  accounting  practices.
Computers  play a  significant  role in  capturing  and  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.  Further,  we conduct, on a monthly basis, an
independent  overview of our financial  condition  and have engaged  independent
accountants  to conduct an annual  audit and to review and advise us relating to
our internal controls.

     ATMOSPHERE. We maintain a high design standard in our facilities and D cor.
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.  This
environment is carefully  monitored,  in terms of maintenance,  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
business  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 marketing philosophy towards customers is to
portray Rick's Cabarets as premiere cabarets providing topless  entertainment in
a fun,  yet  discreet,  environment.  Hotel  publications,  local  radio,  cable
television,  newspapers, billboards, taxi-cab reader boards as well as a variety
of promotional  campaigns ensure that the Rick's Cabaret name is kept before the
public.  We have also gained great exposure through the Internet through our web
sites, including www.Ricks.com.


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<PAGE>
     Rick's Cabaret has received a significant amount of media exposure over the
years. Television segments about Rick's Cabaret have appeared on television talk
shows. In addition,  Penthouse magazine produced a nine page article on the club
and Playboy  magazine  covered our 1993 golf  tournament.  In the past,  we have
sponsored golf tournaments and outings that have generated  significant interest
and tradition.  Articles about Rick's Cabaret have appeared in Glamour  Magazine
and The Ladies Home  Journal.  Rick's  Cabaret has been  mentioned  in an inside
cover story in Time Magazine as well as being mentioned on numerous occasions in
local  newspapers  and in Texas Monthly  Magazine.  In 1993 Rick's  produced the
Girls  of  Rick's  video,  a 90  minute  video  feature,  which  was  aired as a
Pay-per-View show on Warner Cable Television. This video was reviewed in several
local newspapers as well as the Hollywood Variety  magazine.  Rick's Cabaret has
provided entertainers for other Pay-Per-View features as well.

     We received  extensive  national coverage of our Initial Public Offering of
stock,  our PI, and articles  appeared in The Wall Street  Journal,  Los Angeles
Times,  Houston Business Journal,  and numerous other regional  newspapers.  The
television  program  "Extra" ran a short  feature on Rick's,  as did the program
"Inside Edition."

NIGHTCLUB  LOCATIONS

     We  have  three  Rick's Cabaret locations in Houston, Texas  and one Rick's
Cabaret  in  Minneapolis,  Minnesota.  We also own one nightclub in San Antonio,
Texas  that operates under the name XTC.  Our 93%-owned subsidiary, Taurus, owns
a  nightclub  in  Austin,  Texas  also  under  the  name  XTC.

     We sold our New Orleans nightclub in March,  1999. In July, 2000, we sold a
facility in south Houston. We are continually looking at expansion opportunities
to open more nightclubs throughout the U.S.

COMPETITION

     The adult topless club  entertainment  business is highly  competitive with
respect to price,  service and location,  as well as the  professionalism of our
entertainment   product.  All  of  our  nightclubs  compete  with  a  number  of
locally-owned  adult cabarets,  some of whose names may enjoy  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 and only the name "Rick's" and
"Rick's  Cabaret" and "XTC  Cabaret"  are  proprietary.  For example,  there are
approximately   50  adult  cabarets   located  in  the  Houston  area  of  which
approximately 10 are in direct  competition  with us. In Minneapolis,  Rick's is
favorably  located  downtown and is a short walk from the Metrodome  Stadium and
the  Target  Center.  There  is  only  one  cabaret  in  Minneapolis  in  direct
competition  with us. We  believe  that the  combination  of our  existing  name
recognition and the distinctive entertainment environment that we have created ,
will allow us to  effectively  compete within the industry and within the cities
in which 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 Hours


     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  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.  Prior to  expanding  into any new market,  we will 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, 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.


                                        6
<PAGE>
     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.

     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 in the prior  Houston,  Texas
Ordinance.

     The City of Houston has  appealed  the  District  Court's  rulings with the
Fifth  Circuit  Court of Appeals,  and the Company  filed a brief with the Fifth
Circuit.  In the event that the City of Houston is successful in the appeal, the
Company's  Bering Drive  location  could be out of  compliance.  Such an outcome
could have an adverse impact on the Company's future.

     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 that were upheld
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 the event that our court appeal is unsuccessful,  such an outcome
could have an adverse impact on us.

     In 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 recently  implemented  provisions 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 may result in fewer
dancers working, which could have an adverse impact on the Houston locations. It
is unknown what future impact the  enforcement  of the Ordinance may have on our
Houston locations.

     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.

     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 our "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.


                                        7
<PAGE>
EMPLOYEES  AND  INDEPENDENT  CONTRACTORS

     As of September 30, 2000, we had approximately 400 full-time employees,  of
which 40 are in management  positions,  including  corporate and  administrative
operations,  and  approximately  360 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.

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


SUBSEQUENT  EVENT


     In August  2000,  we  acquired  the  Chesapeake  Bay  Cabaret,  an  upscale
gentlemen's  club  located  just  minutes from the Houston NASA Space Center and
Houston's  Hobby  Airport.  We issued  160,000 shares of our common stock to WMF
Investments Inc., the seller, as consideration.  We entered into a 10 year lease
with an additional 10 year lease option for the Chesapeake Bay Cabaret  property
from WMF Investments, Inc.


ITEM  2.   PROPERTIES

     Our principal  executive offices are co-located at 505 North Belt, Houston,
Texas 77060 with our  subsidiary,  Taurus in leased  facilities  consisting of a
total of 1,200 square feet.  We pay rent of  approximately  $1,100 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  locations of our  Internet  production  studio and  DancerDorm,
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
Houston location of the Chesapeake Bay Club.

     The Rick's Cabaret located on Bering Drive in Houston has aggregate  12,300
square feet of space.  The balance as of September 30, 2000,  that we owe on the
mortgage is $453,824  and the  interest  rate is prime plus 1%. We pay $8,315 in
monthly mortgage  payments.  The last mortgage payment is due in December,  2001
with a balloon payment of $370,000.

     The Rick's Cabaret  located on Northbelt Drive in Houston has 12,000 square
feet of space, and is owned by our 93%-owned subsidiary,  Taurus. The balance as
of September 30, 2000,  that we owe on the mortgage is $281,682 and the interest
rate is 10%.  We pay $13,758 in monthly  mortgage  payments.  The last  mortgage
payment is due in August 2002.

     The Rick's Cabaret  located in Minneapolis has 15,400 square feet of space.
The balance as of September, 2000, that we owe on the mortgage is $2,394,981 and
the interest rate is 9%. We pay $22,732 in monthly mortgage  payments.  The last
mortgage payment is due in 2018.

     The XTC  nightclub in Austin has 6,800 square feet of space,  which sits on
1.2  acres  of land.  The  balance  as of  September,  2000,  that we owe on the
mortgage is  $184,376  and the  interest  rate is 14%. We pay $17,957 in monthly
mortgage payments. The last mortgage payment is due in August 2001.

     The XTC  nightclub  in San  Antonio  has 7,800  square  feet of  space.  We
acquired the property from Mr. Ralph McElroy for the same price that Mr. McElroy
paid for the property.  We financed the purchase of the property by the issuance
of a six  year  $366,000  Convertible  Debenture,  secured  by the  real  estate
acquired.  The principal  balance of the  Convertible  Debenture is due in July,
2004,  in one lump sum payment.  Interest is due and payable  monthly,  with the
first interest payment beginning in September,  1998. The Convertible  Debenture
is subject to  redemption  at our  option,  in whole or in part,  at 100% of the
principal face amount of the Convertible Debenture redeemed plus any accrued and
unpaid interest on the redemption  date, at any time and from time to time, upon
not less  than 30 nor more  than 60 days  notice,  if the  Closing  Price of our
common stock shall have equaled or exceeded $17.00 per share of common stock for
ten (10) consecutive trading days. The Convertible Debenture is convertible into
shares of Common Stock at any time prior to maturity  (unless earlier  redeemed)
at the  Conversion  Price of  $5.50.  See,  Certain  Relationships  and  Related
Transactions.


                                        8
<PAGE>
     Our  Internet  production  studio  has 8,000  square  feet of  space.  This
property is owned by us free and clear.

     Taurus formerly owned a 12,000 square foot building in Houston, Texas which
Was Subsequently sold in July, 2000.

     Taurus and its subsidiaries own a 350 acre ranch in Brazoria County, Texas,
and approximately 50 acres of raw land in Wise County, Texas.

     The balance as of  September  30, 2000 that we owe on the  Brazoria  County
ranch  mortgage is $305,732  and the  interest  rate is 9.25%.  We pay $2,573 in
monthly  mortgage  payments.  The last  mortgage  payment  is due in 2006 with a
balloon payment of $287,920.

     The  balance as of  September  30,  2000 that we owe on the Wise County raw
land mortgage is $146,634 and the interest rate is 12%. We pay $1,537 in monthly
mortgage payments. The last mortgage payment is due in March, 2026.

     We lease the  property  in  Houston  where our  Chesapeake  Bay  Cabaret is
located.  We acquired the  operations of the Chesapeake Bay Club in August 2000.
The  lease  term is for 10  years,  with an  additional  10  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.


ITEM  3.   LEGAL  PROCEEDINGS

     In November,  1998, LMTD, Inc. initiated litigation against a subsidiary of
one of our subsidiaries, Citation Land, LLC ("Citation"), in a case styled LMTD,
Inc. v. Texas  Warehouse  Company,  Inc., et al. in Cause No.  98-12570,  in the
200th Judicial  District Court of Travis County,  Texas. The plaintiff alleged a
tortuous  interference  claim  against  Citation  in the amount of  $540,000  in
connection with a Purchase Option  Agreement the plaintiff claims to have with a
company named Texas Warehouse  Company,  Inc. In October 2000, we were granted a
partial summary judgment on some of the issues in this matter. In November 2000,
the court signed a  take-nothing  judgment in our favor against the plaintiff on
all other matters.

     In April,  1999 we were served as a defendant in litigation  styled John M.
Skora and Robert Martin v. Trumps, Inc., Rick's Cabaret International, Inc., RCI
Entertainment (Texas), Inc., and Robert L. Watters, Cause No. 1999-09394, in the
11th Judicial  District Court of Harris County,  Texas.  The plaintiffs  claimed
that they purchased dances at our nightclubs and paid for the dances with credit
cards. The plaintiffs assert that we violated the Texas Finance Code by imposing
a  surcharge  for  credit  card  use.  The  Plaintiffs  non-suited  (voluntarily
dismissed) this action in August, 2000.


     In January,  1999,  the  Company was named as a defendant  in McGill v. RCI
Entertainment (Minnesota) Inc., No. 98-2742, U.S. District Court, Minnesota. The
plaintiffs  asserted  claims  for  federal  and  state  civil  rights  acts  for
discrimination  and harassment.  Some of the plaintiffs settled with us, and all
other matters were dismissed by the court

     In  June,  1999,  the  Company  was  named  as  defendant  in  Hubka v. RCI
Entertainment  (Minnesota).  Inc., No. CT 99-009560,  Hennepin  County  District
Court.  The plaintiff has asserted  claims under the Minnesota  Human Rights Act
and for negligence. This matter has been resolved.

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.


                                        9
<PAGE>
     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.

     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,  and we filed a brief with the Fifth Circuit. 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 the our
future.

     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  the  event  that  our  court  appeal  is
unsuccessful, such an outcome could have an adverse impact on us.

     In 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 and club managers be licensed.
The City of Houston's enforcement of the recently implemented  provisions 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  locations.  The requirement that a dancer be licensed may result
in fewer  dancers  working,  which  could have an adverse  impact on the Houston
locations. It is unknown what future impact the enforcement of the Ordinance may
have on our Houston locations.


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

We held our annual meeting of shareholders on August 24, 2000. The  shareholders
elected the following seven persons as directors.

                    Votes For
                    ---------
Eric S. Langan      4,007,048
Robert L. Watters   4,007,023
Michael S. Thurman  4,007,048
Alan Bergstrom      4,007,048
Travis Reese        4,007,048
Ron Levi            4,007,048
Pal Lesser          4,007,048

     The shareholders ratified the selection of Jackson & Rhodes, P.C., as the
     Company's independent auditors:
     4,004,601 Votes For The Ratification
     5,762 Votes Against Ratification
     1,408 Votes Abstaining


                                       10
<PAGE>
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 last sales
prices per share for the common stock. Our fiscal year ends September 30, 2000.

     COMMON STOCK PRICE RANGE

                  HIGH       LOW

                 Fiscal 1999 (*)

First Quarter   $    9/16   $   5/16
Second Quarter  $   15/16   $   7/16
Third Quarter   $  5-1/16   $  1-7/8
Fourth Quarter  $ 4-11/16   $ 2-9/16

          Fiscal 2000

First Quarter   $  3.50     $ 2 1/16
Second Quarter  $  6 7/16   $  2 3/8
Third Quarter   $  5 3/8    $   2.00
Fourth Quarter  $  2.50     $  1 5/8

_________________
(*)     In March, 1999, we had a 2:1 reverse stock split.

     On December 4, 2000,  the last sales price for the common stock as reported
on the Nasdaq  SmallCap  Market  was  $1.25.  On  December  4, 2000,  there were
approximately 410 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.


RECENT SALES OF UNREGISTERED SECURITIES

     During the quarter ended September 30, 2000, we sold unregistered shares of
our  common  stock in  reliance  upon  exemptions  from  registration  under the
Securities Act of 1933 as amended (the "Act") as provided in Section 4(2) of the
Act. Each  certificate  issued for  unregistered  securities  contained a legend
stating that the securities have not been  registered  under the Act and setting
forth the restrictions on the transferability and the sale of the securities. No
underwriter  participated  in,  nor  did we pay any  commissions  or fees to any
underwriter  in  connection  with  any  of  these  transactions.   None  of  the
transactions involved a public offering.

     In July 2000, we issued  700,000 shares of our common stock to Voice Media,
Inc. as consideration  for our purchase of  xxxpassword.com.  Of these,  450,000
shares were issued at a value of $669,375. The remaining 250,000 shares are held
in escrow  and are  subject  to an earnout  requirement  based on the  financial
performance of  xxxpassword.com.  These 250,000 shares are further  subject to a
voting agreement whereby our President,  Eric Langan, holds the voting power for
these shares.  We made this sale in reliance upon exemptions  from  registration
under Section 4(2) of the Act.

     In  August  2000,  we issued  160,000  shares  of our  common  stock to WMF
Investments,  Inc. as consideration for our purchase of the Chesapeake Bay Club.
These  shares  were  valued at  $189,000.  We made this  sale in  reliance  upon
exemptions from registration under Section 4(2) of the Act.


                                       11
<PAGE>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.

     The following  discussion  should be read in conjunction with the Company's
audited consolidated  financial statements and related notes thereto included in
this annual report.

FORWARD  LOOKING  STATEMENT  AND  INFORMATION

     The Company is 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, or on behalf of, the  Company.  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",  "anticipates"
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.  The  Company's  expectations,  beliefs and
projections  are expressed in good faith and are believed by the Company to have
a reasonable basis,  including without limitation,  management's  examination of
historical  operating trends,  data contained in the Company's records and other
data  available  from  third  parties,  but  there  can  be  no  assurance  that
management's expectation, beliefs or projections will result, be achieved, or be
accomplished.  In addition to other  factors  and  matters  discussed  elsewhere
herein,  the following  are important  factors that, in the view of the Company,
could cause material  adverse affects on the Company's  financial  condition and
results of  operations:  the risks and  uncertainties  relating to our  Internet
operations,  the impact and  implementation  of the sexually  oriented  business
ordinance  in the  City of  Houston,  competitive  factors,  the  timing  of the
openings of other clubs,  the integration of operations of Taurus  Entertainment
Companies,  Inc.  with  our  operations  and  management,  the  availability  of
acceptable  financing to fund corporate expansion efforts,  competitive factors,
and the dependence on key personnel.  The Company has no obligation to update or
revise these  forward-looking  statements  to reflect the  occurrence  of future
events or circumstances.

GENERAL

     We currently own and operate three adult  Internet  membership web sites at
www.dancerdorm.com, www.amateurdan.com, and www.xxxpassword.com.

     We  also  own  and operate adult nightclubs under the name "Rick's Cabaret"
and  "XTC"  which offer live adult entertainment, restaurant and bar operations.
We  own  and  operate  our  Internet  content  production  studio  and  web site
operations  center,  and  three adult nightclubs in Houston, Texas.  We also own
and  operate adult nightclubs in Austin and San Antonio, Texas, and Minneapolis,
Minnesota.

     Our  revenues  are derived from subscriptions to adult content internet web
sites  and from the sale of liquor, beer, wine and food, cover charges and other
income.  Our  fiscal  year  end  is  September  30.

RESULTS OF OPERATIONS  FOR THE FISCAL YEAR ENDED  SEPTEMEBR 30, 2000 AS COMPARED
TO THE FISCAL YEAR ENDED SEPTEMEBR 30, 1999

     For the fiscal year ended September 30, 2000, the Company had  consolidated
total  revenues of  $12,739,316  compared  to  consolidated  total  revenues  of
$10,381,427  for  the  year  ended  September  30,  1999,  or  an   increase  of
$2,357,889.  The increase in total  revenues was due to the increase in revenues
in the  Company's  existing  and new  locations  of $775,613 and to the revenues
generated by the Company's Internet businesses of $1,582,276.

     The cost of goods sold for the year ended  September  30,  2000 was 19 % of
total  revenues  compared  to 13% for the  year  ended  September  30,1999.  The
increase was due primarily to the initial costs of our Internet operations,  the
increase in cost of providing  complimentary food in our XTC locations,  and the
addition of logo  merchandise  to our sales mix.  The cost of goods sold for the
club  operation  for the year ended  September  30, 2000 was 24% of the sales of
alcoholic  beverages and food  compared to 26% for the year ended  September 30,
1999.  We continued  our efforts to achieve  reductions in cost of goods sold of
the club operations through improved inventory management. We continue a program
to improve margins from liquor and food sales and food service  efficiency.  The
cost of sales from our Internet  operation for the year ended September 30, 2000
was 63%.


                                       12
<PAGE>
     Payroll  and  related  costs for the year  ended  September  30,  2000 were
$4,193,349  compared to $3.637,637  for the year ended  September 30, 1999.  The
increase was a reflection of the additional personnel experienced by the Company
as it adds more  locations  and  continues to increase the size and the scope of
our  internet  operation.  Management  currently  believes  that its  labor  and
management staff levels are of appropriate levels.

     Other  selling,  general  and  administrative  expenses  for the year ended
September 30, 2000 were  $5,986,936  compared to  $5,264,577  for the year ended
September  30, 1999.  The increase was due to increased  number of the Company's
locations and the expansion of our Internet business.

     Interest  expense  for the year  ended  September  30,  2000  was  $414,660
compared to $545,829 for the year ended  September  30,  1999.  The decrease was
primarily  due to the  Company's  position in not  obtaining  new debts,  but to
aggressively reduce its debt burden.

     Other Income for year ended  September 30, 2000 was $281,076 as a result of
vendors' concessions on our liabilities,  and $181,840 from the gain on the sale
of assets.

     Net income for the year ended September 30, 2000 was $202,587 compared to a
net loss of $40,572 for the year ended  September 30, 1999.  The increase in net
income was primarily  due to the increase in net income in Company's  locations,
the vendors'  concessions  on Company's  liability,  the results of our Internet
operations and the gain on sale of assets.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  September  30,  2000,  the  Company  had a working  capital  deficit of
$133,686 compared to working capital of $15,709 at September 30, 1999.

     Net cash provided by operating  activities in the year ended  September 30,
2000 was  $774,077  compared  to net cash used of  $543,347  for the year  ended
September 30, 1999.  The increase in cash provided by operating  activities  was
due to an increase in accounts  payable  and accrued  expenses  and  significant
profit before depreciation in fiscal 2000.

     Depreciation  and  Amortization  for the year ended September 30, 2000 were
$585,797 compared to $630,001 for the year ended September 30, 1999.

     In the opinion of  management,  working  capital is not a true indicator of
the financial  status.  Typically,  the Company carries  current  liabilities in
excess of current assets because the business receives  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 the Company with  opportunities  to
adjust to  short-term  business  down turns.  The Company  considers the primary
indicators  of  financial  status  to be the  long-term  trend  and mix of sales
revenues,  overall cash flow and profitability  from operations and the level of
long-term debt.

SEASONALITY

     The Company is significantly affected by seasonal factors.  Typically,  the
Company has experienced  reduced revenues from April through  September with the
strongest operating results occurring during October through March.


YEAR  2000  ISSUES

     We have not had any Year 2000 deficiencies internally or externally.  We do
not expect to have any Year 2000  deficiencies  internally and externally.  If a
Year 2000 deficiency occurs internally or externally, we will shift our internal
and  external  resources to fix the  deficiency.  We do not expect any Year 2000
deficiency to require an expenditure of more than $10,000.


ITEM  7.   FINANCIAL  STATEMENTS

     The information  required hereunder is included in this report as set forth
in the "Index to Financial Statements" on page F-1.

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

     There have been no changes in accountants  since our incorporation in 1994,
nor  have  there  been any  disagreements  with  accountants  on any  matter  of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure.


                                       13
<PAGE>
                                    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 Langan          32  Director, CEO, President and Chief Financial Officer
Michael S. Thurman   40  Director, COO and V.P.-Director of Operations.
Travis Reese         30  Director and V.P.-Director of Technology
Robert L.  Watters   49  Director
Alan Bergstrom       54  Director
Ron Levi             50  Director
Paul Lesser          41  Director


     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. Taurus is our public subsidiary. From January 1997 through
the present, he has held the position of President with XTC Cabaret, Inc., which
was subsequently  acquired by Taurus. From November 1992 until January 1997, Mr.
Langan was the President of Bathing  Beauties,  Inc.  Since 1989, Mr. Langan has
exercised managerial control over the grand openings and operations of more than
twelve 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 the 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 cabaret  located in Houston,  Texas and in 1988 performed site
selection,   negotiated  the  property  purchase  and  oversaw  the  design  and
permitting for the cabaret 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.

     Michael S. Thurman became our Director and our V.P.- Director of Operations
in 1999. He has been employed in the bar and restaurant  industry since 1982 for
several operators of bars and restaurants.  He has served in various  management
positions.  From 1986 through 1989 Mr.  Thurman  worked as the  controller  of a
multi-location   bar  and  restaurant   chain  with  annual  sales  in  1989  of
approximately  $6,000,000.  Beginning in 1989,  Mr. Thurman worked in managerial
capacities  for  adult  entertainment   businesses  located  in  Houston,  Texas
including  the Colorado Bar & Grill,  the Gold Club,  Rick's,  and Caligula XXI.
From 1994 until 1997, Mr. Thurman was employed as the chief financial officer of
XTC Group and the XTC  Cabaret,  businesses  now  owned and  operated  by Taurus
Entertainment Companies,  Inc., which became our subsidiary in 1998. During 1997
until mid-1998,  Mr. Thurman was a director of Taurus  Entertainment  Companies,
Inc.,

     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  stock broker 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.


                                       14
<PAGE>
     Travis Reese became our Director and our  V.P.-Director  of  Technology  in
1999.  From 1997  through  the  present,  Mr.  Reese  has 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 a 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.

     Ron Levi,  age 49, has been a director  and officer of  National  Telemedia
Corporation  since 1991. Since 1992, Mr. Levi has been a director and officer of
Voice  Media,  Inc.  In July,  2000,  Mr.  Levi was  appointed  to our  board in
connection  with our  acquisition of certain  assets of Voice Media,  Inc. Voice
Media,  Inc. and the National  Telemedia  Corporation  are global Internet media
companies, focusing on Internet development and Electronic commerce applications
for Web based entertainment  products,  including the development of proprietary
technologies, industry-defining systems and marketing processes.

     Paul Lesser,  age 40, has been a director and officer of National Telemedia
Corporation  since 1991.  Since 1992, Mr. Lesser has been a director and officer
of Voice  Media,  Inc. In July,  2000,  Mr. Levi was  appointed  to our board in
connection  with our  acquisition of certain  assets of Voice Media,  Inc. Voice
Media,  Inc. and the National  Telemedia  Corporation  are global Internet media
companies, focusing on Internet development and Electronic commerce applications
for Web based entertainment  products,  including the development of proprietary
technologies, industry-defining systems and marketing processes.


COMMITTEES  OF  THE  BOARD  OF  DIRECTORS

     We have no compensation  committee and no nominating  committee.  Decisions
concerning  executive officer  compensation for 1999 were made by the full Board
of Directors.  Eric S. Langan,  Michael S. Thurman 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 and Alan Bergstrom. The primary purpose of the Audit Committee
is to  oversee  our  financial  reporting  process  on  behalf  of the  Board of
Directors.  The Audit Committee will meets  privately with our Chief  Accounting
Officer and with our independent  public accountants and evaluates the responses
by the Chief Accounting Officer both to the facts presented and to the judgments
made by the outside  independent  accountants.  The Audit Committee  reports its
activities  to the full Board after each such  meeting so that the Board is kept
informed of its activities on a current basis.  In addition,  the activities and
responsibilities  of the Audit Committee  include the nomination or selection of
the  independent  auditors,  review of the  results  of the audit and a detailed
review of the overall Company and the adequacy of our internal controls.

     In May 2000,  the Board  adopted a  Charter  for the Audit  Committee.  The
Charter  establishes the  independence of our Audit Committee and sets forth the
scope of the Audit Committee's  duties. The Purpose of the Audit Committee is to
conduct  continuing  oversight of our  financial  affairs.  The 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.  The 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.  A majority of the members of the Audit  Committee will be independent.
The Audit  Committee  is  objective,  and reviews and  assesses  the work of our
independent accountants and our internal audit department.

     A majority of our Audit Committee members must be independent Directors and
we will meet this  requirement by June 2001. The Board of Directors  shall elect
the Members  annually.  Members  shall serve  until  their  successors  are duly
elected and qualified.  Unless an Audit Committee  Chairperson is elected by the
full Board, the Members of the Committee may designate a Chairperson by majority
vote of the all  Members.  A  majority  of the  members  will be free  from  any
relationship  that could  conflict  with a Member's  independent  judgment.  All
Members must be able to read and understand  fundamental  financial  statements,
including a balance sheet, income statement,  and cash flow statement.  At least
one Member  must have 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.


                                       15
<PAGE>
     The Board of  Directors  held four  meetings  during the fiscal  year ended
September 30, 2000.

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

CERTAIN  SECURITIES  FILINGS

     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.

ITEM  10.     EXECUTIVE  COMPENSATION


     The  following  table reflects all forms of compensation for services to us
for  the  fiscal  years  ended  September  30,  2000,  1999  and 1997 of certain
executive  officers.  No  other  executive officer of ours received compensation
that  exceeded  $100,000  during  fiscal  2000.


<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     Compens-
Position  Year    Salary     Bonus   sation (1)     Awards      SARs     Payouts    sation
--------  ----  -----------  ------  ----------  ----------  ----------  -------  ---------
<S>       <C>   <C>          <C>     <C>         <C>         <C>         <C>      <C>
Eric      2000  $175,890(2)  $1,000         -0-         -0-     -0-        5,000     -0-
Langan    1999  $155,000(2)     -0-         -0-         -0-  85,000          -0-     -0-
Director  1998         -0-      -0-         -0-         -0-  50,000          -0-     -0-
President  and  Acting  CFO
and CFO

<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.
(2)     We paid Mr. Langan $155,000 as compensation in fiscal 1999, of which
        $52,000 was allocated to our subsidiary, Taurus Entertainment Companies,
        Inc.
</TABLE>


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

              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
-----------  ------------  -----------------  ------------  --------------

Eric         5,000 shares              1.2%          $2.18       8/24/2005
Langan       100,000 shares              25%         $2.56      11/16/2004


               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

                                        Number Of
                                        Unexercised           Value of
                                        Securities            Unexercised
                                        Underlying            In-The-Money
                                        Options/SARs          Options/SARs
             Shares                     At FY-End             At FY-End
             Acquired On    Value       Exercisable/          Exercisable/
Name         Exercise       Realized    Unexercisable         Unexercisable
-----------  ------------  --------    ---------------        -------------
Eric Langan     -0- (1)       -0-       175,000 / 55,000       -0- / -0-

(1)    Mr.  Langan did not exercise any options during the fiscal year ended
       September 30, 2000.


                                       16
<PAGE>
DIRECTOR COMPENSATION

     We do not currently pay any cash  directors'  fees, but we pay the expenses
of our directors in attending board meetings.  In August,  2000, we issued 5,000
options to each present Director. These options have a strike price of $2.18 per
share and expire in August 2005.


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 Stock Option Plans for employee 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.  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.

     In 1995 we adopted the 1995 Stock Option  Plan.  A total of 300,000  shares
may be granted  and sold under the 1995 Plan.  As of December 4, 2000 a total of
192,500 stock options had been granted and are outstanding  under the Plan, none
of which have been exercised.  The Company does not plan to issue any additional
options under the 1995 Plan.

     In August,  1999 we adopted the 1999 Stock  Option Plan. A total of 500,000
shares may be granted and sold under the 1999 Plan.  As of September 30, 2000, a
total of 398,000  stock options had been granted and are  outstanding  under the
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 August 11, 2001 and provides
for an annual  base  salary of  $171,600.  In April,  1999,  Mr.  Langan  took a
voluntary  salary  reduction  for the remainder of fiscal year 1999 of 20% for a
reduction of $34,320.  The Langan  Agreement also provides for  participation in
all  benefit  plans  maintained  by us  for  salaried  employees.  Mr.  Langan's
Agreement  contains a  confidentiality  provision and an agreement by Mr. Langan
not to compete with us upon the expiration of the Langan Agreement.  We have not
established  long term incentive  plans or defined  benefit or actuarial  plans.
Pursuant to the Langan  Agreement,  Mr. Langan has received  options to purchase
125,000 shares at an exercise price of $1.87 per share,  which vested in August,
1999.

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth certain  information  at December 4, 2000,
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.  As of December  4, 2000 there were  approximately
4,595,495 shares of Common Stock outstanding.


                                        17
<PAGE>
<TABLE>
<CAPTION>
Name and Address                   Number of Shares   Title of Class  Percent of Class
---------------------------------  -----------------  --------------  -----------------
<S>                                <C>                <C>             <C>
Eric S. Langan
505 North Belt, Suite 630
Houston, Texas 77060                   1,271,038 (1)  Common Stock               27%

Robert L. Watters
315 Bourbon Street
New Orleans, Louisiana 70130             10,000  (2)  Common Stock               0.3%

Michael S. Thurman
505 North Belt, Suite 630
Houston, Texas 77060                     22,471  (3)  Common Stock               0.4%

Travis Reese
505 North Belt, Suite 630
Houston, Texas 77060                     22,600  (4)  Common Stock               0.4%

Alan Bergstrom
707 Rio Grande, Suite 200
Austin, Texas 78701                      15,000  (2)  Common Stock               0.4%

Ron Levi
Suite 205
5000 North Parkway
Calabasas, California 91302              754,000 (5)  Common Stock               16.5%

Paul Lesser
Suite 205
5000 North Parkway Calabasas
Calabasas, California 91302              700,000 (5)  Common Stock               15.3%

Voice Media, Inc.
Suite 205
5000 North Parkway Calabasas
Calabasas, California 91302              700,000 (6)  Common Stock               15.2%

E. S. Langan. L.P.
505 North Belt, Suite 630
Houston, Texas 77060                     578,632      Common Stock               12.6%

Ralph McElroy
1211 Choquette
Austin, Texas, 78757                    817,147  (7)  Common Stock               17.3%

All of our Directors and Officers
as a group of seven persons            1,845,109   (8)  Common Stock             37.6%

<FN>
______________________________________
(1)  This amount includes shares owned indirectly through E. S. Langan, L.P. Mr.
     Langan is the general  partner of E. S. Langan,  L.P.  Mr.  Langan has sole
     voting and investment  power for 207,406 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.  This amount  also  includes
     options to purchase up to 235,000 shares of common stock that are presently
     exercisable.  Includes  250,000  shares  over  which Mr.  Langan has voting
     power.

(2)  Includes  options to purchase up to 10,000 shares of common stock which are
     presently exercisable.

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

(4)  Includes  options to purchase up to 22,500  shares of common stock that are
     presently exercisable

(5)  Of these,  700,000 shares are owned directly by Voice Media,  Inc.  Messrs.
     Levi and Lesser are control  person of Voice Media,  Inc. Of these  shares,
     250,000 shares are subject to a voting agreement whereby Eric S. Langan has
     voting  power over these  shares.  This voting  agreement is related to the
     acquisition  of the  XXXPassword.com  assets of Voice  Media,  Inc.  by us.


                                       18
<PAGE>
(6)  Of these shares,  250,000 shares are subject to a voting agreement  whereby
     Eric S. Langan has voting power over these shares. This voting agreement is
     related to the  acquisition of the  XXXpassword.com  assets of Voice Media,
     Inc. by us.

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

(8)  Includes options to purchase up to 297,500 shares of common stock which are
     presently exercisable.
</TABLE>

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Our Board of  Directors  has  adopted  a policy  that our  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 the
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 August,  1998, we acquired  approximately 93% of the outstanding  common
stock of Taurus  Entertainment  Companies,  Inc.  ("Taurus")  in a private stock
exchange  transaction with the certain principal  stockholders of Taurus,  among
whom were  Eric S.  Langan  and Ralph  McElroy.  The  Stock  Exchange  Agreement
provided  that we  exchange  one share of our  common  stock for each  three and
one-half shares of Taurus common stock owned by certain  principal  shareholders
of Taurus.  As a result of the Exchange,  Mr. Langan received  402,146 shares of
our common stock,  and Mr. McElroy  received 393,389 shares of our common stock.
The terms and conditions of the Exchange were  determined by the parties through
arms length negotiations.

     In a transaction  simultaneous  to the  acquisition of Taurus,  we acquired
certain  real estate in San  Antonio,  Texas from Mr.  McElroy.  We acquired the
property  from Mr.  McElroy  for the same  price that Mr.  McElroy  paid for the
property. We financed the purchase of the property by the issuance of a six year
$366,000  Convertible  Debenture,  secured  by the  real  estate  acquired.  The
Convertible Debenture bears interest at the rate of 12% per annum, with interest
payable  monthly.  Interest  payments  began in September,  1998.  The principal
balance of the  Convertible  Debenture  is due in one lump sum  payment in July,
2004. The Convertible Debenture is subject to redemption at our option, in whole
or in part, at 100% of the principal  face amount of the  Convertible  Debenture
redeemed  plus any accrued and unpaid  interest on the  redemption  date, at any
time and from time to time,  upon not less than 30 nor more than 60 days notice,
if the closing  price of our common stock shall have  equaled or exceeded  $8.50
per share of common stock for ten (10) consecutive trading days. The Convertible
Debenture  is  convertible  into  shares  of Common  Stock at any time  prior to
maturity  (unless earlier  redeemed) at the Conversion Price of $2.75 per share.
In the event that we file a  Registration  Statement  to register  shares of our
Common Stock with the  Securities  and Exchange  Commission on Form S-3 or other
similar form (except for Form S-8 or Form S-4) than we will undertake to use our
best efforts to register for resale all of Mr.  McElroy's  shares into which the
Convertible Debenture may be converted under the same Registration Statement.

     In  a  transaction  simultaneous  to  the  acquisition  of  Taurus,  Taurus
refinanced  a mortgage on one of its real estate  holdings in Houston,  Texas by
extinguishing  this  mortgage  and  replacing  it with a  Convertible  Debenture
secured by this real  estate.  The  mortgagee  was Mr.  McElroy and Mr.  McElroy
received the Convertible  Debenture.  Taurus had purchased the property from Mr.
McElroy for the same price that Mr. McElroy paid for the property. We refinanced
the purchase of the  property on terms more  favorable to Taurus by the issuance
of a six  year  $286,744  Convertible  Debenture,  secured  by the  real  estate
acquired.  We are a guarantor of this  Convertible  Debenture.  The  Convertible
Debenture  bears  interest at the rate of 12% per annum,  with interest  payable
monthly.  Interest  payments began in September,  1998. The principal balance of
the  Convertible  Debenture  is due in one lump sum payment in July,  2004.  The
Convertible Debenture is convertible into shares of our common stock at any time
prior to maturity at the Conversion  Price of $2.75 per share. In the event that
we file a Registration Statement to register shares of our Common Stock with the
Securities and Exchange Commission on Form S-3 or other similar form (except for
Form S-8 or Form S-4) than we will undertake to use our best efforts to register
for resale all of Mr. McElroy's shares into which the Convertible  Debenture may
be converted under the same Registration Statement.


                                       19
<PAGE>
     On  March  29,  1999,  Robert  L.  Watters,  our  Director,  purchased  RCI
Entertainment  Louisiana,  Inc.  ("RCI  Louisiana"),  our  subsidiary,  for  the
purchase price of $2,200,000  consisting of $1,057,327 in cash, the  endorsement
over  to us  of a  $652,744  secured  promissory  note  (the  "McElroy  Note"),a
guaranteed  promissory  note in the amount of $326,773 made by Mr.  Watters (the
"Watters   Note"),   and  the  cancellation  by  Mr.  Watters  of  our  $163,156
indebtedness  to him.  The  McElroy  Note,  which is due July  31,  2004,  bears
interest at the rate of twelve  percent (12%) per annum with interest being paid
monthly.  The principal of the McElroy Note is due in one lump sum payment.  The
McElroy  Note  is  secured  by (i) our  convertible  debenture  in the  original
principal amount of $366,000,  which we issued on August,  11, 1998, in favor of
Mr. McElroy (the  "Convertible  Debenture") and (ii) a promissory note of Taurus
Entertainment Companies,  Inc. (our subsidiary) and guaranteed by us(which has a
conversion  feature) in the  original  principal  amount of  $286,744.61,  dated
August 11, 1998, in favor of Mr. McElroy,  (the "Convertible  Promissory Note").
Both the Convertible  Debenture and the Convertible  Promissory Note are secured
by certain real estate holdings of us or our  subsidiaries.  The Watters Note is
guaranteed by RCI  Louisiana,  which  operates a Rick's  Cabaret in New Orleans,
Louisiana. In connection with the acquisition of the stock of RCI Louisiana, Mr.
Watters also assumed RCI Louisiana's liabilities of approximately $1,400,000. As
a condition  of this  transaction,  Mr.  Watters  arranged  for the release by a
lender of our liability of $763,199 owed to the lender by RCI  Louisiana,  which
we had guaranteed. We obtained an opinion from Chaffe & Associates,  Inc., a New
Orleans  investment  banking firm,  stating that the purchase  price paid by Mr.
Watters  for RCI  Louisiana  was  fair  from a  financial  point  of view to our
shareholders.  The terms of this  transaction  were the  result  of arms  length
negotiations  between us and Mr.  Watters.  In  connection  with the sale of RCI
Louisiana,  Mr. Watters,  and Erich Norton White, our former  director,  entered
into agreements with us to terminate their  Employment  Agreements and to cancel
all stock  options on our common stock which they held.  Further,  in connection
with the sale of RCI Louisiana, we entered into an Exclusive Licensing Agreement
with Mr.  Watters  which  granted  Mr.  Watters the right to the use of the name
"Rick's Cabaret" and all logos,  trademarks and service marks attendant  thereto
for use in the states of Louisiana, Florida, Mississippi and Alabama.

     On  July  6,  2000,  we  acquired  the  adult  Internet  web  site
www.XXXPassword.com from Voice Media, Inc., a corporation owned by Messrs.  Levi
and  Lesser, who a re two of our directors.  This web site had gross revenues in
excess  of  $3,000,000 for the 11 months ended May 31, 2000.  Under the terms of
the  acquisition,  we  issued  700,000  restricted shares of our common stock to
Voice  Media,  of  which  250,000  shares  will  remain  in escrow until certain
earnings  benchmarks are achieved.  Voice Media will also be entitled to receive
a  cash  earn-out  amount  from  us  of  $380,000 during the next six years.  In
addition,  Voice Media could receive up to an additional cash earn out amount of
$925,000 if certain earnings benchmarks are achieved.  Voice Media would receive
the  entire  amount if the EBIDTA (earnings before interest, depreciation, taxes
and  amortization)  of XXXPassword during the next 12 months exceeds $1,200,000.
The  cash  earn-out portion of the purchase price is payable only from up to 50%
of the free cash flow from the web site, payable over six years.  As part of the
acquisition,  Voice  Media will continue to manage and market XXXPassword for us
at  a  flat  monthly  fee.  This  transaction  was  the  result  of  arm  length
negotiations  between  the  parties.  However,  no  appraisal  was  done.


ITEM  13.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)   Exhibits

Exhibit No.  Identification  of  Exhibit
3.1   *      The  Company's Articles of Incorporation, which are incorporated by
             reference  to the Company's Form SB-2 Exhibit 3.1 as effective with
             the  Commission  on  October  12,  1995.

3.2   *      The  Company's  By-laws, which are incorporated by reference to the
             Company's  Form  SB-2 Exhibit 3.2  as effective with the Commission
             on October 12, 1995.

4.1   *      Specimen  of  the  Company's  common  stock  certificate.

4.2   *      Instruments  defining  the  rights  of  security holders, which are
             incorporated by reference to the Company's Form SB-2 Exhibit 4.2 as
             effective  with  the  Commission  on  October  12,  1995.

4.3   *      Form  of  Debenture,  which  is  incorporated  by  reference to the
             Company's  Form  8-K  dated  August  11,  1998.

21.1  *      Subsidiaries, which  is  incorporated by reference to the Company's
             Form  10-KSB  for  the  year  ended  September  30,  1998.


                                       20
<PAGE>
27.1  **     Financial  Data  Schedule
______________________
*     Incorporated  by  reference
**    Filed  herewith

(b)  Reports  on  Form  8-K.

     On July 12, 2000, we filed a report on Form 8-K  reporting the  acquisition
of assets, other events and financial statements. On September 14, 2000 we filed
a report on Form 8-K Amendment No. 1 reporting the financial  statements for the
same transaction. a report on Form 8-K reporting


                                       21
<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 6, 2000.

                                       Rick's Cabaret International, Inc.

                                       _________________________________________
                                       By:  /s/ Eric Langan
                                       ------------------------------
                                       Eric Langan, Director, CEO, 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 Langan                                         December  6, 2000
----------------------   Director,  CEO,  President
    Eric Langan          and Chief Financial Officer


_____________________________________
/s/ Michael S. Thurman                                  December  6, 2000
----------------------   Director,  COO  and
    Michael S. Thurman   V.P.-Director of Operations


______________________________________
/s/ Travis Reese                                        December  6, 2000
----------------------   Director  and
    Travis Reese         V.P.-Director of Technology


_______________________________________                 December __, 2000
/s/ _____________________
----------------------   Director
    Robert L. Watters


________________________________________
/s/ Alan Bergstrom                                      December  6, 2000
----------------------   Director
    Alan Bergstrom


________________________________________
/s/  Ron Levi                                           December  6, 2000
----------------------   Director
 Ron Levi

_______________________________________
/s/ Paul Lesser                                         December  6, 2000
----------------------   Director
 Paul Lesser


                                       22
<PAGE>
          RICK'S  CABARET  INTERNATIONAL,  INC.  AND  SUBSIDIARIES

                          AUDITED FINANCIAL INFORMATION

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                            PAGE
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . .     F-2

Consolidated Balance Sheets for the years ended
     September 30, 2000 and 1999 . . . . . . . . . . . . . . . . . . . .     F-3

Consolidated Statements of Operations for the years ended
     September 30, 2000 and 1999 . . . . . . . . . . . . . . . . . . . .     F-4

Consolidated Statements of Changes in Stockholders' Equity
     for the years ended September 30, 2000 and 1999 . . . . . . . . . .     F-5

Consolidated Statements of Cash Flows for the years ended
     September 30, 2000 and 1999 . . . . . . . . . . . . . . . . . . . .     F-6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . .     F-7


<PAGE>
                          INDEPENDENT AUDITORS' REPORT



Board  of  Directors  and  Stockholders
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, 2000 and 1999, and the
related  consolidated  statements of operations, changes in 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  consolidated  financial  statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits 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 consolidated financial statements referred to above present
fairly,  in all material respects, the consolidated financial position of Rick's
Cabaret  International, Inc. and subsidiaries as of September 30, 2000 and 1999,
and  the  results  of  their  operations and their cash flows for the years then
ended  in  conformity  with  generally  accepted  accounting  principles.


                                                          Jackson & Rhodes P.C.


Dallas,  Texas
November  30,  2000


<PAGE>
<TABLE>
<CAPTION>
                       RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                   SEPTEMBER 30, 2000 AND 1999


                                              ASSETS

                                                                          2000          1999
                                                                      ------------  ------------
<S>                                                                   <C>           <C>
Current assets:
   Cash                                                               $   374,532   $   378,161
   Accounts receivable                                                    297,761       225,565
   Inventories                                                            200,471       115,773
   Prepaid expenses                                                        67,661       102,031
   Land held for sale                                                     200,000       200,000
                                                                      ------------  ------------
     Total current assets                                               1,140,425     1,021,530
                                                                      ------------  ------------
Property and equipment:
   Buildings, land and leasehold improvements                           8,360,090     8,324,297
   Furniture and equipment                                              1,508,990     1,569,767
                                                                      ------------  ------------
                                                                        9,869,080     9,894,064
   Less accumulated depreciation                                       (1,296,898)   (1,340,343)
                                                                      ------------  ------------
                                                                        8,572,182     8,553,721
                                                                      ------------  ------------
Other assets:
   Goodwill, less accumulated amortization of $582,221 and $386,066     3,412,827     2,839,745
   Other                                                                  288,223       223,141
                                                                      ------------  ------------
                                                                        3,701,050     3,062,886
                                                                      ------------  ------------
                                                                      $13,413,657   $12,638,137
                                                                      ============  ============


                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt (Note 4)                         $   456,749   $   375,622
   Accounts payable - trade                                               437,083       514,447
   Accrued expenses                                                       380,279       115,752
                                                                      ------------  ------------
     Total current liabilities                                          1,274,111     1,005,821
Long-term debt, less current portion (Note 4)                           3,409,767     4,282,777
                                                                      ------------  ------------
         Total liabilities                                              4,683,878     5,288,598
                                                                      ------------  ------------
Commitments and contingencies (Note 7)                                          -             -
Minority interests                                                         64,410        34,247
Stockholders' equity (Note 9):
   Preferred stock - $.10 par, authorized
     1,000,000 shares; none issued                                              -
   Common stock - $.01 par, authorized
     15,000,000 shares;  issued 4,348,678 and 3,613,678 shares             43,487        36,137
   Additional paid-in capital                                          10,867,449     9,727,309
   Retained earnings (deficit)                                         (2,245,567)   (2,448,154)
                                                                      ------------  ------------
     Total stockholders' equity                                         8,665,369     7,315,292
                                                                      ------------  ------------
                                                                      $13,413,657   $12,638,137
                                                                      ============  ============
</TABLE>


           See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999


                                                     2000          1999
                                                 ------------  ------------
 Revenues:
   Sales of alcoholic beverages                  $ 4,751,459   $ 4,511,205
   Sales of food                                   1,310,893     1,035,178
   Service revenues                                4,918,740     4,229,426
   Internet revenues                               1,582,276             -
   Other                                             175,948       605,618
                                                 ------------  ------------

                                                  12,739,316    10,381,427
                                                 ------------  ------------

 Operating expenses:
   Cost of goods sold                              2,444,429     1,437,553
   Salaries and wages                              4,193,349     3,637,637
   Other general and administrative:
     Taxes and permits                             1,745,975     1,408,115
     Charge card fees                                189,463       187,428
     Rent                                            121,017       264,988
     Legal and accounting                            776,351       716,545
     Advertising                                     793,836       585,470
     Other                                         2,360,294     2,102,031
                                                 ------------  ------------

                                                  12,624,714    10,339,767
                                                 ------------  ------------

 Income (loss) from operations                       114,602        41,660

 Other income (expense)
   Interest expense                                 (414,660)     (545,829)
   Gain on sale of assets                            181,840       169,955
   Excess of insurance proceeds over fire loss             -       290,769
   Vendors' concessions (Note 10)                    281,076
   Loss on lease termination                               -      (219,780)
   Other                                              39,729       222,653
                                                 ------------  ------------

 Net loss                                        $   202,587   $   (40,572)
                                                 ============  ============

 Basic loss per common share                     $      0.05   $     (0.01)
                                                 ------------  ------------
 Weighted average shares outstanding               4,198,735     3,355,969
                                                 ============  ============


           See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                             RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999



                                                    Common Stock
                                                 -------------------   Additional   Retained
                                                 Number of              Paid-in     Earnings
                                                  Shares     Amount     Capital     (Deficit)       Total
                                                 ---------  --------  -----------  ------------  -----------
<S>                                              <C>        <C>       <C>          <C>           <C>

 Balance, September 30, 1998                     3,233,677  $ 32,337  $ 8,973,714  $(2,407,582)  $6,598,469

 Sales of common stock for cash                    312,501     3,125      621,877            -      625,002

 Issuance of common stock for services              67,500       675       63,065            -       63,740

 Stock options issued for future services                -         -       30,000            -       30,000

 Stock options issued as compensation                    -         `       38,653            -       38,653

 Net income (loss)                                       -         -            -      (40,572)     (40,572)
                                                 ---------  --------  -----------  ------------  -----------

 Balance, September 30, 1999                     3,613,678    36,137    9,727,309   (2,448,154)   7,315,292

 Sales of common stock for cash                     76,500       765      174,410            -      175,175

 Issuance of common stock for services              28,500       285       73,655            -       73,940

 Issuance of common stock for accounts payable      20,000       200       39,800            -       40,000

 Shares issued for XXXPassword (Note 3)            450,000     4,500      664,875            -      669,375

 Shares issued for Chesapeake Bay (Note 3)         160,000     1,600      187,400            -      189,000

 Net income (loss)                                       -         -            -      202,587      202,587
                                                 ---------  --------  -----------  ------------
 Balance, September 30, 2000                     4,348,678  $ 43,487  $10,867,449  $(2,245,567)  $8,665,369
                                                 =========  ========  ===========  ============  ===========
</TABLE>


           See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999

                                                             2000         1999
                                                          ----------  ------------
<S>                                                       <C>         <C>
 Net income (loss)                                        $ 202,587   $   (40,572)

 Adjustments to reconcile net income (loss) to net
  cash provided (used) by operating activities:
   Depreciation and amortization                            585,797       630,001
   Issuance of common stock for services                     73,940        63,740
   Stock options issued as compensation                           -        38,653
   Loss on lease termination                                      -       219,780
   Minority interest                                         30,163        22,351
   Gain on sale of subsidiary                                     -      (169,955)
   Excess of insurance proceeds over fire loss                    -      (290,769)
   Gain on sale of assets                                  (181,840)            -
   Vendors' concessions (Note 10)                          (281,076)            -
   Changes in assets and liabilities:
     Accounts receivable                                    102,804      (520,169)
     Inventories                                            (84,698)      (56,866)
     Prepaid expenses and other assets                      (30,712)      (68,981)
     Accounts payable and accrued liabilities               357,112      (370,560)
                                                          ----------  ------------
       Net cash provided (used) by operating activities     774,077      (543,347)
                                                          ----------  ------------

 Cash flows from investing activities:
   Additions to property and equipment and goodwill        (552,261)   (1,038,600)
   Insurance proceeds -- fire damage                              -       496,625
   Cash in subsidiary sold                                        -      (171,899)
   Proceeds from sale of subsidiary                               -     1,057,327
   Proceeds from sale of assets                             240,136             -
                                                          ----------  ------------
       Net cash provided (used) by investing activities    (312,125)      343,453
                                                          ----------  ------------

 Cash flows from financing activities:
   Common stock issued, less offering costs                 175,175       625,002
   Increase in long-term debt                               228,150         9,057
   Payments on long-term debt                              (868,906)     (653,648)
                                                          ----------  ------------
       Net cash used by financing activities               (465,581)      (19,589)
                                                          ----------  ------------

 Net increase (decrease) in cash                             (3,629)     (219,483)

 Cash at beginning of year                                  378,161       597,644
                                                          ----------  ------------

 Cash at end of year                                      $ 374,532   $   378,161
                                                          ==========  ============

 Cash paid during the period for:
   Interest                                               $ 418,701   $   501,864
                                                          ==========  ============
</TABLE>


 Noncash  activities:
     During the year ended September 30, 2000, the Company issued common shares
         for accounts  payable  and  for  certain  acquisitions  (see Note 3).


           See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999

1.   ORGANIZATION

     Rick's Cabaret  International,  Inc. (the "Company") was formed in December
     1994,  to  acquire  all  the  outstanding  capital  stock  of  Trumps  Inc.
     ("Trumps"),  a company owned 100% by the  Company's  sole  stockholder.  On
     October 13, 1995,  the Company  completed its public  offering of 1,840,000
     shares of common  stock.  The proceeds  from the sale of stock  amounted to
     approximately  $4,270,000 net of  underwriting  discounts,  commissions and
     expenses of the offering.  The Company  originally  owned a premiere  adult
     nightclub offering topless  entertainment and restaurant and bar operations
     and a  non-sexually  oriented  bar in Houston,  Texas.  The Company  opened
     another premier adult  nightclub in leased  facilities on Bourbon Street in
     New  Orleans,  Louisiana  in January  1997 (sold in 1999 - see Note 4), and
     during the year ended  September  30,  1998,  the  Company  opened  another
     premier adult nightclub in a facility purchased in Minneapolis,  Minnesota.
     Also  during  the year ended  September  30,  1998,  the  Company  acquired
     approximately 93% of the outstanding  common stock of Taurus  Entertainment
     Companies,  Inc. ("Taurus"),  a publicly held company which also owns adult
     nightclubs.  In December 1998,  the Company  opened  another  premier adult
     nightclub  in north  Houston,  located  near George  Bush  Intercontinental
     Airport in premises  leased from a subsidiary of Taurus.  During 2000,  the
     Company has  acquired  another  club  location in Houston.  The Company now
     operates  six  nightclubs  in Houston,  San  Antonio and Austin,  Texas and
     Minneapolis, Minnesota.

     During the year ended  September  30, 1999,  the Company  launched  certain
     adult  internet web sites and acquired  another site during July 2000 (Note
     3).

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Net Loss Per Common Share

     In March 1997, the Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 128,  Earnings Per Share ("SFAS 128").
     SFAS 128 provides a different method of calculating earnings per share than
     was formerly used in APB Opinion 15. SFAS 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. Dilutive earnings per share reflects the potential dilution
     of securities that could share in the earnings of the Company.  The Company
     was required to adopt this standard in the fourth quarter of calendar 1997.
     All  share  and  per  share  information  in  the  accompanying   financial
     statements  has been  retroactively  adjusted  to reflect  the effects of a
     1-for-2  reverse  split of the Company's  common shares in March 1999.  The
     accompanying  presentation is of basic earnings per share because  dilutive
     earnings per share is the same as basic.


                                      F - 7
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Use of Estimates and Assumptions

     Preparation  of the  Company's  financial  statements  in  conformity  with
     generally  accepted  accounting  principles  requires  management  to  make
     estimates  and  assumptions   that  affect  certain  reported  amounts  and
     disclosures. Accordingly, actual results could differ from those estimates.

     Inventories

     Inventories, consisting principally of liquor and food products, are stated
     at the lower of cost or market (first-in, first-out method).

     Cash  Equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid debt instruments purchased with an original maturity of three
     months or less to be cash equivalents.

     Property and Equipment

     Property and  equipment are stated at cost.  Cost of property  renewals and
     betterments are capitalized;  costs of property maintenance and repairs are
     charged against operations as incurred.  Depreciation is computed using the
     straight-line  method over the  estimated  useful  lives of the  individual
     assets, as follows:

           Building and improvements        31  years
           Equipment                       5-7  years
           Leasehold improvements           40  years

     Revenue Recognition

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

     Income  Taxes

     The Company  accounts for its income taxes in accordance  with Statement of
     Financial  Accounting  Standards  No.  109,  which  reflects  an asset  and
     liability  approach in accounting  for income  taxes.  The objective of the
     asset  and  liability  method  is to  establish  deferred  tax  assets  and
     liabilities for the temporary  differences  between the financial reporting
     basis and the tax basis of the Company's  assets and liabilities at enacted
     tax rates  expected  to be in effect  when such  amounts  are  realized  or
     settled.


                                      F - 8
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
     and its majority-owned subsidiaries.  All significant intercompany balances
     and transactions are eliminated in consolidation.

     Goodwill

     Goodwill acquired in business  acquisitions is stated at cost and amortized
     over the estimated  useful lives of fifteen years for  nightclubs  and five
     years for internet web sites.

3.   ACQUISITIONS

     On  July  6,  2000,  the  Company  acquired  an  adult  internet   website,
     XXXPassword.  The  acquisition  of  XXXPassword  was  accounted  for by the
     purchase  method of  accounting;  therefore,  the operations of XXXPassword
     have been included in the  accompanying  statement of operations  since the
     date of  acquisition.  Under  purchase  accounting,  the purchase price was
     allocated to goodwill,  because  XXXPassword  has no tangible  assets.  The
     purchase  price  was  based on the value of the  450,000  common  shares of
     Rick's issued in the acquisition.  Rick's also placed 250,000 common shares
     in escrow to be issued  should the  earnings,  as defined,  of  XXXPassword
     aggregate $400,000 for the first full 12 months following the closing date.
     These contingent  shares are to be valued and charged to the purchase price
     if the contingency is met in the next twelve months.

     The acquisition agreement between the Company and the seller of XXXPassword
     requires  the  Company to pay an Earn Out Amount of $380,000 to the seller,
     plus either (1) $475,000 if the earnings before depreciation, amortization,
     interest  and  taxes  ("EBITDA")  of  XXXPassword  during  the  first  full
     twelve-month  period  beginning on the closing date exceeds $800,000 but is
     less than  $1,200,000  (but not otherwise) or (2) $925,000 if the EBITDA of
     XXXPassword  during the first full  twelve-month  period  beginning  on the
     closing  date  exceed  $1,200,000.  The  Earn Out  Amount  is to be paid in
     monthly amounts equal only to 50% of the Free Net Cash Flow (as defined) of
     XXXPassword  during the six year period from the closing date.  Because the
     EBITDA  in the  period  from  July  6,  2000  to  September  30,  2000  was
     approximately $136,000, a portion of the Earn Out Amount ($68,263) has been
     accrued in the  accompanying  financial  statements.  This  amount has been
     added to goodwill at September 30, 2000.


                                      F - 9
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   ACQUISITIONS (CONTINUED)

     The cost of the XXXPassword acquisition was as follows:

     Fair value of 450,000 common shares issued          $669,375
      Earn out amount capitalized                          68,263
                                                         --------
                   Amount charged to goodwill            $737,638
                                                         ========

     On May 1, 2000, the Company began  operating an adult nightclub in Houston,
     Texas  ("Chesapeake  Bay") and acquired the club effective  August 4, 2000.
     The  acquisition of Chesapeake Bay was accounted for by the purchase method
     of  accounting;  therefore,  the  operations  of  Chesapeake  Bay have been
     included in the  accompanying  statement  of  operations  since the date of
     acquisition. Under purchase accounting, the purchase price was allocated to
     the assets  acquired  based on their  fair  values.  Consideration  for the
     purchase  was 160,000  shares of Company  common stock valued at their fair
     market  value of  $189,000.  The  purchase  price  and  adjustments  to the
     historical book values of Chesapeake Bay are as follows:


       Fair value of inventory acquired                   $ 12,165
       Fair values of property and equipment               142,658
       Excess cost over fair values assigned to goodwill    34,177
                                                          --------
                 Purchase price                           $189,000
                                                          ========


     The following  unaudited pro forma information for the year ended September
     30,  1999 gives  effect to the  transaction  as if it had  occurred  at the
     beginning of that year.  Chesapeake  Bay's  operations are for the calendar
     year  1999.   The  unaudited  pro  forma   information   is  presented  for
     informational purposes only and is not necessarily indicative of results of
     operations that would have been achieved had the transaction been completed
     as of the beginning of the year,  nor are they  indicative of the Company's
     future results of operations.


                                      1998
                                  ------------
       Revenues                   $11,580,298
                                  ------------
       Net loss                   $   (97,769)
                                  ------------
       Net loss per common share  $     (0.03)
                                  ------------


                                     F - 10
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                   2000         1999
                                                                -----------  -----------
<S>                                                             <C>          <C>
Note payable to a bank, payable $8,315 per month,
including interest at the prime rate plus 1%, matures
December 2001, collateralized by land and building
in Houston, Texas.                                              $  453,824   $  502,027

9% notes payable to an individual, monthly payments
aggregating $22,732, including interest, maturing in
2018.  Collateralized by real estate in Minneapolis,
Minnesota.                                                       2,394,981    2,449,511

 Note payable to partnership maturing March 2026,
 due in monthly installments of $576 including principal
 and interest at 12%; collateralized by real estate.                54,860       55,169

 Note payable to partnership maturing July 2007,
 due in monthly installments of $653 including principal
 and interest at 12%; collateralized by real estate.                62,207       62,557

 Note payable to individual maturing March 2006,
 due in monthly installments of $2,573, plus interest at
 9.25%; collateralized by real estate.                             305,731      308,202

 Note payable to corporation maturing April 2002,
 due in monthly installments of $13,758 including
 principal and interest at 10%; collateralized by real estate.     281,682      411,478

 Note payable to a financing company maturing
 August 2003, due in monthly installments of $5,380,
 including interest at 10%, collateralized by real estate .              -      547,464

 Note payable to an individual, due in monthly installments
 of $17,957, including interest at 14% through
 August 2001, collateralized by real estate                        184,381            -

 Various notes, at interest rates ranging from 6% to 12%,
 payable in monthly installments, including interest,
 aggregating approximately $8,500, collateralized by
 real estate.                                                      128,850      321,991
                                                                -----------  -----------
                                                                 3,866,516    4,658,399
 Less current maturities                                          (456,749)    (375,622)
                                                                -----------  -----------
                                                                $3,409,767   $4,282,777
                                                                ===========  ===========
</TABLE>
     Following is a summary of long-term debt at September 30:


                                     F - 11
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   LONG-TERM DEBT (CONTINUED)

     Substantially  all the  Company's  assets  are  pledged to secure the above
     debt.  The prime rate was 9.5% at  September  30, 2000.  Following  are the
     maturities of long-term debt for the years ending September 30:


            2000          $ 375,622
            2001            300,716
            2002            301,859
            2003            605,804
            2004            294,878
            Thereafter    2,779,520
                         ----------
                         $4,658,399
                        ===========

5.   SALE OF SUBSIDIARY

     On  March  29,  1999 an  investment  partnership,  headed  by Eric  Langan,
     President  of the  Company,  and another  investor,  acquired all of Robert
     Watters'  outstanding share of stock of the Company.  At the same time, the
     Company sold one of its  subsidiaries,  RCI Entertainment  Louisiana,  Inc,
     which operates a Rick's Cabaret in New Orleans,  Louisiana,  to Mr. Watters
     for the purchase price of  $2,200,000,  consisting of $1,057,327 in cash, a
     $652,744  secured  promissory  note  made by one of the  purchasers  of Mr.
     Watters' stock, a $326,773 secured promissory note made by Mr. Watters, and
     the cancellation by Mr. Watters of the Company's  $163,156 debt to him. The
     Company recorded a $169,955 gain on the sale.

6.   INCOME TAXES

     Income tax expense (benefit) consisted of current taxes for 1999. Following
     is a reconciliation  of income taxes (benefit) at the U.S. Federal tax rate
     to the amounts recorded by the Company for the years ended September 30:

                                                   2000          1999
                                               ------------  ------------
     Tax credit on loss before income
         taxes at the statutory rate           $   (76,355)  $   (13,000)
     Separate return limitation - unavailable
         loss carrybacks                            76,355        13,000
                                               ------------  ------------
                                               $         -   $         -
                                               ============  ============


                                     F - 12
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.   INCOME TAXES (CONTINUED)

     The  components of the net deferred tax  asset/liability  are as follows at
     September 30:

                                                      2000          1999
                                               ------------  ------------
     Operating loss carryforwards              $(1,087,000)  $(1,140,000)
     Deferred tax asset valuation allowance      1,087,000     1,140,000
                                               ------------  ------------
                                               $         -   $         -
                                               ============  ============


     For  tax  purposes,  the  Company  has a net  operating  loss  carryforward
     amounting to approximately  $3,200,000 which will expire,  if not utilized,
     beginning in 2012.

7.   COMMITMENTS  AND  CONTINGENCIES

     Leases

     The Company leases corporate office facilities.  Following is a schedule of
     minimum lease payments for the years ending September 30:


            2001      $ 13,536
            2002        14,382
            2003        15,228
            2004         7,416

     Concentration of Credit Risk

     The  Company  invests its cash and  certificates  of deposit  primarily  in
     deposits with major banks.  Certain  deposits may be in excess of federally
     insured limits.  The Company has not incurred losses related to its cash on
     deposit with banks.

     Litigation

     In November,  1998, LMTD, Inc. initiated litigation against a subsidiary of
     one of the Company's  subsidiaries,  Citation Land, LLC ("Citation"),  in a
     case styled LMTD, Inc. v. Texas Warehouse  Company,  Inc., et al. Cause No.
     98-12570, in the 200th Judicial District Court of Travis County, Texas. The
     Plaintiff  alleged a tortuous  interference  claim against  Citation in the
     amount of $540,000  in  connection  with a Purchase  Option  Agreement  the
     plaintiff claims to have with a company named Texas Warehouse Company, Inc.
     In October 2000, the Company was granted a partial summary judgment on some
     of the  issues  in this  matter.  In  November  2000,  the  court  signed a
     take-nothing  judgment in the Company's  favor against the plaintiff in all
     matters.


                                     F - 13
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

     On April 20, 1999 the Company was served as a defendant in litigation  that
     was filed on  February  23,  1999.  The lawsuit is styled John M. Skora and
     Robert Martin v. Trumps,  Inc.,  Rick's  Cabaret  International,  Inc., RCI
     Entertainment  (Texas),  Inc., and Robert L. Watters, Cause No. 1999-09394,
     in the 11th Judicial District Court of Harris County, Texas. The plaintiffs
     claim that they  purchased  a dance  from one of the  dancers at one of the
     Company's  nightclubs  and  paid for the  dance by the use of their  credit
     card.  The  plaintiffs  assert that the Company  violated the Texas Finance
     Code  by  imposing  a  surcharge  for  credit  card  use.  The   plaintiffs
     voluntarily dismissed this action in August 2000.

     In January,  1999,  the  Company as named as a  defendant  in McGill v. RCI
     Entertainment   (Minnesota)   Inc.,  No.  98-2742,   U.S.  District  Court,
     Minnesota.  The plaintiffs have asserted claims for under federal and state
     civil rights acts for discrimination and harassment. Some of the plaintiffs
     settled  with the  Company,  and all other  matters  were  dismissed by the
     court.

     In  June,  1999,  the  Company  was  named  as  defendant  in  Hubka v. RCI
     Entertainment (Minnesota). Inc., No. CT 99-009560, Hennepin County District
     Court.  The plaintiff has asserted  claims under the Minnesota Human Rights
     Act and for negligence. This matter has been resolved.

     The  Company is also the  subject  of other  routine  legal  matters in the
     ordinary course of business. The Company does not believe that the ultimate
     resolution  of the  above  matters  will  have  a  material  impact  on the
     Company's financial position or results of operations.

     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
     distances  that  Sexually  Oriented  Businesses  may be located to 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,  the
     Company was  informed  that Rick's  Cabaret at its  location at 3113 Bering
     Drive failed to meet the  requirements of the Ordinance and accordingly the
     renewal of the Company's  Business License at that location was denied. The
     location in north Houston opened in December, 1998 similarly failed to meet
     the requirements of the Ordinance as passed.

     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.


                                     F - 14
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Sexually Oriented Business Ordinance of Houston, Texas (Continued)

     The Company filed a written request with the City of Houston  requesting an
     extension of time during which the Company could continue operations at its
     original location under the Amortization Period provisions of the Ordinance
     since  the  Company  was  unable  to  recoup  its  investment  prior to the
     effective date of the Ordinance.  An administrative hearing (the "Hearing")
     was held by the City of Houston to determine the  appropriate  Amortization
     Period to be  granted to the  Company.  At the  Hearing,  the  Company  was
     granted an amortization period through July 1998. The Company has 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 in the prior
     Houston, Texas Ordinance.

     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
     that were upheld which may be  detrimental  to the business by the Company.
     The  Company,  in  concert  with other  sexually  oriented  businesses,  is
     appealing these aspects of the Houston, Texas Ordinance.

     The City of Houston has  appealed  the  District  Court's  rulings with the
     Fifth  Circuit  Court of Appeals,  and the  Company  filed a brief with the
     Fifth  Circuit.  In the event that the City of Houston is  successful in an
     appeal,  the Company's  Bering Drive  location  could be out of compliance.
     Such an outcome could have an adverse impact on the Company's future.

     On April 1, 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 recently implemented provisions of the
     Ordinance  could have an adverse impact on the Rick's  location 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 may 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 on the Company's Houston locations.


                                     F - 15
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Fair Value of Financial Instruments

     The  following   disclosure  of  the  estimated  fair  value  of  financial
     instruments is made in accordance  with the  requirements  of SFAS No. 107,
     Disclosures about Fair Value of Financial  Instruments.  The estimated fair
     value amounts have been determined by the Company,  using available  market
     information and appropriate valuation methodologies.

     The fair value of financial  instruments  classified  as current  assets or
     liabilities  including  cash and cash  equivalents  and notes and  accounts
     payable  approximate  carrying value due to the short-term  maturity of the
     instruments.  The fair value of short-term and long-term  debt  approximate
     carrying value base on their  effective  interest rates compared to current
     market rates.

     Other

     The  Company  presently  has a three year  employment  agreement  with Eric
     Langan (the  "Agreement")  to serve as its  President  and Chief  Executive
     Officer. The Agreement,  which extends through 2001, provides for an annual
     base salary of $171,600.  The Agreement also allows for an annual bonus, at
     the discretion of the Board of Directors (excluding Mr. Langan), based upon
     the financial performance,  including evaluation of the income and earnings
     of  the  Company   during  the  year.   The  Agreement  also  provides  for
     participation  in all benefit plans  maintained by the Company for salaried
     employees.  The  Agreement  contains  a  confidentiality  provision  and an
     agreement by Mr. Langan not to compete with the Company upon the expiration
     of the Agreement.

8.   EMPLOYEE STOCK OPTION PLAN

     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 maybe either  Incentive  Stock Options,  as
     that term is defined in Section 422A of the Internal  Revenue Code of 1986,
     as amended, or nonstatutory  options taxed under Section 83 of the Internal
     Revenue Code of 1986, as amended.  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 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 Plan. A total of 300,000
     shares  could be optioned  and sold under the 1995 Plan and 500,000  shares
     under the 1999 Plan.  The Company does not plan to issue any other  options
     under the 1995 Plan.


                                     F - 16
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.   EMPLOYEE STOCK OPTION PLAN (CONTINUED)

     During the year ended September 30, 2000 and 1999,  options were granted as
     follows:


                                                  Weighted             Weighted
                                                   Average             Average
                                                  Exercise             Exercise
                                          2000      Price      1999     Price
                                        --------  ---------  ---------  -------
      Outstanding at beginning of year   192,500  $    2.15   300,000   $ 2.23
      Granted                            398,000  $    2.48   125,000   $ 2.04
      Expired                                  -  $       -  (232,500)  $ 2.23
      Exercised                                -  $       -         -
      Outstanding at end of year         590,500  $    2.37   192,500   $ 2.15
                                        --------             ---------
      Exercisable at end of year         280,000  $    2.27   167,500   $ 2.06
                                        --------             ---------

     SFAS 123

     In October 1995, the Financial  Accounting  Standards Board ("FASB") issued
     SFAS 123,  "Accounting  for Stock-Based  Compensation."  SFAS 123 defines a
     fair value  based  method of  accounting  for an employee  stock  option or
     similar equity  instrument and encourages all entities to adopt that method
     of accounting for all of their employee stock compensation plans. Under the
     fair value based  method,  compensation  cost is measured at the grant date
     based on the value of the award. However, SFAS 123 also allows an entity to
     continue to measure  compensation  cost for those plans using the intrinsic
     value  based  method  of  accounting  prescribed  by APB  Opinion  No.  25,
     "Accounting for Stock Issued to Employees."

     Under the intrinsic value based method, compensation cost is the excess, if
     any,  of the  quoted  market  price of the  stock  at  grant  date or other
     measurement date over the amount an employee must pay to acquire the stock.
     Entities electing to remain with the accounting in Opinion 25 must make pro
     forma disclosures of net income and earnings per share as if the fair value
     based method of  accounting  had been  applied.  The Company has elected to
     measure  compensation  cost,  including  options issued,  under Opinion 25.
     Under this method,  compensation  expense  amounted to $10,890 for the year
     ended  September 30, 1999. The Company  recorded an additional  $13,648 and
     $27,763  in  expense  for 2000 and 1999,  respectively  under  SFAS 123 for
     options issued to non-employees.

     Pro forma  disclosures  as required by SFAS 123 for the fiscal  years ended
     September 30, 2000 and 1999 are as follows:


                                                      2000        1999
                                                   ----------  ----------
           Pro forma net income (loss)             $(187,705)  $(176,374)
                                                   ----------  ----------
           Pro forma net income (loss) per share   $   (0.04)  $   (0.05)
                                                   ----------  ----------


                                     F - 17
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.   EMPLOYEE STOCK OPTION PLAN (CONTINUED)

     The fair  value of the  awards  was  estimated  at the grant  date  using a
     Black-Scholes  option  pricing  model with the following  weighted  average
     assumptions for 2000: risk-free interest rate of 5.5%; volatility factor of
     80%; and an expected life of the awards of two years.  The weighted average
     assumptions  for 1999 were:  risk-free  interest  rate of 4.5%;  volatility
     factor  of 374%;  and an  expected  life of the  awards  of one  year.  The
     weighted average  contractual life of the outstanding  options at September
     30, 2000 and 1999 was 3.9 and 4.1 years, respectively.

9.   STOCKHOLDERS' EQUITY

     The Company acquired certain real estate in San Antonio,  Texas under terms
     of a 12%  subordinated  convertible  debenture  (Note 4). The  debenture is
     payable  monthly,  interest only,  until maturity in July 2004. The Company
     has the option to redeem the debenture,  in whole or in part, at its option
     if the closing price of the  Company's  common stock should equal or exceed
     $8.50 per share for a period of ten days.  The holder of the  debenture has
     the option to convert any portion of the  debenture to common shares of the
     Company at the  conversion  price of $2.75 per share.  The  debentures  are
     subordinated  to the  Company's  bank  debt and  other  "Senior  Debt",  as
     defined. The debentures are collateralized by the acquired real estate.

     Taurus  purchased  real  estate in  Houston,  Texas from Ralph  McElroy,  a
     principal stockholder of the Company, where Taurus operates an XTC Cabaret.
     The Company  acquired the property from Mr. McElroy for the same price that
     Mr. McElroy paid for the property. The Company financed the purchase of the
     property by the  issuance  of a six-year  $286,744  Convertible  Debenture,
     secured by the real estate  acquired.  The  Company is a guarantor  of this
     Convertible  Debenture.  The principal balance of the Convertible Debenture
     is due in July, 2004, in one lump sum payment.  Interest is due and payable
     monthly,  with the first interest payment  beginning in September 1998. The
     Convertible  Debenture  is  convertible  into shares of Common Stock of the
     Company at any time prior to maturity at the Conversion  Price of $2.75 per
     share.

     In connection  with the sale of the Company's  subsidiary in 1999 (Note 4),
     the  Company  received  a note  receivable  from  the  holder  of  the  two
     debentures above which is equal in amount and rate to the debentures above.
     The  Company  has  offset  these  notes   receivable  and  payable  in  the
     accompanying balance sheet at September 30, 1999.


                                     F - 18
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.  OTHER INCOME

     Other income includes  approximately  $281,000 representing the writeoff of
     old outstanding  accounts  payable which the Company  believes is no longer
     owed to certain third parties.

11.  SEGMENT INFORMATION

     Beginning in 2000, the Company is operating in two industries:  adult night
     clubs and adult internet web sites.

     Following is a summary of segment  information for the year ended September
     30, 2000:

             Sales:
                Night clubs                   $11,157,040
                Internet                        1,582,276
                                              ------------
                                              $12,739,316
                                              ============

              Operating income (loss):
                Night clubs                   $ 1,152,591
                Internet                         (309,201)
                                              ------------
                                                  843,390

              General corporate expenses         (698,626)
              Other income (expense), net          57,823
                                              ------------
              Net income                      $   202,587
                                              ============

              Identifiable assets:
                Night clubs                   $ 9,256,549
                Internet                          275,329
                                              ------------
                                                9,531,878
              General corporate assets            537,202
                                              ------------
                Total assets                  $10,069,080
                                              ============


                                     F - 19
<PAGE>
               RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11.  SEGMENT INFORMATION (CONTINUED)

              Capital expenditures:
                Night clubs                   $   312,762
                Internet                      $   175,614
                General corporate                  63,885
                                              $   552,261
                                              ============

              Depreciation and amortization:
                Night clubs                   $   474,756
                Internet                      $    92,774
                General corporate                  18,267
                                              $   585,797
                                              ============


Operating  income  represents  revenues less operating expenses for each segment
and  excludes  income  and expenses of a general corporate nature.  Identifiable
assets  by  segment  are  those assets that are used in the Company's operations
within  that  industry  but  exclude  investments  in  other  industry segments.
General  corporate  assets  consist  principally  of  corporate  cash.


                                     F - 20
<PAGE>