UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

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

         For the quarterly period ended      March 31, 2003
                                             --------------

                                       OR

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

         For the transition period from                      to
                                            ----------------    ----------------


                         Commission file number 0-23367


                     BIRNER DENTAL MANAGEMENT SERVICES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                    COLORADO                                 84-1307044
-----------------------------------------------         -------------------
 (State or other jurisdiction of incorporation             (IRS Employer
                or organization)                        Identification No.)


               3801 EAST FLORIDA AVENUE, SUITE 508
                        DENVER, COLORADO                        80210
--------------------------------------------------------------------------------
            (Address of principal executive offices)         (Zip Code)

                                 (303) 691-0680
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes      X     No
     --------      ---------

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes             No     X
     ---------      -------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

             Class                         Shares Outstanding as of May 5, 2003
-------------------------------           --------------------------------------
Common Stock, without par value                          1,334,936


<PAGE>




            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                               INDEX TO FORM 10-Q


PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>

Item 1.   Financial Statements                                                                  Page
                                                                                                ----

<S>                                                                                               <C>
          Unaudited Condensed Consolidated Balance Sheets as of December 31, 2002
           And March 31, 2003                                                                     3

          Unaudited Condensed Consolidated Statements of Operations for the Quarters
           Ended March 31, 2002 and 2003                                                          4

          Unaudited Condensed Statement of Shareholders' Equity                                   5

          Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months
             Ended March 31, 2002 and 2003                                                        6

          Unaudited Notes to Condensed Consolidated Financial Statements                          8

Item 2.   Management's Discussion and Analysis of Financial Condition
                  And Results of Operations                                                      11

Item 3.   Quantitative and Qualitative Disclosures About Market Risk                             17

Item 4.   Controls and Procedures                                                                17

PART II - OTHER INFORMATION


Item 1.   Legal Proceedings                                                                      18

Item 6.   Exhibits and Reports on Form 8-K                                                       18

Signatures                                                                                       19

Certification of 10-Q Report                                                                     20
</TABLE>

                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                   December 31,           March, 31,
                                     ASSETS                                           2002                   2003
                                                                                  -------------         -------------
                                                                                       **                 (Unaudited)

<S>                                                                               <C>                   <C>
CURRENT ASSETS:
    Cash and cash equivalents                                                       $ 1,072,757         $  1,040,195
    Accounts receivable, net of allowance for doubtful accounts
       of $212,803 and $207,761, respectively                                         2,708,231            2,956,866
       Deferred tax asset                                                               120,622              120,622
       Prepaid expenses and other assets                                                738,119              613,458
                                                                                    -----------         ------------
                Total current assets                                                  4,639,729            4,731,141

PROPERTY AND EQUIPMENT, net                                                           3,926,422            3,552,455

OTHER NONCURRENT ASSETS:
    Intangible assets, net                                                           15,496,271           15,304,647
    Deferred charges and other assets                                                   167,098              154,827
                                                                                    -----------         ------------
                Total assets                                                        $24,229,520          $23,743,070
                                                                                    ===========          ===========

                       LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable and accrued expenses                                          $  3,981,247         $  3,987,960
    Income taxes payable                                                                 30,219              149,805
    Current maturities of long-term debt                                              2,169,713            2,500,203
                                                                                    -----------         ------------
             Total current liabilities                                                6,181,179            6,637,968

LONG-TERM LIABILITIES:
    Deferred tax liability, net                                                          24,258               24,258
    Long-term debt, net of current maturities                                         1,087,422            1,001,972
    Other long-term obligations                                                         177,635              184,027
                                                                                    -----------         ------------
                Total liabilities                                                     7,470,494           7,848,225

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Preferred Stock, no par value, 10,000,000 shares
       authorized; none outstanding                                                           -                    -
    Common Stock, no par value, 20,000,000 shares
       authorized; 1,434,817 and 1,354,137 shares issued and
       outstanding, respectively                                                     15,959,829           14,818,951
    Retained earnings                                                                   799,197            1,075,894
                                                                                    -----------         ------------
                Total shareholders' equity                                           16,759,026           15,894,845
                                                                                    -----------         ------------
                Total liabilities and shareholders' equity                          $24,229,520          $23,743,070
                                                                                    ===========          ===========
</TABLE>

**  Derived from the Company's audited consolidated balance sheet at
    December 31, 2002

              The accompanying notes are an integral part of these
                     condensed consolidated balance sheets.

                                       3
<PAGE>

            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                Quarters Ended
                                                                                                    March 31,
                                                                                         -----------------------------
                                                                                            2002               2003
                                                                                         -----------       -----------
<S>                                                                                      <C>               <C>
NET REVENUE                                                                              $ 7,767,614       $ 7,728,758
DIRECT EXPENSES:
    Clinical salaries and benefits                                                         2,972,198         3,010,839
    Dental supplies                                                                          444,261           444,597
    Laboratory fees                                                                          594,971           599,502
    Occupancy                                                                                834,270           863,708
    Advertising and marketing                                                                 79,066            97,939
    Depreciation and amortization                                                            594,390           582,027
    General and administrative                                                               773,687           751,240
                                                                                         -----------       -----------
                                                                                           6,292,843         6,349,852
                                                                                         -----------       -----------
    Contribution from dental offices                                                       1,474,771         1,378,906

CORPORATE EXPENSES:
    General and administrative                                                               905,932           799,838
    Depreciation and amortization                                                             79,219            79,982
                                                                                         -----------       -----------
    Operating income                                                                         489,620           499,086
    Interest expense, net                                                                    106,481            52,803
                                                                                         -----------       -----------
    Income before income taxes                                                               383,139           446,283
    Income tax expense                                                                       145,593           169,586
                                                                                         -----------       -----------
    Net income                                                                           $   237,546       $   276,697
                                                                                         ===========       ===========




Net income per share of Common Stock:
     Basic                                                                               $       .16       $       .20
                                                                                         ===========       ===========

     Diluted                                                                             $       .15       $       .18
                                                                                         ===========       ===========

Weighted average number of shares of Common Stock and dilutive securities:
     Basic                                                                                 1,506,705         1,407,292
                                                                                         ===========       ===========
     Diluted                                                                               1,609,461         1,534,001
                                                                                         ===========       ===========
</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.


                                       4

<PAGE>




            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                                               Common Stock                               Total
                                                      ---------------------------     Retained        Shareholders'
                                                        Shares            Amount      Earnings            Equity
                                                      ---------      ------------   -----------        ------------
<S>                                                   <C>            <C>            <C>                 <C>
BALANCES, December 31, 2002                           1,434,817      $ 15,959,829   $   799,197         $16,759,026
   Common Stock options exercised                        17,212            99,797             -              99,797
   Purchase and retirement of Common Stock              (97,892)       (1,240,675)            -          (1,240,675)
   Net Income                                                 -                 -       276,697             276,697
                                                      ---------      ------------   -----------         -----------
BALANCES, March 31, 2003                              1,354,137      $ 14,818,951   $ 1,075,894         $15,894,845
                                                      =========      ============   ===========         ===========
</TABLE>





























              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.



                                       5
<PAGE>


                                                                    Page 1 of 2

            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                              Quarters Ended
                                                                                                  March 31,
                                                                                      --------------------------------
                                                                                          2002                 2003
                                                                                      ------------          ----------
<S>                                                                                   <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                        $    237,546         $   276,697
    Adjustments to reconcile net income  to net
       cash provided by operating activities:
          Depreciation and amortization                                                    673,609             662,009
          Gain on disposition of property                                                        -                (199)
          Provision for doubtful accounts                                                   (4,840)             (5,042)
          Amortization of debt issuance costs                                               27,367              12,707
    Changes in assets and liabilities, net of effects from acquisitions:
          Accounts receivable                                                             (349,239)           (243,593)
          Prepaid expense and other assets                                                  56,661             124,225
          Accounts payable and accrued expenses                                            282,921               6,713
          Income taxes payable                                                              95,592             119,586
          Other long-term obligations                                                       (4,352)              6,392
                                                                                       -----------         -----------
              Net cash provided by operating activities                                  1,015,265             959,495
                                                                                       -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                                  (106,547)            (96,219)
    Acquisition of dental offices                                                         (398,654)                  -
                                                                                       -----------         -----------
              Net cash used in investing activities                                       (505,201)            (96,219)
                                                                                       -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings (repayments) - line of credit                                          (168,000)            650,000
    Repayment of bank term-loan                                                           (250,000)           (320,000)
    Repayment of long-term debt                                                            (56,617)            (84,960)
    Payment of debt issuance and financing costs                                            (6,703)                  -
    Proceeds from exercise of Common Stock options                                               -              99,797
    Purchase and retirement of Common Stock                                                      -          (1,240,675)
                                                                                       -----------          ----------
              Net cash used in financing activities                                       (481,320)           (895,838)
                                                                                       -----------         -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                        28,744             (32,562)
CASH AND CASH EQUIVALENTS, beginning of period                                             949,236           1,072,757
                                                                                       -----------         -----------

CASH AND CASH EQUIVALENTS, end of period                                               $   977,980         $ 1,040,195
                                                                                       ===========         ===========
</TABLE>







              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.



                                       6
<PAGE>


                                                                     Page 2 of 2

            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                              Quarters Ended
                                                                                                  March 31,
                                                                                     -----------------------------------
                                                                                         2002                   2003
                                                                                     -------------         -------------
<S>                                                                                  <C>                   <C>
SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW INFORMATION:

       Cash paid during the period for interest                                      $      86,994         $      52,953
                                                                                     =============         =============

       Cash paid during the period for income taxes                                  $      50,000         $      50,000
                                                                                     =============         =============

SUPPLEMENTAL DISCLOSURE OF NONCASH
    INVESTING AND FINANCING ACTIVITIES:

       Notes payable incurred from:
          Acquisition of dental offices                                              $      400,000        $           -
                                                                                     ==============        =============
</TABLE>




















              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       7
<PAGE>


            BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2003

(1)    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The  financial  statements  included  herein have been prepared by Birner Dental
Management Services,  Inc. (the "Company") pursuant to the rules and regulations
of the  Securities and Exchange  Commission.  Certain  information  and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with  accounting  principles  generally  accepted in the United States have been
condensed  or omitted  pursuant  to such  rules and  regulations,  although  the
Company  believes that the disclosures  included herein are adequate to make the
information presented not misleading.  A description of the Company's accounting
policies and other financial information is included in the audited consolidated
financial statements as filed with the Securities and Exchange Commission in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002.

In the opinion of management,  the accompanying unaudited condensed consolidated
financial  statements  contain all  adjustments  necessary to present fairly the
financial  position  of the  Company  as of March 31,  2003 and the  results  of
operations and cash flows for the periods presented. All such adjustments are of
a normal recurring nature. The results of operations for the quarter ended March
31, 2003 are not necessarily  indicative of the results that may be achieved for
a full fiscal year and cannot be used to indicate financial  performance for the
entire year.

(2)    SIGNIFICANT ACCOUNTING POLICIES

       Stock Options

The Company  accounts for stock options using the intrinsic value method wherein
compensation  expense is recognized on stock options granted only for the excess
of the market  price of our common stock over the option  exercise  price on the
date of grant.  All options of the  Company  are granted at amounts  equal to or
higher than the fair-value of our stock so no compensation expense is recorded.

Some companies also recognize compensation expense for the fair value of the
option right itself. The Company has elected not to adopt this accounting method
because it requires the use of subjective valuation models which the Company
believes are not representative of the real value of the option to either the
Company or the optionees. However, we are required to disclose the pro forma
effect of accounting for stock options using such a valuation for all options
granted. The fair value of the options was estimated at the date of grant using
a Black-Scholes option pricing model with the following weighted average
assumptions:

                                                   2002                 2003
                                                 ---------            ---------
                  Risk-free interest rate            3.49%                2.39%
                  Expected dividend yield               0%                   0%
                  Expected lives                 3.4 years            3.4 years
                  Expected volatility                  63%                  57%

To estimate lives of options for this valuation, it was assumed options would be
exercised  one year after  becoming  fully  vested.  All options  are  initially
assumed to vest. Cumulative compensation cost recognized in pro forma net income
or loss with respect to options that are forfeited  prior to vesting is adjusted
as a reduction of pro forma  compensation  expense in the period of  forfeiture.
Fair value  computations are highly sensitive to the volatility  factor assumed;
the  greater  the  volatility,  the  higher the  computed  fair value of options
granted.

The total  fair  value of  options  and  warrants  granted  was  computed  to be
approximately  $72,000 and $469,000 for the quarters  ended March 31, 2002,  and
2003, respectively. These amounts are amortized ratably over the vesting periods
of the  options  or  recognized  at the date of grant if no  vesting  period  is
required. Pro forma stock-based compensation,  net of the effect of forfeitures,
was  $48,000  and  $404,000  for the  quarters  ended  March 31,  2002 and 2003,
respectively.







                                       8
<PAGE>




If  the  Company  had  accounted  for  its  stock-based  compensation  plans  in
accordance with SFAS No. 123, the Company's net income and net income per common
share would have been reported as follows:


                                                            Three Months Ended
                                                                 March 31,
                                                          ----------------------
                                                            2002          2003
                                                          --------      --------

Net income, as reported                                   $237,546      $276,697
Pro forma stock compensation expense, net of tax benefit    29,743       274,592
                                                          --------      --------
Pro forma net income                                      $207,803      $  2,105
                                                          ========      ========
Net income per share, basic:
    As reported                                           $    .16      $    .20
    Pro forma stock compensation expense                       .02           .20
                                                          --------      --------
Pro forma                                                 $    .14      $    .00
                                                          ========      ========
Net income per share, diluted:
    As reported                                           $    .15      $    .18
    Pro forma stock option compensation expense                .02           .18
                                                          --------      --------
Pro forma                                                 $    .13      $    .00
                                                          ========      ========




(3) EARNINGS PER SHARE

The Company  calculates  earnings  per share in  accordance  with  Statement  of
Financial Accounting Standards ("SFAS") No. 128 "Earnings Per Share".

<TABLE>
<CAPTION>
                                                                  Quarters Ended March 31,
                                           -------------------------------------------------------------------------
                                                           2002                                    2003
                                           ---------------------------------      ----------------------------------
                                                                   Per Share                               Per Share
                                            Income        Shares     Amount          Income       Shares    Amount
                                           ---------    ---------- ---------      -----------   ---------- ---------
<S>                                        <C>           <C>         <C>           <C>           <C>         <C>
Basic EPS:
   Net income available to
     shares of Common Stock                $ 237,546     1,506,705   $ .16         $  276,697    1,407,292   $ .20

   Effect of dilutive shares of Common
     Stock from stock and warrants                 -       102,756    (.01)                 -      126,709    (.02)
                                           ---------    ----------   -----        -----------   ----------   -----
Diluted EPS:
   Net income available to
      shares of Common Stock               $ 237,546     1,609,461   $ .15         $  276,697    1,534,001   $ .18
                                           =========     =========   =====         ==========    =========   =====
</TABLE>

The difference in weighted average shares outstanding between basic earnings per
share and  diluted  earnings  per share for the  quarter  ended  March 31,  2002
relates  to the  effect of 102,756  dilutive  shares of Common  Stock from stock
options  and  warrants  which  are  included  in total  shares  for the  diluted
calculation. The difference in weighted average shares outstanding between basic
earnings per share and diluted  earnings  per share for the quarter  ended March
31, 2003 relates to the effect of 126,709  dilutive  shares of Common Stock from
stock  options and  warrants  which are included in total shares for the diluted
calculation.


                                       9
<PAGE>



(4)      LINE OF CREDIT

Under the  Company's  Credit  Facility  (as amended on  December  6, 2002),  the
Company  may  borrow on a  revolving  basis up to the  lesser  of an  applicable
Borrowing  Base  (calculated in accordance  with the most recent  Borrowing Base
Certificate  delivered  to the Lender) or $2.0  million  and on a  non-revolving
basis, an aggregate  principal  amount not in excess of $4.0 million for working
capital,  for restructuring of the Original Loan and for other general corporate
purposes.  Balances bear interest at the lender's base rate. The Company is also
obligated to pay an annual  facility fee of .50% on the average unused amount of
the revolving line of credit during the previous full calendar month. Borrowings
on the  revolving  loan are  limited  to an  availability  formula  based on the
Company's eligible accounts receivable.  As amended, both the revolving loan and
the  non-revolving  note  mature on April 30, 2003 (see  Footnote 7,  Subsequent
Events).  At March 31,  2003,  the Company had  $650,000  outstanding  and $1.35
million  available for borrowing  under the  revolving  loan and $1.505  million
outstanding  under the  non-revolving  loan. The Credit Facility is secured by a
lien on the Company's  accounts  receivable and its Management  Agreements.  The
Credit Facility  prohibits the payment of dividends and other  distributions  to
shareholders,  restricts or prohibits the Company from  incurring  indebtedness,
incurring liens, disposing of assets, making investments or making acquisitions,
and  requires  the Company to maintain  certain  financial  ratios on an ongoing
basis.  At March 31,  2003 the Company  was in full  compliance  with all of its
covenants under this agreement.

(5)    RECENT ACCOUNTING PROUNCEMENTS

In December 2002, the FASB issued Statements of Financial  Accounting  Standards
No.148,  "Accounting for Stock-Based  compensation - Transition and Disclosure -
an amendment of FASB  Statement  123" (SFAS 123). For entities that change their
accounting for stock-based  compensation  from the intrinsic  method to the fair
value   method  under  SFAS  123,  the  fair  value  method  is  to  be  applied
prospectively  to those  awards  granted  after the  beginning  of the period of
adoption  (the  prospective   method).  The  amendment  permits  two  additional
transition  methods for  adoption of the fair value  method.  In addition to the
prospective  method,  the entity can choose to either (i)  restate  all  periods
presented  (retroactive  restatement method) or (ii) recognize compensation cost
from the  beginning  of the fiscal year of adoption as if the fair value  method
had been used to account for awards (modified  prospective  method).  For fiscal
years beginning  after December 15, 2002, the prospective  method will no longer
be allowed.  The Company  currently  accounts for its  stock-based  compensation
using the intrinsic  value method as proscribed by Accounting  Principles  Board
Opinion  No.  25,  "Accounting  for  Stock  Issued  to  Employees"  and plans on
continuing  using this method to account for stock options,  therefore,  it does
not intend to adopt the  transition  requirements  as specified in SFAS 148. The
Company  adopted the SFAS 148  disclosure  requirements  in the first quarter of
fiscal 2003.

(6)    INCOME TAXES

The Company accounts for income taxes through recognition of deferred tax assets
and liabilities for the expected future income tax consequences of events, which
have been  included  in the  financial  statements  or tax  returns.  Under this
method,  deferred  tax  assets  and  liabilities  are  determined  based  on the
difference  between  the  financial  statement  and  tax  basis  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences  are expected to reverse.  The Company is aware of the risk that the
recorded deferred tax assets may not be realizable. However, management believes
that it will obtain the full  benefit of the deferred tax assets on the basis of
its  evaluation of the Company's  anticipated  profitability  over the period of
years that the temporary differences are expected to become tax deductions.  The
Company  believes that  sufficient  book and taxable income will be generated to
realize the benefit of these tax assets.


(7)   SUBSEQUENT EVENTS

On April 24, 2003,  the  Company's  current  Credit  Facility was amended.  This
fourth  amendment  to the amended and  restated  credit  agreement,  among other
provisions,  extends the  maturity  date for the Credit  Facility to October 31,
2003,  and allows for the payment of dividends to  shareholders  up to $1.00 per
share during any fiscal year.


                                       10
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITON AND
         RESULTS OF OPERATIONS

Forward-Looking Statements

The statements  contained in this Form 10-Q ("Quarterly  Report") of the Company
which are not  historical in nature are  forward-looking  statements  within the
meaning  of  the  Private  Securities  Litigation  Reform  Act  of  1995.  These
forward-looking  statements  include  statements in this Item 2.,  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations,"  and
in Part II, Item 1., "Legal  Proceedings",  regarding intent,  belief or current
expectations  of the Company or its officers with respect to the  development or
acquisition  of  additional  dental  practices  ("Offices")  and the  successful
integration  of  such  Offices  into  the  Company's  network,   recruitment  of
additional dentists,  funding of the Company's expansion,  capital expenditures,
payment or nonpayment of dividends, cash outlays for income taxes and outcome of
pending legal proceedings.

Such  forward-looking  statements  involve certain risks and uncertainties  that
could cause actual results to differ materially from anticipated results.  These
risks and  uncertainties  include  regulatory  constraints,  changes  in laws or
regulations  concerning the practice of dentistry or dental practice  management
companies,  the  availability  of suitable  new markets and  suitable  locations
within such markets,  changes in the Company's  operating or expansion strategy,
the general  economy of the United States and the specific  markets in which the
Company's  Offices  are located or are  proposed  to be  located,  trends in the
health  care,  dental  care and  managed  care  industries,  as well as the risk
factors set forth in the  "Management's  Discussion  and  Analysis of  Financial
Condition  and Results of  Operations - Risk  Factors"  section of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (as filed
with the Securities  Exchange  Commission on March 27, 2003), the  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations  -Year
2003" of this Quarterly Report, and other factors as may be identified from time
to time in the Company's filings with the Securities and Exchange  Commission or
in the Company's press releases.

General

The following discussion relates to factors,  which have affected the results of
operations  and  financial  condition  of the Company for the three months ended
March 31, 2002 and 2003. This information should be read in conjunction with the
Company's Condensed  Consolidated Financial Statements and related Notes thereto
included elsewhere in this Quarterly Report.

Overview

The  Company  was  formed in May 1995,  and  current1y  manages  54  Offices  in
Colorado,  New  Mexico  and  Arizona  staffed  by 78  general  dentists  and  13
specialists.   The  Company  has  acquired  42  Offices   (five  of  which  were
consolidated  into existing Offices) and opened 18 de novo Offices (one of which
was consolidated  into an existing  Office).  Of the 42 acquired  Offices,  only
three  (the  first  three  practices,  which were  acquired  from the  Company's
President,  Mark Birner, DDS) were acquired from affiliates of the Company.  The
Company  derives  all of its revenue  (as  defined  below)  from its  Management
Agreements with professional  corporations  ("P.C.s") which conduct the practice
at each Office.  In addition,  the Company assumes a number of  responsibilities
when it  acquires a new  practice or  develops a de novo  Office,  which are set
forth in a Management  Agreement,  as described  below.  The Company  expects to
expand in existing markets  primarily by enhancing the operating  performance of
its  existing  Offices  and by  developing  de novo  Offices.  The  Company  has
historically  expanded in existing  markets by  acquiring  solo and group dental
practices and may do so in the future if an  economically  feasible  opportunity
presents  itself.  Generally,  the Company seeks to acquire dental practices for
which the Company believes  application of its Dental Practice  Management Model
will improve operating performance.



                                       11
<PAGE>



The Company  was formed  with the  intention  of  becoming  the  leading  dental
practice management company in Colorado. The Company's growth and success in the
Colorado  market led to its expansion into the New Mexico and Arizona markets as
well as to its  evaluation of  additional  markets.  During 2000,  the Company's
growth  strategy  shifted from an  acquisition  and  development  approach to an
approach which is focused on greater  utilization of existing  physical capacity
through  recruiting  more dentists and support staff.  The following  table sets
forth the increase in the number of Offices  affiliated  with and managed by the
Company  from 1999  through  March 31,  2003,  including  the  number of de novo
Offices and acquired Offices in each such period.

<TABLE>
<CAPTION>
                                             1999            2000            2001           2002         2003 (1)
                                             ----            ----            ----           ----         --------
<S>                                           <C>              <C>             <C>            <C>            <C>
Offices at beginning of the period            49               54              56             54             54
De novo Offices                                5                2               0              0              0
Acquired Offices                               1                0               0              0              0
Consolidation of Offices                      (1)               0              (2)             0              0
                                              --               --              --             --             --
Offices at end of the period                  54               56              54             54             54
                                              ==               ==              ==             ==             ==
</TABLE>
----------
(1)   From January 1, 2003 through March 31, 2003.


The purchase  amount for the one  practice  acquired in 1999 was  $760,000.  The
average initial  investment by the Company in each of its 17 de novo Offices has
been  approximately  $194,000,  which includes the cost of equipment,  leasehold
improvements  and working  capital  associated  with the Offices.  These de novo
Offices,  which  were  opened  between  January  1996 and  October  2000,  began
generating positive  contribution from dental offices, on average,  within eight
months of opening.

At March 31, 2003,  the Company's  total assets of  approximately  $23.7 million
included  approximately $15.3 million of identifiable  intangible assets related
to  Management  Agreements.  At that date,  the Company had total  shareholders'
equity of approximately  $15.9 million.  The Company reviews the recorded amount
of intangible  assets and other long-lived assets for impairment for each Office
whenever events or changes in circumstances  indicate the carrying amount of the
assets may not be recoverable. If this review indicates that the carrying amount
of the assets may not be  recoverable  as determined  based on the  undiscounted
cash flows of each Office, whether acquired or developed,  the carrying value of
the asset is reduced to fair  value.  Among the factors  that the  Company  will
continually  evaluate are  unfavorable  changes in each Office,  relative market
share and local market  competitive  environment,  current period and forecasted
operating results, cash flow levels of Offices and the impact on the net revenue
earned by the  Company,  and the  legal and  regulatory  factors  governing  the
practice of dentistry.  As of March 31, 2003 a review by the Company  determined
that there was no permanent  impairment of any long-lived or intangible asset at
any Office.

Components of Revenue and Expenses


Total dental group practice  revenue  ("Revenue")  represents the revenue of the
Offices  reported at estimated  realizable  amounts,  received from  third-party
payors and patients  for dental  services  rendered at the Offices.  Net revenue
represents Revenue less amounts retained by the Offices. The amounts retained by
the Offices  represent  amounts paid as salary,  benefits and other  payments to
employed dentists and hygienists.  The Company's net revenue is dependent on the
Revenue of the  Offices.  Management  service  fee  revenue  represents  the net
revenue  earned  by the  Company  for the  Offices  for which  the  Company  has
management agreements, but does not have control. Direct expenses consist of the
expenses  incurred by the  Company in  connection  with  managing  the  Offices,
including   salaries  and  benefits  (for  personnel  other  than  dentists  and
hygienists),   dental  supplies,   dental  laboratory  fees,   occupancy  costs,
advertising  and  marketing,  depreciation  and  amortization  and  general  and
administrative   (including  office  supplies,   equipment  leases,   management
information  systems and other expenses related to dental practice  operations).
The Company also incurs personnel and administrative expenses in connection with
maintaining  a corporate  function  that  provides  management,  administrative,
marketing, development and professional services to the Offices.

Under each of the Management  Agreements,  the Company  manages the business and
marketing  aspects  of  the  Offices,  including  (i)  providing  capital,  (ii)
designing  and  implementing  marketing  programs,  (iii)  negotiating  for  the
purchase of supplies, (iv) staffing, (v) recruiting, (vi) training of non-dental
personnel,  (vii)  billing and  collecting  patient fees,  (viii)  arranging for
certain legal and accounting  services,  and (ix)  negotiating with managed care
organizations.  The P.C. is responsible  for, among other things (i) supervision
of all dentists and dental  hygienists,  (ii) complying with all laws, rules and
regulations  relating to dentists and dental  hygienists,  and (iii) maintaining
proper patient records. The Company has made, and intends to make in the future,
loans to P.C.s in Colorado,  New Mexico and Arizona to fund their acquisition of
dental  assets  from  third  parties  in order to  comply  with the laws of such
states.

                                       12
<PAGE>



Under the typical  Management  Agreement used by the Company,  the P.C. pays the
Company a management  fee equal to the Adjusted Gross Center Revenue of the P.C.
less  compensation  paid to the dentists and dental  hygienists  employed at the
Office of the P.C.  Adjusted  Gross Center  Revenue is comprised of all fees and
charges  booked  each  month by or on behalf  of the P.C.  as a result of dental
services  provided  to  patients  at  the  Office,   less  any  adjustments  for
uncollectible accounts, professional courtesies and other activities that do not
generate a collectible  fee. The Company's costs include all direct and indirect
costs,  overhead and expenses relating to the Company's  provision of management
services at each Office under the Management Agreement,  including (i) salaries,
benefits and other direct costs of employees who work at the Office, (ii) direct
costs of all Company  employees  or  consultants  who provide  services to or in
connection with the Office, (iii) utilities,  janitorial,  laboratory, supplies,
advertising  and other  expenses  incurred by the  Company in  carrying  out its
obligations under the Management Agreement, (iv) depreciation expense associated
with the P.C.'s assets and the assets of the Company used at the Office, and the
amortization  of  intangible  asset value  relating to the Office,  (v) interest
expense  on  indebtedness  incurred  by  the  Company  to  finance  any  of  its
obligations  under  the  Management  Agreement,  (vi)  general  and  malpractice
insurance  expenses,  lease  expenses and dentist  recruitment  expenses,  (vii)
personal  property and other taxes assessed  against the Company's or the P.C.'s
assets used in connection with the operation of the Office, (viii) out-of-pocket
expenses of the Company's personnel related to mergers or acquisitions involving
the P.C., (ix) corporate  overhead  charges or any other expenses of the Company
including  the P.C.'s  pro rata  share of the  expenses  of the  accounting  and
computer services provided by the Company,  and (x) a collection  reserve in the
amount of 5.0% of Adjusted Gross Center Revenue. As a result,  substantially all
costs  associated with the provision of dental services at the Offices are borne
by the  Company,  other than the  compensation  and benefits of the dentists and
hygienists  who work at the Offices of the P.C.'s.  This  enables the Company to
manage the profitability of the Offices. Each Management Agreement is for a term
of 40 years.  Further,  each Management Agreement generally may be terminated by
the P.C. only for cause,  which includes a material  default by or bankruptcy of
the Company.  Upon expiration or termination of a Management Agreement by either
party, the P.C. must satisfy all obligations it has to the Company.

The Company's Revenue is derived  principally from  fee-for-service  revenue and
revenue  from  capitated  managed  dental  care plans.  Fee-for-service  revenue
consists  of P.C.  revenue  received  from  indemnity  dental  plans,  preferred
provider  plans and direct  payments by patients not covered by any  third-party
payment  arrangement.  Managed  dental care  revenue  consists  of P.C.  revenue
received from capitated managed dental care plans, including capitation payments
and patient  co-payments.  Capitated  managed  dental care contracts are between
dental benefits  organizations and the P.C.s.  Under the Management  Agreements,
the Company  negotiates and administers  these contracts on behalf of the P.C.s.
Under a  capitated  managed  dental care  contract,  the dental  group  practice
provides dental services to the members of the dental benefits  organization and
receives a fixed monthly  capitation  payment for each plan member covered for a
specific schedule of services  regardless of the quantity or cost of services to
the  participating  dental  group  practice  obligated  to  provide  them.  This
arrangement shifts the risk of utilization of these services to the dental group
practice   providing   the  dental   services.   Because  the  Company   assumes
responsibility under the Management  Agreements for all aspects of the operation
of the dental  practices  (other than the practice of dentistry)  and thus bears
all costs of the P.C.s  associated  with the provision of dental services at the
Offices (other than  compensation and benefits of dentists and hygienists),  the
risk of  over-utilization  of dental  services  at the Offices  under  capitated
managed  dental care plans is effectively  shifted to the Company.  In addition,
dental group  practices  participating  in a capitated  managed dental care plan
often receive supplemental payments for more complicated or elective procedures.
In contrast,  under traditional indemnity insurance arrangements,  the insurance
company pays whatever reasonable charges are billed by the dental group practice
for the dental services provided.

The Company seeks to increase its  fee-for-service  business by  increasing  the
patient volume at existing Offices through  effective  marketing and advertising
programs  and by opening new  Offices.  The  Company  seeks to  supplement  this
fee-for-service  business with revenue from  contracts  with  capitated  managed
dental care plans. Although the Company's  fee-for-service business generally is
more  profitable  than its capitated  managed  dental care  business,  capitated
managed dental care business serves to increase facility utilization and dentist
productivity.  The relative  percentage  of the Company's  revenue  derived from
fee-for-service business and capitated managed dental care contracts varies from
market to market depending on the availability of capitated  managed dental care
contracts  in any  particular  market and the  Company's  ability  to  negotiate
favorable  contractual  terms. In addition,  the profitability of managed dental
care Revenue  varies from market to market  depending on the level of capitation
payments and  co-payments in proportion to the level of benefits  required to be
provided.


                                       13
<PAGE>




Results of Operations

As a result of the  shift in focus  from  expansion  of the  Company's  business
through  acquisitions  and the  development  of de novo  Offices to the  greater
utilization of existing  physical capacity through the recruitment of additional
dentists and staff, the period-to-period  comparisons set forth below may not be
representative of future operating results.

For the three months ended March 31, 2003,  Revenue  decreased  $70,000 to $10.9
million  compared to $11.0  million for the three  months  ended March 31, 2002.
This was the direct  result of a severe  snow storm in Colorado  which  effected
office  performance for most of the week of March 17, including the closing of a
significant  number of offices for three days.  The Company  estimates  the lost
Revenue at the Offices from this snow storm was approximately $300,000.

The following  table sets forth the  percentages  of net revenue  represented by
certain items reflected in the Company's  Condensed  Consolidated  Statements of
Operations.  The  information  contained in the table  represents the historical
results  of the  Company.  The  information  that  follows  should  be  read  in
conjunction with the Company's Condensed  Consolidated  Financial Statements and
related Notes thereto contained elsewhere in this Quarterly Report.

                                                   Quarters Ended March 31,
                                                   ------------------------
                                                    2002             2003
                                                    ----             ----

Net revenue                                        100.0 %          100.0 %
Direct expenses:
     Clinical salaries and benefits                 38.3 %           39.0 %
     Dental supplies                                 5.7 %            5.7 %
     Laboratory fees                                 7.7 %            7.8 %
     Occupancy                                      10.7 %           11.2 %
     Advertising and marketing                       1.0 %            1.3 %
     Depreciation and amortization                   7.6 %            7.5 %
     General and administrative                     10.0 %            9.7 %
                                                   -----            -----
                                                    81.0 %           82.2 %
                                                   -----            -----
Contribution from dental offices                    19.0 %           17.8 %
Corporate expenses:
     General and administrative                     11.7 %           10.3 %
     Depreciation and amortization                   1.0 %            1.0 %
                                                   -----            -----
Operating income                                     6.3 %            6.5 %
Interest expense, net                               (1.4)%           (0.7)%
                                                   -----            -----
Income before income taxes                           4.9 %            5.8 %
Income tax expense                                  (1.9)%           (2.2)%
                                                   ------           -----
Net income                                           3.0 %            3.6 %
                                                   =====            =====



Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002:

Net revenue.  For the three  months  ended March 31, 2003 net revenue  decreased
slightly to $7.7  million  compared to $7.8  million for the three  months ended
March 31,  2002,  a decrease of  approximately  $39,000,  or 0.5%.  This was the
direct  result  of a  severe  snow  storm  in  Colorado  which  effected  office
performance  for  most of the week of  March  17,  including  the  closing  of a
significant number of offices for three days. The Company estimates the lost net
revenues to the Company from this snow storm was approximately $212,000.

Clinical  salaries  and  benefits.  For the three  months  ended  March 31, 2003
clinical  salaries and benefits remained constant at $3.0 million as compared to
the three months ended March 31, 2002. As a percentage of net revenue,  clinical
salaries  and  benefits  increased to 39.0% for the three months ended March 31,
2003 compared to 38.3% for the three months ended March 31, 2002.

Dental  supplies.  For the three  months  ended March 31,  2003 dental  supplies
remained constant at $445,000 compared to the three months ended March 31, 2002.
As a percentage of net revenue,  dental supplies  remained  constant at 5.7% for
the three months  ended March 31, 2003  compared to the three months ended March
31, 2002.


                                       14
<PAGE>




Laboratory  fees.  For the three  months  ended March 31, 2003  laboratory  fees
increased to $600,000  compared to $595,000 for the three months ended March 31,
2002, an increase of $5,000 or 0.8%. As a percentage of net revenue,  laboratory
fees  increased to 7.8% for the three  months  ended March 31, 2003  compared to
7.7% for the three months March 31, 2002.

Occupancy. For the three months ended March 31, 2003 occupancy expense increased
to $864,000  compared to $834,000 for the three months ended March 31, 2002,  an
increase of $29,000 or 3.5%. This increase was primarily due to increased rental
payments resulting from the renewal of Office leases at current market rates for
Offices whose leases expired  subsequent to the 2002 period.  As a percentage of
net  revenue,  occupancy  expense  increased to 11.2% for the three months ended
March 31, 2003 compared to 10.7% for the three months ended March 31, 2002.

Advertising and marketing. For the three months ended March 31, 2003 advertising
and  marketing  increased  to $98,000  compared to $79,000 for the three  months
ended  March 31,  2002,  an  increase  of $19,000  or 23.9%.  This  increase  is
primarily due to enhanced  yellow page  advertising  during the first quarter of
2003. As a percentage  of net revenue,  advertising  and marketing  increased to
1.3% for the three  months  ended March 31, 2003  compared to 1.0% for the three
months ended March 31, 2002.

Depreciation  and  amortization.  For the three  months  ended  March  31,  2003
depreciation and  amortization,  which consists of depreciation and amortization
expense incurred at the Offices,  decreased to $582,000 compared to $594,000 for
the three  months  ended March 31,  2002,  a decrease  of $12,000 or 2.1%.  This
decrease is related to the decrease in the Company's depreciable and amortizable
asset base. The decrease in the asset base is directly  related to the Company's
efforts to control costs,  including  capital  expenditures  and existing assets
becoming fully  depreciated.  As a percentage of net revenue,  depreciation  and
amortization  decreased  to 7.5% for the  three  months  ended  March  31,  2003
compared to 7.6% for the three months ended March 31, 2002.

General and  administrative.  For the three  months ended March 31, 2003 general
and administrative,  which is attributable to the Offices, decreased to $751,000
compared to $774,000  for the three  months  ended March 31, 2002, a decrease of
approximately  $22,000 or 2.9%.  As a  percentage  of net  revenue,  general and
administrative  expenses  decreased to 9.7% for the three months ended March 31,
2003 compared to 10.0% during the three months ended March 31, 2002.

Contribution  from dental offices.  As a result of the above,  contribution from
dental  offices  decreased  to $1.4 million for the three months ended March 31,
2003  compared to $1.5  million for the three  months  ended March 31,  2002,  a
decrease of $96,000 or 6.5%. As a percentage of net revenue,  contribution  from
dental  offices  decreased  to 17.8% for the three  months  ended March 31, 2003
compared to 19.0% for the three months ended March 31, 2002.

Corporate  expenses - general and  administrative.  For the three  months  ended
March 31, 2003  corporate  expenses - general and  administrative  decreased  to
$800,000  compared to $906,000  for the three  months  ended March 31,  2002,  a
decrease of $106,000 or 11.7%. This decrease is attributable to lower legal fees
in 2003 as a result of the disposition of certain outstanding  litigation during
2002.  As  a  percentage  of  net  revenue,  corporate  expense  -  general  and
administrative  decreased  to 10.3% for the three  months  ended  March 31, 2003
compared to 11.7% during the three months ended March 31, 2002.

Corporate  expenses - depreciation and amortization.  For the three months ended
March 31, 2003  corporate  expenses -  depreciation  and  amortization  remained
constant at $80,000  compared to the three  months  ended March 31,  2002.  As a
percentage of net revenue,  corporate  expenses - depreciation  and amortization
remained  constant at 1.0% for the three months ended March 31, 2003 compared to
the three months ended March 31, 2002.

Operating  income.  As a result of the above,  the Company  generated  operating
income of  $499,000  for the three  months  ended  March 31,  2003  compared  to
operating  income of $490,000  for the three  months  ended March 31,  2002,  an
increase of $9,000 or 1.9%.

Interest  expense,  net.  For the three  months  ended March 31,  2003  interest
expense  decreased  to $53,000  compared to $106,000  for the three months ended
March 31,  2002,  a decrease  of $54,000 or 50.4%.  This  decrease  in  interest
expense is  attributable  to lower average  outstanding  debt balances and lower
interest rates as well as lower  amortization of debt  acquisition  costs during
the first  quarter of 2003.  As a percentage  of net revenue,  interest  expense
decreased to 0.7% for the three months ended March 31, 2003 compared to 1.4% for
the three months ended March 31, 2002.


                                       15
<PAGE>


Net  income.  As a result of the  above,  the  Company  reported  net  income of
$277,000  for the three  months  ended March 31, 2003  compared to net income of
$238,000 for the three  months  ended March 31, 2002,  an increase of $39,000 or
16.5%.  Net income for the  quarter  ended  March 31, 2003 was net of income tax
expense of $170,000  while net income for the  quarter  ended March 31, 2002 was
net of income tax expense of $146,000.

Liquidity and Capital Resources

Since its  inception,  the Company has financed its growth through a combination
of private sales of convertible  subordinated  debentures and Common Stock, cash
provided by operating activities, a bank line of credit (the "Credit Facility"),
seller notes and its initial public offering of Common Stock.

Net cash provided by operating  activities  remained  constant at  approximately
$1.0 million for the three  months ended March 31, 2002 and 2003,  respectively.
During 2003,  excluding  net income and after adding back  non-cash  items,  the
Company's  cash  provided  by  operating  activities  consisted  primarily  of a
decrease in prepaid  expenses and other  assets of  approximately  $124,000,  an
increase in income taxes  payable of  approximately  $120,000 and an increase in
accounts payable and accrued expenses of approximately $7,000,  partially offset
by an increase in accounts receivable of approximately $244,000. During the 2002
period, excluding net income and after adding back non-cash items, the Company's
cash  provided by  operating  activities  consisted  primarily of an increase in
accounts payable and accrued expenses of approximately  $283,000, an increase in
income taxes payable of approximately  $96,000 and a decrease in prepaid expense
and other assets of  approximately  $57,000,  partially offset by an increase in
accounts receivable of approximately $349,000.

Net cash used in investing activities was approximately $505,000 and $96,000 for
the three  months  ended  March 31, 2002 and 2003,  respectively.  For the three
months ended March 31, 2003,  approximately $96,000 was invested in the purchase
of additional property and equipment. For the three months ended March 31, 2002,
approximately  $399,000  was  utilized  for  acquisition  of dental  offices and
approximately  $107,000 was invested in the purchase of additional  property and
equipment.

Net cash used in financing  activities was  approximately  $481,000 and $896,000
for the three  months  ended March 31, 2002 and 2003,  respectively.  During the
three  months ended March 31, 2003,  net cash used in financing  activities  was
comprised of  approximately  $1.2 million used in the purchase and retirement of
Common Stock,  approximately  $320,000 used to reduce the amount  outstanding on
the  Company's  term-loan  with  its  bank  and  approximately  $85,000  for the
repayment of long-term  debt.  This was partially  offset by $650,000 drawn from
the Company's  bank line of credit and  approximately  $100,000 of proceeds from
the  exercise of Common Stock  options.  During the three months ended March 31,
2002,  net cash used in financing  activities  was  comprised  of  approximately
$250,000 used to reduce the amount  outstanding on the Company's  term-loan with
its bank,  $168,000 used to reduce the amount  outstanding on the Company's bank
line of credit and approximately $57,000 for the repayment of long-term debt.

Under the Company's  Credit Facility (as amended on April 24, 2003), the Company
may borrow on a revolving basis up to the lesser of an applicable Borrowing Base
(calculated  in  accordance  with the most  recent  Borrowing  Base  Certificate
delivered  to the  Lender) or $2.0  million  and on a  non-revolving  basis,  an
aggregate  principal  amount not in excess of $4.0 million for working  capital,
for restructuring of the Original Loan and for other general corporate purposes.
Balances bear interest at the lender's base rate.  The Company is also obligated
to pay an  annual  facility  fee of .50% on the  average  unused  amount  of the
revolving line of credit during the previous full calendar month.  Borrowings on
the revolving loan are limited to an availability formula based on the Company's
eligible accounts receivable.  As amended subsequent to March 31, 2003, both the
revolving loan and the  non-revolving  note mature on October 31, 2003. At March
31, 2003, the Company had $650,000  outstanding and $1.35 million  available for
borrowing  under the revolving  loan and $1.505  million  outstanding  under the
non-revolving  loan.  The Credit  Facility is secured by a lien on the Company's
accounts receivable and its Management Agreements. The Credit Facility prohibits
the payment of dividends in excess of $1.00 per share per fiscal year, restricts
or prohibits the Company from incurring indebtedness, incurring liens, disposing
of assets,  making investments or making acquisitions,  and requires the Company
to maintain certain  financial ratios on an ongoing basis. At March 31, 2003 the
Company was in full compliance with all of its covenants under this agreement.


                                       16
<PAGE>


At March 31, 2003, the Company had  outstanding  indebtedness  of  approximately
$1.3 million  represented  by notes issued in connection  with various  practice
acquisitions, all of which bear interest at 8.0%. At March 31, 2003, the Company
had no material  commitments for capital  expenditures.  The Company's  retained
earnings as of March 31, 2003 was approximately $1.1 million and the Company had
a working capital deficit on that date of  approximately  $1.9 million which was
the result of the  classification  of the entire  amount  outstanding  under the
Credit  Facility as a short-term  liability.  When  excluding the effect of this
classification, the Company's working capital deficit would be $1.4 million. The
Company's  earnings  before  interest,   taxes,  depreciation  and  amortization
("EBITDA")  remained  constant at $1.2  million for the three months ended March
31, 2003 compared to the corresponding three-month period in 2002.

The Company  believes that cash generated from  operations and borrowings  under
its Credit Facility,  will be sufficient to fund its anticipated working capital
needs,  capital  expenditures  and future  acquisitions for at least the next 12
months.  In the event the  Company is not able to  successfully  negotiate a new
Credit  Facility  at the end of its  term,  the  Company's  current  sources  of
liquidity  may not be  adequate.  In  addition,  in order to meet its  long-term
liquidity  needs the Company may issue  additional  equity and debt  securities,
subject  to market and other  conditions.  There can be no  assurance  that such
additional  financing will be available on terms acceptable to the Company.  The
failure to raise the funds  necessary  to finance its future  cash  requirements
could  adversely  affect the Company's  ability to pursue its strategy and could
negatively affect its operations in future periods.

On May 8,  2002  the  Company's  Board of  Directors  unanimously  approved  the
purchase of shares of the  Company's  Common Stock on the open market up to $1.0
million.  On October  24,  2002 the  Company's  Board of  Directors  unanimously
approved an incremental increase of $500,000 in the amount that could be used to
purchase  shares  of the  Company's  Common  Stock  on the open  market  to $1.5
million.  On February  19, 2003 the  Company's  Board of  Directors  unanimously
approved an  increase,  to $2.4 million  from $1.5  million,  in the amount that
could be used to  purchase  shares  of the  Company's  Common  Stock on the open
market. During 2002, the Company, in 93 separate transactions, purchased 117,236
shares of its Common Stock for total consideration of approximately $1.2 million
at prices ranging from $7.35 to $11.25 per share, of which approximately $60,000
was recorded as  compensation  expense in accordance  with Financial  Accounting
Standards  Board  Interpretation  Number 44. During the three month period ended
March 31,  2003,  the Company,  in 45 separate  transactions,  purchased  97,892
shares of its Common Stock for total consideration of approximately $1.2 million
at prices ranging from $9.54 to $14.20 per share.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact the financial  position,
results of  operations  or cash flows of the Company  due to adverse  changes in
financial  and  commodity  market  prices and rates.  The  Company is exposed to
market risk in the area of changes in United States interest rates. Historically
and as of March 31, 2003,  the Company has not used  derivative  instruments  or
engaged in hedging activities.

Interest Rate Risk.  The interest  payable on the Company's  line-of-credit  and
term-loan  is  variable  based upon the prime rate and,  therefore,  affected by
changes  in  market  interest  rates.  At March 31,  2003,  $2.155  million  was
outstanding  with an interest rate of 4.25%  (Prime).  The Company may repay the
balance in full at any time without penalty.  As a result,  the Company does not
believe that reasonably possible near-term changes in interest rates will result
in a  material  effect  on future  earnings,  fair  values or cash  flows of the
Company.  Based on calculations performed by the Company, a 1.0% increase in the
Company's  interest  rate  would  result  in  additional   interest  expense  of
approximately $5,000 for the three months ended March 31, 2003.


ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

The Company,  under the supervision and with the  participation of the Company's
management,  including its Chief Executive Officer and Chief Financial  Officer,
carried out an  evaluation of the  effectiveness  of the design and operation of
the  Company's  disclosure  controls  and  procedures  as of March 25, 2003 (the
"Evaluation Date"). Based upon this evaluation,  the Chief Executive Officer and
Chief Financial  Officer  concluded as of the Evaluation Date that the Company's
disclosure  controls and  procedures  were  effective for purposes of recording,
processing, summarizing and timely reporting material information required to be
disclosed in reports that the Company files under the Exchange Act.



                                       17
<PAGE>


Changes in internal controls.

There were no significant  changes in our internal controls and no other factors
that could  significantly  affect these  controls  subsequent to the  Evaluation
Date. The Company did not need to implement any  corrective  actions with regard
to any significant deficiency or material weakness in its internal controls.



                           PART II. OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

From  time to time the  Company  is  subject  to  litigation  incidental  to its
business. The Company is not presently a party to any material litigation.  Such
claims,  if  successful,  could  result  in  damage  awards  exceeding,  perhaps
substantially, applicable insurance coverage.




ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


(a)          Exhibits

 Exhibit
Number       Description of Document

10.41    Fourth Amendment to Amended and Restated Credit Agreement dated
         April 24, 2003 between the Registrant  and Key Bank of Colorado.

99.1     Certification of 10-Q report pursuant to Section 906 of the Sarbanes-
         Oxley Act of 2002.

(b)      Reports on Form 8-K

         None.



















                                       18
<PAGE>




                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.




                          BIRNER DENTAL MANAGEMENT SERVICES, INC.
                          a Colorado corporation


Date:  May 8, 2003        By:    /s/ Frederic W.J. Birner
                             -------------------------------------------------
                          Name:   Frederic W.J. Birner
                          Title:  Chairman of the Board,
                                  Chief Executive Officer and Director
                                  (Principal Executive Officer)


Date:  May 8, 2003        By:     /s/ Dennis N. Genty
                             -------------------------------------------------
                          Name:    Dennis N. Genty
                          Title:   Chief Financial Officer, Secretary,
                                   Treasurer and Director
                                   (Principal Financial and Accounting Officer)



















                                       19
<PAGE>



                                  CERTIFICATION


I, Frederic W.J. Birner, Chief Executive Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Birner Dental
     Management Services, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the Registrant as of, and for, the periods presented in this
     quarterly report;

4.   The Registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

         a)       designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   Registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this quarterly report is being prepared;

         b)       evaluated the  effectiveness  of the  Registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and

         c)       presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The Registrant's other certifying officer and I have disclosed, based
      on our most recent evaluation, to the Registrant's auditors and the audit
      committee of Registrant's board of directors (or persons performing the
      equivalent function):

         a)       all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  Registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  Registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  Registrant's internal controls; and

6.    The Registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


         May 8, 2003             By: /s/   Frederic W.J. Birner
                                 ---------------------------------------
                                 Name:    Frederic W.J. Birner
                                 Title:   Chairman of the Board,
                                          Chief Executive Officer and Director
                                          (Principal Executive Officer)






















                                       20
<PAGE>



                                  CERTIFICATION

I, Dennis N. Genty, Chief Financial Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Birner Dental
     Management Services, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the Registrant as of, and for, the periods presented in this
     quarterly report;

4.   The Registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

         a)       designed  such disclosure controls and  procedures to ensure
                  that  material  information  relating  to  the   Registrant,
                  including its consolidated  subsidiaries, is made known to us
                  by others  within  those entities,  particularly  during  the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the  Registrant's  disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing  date of this quarterly  report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The Registrant's other certifying officer and I have disclosed, based
      on our most recent evaluation, to the Registrant's auditors and the audit
      committee of Registrant's board of directors (or persons performing the
      equivalent function):

         a)       all significant deficiencies in the design or  operation of
                  internal controls  which  could  adversely  affect  the
                  Registrant's ability to record, process, summarize and report
                  financial data and  have identified for  the  Registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant  role  in  the
                  Registrant's internal controls; and

6.    The Registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


                  May 8, 2003       By: /s/   Dennis N. Genty
                                        --------------------------------
                                    Name:    Dennis N. Genty
                                    Title:   Chief Financial Officer, Secretary,
                                             Treasurer and Director
                                             (Principal Financial Officer)













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