U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  ------------

                                   FORM 10-QSB


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

                For the quarterly period ended September 24, 2000

                                       OR

[    ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-27148

                    New World Coffee - Manhattan Bagel, Inc.
           (Name of small business issuer as specified in its charter)

             Delaware                                      13-3690261
   (State or other jurisdiction                         (I.R.S. Employer
  of Incorporation or organization)                   Identification No.)

                             246 Industrial Way West
                               Eatontown, NJ 07724
          (Address of principal executive offices, including zip code)

                                 (732) 544-0155
                           (Issuer's telephone number)

Check 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 past 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 ___

Transitional small business disclosure format (check one): Yes ____No X

Number of shares of common stock,  $.001 par value per share,  outstanding As of
November 3, 2000: 16,765,219

<PAGE>

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

              INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES

                               SEPTEMBER 24, 2000
<TABLE>
<CAPTION>

                                                                                                         Page

PART I.     FINANCIAL INFORMATION

Item 1.      Financial Statements

<S>                                                                                                       <C>
     Consolidated Balance Sheets as of September 24, 2000 and
         December 26, 1999.......................................................................         -3-

     Consolidated Income Statements for the third quarter and
         year to date period ended September 24, 2000 and September 26, 1999.....................         -4-

     Consolidated Statements of Cash Flows for the year to date period
         ended September 24, 2000 and September 26, 1999.........................................         -5-

     Notes to Consolidated Financial Statements..................................................         -6-

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations for the Third Quarter Ended
             September 24, 2000..................................................................         -7-

Item 3.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations for the Year to Date Period Ended
             September 24, 2000..................................................................         -8-

PART II:  OTHER INFORMATION......................................................................         -12-

SIGNATURES.......................................................................................         -13-
</TABLE>


<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                    September 24,            December 26,
                                                                                        2000                    1999
                                                                                   -------------             ------------
ASSETS                                                                               (Unaudited)
------
Current assets:
<S>                                                                                  <C>                     <C>
    Cash and cash equivalents...................................                     $4,199,409              $2,880,342
    Franchise and other receivables, net........................                      4,126,131               2,011,398
    Current maturities of notes receivables.....................                        709,454               1,959,454
    Inventories.................................................                      1,687,604               1,845,354
    Prepaid expenses and other current assets...................                        682,559                 275,694
    Deferred income taxes - current portion.....................                        500,000                 500,000
    Marketable Securities.......................................                     17,411,688                       -
    Assets held for resale......................................                      5,184,408               1,595,036
                                                                                      ---------               ---------
       Total current assets.....................................                     34,501,253              11,067,278

Property, plant and equipment, net..............................                      6,382,431               7,017,513
Notes and other receivables, net................................                      1,205,478               1,143,073
Trademarks, net.................................................                     15,874,458              15,988,993
Goodwill, net...................................................                      2,231,619               2,312,645
Deferred income taxes...........................................                      7,966,178               6,000,000
Deposits and other assets.......................................                      1,350,439                 495,296
                                                                                      ---------                 -------
       Total assets                                                                 $69,511,856             $44,024,798
                                                                                    ===========             ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable............................................                      5,406,858              $2,014,703
    Accrued expenses............................................                      1,754,386               4,554,880
     Current portion of long-term debt..........................                      2,840,505               2,840,492
    Current portion of obligations under capital lease..........                        222,335                 163,359
    Other current liabilities...................................                         11,044                  49,642
                                                                                         ------                  ------
       Total current liabilities................................                     10,235,128               9,623,076

Long-term debt..................................................                     16,916,984              15,557,416
Obligations under capital leases................................                        186,539                 230,692
Deferred rent...................................................                        212,307                 227,065
Other liabilities...............................................                      5,818,005               6,014,784

Commitments and Contingencies
Series D redeemable preferred stock, $.001 par
    value; 25,000 shares authorized; 16,216 and 0
    shares issued and outstanding...............................                     11,776,764                       -

Stockholders' equity:
    Series C convertible preferred stock, $.001 par
      value; 500,000 shares authorized; 444,190 and 0
      shares issued and outstanding.............................                            444                       -
    Common stock, $.001 par value; 50,000,000 shares
      authorized; 13,617,259 and 11,313,508 shares
      issued and outstanding....................................                         13,617                  11,314
    Additional paid-in capital..................................                     43,857,066              34,706,849
    Accumulated deficit.........................................                   (19,504,998)            (22,346,398)
                                                                                   ------------            ------------
       Total stockholders' equity...............................                     24,366,129              12,371,765
                                                                                     ----------              ----------
       Total liabilities and stockholders' equity...............                    $69,511,856             $44,024,798
                                                                                    ===========             ===========
<FN>
The accompany notes are an integral part of these consolidated balance sheets.
</FN>
</TABLE>
<PAGE>


                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                         CONSOLIDATED INCOME STATEMENTS

      FOR THE THIRD QUARTER ENDED SEPTEMBER 24, 2000 AND SEPTEMBER 26, 1999

    AND YEAR TO DATE PERIODS ENDED SEPTEMBER 24, 2000 AND SEPTEMBER 26, 1999

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                              Third Quarter Ended                      Year To Date Ended
                                                    ------------------- -------------------- ------------------- -------------------
                                                      September 24,        September 26,     September 24, 2000  September 26, 1999
                                                          2000                 1999
                                                    ------------------- -------------------- ------------------- -------------------
Revenues:
<S>                                                         <C>                  <C>                <C>                 <C>
    Manufacturing revenues..........................        $7,030,233           $6,241,681         $19,705,393         $18,438,142
    Retail sales....................................         4,433,486            2,119,763           7,595,237           6,849,190
    Franchise related revenues......................         2,098,435            1,841,205           5,575,365           4,283,294
                                                             ---------            ---------           ---------           ---------
Total Revenues......................................        13,562,154           10,202,649          32,875,995          29,570,626

    Cost of sales...................................         9,590,584            7,001,447          22,210,072          20,800,635
    General and administrative expenses.............         1,681,238            1,589,771           4,855,910           4,577,389
    Depreciation and amortization...................           678,726              565,905           1,838,061           1,640,573
                                                               -------              -------           ---------           ---------
Operating Income....................................         1,611,606            1,045,526           3,971,952           2,552,029

    Interest expense, net...........................           448,408              431,212           1,387,397           1,044,978
                                                               -------              -------           ---------           ---------

Income before Income Tax Benefit and
    Extraordinary Item..............................         1,163,198              614,314           2,584,555           1,507,051

Income Tax Benefit                                           1,966,178                    -           1,966,178                   -
                                                             ---------              -------           ---------           ---------

Income before Extraordinary Item                             3,129,376              614,314           4,550,733           1,507,051

Extraordinary Item:
     Net Gain from Early Extinguishment
       Of Debt......................................                 -              240,023                   -             240,023
                                                             ---------              -------           ---------           ---------

Net Income..........................................         3,129,376              854,337           4,550,733           1,747,074

Dividend issued to redeemable
     preferred stockholders representing
     the beneficial conversion of warrants
     issued.........................................       (1,709,333)                    -         (1,709,333)                   -
                                                           -----------             --------         -----------          ----------

Net Income available to Common
     Stockholders...................................        $1,420,043             $854,337          $2,841,400          $1,747,074
                                                            ==========             ========          ==========          ==========
Net income Per Common Share - Basic
     Income before extraordinary item...............              $.12                 $.06                $.24                $.15
                                                                  ====                 ====                ====                ====
     Extraordinary item.............................                 -                  .02                   -                 .02
                                                                     =                  ===                   =                 ===
     Net income.....................................              $.12                 $.08                $.24                $.17
                                                                  ====                 ====                ====                ====
Net income per share - Diluted
     Income before extraordinary item...............              $.09                 $.06                $.21                $.15
                                                                  ====                 ====                ====                ====
     Extraordinary item.............................                 -                  .02                   -                 .02
                                                                     =                  ===                   =                 ===
     Net income.....................................              $.09                 $.08                $.21                $.17
                                                                  ====                 ====                ====                ====
Weighted average number of common
     shares oustanding:
Basic...............................................        12,120,104           10,367,680          11,751,153          10,075,071
                                                            ==========           ==========          ==========          ==========
Diluted.............................................        15,845,625           10,607,680          13,380,807          10,295,071
                                                            ==========           ==========          ==========          ==========
<FN>
The accompanying notes are an integral part of these consolidated statements.
</FN>
</TABLE>
<PAGE>

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

  FOR THE YEAR TO DATE PERIODS ENDED SEPTEMBER 24, 2000 AND SEPTEMBER 26, 1999

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                                                       September 24,       September 26,
                                                                                           2000                 1999
                                                                                    -------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                          <C>                 <C>
    Net income......................................................................         $4,550,733          $1,747,074
    Adjustments   to  reconcile  net  income  to  net  cash  used  in
        operating activities:
        Depreciation and amortization...............................................          1,838,061           1,640,573
        Gain on sale of fixed assets................................................            119,344           (299,726)
        Extraordinary gain for early extinguishment of debt.........................                  -           (240,023)
    Increase/(decrease) in cash as a result of changes in operating
        assets and liabilities:
        Receivables.................................................................        (2,114,731)         (1,260,857)
        Inventories.................................................................            157,751           (482,342)
        Prepaid expenses and other current assets...................................           (23,071)            (18,275)
        Receipts on notes receivable................................................            256,758             497,866
        Advances under notes receivable.............................................          (119,163)           (470,250)
        Deposits and other assets...................................................          (273,560)           (101,629)
        Deferred tax asset..........................................................        (1,966,178)                   -
        Accounts payable............................................................          3,392,156             334,367
        Accrued expenses............................................................        (1,211,388)           (995,977)
        Deferred rent...............................................................           (14,758)              22,542
        Other liabilities...........................................................          (220,524)           (259,362)
                                                                                              ---------           ---------
               Net cash provided by/(used in) operating activities..................          4,371,430             113,981
                                                                                              ---------             --------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures............................................................          (282,294)           (692,919)
    Proceeds from the sale of fixed assets .........................................                  -             696,195
     Net cash paid for acquisition..................................................        (1,770,788)         (2,311,453)
     Additions to assets held for resale............................................        (1,812,355)            (64,085)
    Net cash paid for investments...................................................       (17,411,688)                   -
                                                                                           ------------         -----------
               Net cash provided by/(used in) investing activities..................       (21,277,125)         (2,372,262)
                                                                                           ------------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of common stock, net of issuance costs.................................          2,425,868             679,564
    Issuance of preferred stock, net of issuance costs..............................         16,794,527                   -
    Payment of liabilities in connection with acquired assets.......................        (1,989,104)         (2,828,037)
    Repayments of capital leases....................................................          (366,110)           (502,622)
    Proceeds from long-term borrowings..............................................          1,500,000          14,837,998
    Early retirement of debt........................................................                  -         (4,650,000)
    Repayment of notes payable......................................................          (140,419)         (7,350,475)
                                                                                              ---------         -----------
               Net cash provided by/(used in) financing activities..................         18,224,762             186,428
                                                                                             ----------         -----------
               Net increase(decrease) in cash.......................................          1,319,067         (2,071,853)

CASH, Beginning of Period...........................................................          2,880,342           5,269,627
                                                                                              ---------           ---------
CASH, End of Period.................................................................         $4,199,409          $3,197,774
                                                                                             ==========          ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:
    Cash paid during the period for:
       Interest.....................................................................          1,524,413           1,035,352
    Non-cash investing and financing activities:
       Equipment purchased under capital leases.....................................            388,691             747,724

DETAILS OF ACQUISITION
    Assets acquired.................................................................          3,020,788           6,311,453
    Note Receivable extinguished....................................................        (1,250,000)                   -
    Notes issued....................................................................                  -         (1,500,000)
    Estimated accruals at time of acquisition.......................................                  -         (2,500,000)
                                                                                              ---------          -----------
         Cash paid for acquisition..................................................          1,770,788           2,311,453
                                                                                              =========           =========

<FN>
The accompanying notes are an integral part of these consolidated statements.
</FN>
</TABLE>
<PAGE>


                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   The September 24, 2000  consolidated  balance  sheet  presented  herein was
     derived  from  the  audited  December  26,  1999   consolidated   financial
     statements of the Company.

2.   These  consolidated  financial  statements have been prepared in accordance
     with  generally  accepted  accounting   principles  for  interim  financial
     information  and with the  instructions  to Form 10-QSB.  The  consolidated
     financial  statements  should  be  read in  conjunction  with  the  audited
     consolidated  financial  statements  of the  Company  for  the  year  ended
     December 26, 1999 for a description of the significant accounting policies,
     which have continued without change, and other note information.

3.   All  adjustments  (recurring  in  nature)  which  are,  in the  opinion  of
     management, necessary for a fair presentation of the results of the interim
     periods  have been  included.  The results of the  interim  periods are not
     necessarily   indicative  of  the  results  for  the  full  year.   Certain
     reclassifications  have been made to the prior interim financial statements
     to conform to the current interim presentation.

4.   On May 5, 2000, the Company  acquired  certain lien rights on substantially
     all the assets of New York Bagel  Enterprises  (NYBE) and its wholly  owned
     subsidiary  Lots `A Bagels,  Inc. (LAB) from a bank. Both NYBE and LAB were
     operating as Debtors in Possession under Chapter 11 of the bankruptcy code.
     On May 13,  2000,  the Company  acquired  the leases and other assets of 17
     NYBE stores through NYBE's bankruptcy proceeding.  In addition, the Company
     acquired all trademarks and franchise  rights for 12 stores operating under
     the New York  Bagel & Deli  trade  name.  The  store  assets  acquired  are
     included as Assets held for resale in the  accompanying  balance sheet,  as
     the Company intends to sell the stores to franchisees. On July 12, 2000, in
     LAB's  bankruptcy  proceeding,  the Company  acquired  the leases and other
     assets of an additional 6 LAB stores.

5.   On June 26, 2000, the Company acquired the operating assets of 13 Manhattan
     Bagel  stores in Western New York from a franchisee  that was  operating in
     Bankruptcy.  The store assets were  acquired for cash and  settlement  of a
     note receivable held by the Company.

6.   On June 7, 2000,  the Company issued  1,219,471  Shares of Common Stock and
     392,190  shares  of  Series C  Convertible  Preferred  Stock as a part of a
     private placement. The proceeds from this offering, net of related expenses
     were  $3,628,905.  On June 27, 2000 the Company  issued  140,920  Shares of
     Common  Stock and 52,000  shares of Series C  Convertible  Preferred  Stock
     concluding the private placement.  The proceeds from this offering,  net of
     related  expenses  were  $494,000.  Each share of the Series C  Convertible
     Preferred Stock is convertible into 3 shares of Common Stock. Conversion to
     Common Stock is mandatory upon the  registration  of the underlying  common
     stock.  The Series C Convertible  Preferred Stock provides for a cumulative
     dividend  equal to 10% per annum,  based upon a deemed  value of $ 7.00 per
     share.  As of the date of this filing,  all Series C preferred  shares have
     been converted to common stock.

7.   On August  11,  2000,  the  Company,  Brookwood  New World  Investors,  LLC
     ("Brookwood")  and BET  Associates,  L.P.("BET")  entered  into a  Series D
     Preferred Stock and Warrant Purchase Agreement (the "Purchase  Agreement").
     The first  closing,  under the  Purchase  Agreement,  pursuant to which BET
     purchased its Series D Preferred  Stock and its Warrant (as defined below),
     occurred  on August  11,  2000.  The  second  closing  under  the  Purchase
     Agreement,  pursuant to which  Brookwood  purchased  its Series D Preferred
     Stock and Warrant (as defined  below),  occurred on August 18, 2000.  Under
     the terms of the Purchase  Agreement,  Brookwood and BET each purchased (i)
     8,108.108  shares of New World's  Series D Preferred  Stock (the  "Series D
     Preferred  Stock") and (ii) a warrant to purchase up to 1,196,910 shares of
     the Common Stock of New World,  which  represents  the right to purchase in
     the aggregate  approximately 12.9% of the Common Stock (each, a "Warrant").
     The shares of Common Stock issuable upon exercise of a Warrant are entitled
     to registration  rights under the terms of a Registration  Rights Agreement
     among New World,  the  Brookwood  and BET.  Under the terms of the Purchase
     Agreement,  if New  World  fails to take  actions  to redeem  the  Series D
     Preferred Stock within one year of the closing,  New World will be required
     to issue to each of  Brookwood  and BET,  each  quarter  for the next  four
     quarters,  additional  warrants  representing  the right to purchase in the
     aggregate  an  additional  2.68% of New World's  Common  Stock,  subject to
     reduction for any  redemption(s) of Preferred Stock that occur prior to any
     such quarter.  Further,  under the terms of the Purchase Agreement,  if New
     World fails to take  actions to redeem the Series D Preferred  Stock within
     two years of the  closing,  New World will be  required to issue to each of
     Brookwood  and BET,  each  quarter for the next four  quarters,  additional
     warrants  representing in the aggregate an additional  4.03% of New World's
     Common stock,  subject to reduction for any redemption(s)  that occur prior
     to any such  quarter.  As of September 24, 2000 there were 25,000 shares of
     Series D  Preferred  Stock  authorized  and  16,216.216  shares  issued and
     outstanding.

8.   FAS  No.  115  "Accounting  for  Certain  Investments  in Debt  and  Equity
     Securities,"  requires  that all  applicable  investments  be classified as
     trading  securities,   available-for-sale  securities  or  held-to-maturity
     securities.  The Company's  Marketable  Securities  consist of  $28,666,000
     (face value) of Einstein Noah Bagel Corporation ("ENBC") 7.25% subordinated
     debentures   due   June   1,   2004   which   have   been   classified   as
     available-for-sale  securities.  ENBC is  currently  in  default  on  these
     debentures and is operating under Chapter 11 of the Bankruptcy  Code. Based
     upon ENBC's current court proceedings, the Company expects to fully realize
     this  investment  based  upon  the  Company's  cost  of  $17,411,688  which
     approximates its fair value as of September 24, 2000.

9.   During  the  quarter  ended  September  24,  2000 the  deferred  tax  asset
     valuation allowance decreased by $3,000,000 resulting in the recognition of
     an income  tax  benefit,  net of  current  provision  for  income  taxes of
     $1,966,178 in the accompanying Income Statement.  The decrease is primarily
     the result of the  Company's  analysis of the  likelihood  of realizing the
     future  tax  benefit of tax loss  carryforwards  and  additional  temporary
     differences  associated  with New World Coffee.  The Company had previously
     adjusted the valuation  allowance for recognition of tax loss carryforwards
     related to its Manhattan Bagel Company, Inc. subsidiary. Realization of the
     net deferred tax asset (net of recorded  valuation  allowance) is dependent
     upon  profitable  operations  and  future  reversals  of  existing  taxable
     temporary  differences.  Although  realization is not assured,  the Company
     believes it is more likely than not that the net recorded  benefits will be
     realized through the reduction of future taxable income.  The amount of the
     net deferred tax assets considered realizable, however, could be reduced in
     the near term if actual future taxable income is lower than  estimated,  or
     if there are  differences  in the timing or amount of future  reversals  of
     existing taxable temporary differences.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain  statements  in this Form  10-QSB  under  "Management's  Discussion  and
Analysis  of  Financial   Condition  and  Results  of   Operations"   constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform  Act of 1996 with  respect  to the  financial  condition  and
business of the Company.  The words "estimate",  "plan",  "intend",  "believes",
"expect",  and similar  expressions  are  intended  to identify  forward-looking
statements. Such forward-looking statements involve and are subject to known and
unknown  risks,  uncertainties,  and other  factors which could cause the actual
results, performance, and achievements of the Company to be materially different
from any future results,  performance (financial or operating),  or achievements
expressed or implied by such forward-looking  statements.  Such factors include,
among others, the following:  competition;  success of operating and franchising
initiatives; development schedules; advertising and promotional efforts; adverse
publicity;  acceptance of new product offerings;  availability of new locations,
and  terms of sites for store  development;  changes  in  business  strategy  or
development   plans;  the  ability  to  integrate   acquisitions   successfully;
availability  and terms of capital;  food,  labor,  and employee  benefit costs;
changes  in  government  regulations;  regional  weather  conditions;  and other
factors  referenced in this Form 10-QSB , in the  Company's  Form 10-KSB for its
1999  fiscal  year,  and in the  Company's  most  recent  S-3  filing  which are
incorporated by reference herein.


<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS  FOR THE THIRD QUARTER ENDED  SEPTEMBER 24, 2000 AND SEPTEMBER 26,
1999

General

     New World Coffee - Manhattan Bagel, Inc. is the largest franchisor of bagel
bakeries and coffee bars in the United States.  It operates and franchises bagel
bakeries  and coffee  bars in 27 states  throughout  the  United  States and the
District of Columbia.  The first  Company-owned New World Coffee store opened in
1993 and the first franchised New World Coffee store opened in 1997. On November
24, 1998, the Company  acquired the stock of Manhattan Bagel,  Company,  Inc. On
August 31, 1999, the Company acquired the assets of Chesapeake Bagel Bakery.  At
September 24, 2000 the Company's retail system  consisted of  approximately  374
stores, including 48 Company-owned and 326 franchised and licensed stores.

     The Company is vertically  integrated with bagel dough manufacturing plants
in Eatontown,  NJ and Los Angeles,  CA, and a coffee roasting plant in Branford,
CT. The Company's  products are sold to franchised,  licensed and  Company-owned
stores as well as to wholesale, supermarket and non-traditional outlets.

     The Company is a Delaware corporation and was organized in November 1992.

Results of Operations

Quarter Ended September 24, 2000 Compared to Quarter Ended September 26, 1999

     Revenues.  Total revenues  increased  32.9% to $13,562,154  for the quarter
ended  September  24, 2000 from  $10,202,649  for the  comparable  1999  period.
Manufacturing  revenues increased 12.6% to $7,030,233 or 51.8% of total revenues
for the  quarter  ended  September  24, 2000 from  $6,241,681  or 61.2% of total
revenues for the  comparable  1999  period.  Retail  sales  increased  109.2% to
$4,433,486 or 32.7% of total  revenues for the quarter ended  September 24, 2000
from  $2,119,763  or 20.8% of total  revenues  for the  comparable  1999  period
primarily  due to the  addition of Company  owned stores  through  acquisitions.
Franchise  related  revenues  increased  14.0% to  $2,098,435  or 15.5% of total
revenues for the quarter ended  September  24, 2000 from  $1,841,205 or 18.0% of
total  revenues for the  comparable  1999  period,  primarily as a result of the
acquisition of Chesapeake Bagel Bakery in August of 1999.

     Costs and Expenses. Cost of sales as a percentage of manufacturing revenues
and retail sales remained  constant at 83.7% for the quarter ended September 24,
2000 as compared to the comparable 1999 period.

     General and  administrative  expenses  increased to $ 1,681,238 or 12.4% of
total  revenues  for the quarter  ended  September  24, 2000 from $ 1,589,771 or
15.6% of total revenues for the comparable 1999 period. The increase in expenses
is primarily  attributable to additional  administrative  costs  associated with
recently  acquired  Company owned stores.  General and  administrative  expenses
expressed as a percentage of total  revenues  decreased to 12.4% for the quarter
ended September 24, 2000 from 15.6% for the comparable 1999 period. The decrease
is the result of the higher  revenue base for the quarter  ended  September  24,
2000  primarily  from  revenues  associated  with newly  acquired  Company owned
stores.

     Depreciation  and  amortization  expense  increased  to $678,726 or 5.0% of
total revenues for the quarter ended September 24, 2000 from $565,905 or 5.5% of
total  revenues  for the  comparable  1999  period.  The  increase is  primarily
attributable  to  depreciation  on recently  acquired  Company  owned stores and
infrastructure  improvements  which were made in the fourth  quarter of 1999.

     Interest expense  increased to $448,408 or 3.3% of total revenues,  for the
quarter  ended  September  24, 2000 from  $431,212,  or 4.2% of revenues for the
comparable  1999  period.  This  increase is  primarily  due to  interest  costs
relating to the  acquisition of the Chesapeake  Bagel Bakery as well as interest
incurred on borrowings for infrastructure improvements.

     Gain from the Early Extinguishment of Debt, net, decreased to $0 as no such
gain occurred during the quarter ended September 24, 2000. The gain, realized in
the  comparable  1999 period,  represents  an $850,000  discount  earned for the
prepayment  of the Manhattan  Bagel  Unsecured  Creditors'  Trust Note which was
partially offset by the costs associated with obtaining such discount.

     Net Income.  Net income  increased to $3,129,376 or 23.1% of total revenues
for the quarter ended September 24, 2000 from $854,337 or 8.4% of total revenues
for the comparable 1999 period. This increase is primarily a result of increased
manufacturing and retail gross profit of $513,138,  increased  franchise related
revenues  of  $257,230  and the income  tax  benefit  of  $1,966,178  which were
partially offset by increases in general and administrative expenses of $91,467,
interest expense of $17,196,  depreciation and amortization  expense of $112,821
and a reduction in gain from the early extinguishment of debt of $240,023.


ITEM 3. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE YEAR TO DATE PERIOD ENDED SEPTEMBER 24, 2000 AND SEPTEMBER
26, 1999


Results of Operations

Year To Date Period  Ended  September  24, 2000  Compared to Year To Date Period
Ended September 26, 1999

     Revenues.  Total revenues  increased  11.2% to $32,875,995  for the year to
date period ended  September 24, 2000 from  $29,570,626  for the comparable 1999
period.  Manufacturing  revenues increased 6.8% to $19,705,393 or 59.9% of total
revenues for the year to date period ended  September 24, 2000 from  $18,438,142
or 62.3%  of  total  revenues  for the  comparable  1999  period.  Retail  sales
increased  10.9% to $7,595,237  or 23.1% of total  revenues for the year to date
period ended  September 24, 2000 from  $6,849,190 or 23.2% of total revenues for
the  comparable  1999 period  primarily  due to the  acquisition  of  additional
Company owned stores.  Franchise related revenues  increased 30.2% to $5,575,365
or 17.0% of total revenues for the year to date period ended  September 24, 2000
from  $4,283,294  or 14.5% of total  revenues  for the  comparable  1999 period,
primarily as a result of the acquisition of Chesapeake Bagel Bakery.

     Costs and Expenses. Cost of sales as a percentage of manufacturing revenues
and retail sales  decreased to 81.4% for the year to date period ended September
24, 2000 from 82.3% for the comparable 1999 period.  The reduction was primarily
the result of the Company's  ability to leverage  fixed  manufacturing  overhead
costs over increased manufacturing revenues.

     General and  administrative  expenses as a percentage of revenues increased
to  $4,855,910  or 14.8% of total  revenues  for the year to date  period  ended
September 24, 2000 from $4,577,389 or 15.5% for the comparable 1999 period.  The
increase is primarily attributable to additional administrative costs associated
with recently acquired Company owned stores. General and administrative expenses
expressed  as a  percentage  of  revenues  continue  to decline  as the  Company
continues to leverage its existing infrastructure.

     Depreciation and amortization expense as a percentage of revenues increased
to $  1,838,061  or 5.6% of total  revenues  for the year to date  period  ended
September 24, 2000 from  $1,640,573 or 5.5% of total revenues for the comparable
1999 period. The increase is primarily  attributable to depreciation on recently
acquired Company owned stores and infrastructure improvements which were made in
the fourth quarter of 1999.

     Interest expense increased to $1,387,397 or 4.2% of revenues,  for the year
to date period ended September 24, 2000 from $1,044,978, or 3.5% of revenues for
the  comparable  1999 period.  This increase is primarily due to interest  costs
relating to the  acquisition  of the  Chesapeake  Bagel  Bakery brand as well as
interest incurred on borrowings for infrastructure improvements.

     Gain from the Early Extinguishment of Debt, net, decreased to $0 as no such
gain occurred during the year to date period ended September 24, 2000. The gain,
realized in the comparable 1999 period,  represents an $850,000  discount earned
for the prepayment of the Manhattan Bagel Unsecured  Creditors' Trust Note which
was partially offset by the costs associated with obtaining such discount.

     Net Income.  Net income  increased to $4,550,733 or 13.8% of total revenues
for the year to date period ended  September 24, 2000 from $1,747,074 or 5.9% of
total  revenues for the  comparable  1999 period.  This  increase is primarily a
result of increased manufacturing and retail gross profit of $603,861, increased
franchise  related  revenues  of  $1,292,071  and  the  income  tax  benefit  of
$1,966,178   which  were   partially   offset  by   increases   in  general  and
administrative expenses of $278,521, interest expense of $342,419,  depreciation
and  amortization  expense of $197,488  and a  reduction  in gain from the early
extinguishment of debt of $240,023.

Liquidity and Capital Resources

     The  Company  plans to  satisfy  any of its  capital  requirements  for the
remainder  of  2000  through  cash  flow  from   operations   and  the  sale  of
Company-owned stores to franchisees,  which should generate additional cash. The
Company  continually  accesses  its ongoing  capital  needs and may consider the
issuance  of  additional  shares  in  order  to raise  capital  should  business
conditions dictate that such is necessary.

     On June 7, 2000,  the Company issued  1,219,471  Shares of Common Stock and
392,190  shares of Series C Convertible  Preferred  Stock as a part of a private
placement.  The proceeds, net of related offering expenses, were $3,628,905.  On
June 27,  2000 the  Company  issued  140,920  Shares of Common  Stock and 52,000
shares of Series C Convertible Preferred Stock concluding the private placement.
The proceeds, net of related offering expenses, were $494,000.

     On August 11 and 18,  2000,  the Company  issued  8,108.108  and  8,108.108
shares, respectively, of newly authorized Series D Preferred Stock (see note 7).
The proceeds, net of related offering expenses, were $ 14,687,350.  The proceeds
from these stock sales were utilized to purchase marketable securities (see note
8).

     At  September  24,  2000 the  Company  had a  working  capital  surplus  of
$24,266,125 compared to a working capital surplus of $ 1,444,202 at December 26,
1999.  The increase in working  capital was primarily  attributable  to proceeds
from the preferred stock offering completed during the year to date period ended
September 24, 2000.

     The Company had net cash provided by operating activities of $4,371,430 for
the year to date period ended September 24, 2000 compared with net cash provided
by operating activities of $113,981 for the comparable 1999 period. The increase
is primarily the result of higher net income for the period to date.

     The Company had net cash used in investing  activities of  $21,277,125  for
the year to date period ended  September 24, 2000 compared with net cash used in
investing  activities of $2,372,262 for the comparable 1999 period. The increase
in cash used  reflects the  Company's  acquisition  strategy  combined  with the
purchase of marketable securities (see note 8).

     The Company had net cash provided by financing  activities  of  $18,224,762
for the year to date period  ended  September  24, 2000  compared  with net cash
provided by financing activities of $186,428 for the comparable 1999 period. The
increase  primarily  reflects the completion of a private  placement and sale of
Series D Preferred Stock.


Seasonality and General Economic Trends

     The  Company  anticipates  that its  business  will be  affected by general
economic  trends that  affect  retailers  in general.  While the Company has not
operated  during a period  of high  inflation,  it  believes  based on  industry
experience  that it would generally be able to pass on increased costs resulting
from inflation to its customers. The Company's business may be affected by other
factors,  including  increases in the  commodity  prices of green coffee  and/or
flour,  acquisitions by the Company of existing stores,  existing and additional
competition,  marketing programs, weather, and variations in the number of store
openings.  The Company has few employees at the minimum wage level and therefore
believes  that an increase in the minimum  wage would have little  impact on its
operations and financial condition.


<PAGE>



                           PART II - OTHER INFORMATION

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                               SEPTEMBER 24, 2000

Item 1.   Legal Proceedings

     Not applicable

Item 2.   Changes in Securities

     During  the  second  quarter  of 2000,  the  Company's  board of  directors
designated 500,000 shares of preferred stock as Series C Preferred Stock.

     During  the  third  quarter  of 2000,  the  Company's  board  of  directors
designated 25,000 shares of preferred stock as Series D Preferred Stock

Item 3. Defaults upon Senior Securities

     Not applicable

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

     Not applicable

Item 5.  Other Information

     Not applicable

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits.  None

(b)      Reports on Form 8-K.

     On September 1, 2000, the Company filed a form 8-K relating to the issuance
     of Series D Preferred Stock and related matters.




<PAGE>



                                   SIGNATURES

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

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.


Date:   November 13, 2000               By:/s/ R. Ramin Kamfar
                                           -------------------
                                           R. Ramin Kamfar
                                           Chairman and Chief Executive Officer



Date:   November 13, 2000               By:/s/ Jerold E. Novack
                                           --------------------
                                           Jerold E. Novack
                                           Chief Financial Officer