UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

         For the quarterly period ended September 30, 2001.

         [   ]  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: 0-27704

                           DIGITAL DATA NETWORKS, INC.
        (Exact name of small business issuer as specified in its charter)


Washington                                          91-1426372
(State or other jurisdiction of                     (IRS Employer
incorporation or organization)                      Identification No.)

3102 Maple Avenue, Suite 230
Dallas, Texas  75201                                (214) 969-7200
(Address of principal executive offices)            (Issuer's telephone number)


As of November 10, 2001, 2,458,390 shares of Common Stock were outstanding.

                                       1
<PAGE>



                                      INDEX

                                                                           Page
    PART I. FINANCIAL INFORMATION

        Item  1.      Consolidated Financial Statements                      3

        Item  2.      Management's Discussion and Analysis of Financial
                      Condition and 9 Results of Operations                  9

        Item  3.      Quantitative and Qualitative Disclosure
                      about Market Risk                                     11

    PART II. OTHER INFORMATION

        Item  1.      Legal Proceedings                                     12

        Item  2.      Changes in Securities                                 (a)

        Item  3.      Defaults Upon Senior Securities                       (a)

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

        Item  5.      Other Information                                     (a)

        Item  6.      Exhibits and Reports on Form 8-K                      (a)

    SIGNATURES                                                              13


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

(a)      There are no issues requiring disclosure for these items and they have
         therefore been omitted.

                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION
                    Item 1. Consolidated Financial Statements

                           DIGITAL DATA NETWORKS, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                                 December 31,     September 30,
                                                                                    2000              2001
                                                                                 (audited)        (unaudited)
                                                                                 ---------        -----------
ASSETS
  Current assets:
<S>                                                                               <C>               <C>
    Cash and cash equivalents                                                     $    347          $    189
    Trade accounts receivable, net of allowances
       for doubtful accounts of $8                                                      73                50
    Prepaid expenses and other current assets                                           63                25
    Receivables from officer and director, net of reserves of $5                        87                93
                                                                                  --------          --------
       Total current assets                                                            570               357
  Equipment, net of accumulated depreciation                                            44                57
  Investments in equity securities                                                       2                 -
  Other assets                                                                           1                 1
                                                                                  --------          --------

  Total assets                                                                    $    617          $    415
                                                                                  ========          ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  Current liabilities:
    Accounts payable                                                              $     81          $     50
    Accrued payroll and related                                                         21                29
    Unearned income                                                                    251               155
    Other accrued liabilities                                                           45                45
    Notes payable                                                                      174               178
                                                                                  --------          --------
       Total current liabilities                                                       572               457
                                                                                  --------          --------


  Commitments and contingencies (Note 3)

  Stockholders' equity (deficit):
    Preferred stock, no par value, 1,000,000 shares authorized,
       No shares issued or outstanding                                                   -                 -
    Common stock, no par value, 10,000,000 shares authorized,
      2,284,597 and 2,358,390 shares issued and outstanding                         13,390            13,399
    Accumulated deficit                                                            (13,345)          (13,441)
                                                                                  --------          --------
       Total stockholders' equity (deficit)                                             45               (42)
                                                                                  --------          --------

       Total liabilities and stockholders' equity (deficit)                       $    617          $    415
                                                                                  ========          ========
</TABLE>










                 See accompanying notes to financial statements

                                       3
<PAGE>


                           DIGITAL DATA NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>

                                                      Three Months                  Nine Months
                                                     Ended Sept. 30,              Ended Sept. 30,
                                                     ---------------              ---------------
                                                 2000            2001           2000             2001
                                               --------      ---------      ----------       -------------



<S>                                            <C>            <C>            <C>              <C>
   Revenues                                    $     126      $     208      $     412        $   650
                                               ---------      ---------      ---------        -------

   Expenses:
     Direct operating costs                           28            155            102            347
     Salaries and related                             82             94            246            274
     Marketing, general and administrative            45             30            139            110
                                               ---------      ---------      ---------        -------

       Total expenses                                155            279            487            731
                                               --------       ---------      ---------        -------

   Income (loss) from operations                     (29)           (71)           (75)           (81)
                                               ---------      ---------      ---------        -------

   Other income (expense):
     Interest expense                                 (2)            (1)            (5)            (5)
     Interest income                                   4              3             15             12
     Provision for litigation settlement               -            (20)             -            (20)
     Unrealized loss on equity securities              -              -              -             (2)
                                               ---------      ---------      ---------        -------

       Total other income (expense), net               2            (18)            10            (15)
                                               ---------      ---------      ---------        -------

   Net income (loss)                           $     (27)     $     (89)     $     (65)       $   (96)
                                               =========      =========      =========        =======


   Net loss per share - basic and diluted      $  (0.01)      $   (0.04)     $   (0.03)       $ (0.04)
                                               =========      =========      =========        =======


    Weighted average shares outstanding            2,284          2,358          2,284          2,340
                                               =========      =========      =========        =======
</TABLE>



















                 See accompanying notes to financial statements

                                       4
<PAGE>


                           DIGITAL DATA NETWORKS, INC.
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                   (Unaudited)
                        (Dollars and Shares in Thousands)

<TABLE>
<CAPTION>


                                                                                            Total
                                                 Common Stock            Accumulated     Stockholders'
                                            Shares         Amount            Deficit     Equity (Defict)
                                            ------         ------        ----------      ---------------


<S>                                         <C>         <C>               <C>             <C>
Balance, December 31, 2000                  2,284       $ 13,390          $ (13,345)      $   45

Net Loss                                        -              -                (96)         (96)
Exercise of stock options                      74              9                  -            9
                                            ------      --------          ---------       ------
Balance, September 30, 2001                 2,358       $ 13,399          $ (13,441)      $  (42)
                                            =====       ========          =========       ======
</TABLE>





































                 See accompanying notes to financial statements

                                       5
<PAGE>




                           DIGITAL DATA NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                    Nine Months Ended Sept.30,
                                                                                    --------------------------
                                                                                         2000            2001
                                                                                         ----            ----

Cash flows from operating activities:
<S>                                                                                    <C>             <C>
Net Loss                                                                               $   (65)        $  (96)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
       Depreciation and amortization                                                        10             66
       Decrease in accounts receivable                                                      15             23
       Decrease (increase) in prepaid expenses and other current assets                    (14)            38
       Decrease in accounts payable and accrued liabilities                                (22)           (31)
       Decrease in unearned income                                                         (67)           (96)
       Other                                                                                 2              8
                                                                                       -------         ------
Net cash used by operating activities                                                     (141)           (88)
                                                                                       -------         ------

Cash flows from investing activities:
   Purchases of equipment                                                                  (16)           (80)
                                                                                       -------         ------
Net cash used by investing activities                                                      (16)           (80)
                                                                                       -------         ------

Cash flows from financing activities:
   Proceeds from exercise of stock options                                                   -              9
                                                                                       -------         ------
Net cash provided by financing activities                                                    -              9
                                                                                       -------         ------

Net decrease in cash and cash equivalents                                                 (157)          (159)

Cash and cash equivalents
   Beginning of Period                                                                     372            347
                                                                                       -------         ------

   End of Period                                                                       $   215         $  188
                                                                                       =======         ======
</TABLE>




                 See accompanying notes to financial statements

                                        6
<PAGE>






                           Digital Data Networks, Inc.
                          NOTES TO FINANCIAL STATEMENTS

Note 1  Description of Business

Digital Data Networks, Inc. ("the Company" or DDN"), a wireless, passenger
communication and advertising company, is principally engaged in the operation
of a "digital information network", a network of computerized electronic message
displays that delivers current news, information and advertising to riders
on-board public transit vehicles. The digital information network consists of a
series of electronic information displays utilizing digital radio transmission
technology. The Company, incorporated in 1988, operates a digital information
network in Dallas, Texas under the name The Transit Network.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and related notes thereto included in the Company's 2000 Annual
Report on Form 10-KSB. In the opinion of management, all adjustments, consisting
only of normal recurring accruals, considered necessary for a fair presentation
have been included. Operating results for the nine-month period ended September
30, 2001 are not necessarily indicative of the results that may be expected for
the year.

Note 2  Financial Condition, Liquidity and Going Concern

The Company continues to experience net losses and negative cash flows from
operations. It also has an accumulated deficit at September 30, 2001 of
$13,441,000 and a negative working capital position. The Company's contract to
provide services to DART is due to expire in October 2002 and DART is planning
to re-bid the contract. While the Company intends to respond to DART's bid,
there can be no assurance that the Company will be able to negotiate terms as
favorable as its current contract. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.

As discussed in Note 3, the Company maintains a contract to provide services for
DART, which was recently extended for one year and which now expires in October
2002. If DART wishes to continue having a digital information network on its
vehicles, as the Company believes it does, DART must solicit new proposals for
this project via a Request for Proposal ("RFP"), and allow any and all
interested parties to submit a bid. While the Company intends to respond to this
bid and hopes to enter into a new contract in order to continue providing
services to DART, there can be no guarantee that the Company will be the
successful bidder.

The Company leases a FM subcarrier signal which it uses to transmit its program,
pursuant to terms of a lease which expires in December 2001. The Company is in
the process of finalizing a new subcarrier lease which utilizes a different
frequency which will require a capital investment of approximately $60,000,
since the Company will have to individually modify the receivers in every DART
bus or train which has the Company's digital information network installed in
it.

The Company has taken actions to improve cash flows, including reducing general
and administrative expenses. In addition, the Company has pursued merger
possibilities and continues to do so. The ability of the Company to generate
positive cash flows from operations and net income, is dependent, among other
things, on market conditions, the recovery of recorded assets, cost control, and
the Company's ability to raise capital under acceptable terms. While the Company
has had some successes in these endeavors in the past, there can be no assurance
that its efforts will be successful in the future. These financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.


                                       7
<PAGE>

Note 3  Commitments and Contingencies

In 1998, the Company settled litigation between the Company and the former
stockholder of hip Communications pertaining to the Company's 1996 acquisition
of that company. As part of that settlement agreement, the Company was required
to transfer the "hip.com" domain name to the former stockholder. The Company
failed to transfer the domain name and no longer has registration rights to such
domain name. As a result, in 1999 the former stockholder filed an action against
the Company for damages for breach of settlement agreement. The Company has
contacted the party which holds the registration rights to the hip.com domain
name and attempted to reacquire it, but was unsuccessful. In October 2001, the
Company and former stockholder entered into a new settlement agreement, whereby
plaintiff received $25,000 and 100,000 shares of the Company's stock, and in
exchange, the former stockholder terminated its pending legal action and agreed
to take no further legal action in this matter. As a result of this new
settlement agreement, the Company recorded an additional provision for
litigation settlement of $20,000 during the three months ended September 30,
2001.

The extension of the Company's contract with DART, in addition to extending the
term for one year, also provided for the refinancing of the Company's note
payable to DART. The note payable was due October 15, 2001 and provided for
interest at 18% per annum after the maturity date. Terms of the note payable
were revised to extend the due date to October 15, 2002, require monthly
principal payments of $5,000 commencing in October 2001, and provide for
interest at 12% per annum. The contract also includes a provision for a 4%
royalty payable to DART on certain gross advertising receipts.


                                       8
<PAGE>



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

                              Safe Harbor Statement

Forward-looking statements, within the meaning of Section 21E of the Securities
and Exchange Act of 1934, are made throughout this Management's Discussion and
Analysis or Plan of Operations. For this purpose, any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes", "anticipates", "plans", "expects", "estimates" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the results of the Company to
differ materially from those indicated herein. These factors include, but are
not limited to, those set forth in Item 6 entitled Management's Discussion and
Analysis of Financial Condition and Results of Operations in the Company's Form
10-KSB for the year ended December 31, 2000.
                              --------------------

         The following discussion and analysis should be read in conjunction
with the Company's interim consolidated financial statements included elsewhere
in this Quarterly Report on Form 10-QSB and with the Company's annual
consolidated financial statements and management's discussion and analysis
included in the Company's Annual Report on Form 10-KSB.


Results of Operations

         Revenues increased from $126,000 to $208,000 for the three months ended
September 30, 2001 as compared to the prior year period, due primarily to the
sales of new advertising products, the Marquee Headliner and truckside. There
were no revenues from the Marquee Headliner or truckside advertising for the
three month period ended September 30, 2000. Revenue from the Marquee Headliner
represented $71,000 for this three month period, while truckside revenue
accounted for $36,000 during this same period. Revenue from the electronic
information system accounted for $101,000, a $25,000 decrease over the prior
year period, the result of lower demand for this product. The overall increase
in revenues for this three month period is consistent with prior quarters in
fiscal 2001 and contributed to a 58% increase in revenues, from $412,000 to
$650,000, for the nine months ended September 30, 2001.

         Total expenses for the three months ended September 30, 2001 increased
from $155,000 to $279,000 as compared to the prior year period, while total
expenses for the nine month period increased from $487,000 to $731,000,
primarily due to a $245,000 increase in direct costs. Direct operating costs
increased significantly primarily due to: a) expenses related to the new
truckside advertising product, as production and installation expenses account
for approximately 80% of truckside revenue; and b) expenses related to the
installation of electronic information systems on new DART trains. For the nine
month period ending September 30, 2001, salaries and related increased from
$246,000 to $274,000, primarily the result of sales commissions being paid on

                                       9
<PAGE>

higher revenues. Marketing, general and administrative expenses decreased during
the nine months ended September 30, 2001 as compared to the prior year period
from $139,000 to $110,000, primarily due to reduced legal and accounting
expenditures approximating $15,000.

         As a result of litigation settlement, the Company recorded a provision
for litigation settlement of $20,000 during the three months ended September 30,
2001.

         The three month period ended September 30, 2001 resulted in net loss of
$89,000 which increased the net loss for the nine month period ended September
30, 2001 to $96,000, as compared to a net loss of $65,000 for the prior year
period.

         The Company continues to record a valuation allowance for the full
amount of deferred income taxes, which would otherwise be recorded for tax
benefits relating to operating losses, as realization of such deferred assets
cannot be determined to be more likely than not.

Financial Condition, Liquidity and Capital Resources

         Net cash used by operating activities for the nine months ended
September 30, 2001 was $88,000, a $53,000 decrease as compared to the $141,000
used during the comparative prior year period.

         Capital expenditures were $80,000 during the nine months ended
September 30, 2001. The Company is currently installing its electronic
information system on new trains that have recently been added to DART's fleet,
as well as re-installing its system on new buses that are periodically being
added to DART's fleet to replace older buses. The Company is funding these
installation costs from existing cash. The equipment installed is held as
collateral on the note due to DART and is being amortized over the remaining
term of the contract.

         At September 30, 2001, the Company's principal current assets consisted
primarily of $189,000 of cash, most of which was invested in short-term,
interest-bearing investments with banks, $93,000 of receivables from one of the
Company's directors, $50,000 of accounts receivable and $25,000 of prepaid
expenses. The Company's principal current liabilities consisted of $79,000 in
accounts payable and accrued payroll and related liabilities, $155,000 of
unearned income (which will be recognized during the next twelve months), and
$178,000 of notes payable.

         The Company continues to experience net losses and negative cash flows
from operations. It also has an accumulated deficit at September 30, 2001 of
$13,441,000 and a negative working capital position. The Company's contract to
provide services to DART is due to expire in October 2002 and DART is planning
to re-bid the contract. While the Company intends to respond to DART's bid,
there can be no assurance that the Company will be able to negotiate terms as
favorable as its current contract. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.

                                       10
<PAGE>

         As discussed in Note 3, the Company maintains a contract to provide
services for DART, which was recently extended for one year and which now
expires in October 2002. If DART wishes to continue having a digital information
network on its vehicles, as the Company believes it does, DART must solicit new
proposals for this project via a Request for Proposal ("RFP"), and allow any and
all interested parties to submit a bid. While the Company intends to respond to
this bid and hopes to enter into a new contract in order to continue providing
services to DART, there can be no guarantee that the Company will be the
successful bidder.

         The Company leases a FM subcarrier signal which it uses to transmit its
program, pursuant to terms of a lease which expires in December 2001. The
Company is in the process of finalizing a new subcarrier lease which utilizes a
different frequency which will require a capital investment of approximately
$60,000, since the Company will have to individually modify the receivers in
every DART bus or train which has the Company's digital information network
installed in it.

         The Company has taken actions to improve cash flows, including reducing
general and administrative expenses. In addition, the Company has pursued merger
possibilities and continues to do so. The ability of the Company to generate
positive cash flows from operations and net income, is dependent, among other
things, on market conditions, the recovery of recorded assets, cost control, and
the Company's ability to raise capital under acceptable terms. While the Company
has had some successes in these endeavors in the past, there can be no assurance
that its efforts will be successful in the future. These financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

         The Company is subject to various legal proceedings and claims that
arise in the ordinary course of business. Company management currently believes
that resolution of such legal maters will not have a material adverse impact on
the Company's financial position, results of operations or cash flows. See
"Legal Proceedings."

Item 3.   Quantitative and Qualitative Disclosure about Market Risk

         The Company believes that it does not have any material exposure to
interest or commodity risks. The Company does not own any derivative instruments
and does not engage in any hedging transactions.











                                       11
<PAGE>




PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings

         An action in damages for breach of settlement agreement commenced
against the Company in connection with the April 1998 settlement agreement with
the former stockholder of hip Communications. As part of that settlement
agreement, the Company was required to transfer the "hip.com" domain name to the
former stockholder. The Company failed to transfer the domain name and no longer
has registration rights to such domain name. As a result, in 1999 the former
stockholder filed an action against the Company in the Supreme Court of British
Columbia for damages for breach of settlement agreement. The Company has
contacted the party which holds the registration rights to the hip.com domain
name and attempted to reacquire it, but was not successful in these efforts. In
October 2001, the Company and former stockholder entered into a new settlement
agreement, whereby plaintiff received $25,000 and 100,000 shares of the
Company's stock, and in exchange, the former stockholder terminated its pending
legal action and agreed to take no further legal action in this matter.

         The Company is subject to various legal proceedings and claims that
arise in the ordinary course of business. Company management currently believes
that resolution of such legal matters will not have a material adverse impact on
the Company's financial position, results of operations or cash flows.




                                       12
<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.



                                   Digital Data Networks, Inc.
                                  (Registrant)


Date:     November 14, 2001        By:    /s/   Donald B. Scott, Jr.
                                   ------------------------------
                                   Donald B. Scott, Jr., President



Date:     November 14, 2001        By:    /s/   Richard J. Boeglin
                                   ----------------------------
                                   Richard J. Boeglin
                                   Vice President, Finance & Operations









                                       13