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 March 31, 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.
                 (Name of small business issuer 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
(Address of principal executive offices)                     (Zip Code)

                                 (214) 969-7200
              (Registrant's telephone number, including area code)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

As of April 15, 2001, 2,357,272 shares of Common Stock were outstanding.


<PAGE>



                                      INDEX

                                                                     Page

PART I. FINANCIAL INFORMATION

     1. Consolidated Financial Statements                               3

     2. Management's Discussion and Analysis or Plan of Operations      9

     3. Quantitative and Qualitative Disclosure about Market Risk       10

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings                                          11

     Item 2. Changes in Securities and Use of Proceeds                  (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                                                              12


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

(a) These items are inapplicable or have a negative response and have therefore
been omitted.
                                       2
<PAGE>


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

                                                                                 December 31,        March 31,
                                                                                      2000              2001
                                                                                      ----              ----
Current assets
<S>                                                                                <C>               <C>
  Cash and cash equivalents                                                        $   347           $   214
  Trade accounts receivable, net of allowances
     for doubtful accounts of $8                                                        73                81
  Prepaid expenses and other current assets                                             63                33
  Receivables from officer and director, net of reserves                                87                89
                                                                                   --------          --------
     Total current assets                                                              570               417
Equipment, net                                                                          44               120
Investments in equity securities                                                         2                 2
Other assets                                                                             1                 1
                                                                                   --------          --------

Total assets                                                                       $   617           $   540
                                                                                   ========          ========

Current liabilities
  Accounts payable                                                                 $    81           $    38
  Accrued payroll and related                                                           21                23
  Unearned income                                                                      251               222
  Other accrued liabilities                                                             45                45
  Notes payable                                                                        174               175
                                                                                   --------          --------
     Total current liabilities                                                         572               503
                                                                                   --------          --------


Commitments and contingencies (Note 3)

Stockholders' equity
  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 2,357,272 shares issued and outstanding                           13,390            13,399
  Accumulated deficit                                                              (13,345)          (13,362)
                                                                                   --------          --------
     Total stockholders' equity                                                         45                37
                                                                                   --------          --------

     Total liabilities and stockholders' equity                                    $   617           $   540
                                                                                   ========          ========
</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 Ended March 31,
                                                                                     2000           2001
                                                                                     ----           ----
<S>                                                                                <C>              <C>
Revenues                                                                           $   143          $   221
                                                                                   --------         --------

Expenses
   Direct operating costs                                                               38              111
   Salaries and related                                                                 80               91
   Marketing, general and administrative                                                53               38
                                                                                   --------         --------

      Total expenses                                                                   171              240
                                                                                   --------         --------

Loss from operations                                                                   (28)             (19)
                                                                                   --------         --------

Other income (expense)
   Interest expense                                                                     (2)              (2)
   Interest income                                                                       6                4
                                                                                   --------         --------


      Total other income (expense), net                                                  4                2
                                                                                   --------         --------

Net loss                                                                           $   (24)         $   (17)
                                                                                   ========         ========

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

Weighted average shares outstanding                                                  2,284            2,305
                                                                                   ========         ========
</TABLE>
























                 See accompanying notes to financial statements

                                       4
<PAGE>


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



<TABLE>
<CAPTION>


                                                          Common Stock             Accumulated
                                                      Shares            Amount        Deficit              Total
                                                      ------            ------        -------              -----

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

Net Loss                                                   -                 -             (17)              (17)
Exercise of stock options                                 73                 9                                 9
                                                       ------         ---------      ----------            ------


Balance, March 31, 2001                                2,357          $ 13,399       $ (13,362)            $  37
                                                       =====          =========      ==========            ======
</TABLE>


































                 See accompanying notes to financial statements

                                       5
<PAGE>




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


                                                                                      Three Months Ended March 31,
                                                                                         2000            2001
                                                                                         ----            ----

Cash flows from operating activities
<S>                                                                                    <C>             <C>
Net Loss                                                                               $   (24)        $  (17)
   Adjustments to reconcile net loss to net cash
     used by operating activities
       Depreciation and amortization                                                         3              4
       Decrease in accounts payable and accrued liabilities                                (23)           (41)
       Other                                                                               (19)            (8)
                                                                                       --------        -------
Net cash used by operating activities                                                      (63)           (62)
                                                                                       --------        -------

Cash flows from investing activities
   Purchases of equipment                                                                    -            (80)
                                                                                       --------        -------
Net cash used by investing activities                                                        -            (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                                                  (63)          (133)

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

   End of Period                                                                       $   309         $  214
                                                                                       ========        =======
</TABLE>



          See accompanying notes to consolidated financial statements

                                        6
<PAGE>






                   NOTES TO CONSOLIDATED 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 electronics
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 generally accepted accounting principles 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 generally
accepted accounting principles 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
three-month period ended March 31, 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 has incurred net losses since inception, and while losses from
operations have continued to decrease the last several years, the Company
continues to experience losses and negative cash flows from operations. In 1998,
the Company was notified that its securities were delisted from the Nasdaq
SmallCap Market as a result of non-compliance with tangible net worth continued
listing requirements. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.

The Company's contract with DART expires on October 15, 2001. 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 and allow any
and all interested parties to submit a bid. While the Company intends to seek to
continue to provide services to DART and enter into a new contract to do so,
there can be no guarantee that the Company will be the successful bidder.

The Company has taken actions to reduce negative cash flows, including disposing
of portions of the business, such as the sale of the internet services segment,
and reducing general and administrative expenses. 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 yet-to-be-determined receptiveness by the
advertising community to the Company's recently-introduced advertising products,
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.

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 is attempting to reacquire it. The Company is also exploring the
viability of disputing the current ownership of the

                                       7
<PAGE>

Note 3  Commitments and Contingencies

hip.com domain name under the Internet Corporation for Assigned Names and
Numbers's Uniform Names and Dispute Resolution Policy. In March 2001, a Notice
of Motion was filed in the Supreme Court of British Columbia that the plaintiff
will make an application for an order for judgement in this action. Filed with
this notice of motion was a valuation report which estimated, based on ranges of
estimated values, the fair market value of the domain name as of dates in 1998
and 2000 to be approximately $200,000 and $700,000. This valuation report noted,
among other things, that valuations are subjective, not precise, that others may
place a different value on the asset, and that the underlying data from which
the estimates of value were based was not available for review, thus reducing
confidence of conclusions reached. This motion has not yet been heard by the
Court and the Company is unable at this time to determine the consequences,
monetary or otherwise, which might result from the outcome of this action.

The Company has a contract, which expires in October 2001, to provide services
with the Dallas Area Rapid Transit authority ("DART") that includes a provision
for a 4% royalty payable to DART on certain gross advertising receipts.

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 other various legal proceedings will not have a material adverse
impact on the Company's financial position, results of operations or cash flows.



                                       8
<PAGE>





Item 2. Management's Discussion and Analysis or Plan 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 or Plan 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 consolidated
annual 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 $143,000 to $221,000 during the three months
ended March 31, 2001, as compared to the prior year period, primarily due to new
advertising products, the Marquee Headliner and truckside.

         Total expenses increased from $171,000 to $240,000 during the three
months ended March 31, 2001, as compared to the prior year period. Direct
operating costs increased significantly from $38,000 to $111,000 primarily due
to expenses related to the new truckside advertising product, as production and
installation expenses account for approximately 80% of truckside revenue.
Salaries and related and marketing, general and administrative expenses were
relatively comparable to prior year amounts.

         As a result of the increase in revenues more than offsetting the
increase in expenses, the net loss decreased to $17,000 from $24,000 for the
three months ended March 31, 2001 as compared to 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.


                                       9
<PAGE>
 Financial Condition, Liquidity and Capital Resources

         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."

         Net cash used by operating activities for the three months ended March
31, 2001 was $62,000, a $1,000 decrease as compared to the $63,000 used during
the comparative prior year period.

         Capital expenditures were $80,000 during the three months ended March
31, 2001. The Company is currently installing its 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.

         At March 31, 2001, the Company's principal current assets consisted
primarily of $214,000 of cash, most of which was invested in short-term,
interest-bearing investments with banks, $81,000 of accounts receivable and
$33,000 of prepaid expenses. The Company's principal current liabilities
consisted of $61,000 in accounts payable and accrued payroll and related
liabilities, $222,000 of unearned income (which will be recognized during the
next twelve months), and $175,000 of notes payable.

         The Company has incurred net losses from inception, and while losses
from operations have continued to decrease the last several years, the Company
continues to experience losses and negative cash flows from operations. In 1998,
the Company's securities were delisted from the Nasdaq SmallCap Market as a
result of non-compliance with tangible net worth continued listing requirements.
These are among conditions which raise substantial doubt about the Company's
ability to continue as a going concern.

         The Company has taken actions to reduce negative cash flows, including
disposing of portions of the business, such as the sale of the internet services
segment, and reducing general and administrative expenses. The ability of the
Company to generate positive cash flows from operations and net income, is
dependent on, among other things, overall market conditions, the
yet-to-be-determined receptiveness by the advertising community to the Company's
recently-introduced advertising products, 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 certain of these endeavors in the
past, there can be no assurance that its efforts will be successful in the
future. The accompanying financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

                                       10
<PAGE>

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 has been
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 is attempting to reacquire it, but to date it has not been
successful in these efforts. The Company is also exploring the viability of
disputing the current ownership of the hip.com domain name under the Internet
Corporation for Assigned Names and Numbers's Uniform Name Dispute Resolution
Policy. In March 2001, a Notice of Motion was filed in the Supreme Court of
British Columbia that the plaintiff will make an application for an order for
judgement in this action. Filed with this notice of motion was a valuation
report which estimated, based on ranges of estimated values, the fair market
value of the domain name as of dates in 1998 and 2000 to be approximately
$200,000 and $700,000. This valuation report noted, among other things, that
valuations are subjective, not precise, that others may place a different value
on the asset, and that the underlying data from which the estimates of value
were based was not available for review, thus reducing confidence of conclusions
reached. This motion has not yet been heard by the Court and the Company is
unable at this time to determine the consequences, monetary or otherwise, which
might result from the outcome of this action.

         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 other 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:     May 11, 2001            By:    /s/   Donald B. Scott, Jr.
                                  ------------------------------
                                  Donald B. Scott, Jr., President



Date:     May 11, 2001            By:    /s/   Richard J. Boeglin
                                  ----------------------------
                                  Richard J. Boeglin
                                  Vice President, Finance & Operations


                                       13