----

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**FUEGO      ENTERTAINMENT, INC.**

|  Nevada                                                                        |  20-2078925                                                |
|-------------------------------------------------------------------------------------|-----------------------------------------------------------------|
|  (State                or other jurisdiction of incorporation or organization) |   (I.R.S.                Employer Identification No.) |

|   |  19250                NW 89th Court                                           |   |
|--------|------------------------------------------------------------------------------------|--------|
|   |  Miami,                FL 33018                                               |   |
|   |  (Address,                including zip code, of principal executive offices) |   |
|   |                                                                               |   |
|   |  Issuer’s                telephone number : (305) 829-3777              |   |

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|  PART                I:  |  FINANCIAL                INFORMATION                                                                                                                                        |  Page |
|-------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                          |                                                                                                                                                                              |       |
|  Item                1.  |  Financial                Statements:                                                                                                                                        | 3          |
|                          |                                                                                                                                                                              |       |
|                          |  Balance                Sheets as of Aug 31, 2007 (unaudited) and May 31, 2007                                                                                               | 3          |
|                          |                                                                                                                                                                              |       |
|                          |  Statements                of Operations for the three months ended August 31, 2006 and                for the three months ended August 31, 2007                (unaudited) | 4          |
|                          |                                                                                                                                                                              |       |
|                          |  Statements                of Cash Flows for the three months ended August 31, 2006 and                for the three months ended August 31, 2007                (unaudited) | 5          |
|                          |                                                                                                                                                                              |       |
|                          | Statements                of Stockholders' Equity (Deficit) for the period from May                31, 2005 to August 31, 2007 (unaudited)                                        | 6          |
|                          |                                                                                                                                                                              |       |
|                          |  Notes                to Financial Statements                                                                                                                                | 7          |
|                          |                                                                                                                                                                              |       |
|  Item                2.  |  Managements                Discussion and Analysis of Financial Condition and Plan of                Operations                                                             | 10         |
|                          |                                                                                                                                                                              |       |
|  Item                3.  |  Controls                and Procedures                                                                                                                                      | 13         |
|                          |                                                                                                                                                                              |       |
|  PART                II: |  OTHER                INFORMATION                                                                                                                                            | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                1.  |  Legal                Proceedings                                                                                                                                            | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                2.  |  Changes                in Securities                                                                                                                                        | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                3.  |  Defaults                upon Senior Securities                                                                                                                              | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                4.  |  Submission                of Matters for a Vote of Security Holders                                                                                                         | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                5.  |  Other                Information                                                                                                                                            | 14         |
|                          |                                                                                                                                                                              |       |
|  Item                6.  |  Exhibits                and Reports on Form 8-K                                                                                                                             | 14         |
|                          |                                                                                                                                                                              |       |
|                          |  SIGNATURES                                                                                                                                                                  | 15         |

----

| **FUEGO                          ENTERTAINMENT, INC.**                              |
|-----------------------------------------------------------------------------------------------------------------------------|
| **BALANCE                          SHEETS**                                         |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   | **August                          31,** |   |   | **May                          31,** |   |
|                                                                                                                        |   |   |   |   | **2007** |   |   | **2007** |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |
|    **ASSETS**                                                                  |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |
| CURRENT                          ASSETS                                                                           |   |   |   |   |   |   |   |
| Cash                                                                                                                        |   |   |   |   | $ | 1,058 |   |   | $ | - |   |
| Account                          receivable-trade, less allowance                                                           |   |   |   |   |   |   |   |   |   |
| for                          doubtful accounts of $90,000                                                                   |   |   |   | 23,712 |   |   |   | 29,308 |   |
| Federal                          Income tax refund receivable                                                          |   |   |   | 12,115 |   |   |   | 12,115 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   | Total                          Current Assets |   |   |   | 36,885 |   |   |   | 41,423 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |
| EQUIPMENT,                          less accumulated depreciation                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                                        | of                          $ 17,465.98 |   |   |   |   |   | 35,951 |   |   |   | 39,145 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                          ASSETS                                                                             |   |   |   |   |   |   |   |   |   |
| Production                          costs                                                                         |   |   |   | 95,941 |   |   |   | 95,941 |   |
| Deposit                          on music library                                                                      |   |   |   | 14,500 |   |   |   | 14,500 |   |
| Logo,                          less accumulated amortization                                                                |   |   |   |   |   |   |   |   |   |
| of                          $1,305                                                                                |   |   |   | 1,395 |   |   |   | 1,530 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   | Total                          Other Assets |   |   |   | 111,836 |   |   |   | 111,971 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   | $ | 184,672 |   |   | $ | 192,540 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   **LIABILITIES                          AND STOCKHOLDERS' EQUITY (DEFICIT)**        |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| CURRENT                          LIABILITIES                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                          payable                                                                         |   |   | $ | 19,443 |   |   | $ | 24,092 |   |
| Accounts                          payable - related parties                                                            |   |   |   | 90,107 |   |   |   | 83,518 |   |
| Other                          liabilities                                                                        |   |   |   | 4,208 |   |   |   | 3,906 |   |
| Income                          taxes payable                                                                          |   |   |   | 15,985 |   |   |   | 15,985 |   |
| Accrued                          interest - related parties                                                            |   |   |   | 28,430 |   |   |   | 17,646 |   |
| Deferred                          revenue                                                                         |   |   |   | 6,659 |   |   |   | 6,659 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          Current Liabilities                                                                     |   |   |   | 164,832 |   |   |   | 151,806 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-Term                          Debt                                                                           |   |   |   |   |   |   |   |   |   |
| Notes                          payable - related parties                                                               |   |   |   | 293,640 |   |   | $ | 263,893 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          Liabilities                                                                        |   |   |   | 458,472 |   |   | $ | 415,699 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| COMMITMENTS                          AND CONTINGENCIES                                                                      |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS'                          EQUITY (DEFICIT)                                                                     |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                          stock, par value $.001, 75,000,000                                                          |   |   |   |   |   |   |   |   |   |
| shares                          authorized, 36,639,353 issued and outstanding                                               |   |   |   | 36,640 |   |   |   | 36,640 |   |
| Paid                          in capital                                                                          |   |   |   | 475,580 |   |   |   | 454,905 |   |
| Deferred                          charge                                                                          |   |   |   | (72,667 | ) |   |   | (122,979 | ) |
| Retained                          earnings(deficit)                                                                    |   |   |   | (713,353 | ) |   |   | (591,724 | ) |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          Stockholders' Equity (Deficit)                                                          |   |   |   | (273,800 | ) |   |   | (223,158 | ) |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   | $ | 184,672 |   |   | $ | 192,540 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| **SEE                          ACCOMPANYING NOTES TO FINANCIAL STATEMENTS**         |

----

| **FUEGO                          ENTERTAINMENT, INC.**                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
| **STATEMENTS                          OF OPERATIONS**                                                                                    |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   | **For                          the Three Months Ended**    |   |
|                                                                                                                                          |   | **August                            31, 2007** |   |   | **August                            31, 2006** |   |
|                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |
| REVENUES                                                                                                                                      |   |   |   |   |   |   |
|    Music                                                                                                                       |   |   |   |   |   |   |
|        Music                          sales, net                                                           |   | $ | 11,376 |   |   | $ | 21,994 |   |
|    Filming                                                                                                                     |   |   | - |   |   |   | 30,550 |   |
|    Consulting                                                                                                                  |   |   | - |   |   |   | 6,800 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|    Total                          Revenues                                                                                     |   |   | 11,376 |   |   |   | 59,344 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| COSTS                          AND EXPENSES                                                                                                   |   |   |   |   |   |   |   |   |
|    Cost                          of music                                                                                      |   |   |   |   |   |   |   |   |
|         Royalties                          - related party                                            |   |   | 2,844 |   |   |   | 5,499 |   |
|         Production                          costs                                                     |   |   | 300 |   |   |   |   |   |
|    Cost                          of filming                                                                                    |   |   | - |   |   |   | 5,000 |   |
|    Affiliation                          agreements                                                                             |   |   | - |   |   |   |   |   |
|    Selling,                          general and administrative:                                                               |   |   |   |   |   |   |   |   |
|        Provision                          for bad debts                                                    |   |   | - |   |   |   |   |   |
|        Compensation                          - stock based and contributed                                 |   |   | 63,812 |   |   |   | 75,258 |   |
|        Other                                                                                               |   |   | 51,542 |   |   |   | 62,573 |   |
|    TV                          development                                                                                     |   |   | - |   |   |   | 50,310 |   |
|    Impairment                          of investmest                                                                           |   |   | - |   |   |   |   |   |
|    Interest                          expense - related parties                                                                 |   |   | 10,784 |   |   |   |   |   |
|    Interest                          expense - other                                                                           |   |   | 393 |   |   |   |   |   |
|    Depreciation                          and amortization                                                                      |   |   | 3,329 |   |   |   | 2,665 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|    Total                          costs and expenses                                                                           |   |   | 133,004 |   |   |   | 201,305 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| (Loss)                          before income taxes                                                                                           |   |   | (121,628 | ) |   |   | (141,961 | ) |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Income                          tax expense (benefit)                                                                                         |   |   | - |   |   |   | (19,426 | ) |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| NET                          (LOSS)                                                                                                           |   | $ | (121,628 | ) |   | $ | (122,535 | ) |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| EARNINGS                          (LOSS) PER SHARE - BASIC                                                                                    |   |   | - |   |   |   | * |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| WEIGHTED                          AVERAGE NUMBER OF                                                                                           |   |   |   |   |   |   |   |   |
|   COMMON                          SHARES OUTSTANDING - BASIC                                                                        |   |   | 35,625,161 |   |   |   | 35,318,074 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| *  less                          than $.01 per share                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
|  **SEE                          ACCOMPANYING NOTES TO FINANCIAL STATEMENTS**           |

----

| **FUEGO                            ENTERTAINMENT,                            INC.**                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **STATEMENTS                            OF CASH                            FLOWS**                                                    |
|                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                |   | **For                            the Three Months Ended**    |   |
|                                                                                                                                                                |   | **August                            31, 2007** |   |   | **August                            31, 2006** |   |
|                                                                                                                                                                |   |   |   |   |   |   |
| **OPERATING                            ACTIVITIES**                                                                                                                 |   |   |   |   |   |   |
|     Net                            income (loss)                                                                                                |   | $ | (121,628 | ) |   | $ | (122,535 | ) |
|     Adjustments                            to reconcile net income to net cash used by                                                          |   |   |   |   |   |   |   |   |
|        operating                            activities                                                                           |   |   |   |   |   |   |   |   |
|            Contributed                            services                                                   |   |   | 20,675 |   |   |   | 10,500 |   |
|            Impairment                            loss on investment                                          |   |   | - |   |   |   |   |   |
|            Depreciation                            and amortization                                          |   |   | 3,329 |   |   |   | 2,665 |   |
|            Stock                            based compensation                                               |   |   | 50,312 |   |   |   | 75,258 |   |
|     Changes                            in operating assets and liabilities                                                                      |   |   |   |   |   |   |   |   |
|            Accounts                            receivable                                                    |   |   | 5,596 |   |   |   | (21,994 | ) |
|            Accrued                            federal Income tax refund receivable                           |   |   | - |   |   |   | (19,426 | ) |
|            Deferred                            tax asset                                                     |   |   | - |   |   |   | - |   |
|            Other                            current asset                                                    |   |   | - |   |   |   | - |   |
|            Accounts                            payable                                                       |   |   | 1,940 |   |   |   | 6,620 |   |
|            Income                            taxes payable                                                   |   |   | - |   |   |   | - |   |
|            Other                            current liabilities                                              |   |   | 302 |   |   |   | 575 |   |
|            Deferred                            revenue                                                       |   |   | - |   |   |   | - |   |
|            Production                            costs                                                       |   |   | - |   |   |   | (5,753 | ) |
| **NET                            CASH (USED BY) OPERATING ACTIVITIES**                                                                                              |   |   | (39,474 | ) |   |   | (74,090 | ) |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **INVESTING                            ACTIVITIES**                                                                                                                 |   |   |   |   |   |   |   |   |
| **         **Deposit                            on music library                                                       |   |   | - |   |   |   |   |   |
|          Purchase                            of equipment                                                              |   |   | - |   |   |   | (3,213 | ) |
| **NET                            CASH (USED BY) INVESTING ACTIVITIES**                                                                                              |   |   | - |   |   |   | (3,213 | ) |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **FINANCING                            ACTIVITIES**                                                                                                                 |   |   |   |   |   |   |   |   |
|          Proceeds                            from sale of common stock                                                 |   |   | - |   |   |   | 25,700 |   |
|          Proceeds                            from notes payable - related parties                                      |   |   | 32,912 |   |   |   | 53,300 |   |
|          Repayments                            of notes payable - related parties                                      |   |   | (3,164 | ) |   |   |   |   |
|          Accrued                            interest - related parties                                                 |   |   | 10,784 |   |   |   |   |   |
| **NET                            CASH PROVIDED BY FINANCING ACTIVITIES**                                                                                            |   |   | 40,532 |   |   |   | 79,000 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **NET                            (DECREASE) IN CASH**                                                                                                               |   |   | 1,058 |   |   |   | 1,697 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **CASH,                            BEGINNING OF PERIOD**                                                                                                            |   |   | - |   |   |   | 152 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **CASH,                            END OF PERIOD**                                                                                                                  |   | $ | 1,058 |   |   | $ | 1,849 |   |
|                                                                                                                                                                |   |   | - |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                            SCHEDULE OF NON-CASH INVESTING AND FINANCING                            ACTIVITIES**                                      |   |   |   |   |   |   |   |   |
|        Common                            Stock Issued for Future Consulting Services (875,000                            shares) |   | $ | 131,250 |   |   |   |   |   |
|        Common                            Stock Issued for Debt Reduction (40,000 shares)                                         |   | $ | - |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| **SEE                            ACCOMPANYING NOTES TO FINANCIAL STATEMENTS**                                               |

----

| **FUEGO                            ENTERTAINMENT, INC.**                                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **STATEMENTS                            OF STOCKHOLDERS' EQUITY (DEFICIT)**               |   |
| **For                            the Two Years Ended Aug 31, 2007**                       |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   | **Subscriptions**  |   |   |   |   |   | **Retained** |   |   |   |   |
|                                                                                                                                                            |   | **Common                            Stock**  |   |   | **Paid-in** |   |   | **Common** |   |   | **Amount** |   |   | **Deferred** |   |   | **Earnings** |   |   |   |   |
|                                                                                                                                                            |   | **Shares** |   |   | **Amount** |   |   | **Capital** |   |   | **Stock** |   |   | **Receivable** |   |   | **Charge** |   |   | **(Deficit)** |   |   | **Total** |   |
| **Balance,                            May 31, 2005**                                                                                                            |   |   | 13,272,670 |   |   | $ | 13,273 |   |   | $ | 46,058 |   |   | $ | 43,274 |   |   | $ | (43,274 | ) |   | $ | - |   |   | $ | 39,489 |   |   | $ | 98,820 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                            received from subscribed shares                                                                                             |   |   | 21,658,977 |   |   |   | 21,659 |   |   |   | 29,412 |   |   |   | (51,072 | ) |   |   | 51,072 |   |   |   |   |   |   |   |   |   |   |   | 51,071 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                              from sale of common stock for $.18 per share                                                                              |   |   | 27,915 |   |   |   | 28 |   |   |   | 4,997 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,025 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                            stock subscribed                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|     53,111                            shares @.179 per share                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9,561 |   |   |   | (9,561 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                            stock subscriptions canceled                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 10,000                            shares @ .001 per share                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (10 | ) |   |   | 10 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 40,500                            shares @ .009 per share                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (405 | ) |   |   | 405 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   7,488                            shares @ .179 per share                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,348 | ) |   |   | 1,348 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                            services                                                                                                                 |   |   |   |   |   |   |   |   |   |   | 37,931 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 37,931 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                            (loss) for the year                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (125,655 | ) |   |   | (125,655 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                            May 31, 2006**                                                                                                            |   |   | 34,959,562 |   |   | $ | 34,960 |   |   | $ | 118,398 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | (86,166 | ) |   | $ | 67,192 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                              from sale of common stock for $.18 per share                                                                              |   |   | 102,778 |   |   |   | 103 |   |   |   | 18,397 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 18,500 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            based compensation                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.12                            per share                                                                                                                       |   |   | 25,000 |   |   |   | 25 |   |   |   | 2,975 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,000 |   |
| $.15                            per share                                                                                                                       |   |   | 60,000 |   |   |   | 60 |   |   |   | 8,940 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9,000 |   |
| $.18                            per share                                                                                                                       |   |   | 488,013 |   |   |   | 488 |   |   |   | 87,354 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 87,842 |   |
| $.23                            per share                                                                                                                       |   |   | 89,000 |   |   |   | 89 |   |   |   | 20,381 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 20,470 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            Issued for debt reduction                                                                                                      |   |   | 40,000 |   |   |   | 40 |   |   |   | 7,160 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,200 |   |
| $.18                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            issued for Future Services                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.15                            per share                                                                                                                       |   |   | 875,000 |   |   |   | 875 |   |   |   | 130,375 |   |   |   |   |   |   |   |   |   |   |   | (122,979 | ) |   |   |   |   |   |   | 8,271 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                            services                                                                                                                 |   |   |   |   |   |   |   |   |   |   | 60,925 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 60,925 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                            (loss) for the year                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (505,558 | ) |   |   | (505,558 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                            May 31,  2007**                                                                                                 |   |   | 36,639,353 |   |   | $ | 36,640 |   |   | $ | 454,905 |   |   | $ | - |   |   | $ | - |   |   | $ | (122,979 | ) |   | $ | (591,724 | ) |   | $ | (223,158 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                            from sale of common stock for $.18                            per share                                                     |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            based compensation                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.12                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| $.15                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| $.18                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| $.23                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            Issued for debt reduction                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.18                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                            Issued for Future Services                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.15                            per share                                                                                                                       |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | 50,312 |   |   |   |   |   |   |   | 50,312 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                            services                                                                                                                 |   |   |   |   |   |   |   |   |   |   | 20,675 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 20,675 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                            (loss) for the year                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (121,628 | ) |   |   | (121,628 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                            Aug 31,  2007**                                                                                                 |   |   | 36,639,353 |   |   | $ | 36,640 |   |   | $ | 475,580 |   |   |   | - |   |   | $ | - |   |   | $ | (72,667 | ) |   | $ | (713,352 | ) |   | $ | (273,799 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **SEE                            ACCOMPANYING NOTES TO FINANCIAL                            STATEMENTS**                                                        |

----

**FUEGO                    ENTERTAINMENT, INC.**

**NOTES                    TO FINANCIAL STATEMENTS**

| **1.** | **BASIS                            OF PRESENTATION** |
|--------|------------------------------------------------------|

| **2.** | **NATURE                            OF BUSINESS** |
|--------|---------------------------------------------------|

| **3.** | **SIGNIFICANT                            ACCOUNTING POLICIES** |
|--------|----------------------------------------------------------------|

***GOING                  CONCERN***

| **4.** | **RELATED                            PARTY TRANSACTIONS** |
|--------|-----------------------------------------------------------|

|   | · | Ciocan                            is an entertainment company owned by our President/CEO,                            that creates                            products  for the Latino Market worldwide and anticipates using                            us to                            market, promote and commercialize some of its products                            (music, films,                            documentaries, artist, etc) for the Anglo and international                            markets.  During                            the three months ended August 31, 2007, Ciocan did not                            advance any funds                            leaving a balance owing as of August 31, 2007, of $24,800,                            and accrued                            interest of $3,249. In addition Ciocan was owed a total                            of $40,798 for                            music royalties earned during the current three months                            ended. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**FUEGO                        ENTERTAINMENT, INC.**

**NOTES                        TO FINANCIAL STATEMENTS**

| **4.** | **RELATED                              PARTY TRANSACTIONS -                              continued** |
|--------|------------------------------------------------------------------------------------------------------|

|   | · | Our                            President/CEO is owed $268,840 as of August 31, 2007                            for cash advances to                            the company for a variety of general and administrative                            expenses and the                            development of TV station programming. During the current                            quarter he                            advanced $32,911 and was repaid $3,164. No interest was                            paid on this date                            which accrues at 15 percent per annum and is payable                            on June 1, 2008.                            Accrued interest totaled $25,181 as of August 31,                            2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **INCOME                            TAXES** |
|--------|---------------------------------------------|

|                                                         |   | For                            the three months ended August 31, 2007 |    |   | For the                            three months ended August 31, 2006 |   |
|--------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|
|                                                         |   |                                                                  |    |   |                                                                                 |   |
| Current                            tax expense (benefit):    |   |                                                                  |    |   |                                                                                 |   |
| Federal                            tax at 34% statutory rate |   | $                                                                     | (41,354 | )      |                                                                                 | $      | (48,267 | ) |
| Benefit                            of surtax exemptions      |   |                                                                  | -0-     |   |                                                                                 |   | 25,296 |   |
| Valuation                            allowance               |   |                                                                  | 34,525  |   |                                                                                 |   | (98 | ) |
| Permanent                            differences             |   |                                                                  | 6,829   |   |                                                                                 |   | 3,643 |   |
| Income                            tax expense                |   | $                                                                     | -0-     |   |                                                                                 | $      | (19,426 | ) |

|                                          |   | For                            the three months                            ended August 31, 2007 |                            |   | For the                            three months                            ended August 31, 2006 |   |
|-----------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|---------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|
|                                          |   |                                                                                                  |                            |   |                                                                                                       |   |
| Current                                       |   | $                                                                                                     | -0-                             |   |                                                                                                       | $      | (19,426 | ) |
| Deferred                                      |   |                                                                                                  | -                            0- |   |                                                                                                       |   | -0- |   |
| Income                            tax expense |   | $                                                                                                     | -0-                             |   |                                                                                                       | $      | (19,426 | ) |

----

**FUEGO                        ENTERTAINMENT, INC.**

**NOTES                        TO FINANCIAL STATEMENTS**

| **5.** | **INCOME                              TAXES - continued** |
|--------|-----------------------------------------------------------|

|                                                             |   | For                            the three months                            ended August 31, 2007 |    |   | For the                            three months                            ended August 31, 2006 |   |
|------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|---------|--------|-------------------------------------------------------------------------------------------------------|--------|
| Deferred                            tax asset, beginning of year |   | $                                                                                                     | -0-     |   |                                                                                                  | $      | -0- |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
| Net                            operating loss carryforward       |   |                                                                                                  | 31,028  |   |                                                                                                  |   |   |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
|  Allowance                            for doubtful accounts |   |                                                                                                  | -0-     |   |                                                                                                  |   | -0- |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
| Interest                            Expense related party        |   |                                                                                                  | 3,667   |   |                                                                                                  |   | -0- |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
|  Depreciation                                               |   |                                                                                                  | (170    | )      |                                                                                                  |   | (98 | ) |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
| State                            income taxes                    |   |                                                                                                  | -0-     |   |                                                                                                  |   | -0- |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
|  Valuation                            allowance             |   |                                                                                                  | (34,525 | )      |                                                                                                  |   | 98 |   |
|                                                             |   |                                                                                                  |    |   |                                                                                                  |   |   |   |
|  Deferred                            tax asset, end of year |   | $                                                                                                     | -0-     |   |                                                                                                  | $      | -0- |   |

| **6.** | **CONTRIBUTED                            CAPITAL** |
|--------|----------------------------------------------------|

| **7.** | **DEFERRED                            CHARGE** |
|--------|------------------------------------------------|

----

**Plan                  of Operation**

----

**- **

** **

----

** -**

**Results                  of Operations for the three months  ended  August 31, 2007,                  Compared to three months  ended  August 31,                  2006**

**Revenues                  and Cost of Filming**

**Operating                  Expenses**

**Income                  Tax Benefit**

**Liquidity                  and Capital Resources**

**Material                  Commitments**

----

**- **

**Purchase                  of Significant Equipment**

**Recent                  Accounting Pronouncements**

----

----

|                                                     |                                                                  |                                                 |
|----------------------------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------|
|                                                |                                                             |                                            |
| Date: October                              22, 2007 | By:                                                         | /s/ Hugo                              M. Cancio |
|                                                     | Hugo                              M. Cancio                           |
|                                                     | Title:                              Principal Executive Officer  |

|                                                     |                                                                        |                                                 |
|----------------------------------------------------------|-----------------------------------------------------------------------------|------------------------------------------------------|
|                                                |                                                                   |                                            |
| Date: October                              22, 2007 | By:                                                               | /s/ Hugo                              M. Cancio |
|                                                     | Hugo                              M. Cancio                                 |
|                                                     | Title:  Principal                              Accounting Officer |

|                                                     |                                        |                                                 |
|----------------------------------------------------------|---------------------------------------------|------------------------------------------------------|
|                                                |                                   |                                            |
| Date: October                              22, 2007 | By:                               | /s/ Hugo                              M. Cancio |
|                                                     | Hugo                              M. Cancio |
|                                                     | Title: Director                        |

----