----

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM        10-QSB/A**

**Amendment        No. 1**

**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              |   |

----

|  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** |   |
|                                                                                                                      |   | (Unaudited) |   |   |   |   |
| **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**                                         |
| **(Unaudited)**                                                                                   |
|                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |
|                                                                                                                            |   | **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 |   |
|    Selling,                              general and administrative:                                             |   |   |   |   |   |   |   |   |
|        Provision                              for bad debts                                  |   |   | - |   |   |   |   |   |
|        Compensation                              - stock based and contributed               |   |   | 63,812 |   |   |   | 75,258 |   |
|        Other                                                                                 |   |   | 51,543 |   |   |   | 62,573 |   |
|    TV                              development                                                                   |   |   | - |   |   |   | 50,310 |   |
|    Interest                              expense - related parties                                               |   |   | 10,784 |   |   |   |   |   |
|    Interest                              expense - other                                                         |   |   | 393 |   |   |   |   |   |
|    Depreciation                              and amortization                                                    |   |   | 3,329 |   |   |   | 2,665 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
|    Total                              costs and expenses                                                         |   |   | 133,005 |   |   |   | 201,305 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| (Loss)                              before income taxes                                                                         |   |   | (121,629 | ) |   |   | (141,961 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Income                              tax expense (benefit)                                                                       |   |   | - |   |   |   | (19,426 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| NET                              (LOSS)                                                                                         |   | $ | (121,629 | ) |   | $ | (122,535 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| (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**                                                     |
| **(Unaudited)**                                                                                               |
|                                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                                        |   | **For                              the Three Months Ended**    |   |
|                                                                                                                                        |   | **August                              31, 2007** |   |   | **August                              31, 2006** |   |
|                                                                                                                                        |   |   |   |   |   |   |
| **OPERATING                              ACTIVITIES**                                                                                       |   |   |   |   |   |   |
|     Net                              income (loss)                                                                      |   | $ | (121,629 | ) |   | $ | (122,535 | ) |
|     Adjustments                              to reconcile net income to net cash used by                                |   |   |   |   |   |   |   |   |
|        operating                              activities                                                 |   |   |   |   |   |   |   |   |
|            Contributed                              services                         |   |   | 20,675 |   |   |   | 10,500 |   |
|            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 | ) |
|            Accounts                              payable                             |   |   | 1,941 |   |   |   | 6,620 |   |
|            Other                              current liabilities                    |   |   | 302 |   |   |   | 575 |   |
|            Accrued                              interest - related parties           |   |   | 10,784 |   |   |   |   |   |
|            Production                              costs                             |   |   | - |   |   |   | (5,753 | ) |
| **NET                              CASH (USED BY) OPERATING ACTIVITIES**                                                                    |   |   | (28,690 | ) |   |   | (74,090 | ) |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| **INVESTING                              ACTIVITIES**                                                                                       |   |   |   |   |   |   |   |   |
|          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 | ) |   |   |   |   |
| **NET                              CASH PROVIDED BY FINANCING ACTIVITIES**                                                                  |   |   | 29,748 |   |   |   | 79,000 |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| **NET                              (DECREASE) IN CASH**                                                                                     |   |   | 1,058 |   |   |   | 1,697 |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| **CASH,                              BEGINNING OF PERIOD**                                                                                  |   |   | - |   |   |   | 152 |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| **CASH,                              END OF PERIOD**                                                                                        |   | $ | 1,058 |   |   | $ | 1,849 |   |
|                                                                                                                                        |   |   | - |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| **SEE                              ACCOMPANYING NOTES TO FINANCIAL STATEMENTS**                     |

----

| **FUEGO                              ENTERTAINMENT, INC.**                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **STATEMENTS                              OF STOCKHOLDERS' EQUITY (DEFICIT)**                         |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | **(Deferred** |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   | **Subscriptions**    |   |   | **Charge)** |   |   | **Retained** |   |   |   |   |
|                                                                                                                                                                                                                          | **Common                              Stock**    |   |   | **Paid-in** |   |   | **Common** |   |   | **Amount** |   |   | **Amortization                              of** |   |   | **Earnings** |   |   |   |   |
|                                                                                                                                                                                                                          | **Shares** |   |   | **Amount** |   |   | **Capital** |   |   | **Stock** |   |   | **Receivable** |   |   | **Deferred                              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 | ) |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **(Unaudited)**                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                              of Deferred Charge                                                                                                                                                                  |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | 50,312 |   |   |   |   |   |   |   | 50,312 |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                              services                                                                                                                                                                             |   |   |   |   |   |   |   |   |   | 20,675 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 20,675 |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                              (loss) for the three months                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (121,629 | ) |   |   | (121,629 | ) |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                              Aug 31,  2007 (Unaudited)**                                                                                                                                                 |   | 36,639,353 |   |   | $ | 36,640 |   |   | $ | 475,580 |   |   |   | - |   |   | $ | - |   |   | $ | (72,667 | ) |   | $ | (713,353 | ) |   | $ | (273,800 | ) |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **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: November                                13, 2007 | By:                                                                                          | /s/ Hugo                                M. Cancio |
|                                                             | Hugo                                M. Cancio                                                          |
|                                                             | Title:                                Principal Executive                                Officer  |

|                                                        |                                                                          |                                                   |
|-------------------------------------------------------------|-------------------------------------------------------------------------------|--------------------------------------------------------|
|                                                   |                                                                     |                                              |
| Date: November                                13, 2007 | By:                                                                 | /s/ Hugo                                M. Cancio |
|                                                        | Hugo                                M. Cancio                                 |
|                                                        | Title:  Principal                                Accounting Officer |

|                                                        |                                          |                                                   |
|-------------------------------------------------------------|-----------------------------------------------|--------------------------------------------------------|
|                                                   |                                     |                                              |
| Date: November                                13, 2007 | By:                                 | /s/ Hugo                                M. Cancio |
|                                                        | Hugo                                M. Cancio |
|                                                        | Title: Director                          |

----