----

**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              |   |

----

|  PART                I:  |  FINANCIAL                INFORMATION                                                                                                     |  Page |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                          |                                                                                                                                           |       |
|  Item                1.  |  Financial                Statements:                                                                                                     |  4    |
|                          |                                                                                                                                           |       |
|                          |  Condensed                Balance Sheets November 30, 2006 (unaudited) and May 31,                2005                                    |  4    |
|                          |                                                                                                                                           |       |
|                          |  Unaudited                Condensed Statements of Operations for the three                and six ended November 30, 2006 and 2005        |  5    |
|                          |                                                                                                                                           |       |
|                          |  Unaudited                  Condensed Statements of Cash Flows for the six                  months ended November 30, 2006 and 2005       |  6    |
|                          |                                                                                                                                           |       |
|                          |  Statement                of Stockholders' equity (Deficit) for the period from Inception                to November 30, 2006 (unaudited) |  7    |
|                          |                                                                                                                                           |       |
|                          |  Notes                to Financial Statements                                                                                             |  8    |
|                          |                                                                                                                                           |       |
|  Item                2.  |  Managements                Discussion and Analysis of Financial Condition and Plan of Operations                                         |  12   |
|                          |                                                                                                                                           |       |
|  Item                3.  |  Controls                and Procedures                                                                                                   |  15   |
|                          |                                                                                                                                           |       |
|  PART                II: |  OTHER                INFORMATION                                                                                                         |  16   |
|                          |                                                                                                                                           |       |
|  Item                1.  |  Legal                Proceedings                                                                                                         |  16   |
|                          |                                                                                                                                           |       |
|  Item                2.  |  Changes                in Securities                                                                                                     |  16   |
|                          |                                                                                                                                           |       |
|  Item                3.  |  Defaults                upon Senior Securities                                                                                           |  16   |
|                          |                                                                                                                                           |       |
|  Item                4.  |  Submission                of Matters for a Vote of Security Holders                                                                      |  16   |
|                          |                                                                                                                                           |       |
|  Item                5.  |  Other                Information                                                                                                         |  16   |
|                          |                                                                                                                                           |       |
|  Item                6.  |  Exhibits                and Reports on Form 8-K                                                                                          |  16   |
|                          |                                                                                                                                           |       |
|                          |  SIGNATURES                                                                                                                               |  17   |

----

*This      Form 10-QSB contains forward-looking statements within the meaning of the "safe      harbor" provisions under Section 21E of the Securities Exchange Act of 1934.      We      use forward-looking statements in our description of our plans and objectives      for future operations and assumptions underlying these plans and objectives.      Forward-looking terminology includes the words "August," "expects," "believes,"      "anticipates," "intends," "projects," or similar terms, variations of such      terms      or the negative of such terms. These forward-looking statements are based on      management's current expectations and are subject to factors and uncertainties,      which could cause actual results to differ materially from those, described      in      such forward-looking statements. We expressly disclaim any obligation or      undertaking to release publicly any updates or revisions to any forward-looking      statements contained in this Form 10-QSB to reflect any change in our      expectations or any changes in events, conditions or circumstances on which      any      forward-looking statement is based. Factors, which could cause such results      to      differ materially from those described in the forward-looking statements, and      elsewhere,, are incorporated by reference into this Form 10-QSB.*

----

**PART        I: FINANCIAL INFORMATION**

| **FUEGO                    ENTERTAINMENT, INC.**                                                                     |
|----------------------------------------------------------------------------------------------------------------------|
| **BALANCE                    SHEET**                                                                                 |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   | **November                    30,**  |   |   | **May                    31,** |   |
|                                                                                                                 |   |   | **2006** |   |   | **2006** |   |
|                                                                                                                 |   |   | (unaudited)  |   |   |   |   |
| **ASSETS**                                                                                                           |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| CURRENT                    ASSETS                                                                                    |   |   |   |   |   |   |   |
|     Cash                                                                                         |   | $ | - |   | $ | 152 |   |
|     Account                    receivable-trade, less allowance                                  |   |   |   |   |   |   |   |
|         of                    $11,833 and 0, respectively                    |   |   | 44,787 |   |   | 5,000 |   |
|     Accrued                    federal Income Tax Refund Receivable                              |   |   | 19,426 |   |   | - |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Total                    Current Assets                                                      |   |   | 64,213 |   |   | 5,152 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| EQUIPMENT,                    less accumulated depreciation                                                          |   |   |   |   |   |   |   |
|     of                    $7,633 and $2,190, respectively                                        |   |   | 45,669 |   |   | 33,531 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| OTHER                    ASSETS                                                                                      |   |   |   |   |   |   |   |
|     Production                    costs                                                          |   |   | 100,739 |   |   | 93,431 |   |
|     Investment                    -                    Affiliation Agreements                    |   |   | 50,000 |   |   |   |   |
|     Logo,                    less accumulated amortization                                       |   |   |   |   |   |   |   |
|         of                    $900                    and $630, respectively |   |   | 1,800 |   |   | 2,070 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Total                    Other Assets                                                        |   |   | 152,539 |   |   | 95,501 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   | $ | 262,421 |   | $ | 134,184 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| CURRENT                    LIABILITIES                                                                               |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Accounts                    payable                                                          |   | $ | 21,400 |   | $ | 9,359 |   |
|     Accounts                    payable-related party                                            |   |   | 28,244 |   |   | 23,642 |   |
|     Other                    Liabilities                                                         |   |   | 3,030 |   |   | 1,630 |   |
|     Income                    taxes payable                                                      |   |   | 25,702 |   |   | 25,702 |   |
|     Deferred                    revenue                                                          |   |   | 6,659 |   |   | 6,659 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Total                    Current Liabilities                                                 |   |   | 85,035 |   |   | 66,992 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Long-Term                    Debt                                                            |   |   |   |   |   |   |   |
|     Notes                    payable - Related Parties                                           |   |   | 216,576 |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|     Total                    Liabilities                                                         |   |   | 301,611 |   |   | 66,992 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| COMMITMENTS                    AND CONTINGENCIES                                                                     |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| STOCKHOLDERS'                    EQUITY                                                                              |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| Common                    stock, par value $.001, 75,000,000                                                         |   |   |   |   |   |   |   |
|     shares                    authorized, 35,520,441 outstanding                                 |   |   |   |   |   |   |   |
|     November                    30;                    34,959,562 outstanding May 31             |   |   | 35,521 |   |   | 34,960 |   |
| Paid                    in capital                                                                                   |   |   | 242,870 |   |   | 118,398 |   |
| Retained                    earnings(deficit)                                                                        |   |   | (317,580 | ) |   | (86,166 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |
| Total                    Stockholders' Equity (Deficit)                                                              |   |   | (39,189 | ) |   | 67,192 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   | $ | 262,421 |   | $ | 134,184 |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |
| **SEE                    ACCOMPANYING NOTES TO FINANCIAL                    STATEMENTS**                             |

----

| **FUEGO                  ENTERTAINMENT, INC**                                        |
|--------------------------------------------------------------------------------------|
| **STATEMENTS                  OF OPERATIONS**                                        |
| **(unaudited)**                                                                      |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   | **For                  The**  |   |   | **For                  The** |   |   | **For                  The** |   |   | **For                  The** |   |
|                                                                                 |   |   | **Three                  Months Ended**  |   |   | **Three                  Months Ended** |   |   | **Six                  Months Ended** |   |   | **Six                  Months Ended** |   |
|                                                                                 |   |   | **November                  30, 2006**  |   |   | **November                  30, 2005** |   |   | **November                  30, 2006** |   |   | **November                  30, 2005** |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Misc.                  Revenue                                                       |   | $ | - |   | $ | - |   | $ | - |   | $ | 19 |   |
| Music                                                                                |   |   | 17,793 |   |   | - |   |   | 39,787 |   |   | - |   |
| Filming                                                                              |   |   | - |   |   | - |   |   | 30,550 |   |   | 5,400 |   |
| Consulting                                                                           |   |   | - |   |   | - |   |   | 6,800 |   |   | 13,400 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Revenues                                                      |   |   | 17,793 |   |   | - |   |   | 77,137 |   |   | 18,800 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS                  AND EXPENSES                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Music                  Royalties and other - Related Party                           |   |   | 5,351 |   |   | - |   |   | 10,849 |   |   | - |   |
| Cost                  of revenue - Filming                                           |   |   | - |   |   | - |   |   | 5,000 |   |   | - |   |
| Selling,                  general and administrative:                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Stock                  Based Compensation                    |   |   | - |   |   | - |   |   | 75,258 |   |   | - |   |
|     Other                                                        |   |   | 71,323 |   |   | 29,083 |   |   | 133,896 |   |   | 59,733 |   |
| TV                  Development                                                      |   |   | 46,835 |   |   | - |   |   | 97,146 |   |   | - |   |
| Impairment                  of investmest                                            |   |   | - |   |   | 57,400 |   |   | - |   |   | 57,400 |   |
| Depreciation                  and amortization                                       |   |   | 3,163 |   |   | 735 |   |   | 5,828 |   |   | 1,506 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  costs and expenses                                            |   |   | 126,672 |   |   | 87,218 |   |   | 327,977 |   |   | 118,639 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)                  before income tax (benefit)                                  |   |   | (108,879 | ) |   | (87,218 | ) |   | (250,840 | ) |   | (99,839 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax (benefit)                                                |   |   | - |   |   | (12,049 | ) |   | (19,426 | ) |   | (12,396 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  (LOSS)                                                          |   | $ | (108,879 | ) | $ | (75,169 | ) | $ | (231,414 | ) | $ | (87,443 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EARNINGS                  (LOSS) PER SHARE - BASIC                                   |   |   | * |   |   | * |   | $ | (0.01 | ) |   | * |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED                  AVERAGE NUMBER OF                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COMMON                  SHARES OUTSTANDING - BASIC                                   |   |   | 35,520,441 |   |   | 33,016,263 |   |   | 35,450,758 |   |   | 26,337,377 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *                  less than $.01 per share                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |  |   |
| **SEE                  ACCOMPANYING NOTES TO FINANCIAL                  STATEMENTS** |

----

| **FUEGO                    ENTERTAINMENT, INC.**                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **STATEMENTS                    OF CASH FLOWS**                                                                                                                   |
| **(unaudited)**                                                                                                                                                   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
|                                                                                                                                                              |   |   | **For                    The**  |   |   | **For                    The** |   |
|                                                                                                                                                              |   |   | **Six                    Months Ended**  |   |   | **Six                    Months Ended** |   |
|                                                                                                                                                              |   |   | **November                    30, 2006**  |   |   | **November                    30, 2005** |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **OPERATING                    ACTIVITIES**                                                                                                                       |   |   |   |   |   |   |   |
|     Net                    income (loss)                                                                                                      |   | $ | (231,414 | ) | $ | (87,424 | ) |
|     Adjustments                    to                    reconcile net income to net cash provided by operating                    activities |   |   |   |   |   |   |   |
|         Contributed                    services                                                                           |   |   | 24,075 |   |   | 13,889 |   |
|         Impairment                    loss                    on investment                                               |   |   | - |   |   | 57,400 |   |
|         Depreciation                    and amortization                                                                  |   |   | 5,828 |   |   | 1,506 |   |
|         Stock                    Based Compensation                                                                       |   |   | 75,258 |   |   |   |   |
|     Changes                    in operating assets and liabilities                                                                            |   |   |   |   |   |   |   |
|         Accounts                    receivable                                                                            |   |   | (39,787 | ) |   | (300 | ) |
|         Accrued                    federal Income Tax Refund Receivable                                                   |   |   | (19,426 | ) |   |   |   |
|         Deferred                    tax                    asset                                                          |   |   | - |   |   | (10,157 | ) |
|         Other                    current asset                                                                            |   |   | - |   |   | 51 |   |
|         Accounts                    payable                                                                               |   |   | 12,041 |   |   | 20,401 |   |
|         Income                    taxes payable                                                                           |   |   | - |   |   | (2,239 | ) |
|         Other                    current liabilities                                                                      |   |   | 1,400 |   |   | 1,010 |   |
|         Deferred                    revenue                                                                               |   |   | - |   |   | 5,617 |   |
| **NET                    CASH (USED BY) OPERATING ACTIVITIES**                                                                                                    |   |   | (172,025 | ) |   | (246 | ) |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **INVESTING                    ACTIVITIES**                                                                                                                       |   |   |   |   |   |   |   |
|         Purchased                    of                    equipment                                                      |   |   | (17,696 | ) |   | - |   |
|         Production                    costs                                                                               |   |   | (7,308 | ) |   | (18,000 | ) |
|         Investments                    -                    Affiliation Agreements                                        |   |   | (50,000 | ) |   | - |   |
| **NET                    CASH (USED BY) INVESTING ACTIVITIES**                                                                                                    |   |   | (75,004 | ) |   | (18,000 | ) |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **FINANCING                    ACTIVITIES**                                                                                                                       |   |   |   |   |   |   |   |
|         Proceeds                    from                    sale of common stock                                          |   |   | 25,700 |   |   | 54,609 |   |
|         Deferred                    financing costs                                                                       |   |   | - |   |   | (43,663 | ) |
|         Proceeds                    from                    (to) - Related Parties                                        |   |   | 221,177 |   |   | (179 | ) |
| **NET                    CASH PROVIDED BY FINANCING ACTIVITIES**                                                                                                  |   |   | 246,877 |   |   | 10,767 |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **NET                    DECREASE IN CASH**                                                                                                                       |   |   | (152 | ) |   | (7,479 | ) |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **CASH,                    BEGINNING OF PERIOD**                                                                                                                  |   |   | 152 |   |   | 7,479 |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **CASH,                    END OF PERIOD**                                                                                                                        |   | $ | - |   | $ | - |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |
| **SEE                    ACCOMPANYING NOTES TO FINANCIAL                    STATEMENTS**                                                                          |

----

| **FUEGO                  ENTERTAINMENT, INC.**                                       |
|--------------------------------------------------------------------------------------|
| **STATEMENTS                  OF STOCKHOLDERS' EQUITY (DEFICIT)**                    |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   | **Subscriptions**  |   |   | **Retained** |   |   |   |   |
|                                                                                 |   |   | **Common                  Stock**  |   |   | **Paid-in** |   |   | **Common** |   |   | **Amount** |   |   | **Earnings** |   |   |   |   |
|                                                                                 |   |   | **Shares**  |   |   | **Amount** |   |   | **Capital** |   |   | **Stock** |   |   | **Receivable** |   |   | **(Deficit**)**** |   |   | **Total** |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  at inception**                                           |   |   | - |   | $ | - |   | $ | - |   |   | - |   | $ | - |   | $ | - |   | $ | - |   |
| Proceeds                  from sale of common stock for                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.001                  per share                                                     |   |   | 7,772,670 |   |   | 7,773 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,773 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from sale of common stock for                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.006                  per share                                                     |   |   | 5,500,000 |   |   | 5,500 |   |   | 24,350 |   |   |   |   |   |   |   |   |   |   |   | 29,850 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock subscribed                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 21,262,530                  shares @ $.001 per share                                 |   |   |   |   |   |   |   |   |   |   |   | 21,262 |   |   | (21,262 | ) |   |   |   |   | - |   |
| 295,450                  shares @ $.009 per share                                    |   |   |   |   |   |   |   |   |   |   |   | 2,955 |   |   | (2,955 | ) |   |   |   |   | - |   |
| 105,874                  shares @ $.179 per share                                    |   |   |   |   |   |   |   |   |   |   |   | 19,057 |   |   | (19,057 | ) |   |   |   |   | - |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                  services                                                |   |   |   |   |   |   |   |   | 21,708 |   |   |   |   |   |   |   |   |   |   |   | 21,708 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 39,489 |   |   | 39,489 |   |
|                                                                                 |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |
| **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 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  **(unaudited)**                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from sale of common stock for                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.18                  per share                                                      |   |   | 102,778 |   |   | 103 |   |   | 18,397 |   |   |   |   |   |   |   |   |   |   |   | 18,500 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  based compensation                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $.18                  per share                                                      |   |   | 458,101 |   |   | 458 |   |   | 82,000 |   |   |   |   |   |   |   |   |   |   |   | 82,458 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contributed                  services                                                |   |   |   |   |   |   |   |   | 24,075 |   |   |   |   |   |   |   |   |   |   |   | 24,075 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (loss) for the six months                                       |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | (231,414 | ) |   | (231,414 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  November 30, 2006, (unaudited)**                         |   |   | 35,520,441 |   | $ | 35,521 |   | $ | 242,870 |   |   | - |   | $ | - |   | $ | (317,580 | ) | $ | (39,189 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **SEE                  ACCOMPANYING NOTES TO FINANCIAL                  STATEMENTS** |

----

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

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

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

***GOING      CONCERN***

----

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

|   | · | For                    the six month period ended November 30, 2006, Ciocan advanced                    to the                    Company a total of $32,300 for accounting and legal fees, and                    was owed a                    total of $9,947 for music royalties. As of November 30, 2006                    Ciocan was                    owed $42,247. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For                the six month period ended November 30, 2006, Mr. Cancio advanced                to and                is owed by the Company a total of $174,329 for audit fees, operating                expenses, TVdevelopment expenses, and the $50,000 advanced for the                purchase of affiliation agreements from VSEN which acquisition is                presently being finalized. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fees                incurred in the six month period end November 30, 2006 for a related                party                accounting firm totaled $23,303. The total amount owed to the firm                as of                November 30, 2006 was $28,244. which is included in the category,                accounts                payable-related parties, in the accompanying balance                sheet. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

|                                                                                 |   |   | **For                  the six****months                  ended****Nov                  30, 2006**  |   |   | **For                  the six****months                  ended****Nov                  30, 2005** |   |
|--------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------|--------|
|                                                                                 |   |   |                                                                                                     |   |   |                                                                                               |   |
| Current                  tax expense:                                                |   |   |                                                                                                     |   |   |                                                                                               |   |
|     Federal                  tax at statutory rates              |   | $      | (85,286                                                                                                  | )      | $      | (33,939                                                                                            | )      |
|     State                  income taxes less federal tax benefit |   |   | 0                                                                                                        |   |   | 0                                                                                                  |   |
|     Benefit                  of surtax exemptions                |   |   | 59,139                                                                                                   |   |   | 4,369                                                                                              |   |
|     Valuation                  allowance                         |   |   | (1,571                                                                                                   | )      |   | 6,700                                                                                              |   |
|     Permanent                  differences                       |   |   | 8,292                                                                                                    |   |   | 10,474                                                                                             |   |
| Income                  tax expense                                                  |   | $      | (19,426                                                                                                  | )      | $      | (12,396                                                                                            | )      |

|                              |   |   | **For                the six**** months                ended**** Nov                30, 2006**  |   |   | **For                the six****months                ended****Nov                30, 2005** |   |
|-----------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
|                              |   |   |                                                                                                           |   |   |                                                                                         |   |
| Current                           |   | $      | (19,426                                                                                                        | )      |   | (2,239                                                                                       | )      |
| Deferred                          |   |   | -                0 -                                                                                           |   |   | (10,157                                                                                      | )      |
| Income                tax expense |   | $      | (19,426                                                                                                        | )      | $      | (12,396                                                                                      | )      |

|                                           |   |   | **For                the six**** months                ended**** Nov                30, 2006**  |   |   | **For                the six****months                ended****Nov                30, 2005** |   |
|------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
|                                           |   |   |                                                                                                           |   |   |                                                                                         |   |
| Unearned                Income                 |   |   |                                                                                                           |   |   | 914                                                                                          |   |
| Impairment                of Investment        |   |   |                                                                                                           |   |   | 8,938                                                                                        |   |
| Depreciation                                   |   |   | 1,571                                                                                                          |   |   | 305                                                                                          |   |
| Valuation                allowance             |   |   | (1,571                                                                                                         | )      |   | 0                                                                                            |   |
| Deferred                tax asset, end of year |   |   | **-0-**                                                                                                        |   |   | 10,157                                                                                       |   |

----

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

| **7.** | **ISSUANCE                OF RESTRICTED COMMON STOCK** |
|--------|--------------------------------------------------------|

| **8.** | **NOTES                  PAYABLE-RELATED PARTIES** |
|--------|----------------------------------------------------|

----

**MANAGEMENT'S        DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF        OPERATION**

**QUARTER        ENDED NOVEMBER 30, 2006**

**Revenues        for the current quarter-**

**Cost        of Revenue-**

**Selling,        General and Administrative Expenses**

**Income        Tax Benefit-**

**QUARTER        ENDED NOVEMBER 30, 2006 COMPARED TO THE QUARTER ENDED NOVEMBER 30,        2005**

----

**Revenues-**

**Cost        of Revenues-**

**Selling,        General and Administrative Expenses-**

**Income        Tax Benefit-**

**SIX        MONTHS ENDED NOVEMBER 30, 2006 COMPARED TO THE SIX MONTHS ENDED NOVEMBER        30,        2005**

**Revenues**

----

**Cost        of Revenue-**

**Selling,        General and Administrative Expenses-**

**Income        Tax Benefit-**

----

**Item        3. Controls and Procedures.**

----

**PART          II: OTHER INFORMATION**

----

**SIGNATURES**

**FUEGO          ENTERTAINMENT, INC.**

|                                           |                                                        |                                       |
|------------------------------------------------|-------------------------------------------------------------|--------------------------------------------|
|                                      |                                                   |                                  |
| Date: January                    19, 2007 | By:                                               | /s/ Hugo                    M. Cancio |
|                                           | Hugo                    M. Cancio                           |
|                                           | Title:                    Principal Executive Officer  |

|                                           |                                                              |                                       |
|------------------------------------------------|-------------------------------------------------------------------|--------------------------------------------|
|                                      |                                                         |                                  |
| Date: January                    19, 2007 | By:                                                     | /s/ Hugo                    M. Cancio |
|                                           | Hugo                    M. Cancio                                 |
|                                           | Title:  Principal                    Accounting Officer |

|                                           |                              |                                       |
|------------------------------------------------|-----------------------------------|--------------------------------------------|
|                                      |                         |                                  |
| Date: January                    19, 2007 | By:                     | /s/ Hugo                    M. Cancio |
|                                           | Hugo                    M. Cancio |
|                                           | Title: Director              |

----