`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549




                                    FORM 10-Q

(Mark one)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the quarterly period ended SEPTEMBER 30, 2004
                                    ------------------
                                       Or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the transition period from ______________ to _______________

                         Commission File Number 0-19824
                                                -------

                      NUTRITION MANAGEMENT SERVICES COMPANY
                      -------------------------------------
             (Exact name of registrant as specified in its charter)

   PENNSYLVANIA                                     23-2095332
--------------------------------             ----------------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

  BOX 725, KIMBERTON ROAD, KIMBERTON, PA                19442
-------------------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code  (610) 935-2050
                                                   -----------------------

                               N/A
                        ------------------
 Former name, former address and former fiscal year, if change since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days Yes  X  No
                                      ---    ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes     No  X
                                         ---    ---
2,747,000 Shares of Registrant's Class A Common Stock, with no par value, and
100,000 shares of Registrant's Class B Common Stock, with no par value, are
outstanding as of January 3, 2005.




                                TABLE OF CONTENTS


Part I.     FINANCIAL INFORMATION                                       PAGE NO.
            ---------------------                                       --------


            Consolidated Balance Sheets as of
            September 30, 2004 (unaudited) and June 30, 2004             2

            Consolidated Statements of Operations for the Three
            Months Ended September 30, 2004 (unaudited) and
            2003 (unaudited)                                             3

            Consolidated Statements of Cash Flows for the Three
            Months Ended September 30, 2004 (unaudited) and
            2003 (unaudited)                                             4

            Notes to Consolidated Financial Statements                   5 - 8

            Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                    8 - 13

            Item 9A - Controls and Procedures                            13

Part II.    Other Information                                            14

            Signatures                                                   15





                      NUTRITION MANAGEMENT SERVICES COMPANY
                           CONSOLIDATED BALANCE SHEETS

                                                                                              SEPTEMBER 30, 2004      JUNE 30, 2004
                                                                                                  (UNAUDITED)
                                                                                                  ------------         ------------
Current assets:
   Cash and cash equivalents                                                                      $    338,803         $    946,523
   Marketable securities                                                                               201,453              202,969
   Accounts receivable, net of allowance for doubtful
      accounts of $2,952,336 and $2,877,336, respectively                                            3,012,459            2,259,582
   Deferred income taxes                                                                               405,320              405,320
   Inventory                                                                                           156,704              159,181
   Prepaid and other current assets                                                                    640,289              525,556
                                                                                                  ------------         ------------
Total current assets                                                                                 4,755,028            4,499,131

Property and equipment, net                                                                          7,432,452            7,563,568

Other assets:
   Restricted cash                                                                                     250,000              250,000
   Note receivable                                                                                     116,127              120,608
   Advances to employees                                                                               435,283              435,283
   Deferred income taxes                                                                             1,218,521            1,218,521
   Bond issue costs, net of accumulated amortization of $114,103
      and $110,461, respectively                                                                       177,221              180,863
   Other assets                                                                                         11,321               11,321
                                                                                                  ------------         ------------
Total other assets                                                                                   2,208,473            2,216,596
                                                                                                  ------------         ------------
Total assets                                                                                      $ 14,395,953         $ 14,279,295
                                                                                                  ============         ============

Current liabilities:
     Current portion of long-term debt                                                            $    145,000         $    145,000
     Current portion of note payable                                                                    70,206              154,453
     Accounts payable                                                                                3,341,227            3,303,947
     Accrued payroll and related expenses                                                              191,623              222,176
     Accrued expenses and other                                                                        471,958              447,114
                                                                                                  ------------         ------------
Total current liabilities                                                                            4,220,014            4,272,690

Long-Term liabilities:
    Long-term debt, net of current portion                                                           5,754,922            5,376,922

Commitments and contingencies

Stockholders' equity:
    Undesignated preferred stock - no par, 2,000,000 shares authorized, none
         issued or outstanding
     Common stock:
     Class A - no par, 10,000,000 shares authorized; 3,000,000 issued,
         2,747,000 outstanding                                                                       3,801,926            3,801,926
     Class B - no par, 100,000 shares authorized, issued and outstanding                                    48                   48
     Retained earnings                                                                               1,118,606            1,327,272
     Less:  treasury stock (Class A common: 253,000 and 253,000
         shares, respectively) - at cost                                                              (499,563)            (499,563)
                                                                                                  ------------         ------------
Total stockholders' equity                                                                           4,421,017            4,629,683
                                                                                                  ------------         ------------
                                                                                                  $ 14,395,953         $ 14,279,295
                                                                                                  ============         ============


            See Notes to Unaudited Consolidated Financial Statements


                                       2



                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                                 THREE MONTHS ENDED SEPTEMBER 30,
                                                                      2004               2003
                                                                 -----------         -----------
Food Service Revenue                                             $ 6,769,547        $ 6,706,854

Cost of Operations
     Payroll and related expenses                                  2,702,347          2,510,402
     Other costs of operations                                     2,763,888          2,883,118
                                                                 -----------        -----------
Total cost of operations                                           5,466,235          5,393,520
                                                                 -----------        -----------
Gross Profit                                                       1,303,312          1,313,334

Expenses
     General and administrative expenses                           1,225,294          1,176,840
     Depreciation and amortization                                   151,676            154,397
      Provision for doubtful accounts                                 75,000             60,000
                                                                 -----------        -----------
           Total expenses                                          1,451,970          1,391,237

                                                                 -----------        -----------
Loss from operations                                              (  148,658)        (   77,903)

Other income/(expense)
     Other                                                        (    2,383)        (    4,509)
     Interest income                                                   1,035              1,640
     Interest expense                                             (   58,660)        (   45,184)
                                                                 -----------        -----------
            Total other income/(expense)                          (   60,008)        (   48,053)
                                                                 -----------        -----------
 Loss before income taxes                                         (  208,666)        (  125,956)

Provision for income taxes                                              --                 --

                                                                 -----------        -----------
Net loss                                                         ($  208,666)       ($  125,956)
                                                                 ===========        ===========

Net loss per share - basic and diluted                           ($     0.07)       ($     0.04)
                                                                 ===========        ===========

Weighted average number of shares                                  2,847,000          2,847,000
                                                                 ===========        ===========








            See Notes to Unaudited Consolidated Financial Statements

                                       3





                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

                                                                               THREE MONTHS ENDED SEPTEMBER 30,
                                                                                2004                   2003
                                                                             -----------           -----------
Operating activities:
Net loss                                                                      ($ 208,666)           ($ 125,956)
Adjustments to reconcile net loss to
  net cash used in operating activities:
     Depreciation and amortization                                               151,676               154,397
     Provision for bad debts                                                      75,000                60,000
     Amortization of bond costs                                                    3,642                 3,641
 Changes in assets and liabilities:
     Marketable securities                                                         1,517                  --
     Accounts receivable                                                        (823,397)             (314,366)
     Inventory                                                                     2,477                15,317
     Prepaid and other current assets                                           (114,733)             ( 79,210)
     Accounts payable                                                             37,280              (117,336)
     Accrued payroll and related expenses                                        (30,553)              (85,417)
     Accrued expenses and other                                                   24,844                (7,838)
                                                                             -----------           -----------
Net cash used in operating activities                                           (880,913)             (494,163)

Investing activities:
    Purchase of property and equipment                                           (20,560)              (12,199)
                                                                             -----------           -----------
Net cash used in investing activities                                            (20,560)              (12,199)

Financing activities:
     Repayment of note payable                                                   (84,247)              (84,247)
     Repayments of long-term borrowing                                           (58,000)             (832,531)
     Proceeds from long-term borrowing                                           436,000             1,315,000
                                                                             -----------           -----------
Net cash provided by financing activities                                        293,753               398,222
                                                                             -----------           -----------
Net decrease in cash                                                            (607,720)             (108,140)

Cash and cash equivalents - beginning of period                                  946,523             1,360,512
                                                                             -----------           -----------

Cash and cash equivalents - end of period                                    $   338,803           $ 1,252,372
                                                                             ===========           ===========






            See Notes to Unaudited Consolidated Financial Statements

                                       4


                      NUTRITION MANAGEMENT SERVICES COMPANY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

1.   BASIS OF PRESENTATION

     The accompanying  unaudited consolidated financial statements were prepared
     in accordance  with generally  accepted  accounting  principles for interim
     financial information for quarterly reports on Form 10-Q and, therefore, do
     not include all of the  information  and  footnotes  required by  generally
     accepted accounting principles for complete financial statements.  However,
     all adjustments that, in the opinion of management,  are necessary for fair
     presentation  of the  financial  statements  have  been  included  and such
     adjustments are of a normal recurring nature. The results of operations for
     the interim period  presented is not necessarily  indicative of the results
     that may be expected for the entire  fiscal year ending June 30, 2005.  The
     financial  information  presented  should be read in  conjunction  with the
     Company's 2004 financial statements that were filed under Form 10-K.

2.   NEW ACCOUNTING PRONOUNCEMENTS

     In January 2003 the FASB issued Financial Interpretation No. 46 ("FIN 46"),
     "Consolidation of Variable Interest Entities" and in December 2003 the FASB
     issued     Financial     Interpretation     No.    46    (revised)    ("FIN
     46(R)"),"Consolidation  of Variable  Interest  Entities  (revised)".  These
     interpretations  of  Accounting  Research  Bulletin  No. 51,  "Consolidated
     Financial  Statements,"  address  consolidation by business  enterprises of
     certain variable interest  entities where there is a controlling  financial
     interest in a variable  interest entity or where the variable interest does
     not have  sufficient  equity  at risk to  finance  its  activities  without
     additional  subordinated financial support from other parities. The Company
     will apply the consolidation  requirement of FIN 46 and FIN 46(R) in future
     periods if the Company  should own any  interests in any variable  interest
     entity.

3.   EARNINGS PER COMMON SHARE

     Earnings per common share amounts are based on the weighted-average  number
     of shares of common stock outstanding  during the three-month period ending
     September 30, 2004 and 2003. The Company did not have any stock options and
     warrants that impacted earnings per share in each period.


                                       5



4.   LITIGATION

     On February 7, 2001, the Company filed a suit against a major client in the
     Court of  Common  Pleas in  Chester  County,  Pennsylvania.  This  suit has
     subsequently  been  removed to the  United  States  District  Court for the
     Eastern  District of  Pennsylvania.  In the  lawsuit,  the Company has made
     various  claims,  including  among others a claim that the client failed to
     pay approximately $2.1 million in invoiced amounts, a claim that the client
     failed to pay  approximately $1 million in other amounts owing, a claim for
     reimbursement  for start up costs in an amount  in  excess of  $400,000,  a
     claim for over $2 million in lost profits (or,  alternatively,  a claim for
     reimbursement  for over  $300,000  in credits  issued in  exchange  for the
     promise to extend the arrangement), a claim in the nature of treble damages
     and counsel  fees,  and other claims.  The client has filed a  counterclaim
     which the Company is  contesting  as part of the overall  proceedings.  The
     case is currently tentatively scheduled for February 7, 2005.

     The  Company is  involved  in  litigation  with two  separate  construction
     contractors  related to the renovations of Collegeville  Inn Conference and
     Training  Center.  The Company  denies its liability for each claim and has
     asserted offsets against the amounts claimed.  One case is listed for trial
     in early 2005, while the other case is in discovery.

     Although it is not possible to predict with  certainty the outcome of these
     unresolved  legal  actions or the range of possible  loss or recovery,  the
     Company  believes these  unresolved  legal actions will not have a material
     adverse effect on its financial position or results of operations.

     In addition to the litigation  described  above,  the Company is exposed to
     asserted  and  unasserted  claims.  In  the  opinion  of  management,   the
     resolution of these matters will not have a material  adverse effect on the
     Company's financial position, results of operations or cash flows.

5.   BUSINESS SEGMENTS

     The Company follows the disclosure  provisions of SFAS No. 131, Disclosures
     About Segments of an Enterprise and Related  Information.  This  management
     approach  focuses  on  internal  financial  information  that  is  used  by
     management to assess performance and to make operating decisions.  SFAS No.
     131 also requires disclosures about products,  services,  geographic areas,
     and major customers.

     The Company's  reportable  segments are (1) food service management and (2)
     training and conference center. The Company reports segment  performance on
     an after-tax  basis.  Deferred  taxes are not  allocated  to segments.  The
     management  accounting policies and processes utilized in compiling segment
     financial   information  are  highly   subjective  and,  unlike   financial
     accounting,  are not based on authoritative  guidance similar to accounting
     principals generally accepted in the United States of America. As a result,
     reported  segment  results  are not  necessarily  comparable  with  similar
     information reported by other similar companies.


                                       6



For the quarter ended September 30, 2004:

                                                   Food Service       Training and
                                                    Management      Conference Center           Total
                                                    ----------      -----------------           -----
Food service revenue                               $ 6,529,559        $   239,988           $ 6,769,547
Depreciation and amortization                           27,277            124,399               151,676
Income (loss) from operations                          201,531        (   350,189)          (   148,658)
Interest income                                          1,035                  0                 1,035
Interest expense                                   (    35,213)       (    23,446)          (    58,659)
Income (loss) before taxes (benefit)                   165,837        (   374,503)          (   208,666)
Net income (loss)                                      165,837        (   374,503)          (   208,666)
Total assets                                       $ 6,645,156        $ 7,750,798           $14,395,954

For the quarter ended September 30, 2003:

                                                   Food Service       Training and
                                                    Management      Conference Center           Total
                                                    ----------      -----------------           -----
Food service revenue                               $ 6,527,881        $   178,973           $ 6,706,854
Depreciation and amortization                           30,280            124,118               154,398
Income (loss) from operations                          288,519           (366,422)             ( 77,903)
Interest income                                          1,640               0                    1,640
Interest expense                                       (28,244)           (16,939)             ( 45,183)
Income (loss) before taxes (benefit)                   261,915           (387,870)             (125,955)
Net income (loss)                                      261,915           (387,870)             (125,955)
Total assets                                       $ 7,054,000        $ 8,152,992           $15,206,992


6.   REVOLVING CREDIT FACILITY

     In February 2001,  the Company  executed a loan agreement with a bank for a
     revolving   credit  and  two  irrevocable   letters  of  credit  issued  in
     conjunction  with  the  issuance  of  Industrial  Revenue  Bonds,  totaling
     $4,000,000  and  $3,065,000,  respectively.  In  October  2003 the  Company
     entered into an amended credit agreement  whereby the $4,000,000  Revolving
     Credit Loan Facility was reduced to $3,500,000 and $500,000 was placed in a
     cash collateral  account and pledged as additional  collateral  against the
     revolving credit line. At September 30, 2004, the Company had approximately
     $275,078 available under the revolving credit. Advances under the revolving
     credit are used for working capital purposes.

     These credit  agreements  contain  covenants that include the submission of
     specified  financial  information and the maintenance of insurance coverage
     for the pledged  assets during the term of the loans.  The  covenants  also
     include  the  maintenance  of a certain  consolidated  fixed  debt  service
     coverage  ratio,  ratio of total  consolidated  liabilities to consolidated
     tangible net worth, and minimum working capital.  At September 30, 2004 the
     Company was in compliance with these covenants.



                                       7


     As of  September  30,  2004  and  June  30,  2004  the  Company  maintained
     restricted cash balances of $250,000, which was not available for operating
     purposes.  On  December  15,  2004  the  Company  entered  into an  amended
     agreement whereby the non-compliance was waived and new financial covenants
     were negotiated  through June 30, 2005, which reflect the Company's current
     operating  projections.  As part of the amended  agreement,  the  Company's
     Chief  Executive  Officer  was  required  to  execute  a  limited  personal
     guarantee in the amount of $3,000,000.

7.   COLLEGEVILLE INN

     On September 8, 2004 the Company  entered into an agreement of sale for the
     land adjacent to its  Collegeville  Inn Conference & Training  Center.  The
     agreement provides for an initial deposit of $10,000 within ten days of the
     effective date of the agreement,  with  additional  deposits of $50,000 and
     $25,000  payable to the  Company  upon the  occurrence  of certain  events,
     including,   but  not  limited  to,  zoning  approvals.  The  deposits  are
     non-refundable upon the end of a 120-day inspection period, which commenced
     on the date the buyer received a fully  executed  original of the agreement
     of sale.  Pursuant to the terms of the  agreement of sale,  the Company may
     realize gross proceeds of not less than  $1,710,000.  However,  the Company
     may realize gross proceeds in excess of $1,710,000, if the buyer is able to
     maximize the yield of the  property.  The  agreement of sale  provides that
     settlement  occur within  twenty-four  months of the date of the agreement,
     however, upon payment of additional deposits, settlement may be extended an
     additional  twelve  months.  Upon closing of the  transaction,  the Company
     plans on using the proceeds to retire a proportional  amount of outstanding
     debt associated with the parcel of land. There can be no assurance that the
     sale of this land will be  completed  in  accordance  with the terms of the
     agreement of sale.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

     The following  discussion and analysis  should be read in conjunction  with
the financial statements and notes thereto.

FORWARD LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange  Act of 1934,  as amended,  that are intended to be covered by the safe
harbors  created  thereby.  Investors  are  cautioned  that all  forward-looking
statements  involve risks and uncertainty,  including  without  limitation,  the
adequacy of the Company's cash from operations,  existing balances and available
credit line.  Although the Company believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form  10-Q will  prove to be
accurate.  Factors  that could cause  actual  results to differ from the results
discussed in the  forward-looking  statements  include,  but are not limited to,
results of operations of Collegeville Inn Conference & Training Center, the sale
of land adjacent to the Collegeville Inn discussed in Note 7 - Collegeville Inn,
and the outcome of the Company's litigation discussed in Note 4 - Litigation. In
light of significant  uncertainties  inherent in the forward-looking  statements
included herein,  the inclusion of such information  should not be regarded as a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.



                                       8


RESULTS OF OPERATIONS

Revenues for the quarter ended September 30, 2004 were  $6,769,547,  an increase
of $62,693 or 0.9%  compared  to  revenues of  $6,706,854  in the  corresponding
quarter last year.  This increase is primarily due to the net impact of revenues
from new contracts  versus  revenues from lost contracts as well as increases in
contract rates in the normal course of business.

Cost of operations provided for the current quarter was $5,466,235,  compared to
$5,393,520  for similar  expenses  in the same period last year,  an increase of
$72,715 or 1.3%.  The increase is primarily  due to higher  revenues  during the
period as well as inflationary  price, wage and expense  increases.  In addition
there were payroll and related costs for new contracts.

Gross Profit for the current quarter was $1,303,312,  or 19.3% of gross revenue,
compared  to  $1,313,334,  or 19.6% of gross  revenue,  for the same period last
year, a decrease of $10,022 or 0.8%.  The decrease is due to an increase in cost
of operations that exceeds the increase in revenues.

General and administrative  expenses for the quarter were $1,225,294 or 18.1% of
revenue,  compared to  $1,176,840  or 17.5% of revenue for the same quarter last
year, an increase of $48,454 or 4.1%. This increase is due to higher fixed costs
within the general and  administrative  expenses  including  corporate  overhead
personnel.

Provision for doubtful  accounts for the quarter was $75,000 compared to $60,000
for the corresponding quarter last year.

Interest expense for the three-month  period totaled $58,660 compared to $45,184
for the same period last year.  The increase in interest  expense is a result of
additional borrowings as well as an increase in interest rates.

For the  reasons  stated  above,  net loss  after  taxes for the  quarter  ended
September  30, 2004 was  $208,666  compared to  $125,956  for the  corresponding
quarter last year.

Net loss per share for the current  quarter  was $0.07  compared to net loss per
share of $0.04 for the same quarter last year.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2004 the Company had working capital of $535,014.

OPERATING  ACTIVITIES.  Cash  used in  operations  for the  three  months  ended
September 30, 2004 was $880,913  compared to $494,163 used by operations for the
three  months  ended  September  30,  2003.  The  current  period's  activity is
primarily  attributable to operating  losses  sustained in the current period as
well as an increase in accounts receivable.

INVESTING  ACTIVITIES.  Investing activities used $20,560 in cash in the current
quarter  compared to $12,199 in cash used in the same period last year. This was
due to an increase in purchases of property and equipment.



                                       9




FINANCING ACTIVITIES.  Current quarter financing activities provided $293,753 in
cash compared to $398,222 provided in the same period last year.

CAPITAL  RESOURCES.  The  Company has certain  credit  facilities  with its bank
including a revolving  credit facility of $3,500,000.  At September 30, 2004 and
June 30, 2004,  the Company had $275,078 and $653,078,  respectively,  available
under its revolving  credit.  The Company has pledged a $250,000  certificate of
deposit as  additional  collateral  against  the  revolving  line of credit.  In
November  2004,  the Company  entered into an agreement  whereby its credit loan
facility was extended to December 31, 2005. The loan facility  contains  certain
covenants that include  maintenance of certain financial ratios,  maintenance of
minimum levels of working capital as well as affirmative and negative covenants.
On December 15, 2004 the Company entered into an amended  agreement  whereby new
financial  covenants were  negotiated  through June 30, 2005,  which reflect the
Company's current operating projections.  As part of the amended agreement,  the
Company's  Chief  Executive  Officer was required to execute a limited  personal
guarantee  in the amount of  $3,000,000.  The  Company  is current  with all its
obligations to its bank and on its bonds and has met all financial  covenants in
its loan documents.

The Company issued two series of Industrial Revenue Bonds totaling $3,560,548 in
December  1996.  The  outstanding  balance  on the  bonds was  $2,675,000  as of
September 30, 2004 and June 30, 2004.


                                                                   Payment Due by Period
                                                               Less
   Contractual                                  Total          Than 1    2 - 3 Years    4 - 5         After 5
   Obligations                                                 Year                     Years           Years
------------------------------------         ----------    ----------    ----------    ----------    -----------
Note Payable                                 $   70,206    $   70,206    $     --      $     --      $     --
Long-Term Debt *                              5,899,922       145,000     3,539,922       350,000     1,865,000
Operating Leases                                 89,346        41,702        47,644          --            --
Total Contractual Cash Obligations
                                             $6,059,474    $  256,908    $3,587,566    $  350,000    $1,865,000

*  Long-Term Debt includes the $3,224,922 outstanding balance on the revolving credit facility.


                                                                       Amount of Commitment Expiration
                                                                               Per Period

             Other                         Total Amounts
           Commercial                        Committed      Less Than                    4 - 5        Over 5
          Commitments                                         1 Year     1 - 3 Years     Years         Years
----------------------------               -------------    ---------    -----------   --------      ---------
Lines of Credit                              $3,500,000     $     --     $3,500,000    $    --       $     --

Standby Letter of
Credit                                       3,065,000            --       3,065,000        --             --

Total Commercial
Commitments                                  $6,565,000     $     --     $6,565,000    $    --       $     --



                                       10



Based upon its present  plans,  management  believes that  operating  cash flow,
available  cash  and  available  credit  resources  will  be  adequate  to  make
repayments of indebtedness  described  herein,  to meet the working capital cash
needs of the Company and to meet anticipated  capital  expenditure  needs during
the 12 months ending June 2005. In addition, the Company anticipates the sale of
certain land  adjacent to its  Collegeville  facility  that it believes will net
cash proceeds of not less than $1,710,000.

In an effort to extend its current bank debt, the Company may seek to access the
public equity market whenever conditions are favorable, even if the Company does
not have an immediate need for  additional  capital at that time. Any additional
funding may result in  significant  dilution  and could  involve the issuance of
securities with rights, which are senior to those of existing stockholders.  The
Company may also need additional funding earlier than anticipated,  and our cash
requirements,  in  general,  may vary  materially  from those now  planned,  for
reasons  including,  but not limited to,  competitive  advances  and higher than
anticipated revenues from operations.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based upon the Company's consolidated financial statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America. The preparation of these financial statements requires
the Company to make estimates and judgments  that affect the reported  amount of
assets and  liabilities,  revenues  and  expenses,  and  related  disclosure  of
contingent  assets  and  liabilities  at the  date  of the  Company's  financial
statements.  Actual  results may differ  from these  estimates  under  different
assumptions or conditions.

Critical  accounting  policies  are  defined  as those  that are  reflective  of
significant  judgments and  uncertainties,  and potentially result in materially
different  results  under  different  assumptions  and  conditions.  The Company
believes that its critical accounting policies include those described below.

REVENUE RECOGNITION

Revenue  is  generated  primarily  from  fees for food  service  management  and
facilities  management at  continuing  care and health care  facilities  and the
Collegeville Inn restaurant.  Revenue is recognized when services are performed.
Ongoing  assessments of the credit  worthiness of customers  provide the Company
reasonable assurance of collectibility upon performance of services.

ACCOUNTS RECEIVABLE

The Company  performs  ongoing  credit  evaluations of its customers and adjusts
credit  limits  based on  payment  history  and the  customer's  current  credit
worthiness,  as determined by a review of their current credit information.  The
Company  continuously  monitors  collections and payments from its customers and
maintains a provision for estimated credit losses based on historical experience
and any specific  customer  collection  issues that have been identified.  While
such credit losses have historically been within the Company's  expectations and
the provisions  established,  the Company cannot guarantee that it will continue
to experience the same credit loss rates that it has in the past.  During Fiscal
2004,  due to the passage of time,  the Company  made a decision to increase the
provision for doubtful accounts with respect to certain delinquent customers.


                                       11



IMPAIRMENT OR DISPOSAL OF LONG LIVED ASSETS

The carrying  value of property,  plant,  and equipment is evaluated  based upon
current and  anticipated  undiscounted  operating cash flows before debt service
charges.  An impairment is  recognized  when it is probable that such  estimated
future  cash  flows  will  be  less  than  the  carrying  value  of the  assets.
Measurement  of the amount of  impairment,  if any, is based upon the difference
between the net carrying value and the fair value, which is estimated based upon
anticipated undiscounted operating cash flows before debt service charges. Based
upon a review  of its  long-lived  assets,  the  Company  did not  recognize  an
impairment  loss for the quarter  ending  September  30, 2004 or the fiscal year
ended June 30, 2004;  however,  there can be no assurance  that the Company will
not recognize an impairment loss on its long-lived assets in future periods.

INCOME TAX ACCOUNTING

The  Company  determines  its  provision  for income  taxes  using the asset and
liability  method.  Under this method,  deferred tax assets and  liabilities are
recognized  for the future tax  effects of  temporary  differences  of  existing
assets and  liabilities and their  respective tax bases.  Future tax benefits of
tax loss and credit  carryforwards  are also  recognized as deferred tax assets.
When necessary,  deferred tax assets are reduced by a valuation allowance to the
extent  the  Company  concludes  there  is  uncertainty  as  to  their  ultimate
realization.  Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those  temporary  differences are expected
to be  recovered  or settled.  The effect on  deferred  taxes of a change in tax
rates is recognized as income in the period that the change is enacted.

As of September 30, 2004 and June 30, 2004 the Company maintained a deferred tax
asset of $1,623,841.  The Company has not provided a valuation allowance against
its deferred tax assets after  consideration of a future gain on the disposal of
certain  land  adjacent to its  Collegeville  facility  and  anticipated  future
profitable  operating results.  However, the amount realizable may be reduced if
future  taxable  income is reduced  or is  insufficient  to  utilize  the entire
deferred tax asset.

CAPITAL EXPENDITURES

The Company has no other  material  commitments  for  capital  expenditures  and
believes that its existing cash and cash  equivalents,  cash from operations and
available  revolving  credit  will be  sufficient  to  satisfy  the needs of its
operations and its capital  commitments for the next twelve months.  However, if
the need arose,  the Company  would seek to obtain  capital from such sources as
continuing debt financing or equity financing.

EFFECTS OF INFLATION

Substantially  all of the  Company's  agreements  with its  customers  allow the
Company to pass  through to its  customers  its  increases in the cost of labor,
food  and  supplies.  The  Company  believes  that it  will  be able to  recover
increased  costs  attributable  to inflation by  continuing to pass through cost
increases to its customers.



                                       12



MEDICARE AND MEDICAID REIMBURSEMENTS

A substantial  portion of the Company's revenue is dependent upon the payment of
its fees by customer health care facilities,  which, in turn, are dependent upon
third-party payers such as state governments,  Medicare and Medicaid.  Delays in
payment by third party payers,  particularly  state and local  governments,  may
lead to delays in collection of accounts receivable.

ITEM 9A.

CONTROLS AND PROCEDURES

Based on their  evaluation,  as of the end of the period covered by this report,
the  Company's  Chief  Executive  Officer and Principal  Financial  Manager have
concluded the Company's  disclosure controls and procedures (as defined in Rules
13a-14 and 15d-14  under the  Securities  Exchange  Act of 1934) are  effective.
There have been no significant  changes in internal controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.




                                       13




                           PART II - OTHER INFORMATION


       Item 1.     Legal Proceedings                                        None

       Item 2.     Changes in Securities                                    None

       Item 3.     Defaults Upon Senior Securities                          None

       Item 4.     Submission of Matters to a Vote of Security Holders      None

       Item 5.     Other Information

                   As of January 6, 2005, the Company's Class A Common Stock was
                   no  longer  eligible  for  continued  quotation  on  the  OTC
                   Bulletin Board ("OTCBB") due to the Company's failure to file
                   this Form 10-Q for the quarter ended  September 30, 2004. The
                   Company's  Class A Common  Stock is  currently  traded on the
                   pink sheets but the Company believes that after the filing of
                   this Form 10-Q and assuming a broker/dealer files a Form 211,
                   the  Company's  Class A Common  Stock  will be  eligible  for
                   Quotation on the OTCBB.  The fact that the Company's  Class A
                   Common Stock is not  currently  eligible for quotation on the
                   OTCBB may  negatively  impact  the  liquidity  of the Class A
                   Common  Stock.  The  Company  believes  it  has  adopted  the
                   appropriate  measures to ensure that its future  filings will
                   be made on a timely basis.

       Item 6.     Exhibits and Reports on Form 8-K

               (a) Exhibits
                   31.1  Certification of Chief Executive Officer pursuant to
                         Rule 13a-14(a) under the Securities and Exchange Act of
                         1934, as adopted pursuant to Section 302 of the
                         Sarbanes-Oxley Act of 2002.
                   31.2  Certification of Principal Financial Officer pursuant
                         to Rule 13a-14(a) under the Securities and Exchange Act
                         of 1934, as adopted pursuant to Section 302 of the
                         Sarbanes-Oxley Act of 2002.
                   32.1  Certification of Chief Executive Officer pursuant to 18
                         U.S. C. Section 1350, as adopted pursuant to Section
                         906 of the Sarbanes-Oxley Act of 2002.
                   32.2  Certification of Principal Financial Officer pursuant
                         to 18 U.S. C. Section 1350, as adopted pursuant to
                         Section 906 of the Sarbanes-Oxley Act of 2002.

               (b) Reports on Form 8-K

                   None.



                                       14


                                   SIGNATURES


          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                          Nutrition Management Services Company


                                          /s/ Joseph V. Roberts
                                          -------------------------------
                                          Joseph V. Roberts
                                          Chairman and Chief Executive Officer



                                          /s/ Linda J. Haines
                                          --------------------------------
                                          Linda J. Haines
                                          (Principal Financial Manager)





Date:  January 12, 2005`