UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 March 31, 2002
                                       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 No. 0 20660


                              DIRECT INSITE CORP.
             (Exact name of registrant as specified in its charter)


              Delaware                                 11-2895590
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                  Identification  No.)


    80 Orville Drive, Bohemia, N.Y.                      11716
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code    (631) 244-1500



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 reports),  and (2) has been subject to such
filing requirements for the past 90 days.


                              Yes    [X]         No  [  ]


The number of shares of $.0001 par value  stock  outstanding  as of May 17, 2002
was: 3,664,882.
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                     INDEX


PART I  FINANCIAL INFORMATION                                               Page

  Condensed Consolidated Balance Sheets as of March 31, 2002 and
   December 31, 2001                                                           3

  Condensed Consolidated Statements of Operations and Comprehensive
   Income (Loss) For the Three Months Ended March 31, 2002 and 2001            4

  Condensed Consolidated Statements of Cash Flows
   For the Three Months ended March 31, 2002 and 2001                          5

  Notes to Condensed Consolidated Financial Statements                    6 - 10

  Management's Discussion and Analysis of Financial Condition
   and Results of Operations                                             11 - 14

  Quantitative and Qualitative Disclosure About Market
   Risk -------- Not Applicable

PART II  OTHER INFORMATION

  Item 1. Legal Proceedings                                                   15

  Item 2. Changes in Securities                                               15

  Item 3. Defaults Upon Senior Securities                                     15

  Item 4.  Submission of Matters to a Vote of Security Holders                15

  Item 5. Other Information                                                   15

  Item 6. Exhibits and Reports on Form 8-K                                    15

  Signatures                                                                  16
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                   AS OF MARCH 31, 2002 AND DECEMBER 31, 2001
                       (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                    March 31,     December 31,
                                                                      2002           2001
                                                                    ---------     ------------
                                                                   (Unaudited)      (Audited)
<S>                                                                <C>           <C>
ASSETS
Current assets
   Cash and cash equivalents                                       $       264    $       1,359
   Accounts receivable, net of allowance for doubtful accounts of
     $80 and $53 in 2002 and 2001, respectively                          1,668            1,098
   Prepaid expenses and other current assets                             1,015            1,096
   Investment in NetWolves Corporation                                     419            1,209
                                                                   -----------    -------------
      Total current assets                                               3,366            4,762

Software costs, net                                                        478              508
Property and equipment, net                                              1,185            1,278
Investment in non-marketable securities                                    593              656
Other assets                                                               658              586
                                                                   -----------    -------------
                                                                   $     6,280    $       7,790
                                                                   ===========    =============
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable and accrued expenses                           $     1,759    $       2,057
   Restructuring costs payable, current portion                            248              294
   Due to bank                                                             411              448
   Current portion of long-term debt                                       282              290
                                                                   -----------    -------------
      Total current liabilities                                          2,700            3,089

Long term debt, net of current portion                                     328              103
Restructuring costs payable, long-term                                     337              492
                                                                   -----------    -------------
      Total liabilities                                                  3,365            3,684
                                                                   -----------    -------------
Commitments and contingencies

Shareholders' equity
   Common  stock, $.0001 par value; 150,000,000 shares authorized;           -                -
     3,330,920 and 2,472,866 shares issued in 2002 and 2001,
     respectively; and 3,259,882 and 2,401,828 shares outstanding
     in 2002 and 2001, respectively
   Additional paid-in capital                                          105,477          104,573
   Accumulated deficit                                                (101,742)        (100,114)
   Subscriptions receivable                                                (28)               -
   Unearned compensation                                                  (135)               -
   Accumulated other comprehensive loss                                   (329)             (25)
                                                                   -----------    -------------
                                                                         3,243            4,434
   Common stock in treasury, at cost  - 24,371 shares                     (328)            (328)
                                                                   -----------    -------------
     Total shareholders' equity                                          2,915            4,106
                                                                   -----------    -------------
                                                                   $     6,280    $       7,790
                                                                   ===========    =============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       3
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED STATEMENTS OF
                   OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 and 2001
                     (in thousands, except per share data)


<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                                March 31,
                                                                ---------
                                                           2002            2001
                                                          -------        -------
<S>                                                       <C>            <C>
Revenue                                                   $ 1,514        $   517
                                                          -------        -------
Costs and expenses
  Operations, research and development                      1,058            645
  Sales and marketing                                         535            505
  General and administrative                                  945            830
  Amortization and depreciation                               254            238
                                                          -------        -------
                                                            2,792          2,218
                                                          -------        -------
Operating loss                                             (1,278)        (1,701)

Other expenses
  Loss on sales of NetWolves
     common stock                                            (250)             -
  Equity in loss of Voyant                                    (63)             -
  Interest  expense, net                                      (37)          (317)
                                                          -------        -------
Loss before provision for income taxes                     (1,628)        (2,018)
Provision for income taxes                                      -            (33)
                                                          -------        -------
Net loss                                                   (1,628)        (2,051)

Other comprehensive (loss) income
Unrealized (loss) gain on marketable
    securities                                               (303)           704
                                                          -------        -------
Comprehensive loss                                        $(1,931)       $(1,347)
                                                          =======        =======
Basic and diluted net loss per share                      $ (0.53)       $ (1.44)
                                                          =======        =======
Basic and diluted weighted average
  common shares outstanding                                 3,069          1,425
                                                          =======        =======
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       4
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                         For the three months ended
                                                                 March 31,
                                                         --------------------------
                                                              2002         2001
                                                              ----         ----
                                                               (In thousands)
<S>                                                          <C>         <C>
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities
  Net loss                                                   $(1,628)    $(2,051)
  Adjustments to reconcile net loss to net cash used in
   operating activities
    Depreciation and amortization
       Property and equipment                                    224         243
       Software costs                                             30           -
       Other                                                       -           1
    Non-cash interest charge pertaining to the discount on
      convertible debentures and loss on prepayment                -         346
    Provision for doubtful accounts                               32           8
    Loss on sales of NetWolves common stock                      250           -
    Equity in loss of Voyant                                      63           -
    Common stock and options issued for services                 186          33
  Changes in operating assets and liabilities
    Accounts receivable                                         (602)       (420)
    Prepaid expenses and other current assets                     81          79
    Other assets                                                 (72)         27
    Accounts payable and accrued expenses                        (77)          4
    Restructuring costs payable                                 (201)     (1,181)
    Income taxes payable                                           -        (816)
                                                              ------      ------
         Net cash used in operating activities                (1,714)     (3,727)
                                                              ------      ------
Cash flows from investing activities
  Proceeds from the sale of NetWolves common stock               236           -
  Investment in non-marketable securities                          -        (500)
  Capital expenditures                                          (131)       (350)
                                                              ------      ------
         Net cash provided by (used in) investing activities     105        (850)
                                                              ------      ------
Cash flows from financing activities
  Repayments of bank advances, net                               (37)          -
  Proceeds from the sale of common stock                         334           -
  Proceeds from long term debt, net of repayments                217           -
  Repayments of convertible debentures                             -      (3,751)
                                                              ------      ------
         Net cash provided by (used in) financing activities     514      (3,751)
                                                              ------      ------
Net decrease in cash and cash equivalents                     (1,095)     (8,328)

Cash and cash equivalents, beginning of period                 1,359      10,851
                                                              ------      ------
Cash and cash equivalents, end of period                      $  264      $2,523
                                                              ======      ======
<FN>
          See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                       5
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001



1    Interim financial information

     The  condensed  consolidated  balance  sheet as of March 31, 2002,  and the
     condensed  consolidated  statements of operations and comprehensive  income
     (loss) and cash flows for the periods  ended March 31, 2002 and 2001,  have
     been  prepared  by the  Company  without  audit.  These  interim  financial
     statements  include all  adjustments,  consisting only of normal  recurring
     accruals,  which management  considers necessary for a fair presentation of
     the financial  statements.  The results of operations  for the three months
     ended March 31, 2002, are not necessarily indicative of results that may be
     expected for any other interim periods or for the full year.

     These  condensed  consolidated  financial  statements  should  be  read  in
     conjunction  with the consolidated  financial  statements and notes thereto
     for the year ended  December  31, 2001.  The  accounting  policies  used in
     preparing the condensed  consolidated  financial  statements are consistent
     with those  described  in the  December  31,  2001  consolidated  financial
     statements.


2    The Company

     Direct Insite Corp. and subsidiaries (the "Company"),  primarily operate as
     an application  service provider ("ASP"),  which markets an integrated "fee
     for services"  offering  providing high volume  processing of transactional
     data for billing  purposes,  electronic bill presentation as well as visual
     data  analysis  and  reporting  tools  delivered  via the  Internet for its
     customers.  The Company's core technology is d.b.Express?,  the proprietary
     and patented  management  information  tool, which provides targeted access
     through the mining of large volumes of transactional data via the Internet.
     In  May  2001,  the  Company   acquired   Platinum   Communications,   Inc.
     ("Platinum"),  a Dallas,  Texas  based  company  which  markets  integrated
     business and operational support systems to the telecommunications industry
     primarily as an ASP; marketed as Account  Management  Systems ("AMS").  The
     Company and  Platinum  completed a merger  under an  Agreement  and Plan of
     Merger ("Merger  Agreement").  Under the Merger  Agreement,  a newly formed
     wholly owned  subsidiary  of the Company  acquired  all of the  outstanding
     common  stock of  Platinum.  Further,  as an added  source of revenue,  the
     Company,  during 2001, began providing custom engineering  services for its
     customers.

     New Accounting Pronouncements
     -----------------------------
     SFAS No. 141,  "Business  Combinations,"  and SFAS No. 142,  "Goodwill  and
     Other  Intangible  Assets"  became  effective  for the  Company  during the
     quarter ended March 31, 2002. The provisions of these  interpretations that
     are applicable to the Company were implemented on a prospective basis as of
     January 1, 2002,  which had no material  effect on the Company's  financial
     statements.

     SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
     Assets" became effective for the Company during the quarter ended March 31,
     2002.  The  provisions of the  interpretations  that are  applicable to the
     Company  were  implemented  on a  prospective  basis as of January 1, 2002,
     which had no material effect on the Company's financial statements.


3    Restructuring

     The Company  implemented a restructuring  plan and recorded a non-recurring
     charge  during  the year ended  December  31,  2000.  The  activity  in the
     restructuring  accrual  for  the  three  months  ended  March  31,  2002 is
     summarized below:

                                       6
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
<TABLE>
<CAPTION>

                                     Officer/director
                          Employee      retirement     Consulting   Operating
                        terminations    packages        contracts     leases      Total
                        ------------ ----------------  ----------   ---------     -----
<S>                       <C>            <C>             <C>          <C>         <C>
Restructuring accrual,
 as of December 31,
 2001                     $2,000         $10,000         $686,000     $88,000     $786,000

Cash expenditures,
  three months ended
  March 31, 2002          (2,000)         (5,000)        (155,000)    (39,000)    (201,000)
                          ------         -------         --------     -------     --------
Restructuring accrual,
  March 31, 2002          $    -         $ 5,000         $531,000     $49,000     $585,000
                          ======         =======         ========     =======     ========
</TABLE>
4    Shareholders' equity

     In January 2002,  the Company's  Board of Directors  authorized and adopted
     the 2002 Stock / Stock  Option Plan  whereby  625,000  shares of its common
     stock were  reserved.  The 2002 Plan is divided  into two  separate  equity
     programs:  an option grant program and a stock issuance program.  Under the
     stock issuance program,  the purchase price per share is fixed by the Board
     of Directors or committee  but cannot be less than the fair market value of
     the common stock on the issuance date.

     During the quarter ended March 31, 2002,  the Company issued 858,054 shares
     of its common  stock and granted  645,000  options to  purchase  its common
     stock as detailed below:

--   The  Company  raised  approximately  $359,000  through  the sale of 344,524
     shares of the Company's  common stock to members of the Company's  Board of
     Directors, senior executives and other non-related parties.
--   In lieu of cash,  the Company  issued  213,580  shares of its common  stock
     valued at $224,000  ($1.05) to its  employees in settlement of bonus awards
     granted in 2001.
--   Issued 89,950  shares of its common stock as payment of certain  consultant
     liabilities, valued at $111,000.
--   The Company granted 405,000 stock options to several of its employees.  The
     options vest in one-third  increments on April 30, 2002,  December 31, 2002
     and June 30, 2003, with an exercise price of $1.05 per share.
--   In January 2002,  the Company  entered into a two-year  services  agreement
     with its  Chairman.  During the first year of the  agreement,  compensation
     will consist of 180,000  restricted  shares of the Company's  common stock,
     valued at $180,000,  which will be expensed over the first twelve months of
     the agreement.  During the second year of the agreement,  compensation will
     consist of a monthly fee of $15,000. Further, the Chairman received 240,000
     stock  options,  which  vest  ratably  during  the  two-year  term  of  the
     agreement.  The stock  options have an exercise  price equal to the closing
     price of the Company's common stock on the date of the agreement.
--   In  January  2002,  the  Company  retained a  financial  advisor to provide
     general financial  advisory  services.  The term of the agreement is for 12
     months, with an aggregate fee of $120,000.  The parties subsequently agreed
     that the fee would be paid with  120,000  shares  of the  Company's  common
     stock in lieu of cash.  Through  March 31,  2002,  30,000  shares of common
     stock valued at $30,000 have been issued.

                                       7
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

5    Long Term Debt

     In January 2002, the Company's  Chairman loaned the Company  $250,000.  The
     term of the loan is three years and bears interest at 5%, payable quarterly
     in arrears.


6    Reclassifications

     Certain  reclassifications  have  been made to the  condensed  consolidated
     financial statements shown for the prior period in order to have it conform
     to the current period's classifications.


7    Products and Services

     The Company and its subsidiaries  currently operate in one business segment
     and have, during the years 2002 and 2001, provided three separate products,
     ASP Services, custom engineering fees and AMS Services.
<TABLE>
<CAPTION>
                                              Three Months Ended March 31,
                                                  2002            2001
                                              ----------------------------
                  <S>                          <C>             <C>
                  ASP fees                      $    822        $    480
                  Custom engineering fees            578              37
                  AMS fees                           114              --
                                                --------        --------
                        Total Revenue           $  1,514        $    517
                                                 =======        ========
</TABLE>

     Major customer

     For the three  months  ended March 31,  2002 and 2001,  the Company had one
     major customer that accounted for 90.9% and 90.3% of the Company's revenue,
     respectively. Accounts receivable from this customer amounted to $1,529,000
     and $628,000, at March 31, 2002 and 2001, respectively.


8    Investments In Securities

     Non-Marketable
     --------------
     In  February  2001,  the  Company  acquired   2,000,000  shares  of  Voyant
     Corporation   ("Voyant")   through  an  equity   investment   of  $500,000.
     Additionally,  in November 2001, the Company acquired  15,680,167 shares in
     exchange  for 60,000  shares of  NetWolves  common  stock,  with a value of
     $156,000.  Further,  as part of an anti-dilution  protection  clause in the
     initial  investment  agreement,  the Company is  entitled to  approximately
     46,000,000  additional shares,  which will increase the Company's ownership
     in Voyant to approximately 10.5%.

     Voyant is a privately held company,  and accordingly,  through December 31,
     2001, the investment had been reflected on the Company's balance sheet as a
     non-marketable  security,  at  cost.  The  Company's  Chairman  is also the
     Chairman of Voyant. The Company has achieved a level of influence such that
     the Company  began to account for its  investment  in Voyant  utilizing the
     equity method of accounting  commencing  January 1, 2002. As a result,  the
     Company  recorded  a $63,000  non-operating  loss as its pro rata  share of
     Voyant's operations for the quarter ended March 31, 2002.

                                       8
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

     The Company recently began providing administrative services to Voyant, the
     value of which are not readily determinable.  Further, the Company has from
     time to time  advanced  and  collected  funds to and from  Voyant.  The net
     amount owed to the Company as of March 31, 2002 was $111,000.

     Marketable  -  Available  for  sale
     -------------------------------
     The  Company,  as of December 31,  2001,  held 298,500  shares of NetWolves
     Corporation  common  stock.  During the three month  period ended March 31,
     2002,  the Company sold 120,000 shares in the open market at prices ranging
     from $2.00 to $2.06  aggregating  proceeds of  approximately  $236,000  and
     resulting in a realized  loss of $250,000.  At March 31, 2002,  the Company
     owned 178,500  shares of NetWolves  common stock with a quoted market value
     of $419,000 ($2.35 per share). The unrealized loss as of March 31, 2002 was
     $303,000, and has been included in "Accumulated other comprehensive loss."


9    Investment In Platinum Communications, Inc.

     On May 10, 2001, the Company and Platinum completed a merger. The following
     pro forma financial  information has been prepared as if the acquisition of
     Platinum were consummated as of January 1, 2001. The pro forma  information
     is not  necessarily  indicative  of the  combined  results  that would have
     occurred  had the  acquisition  taken  place at January 1, 2001,  nor is it
     necessarily  indicative  of the results  that may occur in the future.  (In
     thousands except per share data):

<TABLE>
<CAPTION>
                       Three months ended March 31, 2001

                                                       Pro Forma
                                                       ---------
                <S>                                     <C>
                Revenue                                 $     665

                Expense                                     2,837
                                                        ---------
                Net loss                                $  (2,172)
                                                        =========
                Basic and diluted net loss per share    $   (1.46)
                                                        =========
</TABLE>
10   Management's Plans

     For the three months ended March 31, 2002,  the Company  continued to incur
     net losses and use substantial amounts of cash in operating activities.  In
     order to fund its operating  losses,  the Company  continues to make use of
     the financing arrangement with an asset based lending institution, received
     cash from the sale of its common  stock,  issued  long term debt as well as
     partially liquidated its holdings of NetWolves common stock.

     The Company's  management has and will continue to take numerous steps that
     it believes will create positive  operating cash flow for the Company.  Key
     measures are as follows:

     --   Expanding the Company's products and services;
          --   The  Company  acquired  Platinum   Communications,   Inc.,  which
               broadened the Company's product  offerings.  Management  believes
               this  acquisition  significantly  enhances the Company's  current
               market strategy by allowing it to capitalize on the growing trend
               for outsource services within the communications sector;

                                       9
<PAGE>

                     DIRECT INSITE CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001


     --   Materially improving its sales efforts through expanding its marketing
          staff;
          --   In  2002,  the  Company  entered  into a new ASP  agreement  with
               International  Business Machines Corporation ("IBM"),  which will
               enable IBM to provide an electronic invoice to their customers;
     --   The Company generated significant custom engineering fees in the first
          quarter of 2002 and  believes  that this  revenue  should  continue in
          2002;
     --   In October  2001,  the Company  entered  into an  Accounts  Receivable
          Purchase  Agreement,  which  has  provided  an  additional  source  of
          liquidity.
     --   In January 2002, the Company raised an additional $609,000 through the
          issuance of long-term  debt (Notes 5) and the sale of its common stock
          to members of the Company's Board of Directors,  senior executives and
          other non-related parties (Note 4).
     --   Additionally, the Company has obtained a commitment from its Chairman,
          other  members  of the  Board of  Directors  as well as its  executive
          officers in which they will provide, under certain  circumstances,  up
          to an aggregate of $750,000 for working capital purposes, if needed.

     Management  believes  that its plan will  ultimately  enable the Company to
     generate positive cash flows from operations.  Until such time, the Company
     believes  that its present cash on hand,  the sale of the  remainder of its
     NetWolves common stock, as well as obtaining  additional debt and/or equity
     financing  should provide adequate funding through at least March 31, 2003.
     However,  there can be no assurances  that the Company will have sufficient
     funds to implement its current plan. In such an event, the Company could be
     forced to significantly  alter its plan and reduce its operating  expenses,
     which could have an adverse effect on revenue  generation and operations in
     the near term.

11   Subsequent Events

     During  April 2002 the Company  sold,  at market,  an  aggregate  of 71,000
     shares to four key  employees.  The Company  accepted full recourse  notes,
     aggregating $88,750,  which carry an interest rate of 6% and will be repaid
     to the Company over twelve months through payroll deductions. Additionally,
     the shares further  collateralize  the  obligation to the Company.  Also in
     April,  in settlement of various  obligations,  the Company  issued 134,000
     shares of its common stock valued at $160,000.

     On April 19, 2002 the Company also sold 160,000  shares of its common stock
     at an aggregate price of $200,000,  or $1.25 per share, the market price on
     such date,  to  unrelated  third  parties in a private  transaction.  These
     proceeds will be used for working capital purposes.

                                       10
<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001


Forward looking statements

All statements  other than  statements of historical  fact included in this Form
10-Q including,  without limitation,  statements under, "Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations"  regarding the
Company's financial position,  business strategy and the plans and objectives of
management for future operations, are forward-looking  statements.  When used in
this Form 10-Q, words such as  "anticipate,"  "believe,"  "estimate,"  "expect,"
"intend"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management, identify forward-looking statements. Such forward-looking statements
are based on the  beliefs of  management,  as well as  assumptions  made by, and
information  currently  available to, the Company's  management.  Actual results
could  differ  materially  from  those   contemplated  by  the   forward-looking
statements  as a  result  of  certain  factors  including  but not  limited  to,
fluctuations in future operating results, technological changes or difficulties,
management  of future  growth,  the risk of errors or failures in the  Company's
software products,  dependence on proprietary  technology,  competitive factors,
risks associated with potential  acquisitions,  the ability to recruit personnel
and the dependence on key personnel.  Such statements  reflect the current views
of  management  with respect to future events and are subject to these and other
risks,  uncertainties  and assumptions  relating to the  operations,  results of
operations, growth strategy and liquidity of the Company. All subsequent written
and oral  forward-  looking  statements  attributable  to the Company or persons
acting  on its  behalf  are  expressly  qualified  in  their  entirety  by  this
paragraph.

Overview

Direct Insite Corp. and subsidiaries  (the "Company"),  primarily  operate as an
application  service  provider  ("ASP"),  which markets an  integrated  "fee for
services"  offering  providing high volume processing of transactional  data for
billing  purposes,  electronic bill presentation as well as visual data analysis
and reporting tools delivered via the Internet for its customers.  The Company's
core  technology  is  d.b.Express?,  the  proprietary  and  patented  management
information  tool,  which provides  targeted  access through the mining of large
volumes  of  transactional  data via the  Internet.  In May  2001,  the  Company
acquired  Platinum  Communications,  Inc.  ("Platinum"),  a Dallas,  Texas based
company which markets integrated business and operational support systems to the
telecommunications  industry primarily as an ASP; marketed as Account Management
Systems ("AMS").  The Company and Platinum completed a merger under an Agreement
and Plan of Merger ("Merger  Agreement").  Under the Merger  Agreement,  a newly
formed wholly owned  subsidiary of the Company  acquired all of the  outstanding
common stock of Platinum.  Further, as an added source of revenue,  the Company,
during 2001, began providing custom engineering services for its customers.

Currently,  IBM Global Services,  the Company's largest  customer,  utilizes its
core technology,  d.b.Express? to allow their large enterprise customers to mine
their  respective  high volume  telecommunications  data  uncovering call abuse,
deliver cost allocation by usage,  provide for network  planning,  budgeting and
the identification of significant trends in calling patterns.

During the year 2001,  due to negligible  revenue and as part of its  continuing
effort to reduce costs and strive towards achieving operating profitability, the
Company halted all marketing efforts of its Global  Telecommunications  Services
offering.

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                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

Results of operations

For the three months  ended March 31,  2002,  total  revenue  increased  193% or
$997,000,  to $1,514,000  when compared to the three months ended March 31, 2001
amount of $517,000.  During 2002,  revenue from ASP fees amounted to $822,000 or
54.3% of the Company's  revenue.  This represents a 70% increase in revenue from
this  service.  The major  customer for this service is  International  Business
Machines  Corporation  ("IBM").  In 2001, the Company  entered into an agreement
with IBM wherein for a per  transaction  fee, the Company enables IBM to present
invoices to a portion of its customers via the Internet.  This  Electronic  Bill
Presentment  & Payment  ("EBP&P")  offering  has since been  expanded to include
additional  functionality.  In March 2002,  the parties  signed a new agreement,
which allows IBM to expand this EBP&P  offering to more of its  customers,  both
domestic and  international.  The Company continues to provide data analysis and
reporting services for IBM's telecommunications customers.

During 2001,  the Company  began  providing  custom  integration  /  engineering
services.  Revenue generated from this offering  aggregated $578,000 and $37,000
for the three  months ended March 31, 2002 and 2001,  respectively.  The Company
believes that revenue  generated from  engineering  services is the precursor to
added recurring revenue sources. In an effort to better serve its customers,  in
2001, the Company built a fully  redundant  facility  within an IBM  co-location
center, the purpose of which is to ensure virtual zero down time.

IBM is currently the Company's  largest  customer,  accounting for approximately
90.9% of total revenue or $1,376,000 and $467,000, or 90.3% of total revenue for
the three  months  ended March 31,  2002 and 2001,  respectively.  Further,  the
Company is presently  investigating  entry into new  specific  markets for these
managed services.

Included in total  revenue for 2002, is $114,000  generated by Platinum.  In May
2001 the Company  completed  the  acquisition  of Platinum,  which  develops and
markets an integrated proprietary suite of back office software solutions, known
as AMS to the telecommunications industry as an ASP.

Operations,  research and development expenses consist primarily of salaries and
related costs (benefits,  travel,  training) for developers,  sales  application
engineers,  quality control / quality assurance and documentation  personnel. It
also includes consultants as well as applicable overhead  allocations.  Overall,
when  comparing  the three  months  ended March 31,  2002 and 2001,  the Company
increased its research and  development  expenses by $413,000.  Included in this
increase was $160,000 incurred as a result of the acquisition of Platinum.  With
respect to ASP-managed services,  the Company continues to upgrade,  improve and
enhance its current  products and services.  As a result,  development  expenses
directly  attributable  to this  offering  increased  $253,000  over prior year.
Management  believes that it is critical to maintain a qualified personnel staff
and,  further to  continue  to enhance  as well as  develop  new and  innovative
services and products.  As such, it is likely that these costs could increase in
future periods.

Sales and marketing  expenses include  salaries and related costs,  commissions,
travel,  facilities,  communications  costs  and  promotional  expenses  for the
Company's direct sales  organization  and marketing  staff.  Sales and marketing
expenses  increased  slightly by $30,000 to $535,000  for the three months ended
March 31, 2002,  when  compared to $505,000 for the three months ended March 31,
2001. The major factor for this increase was the acquisition of Platinum,  which
included approximately $108,000 of sales and marketing expenses. Offsetting this
addition was the elimination of the Global Technology  Services product offering
which totaled $81,000 during 2001.

General  and  administrative   expenses  include  administrative  and  executive
salaries and related benefits,  legal, accounting and other professional fees as
well as general corporate overhead.  Expenses increased $115,000 to $945,000 for
three months ended March 31, 2002, when compared to the three months ended March
31, 2001.  Major  factors  contributing  to this increase  include,  among other
things,  $113,000  attributable  to the  Company's  newly  acquired  subsidiary,

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Platinum,  offset by the cost savings generated by the elimination of the Global
Technology Services offering,  which resulted in net reductions of approximately
$32,000.

Amortization  and  depreciation  expenses  increased  $16,000 when comparing the
three-month  period ended March 31, 2002 and March 31, 2001,  respectively.  The
increase is primarily  attributable  to the  purchase of property and  equipment
during the respective periods and amortization of software costs associated with
Platinum.

As discussed  in Note 8, for the three months ended March 31, 2002,  the Company
sold  120,000  shares of  NetWolves  common  stock,  resulting  in a net loss of
$250,000.

The Company made no provision  for taxes during the three months ended March 31,
2002.  The tax  provision for the three months ended March 31, 2001 was $33,000,
which consisted entirely of current tax expense.

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<PAGE>
                      DIRECT INSITE CORP. AND SUBSIDIARIES

                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

Financial Condition and Liquidity

For the three months ended March 31,  2002,  the Company  continued to incur net
losses and use substantial amounts of cash in operating activities.  In order to
fund its operating  losses,  the Company  continues to make use of the financing
arrangement with an asset based lending institution, received cash from the sale
of its common stock,  issued long term debt as well as partially  liquidated its
holdings of NetWolves common stock.

As detailed in the Condensed  Consolidated  Statement of Cash Flows,  during the
three month period  ended March 31, 2002,  the Company  utilized  $1,714,000  in
operating  activities,  which  includes,  among  other  items,  a  net  loss  of
$1,628,000  (offset by  non-cash  expenses  totaling  $785,000),  an increase in
accounts receivable of $602,000 and $201,000 paid toward the restructuring.

During the three months ended March 31,  2002,  pursuant to a service  agreement
with  its  major  customer,   the  Company  expended  approximately  $53,000  of
additional  data  processing  and  Internet   connectivity   equipment  for  its
co-location facility.

Management's current short-term plan is primarily focused on achieving operating
profit by successfully marketing innovative software products and services that
capitalize on the Company's patented technologies. To achieve its goals, the
Company has and will continue to take numerous steps that it believes will
create positive operating cash flow. Key measures are as follows:

     --   Expanding the Company's products and services;
          --   The Company also acquired  Platinum  Communications,  Inc., which
               broadened the Company's product  offerings.  Management  believes
               this  acquisition  significantly  enhances the Company's  current
               market strategy by allowing it to capitalize on the growing trend
               for outsource services within the communications sector;
     --   Materially improving its sales efforts through expanding its marketing
          staff;
          --   In 2002,  the Company  entered into a new ASP agreement with IBM,
               which will enable IBM to provide an  electronic  invoice to their
               customers;  The Company generated  significant custom engineering
               fees in 2001 and believes that this revenue should  continue into
               2002;
     --   In October  2001,  the Company  entered  into an  Accounts  Receivable
          Purchase  Agreement,  which  has  provided  an  additional  source  of
          liquidity.
     --   In January 2002, the Company raised an additional $609,000 through the
          issuance of  long-term  debt (Note 5) and the sale of its common stock
          to members of the Company's Board of Directors,  senior executives and
          other non-related parties (Note 4).
     --   Additionally, the Company has obtained a commitment from its Chairman,
          other  members  of the  Board of  Directors  as well as its  executive
          officers in which they will provide, under certain  circumstances,  up
          to an aggregate of $750,000 for working capital purposes, if needed.

     Management  believes  that its plan will  ultimately  enable the Company to
     generate positive cash flows from operations.  Until such time, the Company
     believes  that its present cash on hand,  the sale of the  remainder of its
     NetWolves common stock, as well as obtaining  additional debt and/or equity
     financing  should provide adequate funding through at least March 31, 2003.
     However,  there can be no assurances  that the Company will have sufficient
     funds to implement its current plan. In such an event, the Company could be
     forced to significantly  alter its plan and reduce its operating  expenses,
     which could have an adverse effect on revenue  generation and operations in
     the near term.

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                      DIRECT INSITE CORP. AND SUBSIDIARIES

                           PART II OTHER INFORMATION

               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001


Item 1. Legal Proceedings
        See Note 5 to the Financial Statements.

Item 2. Changes in Securities
        Not applicable.

Item 3. Defaults Upon Senior Securities
        Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders
        Not applicable.

Item 5. Other Information
        Not applicable.

Item 6. Exhibits and Reports on Form 8-K.
        Not applicable.

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                                   SIGNATURES

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


DIRECT INSITE CORP.



/s/ James Cannavino
--------------------------
James Cannavino                Chairman and Director            May 17, 2002



/s/ George Aronson
--------------------------
George Aronson                 Chief Financial Officer          May 17, 2002






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