SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-QSB

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the Quarterly Period ended: May 31, 2001

                         Commission file number 000-30129

                               S.D.E. HOLDINGS 2, INC.
                               -------------------
        (Exact name of small business issuer as specified in its charter)

         Nevada                                  84-1529309
         --------                                ----------
(State or other jurisdiction of                  (I.R.S. Employer incorporation
or organization)                                 Identification No.)


                       7609 Ralston Road, Arvada, CO 80002
               ---------------------------------------------------
                     Address of principal executive offices)

                                 (303) 422-8127
                                 ---------------
                           (Issuer's telephone number)


Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act of 1934  during the past 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

As of May 31, 2001 1,000,000 shares of common stock were outstanding.

Transitional Small Business Disclosure Format: Yes      No  X





<PAGE>

                              SDE HOLDINGS 2, INC.

                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS

                                  MAY 31, 2001
                                   (UNAUDITED)




<PAGE>

                           MICHAEL JOHNSON & CO., LLC
                          Certified Public Accountants
                        9175 East Kenyon Ave., Suite 100
                             Denver, Colorado 80237

MichaelB. Johnson C.P.A.                               Telephone: (303) 796-0099
Member A.I.C.P.A.                                      Fax:       (303) 796-0137
Colorado Society of C.P.A.'s


          REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
SDE Holdings 2, Inc.
Denver, CO


We have reviewed the accompanying balance sheet of SDE Holdings 2, Inc. for May
31, 2001 and the related statement of operations and cash flows for the
three-months ended May 31, 2001, included in the accompanying Securities and
Exchange Commission Form 10-QSB for the period ended May 31, 2001. These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accounts. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are unaware of any material modifications that should be
made to the accompanying financial statements for them to be in conformity with
accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of February 28, 2001, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated April 4, 2002,
we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of May
31, 2001 is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.


Michael Johnson & Co., LLC
May 4, 2002

/s/Michael Johnson & Co., LLC

<PAGE>
<TABLE>
<CAPTION>


                            S.D.E. HOLDINGS 2, INC.
                         (A Development Stage Company)
                                 Balance Sheets
                                  (Unaudited)


<S>                                                                          <C>                        <C>


                                                                                  May 31,                 February 29,
                                                                                   2001                       2001
                                                                             ------------------         ------------------
ASSETS:
Current assets:
   Cash                                                                                    $ -                        $ -
                                                                             ------------------         ------------------

Total Current Assets                                                                         -                          -
                                                                             ------------------         ------------------

TOTAL ASSETS                                                                               $ -                        $ -
                                                                             ==================         ==================


LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
    Accounts Payable - Related Party                                                   $ 1,234                    $ 1,234
                                                                             ------------------         ------------------

Total Current Liabilities                                                                1,234                      1,234
                                                                             ------------------         ------------------

Stockholders' Equity:
Common Stock, $.001 Par Value, 25,000,000 shares
   authorized, 1,000,000 shares issued and outstanding                                   1,000                      1,000
Deficit accumulated during the development stage                                        (2,234)                    (2,234)
                                                                             ------------------         ------------------

Total Stockholders' Deficit                                                             (1,234)                    (1,234)
                                                                             ------------------         ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 $ -                        $ -
                                                                             ==================         ==================


</TABLE>
See Accountant's Review Report

<PAGE>
<TABLE>
<CAPTION>

                            S.D.E. HOLDINGS 2, INC.
                         (A Development Stage Company)
                            Statements of Operations
                                  (Unuadited)

<S>                                                 <C>                  <C>                          <C>

                                                                                                January 19, 2000
                                                             Three-Months Ended                  (Inception) to
                                                                  May 31,                            May 30,
                                                         2001                 2000                      2001
                                                         ----                 ----                      ----

Revenue
   Revenue                                                $ -                  $ -                         $ -
                                                    ---------            ---------                    --------
Total Income                                                -                    -                           -

Operating Expenses
    General and Administrative                              -                1,512                       2,234
                                                    ---------            ---------                    --------
Total Expenses                                              -                1,512                       2,234
                                                    ---------            ---------                    --------
Net Loss From Operations                                    -               (1,512)                     (2,234)
                                                    ---------            ---------                    --------
Other Income
   Interest Income                                          -                    -                           -
                                                    ---------            ---------                    --------
Net Loss                                                  $ -             $ (1,512)                   $ (2,234)
                                                    =========            =========                    ========
Per Share Information:

   Weighted average number of
     common shares outstanding                      1,000,000            1,000,000
                                                    ---------            ---------
Net Loss per Common Share                            *                    *
                                                    =========            =========
* Less than $.01

</TABLE>
See Accountant's Review Report


<PAGE>
<TABLE>
<CAPTION>


                            S.D.E. HOLDINGS 2, INS.
                         (A Development Stage Company)
                  Statement of Stockholders' Equity (Deficit)
                                  May 31, 2001
                                  (Unaudited)

<S>                                                <C>                <C>                  <C>             <C>             <C>

                                                                                                        Deficit
                                                                                                         Accumulated
                                                                                     Additonal         During the
                                                        Common Stock                  Paid-In         Development
                                                # of Shares        Amount             Capital            Stage               Totals
                                                -----------        ------             -------            -----               ------

Balance - January 19, 2000                                 -              $ -                $ -                $ -             $ -

Issuance for cash February 21, 2000                1,000,000            1,000                  -                  -           1,000

Net Loss for Period                                        -                -                  -               (220)           (220)
                                                   ---------          -------              -----           --------        ---------
Balance - February 29, 2000                        1,000,000            1,000                  -               (220)            780
                                                   ---------          -------              -----           ---------
Net Loss for year                                          -                -                  -             (2,014)         (2,014)
                                                   ---------          -------              -----           ---------       ---------
Balance - February 28, 2001                        1,000,000            1,000                  -             (2,234)         (1,234)
                                                   ---------          -------              -----           ---------       ---------
Net Loss for Period                                        -                -                  -                  -               -
                                                   ---------          -------              -----           ---------       ---------
Balance - May 31, 2001                             1,000,000          $ 1,000                $ -           $ (2,234)       $ (1,234)
                                                   =========          =======              =====           =========       =========

</TABLE>
See Accountant's Review Report




<PAGE>
<TABLE>
<CAPTION>


                            S.D.E. HOLDINGS 2, INC.
                         (A Development Stage company)
                            Statement of Cash Flows
                                  (Unaudited)

<S>                                                                        <C>            <C>                     <C>


                                                                                                             January 19, 2000
                                                                            Three-Months Ended                (Inception) to
                                                                                  May 31,                         May 31,
                                                                            2001              2000                 2001
                                                                            ----              ----                 ----

Cash Flows from Operating Activities:
Net Loss                                                                    $ -           $ (1,512)               $ (2,234)
Increase in Accounts Payable                                                  -              1,512                   1,234
                                                                           -----          --------                --------
Net Cash Flows Used by Operating Activities                                   -                  -                  (1,000)
                                                                           -----          --------                --------
Cash Flows from Financing Activities:
   Issuance of Common Stock                                                   -                  -                   1,000
                                                                           -----          --------                --------
Net Cash Flows Provided by Financing Activities                               -                  -                   1,000
                                                                           -----          --------                --------
Net Increase (Decrease) in Cash                                               -                  -                       -
                                                                           -----          --------                --------
Cash and cash equivalents - Beginning of period                               -                  -                       -
                                                                           -----          --------                --------
Cash and cash equivalents - End of period                                   $ -                $ -                     $ -
                                                                           =====          ========                ========


Supplemental Disclosure of Cash Flow Information
      Cash paid for Interest                                                $ -                $ -                     $ -
                                                                           =====          ========                ========
      Cash paid for Income Taxes                                            $ -                $ -                     $ -
                                                                           =====          ========                ========
</TABLE>
See Accountant's Review Report

<PAGE>

                              SDE HOLDINGS 2, INC.
                          Notes to Financial Statements
                                  May 31, 2001
                                   (Unaudited)



Note 1 - Presentation of Interim Information:

In the opinion of the management of SDE Holdings 2, Inc., the accompanying
unaudited financial statements include all normal adjustments considered
necessary to present fairly the financial position as of May 31, 2001 and the
results of operations for the three-months ended May 31, 2001 and 2000, and cash
flows for the three-months ended May 31, 2001 and 2000. Interim results are not
necessarily indicative of results for a full year.

The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended February 28, 2001.

<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation.
- - - ------------------------------------------------------------------

LIQUIDITY AND CAPITAL RESOURCES

The Company had $0 cash capital at the end of the period and no current  assets.
The Company will be forced to either borrow or make private  placements of stock
in order to fund  operations.  No assurance  exists as to the ability to achieve
loans or make private placements of stock.

Results of Operations for the Three Month Period Ended May 31, 2001 compared to
same period in 2000
- - ----------------------------------------------------------------------------

     The Company had no  operations or revenues for the three month period ended
May 31, in 2001 or 2000.  The Company  incurred  no general  and  administrative
expenses in the period in 2001 as  compared to $1,512 in the three month  period
in 2000.  The Company had no loss in the three month  period in 2001 and in 2000
the company's  loss was  ($1,512).  The loss per share was none in the period in
2001 and nominal in 2000.

     (a) Plan of Operation.  S.D.E.  Holdings 2, Inc. (the "Company") intends to
seek to acquire assets or shares of an entity actively engaged in business which
generates  revenues,  in  exchange  for  its  securities.  The  Company  has  no
particular  acquisitions  in mind  and has not  entered  into  any  negotiations
regarding such an acquisition. As of the date of this report, the Company has no
plans, arrangements, understandings or commitments with respect to any potential
merger or acquisition,  nor is the Company engaged in negotiations  with respect
to such matter.


<PAGE>



transferred will not materially differ from the representations included in such
closing documents, or the transaction will be voidable.

     (b) Liquidity and Capital Resources.  At May 31, 2001 , the Company had
minimal cash or other assets with which to conduct  operations.  There can be no
assurance  that the Company will be able to complete  its  business  plan and to
exploit fully any business  opportunity that management may be able to locate on
behalf of the Company. Due to the lack of a specified business opportunity,  the
Company is unable to predict  the  period for which it can  conduct  operations.
Accordingly,  the Company will need to seek additional  financing through loans,
the sale and issuance of  additional  debt and/or  equity  securities,  or other
financing  arrangements.  Management of the Company and its counsel have advised
that they will pay certain costs and expenses of the Company from their personal
funds as interest free loans in order to facilitate development of the Company's
business  plan.  Management  believes  that the Company has  inadequate  working
capital to pursue any  operations  at this time;  however,  loans to the Company
from management and its counsel may facilitate development of the business plan.
For the  foreseeable  future,  the Company  through its  management  and counsel
intend to pursue  acquisitions  as a means to develop the  Company.  The Company
does not intend to pay dividends in the foreseeable future. As of the end of the
reporting period,  the Company had no material cash or cash  equivalents.  There
was no significant change in working capital during this quarter.

Evaluation of Internal and Disclosure Controls
----------------------------------------------

     The  management  of the  company has  evaluated  the  effectiveness  of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing  date of the report  (evaluation  date) and have  concluded  that the
disclosure  controls and procedures are adequate and effective  based upon their
evaluation as of the evaluation date.

     There were no significant  changes in internal controls or in other factors
that could significantly  affect internal controls subsequent to the date of the
most recent evaluation of such,  including any corrective actions with regard to
significant deficiencies and material weaknesses.




<PAGE>




PART II--OTHER INFORMATION

Item 1. Legal Proceedings.
- - - --------------------------

There are no  pending  legal  proceedings,  and the  Company is not aware of any
threatened  legal  proceedings,  to which the Company is a party,  however,  the
Company  has had three  judgments  rendered  against it for  collection  for old
obligations for money due. Such judgements remain  unsatisfied,  and are carried
as liabilities in the balance sheet.

Item 2. Changes in Securities.
- - - ------------------------------

         (a) There have been no material modifications in any of the instruments
defining  the  rights  of  the  holders  of  any  of  the  Company's  registered
securities.

         (b)  None  of the  rights  evidenced  by  any  class  of the  Company's
registered  securities have been materially limited or qualified by the issuance
or modification of any other class of the Company's securities.

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.
- - - -----------------------------------------

         (a) Exhibits

         SK# 99.14 Sarbanes Oxley Certification

         (b) Reports on Form 8-K

             None.

<PAGE>
                                   SIGNATURES


         In accordance with the  requirements of the Securities  Exchange Act of
1934, as amended,  the registrant  caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                                     S.D.E. Holdings 2, Inc.


Date: January 13, 2002
                                                   /s/Scott Deitler
                                                    ------------------
                                                    Scott Deitler, President