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 000-30145

                               S.D.E. HOLDINGS 3, INC.
                               -------------------
        (Exact name of small business issuer as specified in its charter)

         Nevada                                  84-1529308
         --------                                ----------
(State or other jurisdiction of                  (I.R.S. Employer incorporation
or organization)                                 Identification No.)


               3816 W. Linebaugh Avenue, Suite 200, Tampa, FL 33624
               ---------------------------------------------------
                     Address of principal executive offices)

                                 (813) 960-0557
                                 ---------------
                           (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>



                          PART I--FINANCIAL INFORMATION

Item 1. Financial Statements.

         For financial information,  please see the financial statements and the
notes thereto, attached hereto and incorporated herein by this reference.

     The financial  statements have been prepared by S.D.E. Holdings 3,  Inc.
without  audit  pursuant  to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  have been  condensed or omitted as allowed by such rules
and  regulations,  and management  believes that the disclosures are adequate to
make the  information  presented  not  misleading.  These  financial  statements
include  all  of the  adjustments  which,  in the  opinion  of  management,  are
necessary  to  a  fair  presentation  of  financial   position  and  results  of
operations.  All such  adjustments are of a normal and recurring  nature.  These
financial  statements  should be read in conjunction with the audited  financial
statements at June 30, 2000, included in the Company's Form 10-KSB.



<PAGE>

                              SDE HOLDINGS 3, 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

Michael B. 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 3, Inc.
Denver, CO


We have reviewed the accompanying balance sheet of SDE Holdings 3, 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
April 29, 2002



<PAGE>
<TABLE>
<CAPTION>
                            S.D.E. HOLDINGS 3, 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                                                    $ 20                       $ 20
                                                                            -----------------         ------------------

Total Current Liabilities                                                                 20                         20
                                                                            -----------------         ------------------

Stockholders' Equity:
Common Stock, $.001 Par Value, 25,000,000 shares
   authorized, 1,000,000 shares issued and outstanding                                 1,000                      1,000
Stock subscription receivable                                                           (800)                      (800)
Deficit accumulated during the development stage                                        (220)                      (220)
                                                                            -----------------         ------------------

                                                                            -----------------         ------------------
Total Stockholders' Deficit                                                              (20)                       (20)
                                                                            -----------------         ------------------

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

</TABLE>

See Accountant's Review Report

<PAGE>
<TABLE>
<CAPTION>
                            S.D.E. HOLDINGS 3, INC.
                         (A Development Stage Company)
                            Statements of Operations
                                  (Unaudited)

<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                             -                    -                        220
                                                   ---------           ----------                    -------
Total Expenses                                             -                    -                        220
                                                   ---------           ----------                    -------
Net Loss From Operations                                   -                    -                       (220)
                                                   ---------           ----------                    -------
Other Income
   Interest Income                                         -                    -                          -
                                                   ---------           ----------                    -------
Net Loss                                                 $ -                  $ -                     $ (220)
                                                   =========           ==========                    =======
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 3, INC.
                         (A Development Stage Company)
                  Statement of Stockholders' Equity (Deficit)
                                  May 31, 2001
                                  (Unaudited)

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


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

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

Issuance for cash February 21, 2000        1,000,000           1,000               -            (800)               -           200

Net Loss for Period                                -               -               -               -             (220)         (220)
                                           ---------         -------            ----         -------           ------         ------
Balance - February 29, 2000                1,000,000           1,000               -            (800)            (220)          (20)
                                           ---------         -------            ----         -------           ------         ------
Net Loss for year                                  -               -               -                                -             -
                                           ---------         -------            ----         -------           ------         ------
Balance - February 28, 2001                1,000,000           1,000               -            (800)            (220)          (20)
                                           ---------         -------            ----         -------           ------         ------
Net Loss for Period                                -               -               -               -                -             -
                                           ---------         -------            ----         -------           ------         ------
Balance - May 31, 2001                     1,000,000         $ 1,000             $ -          $ (800)          $ (220)        $ (20)
                                           =========         =======            ====         =======           ======         ======

</TABLE>
See Accountant's review Report

<PAGE>
<TABLE>
<CAPTION>
                            S.D.E. HOLDINGS 3, 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                                                                    $ -               $ -                   $ (220)
Increase in Accounts Payable                                                  -                 -                       20
                                                                            ----             ----                   ------
Net Cash Flows Used by Operating Activities                                   -                 -                     (200)
                                                                            ----             ----                   ------
Cash Flows from Financing Activities:
   Issuance of Common Stock                                                   -                 -                      200
                                                                            ----             ----                   ------
Net Cash Flows Provided by Financing Activities                               -                 -                      200
                                                                            ----             ----                   ------
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 3, INC.
                          Notes to Financial Statements
                                  May 31, 2001
                                   (Unaudited)



Note 1 - Presentation of Interim Information:

In the opinion of the management of SDE Holdings 3, 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 expenses in the three month
period in 2001 and 2002.  The Company had no losses in the three month period in
2001 and 2002. The loss per share was none in the period in 2001 and 2002.

     (a) Plan of Operation.  S.D.E.  Holdings 3, 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.

<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

         No exhibits as set forth in Regulation SB, are  necessary for this
filing.

         (b) Reports on Form 8-K

         No  reports on Form 8-K were filed  during the  quarter  for which this
report is filed.

<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 3, Inc.


Date: May 7, 2002
                                                   /s/Thomas McCrimmon
                                                    ------------------
                                                    Thomas McCrimmon, President