|SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

FORM 10-Q

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

(X)    Quarterly report for the quarterly period ended March 31, 2001


OR

(  )   
Transition Report Pursuant To Section 13 Or 15(d) of The Securities Exchange Act of 1934

Commission file number   1-3952

SIBONEY CORPORATION(Exact name of registrant as specified in its charter)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Maryland
(State or other jurisdiction of 
 incorporation or organization) | 73-0629975
  (I.R.S. Employer I.D. No.)
|------------------------------------------------------------------------- | ---------------------------------------

|325 North Kirkwood Road, Ste 310, P.O. Box 221029, St. Louis, MO 63122
                                      (Address of principal executive offices)
                                                     (Zip Code)
314-822-3163
 (Registrant's telephone number, including area code)

(Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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   [   ]
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Title of class ofcommon stock | Number of Shares
   outstanding as of this Report Date
|----------------------------- | ------------------------------------------------------

|Common stock, par value
       $.10 per share | 16,668,344
|--------------------------------------------- | ----------

|INDEX

PART I  
FINANCIAL INFORMATION
|-------------------------------------

`Item 1.   Financial Statements

          Condensed Consolidated Balance Sheet, March 31,
          2001 and December 31, 2000                                           3

          Condensed Consolidated Statement of Operations,
          Three Months Ended March 31, 2001 and March 31, 2000                 4

          Condensed Consolidated Statement of Cash Flows, Three
          Months Ended March 31, 2001 and March 31, 2000                       5

          Notes to Condensed Consolidated Financial                            6
          Statements

 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations                        8


PART II OTHER INFORMATION


Item 5.  Other Matters                                                        11

Item 6.  Reports on Form 8-K                                                  12

Signatures                                                                    12`

|PART I -
FINANCIAL INFORMATION

ITEM 1.  
FINANCIAL STATEMENTS

SIBONEY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET
|-----------------------------------------------------------------------------------------------------------------------------------------

`Assets

                                                                   DECEMBER 31,
                                                March 31,           2000 (SEE
                                                  2001             NOTE BELOW)
                                             --------------       -----------
Current Assets
 Cash                                        $   387,895          $    626,554
 Investment                                        6,100                 4,500
 Accounts receivable                           1,083,378               699,866
 Inventories (Note 2)                            266,327               224,680
 Prepaid expenses                                170,108                67,381
 Deferred tax asset                              484,000               484,000
                                             -----------          ------------
         Total Current Assets                  2,397,808             2,106,981

Property and Equipment (Net of
accumulated depreciation of
$502,555 at March 31, 2001 and $472,606
at December 31, 2000)                             318,158              271,503

Other Assets (Note 3)
                                                1,851,471            1,048,628
                                               ----------         ------------

                                             $  4,567,437          $ 3,427,112
                                             ============         ============

                      Liabilities and Stockholders' Equity

Current Liabilities
 Current portion of long-term debt           $   236,615          $    74,783
 Current portion of capitalized lease
   obligation
 Accounts payable                                 19,231               22,653
 Accrued expenses                                203,746              129,978
         Total Current Liabilities               399,398              344,177
                                             -----------          -----------
                                                 858,990              571,591
                                             -----------          -----------
Long-Term Liabilities
 Long-term debt                                  574,114              198,685
 Capitalized lease obligation                      9,212               11,613
 Deferred tax liability                          159,000              159,000
                                             -----------          -----------
         Total Long-Term Liabilities             742,326              369,298
                                             -----------          -----------
Stockholders' Equity
 Common stock:
  Authorized 20,000,000 shares
  at $0.10 par value; issued and
  outstanding 16,668,344 in
  2001 and 16,658,344 in 2000                  1,666,835            1,665,835
 Unrealized holding gain on investment             6,100                4,500
 Additional paid-in capital                        8,932                8,332
 Retained earnings (deficit)                   1,284,254              807,556
                                             -----------          -----------
    Total Stockholders' Equity                 2,966,121            2,486,223
                                             -----------          -----------

                                             $ 4,567,437          $ 3,427,112
                                             ===========          ===========


NOTE:   The balance sheet at December 31, 2000  has been taken from the  audited
        financial statements at that date and condensed.  See accompanying notes
        to condensed consolidated financial statements.`

---

|SIBONEY CORPORATION AND SUBSIDIARIES


 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|--------------------------------------------------------------------------------------

`THREE MONTHS ENDED
                                                             MARCH 31,
                                               -------------------------------
                                                   2001                2000
                                               ----------           ----------

Revenues                                       $2,001,300           1,007,127

Cost of Product Sales                             298,311             132,969

Selling, General and
Administrative Expenses                         1,204,921             701,696
                                               ---------           ----------

Income from Operations
                                                  498,068             172,462
                                               ----------             -------
Other Income (Expense)
 Interest Income (Expense)                        (21,629)                463
 Miscellaneous                                        259                 362
                                               -----------         ----------
Total Other Income (Expense)                      (21,370)                825
                                               -----------         ----------

Net Income                                     $  476,698          $  173,287
                                               ==========          ==========

Weighted Average Shares Outstanding            16,665,011          16,529,844
                                               ==========          ==========

Basic and Diluted Income per Common Share      $      .03             $   .01
                                               ==========          ==========


See accompanying notes to condensed consolidated financial statements.`

|SIBONEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
|---------------------------------------------------------------------------------------------------------------------------------------

`2001          2000
                                                           ----          ----
Cash Flows from Operations
    Net income                                          $ 476,698     $ 173,287
    Adjustments to reconcile net income to
    net cash provided by continuing
    operations:

    Depreciation                                           29,949        19,261
    Amortization                                           93,727         3,796

    Change in assets and liabilities:

    Increase in accounts receivable                      (383,512)     (255,255)

    (Increase) decrease in inventories                    (41,647)        7,892
    Increase in prepaid expenses and deposits             (92,324)      (36,506)

    Increase (decrease) in accounts payable
    and accrued expenses                                  128,989       (33,516)
                                                        ----------    ----------

Net Cash Provided by (Used in) Operations                 211,880      (121,041)
                                                        ----------    ----------

Cash Flows from Investing Activities
 Payments for equipment                                   (76,604)      (25,862)
 Payments for capitalized software development cost       (69,445)      (78,297)
 Payments for assets of unrelated entity                 (581,893)           --
                                                         ---------    ---------
Net Cash Used in Investing Activities                    (727,942)     (104,159)
                                                       ----------    ----------

Cash Flows from Financing Activities

 Proceeds from issuance of common stock                     1,600            --
 Bank Borrowing                                           325,000            --

 Payments on capital leases                                (5,823)       (7,256)
 Principal payments on long-term debt                     (43,374)           --
                                                        ----------    ---------

Net Cash Provided by (Used in)Financing Activities        277,403        (7,256)
                                                       ----------    ----------

Net Decrease in Cash and Cash Equivalents                (238,659)     (232,456)


Cash and Cash Equivalents - Beginning of Period           626,554       383,356
                                                        ----------    ---------

Cash and Cash Equivalents - End of Period               $ 387,895     $ 150,900
                                                        =========     =========

Supplemental Disclosure of Cash Flow Information

 Interest Paid                                         $  23,398      $   1,298
                                                       ----------     ---------


See accompanying notes to condensed consolidated financial statements.`

|SIBONEY
CORPORATION AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31,
2001 AND 2000

1.   CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

The
condensed consolidated balance sheet as of March 31, 2001, the condensed
consolidated statement of operations for the three-month periods ended March 31,
2001 and 2000 and the condensed consolidated statement of cash flows for the
three-month periods then ended have been prepared by the Company, without audit.
In the opinion of management, all adjustments (which include only recurring
adjustments) necessary to present fairly the financial position and results of
operations at March 31, 2001 and for all periods have been made.

Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. These condensed consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Registrants Annual Report on Form 10-K for the year ended December
31, 2000. The results of operations for the period ended March 31, 2001 are not
necessarily indicative of the operating results for the full year.

2.   INVENTORIES

Inventories consist of the following:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`MARCH 31, 2001               DECEMBER 31, 2000
                                --------------               -----------------

    Raw materials                  $174,490                       $ 163,473

    Finished goods                   91,837                          61,207
                                    -------                        --------
                                   $266,327                       $ 224,680
                                   ========                        ========`

|3.   OTHER ASSETS

Other assets consist of:
|-------------------------------------------

`March 31, 2001      December 31, 2000
                                        --------------      -----------------


    Software development costs              $1,063,804         $  695,512
    Goodwill                                   797,683            346,904
    Covenants not to compete                   200,000            100,000
    Deposits                                     3,986             26,488
                                             ---------            -------
                                             2,065,473          1,168,904
    Less: Accumulated Amortization             214,003            120,276
                                             ---------          ---------
                                            $1,851,470         $1,048,628
                                            ==========         ==========`

|The Company capitalizes
costs associated with the development of computer software for sale. Costs are
capitalized at the point the Company determines that it is technologically
feasible to produce the software title. Such costs are amortized on a modified
declining balance method over a period of four years. Amortization expense
charged against earnings amounted to $33,507 for the three months ended March
31, 2001 and $54,766 for the year ended December 31,2000.

Goodwill represents the
purchase price of the acquired companys assets in excess of the fair value
of those net assets at the date of acquisition and is being amortized on a
straight-line basis over 5 years, which approximates the life of the acquired
assets. Amortization of goodwill charged to operations during the first quarter
of 2001 was $35,220.

Covenants not to compete
are being amortized on a straight-line basis over 2 years, which is the life of
the covenant agreements. Amortization of these covenants charged to operations
during the first quarter of 2001 was $25,000.

4.   BUSINESS
ACQUISITION

Effective January 1, 2001,
the Company purchased the stock of an educational software company for $850,000.
The acquisition was paid for with a $550,000 cash payment at closing and a
non-interest bearing note payable consisting of 12 quarterly installments of
$25,000 each. The $550,000 cash payment was provided by funds on hand in
addition to a term loan from the Companys bank for $325,000. The loan
bears interest at 0.25% above the prime rate, with monthly principal and
interest payments of $6,771 and is due in January 2005. The acquisition was
accounted for under the purchase method of accounting.

As part of the term loan
agreement obtained for this acquisition, the Company renegotiated its revolving
line of credit agreement with the bank on January 5, 2001. Under this agreement,
outstanding balances are due on demand, and if no demand is made, then due on
January 5, 2002. The agreement, secured by accounts receivable, inventories and
equipment, requires monthly interest payments on outstanding balances at the
lenders prime rate. The new agreement requires the Company to maintain a
minimum net worth of $2,000,000.
SIBONEY
CORPORATION AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The Company is engaged,
through Siboney Learning Group, Inc. (SLG), a wholly-owned
subsidiary, in the publishing and distribution of educational software,
primarily for schools. The Company has 40 full-time employees.

The Company has served the
educational market for more than 35 years. Since 1986, the Companys main
business has been publishing educational software in reading, language arts,
math and science for students and teachers in grades kindergarten through adult.
The Company is best known for its software which motivates students to master
key skills correlated to state and national objectives and which keeps track of
student progress for teachers to review.

The Companys growing
portfolio of products now includes more than 150 active titles which focus on
teaching basic skills and new concepts while meeting the different learning
needs of all students through time-on-task instruction. Popular titles include
Math Concepts, Phonics Mastery, Reading Concepts, Reading for
Critical Thinking, Process Writing, Money ChallengeandTouchdown Math.

Siboney Learning Group
sells four complementary product lines which are developed, marketed and
supported by the Companys same core team. These product lines allow the
Company to offer a comprehensive product selection to schools and adult
education centers at a variety of budget levels.

GAMCO Educational Software
(GAMCO), the Companys original product line, provides schools
with highly motivating single titles and series. GAMCO titles are sold primarily
through major national and regional school software dealers, the Companys
inside sales force and its direct catalogs. These titles are known for their
effective blend of time-on-task learning with motivational games. In addition,
each GAMCO title includes a management program that tracks student progress and
allows teachers to modify the instruction to meet individual learning needs.

Orchard Teachers
Choice Software (Orchard) offers schools and school districts a
comprehensive curriculum- and technology-based solution with universal
management and assessment. Orchard is sold through a proprietary network of
dealers and representatives who actively call on schools to sell larger
curriculum- and technology-based learning solutions. The Company believes that
Orchard is now a recognized competitor in the growing Integrated Learning
Systems market as a result of its motivating and balanced content, strong
correlation to major national tests and state objectives, and its cost-effective
pricing structure. The Company expects to introduce its first state-specific
versions of Orchard in 2001 by correlating its content to state-specific
standards and high-stakes state tests.

In July 2000, the Company
acquired the publishing assets of Teacher Support Software (TSS).
TSS is a 20 year old software publisher best known for its popular tools for
teachers, including Worksheet Magic, and its effective and comprehensive
language arts programs, including WordWorks. TSS products are sold
through all of the Companys sales channels.
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS (Continued)

In January 2001, the
Company purchased the stock of Activity Records, Inc. and in so doing acquired
Educational Activities, Inc.s software product line which is now called
Educational Activities Software (EAS). Educational Activities has
been a leading publisher of software for the middle-school to adult learner
software market for over 20 years. Best known for its Diascriptive® Reading
series, Education Activities has traditionally sold its products to schools,
community colleges, adult learning centers and correctional facilities through a
network of independent representatives. A substantial part of EAS is adult
education products, a new market for the Company.

Effective May 7, 2001,
Siboney Learning Group, the Companys wholly owned subsidiary completed the
purchase of the publishing assets of The Denali Project, L.L.C.
(Denali).

The Denali Project, based
in Lansing, Michigan, has published Summit Software, a comprehensive
instructional software program with over 900 integrated lessons for grades 3-8
in reading and mathematics with management and reporting for teachers. After
almost four years of development and testing, the product has been very well
received by its early users.

The Company has also
generated sales of select products through a direct-to-the-home marketer of
educational software. This alliance allows the Company to reach families in
their homes without going through expensive retail distribution. The Company is
considering using the Internet to distribute its products to the school and home
markets, but has not yet done so. However, it believes that its entry into the
adult education market by the acquisition of EAS may be an area suited to such
distribution by the Company.

The Company also has
certain natural resources interests, including coal, oil and gas, through
several subsidiaries.

RESULTS OF
OPERATION

The following is
managements discussion and analysis of certain significant factors which
have affected the Companys financial position and operating results during
the periods covered by the accompanying condensed consolidated financial
statements.

THREE MONTHS ENDED MARCH 31, 2001 vs. MARCH 31, 2000

Total revenues increased
98.7% or $994,173 during the three month period ended March 31,2001 compared to
the same period in 2000, reflecting higher sales of Siboney Learning Group.
Sales of Orchard Teachers Choice Software were primarily responsible for this
growth in sales with an increase of 179% over the same period in 2000.

Cost of product sales
increased 124.4% or $165,342 during the quarter compared to the previous
years quarter, primarily due to higher sales. Gross profit decreased
slightly from 86.8% for the first quarter of 2000 to 85.1% for the same period
in 2001, primarily due to an increase in amortization expense of product
development costs.


ITEM  2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND
           RESULTS  OF   OPERATIONS (Continued)

     Selling,  general and
administrative  expenses  increased  71.7% or $503,225  during the quarter ended
March  31,  2001  compared  to the same  quarter  in 2000,  primarily  due to an
increase  in  salaries  and  compensation-related   expenses.  The  Company  has
increased  staffing in both its sales department and product  development group.
In  addition,  additional  support  staff was hired to market  and  support  its
growing number of product lines.

The Companys net
income for the first quarter of 2001, primarily for the reasons above, was
$476,698, an increase of 175% over the $173,287 reported for the first quarter
of 2000.

LIQUIDITY AND CAPITAL RESOURCES

Sales at Siboney Learning
Group increased during February and March 2001, compared with November and
December 2000, consistent with our experience in the previous year. As a result,
accounts receivable increased at March 31, 2001 compared to December 31, 2000.
In addition, cash decreased at March 31, 2001, compared to December 31, 2000, in
order to pay the increased level of expenses such as the cost of catalog
mailings during February 2001, salaries and acquisition costs related to the
purchase of Activity Records, Inc.

Long-term debt increased at
March 31, 2001 compared to December 31, 2000 due to the acquisition of Activity
Records, Inc.

The Company has a line of
credit availability of $500,000. There was no balance outstanding at March 31,
2001 or December 31, 2000.

The net worth of the
Company at March 31, 2001 was $2,966,121 compared to $2,486,223 at December 31,
2000, as a result of the retention of earnings during the three month period.

PART II -
OTHER INFORMATION

ITEM 5.   OTHER
MATERS

Siboney Learning Group, the
Companys wholly owned subsidiary completed the purchase of the publishing
assets of The Denali Project, L.L.C., effective May 7, 2001.

The Denali Project, based
in Lansing, Michigan, has published Summit Software, a comprehensive
instructional software program with over 900 integrated lessons for grades 3-8
in reading and mathematics with management and reporting for teachers. After
almost four years of development and testing, the product has been very well
received by its early users.

The Company believes
there is room for a structured comprehensive software program in their growing
portfolio of products that will be sold through their existing sales channels.
Because Summit Software is written in Java, it can easily be web enabled and
delivered over the Internet to our customers who are looking for web-based
delivery.

The development and
web-enabling team at Denali will join the Siboney team as an ongoing development
group in Lansing.

ITEM 6.  
REPORTS ON FORM 8-K

a)  
Reports on Form 8-K: No reports on Form 8-K were filed by the Registrant during
the quarter ended March 31, 2001.

SIGNATURES

Pursuant to the
requirements of Section 13 or 15(d) 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.
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------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SIBONEY CORPORATION
| | -------------------

|Date: May 11, 2001 | By:  /s/ Timothy J. Tegeler
                                                  Timothy J. Tegeler
                                                  President, Chief Executive
                                                  Officer and Chief Financial
                                                  Officer
|------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------