**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**


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


**For
      the quarterly period ended September 30, 2007**





**OR**


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


**For
      the transition period from ___________ to
      ___________**




Commission
      file number **000-52704**





**CAPITAL
      EQUITY FINANCE, INC.**


(Exact
      name of small business issuer as specified in its charter)


**Florida**
            **20-****8090841**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                Number)





**5775
                Blue Lagoon
                Drive**
              **Suite
                100**
              **Miami,
                Florida**
            **33126**(Address
                of principal executive offices)
            (Zip
                Code)




**(786) 888-4567**


(Issuer’s
      telephone number, including area code)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act 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. Yeso No þ





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act). Yes þNo o





Transitional
      Small Business Disclosure Format (check one): Yes oNo  þ




Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.


Class
            
            Outstanding
                at September 30, 2007**Common
                Stock, $.001 par value per share**
            
            **6,000,000
                shares**


-1-






**CAPITAL
      EQUITY FINANCE, INC.**




**TABLE
      OF CONTENTS**


**PAGE****Part
                I Financial
                Information**
            
            
            3Item 1.
                Financial Statements (unaudited)
            
            
            3Balance
                Sheet
            
            
            4Statements
                of
                Operations
            
            
            5Statements
                of Cash
                Flows
            
            
            6Notes
                to
                Financial Statements
            
            
            7Item 2.
                Management’s Discussion and Analysis or Plan of
                Operation
            
            
            10Item 3.
                Controls and Procedures
            
            
            12**Part
                II Other
                Information**
            
            
            12Item 6.
                Exhibits
            
            
            12**Signatures**
            
            
            13





-2-


**PART
      I FINANCIALINFORMATION**





**Item
      1. Financial Statements**





**Capital
      Equity Finance, Inc.**


**(A
      Development Stage Company)**


**Financial
      Statements**





**For
      the nine months ended September 30, 2007 and for the**


**period
      from December 22, 2006 (inception) to September 30, 2007**


**(Unaudited)**





CONTENTS


**PAGE**Financial
                Statements:Balance
                Sheet - As of September 30, 2007
                (Unaudited)
            4Statements
                of Operations -For
                the three and nine months ended September 30, 2007 and for
                theperiod
                from December 22, 2006 (inception) to September 30, 2007
                (Unaudited)
            5Statements
                of Cash Flows -For
                the nine months ended September 30, 2007 and for theperiod
                from December 22, 2006 (inception) to September 30, 2007
                (Unaudited)
            6Notes
                to Financial Statements
                (Unaudited)
            7







-3-







**Capital
                Equity Finance, Inc.****(A
                Development Stage Company)****Balance
                Sheet****September
                30, 2007****(Unaudited)****Assets****Current
                Assets:**Cash
            
            $
            705**Total
                Current Assets**
            
            
            705**Total
                Assets**
            
            **$**
            **705****Stockholders'
                Equity****Stockholders'
                Equity:**Preferred
                stock (no par value), 5,000,000 shares authorized,authorized,
                none issued and outstanding)
            
            $
            -Common
                stock ($0.001 par value, 100,000,000 shares authorized,authorized,
                6,000,000 shares issued and outstanding)
            
            
            6,000Additional
                paid in capital
            
            
            18,137Deficit
                accumulated during development stage
            
            
            (23,432
            )**Total
                Stockholders' Equity**
            
            **$**
            **705**


See
      accompanying notes to unaudited financial statements.


-4-


**Capital
                Equity Finance, Inc.****(A
                Development Stage Company)****Statements
                of Operations****(Unaudited)****For
                the Period****from
                December 22,****For
                the three months ended**
            
            
            **For
                the nine months ended**
            
            
            **2006**
              **(Inception)
                to****September
                30, 2007**
            
            
            **September
                30, 2007**
            
            
            **September
                30, 2007****Operating
                Expenses**General
                and administrative
            
            $
            5,635
            
            
            $
            22,612
            
            
            $
            23,432Total
                Operating Expenses
            
            
            5,635
            
            
            
            22,612
            
            
            
            23,432**Net
                Loss**
            
            **$**
            **(5,635**
            **)**
            
            **$**
            **(22,612**
            **)**
            
            **$**
            **(23,432**
            **)****Net
                loss per share - basic and diluted**
            
            **$**
            **(0.00**
            **)**
            
            **$**
            **(0.00**
            **)**
            
            **$**
            **(0.00**
            **)****Weighted
                average number of shares outstanding****during
                the period - basic and diluted**
            
            ****
            **6,000,000**
            
            
            ****
            **6,000,000**
            
            
            ****
            **6,000,000**


See
        accompanying notes to unaudited financial statements.


-5-


**Capital
                Equity Finance, Inc.****(A
                Development Stage Company)****Statements
                of Cash Flows****(Unaudited)****For
                the Period****from
                December 22,****For
                the nine months ended**
            
            
            **2006**
              **(Inception)
                to****September
                30, 2007**
            
            
            **September
                30, 2007****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (22,612
            )
            
            $
            (23,432
            )Adjustments
                to reconcile net loss to net cash used inoperating
                activities:Contributed
                services - related party
            
            
            11,332
            
            
            
            12,152Net
                Cash Used In Operating Activities
            
            
            (11,280
            )
            
            
            (11,280
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from sale of common stock - related party
            
            
            4,000
            
            
            
            6,000Contributed
                capital - related party
            
            
            5,985
            
            
            
            5,985Net
                Cash Provided By Financing Activities
            
            
            9,985
            
            
            
            11,985Net
                Increase (Decrease) in Cash
            
            
            (1,295
            )
            
            
            705Cash
                - Beginning of Period
            
            
            2,000
            
            
            
            -Cash
                - End of Period
            
            $
            705
            
            
            $
            705**SUPPLEMENTARY
                CASH FLOW INFORMATION:**Cash
                Paid During the Period for:Income
                Taxes
            
            $
            -
            
            
            $
            -Interest
            
            $
            -
            
            
            $
            -


See
        accompanying notes to unaudited financial statements.




-6-


**Capital
      Equity Finance, Inc.**


**(A
      Development Stage Company)**


**Notes
      to Financial Statements**


**September
      30, 2007**


**(Unaudited)**









**Note
      1 Basis of Presentation**




The
      accompanying unaudited interim financial statements have been prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America and the rules and regulations of the United States Securities and
      Exchange Commission for interim financial information. Accordingly, they do
      not
      include all the information and footnotes necessary for a comprehensive
      presentation of financial position, results of operations, stockholders’ equity
      or cash flows. It is management's opinion, however, that all material
      adjustments (consisting of normal recurring adjustments) have been made which
      are necessary for a fair financial statement presentation.





The
      unaudited interim financial statements should be read in conjunction with the
      Company’s Registration Statement on Form 10-SB, which contains the audited
      financial statements and notes thereto, together with the Management’s
      Discussion and Analysis, for the year ended December 31, 2006. The interim
      results for the period ended September 30, 2007 are not necessarily indicative
      of results for the full fiscal year.





**Note
      2 Nature of Operations and Summary of Significant Accounting
      Policies**





**Nature
      of operations**





Capital
      Equity Finance, Inc. (the "Company"), was incorporated in Florida on December
      22, 2006. The Company intends to serve as a vehicle to effect an asset
      acquisition, merger, or business combination with a domestic or foreign
      business. At September 30, 2007, the Company had not yet commenced
      operations.





**Development
      Stage**





The
      Company's financial statements are presented as those of a development stage
      enterprise. Activities during the development stage primarily include related
      party equity-based financing.





**Use
      of estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles in the United States of America, requires management
      to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenue and expenses during
      the reporting period. Actual results could differ from those
      estimates.





**Cash**





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      instruments purchased with a maturity of three months or less and money market
      accounts to be cash equivalents.





-7-


**Net
      loss per share**





Basic
      loss per share is computed by dividing net loss by weighted average number
      of
      shares of common stock outstanding during each period.  Diluted loss
      per share is computed by dividing net loss by the weighted average number of
      shares of common stock, common stock equivalents and potentially dilutive
      securities outstanding during each period. At September 30, 2007, the Company
      does not have any outstanding common stock equivalents; therefore, a separate
      computation of diluted loss per share is not presented.





**Recent
      accounting pronouncements**





In
      February 2006, the FASB issued SFAS 155, *“Accounting for Certain Hybrid
      Financial Instruments”* (SFAS 155), which amends SFAS No. 133,
*“Accounting for Derivatives Instruments and Hedging Activities”* (SFAS
      133) and SFAS No. 140, *“Accounting for Transfers and Servicing of Financial
      Assets and Extinguishment of Liabilities”* (SFAS 140).  SFAS 155
      amends SFAS 133 to narrow the scope exception for interest-only and
      principal-only strips on debt instruments to include only such strips
      representing rights to receive a specified portion of the contractual interest
      or principal cash flows.  SFAS No. 155 also amends SFAS No. 140 to
      allow qualifying special-purpose entities to hold a passive derivative financial
      instrument pertaining to beneficial interests that it is a derivative financial
      instrument.  The Company adopted SFAS No. 155 on January 1, 2007 and
      it did not have a material effect on its financial position, results of
      operations or cash flows.





In
      July
      2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      No. 48, (“FIN 48”) *“Accounting for Uncertainty in Income Taxes – An
      Interpretation of SFAS No. 109.”*  This Interpretation provides
      guidance for recognizing and measuring certain tax positions, as defined in
      FASB
      No. 109, *“Accounting for Income Taxes.”*  FIN 48 prescribes a
      threshold condition that a tax position must meet for any of the benefit of
      an
      uncertain tax position to be recognized in the financial
      statements.  Guidance is also provided regarding de-recognition,
      classification and disclosure of uncertain tax positions.  FIN 48 is
      effective for fiscal years beginning after December 15, 2006.  The
      Company does not expect that this Interpretation will have a material impact
      on
      their financial position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), *Fair Value
      Measurements.*  SFAS 157 clarifies the principle that fair value
      should be based on the assumptions that market participants would use when
      pricing an asset or liability.  Additionally, it established a fair
      value hierarchy that prioritizes the information used to develop those
      assumptions.  SFAS 157 is effective for financial statements issued
      for fiscal years beginning after November 15, 2007.  The Company does
      not expect the adoption of SFAS 157 to have a material impact on their financial
      position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS No. 158 (“SFAS 158”), *“Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans,
      an
      amendment of FASB Statements No. 87, 88, 106, and 132(R).”*  SFAS
      158 requires employers to recognize the under funded or over funded status
      of a
      defined benefit postretirement plan as an asset or liability in its statement
      of
      financial position and to recognize changes in the funded status in the year
      in
      which the changes occur through accumulated other comprehensive
      income.  Additionally, SFAS 158 requires employers to measure the
      funded status of a plan as of the date of its year-end statement of financial
      position.  The new reporting requirements and related new footnote
      disclosure rules of SFAS 158 are effective for fiscal years ending after
      December 15, 2006.  The new measurement date requirement applies for
      fiscal years ending after December 15, 2008.  The Company adopted SFAS
      No. 158 on January 1, 2007 and it did not have a material effect on its
      financial position, results of operations or cash flows.





In
      September 2006, the U.S. Securities and Exchange Commission (the “SEC”) issued
      Staff Accounting Bulletin (“SAB No.108”), which expresses the views of the SEC
      staff regarding the process of quantifying financial statement
      misstatements.  SAB No. 108 provides guidance on the consideration of
      the effects of prior year misstatements in quantifying current year
      misstatements for the purpose of a materiality assessment.  The
      guidance of this SAB is effective for annual financial statements covering
      the
      first fiscal year ending after November 15, 2006. The Company adopted SAB No.
      108 and it did not have an impact on the Company’s financial position, results
      of operations or cash flows.





-8-


In
      February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial
      Assets and Financial Liabilities, which permits entities to choose to measure
      many financial instruments and certain other items at fair value. The unrealized
      gains and losses on items for which the fair value option has been elected
      should be reported in earnings.  The decision to elect the fair value
      option is determined on an instrument-by-instrument basis, should be applied
      to
      an entire instrument and is irrevocable.  Assets and liabilities
      measured at fair values pursuant to the fair value option should be reported
      separately in the balance sheet from those instruments measured using other
      measurement attributes.  SFAS No. 159 is effective as of the
      beginning of the Company’s 2008 fiscal year. The Company will adopt SFAS No. 159
      on January 1, 2008 and it is not expected to have a material effect on its
      financial position, results of operations or cash flows.





Other
      accounting standards that have been issued or proposed by the FASB or other
      standards-setting bodies that do not require adoption until a future date and
      are not expected to have a material impact on the financial statements upon
      adoption.





**Note
      3 Stockholders’ Equity**





**(A)**
            **Common
                Stock Issuance for Cash**





On
      December 22, 2006, the Company issued 6,000,000 shares of common stock, par
      value $.001 per share, to its founding stockholders in exchange for $2,000
      in
      cash and a $4,000 subscription receivable.  The subscriptions were
      received in full during the three months ended March 31, 2007.





**(B)**
            **Contributed
                Capital and Services – Related
                Party**





**(1)** **Year
      ended December 31, 2006**





During
      2006, an affiliate of the Company’s President contributed professional services
      to the Company aggregating $750.  The value of these contributed
      services was based upon the fair value of the services provided.





During
      2006, an affiliate of the Company’s President paid $70 for certain general and
      administrative expenses on behalf of the Company.





**(2)** **Period
      ended September 30, 2007**





During
      2007, an affiliate of the Company’s President contributed professional services
      to the Company aggregating $9,025.  The value of these contributed
      services was based upon the fair value of the services provided.





During
      2007, an affiliate of the Company’s President paid $1,895 for certain general
      and administrative expenses on behalf of the Company.





During
      2007, a related party stockholder of the company paid $412 for certain general
      and administrative expenses on behalf of the company.





During
      2007, the Company received $5,985 from related party stockholders to fund future
      expenses of the Company.





-9-





**Item
                2. Management’s Discussion and Analysisor Plan of
                Operation**





**CAUTIONARY
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





The
      information presented in Item 2 contains forward-looking statements. You should
      understand that forward-looking statements are only predictions reflecting
      our
      current beliefs and are based on information currently available to us. Although
      we believe that the assumptions reflected in our forward-looking statements
      are
      reasonable, we cannot guarantee future results, levels of activity, performance
      or achievements.




You
      can
      identify a forward-looking statement by our use of a word such as “may”, “will”,
“should”, “could”, “anticipate”, “believe”, “estimate”, “expect”, “intend”,
“plan”, “predict”, “project”, “propose”, “potential” “continue” and similar
      terms and expressions, or the negative of these words or other variations on
      these words or comparable terminology.




In
      evaluating a forward-looking statement, you should understand that a forward
      looking statement involves known and unknown risks, uncertainties,
      contingencies, and other factors that may cause our actual results, levels
      of
      activity, performance or achievements to be materially different from any future
      results, performance or achievements expressed or implied by such
      forward-looking statement. Known risks related to an investment in our Company,
      risks related to our business, and risks related to our securities are
      identified in our Form 10-SB as amended and are incorporated herein by
      reference. You should also understand that we have no obligation and do not
      undertake to update or revise forward-looking statements made in this Report
      to
      reflect events or circumstances occurring after the date of this
      Report.





**Overview**





Capital
      Equity Finance, Inc., a Florida corporation (the “Company”, “us”, “we” and
“our”), is a development stage company conducting no business operations, other
      than our efforts to effect a business combination with a target business that
      desires to utilize our status as a reporting corporation under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), which we consider to have
      significant growth potential. To date, we have neither engaged in any operations
      nor generated any revenue. We have generated no cash flow. We cannot predict
      to
      what extent our liquidity and capital resources will be diminished prior to
      the
      consummation of a business combination or whether our capital will be further
      depleted by the operating losses, if any, of the target business with which
      we
      may effectuate a business combination. The continuation of our business is
      dependent upon our ability to obtain adequate financing arrangements, effectuate
      a business combination and ultimately, engage in future profitable
      operations.





Presently,
      we have been meeting our expenses through capital contributions made by our
      founding shareholders.  We neither generate any cash revenue nor cash
      flow. Our operating costs, which include professional fees and costs are likely
      to approximate $20,000 to $30,000 during the next 12 months. In the event we
      cannot meet our operating costs prior to the effectuation of a business
      combination, we may cease operations and a business combination may not
      occur.





**Critical
      Accounting Policies and Estimates**





A
      summary
      of significant accounting policies is provided in Note 1 to our financial
      statements included in our Form 10-SB, as amended. Our sole officer and director
      believes that the application of these policies on a consistent basis enables
      the Company to provide useful and reliable financial information about the
      Company's operating results and financial condition.





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires our sole officer and director to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results will differ from those estimates.





-10-


**Plan
      of Operation**





We
      were
      organized as a vehicle to investigate and, if such investigation warrants,
      acquire a target company or business seeking the perceived advantages of being
      a
      publicly held corporation. Our principal business objective for the next 12
      months and beyond such time will be to achieve long-term growth potential
      through a combination with a business rather than immediate, short-term
      earnings. We will not restrict our potential candidate target companies to
      any
      specific business, industry or geographical location and, thus, may acquire
      any
      type of business.




We
      may
      consider a business which has recently commenced operations, is a developing
      company in need of additional funds for expansion into new products or markets,
      is seeking to develop a new product or service, or is an established business
      which may be experiencing financial or operating difficulties and is in need
      of
      additional capital. In the alternative, a business combination may involve
      the
      acquisition of, or merger with, a company which does not need substantial
      additional capital, but which desires to establish a public trading market
      for
      its shares, while avoiding, among other things, the time delays, significant
      expense, and loss of voting control which may occur in a public
      offering.





We
      do not
      currently engage in any business activities that provide cash flow. The costs
      of
      investigating and analyzing business combinations for the next 12 months and
      beyond such time will be paid with money in our treasury, if any, or with
      additional money contributed by our stockholders, or another
      source.




During
      the next 12 months, we anticipate incurring costs related to filing of Exchange
      Act reports and costs relating to consummating an acquisition. We believe we
      will be able to meet these costs through use of funds in our treasury and
      additional amounts, as necessary, to be loaned to or invested in us by our
      stockholders, management or other investors.




We
      have
      not had any preliminary contact or discussions with any representative of any
      other entity regarding a business combination with us. Any target business
      that
      is selected may be a financially unstable company or an entity in its early
      stages of development or growth, including entities without established records
      of sales or earnings. In that event, we will be subject to numerous risks
      inherent in the business and operations of financially unstable and early stage
      or potential emerging growth companies. In addition, we may effect a business
      combination with an entity in an industry characterized by a high level of
      risk,
      and, although our management will endeavor to evaluate the risks inherent in
      a
      particular target business, there can be no assurance that we will properly
      ascertain or assess all significant risks.




Our
      management anticipates that it will likely be able to effect only one business
      combination, due primarily to our limited financing, and the dilution of
      interest for present and prospective stockholders, which is likely to occur
      as a
      result of our management's plan to offer a controlling interest to a target
      business in order to achieve a tax-free reorganization. This lack of
      diversification should be considered a substantial risk in investing in us,
      because it will not permit us to offset potential losses from one venture
      against gains from another.




We
      anticipate that the selection of a business combination will be complex and
      extremely risky. Because of general economic conditions, rapid technological
      advances being made in some industries and shortages of available capital,
      our
      management believes that there are numerous firms seeking even the limited
      additional capital that we will have and/or the perceived benefits of becoming
      a
      publicly traded corporation. Such perceived benefits of becoming a publicly
      traded corporation include, among other things, facilitating or improving the
      terms on which additional equity financing may be obtained, providing liquidity
      for the principals of and investors in a business, creating a means for
      providing incentive stock options or similar benefits to key employees, and
      offering greater flexibility in structuring acquisitions, joint ventures and
      the
      like through the issuance of stock. Potentially available business combinations
      may occur in many different industries and at various stages of development,
      all
      of which will make the task of comparative investigation and analysis of such
      business opportunities extremely difficult and complex.




-11-


**Item
      3. Controls and Procedures**




The
      Company’s disclosure controls and procedures are designed to ensure that
      information required to be disclosed in reports that it files or submits under
      the Exchange Act is recorded, processed, summarized and reported within the
      time
      periods specified in the rules and forms of the Securities and Exchange
      Commission (the “Commission”). Our sole officer and director has reviewed the
      effectiveness of the Company’s disclosure controls and procedures and have
      concluded that the disclosure controls and procedures, as of September 30,
      2007,
      are effective in timely alerting her to material information relating to the
      Company that is required to be included in its periodic filings with the
      Commission.




In
      connection with its evaluation during the quarterly period ended September
      30,
      2007, the Company has made no change in the Company’s internal controls over
      financial reporting that has materially affected or is reasonably likely to
      materially affect the Company’s internal controls over financial reporting.
      There also were no significant deficiencies or material weaknesses identified
      for which corrective action needed to be taken.


**PART
        II OTHER INFORMATION**
 **Item
        6. Exhibits**
 (a) Exhibits
 
 Description
 31.1
              
              13a-14(a)-15d-14(a)
                  Certification
                  – Luz M. Weigel31.2
              
              13a-14(a)-15d-14(a)
                  Certification
                  - Luz M. Weigel32.1
              
              18
                  U.S.C. § 1350 Certification -
                  Luz M. Weigel32.2
              
              18
                  U.S.C. § 1350 Certification -
                  Luz M. Weigel
 
 -12-
 **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.
 
 **CAPITAL
                  EQUITY FINANCE, INC.**Date: October
                  17, 2007
              By:
              /s/ Luz
                  M. WeigelLuz
                  M. WeigelPresident,
                  Secretary and Treasurer
                (Principal
                  Accounting Officer and Authorized
                  Officer)
 
 -13-