<PAGE>

                                   FORM 10-QSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                   For the quarterly period ended June 30, 2001
                                                  -------------

                                       OR

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

        For the transition period from _______________ to _______________

                         Commission file number 0-21384

                        Digital Descriptor Systems, Inc.
                   ------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                        23-2770048
-------------------------------                     -----------------------
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization)                       identification number)

                  446 Lincoln Highway, Fairless Hills, PA 19030
               (Address of principal executive offices) (Zip Code)

       Registrant's Telephone number, including area code: (267) 580-1075
                                                           --------------

  ---------------------------------------------------------------------------
  (former, name, 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 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

State the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.


                                                       Outstanding at
                  Class of Common Stock                 July 31, 2001
                  ---------------------               -----------------
                     $.001 par value                  21,279,612 shares

             Transitional Small Business Disclosure Format  Yes     No X
                                                               ---    ---


                                      -1-
<PAGE>


                                   FORM 10-QSB
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                        DIGITAL DESCRIPTOR SYSTEMS, INC.

                                      Index

PART I - FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Balance Sheets at June 30, 2001 (unaudited) and
                  December 31, 2000

                  Statements of Operations for the three and six months ended
                  June 30, 2001 and 2000 (Unaudited)

                  Statements of Cash Flows for the six months ended
                  June 30, 2001 and 2000 (Unaudited)

                  Notes to Financial Statements (Unaudited)

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


PART II. - OTHER INFORMATION

         Item 1.  Legal Proceedings

         Item 2.  Changes in Securities and Use of Proceeds

         Item 3.  Defaults Upon Senior Securities:

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

         Item 5. Other Information

         Item 6. Exhibits and Reports on Form 8-K



SIGNATURES


                                      -2-


<PAGE>
                          PART I. FINANCIAL INFORMATION
                          -----------------------------

      ITEM I.     FINANCIAL STATEMENTS

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                 June 30               December 31
                                                                                   2001                    2000
                                                                                   -----                   ----
                                                                                (Unaudited)
<S>                                                                                 <C>                      <C>
Assets
Current assets:
   Cash                                                                         $  153,766               $   202,877
   Restricted cash                                                                  10,452                    10,452
   Investments                                                                       1,000                     1,000
   Account receivable, less allowance for uncollectible
      accounts of $96,000 (unaudited) and $114,000 in
      2001 and 2000, respectively                                                  530,919                   526,292
   Inventory                                                                        42,897                    22,596
   Prepaid expenses                                                                213,242                     8,698
   Debt discount and deferred financing costs                                      558,241                   228,500
                                                                                ----------                 ---------
Total current assets                                                             1,510,517                 1,000,415


  Note receivable - Officer                                                        171,462                   165,525
Software development costs at cost, net                                            367,648                   413,604
  Furniture and equipment, at cost, net                                            100,832                   172,046
   Deposits and other assets                                                        24,396                    31,454
                                                                                ----------               -----------
Total assets                                                                    $2,174,855                $1,783,044
                                                                                ==========               ===========

Liabilities and Shareholders' Equity
Current liabilities:
   Accounts payable                                                             $  582,693                $  481,163
   Accrued expenses                                                                 46,468                   189,209
   Deferred income                                                               1,442,732                   854,787
   Current portion of equipment loan                                                 6,578                     7,147
   Convertible debentures                                                          555,000                   200,000
                                                                                ----------                ----------
Total current liabilities                                                        2,633,471                 1,732,306

   Equipment Loan                                                                   25,630                    28,626
                                                                                ----------               -----------
Total liabilities                                                               $2,659,101                $1,760,932
                                                                                ----------               -----------
</TABLE>

                                      -3-

<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           BALANCE SHEETS (continued)
<TABLE>
<CAPTION>
                                                                                  June 30,              December 31
                                                                                   2001                    2000
                                                                                   -----                   ----
                                                                                 (Unaudited)
<S>                                                                                  <C>                    <C>
Shareholders' equity (deficit):
   Preferred Stock, $.01 par value, authorized shares - 1,000,000;
     issued and outstanding - none
   Common Stock, $.001 par value, authorized shares -                              21,279                  20,011
     50,000,000; issued and outstanding shares -
     21,279,612 (unaudited) and 20,011,612 at June 30, 2001
     and December 31, 2000, respectively
   Additional paid-in capital                                                   15,340,591             14,544,579
   Accumulated deficit                                                         (15,846,116)           (14,542,478)
                                                                               -----------            -----------
Total shareholder's equity (deficit)                                              (484,246)                22,112
                                                                               -----------            -----------
Total liabilities and shareholders' equity (deficit)                           $ 2,174,855            $ 1,783,044
                                                                               ===========            ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      -4-
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                            Three Months Ended                                 Six Months Ended
                                                  June 30                                            June 30
                                            2001               2000                          2001                 2000
                                            ----               ----                          ----                 ----

<S>                                          <C>                 <C>                         <C>                   <C>
Revenues:
   Software                           $   180,997             $  228,020                $   341,311          $   590,224
   Hardware                                42,599                268,153                     48,574              371,578
   Maintenance                            138,194                149,967                    268,918              304,737
   Consulting                              34,500                 14,105                     34,500              113,237
   Other                                   18,920                 14,956                     31,955               27,562
                                      -----------             ----------                -----------           ----------
                                          415,210                675,201                    725,258            1,407,338

Costs and expenses:
   Cost of revenues                       140,774                498,252                    269,788              803,177
   General and administrative             580,014                504,021                    917,244              790,886
   Sales and marketing                     70,951                214,333                    306,561              417,420
   Research and development                62,712                119,068                    140,094              248,420
   Depreciation and amortization           70,173                 25,358                    120,666               50,595
   Other (income) expense, net            223,864                 (6,236)                   274,543               (4,931)
                                      -----------             ----------                -----------           ----------
                                        1,148,488              1,354,796                  2,028,896            2,305,567
                                      -----------             ----------                -----------           ----------
         Net loss                     $(  733,728)           $(  679,595)               $(1,303,638)         $  (898,229)
                                      ===========            ===========                ===========          ===========

Net loss per common share
   (basic and diluted)                $     (0.03)           $     (0.04)               $     (0.06)         $     (0.05)
                                      ===========            ===========                ===========          ===========

Weighted average number of
   common shares outstanding
   (basic and diluted)                 21,279,612             18,806,612                 21,174,779           17,722,649
                                      ===========            ===========                ===========          ===========

</TABLE>


    The accompanying notes are an integral part of these financial statements

                                      -5-
<PAGE>


                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                         Six Months Ended
                                                                                             June 30
                                                                                   2001                    2000
                                                                                   -----                   -----
<S>                                                                                  <C>                     <C>
Cash flows from operating activities:
Net loss                                                                        ($1,303,638)             ($898,229)
Adjustments to reconcile net loss to net cash
   used in operating activities:
      Depreciation and amortization                                                 120,666                 50,595
      Compensation expense in connection with issuance                              186,530                      -
          of  common stock
     Amortization of unearned compensation                                                -                 12,000
     Amortization of debt discount                                                  284,259                      -
   Changes in operating assets and liabilities:
      Accounts receivable                                                            (4,627)               152,533
      Inventory                                                                     (20,301)                   (69)
      Prepaid expenses, deposits and other assets                                  (169,736)               (28,185)
      Accounts payable                                                              101,530                 45,625
      Accrued expenses                                                             (142,741)              (102,082)
      Deferred income                                                               587,945                (60,417)
                                                                                -----------             ----------
Net cash used in operating activities                                              (360,113)              (828,229)

Cash flows from investing activities:
   Purchase of furniture and equipment                                               (3,496)               (22,771)
   Increase in officer note receivable                                               (5,937)                (5,938)
                                                                                -----------             ----------
Net cash used in investing activities                                                (9,433)               (28,709)

Cash flows from financing activities:
   Proceeds from issuance of common stock                                                 -              1,164,066
   Net proceeds from issuance of convertible debentures                             355,000                      -
   Deferred financing costs                                                         (31,000)                     -
   Repayment of equipment loan                                                       (3,565)                     -
                                                                                -----------             ----------
Net cash provided by financing activities                                           320,435              1,164,066
                                                                                -----------             ----------
Net (decrease) increase in cash                                                     (49,111)               307,128
Cash at beginning of period                                                         202,877                287,223
                                                                                -----------             ----------
Cash at end of period                                                             $ 153,766             $  594,351
                                                                                ===========             ===========

Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                         $ 233,517              $    1,748
                                                                                ===========             ===========

Debt discount in connection with convertible debentures                          $ 583,000              $        -
                                                                                ===========             ===========

</TABLE>
                                      -6-
<PAGE>


                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
                                  June 30, 2001

1.  BUSINESS

Digital Descriptor Systems, Inc. incorporated in Delaware in 1994, develops,
assembles and markets computer installations consisting of hardware and
software, which capture video and scanned images, link the digitized images to
text and store the images and text on a computer database and transmit this
information to remote locations. The principal product of the Company is the
Compu-Capture Law Enforcement Program, which is marketed to law enforcement
agencies and jail facilities and generated the majority of the Company's
revenues during the quarters ended June 30, 2001 and 2000. Substantially all of
the Company's revenues are derived principally from U.S. government agencies.

2.  BASIS OF PRESENTATION

The financial statements and disclosures included herein for the three and six
months ended June 30, 2001 and, 2000 are unaudited. These financial statements
and disclosures have been prepared by the Company in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of adjustments of a normal and
recurring nature) considered necessary for a fair presentation have been
included. Operating results for the three and six month periods ended June 30,
2001 and 2000 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2001.

3.  ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Revenue Recognition

The Company derives revenue from the sale of hardware, software, post customer
support (PCS), and other related services. PCS includes telephone support, bug
fixes, and rights to upgrades on a when-and-if-available basis. Other related
services include basic consulting and training. Included with the hardware is
software that is not considered to be incidental. Revenue from transactions with
customers where the software component is not considered to be incidental is
allocated between the hardware and software components based on the relative
fair value of the respective components.

                                      -7-
<PAGE>
The Company also derives revenue from the sale of software without a related
hardware component. Revenue allocable to software components is further
allocated to the individual deliverable elements of the software portion of the
arrangement such as PCS and other services. In arrangements that include rights
to PCS for the software and/or other services, the software component
arrangement fee is allocated among each deliverable based on the relative fair
value of each of the deliverables determined using vendor-specific objective
evidence, which has been established by the separate sales of these
deliverables.

The Company recognizes the revenue allocable to hardware and software licenses
upon delivery of the product to the end-user, unless the fee is not fixed or
determinable or collectibility is not probable. If collectibility is not
considered probable, revenue is recognized when the fee is collected. Revenue
allocable to PCS is recognized on a straight-line basis over the period the PCS
is provided. Revenue allocable to other services is recognized as the services
are provided.

Software Development Costs

The Company capitalizes software development costs after technological
feasibility of the software is established and through the product's
availability for general release to the Company's customers. Technological
feasibility of the Company's software development costs is determined when the
planning, designing, coding, and testing activities are completed, and the
Company has established that the product can be produced to meet its design
specifications. All costs incurred in the research and development of new
software products and costs incurred prior to the establishment of technological
feasibility are expensed as incurred. During 1999, $413,604 was capitalized as
software development costs in connection with the Company's new product entitled
Compu-Scan, a computerized inkless fingerprint device. The Company awarded a
contract to Titan Systems Corporation's DBA division for technical assistance in
achieving final compliance with the FBI certification process. Such
certification is not required to sell this device for commercial
(non-government) applications, and as of March 31, 2001, the Company believes
the product meets the necessary specification and is available for general
release to customers.

Amortization of software development costs is calculated as the greater of the
amount computed using (i) the ratio that current gross revenues for a product
bear to the total of current and anticipated future gross revenues of that
product or (ii) the straight-line method over the remaining estimated economic
life of the product, including the period being reported on. Amortization of
such costs will commence when the software becomes available for general release
to customers. Amortization expense of $11,489 and $45,956 was recorded during
the three and six months ended June 30, 2001. The Company reviews the
unamortized software development costs at each balance sheet date and, if
necessary, will write down the balance to net realizable value if the
unamortized costs exceed the net realizable value of the asset.

Net Loss Per Common Share

Basic loss per share is calculated by dividing the net loss by the weighted
average common shares outstanding for the period. Diluted loss per share is
calculated by dividing the net loss by the weighted average common shares
outstanding of the period plus the dilutive effect of common stock equivalents.
No exercise of common stock equivalents were assumed during any period because
the assumed exercise of these securities would be antidilutive.

                                      -8-
<PAGE>
4.  CONVERTIBLE DEBENTURES

During March 2001, the Company issued $200,000 of convertible debentures to two
investors. These debentures mature on March 4, 2002 and accrue interest at 12%
per annum. The holder has the right to convert the debentures to common shares
at any time through maturity at the conversion price as described in the note
agreement. The debenture holders received warrants to purchase 200,000 common
shares at an exercise price the lesser of: $0.036 per share or the average of
the lowest three trading prices during the 20 days preceding the exercise date.
Such warrants expire March 4, 2004. The debentures are collateralized by
substantially all of the Company's assets.

During April 2001, the Company issued two convertible notes for $100,000 and
$15,000, and one convertible note in May 2001 for $40,000 respectively, with
interest accruing at the annual rate of 10% interest on these Notes shall be
payable quarterly commencing June 30, 2001. The holder has the right to convert
the debentures and interest accrued into shares of the Company's Common Stock at
a conversion price per share that shall be an amount equal to 50% of the mean
average price of the Common Stock for the ten (10) trading days prior to notice
of conversion per share. The intrinsic value of the beneficial conversion
features relating to the convertible debentures issued in 2001 of $155,000 has
been allocated to paid in capital. This resulting debt discount will be
amortized over the term of the debentures.

5.  EQUITY TRANSACTIONS

During the quarter ended March 31, 2001, the Company granted 1,100,000 shares of
restricted common stock to certain parties in connection with raising capital
and for services performed and to be performed. Such shares were valued at the
fair market value on the date the shares were granted. In April 2001, the
Company granted an additional 168,000 shares of restricted common stock for
services to be performed.

At the Annual Meeting held on July 26, 2001, the Company's shareholders elected
a new Board of Directors and approved and consented to amend the Company's
restated Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 50,000,000 to 150,000,000 shares. The shareholders
also approved and consented to increase the number of shares in the Digital
Descriptor Systems, Inc. Employee Stock Option Plan from 300,000 to 5,000,000
shares.


                                      -9-


<PAGE>


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

Plan of Operations


The short-term objective of the Company is to continue to expand the sale and
acceptance of its core business solutions by adding more sales personnel and
demonstrating at more trade exhibits. The Company also is pursuing the FBI
certification and roll out of the Compu-Scan 3000 fingerprint capturing device
in order to capitalize on its unique patent pending technology. On July 25, 2001
the Company announced that it had awarded a contract to Titan Systems
Corporation's DBA division for technical assistance in achieving final
compliance with the FBI certification process. There are no assurances by DDSI
that the FBI will certify this technology and device. Such certification is not
required to sell this device for commercial (non-government) applications.


The Company's long-term objectives are to obtain enough products to sell into
its basic business market--Criminal Justice -- so that sales will expand
adequately to allow for profits. Three such new products are the Compu-Scan
3000, FMS (Fingerprint Matching System), and Compu-Capture lite.


The FMS (Fingerprint Matching System) is a product that we licensed from Harris
Corporation (NYSE: "HAR"), Melbourne, FL to sell its product to the criminal
justice field. The Company anticipates additional development costs of
approximately $100,000 in 2001, which is required to prepare this product for
market. The FMS will need to be integrated as part of the Company's software
offerings and will also be introduced to large-project integrators. On February
15, 2000, the Company introduced the FMS to the criminal justice industry. The
Company also plans to develop a sales channel into the Federal government.

The Company believes that it will reach profitability during the third quarter
of year 2002. The Company estimates that it will need to raise $2,000,000 in the
next 12 months to cover its operating costs until it can reach positive cash
flow and profitability. The Company may need to raise funds through the sale of
its common stock or issuance of convertible notes, if funds provided by
operations fall short. This estimate considers current operating and marketing
dollars plus the remaining costs required to complete for market both the
Compu-Scan and FMS solutions. There is no guarantee that the Company will be
able to raise the required funds through the sale of its Common Stock or
issuance of convertible notes.


One key to the Company reaching profitability is the approval of the Compu-Scan
product. Though the Company cannot guarantee a date when the Compu-Scan will
receive certification, we are hopeful that the approval will be given sometime
within the next six months. We estimate that the Compu-Scan would add one
million dollars in revenues in the first twelve months on the market growing to
three million dollars in revenues during the second twelve months.


                                      -10-

<PAGE>

In conjunction with bringing the Compu-Scan 3000 online, the Company is doing
the following in its effort to reach profitability:

     o   Cut costs in areas that add the least value to the Company.
     o   Derive funds through investigating business alliances with other
         companies who may wish to license the Compu-Scan device.
     o   Increase revenues through the introduction of a scaled down version of
         our Compu-Capture product. The Compu-Capture lite is a low cost product
         and will open up a greater portion of the criminal justice market place
         for potential sales.


Results of Operations

Six Months June 30, 2001 Compared to the Six Months Ended June 30, 2000
-----------------------------------------------------------------------

Revenues for the six months ended June 30, 2001 of $725,258 decreased $682,080
or 48% from the six months ended June 30, 2000. The Company generates its
revenues through software licenses, hardware, post customer support arrangements
and other services. The decrease in the Company's revenue for software and
hardware during the period is attributed to a trend that the Company has noticed
in a decrease in the sales of the SI-3000 product. Maintenance revenues
decreased $35,819 or 12% from the six months ended June 30, 2000 primarily due
to a decrease in the Company's customer's entering into such arrangements and
the revenue sharing agreement with Itx on maintenance of the SI-3000 product
line. Other revenues consist of sales of supplies that the Company makes
available to its customers, such as wristbands, ID cards and print packs. More
customers ordered such items in the six months ended June 30, 2001 versus June
30, 2000, which accounted for the modest increase. Cost of goods decreased
$533,389 or 66% due to the decrease in revenues and was reduced to 37% of total
revenues from 57% in the same period a year earlier. Overall the gross profit
percentage per sale increased to 63% from 43% in the same period a year earlier.
Both the lower cost of sales and the higher gross margin are attributed to the
decrease in sales of SI-3000.

Costs and expenses decreased $276,571 or 12% during the six months ended June
30, 2001 versus the six months ended June 30, 2000. The decrease is due
primarily to the decrease in cost of goods mentioned above, offset by an
increase in general and administrative expenses of $126,358 or 16% due primarily
to consulting expenses incurred for stock issuances. Other expenses also
increased $279,474 due to interest expense in connection with the convertible
debentures issued in 2000 and the six months ended June 30, 2001.

The net loss for the Company increased 45% for the six months ending June 30,
2001 to $1,303,638 from $898,229 for the six months ending June 30, 2000. This
was principally due to the decrease in revenues during the period.

Three Months June 30, 2001 Compared to the Three Months Ended June 30, 2000
---------------------------------------------------------------------------

Revenues for the three months ended June 30, 2001 of $415,210 decreased $259,991
or 39% from the three months ended June 30, 2000. The Company generates its
revenues through software licenses, hardware, post customer support arrangements
and other services. The decrease in the Company's revenue is attributed to the
fact that the SI-3000 product line and associated hardware had a decrease in


                                      -11-
<PAGE>

sales. Maintenance revenues decreased $11,773 or 8% from the three months ended
June 30,2000 primarily due to a decrease in the Company's customer's entering
into such arrangements and the revenue sharing agreement with Itx on maintenance
of the SI-3000 product. Other revenues consist of sales of supplies that the
Company makes available to its customers, such as wristbands, ID cards and print
packs. More customers ordered such items in the three months ended June 30, 2001
versus 2000, which accounted for the modest increase. Cost of goods decreased
$357,478 or 72% due to the decrease in revenues and was reduced to 34% of total
revenues from 73% in the same period a year earlier. The gross profit percentage
per sale increased by 36% compared to the same period a year earlier.


Costs and expenses decreased $206,308 or 15% during the three months ended June
30, 2001 versus the three months ended June 30, 2000. The decrease is due
primarily to the decrease in cost of goods mentioned above offset by an increase
in other expenses of $230,100 due to interest expense in connection with the
convertible debentures issued in 2000 and the six months ended June 30, 2001.


The net loss for the Company increased 8% for the three months ending June 30,
2001 to $733,278 from $679,595 for the three months ending June 30, 2001. This
was principally due to the decrease in revenues during the period.

Liquidity and Capital Resources

The Company's revenues have been insufficient to cover the cost of revenues and
operating expenses. Therefore, the Company has been dependent on private
placements of its common stock and issuance of convertible notes in order to
sustain operations. In addition, there can be no assurances that the proceeds
from private or other capital will continue to be available, or that revenues
will increase to meet the Company's cash needs, or that a sufficient amount of
the Company's common stock or other securities can or will be sold or that any
common stock purchase options/warrants will be exercised to fund the operating
needs of the Company.


Net cash used in operating activities for the six months ended June 30, 2001 and
2000 was $360,113 and $898,229, respectively. The change in cash from operating
activities in 2001 versus 2000 of $538,116 was principally due to the increase
in the net loss for the 2001 first six months ended June 30, 2001, versus 2000
of $405,409 and by other changes in operating assets and liabilities.


Net cash used in investing activities was $9,433 and $28,709 for the six months
ended June 30, 2001 and 2000, respectively, reflecting a change of $19,276. This
change is due to lesser purchases of furniture and equipment in the six months
ended June 30, 2001.

Net cash provided by financing activities was $320,435 and $1,164,066 for the
six months ended June 30, 2001 and 2000, respectively, reflecting a change of
$843,631. This decrease was principally due to less proceeds received from the
issuance of the Company's common stock in the first six months of 2001 versus
the first six months of 2000.



                                      -12-





<PAGE>



                           PART II. OTHER INFORMATION
Item 1.

None

Item 2.        Changes in Securities and Use of Proceeds

During May 2001, the Company issued one convertible note for $40,000 with
simple interest accruing at the annual rate of 10%. The Holder shall have the
right to convert the principal and interest due under the notes into Shares of
the Company's Common Stock at a conversion price that shall be equal to 50% of
the mean average price of the Common Stock of the borrower for the ten (10)
trading days prior to notice of conversion per share.

During April 2001, the Company issued two convertible notes for $100,000 and
$15,000 respectively with simple interest accruing at the annual rate of 10%.
The Holder shall have the right to convert the principal amount and interest due
under the notes into Shares of the Company's Common Stock at a conversion price
that shall be equal to 50% of the mean price of Common Stock of the borrower for
the ten (10) trading days prior to notice of conversion per share.

During March 2001, the Company issued $200,000 of convertible debentures to two
investors. These debentures mature on March 4, 2002 and accrue interest at 12%
per annum. The holder has the right to convert the debentures to common shares
at any time through maturity at the conversion price as described in the note
agreement. The debenture holders received warrants to purchase 200,000 common
shares at an exercise price the lesser of: $0.036 per share or the average of
the lowest three trading prices during the 20 days preceding the exercise date.
Such warrants expire March 4, 2003. The debentures are collateralized by
substantially all of the Company's assets.

During January 2001 through July 2001, the Company granted 1,268,000 shares of
restricted common stock for services performed or to be performed . Such shares
were valued at the fair market value on the date the shares were granted.

Item 3.        Defaults Upon Senior Securities:

None.

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

At the Annual Meeting held on July 26, 2001, the Company's shareholders elected
a new Board of Directors and approved and consented to amend the Company's
restated Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 50,000,000 to 150,000,000 shares.



                                      -13-
<PAGE>


The principal purpose of the amendment to the Certificate is to authorize
additional shares of Common Stock which will be available to facilitate the
current raising of additional capital through the sale of securities, to grant
options or other stock incentives to the Company's employees, for a possible
acquisition of another company or its business or assets, or to seek to
establish a strategic relationship with a corporate partner.

The shareholders also approved and consented to increase the number of shares in
the Digital Descriptor Systems, Inc. Employee Stock Option Plan from 300,000 to
5,000,000 shares.


Item 5.        Other Information

None


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

None


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<PAGE>




                                   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.

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                                  (Registrant)



      Date:  August 14, 2001    By: /s/ GARRETT U. COHN
                                    -------------------------------------------
                                        Garrett U. Cohn
                                        (President & Chief Executive Officer)


      Date:  August 14, 2001    By:  /s/ MICHAEL J. PELLEGRINO
                                     ------------------------------------------
                                         Michael J. Pellegrino
                                         (Vice President of Finance &
                                           Chief Financial Officer)


      Date:  August 14, 2001    By:  /s/ MYRNA L. MARKS-COHN, PH.D.
                                     ------------------------------------------
                                         Myrna L. Marks-Cohn Ph.D.


      Date:  August 14, 2001    By:  /s/ ROBERT GOWELL.
                                     ------------------------------------------
                                         Robert Gowell

      Date:  August 14, 2001    By:  /s/ JOHN J. BOYLE.
                                     ------------------------------------------
                                         John J. Boyle



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