SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
                                 ---------------
                                    FORM 10-Q


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

                  For the quarterly period ended March 31, 2001
                         Commission file number 0-27042


                            AlphaNet Solutions, Inc.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

          New Jersey                           22-2554535
         ------------                         -----------
(State or Other Jurisdiction of          (I.R.S. Employer Identification No.)
 Incorporation or Organization)


7 Ridgedale Avenue, Cedar Knolls, New Jersey                 07927
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                  (Zip Code)


                                 (973) 267-0088
                                 --------------
                         (Registrant's Telephone Number
                              Including Area Code)


      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: ___
                           ---

      Indicate  the  number of shares  outstanding  of each of the  Registrant's
classes of common stock, as of April 30, 2001 :

Class                                   Number of Shares Outstanding
-----                                   -----------------------------
Common Stock, $.01 par value                     6,411,725


<PAGE>


                            ALPHANET SOLUTIONS, INC.

                                TABLE OF CONTENTS



PART I.           FINANCIAL INFORMATION

<TABLE>
<CAPTION>

      <S>         <C>                                                                                           <C>
      Item 1.     Financial Statements.......................................................................... 1

                  Consolidated Balance Sheets
                  as of March 31, 2001 (unaudited)
                  and December 31, 2000......................................................................... 1

                  Consolidated Statements of Operations
                  for the Three Months Ended
                  March 31, 2001,  (unaudited) and March 31, 2000 (unaudited)................................... 2

                  Consolidated Statements of Cash Flows
                  for the Three Months Ended
                  March 31, 2001(unaudited) and March 31, 2000 (unaudited)...................................... 3

                  Notes to Consolidated Financial Statements (unaudited)........................................ 4

      Item 2.     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations................................................. 9

      Item 3.     Quantitative and Qualitative Disclosures About Market Risk................................... 15

PART II.          OTHER INFORMATION............................................................................ 16

      Item 1.      Legal Proceedings........................................................................... 16

      Item 6.      Exhibits and Reports on Form 8-K............................................................ 16

SIGNATURES..................................................................................................... 17

</TABLE>

<PAGE>


PART I.
                              FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

<TABLE>
<CAPTION>

                            ALPHANET SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
                                   (unaudited)
                                                                            March 31,                  December 31,
                                                                               2001                        2000
                                                                            ---------                  ------------
<S>                                                                       <C>                               <C>
ASSETS
Current assets:
        Cash and cash  equivalents  . . . . . . . . . . . .               $ 14,519                          $ 17,164
        Accounts receivable, less allowance for doubtful
        accounts of $1,189 at March 31, 2001 and $3,923 at
        December 31, 2000 . . . . . . . . . . . . . . . . .                 18,932                            16,340
        Inventories . . . . . . . . . . . . . . . . . . . .                    675                               858
        Income taxes. . . . . . . . . . . . . . . . . . . .                  1,576                             1,576
        Prepaid expenses and other current assets . . . . .                    580                               426
                                                                          --------                          --------
                 Total current assets . . . . . . . . . . .                 36,282                            36,364

Property and equipment, net . . . . . . . . . . . . . . . .                  2,920                             3,235

Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . .                  2,068                             2,134

Other assets. . . . . . . . . . . . . . . . . . . . . . . .                     87                                92
                                                                          ---------                         --------
                 Total assets . . . . . . . . . . . . . . .              $  41,357                         $  41,825
                                                                          =========                         ========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
        Current portion of capital lease obligations . . . .              $     25                         $      23
        Accounts payable . . . . . . . . . . . . . . . . . .                 2,809                             4,405
        Accrued expenses . . . . . . . . . . . . . . . . . .                 4,318                             3,540
        Accrued MTA contract liability. . .  . . . . . . . .                 2,561                             2,093
                                                                          ---------                         --------
                 Total current liabilities . . . . . . . . .                 9,713                            10,061

Long term liabilities:
        Capital lease obligations . . . . . . . . . . . . . .                    2                                 8
                                                                          ---------                         --------
         Total liabilities. . . . . . . . . . . . . . . . . .                9,715                            10,069
                                                                          ---------                         --------
Shareholders' equity:
        Preferred stock -- $0.01 par value; authorized
        3,000,000 shares, none issued . . . . . . . . . . . .                    -                                 -
        Common stock -- $0.01 par value; authorized
        15,000,000 shares, 6,555,550 and 6,536,209 shares
        issued and outstanding at March 31, 2001 and December
        31, 2000, respectively. . . . . . . . . . . . . . . .                   65                                65
        Additional paid-in capital. . . . . . . . . . . . . .               35,043                            35,013
        Accumulated Deficit . . . . . . . . . . . . . . . . .               (2,746)                           (2,602)
        Treasury stock - at cost; 150,600  shares at March
        31, 2001 and December 31, 2000, respectively. . . . .                 (720)                             (720)
                                                                          ---------                         --------
                 Total shareholders' equity . . . . . . . . .               31,642                            31,756
                                                                          ---------                         --------
                 Total liabilities and shareholders' equity .             $ 41,357                          $ 41,825
                                                                          =========                         ========

</TABLE>
           See accompanying notes to consolidated financial statements


<PAGE>


<TABLE>
<CAPTION>


                            ALPHANET SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

                                                                          Three Months ended
                                                                               March 31,
                                                                        2001               2000
                                                                        ----               ----
<S>                                                                  <C>               <C>
Net sales:
      Product sales. . . . . . . . . . . . . .                       $    7,699        $    12,209
      Services and support . . . . . . . . . .                           10,978             11,020
                                                                     ----------        -----------
                                                                         18,677             23,229
Cost of sales:
      Product sales . . . . . . . . . . . . . .                           6,809             11,338
      Services and support . . . . . . . . . .                            7,557              8,241
                                                                     ----------        -----------
                                                                         14,366             19,579
                                                                     ----------        -----------
Gross Profit:
         Product . . . . . . . . . . . . . . .                              890                871
         Service and support . . . . . . . . .                            3,421              2,779
                                                                     ----------        -----------
                                                                          4,311              3,650
Operating expenses:
      Selling, general & administrative . . .                             4,686              5,892
                                                                     ----------        -----------
Operating income (loss) . . . . . . . . . . .                              (375)            (2,242)

Other income (expense):
      Interest  income . . . . . . . . . .  . .                             225                259
      Nex-i.com loss. . . . . . . . . . . . . .                               -               (335)
      Other Income . . . . . . . . . . . . . .                                6                  6
                                                                     ----------        -----------
                                                                            231                (70)
                                                                     ----------        -----------
Income (loss) before income taxes. . . . . . .                             (144)            (2,312)
Provision (benefit) for income taxes . . . . .                                -               (959)
                                                                     ----------        -----------
Net income (loss). . . . . . . . . . . . . . .                       $     (144)       $    (1,353)
                                                                     ==========        ===========
Basic and diluted net income (loss) per share.                       $    (0.02)       $     (0.21)
                                                                     ==========        ===========
Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . .                           6,398              6,299
                                                                     ==========        ===========
Weighted average number of common and common
equivalent shares outstanding. . . . . . .                                6,398              6,299
                                                                     ==========        ===========

</TABLE>

          See accompanying notes to consolidated financial statements.

<PAGE>

<TABLE>
<CAPTION>

                            ALPHANET SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                   (unaudited)
                                                                                            Three Months ended
                                                                                                 March 31,

                                                                                           2001              2000
                                                                                           ----              ----
<S>                                                                                      <C>               <C>
Cash flows from operating activities:
    Net income (loss) . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . .       $  (144)          $ (1,353)
    Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
          Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .          499                632
          Provision for accounts receivable. . . . . . . . . . . . . . . . . . . .            83                  -
          Nex-i.com loss recognition. . . . . . . . . . . . . . . . . . . . . . . .            -                335
          Deferred income taxes. . . . . . . .. . . . . . . . . . . . . . . . . . .            -               (959)
          Increase (decrease) from changes in:
               Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . .       (2,292)             9,724
               Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . .           183             (1,671)
               Prepaid expenses and other current assets . . . . . . . . . . . . .          (154)              (178)
               Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6                  5
               Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . .       (1,596)             1,131
               Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . .          778                985
               Accrued MTA contract liability. . . . . . . . . . . . . . . . . . .           467             (1,102)
                                                                                         -------           --------
          Net cash (used in) provided by operating activities . . . . . . . . . . .       (2,170)             7,549

Cash flows from investing activities:
    Loan to Eureka Broadband. . . . . . . . . . . . . . . . . . . . . . . . . . . .         (382)                 -
    Property and equipment expenditures . . . . . . . . . . . . . . . . . . . . . .         (119)              (558)
    Investment in nex-i.com . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -             (1,800)
                                                                                         -------           --------
    Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . .         (501)            (2,358)

Cash flows from financing activities
    Employee stock purchases . . . . . . . . . . . . . . . . . . . . . . . . . . .            30                183
    Repayment (of capital lease) obligations. . . . . . . . . . . . . . . . . . . .           (4)                (5)
                                                                                         -------           --------
         Net cash provided by financing activities. . . . . . . . . . . . . . . . .           26                178
                                                                                         -------           --------
Net (decrease) increase in cash and cash equivalents. . . . . . . . . . . . . . . .       (2,645)             5,369
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . .      17,164             16,485
                                                                                         -------           --------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . . . . .      $14,519           $ 21,854
                                                                                         ========          ========

</TABLE>

          See accompanying notes to consolidated financial statements.

<PAGE>


                       ALPHANET SOLUTIONS, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Unaudited)


Note 1 - Description of the Business and Basis of Presentation:

         AlphaNet Solutions,  Inc. (the "Company") is an information  technology
professional   services  firm   specializing  in  network   design,   operation,
management, and security. The Company provides services in information security,
network  implementation,   professional  development,  project  management,  and
Internet-related   matters.  The  Company  is  focused  on  offering  integrated
technology  solutions to assist its clients in their migration from  distributed
desktop to web-based computing.

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
periods. The foregoing financial information reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of the Company's
financial position, results of operations and cash flows as of the dates and for
the periods  presented.  Certain  information and footnote  disclosure  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  have  been  condensed  or  omitted.  These  consolidated
financial  statements  should be read in conjunction with the Company's  audited
financial  statements for the year ended December 31, 2000,  which were included
as part of the  Company's  Annual  Report  on  Form  10-K,  as  filed  with  the
Securities  and  Exchange  Commission.  Certain  prior  year  amounts  have been
reclassified to conform with current year presentation.

         Results  for the  interim  periods are not  necessarily  indicative  of
results that may be expected for the entire year.


<PAGE>


Note 2 - Net Income Per Share:

<TABLE>
<CAPTION>

                  COMPUTATION OF EARNINGS PER SHARE
               (in thousands, except per share amounts)
                             (unaudited)                                       Three Months
                                                                                  ended
                                                                                 March 31,
                                                                             2001           2000
                                                                             ----           ----
<S>                                                                        <C>           <C>
Net income (loss). . . . . . . . . . . . . . . . . . . .                   $ (144)       $ (1,353)
                                                                           =======       =========
Basic:

  Weighted average number of shares outstanding. . . . .                    6,398           6,299
                                                                           =======       =========
   Net income (loss) per share.  . . . . . . . . . . . .                   $(0.02)       $  (0.21)
                                                                           =======       =========
Diluted:
   Weighted average number of shares outstanding . . . .                    6,398           6,299
   Dilutive effects of stock options . . . . . . . . . .                        -               -
                                                                           -------       ---------
   Weighted average number of common and common
   Equivalent shares outstanding                                            6,398           6,299
                                                                           =======       =========
   Net income (loss) per share . . . . . . . . . . . . .                   $(0.02)       $  (0.21)
                                                                           =======       =========

</TABLE>

<PAGE>


Note 3 - Investment in nex-i.com:

                  In January 2000, the Company invested $1.8 million in exchange
for 3,101,000 shares of Series A Convertible  Participating Preferred Stock (the
"Series  A  Financing")   in  a  private   internet   start-up--nex-i.com   Inc.
("nex-i.com").  The investment represented approximately 30% of nex-i.com equity
on an "as  converted"  basis.  The Company  recorded  its share of losses to the
extent of its investment  based upon its preferred  stock funding  interest.  On
July  27,  2000,  nex-i.com  received  $12,100,000  in a  Series  B  Convertible
Participating Preferred Stock financing (the "Series B Financing"), in which the
Company did not  participate.  Following  the Series B Financing,  the Company's
investment in nex-i.com represented  approximately 15% of nex-i.com equity on an
"as  converted"  basis.  In  connection  with  the  Series B  Financing,  and in
consideration  of the  Company's  release of nex-i.com  from certain  commercial
commitments  to the  Company  made at the time of the  Series A  Financing,  the
Company  received  100,000  warrants to purchase  shares of  nex-i.com  Series B
Convertible  Participating  Preferred  Stock at an exercise  price  ranging from
$1.50 to $1.85 per share. In February 2001, a wholly-owned  subsidiary of Eureka
Broadband Corporation,  a Delaware corporation ("Eureka"),  merged with and into
nex-i.com,  in connection with which merger the Company received several classes
of preferred stock in Eureka in exchange for the Company's  Series A Convertible
Participating Preferred Stock in nex-i.com.  Coincident to and as a condition of
the merger,  the Company was required to lend $382,098 to Eureka in exchange for
a convertible  promissory  note.  The note bears  interest at the rate of 8% per
annum,  which may be paid by Eureka  in cash on March  31,  2001 (the  "Maturity
Date"),  or may be  converted  into  shares  of  Eureka  preferred  stock on the
Maturity  Date,  at the  discretion  of  the  holders  of  51% of the  aggregate
outstanding  principal of all similar notes.  The Maturity Date was subsequently
extended to May 31,  2001.  The Company also  committed to invest an  additional
$382,098  in Eureka,  if certain  conditions  are met. In  consideration  of the
Company's  investment  in  Eureka,  Eureka  committed  to  purchase a minimum of
$145,621 of the Company's  network  monitoring,  cabling,  field engineering and
other  services  during the first  twelve  months  following  the closing of the
merger and a minimum  of  $182,100  of such  services  during the second  twelve
months following the closing. Eureka also committed to use good faith efforts to
ultimately  purchase a minimum of $500,000 of the Company's  services during the
twenty-four month period following the closing.

         The Company's  interests in Eureka are subject to two agreements  among
Eureka and its  shareholders.  The rights and  restrictions set forth in the two
agreements  are not  deemed by the  Company  to be  material.  The  restrictions
include a limitation on transfer of the Company's  equity  interest in Eureka in
certain  circumstances  and the  requirement to sell the equity  interest when a
transfer  is  approved  by a vote of the  interest  holders.  In  addition,  the
Company,  upon the agreement of a substantial  amount of other interest holders,
has the right to demand that the Company's  equity interest be registered  under
the Securities Act of 1933, and the right,  without other interest  holders,  to
have the Company's equity interest included in certain other registrations under
such Act.



Note 4 - Recently Issued Accounting Standards:

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting   Bulletin   ("SAB")  No.  101  "Revenue   Recognition  in  Financial
Statements."  This SAB  summarizes  certain of the SEC staff's views in applying
generally  accepted  accounting  principles to revenue  recognition in financial
statements.  Adoption  of SAB No.  101 did not  have a  material  effect  on the
Company's results of operations.



Note 5 -MTA Contract:

         In December 1997, the Company  entered into a four-year,  $20.4 million
contract  (the  "MTA  Contract")  with New York City  Transit,  an agency of the
Metropolitan  Transportation  Authority  of the State of New York (the "MTA") to
furnish  and  install  local and  wide-area  computer  network  components.  The
aggregate amount of this contract was  subsequently  increased to $20.6 million.
In the event of  default,  in addition  to all other  remedies  at law,  the MTA
reserves the right to terminate the services of the Company and complete the MTA
Contract  itself at the Company's  cost. In the event of unexcused  delay by the
Company,  the Company may be obligated to pay, as liquidated damages, the sum of
$100 to $200 per day, per site.  In  addition,  the MTA Contract is a fixed unit
price  contract,  and the  quantities  are  approximate,  for  which the MTA has
expressly  reserved the right,  for each item, to direct the amount of equipment
and related installation be increased, decreased, or omitted entirely on 30 days
notice. The MTA has the right to suspend the work on 10 days notice for up to 90
days and/or terminate the contract,  at any time, on notice, paying only for the
work performed to the date of  termination.  Historically,  the project has been
subject to the prevailing wage rate and  classification  for  telecommunications
workers, as determined by the New York City Comptroller's office, over which the
Company has no control, and which is generally adjusted in June of each year and
may be so adjusted in the future.

         The Company has  performed  services and  supplied  products to the MTA
since the inception of the MTA Contract. The work performed to date at MTA sites
has required  greater  than the  originally  estimated  labor and other costs to
complete.  In May 1999,  the Company  submitted a formal  request to the MTA for
equitable  adjustment in the amount of approximately $1.5 million and for a time
extension.  This request was supplemented  with a further  submission in October
1999.  In January  2000,  the Project  Manager for the MTA  Contract  denied the
Company's request,  thereby triggering the Company's right under the contract to
appeal the Project Manager's denial to the MTA's Dispute  Resolution Office (the
"DRO").  The Company filed a Notice of Appeal with the DRO in February 2000, and
pursuant  to  the  DRO's  request,   filed  further   written   submissions  and
participated in an arbitral session with the DRO subsequent thereto. In November
2000, the DRO rendered a written decision denying in full the Company's  Request
for Equitable Adjustment and Time Extension. In March 2001, the Company appealed
the DRO's  denial of the  Company's  Request to the New York  Supreme  Court.  A
return  date of May 9, 2001,  has been set for the  proceeding.  There can be no
assurance  the Company will be  successful,  either in whole or in part,  in its
efforts to obtain the adjustment or the requested extension.

         On July 19, 2000, the MTA advised the Company of a determination by the
Bureau  of  Labor  Law  (hereinafter,   the  "Bureau")  of  the  New  York  City
Comptroller's  Office,  communicated  to the MTA by letter from the Bureau dated
June 22, 2000,  that, as of July 1, 2000, the labor  classification  for all low
voltage  cabling  carrying  voice,  data,  video or any  combination  thereof is
electrician.  The Bureau's  determination  is based on a New York State  Supreme
Court Appellate  Division decision dated May 18, 2000. The workers currently and
historically used by the Company to perform cabling work have been classified as
telecommunications  workers.  The  Company  believes  it is  probable  that  the
Bureau's  determination will apply to the Company's cabling activities under the
contract,    thereby   likely    requiring   the    reclassification    of   its
telecommunications  workers as electricians  retroactive to July 1, 2000.  Since
the  prevailing  wage for  electricians  is  substantially  higher than that for
telecommunications  workers,  the Company expects to incur materially  increased
labor costs as a result of the Bureau's determination.  On October 16, 2000, the
MTA  Project  Manager  denied  the  Company's  request  for a  change  order  to
compensate the Company for the increased costs it expects to incur in connection
with the  reclassification  of  certain  of its  telecommunications  workers  as
electricians.  On January 19, 2001, the Company initiated a "dispute" within the
meaning of the  applicable  federal  regulations  governing  the MTA Contract by
filing a complaint with the United States Department of Labor. In its complaint,
the Company requests that the Department of Labor  adjudicate this dispute,  and
either  issue a  determination  affirming  that  the  prevailing  wage  rate for
telecommunications   workers,  as  originally  specified  by  the  MTA,  is  the
applicable rate for this project, or directing the MTA to compensate the Company
for the  change  in wage  classification  made  during  the  performance  of the
contract in  violation of federal  regulations.  By letter dated March 12, 2001,
the Department of Labor advised the Company that, without knowing which, if any,
federal wage decision was included in the MTA  Contract,  it is unable to make a
determination that any violation of federal labor law has occurred.  The Company
is currently seeking  clarification of the Department's  letter. There can be no
assurance  the Company will be  successful,  either in whole or in part,  in its
efforts with respect to the prevailing wage rate.

         Due to the  determination by the Bureau  communicated to the Company on
July 19, 2000,  as well as lower than  anticipated  gross  margins on networking
activities and higher than expected costs of completion, the Company revised its
estimated costs for the project during the 2000 second quarter.  As a result, in
the second  quarter of 2000, the Company took a charge of $4.4 million for costs
projected in excess of the contract value.  This charge represents the Company's
current estimated loss on the MTA project.  As of March 31, 2001,  approximately
65% of the value of the contract was completed.



Note 6 -Income Taxes:

Set forth below is a summary of the Company's  tax  provision  (benefit) for the
three months ended March 31, 2001.

                                                            Three Months Ended
                                                              March 31, 2001
                                                              --------------

Federal income tax benefit at statutory rate (34%)           ($ 49,000)

State income tax benefit net of Federal effect                 (10,000)
                                                             ----------
Income tax benefit                                             (59,000)
Valuation allowance                                             59,000
                                                             ---------
                                                              $      -
                                                             =========


For the three  months  ended March 31,  2001,  the Company has  recognized a tax
benefit  of  $59,000,  offset  by a tax  valuation  allowance  equal  to the tax
benefit.


<PAGE>


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


General

         AlphaNet Solutions,  Inc. (the "Company") is an information  technology
("IT")  professional  services firm  specializing in network design,  operation,
management,  and security.  Through its Enterprise Network Management  Division,
the Company also offers remote  network  management,  call center  support,  and
managed security  services.  The Company's  customers are primarily Fortune 1000
and other large and mid-sized companies located in the New  York-to-Philadelphia
corridor.  The  Company  was formed in 1984.  The Company is focused on offering
integrated  technology  solutions to assist its clients in their  migration from
distributed desktop to web-based computing.

         The  Company's  results for the first  quarter of 2001 include  certain
items that affect  comparability  to prior periods.  The Company  quantifies the
impact of these  items in order to explain its  results on a  comparable  basis.
Such items are collectively  referred to as "special  charges."  Special charges
recorded  in  the  2001  first  quarter  consisted  of  a  $174,000  charge  for
compensation  and related  employee  costs and  $59,000 of income tax  valuation
allowances.

Results of Operations

Three Months Ended March 31, 2001 Compared To Three Months Ended March 31, 2000

         The Company's  results of  operations  for the three months ended March
31, 2001 showed  significant  improvement  compared to its results of operations
for the three  months ended March 31,  2000.  During the first  quarter of 2001,
excluding  special  charges,  the Company  reported  net income of  $18,000,  or
breakeven  on a per share  basis,  as  compared  to a net loss of  approximately
$1,000,000,  or $0.16 per share,  in the first  quarter of 2000.  The  Company's
gross profit margin was 23.1% in the first quarter of 2001, as compared to 15.7%
in the first  quarter of 2000.  Selling,  general and  administrative  expenses,
excluding  special  charges,  were $4.6 million in the first quarter of 2001, as
compared to $5.6  million in the first  quarter of 2000,  a reduction  of 17.8%.
These  improvements in the Company's  operating  performance are attributable to
cost  reductions,  improvements  in service  delivery and a shift to  higher-end
consulting services commanding higher billing rates and profit margins.

         Net Sales.  Net sales  decreased by $4.5 million,  to $18.7 million for
the first quarter of 2001 from $23.2 million for the first quarter of 2000.  The
decline of $4.5  million  was solely due to a  continued  planned  reduction  in
product  sales.  The Company is  continuing  to pursue its  strategy of securing
high- margin consulting engagements and related revenues.

         Gross  Profit.  The Company's  gross margin  improved from 15.7% in the
first  quarter  of 2000 to 23.1% in the  first  quarter  of  2001.  The  Company
recorded $46,000 of special charges reflecting  severance costs during the first
quarter of 2001. The increase in gross margin resulted from  improvement in both
service and product margins. The Company currently offers technology products as
a  convenience  to its clients and is  therefore  more  selective  in  accepting
technology product orders than was previously the case. Consequently, the amount
of sales and  related  margin  associated  with  technology  product  sales have
declined;  however,  the  margins  on the  remaining  technology  product  sales
improved from 7.1% in the first quarter of 2000 to 11.6% in the first quarter of
2001.  Competitive  pricing  pressures  continue  to impact  technology  product
margins,  and as such  technology  product  margins  may vary  from  quarter  to
quarter.  Service margins have continued to improve  and  increased from 25.2% a
year  ago to  31.2%  in the  first  quarter  of  2001.  This  marks  the  fourth
consecutive quarter in which service margins have increased. The Company intends
to continue to focus its efforts on  increasing  the  efficiency  of its service
delivery force, as well as expanding its higher-end consulting offerings.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses before special charges in each period were $4.6 million
in the first  quarter of 2001,  as compared to $5.6 million in the first quarter
of 2000. Special charges of $128,000 reflecting severance costs were recorded in
2001,  and  severance and other special costs were $275,000 in the first quarter
of 2000.

         Interest income,  net.  Interest  income,  net totaled $225,000 for the
first quarter of 2001, down slightly from 2000.

         nex-i.com.  On January 14, 2000,  the Company  invested $1.8 million in
nex-i.com in exchange for  3,101,000  shares of nex-i.com  Series A  Convertible
Participating  Preferred  Stock. The Company recorded its share of losses to the
extent of its investment  based upon its preferred stock funding  interest.  The
Company  recorded a first  quarter  2000  charge of  $335,000  relating  to this
investment. The entire cost of the Company's investment was recognized as a loss
in 2000.

         Income  taxes.  During  the first  three  months of 2001,  the  Company
recorded a $59,000 income tax benefit  before an income tax valuation  allowance
provision.  The Company recorded a tax valuation  allowance totaling $59,000, in
the first  quarter of 2001.  In  determining  the  Company's tax expense for the
quarter,  an effective tax rate of 41.0% was  utilized.  In the first quarter of
2000 the Company recognized a tax benefit of $959,000.

Risks and Uncertainties

         The Company is authorized by many leading manufacturers of IT products,
such as  3Com,  Cisco  Systems,  Compaq,  Hewlett-Packard,  IBM,  Intel,  Lucent
Technologies,  Microsoft,  NEC, Nortel Networks,  Novell and Sun Microsystems to
resell their  products  and provide  related  services.  Such  products  include
workstations,  servers,  networking  and  communications  equipment,  enterprise
computing  products,  and application  software.  Through its established vendor
alliances  with major  aggregators  of computer  hardware and  software,  Ingram
Micro,  Inc.  ("Ingram") and Tech Data  Corporation  ("Tech Data"),  the Company
provides its customers with competitive pricing and such value-added services as
electronic product ordering,  product  configuration,  testing,  warehousing and
delivery.  The Company initiated its relationships  with Ingram and Tech Data in
1994.  In  general,  the Company  orders IT  products,  including  workstations,
servers, enterprise computing products, networking and communications equipment,
and application  software from such aggregators on an as-needed  basis,  thereby
reducing the Company's need to carry large inventories.  During the three months
ended March 31, 2001, the Company acquired approximately 29.1%, and 12.1% of its
products for resale from Ingram and Tech Data,  respectively,  compared to 48.9%
and 21.3%, respectively, during the three months ended March 31, 2000.

         The Company may receive  manufacturer  rebates resulting from equipment
sales. In addition,  the Company  receives volume discounts and other incentives
from  certain of its  suppliers.  Except  for  products  in transit or  products
awaiting  configuration at a Company  facility,  the Company  generally does not
maintain large inventory  balances.  Both of the Company's  primary vendors have
instituted changes in their price protection and inventory  management  programs
as a direct result of changes in such policies by  manufacturers.  Specifically,
they  (i)  limited  price  protection  to  that  provided  by the  manufacturer,
generally less than 30 days; and (ii)  restricted  product  returns,  other than
defective  returns,  to a percentage  (the  percentage  varies  depending on the
vendor  and when the  return  is made) of  product  purchased,  during a defined
period, at the lower of the invoiced price or the current price,  subject to the
specific  manufacturer's   requirements  and  restrictions.   There  can  be  no
assurances  that any such  rebates,  discounts or  incentives  will  continue at
current  levels,  if  at  all.  Further  adverse  modification,  restriction  or
reduction in such programs could have a material adverse effect on the Company's
financial position, results of operations, and cash flows.

         Except for the MTA Contract  entered into in December 1997 (see below),
there are no ongoing written  commitments by customers to purchase products from
the  Company,  and all product  sales are made on a  purchase-order  basis.  The
Company's  increased  selectivity in selling product  resulted in an increase in
gross profit margin  attributable  to product sales in the first quarter of 2001
as compared to the first quarter of 2000.

         The Company offers enterprise network management, information security,
Internet-related,   eMobile  Solutions,  application  development,  professional
development,  help desk, and workstation support services.  Services and support
revenue is  recognized  as such  services are  performed.  Most of the Company's
services are billed on a  time-and-materials  basis. The Company's  professional
development  and services are fee-based on a per-course  basis.  Generally,  the
Company's  service  arrangements  with its  customers  may be terminated by such
customers with limited advance notice and without significant  penalty. The most
significant cost relating to the services component of the Company's business is
personnel costs which consist of salaries,  benefits,  payroll-related  expenses
and training and  recruiting  costs.  Thus,  the  financial  performance  of the
Company's  service  business is based primarily upon billing  margins  (billable
hourly  rates less the costs to the  Company  of such  service  personnel  on an
hourly basis) and utilization rates (billable hours divided by paid hours).  The
future success of the services  component of the Company's  business will depend
in large part upon its ability to maintain high utilization  rates at profitable
billing margins.

         The  Company  believes  that its  ability to  provide a broad  range of
technical services and its long-term relationships with large clients, positions
the Company to grow the services component of its business. As such, the Company
anticipates  that an  increasing  percentage  of its gross profits in the future
will be derived from the services and support component of its business.  During
the three-month  period ended March 31, 2001,  services revenue,  before special
charges,  produced  approximately  79.4% of the  Company's  total  gross  profit
compared to 76.1% during the same period in 2000. However,  the Company believes
that product sales will  continue to generate a portion of the  Company's  gross
profit for the foreseeable future.

         The Company's net sales, gross profit,  operating income and net income
have varied  substantially  from quarter to quarter and are expected to continue
to do so in the future. Many factors, some of which are not within the Company's
control,  have  contributed and may in the future  contribute to fluctuations in
operating results.  These factors include:  the transition from product reseller
to IT  professional  services  firm and all  expected and  unexpected  costs and
events related to such  transition;  intense  competition  from other IT service
providers;  the Company's  dependence upon a limited number of key clients for a
significant  portion of its  business;  the  short-term  nature of the Company's
customers' commitments;  patterns of capital spending by customers;  the timing,
size, and mix of product and service orders and deliveries;  the timing and size
of new projects;  pricing  changes in response to various  competitive  factors;
market factors  affecting the  availability  of qualified  technical  personnel;
timing and customer acceptance of new product and service offerings;  changes in
trends  affecting  outsourcing of IT services;  disruption in sources of supply;
changes in product,  personnel,  and other operating costs;  deficiencies in the
design and operation of the Company's  internal control  structure as identified
by the  Company  and its  independent  accountants;  and  industry  and  general
economic  conditions.  Operating results have been and may in the future also be
affected by the cost,  timing and other effects of  acquisitions,  including the
mix  of  revenues   of   acquired   companies.   Past   operating   results  and
period-to-period  comparisons  are  not  necessarily  an  indication  of  future
operating performance.

         The  Company's  operating  results  have been and will  continue  to be
impacted by changes in technical  personnel billing and utilization  rates. Many
of the Company's costs,  particularly costs associated with services and support
revenue,  such as  administrative  support  personnel and facilities  costs, are
fixed costs.  The Company's  expense levels are based in part on expectations of
future revenues.  As the Company's business shifts from product-related sales to
services,  expense levels may exceed total gross profits as the Company  invests
in the expansion of its service offerings.  If the Company  successfully expands
its service  offerings,  periods of variability  in utilization  may continue to
occur.  The Company  may incur  greater  technical  training  costs  during such
periods.

         In December 1997, the Company  entered into a four-year,  $20.4 million
contract  (the  "MTA  Contract")  with New York City  Transit,  an agency of the
Metropolitan  Transportation  Authority  of the State of New York (the "MTA") to
furnish and install local and wide-area  computer network  components  including
network and  telecommunications  hardware,  software and cabling  throughout the
MTA's over 200 locations. The aggregate amount of this contract was subsequently
increased to $20.6 million.  The Company is the prime contractor on this project
and  is  responsible   for  project   management,   systems   procurement,   and
installation.  The work is  grouped  in  contiguous  locations  and  payment  is
predicated upon achieving specific milestone events. In the event of default, in
addition to all other  remedies at law,  the MTA reserves the right to terminate
the  services  of the  Company  and  complete  the MTA  Contract  itself  at the
Company's cost. In the event of unexcused delay by the Company,  the Company may
be obligated to pay, as liquidated damages, the sum of $100 to $200 per day, per
site. While the Company  believes it is currently  performing in accordance with
the contract terms, there can be no assurance that any such events of default or
unexcused  delays will not occur. In addition,  the MTA Contract is a fixed unit
price  contract,  and the  quantities  are  approximate,  for  which the MTA has
expressly  reserved the right,  for each item, to direct the amount of equipment
and related installation be increased, decreased, or omitted entirely on 30 days
notice. The MTA has the right to suspend the work on 10 days notice for up to 90
days and/or terminate the contract,  at any time, on notice, paying only for the
work performed to the date of  termination.  Historically,  the project has been
subject to the prevailing wage rate and  classification  for  telecommunications
workers, as determined by the New York City Comptroller's Office, over which the
Company has no control, and which is generally adjusted in June of each year and
may be so adjusted in the future.

         On July 19, 2000, the MTA advised the Company of a determination by the
Bureau  of  Labor  Law  (hereinafter,   the  "Bureau")  of  the  New  York  City
Comptroller's  Office,  communicated  to the MTA by letter from the Bureau dated
June 22, 2000,  that, as of July 1, 2000, the labor  classification  for all low
voltage  cabling  carrying  voice,  data,  video or any  combination  thereof is
electrician.  The Bureau's  determination  is based on a New York State  Supreme
Court Appellate  Division decision dated May 18, 2000. The workers currently and
historically used by the Company to perform cabling work have been classified as
telecommunications  workers.  The Company  believes it is probable  the Bureau's
determination will apply to the Company's cabling activities under the contract,
thereby likely requiring the reclassification of its telecommunications  workers
retroactive  to July 1, 2000.  Since the  prevailing  wage for  electricians  is
substantially  higher  than that for  telecommunications  workers,  the  Company
expects to incur  materially  increased  labor costs as a result of the Bureau's
determination. On October 16, 2000, the MTA Project Manager denied the Company's
request for a change order to compensate the Company for the increased  costs it
expects  to incur in  connection  with the  reclassification  of  certain of its
telecommunications  workers as  electricians.  On January 19, 2001,  the Company
initiated a "dispute" within the meaning of the applicable  federal  regulations
governing  the MTA  Contract  by  filing  a  complaint  with the  United  States
Department of Labor. In its complaint,  the Company requests that the Department
of Labor  adjudicate this dispute,  and either issue a  determination  affirming
that the  prevailing  wage rate for  telecommunications  workers,  as originally
specified by the MTA, is the applicable rate for this project,  or directing the
MTA to compensate the Company for the change in wage  classification made during
the performance of the contract in violation of federal  regulations.  By letter
dated March 12, 2001, the Department of Labor advised the Company that,  without
knowing which,  if any,  federal wage decision was included in the MTA Contract,
it is unable to make a determination that any violation of federal labor law has
occurred.  The Company is currently  seeking  clarification  of the Department's
letter.  There can be no  assurance  the Company will be  successful,  either in
whole or in part, in its efforts with respect to the prevailing wage rate.

         The Company has  performed  services and  supplied  products to the MTA
since the inception of the MTA Contract. The work performed to date at MTA sites
has  required  greater  than  originally  estimated  labor  and  other  costs to
complete.  In May 1999,  the Company  submitted a formal  request to the MTA for
equitable  adjustment in the amount of approximately $1.5 million and for a time
extension.  This request was supplemented  with a further  submission in October
1999.  In January  2000,  the Project  Manager for the MTA  Contract  denied the
Company's request,  thereby triggering the Company's right under the contract to
appeal the Project Manager's denial to the MTA's Dispute  Resolution Office (the
"DRO").  The Company  filed its Notice of Appeal with the DRO in February  2000,
and  pursuant  to the DRO's  request,  filed  further  written  submissions  and
participated in an arbitral session with the DRO subsequent thereto. In November
2000, the DRO rendered a written decision denying in full the Company's  Request
for Equitable Adjustment and Time Extension. In March 2001, the Company appealed
the DRO's  denial of the  Company's  Request to the New York  Supreme  Court.  A
return  date of May 9,  2001 has been set for the  proceeding.  There  can be no
assurance  the Company will be  successful,  either in whole or in part,  in its
efforts to obtain the adjustment for the extension.

         Historically,  the  Company  had  estimated  that  project  costs would
approximate project revenues and, accordingly, had recognized no gross profit on
the contract. Due to the determination by the Bureau communicated to the Company
on July 19, 2000, as well as lower than anticipated  gross margins on networking
activities and higher than expected costs of completion, the Company revised its
estimated costs for the project during the 2000 second quarter.  As a result, in
the second  quarter of 2000, the Company took a charge of $4.4 million for costs
projected in excess of the contract value.  This charge represents the Company's
current estimated loss on the MTA project.  As of March 31, 2001,  approximately
65% of the value of the contract was completed.

Forward-Looking Statements

         Certain  statements are included in this Quarterly  Report on Form 10-Q
which are not  historical and are  "forward-looking,"  within the meaning of The
Private  Securities  Litigation Reform Act of 1995 and may be identified by such
terms as "expect,"  "believe,"  "may,"  "will," and  "intend" or similar  terms.
These  forward-looking  statements may include,  without limitation,  statements
regarding the  anticipated  growth in the IT markets,  the  continuation  of the
trends favoring outsourcing of management  information systems ("MIS") functions
by large and mid-sized  companies,  the anticipated growth and higher margins in
the services and support component of the Company's business,  the timing of the
development and  implementation  of the Company's new service  offerings and the
utilization  of such services by the Company's  customers,  and trends in future
operating  performance.   Such  forward-looking  statements  include  risks  and
uncertainties,  including,  but not  limited  to: (i) the  repositioning  of the
Company as an IT  professional  services  firm and all expected  and  unexpected
costs and events related to such  repositioning,  including,  among other things
(a) the substantial  variability of the Company's  quarterly  operating  results
caused by a variety  of  factors,  some of which are not  within  the  Company's
control,  (b)  intense  competition  from  other IT service  providers,  (c) the
short-term  nature of the  Company's  customers'  commitments,  (d)  patterns of
capital  spending by the Company's  customers,  (e) the timing,  size and mix of
product  and  service  orders  and  deliveries,  (f) the  timing and size of new
projects,  (g) pricing changes in response to various competitive  factors,  (h)
market factors affecting the availability of qualified technical personnel,  (i)
the timing and customer  acceptance  of new product and service  offerings,  (j)
changes in trends  affecting  outsourcing  of IT  services,  (k)  disruption  in
sources of supply, (l) changes in product,  personnel and other operating costs,
and (m)  industry  and general  economic  conditions;  (ii) changes in technical
personnel billing and utilization  rates;  (iii) the intense  competition in the
markets for the Company's  products and  services;  (iv) the ability to develop,
market,  provide,  and achieve market acceptance of new service offerings to new
and existing customers;  (v) the Company's ability to attract,  hire, train, and
retain qualified technical personnel; (vi) the Company's substantial reliance on
a  concentrated  number  of  key  customers;  (vii)  uncertainties  relating  to
potential  acquisitions,  if any,  made by the  Company,  such as the  Company's
ability  to  integrate  acquired  operations  and to retain  key  customers  and
personnel  of the  acquired  business;  (viii)  the  Company's  reliance  on the
continued services of key executive officers and salespersons; and (ix) material
risks  and  uncertainties  associated  with the MTA  Contract.  These  risks and
uncertainties  could cause  actual  results to differ  materially  from  results
expressed or implied by  forward-looking  statements  contained in the document.
These forward-looking statements speak only as of the date of this document.

Recently Issued Accounting Standards

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting   Bulletin   ("SAB")  No.  101  "Revenue   Recognition  in  Financial
Statements."  This SAB  summarizes  certain of the SEC staff's views in applying
generally  accepted  accounting  principles to revenue  recognition in financial
statements.  Adoption  of SAB No.  101 did not  have a  material  effect  on the
Company's results of operations.

Liquidity and Capital Resources

         Cash and cash  equivalents  at  March  31,  2001  were  $14.5  million,
compared  to $17.2  million at  December  31,  2000,  a decline of $2.7  million
primarily  attributable  to timing of cash  received in April from several major
clients.  Working  capital at March 31,  2001 was $26.6  million as  compared to
$26.3 million at December 31, 2000, representing an increase of $0.3 million.

         Since its inception,  the Company has funded its  operations  primarily
from cash generated by operations, as well as with funds from borrowings under a
credit facility and the net proceeds from the Company's  public  offerings.  The
Company's  credit  agreement  with the First  Union  National  Bank  expired  on
December 31, 2000 and was not renewed.

         Cash utilized by operating  activities  reflected primarily an increase
in Company accounts  receivable of approximately  $2.3 million and a decrease in
accounts payable of $1.6 million,  offset by the increase in accrued liabilities
of $0.8 million.  The Company's days sales  outstanding  in accounts  receivable
increased  from 65 days at  December  31,  2000 to 75 days at  March  31,  2001,
primarily  due to timing of cash  received  in April  2001  from  several  major
clients on amounts  outstanding at the end of the period. Cash used in investing
activities  included  the  Company's  capital  expenditures  for the 2001  first
quarter of  $119,000  primarily  for the  purchase  of  computer  equipment  and
software used by the Company and the Company's loan to Eureka of $382,098.

         Cash  utilized by financing  activities  included  $30,000 for employee
stock purchases, reduced by a $4,000 repayment of capital lease obligations.

         The  Company's  Employee  Stock  Purchase  Plan  was  approved  by  the
Company's  shareholders in May 1998.  During 1998, 80,888 shares of common stock
were sold to employees  under the plan for  approximately  $509,000,  an average
price of $6.29 per share. During 1999,  employees purchased an additional 49,691
shares under the plan for approximately  $177,000, an average price of $3.54 per
share.  During 2000,  33,548 shares of common stock were sold to employees under
the plan for  approximately  $117,  000,  an  average  price of $3.51 per share.
During the first three  months of 2001,  employees  purchased  19,341  shares of
stock for  approximately  $30,000,  at an average price of $1.51 per share.  The
Company has issued an  aggregate of 183,468  shares  since the  inception of the
Employee Stock  Purchase Plan at an average price of $4.54 per share,  receiving
total proceeds of approximately $832,000.

         The  Company  purchases  certain  inventory  and  equipment  through  a
financing arrangement with IBM Credit Corporation.  At March 31, 2001, there was
an outstanding  balance of approximately $1.2 million for IBM Credit Corporation
under  this  arrangement.  Obligations  under  this  financing  arrangement  are
collateralized by substantially all of the assets of the Company.

         The Company believes that its available  funds,  together with existing
and anticipated credit  facilities,  will be adequate to satisfy its current and
planned operations for at least the next 12 months.


Item 3.   Quantitative and Qualitative Disclosures About Market Risk.
---------------------------------------------------------------------

         Not applicable.

<PAGE>


                           PART II. OTHER INFORMATION


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

         On July  7,  2000,  Polo  Ralph  Lauren  Corporation  ("Polo")  filed a
counterclaim  against the Company in a lawsuit filed by the Company against Polo
on February 16, 2000 in the Superior Court of New Jersey,  Law Division  (Morris
County) for  collection of an overdue  receivable in the amount of $893,330.  In
its counterclaim, Polo alleges, among other things, that it sustained damages of
$4.7 million as a result of alleged  breach of contract,  breach of warranty and
negligence by the Company in "failing to maintain  accurate shipping records and
documentation." Discovery to date has been limited, and no evidence has yet been
proffered in support of the counterclaim. In October 2000, the Company secured a
commitment from its insurance  carrier,  subject to a reservation of rights,  to
defend  against  the  counterclaim.  The  Company  believes  it has  meritorious
defenses to the  counterclaim  and intends to vigorously  pursue recovery of all
amounts owing to the Company by Polo.

         In  connection  with  the  Company's  ongoing  disputes  with  the  MTA
concerning a contract  entered into with the MTA in December  1997,  the Company
filed  certain legal  proceedings  as discussed in Part I, Item 2 of this Report
(Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations) at pp.13-14.


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

(a)   Exhibit.

           None.

(b)   Reports on Form 8-K.

         No  reports on Form 8-K were filed  during the  quarter  for which this
report on Form 10-Q is filed.


<PAGE>


                                   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.


                           ALPHANET SOLUTIONS, INC.




DATE: May 9, 2001          By: STAN GANG                               _
                             --------------------------------------------
                               Stan Gang
                               Chairman and Chief Executive Officer
                               (Principal Executive Officer)



DATE:  May 9, 2001         By: WILLIAM S. MEDVE                   _
                               -------------------------------------
                               William S. Medve
                               Executive Vice President, Chief Financial Officer
                                and Treasurer
                               (Principal Financial and Accounting Officer)