UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   Form 10-QSB

--------------------------------------------------------------------------------


(Mark one)
    XX          QUARTERLY  REPORT  UNDER  SECTION  13 OR 15(d) OF THE SECURITIES
---------       EXCHANGE ACT OF 1934

                      For the quarterly period ended June 30, 2000

                TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE  ACT
---------       OF 1934

                      For the transition period from ____________ to ___________

--------------------------------------------------------------------------------


                         Commission File Number: 0-27006
                                                 -------

                           Million Dollar Saloon, Inc.
        (Exact name of small business issuer as specified in its charter)

           Nevada                                            13-3428657
----------------------------                        ----------------------------
  (State of incorporation)                            (IRS Employer ID Number)

                    6848 Greenville Avenue, Dallas, TX 75231
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (214) 691-6757
                                 --------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES X  NO
                                                             ---   ---

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: August 5, 2000: 5,731,778

Transitional Small Business Disclosure Format (check one):  YES     NO X
                                                                ---   ---


<PAGE>

                           Million Dollar Saloon, Inc.

                 Form 10-QSB for the Quarter ended June 30, 2000

                                Table of Contents

                                                                            Page
                                                                            ----
Part I - Financial Information

   Item 1 Financial Statements                                                3

   Item 2 Management's Discussion and Analysis or Plan of Operation          12


Part II - Other Information

   Item 1 Legal Proceedings                                                  14

   Item 2 Changes in Securities                                              14

   Item 3 Defaults Upon Senior Securities                                    15

   Item 4 Submission of Matters to a Vote of Security Holders                15

   Item 5 Other Information                                                  15

   Item 6 Exhibits and Reports on Form 8-K                                   15


Signatures                                                                   16



                                        2


<PAGE>


S. W. HATFIELD, CPA
certified public accountants

Member:    American Institute of Certified Public Accountants
               SEC Practice Section
               Information Technology Section
           Texas Society of Certified Public Accountants

Item 1 - Part 1 - Financial Statements

                           Accountant's Review Report
                           --------------------------

Board of Directors and Shareholders
Million Dollar Saloon, Inc.

We have reviewed the accompanying  consolidated balance sheets of Million Dollar
Saloon,  Inc. (a Nevada  corporation)  and  Subsidiaries as of June 30, 2000 and
1999  and  the   accompanying   consolidated   statements  of   operations   and
comprehensive  income for the six and three  months ended June 30, 2000 and 1999
and the consolidated  statements of cash flows for the six months ended June 30,
2000  and  1999.  These  consolidated   financial  statements  are  prepared  in
accordance  with  the  instructions  for Form  10-QSB,  as  issued  by the U. S.
Securities  and  Exchange  Commission,  and are the sole  responsibility  of the
Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression on an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying  consolidated financial statements for them to be in
conformity with generally accepted accounting principles.

                                                             S. W. HATFIELD, CPA
Dallas, Texas
August 11, 2000



P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com
                                        3


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                             June 30, 2000 and 1999

                                   (Unaudited)

                                     Assets
                                     ------
                                                             2000           1999
                                                         -----------    -----------
<S>                                                      <C>            <C>
Current Assets
   Cash on hand and in bank                              $   724,421    $   644,251
   Note receivable - current portion                            --           24,480
   Accounts receivable - other                                   900           --
   Prepaid income taxes receivable                              --           12,903
   Inventory                                                  24,948         17,375
   Prepaid expenses                                           82,841         65,872
                                                         -----------    -----------

      Total current assets                                   833,110        764,881
                                                         -----------    -----------


Property and Equipment - At Cost
   Buildings and related improvements                      1,987,514      1,987,514
   Furniture and equipment                                   856,566        805,087
   Vehicles                                                     --           52,728
                                                         -----------    -----------
                                                           2,844,080      2,845,328
   Less accumulated depreciation                          (1,670,833)    (1,614,881)
                                                         -----------    -----------
                                                           1,173,247      1,230,447
   Land                                                      741,488        741,488
                                                         -----------    -----------

      Net property and equipment                           1,914,735      1,971,935
                                                         -----------    -----------


Other Assets
   Note receivable - noncurrent portion                         --           67,850
   Organization costs, net of accumulated amortization
      of $72,123 and $57,137, respectively                     2,805         17,791
   Loan costs, net of accumulated amortization of
       $31,607 and $23,705 respectively                         --            7,902
   Other                                                       6,225          6,975
                                                         -----------    -----------

      Total other assets                                       9,030        100,518
                                                         -----------    -----------

Total Assets                                             $ 2,756,875    $ 2,837,334
                                                         ===========    ===========

</TABLE>

                                  - Continued -

The  financial  information  presented  herein has been  prepared by  management
without audit by independent  certified  public  accountants.  See  Accountant's
Review Report.  The  accompanying  notes are an integral part of these financial
statements.

                                                                               4


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries
                     Consolidated Balance Sheets - Continued
                             June 30, 2000 and 1999

                                   (Unaudited)

                      Liabilities and Shareholders' Equity
                      ------------------------------------
                                                              2000         1999
                                                           ----------   ----------
<S>                                                        <C>          <C>
Current Liabilities
   Current portion of long-term debt                       $     --     $  181,905
   Accounts payable - trade                                    16,484       23,510
   Accrued liabilities                                         23,997       43,362
   Dividends payable                                           57,318       57,318
   Federal income taxes payable                                41,843         --
   Tenant deposits                                              6,500        6,500
                                                           ----------   ----------

      Total current liabilities                               146,142      312,595
                                                           ----------   ----------


Long-term Liabilities
   Long-term debt, net of current maturities                     --         67,832
   Deferred tax liability                                     139,248      125,057
                                                           ----------   ----------

      Total liabilities                                       285,390      505,484
                                                           ----------   ----------


Commitments and Contingencies

Shareholders' Equity
   Preferred stock - $0.001 par value.  5,000,000 shares
      authorized.  None issued and outstanding                   --           --
   Common stock - $0.001 par value.  50,000,000 shares
      authorized.  5,731,778 and 5,731,778 issued
      and outstanding, respectively                             5,732        5,732
   Additional paid-in capital                                    --           --
   Retained earnings                                        2,465,753    2,326,118
                                                           ----------   ----------

      Total shareholders' equity                            2,471,485    2,331,850
                                                           ----------   ----------

Total Liabilities and Shareholders' Equity                 $2,756,875   $2,837,334
                                                           ==========   ==========

</TABLE>


The  financial  information  presented  herein has been  prepared by  management
without audit by independent  certified  public  accountants.  See  Accountant's
Review Report.  The  accompanying  notes are an integral part of these financial
statements.

                                                                               5


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries
           Consolidated Statements of Income and Comprehensive Income
                Six and Three months ended June 30, 2000 and 1999

                                                             (Unaudited)

                                       Six months     Six months    Three months   Three months
                                         ended          ended          ended          ended
                                     June 30, 2000  June 30, 1999  June 30, 2000  June 30, 1999
                                     -------------  -------------  -------------  -------------
<S>                                  <C>            <C>            <C>            <C>
Revenues
   Bar and restaurant sales           $ 1,976,413    $ 1,644,382    $   975,582    $   789,174
   Rental income                          340,550        340,436        174,525        170,525
                                      -----------    -----------    -----------    -----------
      Total revenues                    2,316,963      1,984,818      1,150,107        959,699
                                      -----------    -----------    -----------    -----------

Cost of Sales - Bar and
   Restaurant Operations                1,192,441      1,016,637        575,015        530,539
                                      -----------    -----------    -----------    -----------

Gross Profit                            1,124,522        968,181        575,092        429,160
                                      -----------    -----------    -----------    -----------

Operating Expenses
   General and administrative             761,023        672,906        392,957        339,966
   Interest                                 2,129         16,299           --            7,520
   Depreciation and amortization           55,936         57,632         28,759         28,815
                                      -----------    -----------    -----------    -----------
      Total operating expenses            819,088        746,837        421,716        376,301
                                      -----------    -----------    -----------    -----------

Income from Operations                    305,434        221,344        153,376         52,859

Other Income (Expenses)

   Interest and other miscellaneous        18,090         10,235          6,842          5,329
                                      -----------    -----------    -----------    -----------

Income before Income Taxes                323,524        231,579        160,218         58,188

Income tax (expense)
   Currently payable                     (100,000)       (78,750)       (49,425)       (20,750)
   Deferred                                  --             --             --             --
                                      -----------    -----------    -----------    -----------

Net Income                                223,524        152,829        110,793         37,438

Other comprehensive income                   --             --             --             --
                                      -----------    -----------    -----------    -----------

Comprehensive Income                  $   223,524    $   152,829    $   110,793    $    37,438
                                      ===========    ===========    ===========    ===========

</TABLE>

The  financial  information  presented  herein has been  prepared by  management
without audit by independent  certified  public  accountants.  See  Accountant's
Review Report.  The  accompanying  notes are an integral part of these financial
statements.

                                                                               6


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries
           Consolidated Statements of Income and Comprehensive Income
                Six and Three months ended June 30, 2000 and 1999

                                   (Unaudited)

                                 Six months    Six months   Three months  Three months
                                   ended         ended         ended         ended
                               June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
                               ------------- ------------- ------------- -------------
<S>                              <C>           <C>           <C>           <C>

Net Income                       $  223,524    $  152,829    $  110,793    $   37,438

Other comprehensive income             --            --            --            --
                                 ----------    ----------    ----------    ----------

Comprehensive Income             $  223,524    $  152,829    $  110,793    $   37,438
                                 ==========    ==========    ==========    ==========


Earnings per share of common
   stock outstanding computed
   on net income - basic and
   fully diluted                 $     0.04    $     0.03    $     0.02    $     0.01
                                 ==========    ==========    ==========    ==========

Weighted-average number
   of shares outstanding -
   basic and fully diluted        5,731,778     5,731,778     5,731,778     5,731,778
                                 ==========    ==========    ==========    ==========


</TABLE>

                (Remainder of this page left blank intentionally)







The  financial  information  presented  herein has been  prepared by  management
without audit by independent  certified  public  accountants.  See  Accountant's
Review Report.  The  accompanying  notes are an integral part of these financial
statements.

                                                                               7


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                     Six months ended June 30, 2000 and 1999

                                   (Unaudited)

                                                                       Six months   Six months
                                                                         ended        ended
                                                                        June 30,     June 30,
                                                                         2000         1999
                                                                       ---------    ---------
<S>                                                                    <C>          <C>
Cash Flows from Operating Activities
   Net income                                                          $ 223,524    $ 152,829
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Depreciation and amortization                                      55,936       57,632
       (Increase) decrease in
         Accounts receivable - trade and other                             8,848        6,671
         Federal income taxes receivable                                    --         78,750
         Inventory                                                         6,714        1,029
         Prepaid expenses                                                (82,841)      (9,412)
       Increase (decrease) in
         Accounts payable and other accrued liabilities                   20,023      (19,321)
         Income taxes payable                                             41,843         --
                                                                       ---------    ---------
Net cash provided by operating activities                                294,386      268,178
                                                                       ---------    ---------

Cash Flows from Investing Activities
   Principal collections on note receivable                               35,179       11,920
   Purchases of property and equipment                                   (18,402)      (6,714)
                                                                       ---------    ---------
Net cash used in investing activities                                     16,777        5,206
                                                                       ---------    ---------

Cash Flows from Financing Activities
   Principal payments on long-term notes payable                        (139,657)     (88,587)
   Funds advanced to affiliated and shareholders - net                      --           --
   Purchase of treasury stock                                               --           --
   Dividends paid                                                        (57,318)    (115,363)
                                                                       ---------    ---------
Net cash used in financing activities                                   (196,975)    (203,950)
                                                                       ---------    ---------

Increase in Cash and Cash Equivalents                                    114,188       69,434

Cash and cash equivalents at beginning of period                         610,233      574,817
                                                                       ---------    ---------

Cash and cash equivalents at end of period                             $ 724,421    $ 644,251
                                                                       =========    =========

Supplemental Disclosures of Interest and Income Taxes Paid
     Interest paid during the period                                   $   2,129    $  16,299
                                                                       =========    =========
     Income taxes paid                                                 $  37,818    $    --
                                                                       =========    =========

Supplemental Schedule of Non-Cash Investing and Financing Activities
     Declaration of second quarter dividend,
       payable in the third quarter at $-0-
       and $0.01 per share, respectively                               $    --      $  57,318
                                                                       =========    =========

</TABLE>

The  financial  information  presented  herein has been  prepared by  management
without audit by independent  certified  public  accountants.  See  Accountant's
Review Report.  The  accompanying  notes are an integral part of these financial
statements.

                                                                               8


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements


Note A - Background and Organization

Million Dollar Saloon,  Inc. (MDS) was incorporated  under the laws of the State
of Nevada on September 28, 1987. MDS is a holding company  providing  management
support to its operating  subsidiaries:  Furrh,  Inc., Tempo Tamers,  Inc., Don,
Inc. and Corporation Lex.

Furrh,  Inc.  (Furrh) was  incorporated  under the laws of the State of Texas on
February 25, 1974. Furrh provides  management services to Tempo Tamers, Inc, its
wholly-owned subsidiary.  Tempo Tamers, Inc. (Tempo), was incorporated under the
laws  of  the  State  of  Texas  on  July  3,  1978.  Tempo  operates  an  adult
entertainment  lounge and restaurant facility,  located in Dallas,  Texas, under
the registered trademark and trade name "Million Dollar Saloon(R)".

Don,  Inc.  (Don)  was  incorporated  under  the  laws of the  State of Texas on
November 8, 1973. Don owns and manages  commercial  rental  property  located in
Tarrant County, Texas.

Corporation Lex (Lex) was  incorporated  under the laws of the State of Texas on
November 30, 1984. Lex owns and manages  commercial  rental property  located in
Dallas County, Texas.

These  financial  statements  reflect  the books and  records of Million  Dollar
Saloon, Inc., Furrh, Inc., Tempo Tamers, Inc., Corporation Lex and Don, Inc. for
the six and  three  months  ended  June 30,  2000 and  1999,  respectively.  All
significant intercompany  transactions have been eliminated in combination.  The
consolidated entities are referred to as Company.

During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the U. S. Securities and Exchange  Commission.
The information  presented  herein may not include all  disclosures  required by
generally accepted accounting  principles and the users of financial information
provided for interim  periods should refer to the annual  financial  information
and footnotes  contained in its Annual Report Pursuant to Section 13 or 15(d) of
The  Securities  Exchange Act of 1934 on Form 10-KSB when  reviewing the interim
financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in accordance with the instructions for Form 10-QSB,  are unaudited and
contain  all  material   adjustments,   consisting  only  of  normal   recurring
adjustments  necessary to present  fairly the  financial  condition,  results of
operations  and cash flows of the Company  for the  respective  interim  periods
presented.  The  current  period  results  of  operations  are  not  necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 2000.

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

                                                                               9


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note B - Summary of Significant Accounting Policies

1.   Cash and Cash Equivalents
     -------------------------

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

     Cash  overdraft  positions may occur from time to time due to the timing of
     making bank deposits and releasing checks, in accordance with the Company's
     cash management policies.

2.   Accounts Receivable and Revenue Recognition
     -------------------------------------------

     In the normal course of business,  the Company extends  unsecured credit to
     virtually  all of its tenants  related to rental  property  operations  and
     accepts national  bankcards as payment for goods and services in its lounge
     and  entertainment  facility.  Bankcard  charges are  normally  paid by the
     clearing  institution  within  three  to  fourteen  days  from  the date of
     presentation  by the Company.  All lease rental  payments are either due on
     the first day of the month in advance  for the month or on the first day of
     the week in arrears  for the  previous  corresponding  period.  All revenue
     sources are located either in Dallas or Tarrant County,  Texas.  Because of
     the credit risk involved, management has provided an allowance for doubtful
     accounts which reflects its opinion of amounts which will eventually become
     uncollectible.  In the  event  of  complete  non-performance,  the  maximum
     exposure to the Company is the recorded amount of trade accounts receivable
     shown on the balance sheet at the date of non-performance.

3.   Inventory
     ---------

     Inventory  consists  of  food  and  liquor  consumables  necessary  in  the
     operation of Tempo's adult lounge and entertainment  facility.  These items
     are  valued at the lower of cost or market  using the  first-in,  first-out
     method of accounting.

4.   Property and Equipment
     ----------------------

     Property  and  equipment  is  recorded  at  cost  and is  depreciated  on a
     straight-line  basis,  over the estimated  useful lives  (generally 5 to 40
     years)  of the  respective  asset.  Major  additions  and  betterments  are
     capitalized and depreciated  over the estimated useful lives of the related
     assets. Maintenance, repairs, and minor improvements are charged to expense
     as incurred.

5.   Trademark rights
     ----------------

     Amounts  paid in  conjunction  with the  acquisition  and  retention of the
     trademark "Million Dollar Saloon(R)" have been capitalized. The life of the
     registration  is  twenty  years  from  its  affirmation  in 1988 and may be
     extended as allowed by applicable law at that point in time. This trademark
     has been  assigned  Registration  No.  1,509,636  by the U. S.  Patent  and
     Trademark Office.  The Company amortizes the trademark over a 10- year life
     using the straight-line method.


                                                                              10


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note B - Summary of Significant Accounting Policies - Continued

6.   Income Taxes
     ------------

     The Company files a consolidated Federal Income Tax return and utilizes the
     asset and liability method of accounting for income taxes. The deferred tax
     asset and deferred tax liability accounts, as recorded when material to the
     financial statements, are entirely the result of temporary differences.  No
     valuation  allowance was provided  against  deferred tax assets.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization.

7.   Earnings per share
     ------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance, whichever is later. As of June 30, 2000 and 1999, the Company has
     no issued and  outstanding  securities,  options or warrants  that would be
     deemed potentially dilutive in the current and future periods.

Note C - Concentrations of Credit Risk

The Company  maintains its cash accounts in a financial  institution  subject to
insurance coverage issued by the Federal Deposit Insurance  Corporation  (FDIC).
Under FDIC rules,  the Company and its  subsidiaries  are  entitled to aggregate
coverage of $100,000 per account type per  separate  legal entity per  financial
institution. During the three months ended June 30, 2000 and 1999, respectively,
respectively,  the  various  operating  companies  had  deposits  in a financial
institution with credit risk exposures in excess of statutory FDIC coverage. The
Company has  incurred no losses  during 1999 or 1998 as a result of any of these
unsecured situations.

Note D - Note Receivable

Note receivable as of June 30, 2000 and 1999, respectively, is as follows:

                                                           2000        1999
                                                         ---------   ---------
$220,000 note receivable from an unrelated
   individual for the sale of real estate.  Interest
   at 8.00%.  Payable in monthly installments
   of approximately $2,669, including interest.
   Final payment due in July 2002.  Collateralized
   by real estate and improvements located in
   Dallas County, Texas.                                 $       -   $  92,330





                                                                              11


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note D - Note Receivable - Continued

                                                         2000       1999
                                                        --------   --------
$35,179 note receivable from an unrelated
   individual for the sale of real estate.  Interest
   at 9.50%.  Payable in monthly installments
   of approximately $2,665, including interest
   Final payment due in February 2001.  Collateral-
   ized by real estate and improvements located in
   Dallas County, Texas.  Paid in full in May 2000          --         --
                                                        --------   --------

Total notes receivable                                      --       92,330
     Less current portion                                   --      (24,480)
                                                        --------   --------

     Noncurrent portion                                 $    --    $ 67,850
                                                        ========   ========


Note E - Property and Equipment

Property and equipment consists of the following at June 30, 2000 and 1999:

                                          2000         1999     Estimated life
                                       ----------   ----------  --------------

  Buildings and related improvements   $1,987,514   $1,987,514  15-40 years
  Furniture and equipment                 856,566      805,087   5-10 years
  Vehicles                                      -       52,728      3 years
                                       ----------   ----------

                                        2,844,080    2,845,328
  Less accumulated depreciation        (1,670,833)  (1,614,881)
                                       ----------   ----------

                                        1,173,247    1,230,447
  Land                                    741,488      741,488
                                       ----------   ----------

  Net property and equipment           $1,914,735   $1,971,935
                                       ==========   ==========

Depreciation expense for the six months ended June 30, 2000 and 1999 was $43,702
and $46,980, respectively.





                                                                              12


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note F -Long-Term Debt

Long-term   debt   consists  of  the  following  at  June  30,  2000  and  1999,
respectively:

                                                  2000        1999
                                                ---------   ---------
$750,000 note payable to a bank.  Interest
   at 11.0%.  Payable in monthly installments
   of approximately $16,369, including
   interest.  Final payment due in September
   2000.  Collateralized by real estate and
   improvements located in Dallas and
   Tarrant Counties, Texas.  Paid in full
   during the first quarter of 2000              $    --     $ 227,579

$52,707 installment note payable to a finance
  company.  Payable in monthly installments of
  approximately $1,111, including interest at
  9.50%. Paid in full in July 1999
  Collateralized by a vehicle                         --        22,158
                                                 ---------   ---------

                                                      --       249,737
      Less current portion                            --      (181,905)
                                                 ---------   ---------

      Long-term portion                          $    --     $  67,832
                                                 =========   =========


Note H - Income Taxes

The deferred  current tax asset and  non-current  deferred tax liability on June
30, 2000 and 1999, respectively, balance sheet consists of the following:

                                                  June 30,    June 30,
                                                   2000        1999
                                                 ---------   ---------

        Non-current deferred tax liability       $(139,248)  $(125,057)
                                                 =========   =========

The  non-current  deferred  tax  liability  results  from the usage of statutory
accelerated tax depreciation and amortization methods.




                                                                              13


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note H - Income Taxes - Continued

The  components of income tax expense  (benefit) for the three months ended June
30, 2000 and 1999, respectively, are as follows:

                                                           2000         1999
                                                         ---------    ---------
                  Federal:
                    Current                              $ 100,000    $  78,750
                    Deferred                                     -            -
                                                         ---------    ---------
                                                           100,000       78,750
                                                         ---------    ---------
                  State:
                    Current                                      -            -
                    Deferred                                     -            -
                                                         ---------    ---------
                                                                 -            -
                                                         ---------    ---------
                  Total                                  $ 100,000    $  78,750
                                                         =========    =========

The Company's income tax expense (benefit) for the years ended June 30, 2000 and
1999,  respectively,  differed from the statutory  federal rate of 34 percent as
follows:

                                                           2000         1999
                                                         ---------    ---------

Statutory rate applied to earnings before income taxes   $ 109,998    $  78,737
Increase (decrease) in income taxes resulting from:
     State income taxes                                          -            -
     Deferred income taxes                                       -            -
     Effect of incremental tax brackets and the
         application of business tax credits                (9,998)          13
                                                         ---------    ---------

Income tax expense                                       $ 100,000    $  78,737
                                                         =========    =========


Note I - Capital Stock Transactions

On March 19, 1998, the Company sold 530,000  shares of restricted,  unregistered
common stock to an individual under a Stock Purchase Agreement  (Agreement) at a
price of $1.00 per share for total  proceeds  to the  Company of  $530,000.  The
Agreement also contains a "second  closing"  clause whereby the individual  will
acquire an  additional  400,000  shares of equivalent  restricted,  unregistered
common  stock at $1.10 per share for gross  proceeds of  $440,000,  on or before
July 15, 1998. On October 18, 1999,  the Company's  Board of Directors  modified
and amended the "second  closing" clause whereby the purchaser may purchase from
time to time any or all of the 400,000 shares of common stock at $1.10 per share
and to extend the  exercise  period  until the close of  business on October 18,
2004. As of June 30, 2000, the individual has not purchased any shares of common
stock in accordance with the "second closing" portion of the Agreement.

Further, the Company granted the individual the option to purchase an additional
1,000,000  shares of restricted,  unregistered  common stock at a price of $1.25
per  share  on or  before  February  28,  1999.  The  option  expiration  may be
accelerated  if the  Company's  common  stock is traded on the NASDAQ  Small-Cap
Market or other  national  exchange  and the closing bid price equals or exceeds
$1.75 per share for 10 consecutive trading days (Trading Period). In this event,
the expiration date of the option shall be the 90th day after the Trading Period
and the Company must notify the individual of the acceleration in writing.  This
option expired on February 28, 1999 with no shares being issued.

                                                                              14


<PAGE>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued

Note I - Capital Stock Transactions - Continued

On March 19, 1998, concurrent with the Stock Purchase Agreement discussed above,
the Company entered into a Consulting  Agreement with a separate  individual for
consulting,  advisory and management services to be performed as directed by the
Company's Board of Directors.  The Consulting Agreement is for a term of one (1)
year and may be  terminated  by either party with ten (10) days written  notice.
The  compensation   for  the  Consulting   Agreement  was  paid  in  restricted,
unregistered  common stock of the Company as follows:  150,000 shares as payment
for consulting,  advisory and management services to be performed as directed by
the Company's Board of Directors and an additional 55,000 shares upon receipt of
the $530,000  discussed above. An additional 45,000 shares will be issued to the
consultant  upon  receipt of the  $440,000  which was due on or before  July 15,
1998.  This Consulting  Agreement  terminated of its own accord in July 1998 and
the termination was  acknowledged in writing to the Company by the individual in
January 2000.

The Company,  upon  execution  of the  Consulting  Agreement  and receipt of the
$530,000 related to the Stock Purchase Agreement,  issued the respective 150,000
and  55,000  shares  due  under  the terms of the  Consulting  Agreement.  These
transactions  were  valued at  approximately  $0.34 per share,  or an  aggregate
$69,700,  which approximated the "fair value" of the Company's  restricted stock
issued on the transaction date.

Note J - Commitments

The  Company  leases  commercial  real  estate  to  entities   controlled  by  a
controlling  shareholder  on  long-term  operating  leases.  The leases  require
minimum weekly lease payments, plus reimbursement for annual property taxes. The
respective tenants are responsible for normal maintenance and repairs, insurance
and other direct operating expenses related to the property.  As of December 31,
1999, future minimum non-cancellable lease revenues are as follows:

                                                  Year ending
                                                  December 31,        Amount
                                                  ------------      ----------

                                                     2000           $  689,000
                                                     2001              689,000
                                                     2002              546,500
                                                     2003              280,500
                                                                    ----------
                                                     Total          $2,205,000
                                                                    ==========







                                                                              15


<PAGE>

<TABLE>

<CAPTION>

                  Million Dollar Saloon, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements - Continued


Note K - Segment Information

The  Company  operates  with a  centralized  management  structure  and  has two
identifiable  operating segments:  an adult entertainment  lounge and restaurant
located in Dallas, Texas and commercial rental real estate located in Dallas and
Tarrant  Counties,  Texas.  All  revenues  are  generated  operations  in  these
geographic  areas.  The Company has a relationship  whereby rental revenues from
various entities under the common control of a controlling  shareholder comprise
approximately  % and % of total  revenues for the six months ended June 30, 2000
and 1999, respectively.

                                      Restaurant       Rental      General and
                                       facility     real estate  administrative     Total
                                     -----------    -----------   -----------    -----------
<S>                                  <C>            <C>           <C>            <C>
Three months ended March 31, 2000
---------------------------------
Revenue from external customers      $ 1,976,413    $      --     $      --      $ 1,976,413
Revenue from related parties                --          340,550          --          340,550
Revenue (expenses) from/to
  intercompany sources                  (120,000)       381,000      (261,000)          --
Interest income                             --              440        17,650         18,090
Interest expense                            --             --           2,129          2,129
Depreciation and amortization             14,197         10,951        30,788         55,936
Income tax expense (benefit)                 831        107,374        (8,205)       100,000
Segment assets                           290,113      2,119,874       346,888      2,756,875
Fixed asset expenditures                  18,402           --            --           18,402


                                      Restaurant       Rental      General and
                                       facility     real estate  administrative     Total
                                     -----------    -----------   -----------    -----------
Six months ended June 30, 1999
------------------------------
   Revenue from external customers   $ 1,644,382    $   340,436   $      --      $ 1,984,818
   Revenue (expenses) from/to
     intercompany sources                   --             --            --             --
   Interest income                          --            4,098         6,137         10,235
   Interest expense                        1,008         15,291        16,299
   Depreciation and amortization          17,427         34,557         5,648         57,632
   Income tax expense (benefit)          (22,265)       102,235        (1,220)        78,750
   Segment assets                        420,369      1,940,851       476,114      2,837,334
   Fixed asset expenditures                 --            6,714          --            6,714


</TABLE>

                                                                              16


<PAGE>

Part I - Item 2

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

(1)  Results of Operations

Bar and restaurant  operations  increased by approximately  $332,000 between the
first six months of 2000 as compared to the first six months of 1999.  Total bar
and  restaurant  sales for the 2000  period  were  approximately  $1,976,000  as
compared to approximately  $1,644,000 for the 1999 period.  The increase was due
to  management's  refocused  efforts in customer  service and  increasing  sales
subsequent to the 2000 change in control of the Company.  The Company  continues
to seek effective marketing and advertising methods to maintain and increase its
bar and restaurant patronage.

Cost of sales increased by approximately $176,000 during the first six months of
2000 as compared to the same expenses for the same period in 1999. This increase
is a result of  increases  in  entertainer  compensation  and other direct costs
related to the approximate $332,000 increase in revenues in the Company's Dallas
Texas entertainment  facility.  Gross profit percentages decreased to 44.53% for
the first six  months of 2000  versus  48.78%  for the first six months of 1998.
Increased  cost controls over  purchasing,  inventory  management  protocols and
labor management are continuously monitored to improve gross profit percentages.

General and administrative  expenses  increased by approximately  $88,000 in the
first six  months of 2000  versus the first six  months of 1999.  This  increase
relates to increased advertising expenses and administrative compensation caused
by the  2000  change  in  control  of the  Company.  The  Company  continues  to
experience  relatively  constant  expenditure levels for other general operating
expenses.  Management  continues  to monitor its  expenditure  levels to achieve
optimum financial results.

Net income  before  income  taxes was  approximately  $323,500 for the first six
months of 2000 versus  approximately  $231,500 for the first six months of 1999.
After-tax  net income  increased by  approximately  $70,500  from  approximately
$153,000  for the first six  months of 1999 to  approximately  $223,500  for the
first  six  months  of 2000.  The  Company  experienced  earnings  per  share of
approximately  $0.04 and  $0.03  per share for the first six  months of 2000 and
1999, respectively.

(2)  Liquidity

As of June 30, 2000, the Company has working capital of  approximately  $687,000
as compared to  approximately  $421,000 at December  31, 1999 and  approximately
$452,000  at June 30 , 1999.  The  Company  achieved  positive  cash  flows from
operations  of  approximately  $294,000  for the first six months of 2000 versus
approximately  $268,000 for the first six months of 1999. The Company's  working
capital  position  was  impacted  by the  payment  in  full  of all  outstanding
long-term  debt  during  the first  quarter  of 2000 and the  collection  of the
outstanding note receivable in May 2000.

The Company has identified no significant  capital  requirements for the current
annual period.  Liquidity requirements mandated by future business expansions or
acquisitions,  if any are specifically identified or undertaken, are not readily
determinable  at this  time as no  substantive  plans  have been  formulated  by
management.

The Company  announced  the  discontinuance  of the payment of  dividends  after
December  31,  1999.  The Company  paid  declared  fourth  quarter  dividends of
approximately   $57,000  during  both  the  first  quarter  of  2000  and  1999,
respectively.   Future  operating  liquidity  is  expected  to  be  provided  by
continuing operations. Additionally,  management is of the opinion that there is
potential  availability  of mortgage  debt and the  opportunity  for the sale of
additional   common  stock  through  either  private   placements  or  secondary
offerings.

                                                                              17


<PAGE>

(3)  Year 2000 Considerations

The Year 2000 (Y2K) date change was believed to affect  virtually  all computers
and  organizations.   The  Company  undertook  a  comprehensive  review  of  its
information  systems,  including  personal  computers,  software and  peripheral
devices, and its general  communications systems during 1999. The Company has no
direct electronic links with any customer or supplier.

The costs associated with the Y2K date change compliance did not have a material
effect  on the  Company's  financial  position  or its  results  of  operations.
However, as the Year 2000 progresses,  there can be no assurance that all of the
Company's  systems,  and the systems of its  suppliers,  shippers,  customers or
other external business partners will continue to function adequately.

Part II - Other Information

Item 1 - Legal Proceedings

   None

Item 2 - Changes in Securities

   None

Item 3 - Defaults on Senior Securities

   None

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

   The Company has held no regularly  scheduled,  called or special  meetings of
   shareholders during the reporting period.

Item 5 - Other Information

   None

Item 6 - Exhibits and Reports on Form 8-K

   None






                                                                              18


<PAGE>

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                                     MILLION DOLLAR SALOON, INC.


August    11   , 2000                                    /s/ Dewanna Ross
       --------                                      ---------------------------
                                                                    Dewanna Ross
                                                         Chief Operating Officer
                                                                    and Director

August    11   , 2000                                    /s/ Ronald W. Johnston
       --------                                      ---------------------------
                                                              Ronald W. Johnston
                                                         Chief Financial Officer






                                                                              19