DME INTERACTIVE HOLDINGS INC - 10QSB - Quarterly Report
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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2001

(    ) Transition Report under Section 13 or 15(d) of the Exchange Act of 1934
     for the transition period from __________ to _________

                         DME INTERACTIVE HOLDINGS, INC.
               (Exact Name of Registrant as Specified in Charter)


Delaware                               0-27944                  98-0157860
(State of Other Jurisdiction         (Commission              (IRS Employer
   of Incorporation)                 File Number)         Identification Number)


519 East Palisades Avenue, Englewood Cliffs, NJ                            07632
(Address of Principal Executive Offices)                             (Zip Code)

Registrant's telephone number, Including area code                 201-569-1813


                                 Not Applicable
          (Former Name of Former Address, if Changed Since Last Report)



     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. Yes X No
                                            ---    ---
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:

     As of June 1, 2001 there were 27,464,666 shares of common stock
outstanding.



<PAGE>


                         DME INTERACTIVE HOLDINGS, INC.

                                TABLE OF CONTENTS

PART I    FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS

          Consolidated Balance Sheets as of March 31, 2001 (Unaudited) and
          December 31, 2000

          Consolidated Statements of Operations for the three months ended March
          31, 2001 (Unaudited) and March 31, 2000 (Unaudited)

          Consolidated Statements of Cash Flows for the three months ended March
          31, 2001 (Unaudited) and March 31, 2000 (Unaudited)

          Notes to Consolidated Financial Statements

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

PART II   OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

ITEM 2.   CHANGES IN SECURITIES

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.   OTHER INFORMATION AND SUBSEQUENT EVENTS

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


<PAGE>



                          PART I FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS



                 DME Interactive Holdings, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                              ASSETS
                                                      As of           As of
                                                     March 31,     December 31,
                                                       2001           2000
                                                   ------------    ------------

CURRENT ASSETS:

Cash and cash equivalents                          $      4,322    $     19,435
Accounts receivable, net                                 73,779          89,071
Prepaid expenses                                           --            15,710
                                                   ------------    ------------

Total current assets                                     78,101         124,216

Security deposits                                       167,257         173,428
Property and equipment, net                             487,263         531,535
                                                   ------------    ------------

Total assets                                       $    732,621    $    829,179
                                                   ============    ============

            LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:

Accounts payable and accrued expenses                 1,965,023       1,691,666
Due to affiliated company                                 1,352           1,352
Loans from shareholders, short term                   1,026,462       1,020,462
Note payables                                           550,000         550,000
Note payable to employee                                   --            41,000
                                                   ------------    ------------

Total current liabilities                             3,542,837       3,304,480

Loans from shareholder                                   36,805          36,805
Unearned revenue                                         10,000          10,000
                                                   ------------    ------------

Total liabilities                                     3,589,642    $  3,351,285
                                                   ============    ============

Commitments and Contingencies(Note 10)

Common stock, par value $0.001; 60,000,000
shares authorized; 27,464,666 and
27,464,666 issued and outstanding as of
March 31, 2001 and December 31, 2000,
respectively                                             27,465          27,465
Additional paid-in capital                           25,644,003      25,644,003
Accumulated deficit                                  (5,348,489)     (5,013,574)
Less deferred strategic agreement expense           (23,180,000)    (23,180,000)
                                                   ------------    ------------

Total shareholders' deficit                          (2,857,021)     (2,522,106)
                                                   ------------    ------------

Total liabilities and shareholders' deficit        $    732,621    $    829,179
                                                   ============    ============


          See accompanying notes to consolidated financial statement.


                                       F-1


<PAGE>


                 DME Interactive Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                 For the             For the
                                                 3-months            3-months
                                               period ended        period ended
                                              March 31, 2001      March 31, 2000
                                              --------------      --------------

GROSS REVENUES
Computer sales, net                            $     54,564        $       --
Interactive services                                 20,250             218,766
                                               ------------        ------------
   Total gross revenues                              74,814             218,766

COST OF OPERATIONS
Salaries and employee benefits                      190,333             407,644
Project expense                                        --                12,003
Consulting services                                     500              70,586
                                               ------------        ------------

Total cost of operations                            190,833             490,233
                                               ------------        ------------

GROSS (LOSS)                                       (116,019)           (271,467)

GENERAL AND ADMINISTRATIVE
  EXPENSES                                          243,566             581,709
                                               ------------        ------------
INCOME (LOSS) FROM OPERATIONS                      (359,585)           (853,176)
                                               ------------        ------------
OTHER INCOME AND (EXPENSES)
Interest and rental income                           24,670               6,539
Interest expense                                       --                 7,347
                                               ------------        ------------
                                                     24,670                (809)
                                               ------------        ------------
NET (LOSS)                                     $   (334,915)       $   (853,984)
                                               ============        ============
INCOME (LOSS) PER SHARE:
Basic                                          $      (0.01)       $      (0.03)
                                               ============        ============
Diluted                                        $      (0.01)       $      (0.02)
                                               ============        ============

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:

Basic                                            27,464,666          25,982,250
                                               ------------        ------------

Diluted                                          49,314,666          48,421,000
                                               ------------        ------------


          See accompanying notes to consolidated financial statements.


                                       F-2


<PAGE>


                DME Interactive Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                      For the        For the
                                                      3-month        3-month
                                                   period ended    period ended
                                                  March 31, 2001  March 31, 2000
                                                  --------------  --------------
CASH FLOWS FROM OPERATING
ACTIVITIES:

Net income (loss)                                  $  (334,915)     $  (853,984)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by
operating activities:
Increase in depreciation                                40,272           41,287
Increase (decrease) in accounts receivable              15,292          (41,228)
(Increase) in prepaid expenses                          15,710           (7,760)
Increase in due to affiliated company                       --              149
Increase in accounts payable and accrued expenses      273,357           71,186
Increase in advances/unearned revenue                       --           56,250
Decrease in security deposit                             6,171               --
                                                   -----------      -----------

Net cash used in provided by
operating activities                                    15,887         (734,100)
                                                   -----------      -----------

INVESTING ACTIVITIES
Purchases of property and equipment                       --           (357,767)
                                                   -----------      -----------

Net cash used in investing activities                     --           (357,767)
                                                   -----------      -----------

FINANCING ACTIVITIES
Proceeds from loans and notes payable                    6,000          300,000
Payments on loans and notes payable                    (37,000)         (52,000)
Proceeds from sale of common stock                        --            901,250
Increase in capital lease obligation                      --             82,672
                                                   -----------      -----------

Net cash provided by financing activities              (31,000)       1,231,922
                                                   -----------      -----------

Net increase in cash
and cash equivalents                                   (15,113)         140,055

CASH AND CASH EQUIVALENTS:
Beginning of period                                     19,435          171,996
                                                   -----------      -----------

End of period                                      $     4,322      $   312,051
                                                   ===========      ===========


          See accompanying notes to consolidated financial statements.


                                       F-3


<PAGE>



                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  BASIS OF PRESENTATION:

          The accompanying unaudited consolidated financial statements, which
          include the accounts of DME Interactive Holdings, Inc. and its wholly
          owned subsidiaries, have been prepared in accordance with generally
          accepted accounting principles for interim financial information and
          with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
          Accordingly, they do not include all of the information and footnotes
          required by generally accepted accounting principles for complete
          financial statements. In the opinion of management, all adjustments,
          consisting only of normal recurring accruals considered necessary for
          a fair presentation, have been included in the accompanying unaudited
          consolidated financial statements. All significant intercompany
          transactions and balances have been eliminated in consolidation.
          Operating results for the three months ended March 31, 2001 are not
          necessarily indicative of the results that may be expected for the
          full year ending December 31, 2001. For further information, refer to
          the consolidated financial statements and notes thereto, included in
          the Company's Annual Report on Form 10-KSB for the fiscal year ended
          December 31, 2000.


NOTE 2. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Organization and Business

          Pride Automotive Group ("Pride") was incorporated in 1995 in the State
          of Delaware as a "C" Corporation. On June 18, 1999, Pride changed its
          name to DME Interactive Holdings, Inc. ("DME or Company") following a
          reverse merger (re-capitalization) with Digital Mafia Entertainment,
          LLC. ("Digital Mafia"), a New Jersey Limited Liability Company. The
          re-capitalization occurred pursuant to the Exchange of Common Stock
          agreement dated March 30, 1999 (as amended). In connection with the
          re-capitalization, Pride exchanged 14,800,000 shares of its Common
          Stock (representing approximately 64% of the outstanding shares after
          the exchange) for all of the membership interests of Digital Mafia. In
          addition, Pride sold all of its interest in its two operating
          subsidiaries to Pride, Inc., its parent and owner of more than 50% of
          its outstanding common stock prior to the transaction, for $1.00 each.
          As a result, Digital Mafia became a wholly owned subsidiary of Pride.
          For accounting purposes, the exchange was treated as a
          re-capitalization, as if Digital Mafia acquired Pride.

          Places of Color, Inc. ("Places of Color") was incorporated in the
          state of Delaware on January 12, 2000 and is a wholly owned subsidiary
          of DME. Places of Color has a social mission


                                      F-4


<PAGE>


          to hasten and promote computer and internet usage by the urban
          minority market. Historically, the cost of the equipment and a
          perception of irrelevance have been the primary causes of the digital
          divide. Our Places of Color business model addresses both facets of
          this problem with a package of bundled solutions that are not only
          affordable but also relevant for the urban markets. Our members can
          buy a certified pre-owned branded PC (including monitor and software),
          email services, customer support, warranty and internet access.

          During 2000, DME made a strategic decision to preserve its capital
          resources and to focus its efforts on the completion and expansion of
          Places of Color. DME is formerly an interactive services (sometimes
          called advanced technology) company that had historically provided
          corporate internet strategy and development services and advertising
          services primarily to clients seeking to reach the urban
          African-American and Latino markets ("urban markets"). Consistent with
          the new strategic direction, the Company has not taken on any new
          business for its interactive services division.

          On October 12, 2000 Places of Color launched its on-line resource
          community, Places of Color Inc.

          On February 2, 2000, DME and Places of Color entered into a "strategic
          agreement" with CompuServe Interactive Service, Inc. (" Compuserve"),
          a subsidiary of America Online, Inc. ("AOL"), an internet service
          provider("ISP"). The agreement expires 18 months after the launch date
          and requires the ISP to provide hosting and other technical and
          support services for a website customized service for internet users
          from the urban market. The Places of Color/Compuserve launch date is
          expected to commence July 2001. Places of Color will receive a stated
          percentage of the monthly subscription fees received by the ISP. DME
          has issued 1,250,000 common shares to the ISP. In addition to the
          shares, DME


                                       F-5


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
          (Continued)

          has issued a warrant for 4,000,000 shares to the ISP at a purchase
          price of $8.563 per share. The warrants become exercisable if, at the
          end of the eighteen-month term, the parties negotiate an extension of
          the strategic agreement or if the parties entered into a substantially
          similar agreement.

          Principles of Consolidation

          The accompanying consolidated financial statements include the
          accounts of DME and its wholly owned subsidiaries, Digital Mafia, DME
          39 Broadway Corporation ("DME 39") and Places of Color. All material
          intercompany transactions and balances have been eliminated in
          consolidation.

          Basis of Presentation

          Digital Mafia is deemed to be the predecessor company and all
          financial information prior to June 18, 1999 is the operating results
          of Digital Mafia.

          Fixed Assets

          Fixed assets are recorded at cost and are depreciated on the
          straight-line basis over the estimated useful lives of the assets.

          Use of Estimates

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

          Statement of Cash Flows

          For financial statement purposes, cash in demand deposit accounts and
          money market accounts with maturities of ninety days or less are
          considered to be cash equivalents.

          Non Cash Transactions

          During the period ended March 31, 2001 and year ended December 31,
          2000, DME issued approximately 0 and 1,000,000 common shares for
          approximately $0 and $437,500, respectively, in exchange for salaries
          forgiveness of notes payable and consulting services. In addition, on
          February 2, 2000, DME issued warrants for 4,000,000 common shares to
          an ISP in exchange for services to be provided by the ISP. The
          approximate fair value of the warrants was $23,180,000 at the date of
          grant and has been reflected in the company's financial statements as
          Deferred Strategic Agreement. These transactions are considered non
          cash operating and financing activities and have been excluded from
          the statement of cash flows.

          Allowance for Doubtful Accounts

          The Company establishes an allowance for uncollectible


                                       F-6


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
        (Continued)

          accounts receivable based on historical collection experience and
          management's evaluation of collectibility of outstanding accounts
          receivable. Accounts receivable is shown net of allowance for doubtful
          accounts in the accompanying consolidated financial statements. The
          allowance for uncollectible accounts receivable as of March 31, 2001
          and December 31, 2000, was $87,179 and $87,179, respectively.

          Revenue Recognition

          Interactive services includes project and maintenance revenue. The
          Company recognizes project revenues based on the percentage of
          completion method. Maintenance revenue is recognized on a monthly
          basis while the relevant maintenance agreement is in effect, and the
          Company has performed the agreed-upon maintenance services. For the
          period ended March 31, 2001, revenues include sales of pre-owned
          computers, net of returns on sales and agent commissions of $2,587.

          Reclassification

          Certain reclassifications have been made to the prior year's financial
          statements in order to conform them to the classifications used for
          the current year.

NOTE 3. INCOME TAXES:

          DME accounts for income taxes under Statement of Financial Accounting
          Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109
          is an asset and liability approach that requires the recognition of
          deferred tax assets and liabilities for the expected future tax
          consequences of events that have been recognized in the Company's
          financial statements or tax returns. In estimating future tax
          consequences, SFAS 109 generally considers all expected future events
          other than enactment of changes in the tax law or rates. Any available
          deferred tax assets arising from net operating loss carryforwards has
          been offset by a deferred tax valuation allowance on the entire
          amount.


                                       F-7


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. PROPERTY AND EQUIPMENT, NET:

          Property and equipment, net is comprised of the following:


                             Estimated      March 31,   December 31,
                             Useful Life        2001           2000
                             -----------        ----           ----

  Office equipment               5          $ 308,312      $312,312
  Furniture and fixtures         5            104,064       104,064
  Software                       3            237,400       237,400
                                            ---------       -------
                                              649,776       653,776
  Accumulated  depreciation                  (162,513)     (122,241)
                                            ---------       -------

                                            $ 487,263      $531,535
                                            =========       =======

          Depreciation expense for the period ended March 31, 2001 and year
          ended December 31, 2000 was $40,272 and $99,151, respectively.

NOTE 5. NOTES PAYABLE:

          At December 31, 1999, DME had two notes payable in the amounts of
          $50,000 and $36,805 outstanding. The $50,000 note bears interest at a
          rate of 9% per annum and matures on March 21, 2001. The $36,805 note
          bears interest at a rate of 9% per annum and has no stated maturity
          date. Both loans were still outstanding as of December 31, 2000. The
          Company is currently in negotiations to extend the maturity dates of
          these notes payable.

          On June 19, 2000, and July 5, 2000, the Company borrowed $200,000 and
          $300,000, pursuant to promissory notes. The maturity date of both
          notes is June 16, 2001 and bear interest at the annual rate of 10%.

NOTE 6. STOCKHOLDERS' EQUITY:

          Authorized Common and Preferred Shares

          On April 7, 2000, DME applied for and obtained an amended and restated
          Certificate of Incorporation creating a new class of two million
          preferred shares and increasing the Company's authorized common shares
          to sixty million.

          Issued and Outstanding Common Stock:

          At the close of the re-capitalization on June 18, 1999, 23,347,999
          shares of common stock were outstanding. On December 5 and 22, 1999,
          the Company issued a total of 366,667 shares through private placement
          offerings. Gross proceeds received relating to the offerings were
          $250,000. As of December 31, 1999, 23,714,666 common shares were
          outstanding.

          In January 2000, the Company issued 500,000 shares of Common Stock at
          par value and 500,000 warrants at a $2.00 strike price, and 500,000
          shares at $2.00 per share in a private placement to satisfy our
          working capital requirements. Gross proceeds totaled $1,000,000.

          On May 31, 2000, the Company borrowed $100,000 pursuant to a
          promissory note. The holder has agreed to convert the note, which
          became due on September 30, 2000 into 300,000 common shares.


                                       F-8



<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          In October 2000, the Company issued 200,000 shares of Common Stock at
          par value and 250,000 warrants at a $2.00 strike price in a private
          placement. Gross proceeds totaled $100,000.

          In October 2000, the Company issued 400,000 shares of Common Stock at
          par value and 400,000 warrants at a $0.60 strike price in a private
          placement to satisfy our working capital requirements. Gross proceeds
          totaled $200,000.

          As of December 31, 1999, 23,714,666 common shares were outstanding. As
          referenced in Note 1, in year 2000, 1,250,000 shares of Common Stock
          were issued. In Note 6, 1,900,000 shares of Common Stock were issued.
          In Note 8, 100,000 shares of Common Stock were issued. In Note 9,
          500,000 shares of Common Stock were issued. During year 2000, a total
          of 3,850,000 shares of Common Stock were issued. As of March 31, 2001,
          27,464,666 common shares were outstanding.

          Employee Stock Options

          DME has an incentive stock option plan (the "2000 Plan") for
          employees. On May 8, 2000, the Board of Directors increased the
          maximum shares of common stock that may be issued under the 2000 Plan
          to 12,000,000 from 3,000,000. The option price, number of shares and
          grant date are determined at the discretion of the Board of Directors.
          Options granted under the 2000 Plan are exercisable at dates
          determined by the Board of Directors. If an employee is terminated,
          all unexercised options expire automatically. An employee has ninety
          days from the date of voluntary termination to exercise options to the
          extent such options were exercisable at the time of termination. As of
          March 31, 2001, no employee compensation expenses were incurred nor
          were any options exercised. As of March 31, 2001, 4,710,000 options
          had been granted to seven employees and two consultants.

          At December 31, 1999, the Company had a non-incentive stock option
          plan (the "1999 Plan") under which a maximum of 3,000,000 shares of
          common stock could be issued to employees and non-employees. As of
          March 31, 2001, a total of 997,000 options had been granted to seven
          employees of the Company under the 1999 Plan.

          Strategic Agreement

          In February 2000, the Company entered into a strategic agreement with
          Compuserve, a subsidiary of AOL. In connection with this agreement the
          Company issued 1,250,000 shares of the Company's


                                       F-9


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Common Stock to AOL valued at $11,210,000 based upon the trading price
          of the stock on the issuance date. In addition the Company also issued
          4,000,000 options with an exercise price of $8.563 that are
          exercisable at the end of the term of the strategic agreement. The
          value of the warrants on the issuance date was $11,970,000 using the
          Black-Scholes Option-Pricing Model.

          Warrants

          As of March 31, 2000, DME had 2,595,000 redeemable purchase warrants
          outstanding. The warrants expiration date and strike price has been
          modified. Each warrant allows the holder to purchase one share of the
          Company's common stock at a price of $3.00. DME may redeem the
          warrants at anytime upon 30 days' written notice at a price of $0.05
          per warrant subject to certain conditions. Holders may exercise their
          warrants any time prior to April 23, 2003. In addition, DME has
          10,520,000 redeemable warrants exercisable at various prices ranging
          from $0.15 to $8.583 outstanding as of March 31, 2001. The warrants
          expire at various periods ranging from December 2001 to October 2002.

NOTE 7. NET LOSS PER COMMON SHARE:

          The following table presents the calculation of basic and diluted net
          loss per common share required under SFAS 128:


                                              Period          Period
                                              Ended            Ended
                                            March 31,       March 31,
                                               2001            2000
                                               ----            ----

          Net loss                         ($   334,915)   ($   853,984)
                                           ============    ============

          Weighted average shares -
            basic                            27,464,666      25,964,666

          Effect of dilutive securities:
          Warrants and employee
             stock options                   21,850,000       8,505,000
                                           ------------    ------------

          Weighted average shares -
            diluted                          49,314,666      27,469,403
                                           ------------    ------------

          Net loss per
            share - basic                  ($      0.01)   ($      0.03)
                                           ------------    ------------

          Net loss per share - diluted     ($      0.01)   ($      0.03)
                                           ------------    ------------

NOTE 8. RELATED PARTY TRANSACTIONS:

          Due to Affiliated Company

          Digital Mafia shares office space with an affiliated company. Certain
          administrative expenses incurred by Digital Mafia are paid by the
          affiliated company. The amount payable to the affiliated company as of
          March 31, 2001 and December 31, 2000 was $1,352 and $1,352,
          respectively.


                                      F-10


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Note Payable to Employee

          DME issued a $41,000 note payable to an employee pursuant to an asset
          purchase agreement executed on September 1, 1999. There is no stated
          interest rate. In February 2001, the employee received $18,000 and
          forgave to the Company, the balance of $23,000. The Company applied
          the $23,000 as miscellaneous income.

          Loans from Shareholders

          On June 30, 2000, the Company borrowed $100,000 from a shareholder,
          pursuant to a promissory note. The note has an interest rate of 9% and
          matures on June 15, 2001. The Company repaid $80,000 of the note on
          July 4, 2000. The Company is in discussions to extend the maturity
          date.

          As of March 31, 2001, the Company owes its principal shareholder a
          total of $917,887, pursuant to promissory notes. As presently
          modified, $770,000 of the notes has an interest rate of 13% and
          $167,887 of the notes has an interest rate of 9%. Each note matures on
          December 31, 2001. The Company is currently in negotiations to convert
          a majority of the principal shareholders notes into the Company's
          common stock.

          During 2000, the Company borrowed approximately $70,850 from a
          shareholder, pursuant to a promissory note. The Company issued in
          connection with the note 100,000 shares of the Company's Common Stock.
          The note has an interest rate of 13% and matures on July 31, 2001.

          During 2000, the Company borrowed $11,725 from a shareholder, pursuant
          to two promissory notes. The note has an interest rate of 13% and
          matures on July 31, 2001.

          In February 2001, the Company borrowed $6,000 from a shareholder,
          pursuant to a promissory note. The note has an interest rate of 13%
          and matures on July 31, 2001.

NOTE 9. COMMITMENTS AND CONTINGENCIES:

          In connection with a $500,000 loan (see Note 5) made by an affiliate
          of a NASD licensed broker-dealer and a proposed private placement by
          such broker-dealer (the "Proposed Private Placement"), the Company was
          to issue 6,000,000 shares of the Company Common Stock to the
          affiliate. Disagreements arose between the affiliate, the
          broker-dealer and the Company regarding the compensation for services
          in connection with the Proposed Private Placement, including whether
          the affiliate was entitled to the shares. As a result, the Company has
          not issued the shares and the affiliate has asserted a claim
          therefore. The Company is currently negotiating with the broker-dealer
          to resolve the compensation disagreement for the Proposed Private
          Placement.

          Consulting Agreement

          On October 12, 2000, the Company entered into a six month consulting
          agreement with The Sabatier Group, Inc. ("Sabatier"), whereby the
          Company will be provided with debt financing, equity funding,
          strategic partners, such other matters as requested. As of May 2001,
          the agreement has not been extended. Per the agreement, Sabatier will
          be entitled to 5% of the cash fee for any financing raised or
          initiated by Sabatier for 30 months after the termination of this
          agreement. Sabatier will be entitled to 5% cash fee based on the gross
          revenues derived from all strategic partnership contracts initiated by
          Sabatier for 30 months after the termination of this agreement.
          Sabatier will be entitled to 5% of the capital stock for any financing
          obtained as a result of Sabatier's effort 30 months after the
          termination of this


                                      F-11


<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          agreement. To date, no financing or strategic partnerships agreements
          have been consummated for the Company on behalf of Sabatier.

          Real Estate Agreements

          On September 23, 1999, DME 39 entered into two non-cancelable office
          space rental lease agreements with a real estate company. The
          agreements became effective in March 2000 and expires in July 2010.

          DME signed an absolute and unconditional deed guaranteeing the full,
          prompt and complete performance of all of the terms, covenants and
          conditions of the lease agreements entered into by DME 39. The
          guaranty expires if, at any time, DME and/or DME 39 pays the landlord
          base rent equal to $450,000 or more under the above leases.

          In March 2001, DME 39 signed a release form to terminate the lease
          agreements, which became effective in April 2001. As a condition of
          the agreement, the landlord has retained the DME security deposit of
          $167,257. The landlord has not requested any other financial
          obligations.

          DME has a non-cancelable office space rental lease agreement which
          expires on September 30, 2001. DME shares the office space with an
          affiliated company and allocates a certain portion of the rental costs
          and expenses to the affiliated company (See Note 8).

          Future minimum lease payments under the lease agreements are as
          follows:

          For the Year Ending December 31,
          --------------------------------
                             2001                             93,850
                                                     ---------------

                                 Total               $        93,850
                                                     ===============

          Total rent expense under all operating leases amounted to $79,035, and
          $38,744 for the three-month period ended March 31, 2001 and 2000,
          respectively.

          Litigation

          The Receiver of Autokraft Limited and ACL(1996) Limited, both in
          Administrative Receivership in the United Kingdom have asserted a
          claim against us for monies allegedly due under (i) a guarantee
          agreement and (ii) a variation agreement executed by us pursuant to
          which the loan allegedly guaranteed was restructured. The amount
          claimed to be due is British pounds 281,107 plus interest. The
          obligations arise out of the purchase by a former subsidiary of ours,
          when we were Pride Automotive Group, Inc. ("PAG"), of certain assets
          of the claimants. We are currently investigating the claim; however,
          we believe that the existence of the liability for the claim
          constitutes a breach of the representations and warranties made to
          Digital Mafia in the agreement pursuant to which it was acquired in
          the re-capitalization. Therefore, we have asserted a claim for
          demnification against Pride (now known as Mason Hill Holdings, Inc.),
          the then parent of PAG, who, in the exchange agreement for the
          acquisition, joined in the foregoing representations and agreed to
          indemnify Digital Mafia in connection with any breach of those
          representations. If it is determined that we are liable to the
          Receiver, we intend to vigorously assert our rights against Pride.


                                      F-12

<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.  GOING CONCERN:

          The accompanying financial statements have been prepared assuming the
          Company will continue as a going concern. A number of factors,
          including the Company's history of significant losses, negative
          working capital, and accumulated deficit raise substantial doubts
          about the Company's ability to continue as a going concern. The
          Company incurred a net loss of $334,915 and $3,757,238 for the period
          ended March 31, 2001 and year ended December 31, 2000, respectively.

          In this regard, management is currently negotiating with a third party
          to raise equity through the private markets and converting certain
          note holders to stock holders.

          The ability of DME to continue as a going concern is dependent on the
          success of management's plan and their ability to raise additional
          capital. The consolidated financial statements do not include any
          adjustments that might be necessary if DME is unable to continue as a
          going concern.

NOTE 11.  SUBSEQUENT EVENT:

          Effective April 16, 2001, the Company entered into a one year
          agreement with Tribe Communications, Inc. ("TCI") whereby the Company
          will be provided with services ranging from capital formation,
          financial public relations, retail support, audio webcasting, mergers
          and acquisitions, strategic partnering and such other matters as
          requested. This agreement may be extended by mutual written agreement
          of the parties. This agreement is cancelable quarterly so long as
          written notice is given 30 days prior to termination. As consideration
          for the services provided, the Company will be issuing 750,000 shares
          of the Company's common stock as the initial payment. Upon completion
          of the first webcast, the Company will issue 675,000 of unregistered
          shares with piggy-back registration rights. Due the first day of
          months four and seven, 675,000 unregistered shares with piggy-back
          registration rights. This totals to 2,775,00 shares of the Company's
          common stock. The Company will pay TCI a 5% finder's fee for a direct
          investment made by a third party investor either introduced to the
          Company by TCI or which contacted the Company as a result of TCI's
          efforts. As consideration for the services provided the Company shall
          pay and after a minimum capital investment is made into the Company,
          the Company shall pay a monthly fee of $6,750.

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

     The following discussion contains forward-looking statements involving
risks and uncertainties based on management's current expectations, which
involve risks and uncertainties. All statements in this 10-QSB related to DME's
changing financial operations and expected future growth or profitability
constitute forward-looking statements. These statements are commonly identified
by the use of such terms and phrases as "intends", "expects", "anticipates",
"estimates", "seeks" and "believes". Actual results and the timing of certain
events could differ materially from the forward-looking statements as a result
of a number of factors. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors," from the year 2000
10-KSB, as well as those discussed elsewhere herein. The actual results may
differ significantly from those anticipated or expressed in these statements.
The following discussion and analysis should be read in conjunction with the
unaudited consolidated financial statements. The results of interim periods are
not necessarily indicative of the results to be obtained in a full fiscal year.




<PAGE>


OVERVIEW

Organization and Business

     Pride Automotive Group ("Pride") was incorporated in 1995 in the State of
Delaware as a "C" Corporation. On June 18, 1999, Pride changed its name to DME
Interactive Holdings, Inc. ("DME" or "Company") following a reverse merger
(re-capitalization) with Digital Mafia Entertainment, LLC. ("Digital Mafia"), a
New Jersey Limited Liability Company (the "Transaction"). The re-capitalization
occurred pursuant to the Exchange of Common Stock Agreement dated March 30, 1999
(as amended). In connection with the re-capitalization, Pride exchanged
14,800,000 shares of its Common Stock (representing approximately 64% of the
outstanding shares after the exchange) for all of the membership interests of
Digital Mafia. In addition, Pride sold all of its interest in its two operating
subsidiaries to Pride, Inc., its parent and owner of more than 50% of its
outstanding common stock prior to the transaction, for $1.00 each. As a result,
Digital Mafia became a wholly owned subsidiary of Pride. For accounting
purposes, the exchange was treated as a re-capitalization, as if Digital Mafia
acquired Pride.

     Therefore, Digital Mafia, LLC is deemed to be our predecessor and all
financial information included in this Form 10-KSB prior to June 18, 1999 is
that of Digital Mafia, LLC.

     In third quarter of 2000, DME made a strategic decision to preserve its
capital resources and to focus its efforts on the completion and expansion of
PLACES OF COLOR. DME is formerly an interactive services company that had
historically provided corporate internet strategy and development services and
advertising services primarily to clients seeking to reach the urban
African-American and Latino markets. Consistent with the new strategic
direction, the Company has not taken on any new business for its interactive
services division and terminated the Fan4Life project.

     On October 12, 2000 the Company launched PLACES OF COLOR Inc., an on-line
resource community. PLACES OF COLOR, incorporated in the state of Delaware on
January 12, 2000, is a wholly owned subsidiary of DME.

     PLACES OF COLOR has a social mission to hasten and promote computer and
Internet usage by the urban minority market. Historically, the cost of the
equipment and a perception of irrelevance have been the primary causes of the
digital divide. Our PLACES OF COLOR business model addresses both facets of this
problem with a package of bundled solutions that are not only affordable but
also relevant for the urban markets. Our members can buy a certified pre-owned
branded PC (including monitor and software), email services, customer support,
warranty and free Internet access for a minimum price of $289.

     In fulfilling our mission, we seek to assist non-profit and governmental
organizations in promoting the use of the Internet in minority communities and
actively encourage other businesses to assist us in this goal. We believe that
the strategic relationship with AOL and the launch of "Places of Color, Powered
by CompuServe" are important




<PAGE>


steps in starting to bridge the digital divide. We are seeking to enter into
other strategic relationships so we, along with other parties, can promote
computer ownership, computer literacy and technology training in the urban
minority market. We believe that increased Internet usage in those communities
will increase the potential base of customers for our clients and prospective
clients, which, in turn, will increase the number of clients seeking our
services.

Revenue Recognition

     The Company's revenues for period ending March 31, 2001 were derived
between Places of Color and from the interactive services business. For the
interactive services business, we bill for time-and-materials arrangements,
fixed-price contracts or maintenance agreements. For the period ended March 31,
2001, we used primarily a combination of fixed-price and time-and-materials
arrangements with our clients.

     We bill and recognize revenues from time-and-materials projects on the
basis of costs incurred in the period. We use a standardized estimation and work
plan development process to determine the requirements and estimated price for
each project. This process takes into account the type and overall complexity of
the project, the anticipated number of personnel of various skill sets needed
and their associated billing rates, and the estimated duration of and risks
associated with the project. Management personnel familiar with the production
process evaluate and price all project proposals.

     We recognize revenues from fixed-price projects using the
percentage-of-completion method based on the ratio of costs incurred to the
total estimated project costs. Fees are billed to the client over the course of
the project. We estimate the price for fixed-price projects using the same
methodology as time-and-materials projects. All fixed-price proposals must first
be approved by a member of our senior management team. Provisions for estimated
losses on contracts are made during the period in which such losses become
probable and can be reasonably estimated.

     We bill and recognize revenues from maintenance agreements on a monthly
basis while the agreement is in effect. Maintenance fees currently represent a
small percentage of our overall revenues.

     The Company also earns revenues from PLACES OF COLOR through electronic
commerce transactions or checks or money orders. Revenues are recognized in the
month in which the service is performed, provided that no significant Company
obligations remain and collection if the resulting receivable is probable.

     Our expenses include direct salaries and costs, selling, general and
administrative and depreciation. Direct salaries and costs includes salaries,
benefits and incentive compensation of billable employees and other direct costs
associated with revenue generation. Sales and marketing expenses include
promotion and new business generation expenses. General and administrative
expenses include benefits costs of management, rent and human resources costs.
Professional fees include accounting, legal and consulting costs. Depreciation
expenses primarily include depreciation of technology equipment and furniture
and fixtures.



<PAGE>


Personnel compensation and facilities costs represent a high
percentage of our operating expenses and are relatively fixed in advance of each
quarter. Expenses related to PLACES OF COLOR were expensed to operations for the
period ended March 31, 2001. In 2001, we expect such expenses to decrease
significantly as we outsource or strategically partner to minimize personnel and
operational cost.

     As a strategic response to changes in the competitive environment, we may
from time to time make certain pricing, service, technology or marketing
decisions or business or technology acquisitions that could have a material
adverse effect on our business, results of operations and financial condition.
DME may also experience seasonality in its business in the future, resulting in
diminished revenues as a consequence of decreased demand for PLACES OF COLOR
during summer and year-end vacation and holiday periods.

RESULTS OF OPERATIONS

The Company operates and manages its business as a single segment. Interactive
service business was used primarily to build the technology infrastructure for
PLACES OF COLOR.


COMPARISON OF THREE MONTHS ENDED MARCH 31, 2001 TO THREE MONTHS ENDED MARCH 31,
2000

GROSS REVENUES. In 2001, gross revenues were $74,814 as compared to $218,766 in
2000. In 2001, the revenue from the interactive service business was $20,250 a
91% decrease from 2000, and from PLACES OF COLOR was $54,564. In the third
quarter of year 2000 the Company made a strategic decision to not take on any
more interactive service contracts, complete the remaining contracts through the
first half of 2001 and predominantly focus on launching PLACES OF COLOR in the
fourth quarter of year 2000.

TOTAL EXPENSES. In 2001, total expenses were $359,585 as compared to
$853,176 in 2000. The decrease of $493,591 was primarily due to a decrease in
salaries and employee benefits, professional fees, and lease payments.

NET LOSS. As a result of the foregoing, in 2001, we had a net loss of $334,915
as compared to a net loss of $853,984 in 2000.

LIQUIDITY

     At March 31, 2001, the Company had $4,321 of cash and cash equivalents
compared to $312,051 at March 31, 2000.

     Net cash used in operating activities was $21,113 for 2001 compared to
$734,100 used during 2000. In 2001, net cash used in operating activities was
primarily attributable to our net loss that resulted primarily from establishing
the necessary infrastructure for the development and expansion of PLACES OF
COLOR. During the comparable period of 2000, net cash used in operating
activities was primarily attributable to our net loss that resulted primarily
from establishing our interactive service business.



<PAGE>


     Net cash used in investing activities was $0 for 2001 compared to $357,767
used during 2000. The use of cash for investing activities in 2001 and 2000 was
attributable to the acquisition of property and equipment.

     Net cash provided in financing activities was $6,000 for 2001
compared to $1,231,922 provided by financing activities during 2000. The cash
provided for financing activities during 2001 was primarily the result of
proceeds from a notes payable transaction.

     Current cash on hand and cash generated from operations in 2001 was
insufficient to fund our business at our current levels and is not sufficient to
properly allow us to develop PLACES OF COLOR. Therefore, we are pursing external
financing. We cannot assure you that such additional capital will be available
when needed on terms acceptable to us, if at all. The inability to obtain such
financing, would adversely affect our ability to continue business operations.

LIQUIDITY AND CAPITAL RESOURCES

     We have substantial liquidity and capital resource requirements, but
limited sources of liquidity and capital resources. We have generated net losses
and negative cash flows from our inception and anticipate that we will
experience substantial and increasing net losses and negative cash flows for at
least year 2001. As we implement our strategy and seek to take advantage of our
market opportunity, we anticipate that our liquidity and capital resource
requirements will increase significantly.

     From our inception to date, we have relied principally upon equity and debt
investments and accounts receivables to support the development of our
businesses. We are exploring strategic alliances, significant equity investments
in the Company or a merger or the sale of the Company or significant portions of
its business.



<PAGE>


                            PART II-OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         Litigation noted in Note 9.


ITEM 2.  CHANGES IN SECURITIES

         None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES


         None.


 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION AND SUBSEQUENT EVENT

On July 21, 2000, Mr. Thomas O'Rourke and the Company signed a Termination
Agreement. Per Mr. O'Rourke's employment agreement, the 4 million employee stock
options issued to Mr. O'Rourke pursuant to that certain Incentive Stock Option
Agreement dated as of May 11, 2000, were immediately vested upon termination.
Mr. O'Rourke agreed to exchange such vested options for 500,000 shares of the
Company's Common Stock.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         None.



                              DME Interactive Holdings, Inc.
                              ------------------------------
                                         (Registrant)


                                   SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


DME INTERACTIVE HOLDINGS, INC.

Dated:  June 29, 2001                       By:  /s/ DARIEN DASH
                                            ------------------------------------
                                            Darien Dash, Chief Executive Officer
                                            and Chairman of the Board (principal
                                            executive officer).


Dated:  June 29, 2001                       BY:  /s/ ANDRE H. MCKOY
                                            ------------------------------------
                                            Andre H. McKoy, Executive Vice
                                            President and Chief Financial
                                            Officer (principal accounting
                                            officer)