UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549
                                 FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

                                     OR

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

For the transition period from _______________ to___________________

Commission file no. 1-9728

                          J NET ENTERPRISES, INC.
____________________________________________________________________
           (Exact name of registrant as specified in its charter)

      Nevada                               88-0169922
_______________________________   ___________________________________
(State or other jurisdiction of   (I.R.S. Employer Identification No.)
incorporation or organization)

4020 Lake Creek Drive, #100, Wilson, Wyoming          83014
____________________________________________        _________
(Address of principal executive offices)            (Zip Code)

                                307-739-8603
           ____________________________________________________
           (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                             Yes   x      No
                                  ___         ___

Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act).

                             Yes           No  x
                                  ___         ___

There were 8,539,021 shares of the Registrant's common stock outstanding as
of May 10, 2004.

                  J NET ENTERPRISES, INC. AND SUBSIDIARIES
                                   INDEX

Part I.   Financial Information

Item 1.   Financial Statements
          Condensed Consolidated Balance Sheets (Unaudited) -
            March 31, 2004 and June 30, 2003
          Condensed Consolidated Statements of Operations (Unaudited) -
            Three and Nine Months Ended March 31, 2004 and 2003
          Condensed Consolidated Statement of Stockholders' Equity
            (Unaudited) - Nine Months Ended March 31, 2004
          Condensed Consolidated Statements of Cash Flows
            (Unaudited) - Nine Months Ended March 31, 2004 and 2003
          Notes to Condensed Consolidated Financial Statements -
            (Unaudited)

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

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

Item 4.  Controls and Procedures

Part II. Other Information

Item 1.  Legal Proceedings

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K


                  J NET ENTERPRISES, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)
                                (Unaudited)

                                             March 31,     June 30,
                                               2004          2003
                                             _________     ________
        ASSETS
        ______

Current assets:
  Cash and cash equivalents                   $ 4,271      $ 5,537
  Short-term investments                       12,923       12,325
  Accounts receivable, net                        177          132
  Prepaid expenses                                 66           34
                                              _______      _______
    Total current assets                       17,437       18,028

Investments in technology-related
  businesses                                    2,000        2,000
Property and equipment, net of
  accumulated depreciation                         64           79

Other non-current assets                          689          735
                                              _______      _______
    Total assets                              $20,190      $20,842
                                              =======      =======

See Notes to Condensed Consolidated Financial Statements.


                  J NET ENTERPRISES, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)
                                (Unaudited)
                                (Concluded)

                                             March 31,     June 30,
                                               2004          2003
                                             _________     ________

LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________

Current liabilities:
  Accounts payable and other current
    liabilities                             $  3,197       $  3,399
  Deferred revenue and customer deposits         848            689
                                            ________       ________
      Total current liabilities                4,045          4,088
                                            ________       ________

Deferred income taxes                          6,910          6,910
Deferred rent                                    177            193
Other non-current liabilities                    212            212

Commitments and contingencies (Note 6)

Stockholders' equity:
  Preferred stock - authorized 1,000,000
    shares of $1 par value; none issued            -              -
  Common stock - authorized 60,000,000
    shares of $.01 par value; 10,233,470
    shares issued                                102            102
  Additional paid-in capital                  75,250         75,250
  Accumulated deficit                        (50,451)       (49,859)
  Less 1,694,449 and 1,708,929 shares of
    common stock in treasury, at cost        (16,055)       (16,054)
                                            ________       ________
      Total stockholders' equity               8,846          9,439
                                            ________       ________
      Total liabilities and stockholders'
        equity                              $ 20,190       $ 20,842
                                            ========       ========

See Notes to Condensed Consolidated Financial Statements.


                  J NET ENTERPRISES, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED MARCH 31, 2004 AND 2003
               (Dollars in thousands, except per share data)
                                (Unaudited)

                                 Three Months Ended   Nine Months Ended
                                       March 31,         March 31,
                                 __________________   __________________
                                  2004        2003      2004      2003
                                 ______     _______   ________   _______
Revenues, net
  Product licenses               $    2     $    -    $    28   $     21
  Maintenance                       423        630      1,253      1,654
  Services                          100         88        551        406
                                 ______     ______    _______    _______
      Total revenues, net           525        718      1,832      2,081

Cost of revenues:
  Product licenses                    -          -          -          -
  Maintenance                        73          5        133         92
  Services                          125        145        391        406
                                 ______     ______    _______    _______
      Total cost of revenues        198        150        524        498

      Gross profit                  327        568      1,308      1,583

Operating expenses:
  Research and development          157        430        495      1,284
  General and administrative        905      1,014      2,457      3,301
  Impairment of assets                -        (44)         -        903
  Gains from settlements with
    unsecured creditors               -          -          -        (46)
                                 ______     ______    _______    _______
      Total operating expenses    1,062      1,400      2,952      5,442
                                 ______     ______    _______    _______
      Operating loss               (735)      (832)    (1,644)    (3,859)
                                 ______     ______    _______    _______

Other income:
  Interest and other income         303        317      1,052        889
  Gain from repurchase of
    convertible subordinated
    notes                             -          -          -        553
                                 ______     ______    _______    _______
      Total other income            303        317      1,052      1,442
                                 ______     ______    _______    _______
  Loss from operations
    before income tax              (432)      (515)      (592)    (2,417)
                                 ______     ______    _______    _______
  Federal income tax expense          -          -          -       (241)
                                 ______     ______    _______    _______
      Net loss                   $ (432)    $ (515)   $  (592)   $(2,658)
                                 ======     ======    =======    =======
Basic and diluted loss
  per share                      $ (.05)    $ (.06)   $  (.07)   $  (.31)
                                 ======     ======    =======    =======

See Notes to Condensed Consolidated Financial Statements.
<PAGE>
<TABLE>
                              J NET ENTERPRISES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                  NINE MONTHS ENDED MARCH 31, 2004
                                  (Dollars and shares in thousands)
                                             (Unaudited)


                             Common Stock   Additional            Treasury Stock
                            ______________   Paid-In             _________________
                            Shares  Amount   Capital   Deficit    Shares   Amount    Totals
                            ______  ______   _______   ________  _______  ________   _______
<S>                         <C>     <C>      <C>       <C>       <C>      <C>        <C>

Balance June 30, 2003       10,233   $102    $75,250   $(49,859)  (1,709) $(16,054)  $ 9,439
  Purchases of stock                                                            (1)       (1)
  Treasury stock
    adjustment (a)                                                    15
      Net loss                                             (592)                        (592)
                            ______   ____    _______   ________   ______  ________   _______
Balance March 31, 2004      10,233   $102    $75,250   $(50,451)  (1,694) $(16,055)  $ 8,846
                            ======   ====    =======   ========   ======  ========   =======


(a)  On October 1, 2003, treasury shares were reduced by 14,900 shares to reflect shares which were
     never delivered and settled, pursuant to a joint reconciliation effort between the Company and
     its transfer agent.


See Notes to Condensed Consolidated Financial Statements.

</TABLE>
<PAGE>
                  J NET ENTERPRISES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED MARCH 31, 2004 AND 2003
                           (Dollars in thousands)
                                (Unaudited)


                                                      2004         2003
                                                    _______      ________
Operating activities:
  Net loss                                          $  (592)     $ (2,658)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
     Receipt of Federal income tax refund                 -         6,910
     (Gain) loss on disposal of assets                    -          (147)
     Impairment of assets                                 -         1,050
     Depreciation and amortization                       15           100

  Changes in assets and liabilities:
    Federal income tax receivable                         -           983
    Accounts receivable                                 (45)          190
    Short-term investments                             (598)         (379)
    Prepaid expenses and other current assets           (32)          242
    Other non-current assets                             46            33
    Accounts payable and other current
      liabilities                                      (202)         (957)
    Deferred revenue and customer deposits              159          (482)
    Deferred rent                                       (16)          (15)
                                                    _______      ________
        Net cash provided by (used in)
          operations                                 (1,265)        4,870


Investing activities:
  Purchase of short-term investments                      -        (6,000)
  Collection of note receivable - related party           -           288
  Collection of notes receivable                          -           132
  Redemption of short-term investments                    -        24,000
  Purchase of treasury stock                             (1)            -
  Proceeds from sale of assets                            -         4,437
  Purchase of property and equipment                      -            (5)
                                                    _______      ________
        Net cash provided by (used in)
          investing activities                           (1)       22,852

Financing activities:
  Repayment of debt                                       -       (27,750)
                                                    _______      ________
        Net cash used in financing
          activities                                      -       (27,750)
                                                    _______      ________

Net decrease in cash and cash equivalents            (1,266)          (28)
Cash and cash equivalents at beginning
    of period                                         5,537         6,674
                                                    _______      ________
Cash and cash equivalents at end of period          $ 4,271      $  6,646
                                                    =======      ========

Supplemental disclosures of cash flow data:
  None

Non-cash investing and financing activities:
  None

See Notes to Condensed Consolidated Financial Statements.


                   J NET ENTERPRISES, INC. AND SUBSIDIARIES
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Significant accounting policies and business

Business:
J Net Enterprises, Inc. ("J Net" or the "Company") is a holding company
with concentrated investments in enterprise software (the "E-Commerce
Operations") and technology infrastructure companies (the "Technology-
Related Businesses").

E-Commerce Operations represent the Company's primary operations and are
conducted through IW Holdings, Inc. ("IWH"), a wholly owned subsidiary of
the Company and the successor to the business formerly conducted by
InterWorld Corporation ("InterWorld"), a 95.3% owned subsidiary of the
Company.  While InterWorld remains a consolidated subsidiary of the
Company, it has not conducted business operations since May 2002, when its
assets were foreclosed on by J Net, which was then InterWorld's sole
secured creditor.  IWH has conducted the E-Commerce Operations since that
time.

J Net also holds minority investments in other technology companies
including, but not limited to, systems development and software companies.
These investments are held directly by the Company, or by J Net Ventures I,
LLC (the "Fund" or "Ventures I"), a fund which is 100% owned and managed by
the Company.  Such investments are included in the Technology-Related
Businesses segment, which is presently inactive.  No minority investments
have been made since July 2001 and the Company presently has no plans to
reinstate such investment strategy.

Business segments:
The Company has two reportable business segments:  E-Commerce Operations
and Technology-Related Businesses.

Principles of consolidation and basis of presentation:
The accompanying unaudited condensed consolidated financial statements
included herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC").  Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to
such rules and regulations, although Management believes that the
disclosures are adequate to make the information presented not misleading.

The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and its subsidiaries.  All material
intercompany accounts and transactions are eliminated.  The Company's
fiscal year ends on June 30.

In the opinion of Management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
normal recurring accruals and estimates, necessary to present fairly the
Company's financial position as of March 31, 2004 and June 30, 2003, the
results of its operations for the three and nine months ended March 31,
2004 and 2003 and its cash flows for the nine months ended March 31, 2004
and 2003.  The results for the three and nine months ended March 31, 2004
and 2003 are not necessarily indicative of results for a full year.
Information included in the condensed consolidated balance sheet as of June
30, 2003 has been derived from the Company's Annual Report to the SEC on
Form 10-K for the fiscal year ended June 30, 2003 (the "2003 Form 10-K").
These unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and disclosures
included in the 2003 Form 10-K.

Reclassifications:
Certain reclassifications have been made to prior year financial statements
to conform to the current year's presentation.

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

Cash equivalents:
Cash equivalents are liquid investments comprised primarily of debt
instruments and money market accounts with maturities of three months or
less when acquired and are considered cash equivalents for purposes of the
unaudited condensed consolidated balance sheets and statements of cash
flows.  Cash equivalents are stated at cost which approximates fair value
due to their short maturity.

Short-term investments:
As of March 31, 2004, the Company held short-term investments in Mariner
Partners, L.P. ("Mariner"), a private investment fund which had a value of
$12.9 million.  J Net can withdraw all or a portion of its investment upon
45 days prior written notice.  The Company classifies those securities as
short-term investments and records changes in the value of the accounts in
the item captioned interest and other income in the unaudited condensed
consolidated statement of operations.  Subsequent to March 31, 2004, the
short-term investment at Mariner was reduced by $8.0 million.  The proceeds
of the liquidation were converted to cash.

Fair value of financial instruments:
The carrying value of certain of the Company's financial instruments,
including accounts receivable, accounts payable and accrued expenses
approximates fair value due to their short maturities.

The unaudited condensed consolidated balance sheet as of March 31, 2004
contains approximately $1.7 million of unsecured creditor liabilities of
InterWorld.  As a result of J Net's foreclosure on its secured promissory
note with InterWorld in 2002 and the transfer of assets, contracts,
intellectual property and employees to IWH, InterWorld does not have
financial resources to pay the face value of these obligations.  Management
of J Net, on behalf of InterWorld, has been actively negotiating with
significant creditors of InterWorld to settle certain liabilities.  Between
April 2002 and March 2004, liabilities with a face value of $1.0 million
were settled for approximately $.3 million, excluding a settlement with PBS
Realty discussed below.  Management expects, but cannot provide assurance,
that the remaining obligations may be settled at substantially less than
their face value.  In May 2004, InterWorld Corporation will file for
protection under Chapter 7 of the U.S. Bankruptcy Code.  InterWorld has no
assets, and has liabilities of approximately $1.7 million.

Financial instruments with concentration of credit risk:
The financial instruments that potentially subject J Net to concentrations
of credit risk consist principally of cash and cash equivalents.  J Net
maintains cash and certain cash equivalents with financial institutions in
amounts which, at times, may be in excess of the FDIC insurance limits.  J
Net's cash equivalents are invested in several high-grade securities and
money markets which limit J Net's exposure to concentrations of credit
risk.

The Company owns short-term investments which are managed by Mariner and
are subject to fluctuations based on Mariner's investment strategies.

Investments in Technology-Related Businesses:
The various interests that the Company acquires in Technology-Related
Businesses are accounted for under one of three methods: consolidation,
equity or cost.  The applicable accounting method is generally determined
based on the Company's voting interest and its ability to influence or
control the Technology-Related Businesses.

It is the policy of the Company to evaluate its investments in Technology-
Related Businesses for possible impairment on a quarterly basis.
Management uses a number of different criteria when evaluating an asset for
possible impairment.  Indicators such as significant decreases in market
value of an investment, discounted cash flow analyses, adverse changes in
the business climate or legal matters, losses of significant customers or
new technologies which could accelerate obsolescence of business products,
and sustained operating losses and cash flows which cannot be resolved or
improved within a reasonable amount of time to justify continued business
operations are used by Management when making its evaluations.

In July 2003, IWH amended an agreement (the "Amended Agreement") related to
licensing of software with EB2B Commerce, Inc. ("EB2B").  The Amended
Agreement allows EB2B to continue to use IWH's software for a two-year
term.  Compensation received by IWH under the Amended Agreement  included
(a) $20 thousand in cash, (b) issuance of 170,015 shares of EB2B's common
stock, which when combined with 145,906 shares previously issued by EB2B to
InterWorld, would equal 9.9% of the issued and outstanding common shares of
EB2B, (c) 10% of the revenues that EB2B generates through the use of IWH's
software, and (d) 7.5% of the revenues (excluding those generated under
provision (c)) received by EB2B from maintenance and other services
performed by EB2B for its customers.  Total compensation under provisions
(c) and (d), excluding the $20 thousand of cash received, shall not exceed
$300 thousand.

IWH uses the cost method to account for the investment in the common shares
of EB2B.  However, EB2B is subject to certain debts which are senior in
preference to the common shares.  As a result, no value has been assigned
to the common shares received as part of the Amended Agreement.

Accounting for equity method investments:
When the Company uses the equity method to account for its investments in
Technology-Related Businesses it uses the procedures outlined in the
Emerging Issues Task Force issue number 98-13 ("EITF 98-13"), which covers
accounting by equity method investors for investee losses when the investor
has loans to and investments in other securities of the investee.  EITF 98-
13 generally defines other investments in the investee to include preferred
stock, debt securities and loans.  The conclusions of the task force also
prescribe the order in which equity method losses shall be recognized in
order of seniority of the other investments (that is, priority in
liquidation).

Stock-based compensation:
The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25") and the pro forma disclosures
required in accordance with Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123") to account for
employee based stock compensation using the fair market value method.  The
Company also follows the provisions contained within the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants ("AICPA") Interpretation 44 ("FIN 44"), which provides
clarification on the application of APB 25.

When the Company issues stock-based compensation awards to non-employees or
Directors, the grants are accounted for in accordance with the Emerging
Issues Task Force Issue 95-18, "Accounting for Equity Instruments that are
Issued to Other Than Employees for Acquiring or in Conjunction with Selling
Goods or Services" ("EITF 96-18").

The Company measures the fair value of equity instruments for employee and
non-employee grants using the Black-Scholes option pricing model.

In 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure" ("SFAS 148").  This statement
amended certain disclosure provisions in SFAS 123 and Accounting Principles
Board Opinion No. 28, "Interim Financial Reporting".  The Company adopted
the disclosure provisions of SFAS 148 beginning March 31, 2003.  Until such
time that the FASB specifies the methodology used to calculate charges to
earnings for stock-based compensation, the Company will continue using the
intrinsic value method prescribed by APB 25.

The following table discloses pro forma amounts for net loss and basic and
dilutive loss per share for the three and nine months ended March 31, 2004
and 2003 assuming compensation cost for employee and director stock options
granted in fiscal 2001 had been determined using the fair value-based
method prescribed by SFAS 123.  There were no options granted in fiscal
2002, 2003 or 2004 to date.  The pro forma results may not be
representative of the effects of options on net income in future years
(dollars in thousands, except per share data):

                                   Three Months Ended   Nine Months Ended
                                         March 31,           March 31,
                                   __________________   _________________
                                    2004         2003   2004       2003
                                   _____        _____   _____     _______
Net loss:
  As reported                      $(432)       $(515)  $(592)    $(2,658)
  Fair value of grants to
    employees (FY01)                   -          (10)      -         (30)
                                   _____        _____   _____     _______
  Pro forma                        $(432)       $(525)  $(592)    $(2,688)
                                   =====        =====   =====     =======

Basic and diluted loss per share:
  As reported                      $(.05)       $(.06)  $(.07)    $  (.32)
  Pro forma                        $(.05)       $(.06)  $(.07)    $  (.32)

Weighted average assumptions:
  Expected stock price volatility      -            -       -           -
  Risk-free interest rate              -            -       -           -
  Expected option lives (in years)     -            -       -           -
  Estimated fair value of
    options granted                $   -        $   -   $   -     $     -

The Company's 1992 Stock Option Plan expired on September 30, 2002.  Under
that plan, each Director of the Company received 27,500 options on June 30
of each year.  Such options vested on the following September 30 at the
market price of the Company's common stock on that date.  The June 30, 2002
stock option grant, which totaled 137,500 (27,500 to each of five
directors), was voluntarily returned and cancelled by each Director in
September 2002.  As a result of these actions, combined with the
contractual termination of the stock option plan, no options have been, or
are expected to be granted until a new option plan is put in place.

Property and equipment:
Leasehold improvements and other property and equipment are recorded at
cost and are depreciated on a straight line basis over the shorter of
estimated useful life of the asset or lease terms, as applicable, as
follows: 2 to 7 years for equipment and 3 to 10 years for leasehold
improvements.  Property sold or retired is eliminated from the accounts in
the period of disposition.

Income taxes:
The Company accounts for income taxes in accordance with SFAS 109,
"Accounting for Income Taxes" ("SFAS 109").  SFAS 109 requires that
deferred tax assets and liabilities arising from temporary differences
between book and tax bases will be recognized using enacted tax rates at
the time such temporary differences reverse.  In the case of deferred tax
assets, SFAS 109 requires a reduction to deferred tax assets if it is more
likely than not that some portion or all of the deferred tax asset will not
be realized.

There are accumulated deferred tax assets of $20.2 million, which are fully
offset by a valuation allowance pursuant to SFAS 109.  Such losses are
limited by certain IRS regulations.  While Management continues to take
actions required to turn the Company profitable, the ability to generate
income at levels sufficient to realize the accumulated deferred benefits is
not determinable at this time.

In March 2002, the Job Creation and Worker Assistance Act of 2002 (the
"Act") was signed into law.  Among other things, the Act extended the
carry-back period for operating losses incurred in fiscal years ended in
2001 and 2002 from two years to five years.  Based on this legislation, on
November 26, 2002, the Company filed for a refund of Federal income taxes
previously paid of $7.7 million.  The refund was received in December 2002.
The refund is subject to audit by the Internal Revenue Service and the
review and approval of the Congressional Joint Committee on Taxation.
There can be no assurance as to what part, if any, of such refund will
ultimately be allowed.  Due to the significance of the refund, Management
determined an appropriate amount to reserve pending further review by the
Internal Revenue Service.  As of June 30, 2003, the amount reserved is $6.9
million.  In May 2003, the Internal Revenue Service began an audit of the
Company's June 30, 2001 and June 30, 2002 Federal income tax returns.

On April 20, 2004, J Net received a notice of proposed adjustments (the
"Notice") from the Internal Revenue Service ("IRS"), dated April 15, 2004,
covering the audit of J Net's tax returns for its fiscal years ended June
30, 2001 and 2002, and related NOL carrybacks that affect other taxable
years.  J Net believes that the proposed adjustments contain factual and
legal errors and intends to vigorously contest the matter with the IRS.
While there can be no assurance that the proposed adjustments will be
reduced or eliminated, J Net does not currently believe that an increase in
the amount previously reserved for taxes is required.

Revenue recognition:
The Company follows AICPA Statement of Position 97-2, "Software Revenue
Recognition" ("SOP 97-2"), as amended by SOP 98-4, further amended by SOP
98-9, and Staff Accounting Bulletin 101.  These pronouncements provide
guidance on when revenue should be recognized and in what amounts as well
as what portion of licensing transactions should be deferred.

Revenue under multiple element arrangements is allocated to each element
using the "residual method", in accordance with Statement of Position No.
98-9, "Modification of SOP 97-2 with Respect to Certain Transactions" ("SOP
98-9").  Under the residual method, the arrangement fee is recognized as
follows:  (a) the total fair value of the undelivered elements, as
indicated by vendor-specific objective evidence, is deferred and (b) the
difference between the total arrangement fee and the amount deferred for
the undelivered elements is recognized as revenue related to the delivered
elements.  Software license agreements generally include two elements:  the
software license and post-contract customer support.  The Company has
established sufficient vendor-specific objective evidence for the value of
maintenance and post-contract customer support services based on the price
when these elements are sold separately and/or when stated renewal rates
for maintenance and post-contract customer support services are included in
the agreement, and the actual renewal rate achieved.

Product licenses:
Revenue from the licensing of software products is recognized upon shipment
to the customer, pursuant to an executed software licensing agreement when
no significant vendor obligations exist and collection is probable.  If
acceptance by the customer is required, revenue is recognized upon customer
acceptance.  Amounts received from customers in advance of product shipment
or customer acceptance are classified as deposits from customers.  Other
licensing arrangements, such as reseller agreements, typically provide for
license fees payable to the Company based on a percentage of the list price
for the software products.  The license revenues are generally recognized
when shipment by the reseller occurs, or when collection is probable.

Contracts for product licenses where professional services require
significant production, modification or customization are generally
recognized on a percentage of completion basis unless contractual terms
indicate an alternative method is more appropriate.

Services revenue:
Revenue from professional services, such as custom development and
installation and integration support is recognized as the services are
rendered and requirements contained within the contracts are satisfied.

Maintenance revenue:
Revenue from maintenance and post-contract customer support services, such
as telephone support and product enhancements is recognized ratably over
the period of the agreement under which the services are provided,
typically one year.  Recognition of maintenance and support revenue is
deferred until payments are received, or sufficient evidence that payment
will be received exists.

Deferred revenue consists principally of billings in advance for services
and support not yet provided and uncollected billings to customers for
maintenance and post contract support.

Recently issued accounting standards:
There were no new accounting standards issued during the three months ended
March 31, 2004.  However, in March 2004, the FASB issued an exposure draft
(the "ED") of a proposed standard which could change the accounting for
employee stock options.

In the ED, the FASB states that it prefers public companies to use a
lattice, or bi-nominal model to calculate a cost for stock options granted.
The lattice model differs from the Black Scholes model because the lattice
model is an iterative calculation that allows for the use of multiple or
variable assumptions.  The most significant change in the ED, if adopted,
would be the treatment of the fair value of granted options as compensation
expense in the statement of operations.  The comment period for the ED ends
on June 30, 2004.  The Company will monitor the status of the ED and adopt
its provisions if the ED becomes a formal Statement of Financial Accounting
Standards.

Note 2   Investments in Technology-Related Businesses

Between March 2000 and November 2001, the Company invested in eleven
companies, including its initial investment in InterWorld.

As of March 31, 2004, four of these investments continue operations: Tellme
Networks, Inc.; eStara, Inc.; Strategic Data Corporation; and certain
companies contained in the Meister Brothers Investment portfolio.  The
Company uses the cost method of accounting for these investments.  The
Company continues to ascribe value to its investment in Tellme Networks,
Inc.  The other investments have been written off.

In addition to these four investments, as part of the Amended Agreement
with EB2B (see Note 1), IWH holds 9.9% of the issued and outstanding shares
of EB2B.

IWH uses the cost method to account for the investment in the common shares
of EB2B.  However, EB2B is subject to certain debts which are senior in
preference to the common shares.  As a result, no value has been assigned
to the common shares received as part of the Amended Agreement.

In September 2000, the Company purchased 136,500 shares of Series "D"
Preferred Stock of Tellme Networks, Inc. ("Tellme"), representing less than
1% voting interest in Tellme, and applied the cost method to account for
its investment.  Tellme is a non public company that provides voice
technology that delivers information from the Internet over the phone.
Tellme has sufficient cash and liquid investments to fund operations for
several years.  It is the policy of the Company to evaluate its investments
for possible impairments quarterly.  Recent forecasts continue to call for
improved operations at Tellme.  Management believes there are no indicators
of impairment for this investment.

Note 3   Loss per share

Basic loss per share for the three and nine months ended March 31, 2004 and
2003 is computed by dividing net loss from operations by the weighted
average number of common shares outstanding for the respective period.
Since the three and nine month periods ended March 31, 2004 and 2003 had
losses from operations, no potential common shares from the assumed
exercise of options have been included in the diluted loss per share
computations pursuant to accounting principles generally accepted in the
United States.

The following is the amount of loss and number of shares used in the basic
and diluted loss per share computations (dollars and shares in thousands,
except per share data):


                                        Three Months       Nine Months
                                           Ended              Ended
                                          March 31,          March 31,
                                       _____________      ______________
                                       2004    2003       2004     2003
                                       _____   _____      _____  _______
Basic and diluted loss per share:
  Net loss                             $(432)  $(515)     $(592) $(2,658)
                                       =====   =====      =====  =======

  Shares:
    Weighted average number of common
      shares and common share
      equivalents outstanding          8,539   8,525      8,534    8,525
                                       =====   =====      =====  =======

  Basic and diluted loss per share     $(.05)  $(.06)     $(.07) $  (.31)
                                       =====   =====      =====  =======

The calculation of earnings per share data excluded 1,487,500 and 1,570,000
of outstanding stock options for the three months ended March 31, 2004 and
2003, respectively, and 1,487,500 and 1,675,946 outstanding stock options
for the nine months ended March 31, 2004 and 2003, respectively.

Note 4   Related party transactions

One director of J Net is a partner of a law firm that provides legal
services to the Company.  Payments to the law firm during the three and
nine months ended March 31, 2004 were less than one thousand dollars.

Note 5   Operating segments

The Company has two reportable segments:  E-Commerce Operations and
Technology-Related Businesses.  Prior to May 2001, the Company operated in
only one segment, the Technology-Related Businesses.  Assets are the owned
assets used by each operating segment.  Summary of consolidated loss from
operations, net of tax (dollars in thousands):

                                          Three Months       Nine Months
                                             Ended             Ended
                                            March 31,         March 31,
                                         _____________    _________________
                                         2004     2003      2004     2003
                                        ______   _____    _______  ________

Net income (loss):
  E-Commerce Operations                 $(282)   $(143)  $  (199)  $  (455)
  Technology-Related Businesses          (150)    (372)     (393)   (2,203)
                                        _____    _____   _______   _______
    Net loss                            $(432)   $(515)  $  (592)  $(2,658)

E-Commerce Operations:
  Revenues                              $ 525    $ 718   $ 1,832   $ 2,081
  Cost of revenues                       (198)    (150)     (524)     (498)
                                        _____    _____   _______   _______
    Gross profit                          327      568     1,308     1,583

Operating expenses                       (609)    (711)   (1,516)   (2,083)
Other income (expense)                      -        -         9        45
                                        _____    _____   _______   _______

    Net income (loss) from E-Commerce
      Operations                        $(282)   $(143)  $  (199)  $  (455)
                                        =====    =====   =======   =======

Technology-Related Businesses:
  Total operating expenses              $(453)   $(733)  $(1,436)  $(3,506)
  Other income                            303      361     1,043     1,544
  Provision for Federal income tax          -        -         -      (241)
                                        _____    _____   _______   _______

    Net loss from Technology-Related
      Businesses                        $(150)   $(372)  $  (393)  $(2,203)
                                        =====    =====   =======   =======

                                           As of March 31, 2004
                                           ____________________
Assets:
E-Commerce Operations                             $   295
Technology-Related Businesses                      19,895
                                                  _______
  Total assets                                    $20,190
                                                  =======

Note 6   Commitments and contingencies

Employment agreements:
J Net entered into employment agreements with Mark W. Hobbs, the former
President and Chief Operating Officer, and Steven L. Korby, the former
Executive Vice President and Chief Financial Officer on October 1, 2000.
Such agreements expired on June 21, 2003.  Pursuant to the terms of those
agreements, upon expiration, Mr. Hobbs and Mr. Korby were entitled to
receive an aggregate of $.6 million of severance pay of which $.5 million
is payable in fiscal 2004.  The unpaid amount was accrued as a liability at
June 30, 2003 in accordance with SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities".  As of March 31, 2004, the
unpaid liability for the severance was $.1 million.  The liability is
reflected as a component of accounts payable and accrued liabilities on the
unaudited condensed consolidated balance sheet as of March 31, 2004.

Legal matters:
J Net is not a party to any legal matters that could have a material impact
on its operations as of March 31, 2004.  However, InterWorld, a 95.3% owned
subsidiary, is subject to two claims.

On March 8, 2001, as amended on May 29, 2001, InterWorld received notice
that the SEC commenced a formal order directing a private investigation by
the SEC with respect to whether InterWorld engaged in violations of Federal
Securities Laws as it relates to InterWorld's financial statements, as well
as its accounting practices and policies.  Also under review by the SEC is
certain trading in InterWorld stock.  All the above events are related to
periods prior to the Company's common stock ownership in InterWorld.

The investigation is confidential and the SEC has advised that the
investigation should not be construed as an indication by the SEC or its
staff that any violation of law has occurred nor should the investigation
be construed as an adverse reflection on any person, entity or security.

Although the Company is unaware of any activity with respect to the
investigation for more than the past year, InterWorld intends to fully
cooperate with the SEC.

PBS Realty ("PBS"), a real estate broker conducting business in New York
City filed a $1.2 million claim against InterWorld in April 2002.  The
claim alleged that PBS was owed commissions by InterWorld for services
related to PBS's attempts to sublease office space previously occupied by
InterWorld in New York City.   InterWorld vigorously contested the claim.
In April 2004, InterWorld and PBS entered into a Settlement Agreement and
Release (the "Settlement").  Upon execution of the Settlement, InterWorld,
PBS and J Net agreed that J Net would pay $.2 million to PBS in exchange
for PBS discontinuing its litigation against InterWorld.  In addition, PBS
agreed to release InterWorld and J Net from any claims, charges, demands,
sums of money, actions, rights, and any other liabilities related to the
claims asserted by PBS, including certain threatened but unasserted claims
against J Net.

From time to time, the Company or its subsidiaries are parties to claims,
legal actions and complaints arising in the ordinary course of business.
Presently, there are no such issues which would have a material adverse
affect on the Company's consolidated position.

Other matters:
In May 2004, InterWorld Corporation will file for protection under Chapter
7 of the U.S. Bankruptcy Code.  InterWorld has no assets, and has
liabilities of approximately $1.7 million.


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

Forward-Looking Statements; Risks and Uncertainties

Certain information included in this Form 10-Q and other materials filed or
to be filed by the Company with the Securities and Exchange Commission (the
"SEC") contains statements that may be considered forward-looking. All
statements other than statements of historical information provided herein
may be deemed to be forward-looking statements.  Without limiting the
foregoing, the words "believes", "anticipates", "plans", "expects",
"should" and similar expressions are intended to identify forward-looking
statements. In addition, from time to time, the Company may release or
publish forward-looking statements relating to such matters as anticipated
financial performance, business prospects, technological developments and
similar matters.  The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements.  In order to comply
with the terms of the safe harbor, the Company notes that a variety of
factors could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in
the Company's forward-looking statements.

The risks and uncertainties that may affect operations, performance,
development and results of the Company include, but are not limited to, the
ability to increase sales of its e-commerce software products, attract new
clients, maintain existing clients in the face of new competition and
reduce costs.  In other investment or partnering activities, the Company
must identify and successfully acquire interests in systems development or
other technology-based companies and grow such businesses.  The ability of
entities in which the Company has invested to raise additional capital on
terms which are acceptable to the Company, or other investors, is critical
in the ongoing success of such companies and obtaining additional capital
in markets which are performing poorly may be difficult.

Overview

J Net Enterprises, Inc. ("J Net" or the "Company") is a holding company
conducting operations through a wholly owned enterprise software subsidiary
(the "E-Commerce Operations").  The Company also holds investments in
technology infrastructure companies (the "Technology-Related Businesses").

E-Commerce Operations are conducted through IW Holdings, Inc. ("IWH"), a
wholly owned subsidiary of the Company and the successor to the business
formerly conducted by InterWorld Corporation ("InterWorld"), a 95.3% owned
subsidiary of the Company which no longer conducts any business operations.

J Net also holds minority investments in other technology companies
including, but not limited to, systems development and software companies.
These investments are held directly by the Company, or J Net Ventures I,
LLC ("Ventures I" or the "Fund"), a fund which is owned 100% by the
Company.  Due to the significant financial and management resources
required to stabilize the E-Commerce Operations, Management has not pursued
additional minority investments and has no plans to actively reinstate that
strategy in the foreseeable future.

The Company is actively seeking potential acquisitions of operating
companies and enhancement opportunities for its E-Commerce Operations.
Such enhancements include strategic alternatives comprised of expansion of
marketing efforts, seeking business partners, or the sale of IWH.
Management will devote its time and resources to these efforts and may
incur expenses in connection with such activities.  The Company anticipates
that, as it continues to engage in such activities, it will periodically
incur expenses that may have a material effect on the Company's operating
income.

Although the Company is exploring expansion and acquisition opportunities,
there can be no assurance that such opportunities will be available on
terms acceptable to J Net or that, if undertaken, they will be successful.

Marketing of E-Commerce products is conducted with a limited internal staff
which is supported by licensed resellers in Germany and Japan.  IWH is also
pursuing negotiations with additional resellers.  Internal marketing staff
increases are dependent on the ability to sell products and a demonstrated
improvement in the market for E-Commerce products, which have been sluggish
for the past several years.

Critical Accounting Policies

General:
The policies outlined below are critical to our operations and the
understanding of our results of operations.  The impact of these policies
on our operations is discussed throughout Management's Discussion and
Analysis of Financial Condition and Results of Operations where such
policies affect our reported and expected financial results.  For a
detailed discussion on the application of these and other accounting
policies, refer to Note 1 in the Notes to the Condensed Consolidated
Financial Statements for this quarterly report.  Note that our preparation
of this Quarterly Report on Form 10-Q requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities and the reported amounts of
revenue and expenses during the reporting period.  There can be no
assurance that actual results will not differ from those estimates.

Accounting for Investments in Technology-Related Businesses:
The various interests that the Company acquires in Technology-Related
Businesses are accounted for under one of three methods:  consolidation,
equity or cost.  The applicable accounting method is generally determined
based on the Company's voting interest and its ability to influence or
control the Technology-Related Businesses.

It is the policy of the Company to evaluate its investments in Technology-
Related Businesses and other long lived assets for possible impairment on a
quarterly basis.  Determination of impairment is based on a number of
factors designed to detect if any specific indicators of impairment exist.
Such factors include, but are not limited to, significant decreases in the
market value of the investment, discounted cash flow analyses, adverse
changes in the business or legal environment, loss of significant
customers, the introduction of new technologies which accelerate
obsolescence of existing products, and sustained operating losses and
negative cash flows which could not be resolved or improved within a
reasonable amount of time to justify continued operations.

Revenue Recognition:
The Company follows AICPA Statement of Position 97-2, "Software Revenue
Recognition" ("SOP 97-2"), as amended by SOP 98-4, further amended by SOP
98-9, and Staff Accounting Bulletin 101.  These pronouncements provide
guidance on when revenue should be recognized and in what amounts as well
as what portion of licensing transactions should be deferred.

Revenue under multiple element arrangements is allocated to each element
using the "residual method", in accordance with Statement of Position No.
98-9, "Modification of SOP 97-2 with Respect to Certain Transactions" ("SOP
98-9").  Under the residual method, the arrangement fee is recognized as
follows: (a) the total fair value of the undelivered elements, as indicated
by vendor-specific objective evidence, is deferred and (b) the difference
between the total arrangement fee and the amount deferred for the
undelivered elements is recognized as revenue related to the delivered
elements.  Software license agreements generally include two elements: the
software license and post-contract customer support.  The Company has
established sufficient vendor-specific objective evidence for the value of
maintenance and post-contract customer support services based on the price
when these elements are sold separately and/or when stated renewal rates
for maintenance and post-contract customer support services are included in
the agreement, and the actual renewal rate achieved.

Product licenses:
Revenue from the licensing of software products is recognized upon shipment
to the customer, pursuant to an executed software licensing agreement when
no significant vendor obligations exist and collection is probable.  If
acceptance by the customer is required, revenue is recognized upon customer
acceptance.  Amounts received from customers in advance of product shipment
or customer acceptance are classified as deposits from customers.  Other
licensing arrangements such as reseller agreements typically provide for
license fees payable to the Company based on a percentage of the list price
for the software products.  The license revenues are generally recognized
when shipment by the reseller occurs and when collection is probable.

Contracts for product licenses where professional services require
significant production, modification or customization are recognized on a
percentage of completion basis.

Services revenue:
Revenue from professional services, such as custom development and
installation and integration support, is recognized as the services are
rendered and other requirements contained within the services contract are
satisfied.

Maintenance revenue:
Revenue from maintenance and post-contract customer support services, such
as telephone support and product enhancements, is recognized ratably over
the period of the agreement under which the services are provided,
typically one year.  Recognition of revenue is deferred until payments from
customers are received, or sufficient evidence that payment will be
received exists.

Deferred revenue consists principally of billings in advance for services
and support not yet provided and uncollected billings to customers for
maintenance and post contract support.

Impairments:
It is the policy of the Company to evaluate its investments in Technology-
Related Businesses and other long lived assets for possible impairment on a
quarterly basis.  Determination of impairment is based on a number of
factors designed to detect if any specific indicators of impairment exist.
Such factors include, but are not limited to, significant decreases in the
market value of the investment, discounted cash flow analyses, adverse
changes in the business or legal environment, loss of significant
customers, the introduction of new technologies which accelerate
obsolescence of existing products and sustained operating losses and
negative cash flows which could not be resolved or improved within a
reasonable amount of time to justify continued operations.

In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement No. 145, "Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS
145").  Prior to the issuance of SFAS 145, early debt extinguishments were
required to be recognized as extraordinary items.  SFAS 145 amended other
previously issued statements and made numerous technical corrections.  With
the exception of the accounting treatment for extinguishments of debts,
those other modifications are not expected to impact the consolidated
financial statements of the Company.

Three Months Ended March 31, 2004 and 2003

Results of Operations

Total revenues:
Consolidated revenues were $.5 million for the three months ended March 31,
2004 (the "2004 three months") compared to $.7 million for the three months
ended March 31, 2003 (the "2003 three months").

During the 2004 three months, no license deals were completed. The license
revenue of $2 thousand in the 2004 three months was the result of a
settlement of a prior years' claim in the amount of $20 thousand, which is
being recognized over a two year period pursuant to the settlement terms.
The Company had no new license sales in the 2004 three months.

Professional services revenues were $.1 million for the 2004 three months
and 2003 three months.  The 2004 three months included four engagements,
all of which were related to upgrading functionality at existing clients.

Post contract support revenue was $.4 million for the 2004 three months and
$.6 million for the 2003 three months.  There was minimal attrition in this
revenue stream from the prior years' quarter, however the 2003 three months
shows $135 thousand of additional support revenue recognized as a result of
the timing of a cash receipt.

Total cost of revenues:
Cost of revenues, which include direct labor costs related to professional
services and maintenance activities and imbedded third party customer
software maintenance fees were $.2 million for the 2004 three months, which
were approximately the same as the 2003 three months costs.

Operating expenses:
Total operating expenses were $1.1 million for the 2004 three months
compared to $1.4 million for the 2003 three months.  The decrease of $.3
million reflects the combination of lower administrative costs in the
Technology-Related Businesses' segment resulting from staff reductions and
reduced research and development costs in E-Commerce Operations.  These
lower operating costs were partially offset by $.2 million of settlement
costs associated with the Company's settlement of litigation with PBS.

Other income:
Net other income, which consists of increases in the value of short-term
investments at Mariner, interest on the Company's cash deposits and
sublease rental income, was $.3 million for the 2004 three months and 2003
three months.

Net loss:
The net loss was $.4 million for the 2004 three months compared to a loss
of $.5 million in the 2003 three months.  The improvement is due primarily
to the reduction in operating expenses since that date.

Nine Months Ended March 31, 2004 and 2003

Results of Operations

Total revenues:
Consolidated revenues were $1.8 million for the nine months ended March 31,
2004 (the "2004 nine months") as compared with $2.1 million for the nine
months ended March 31, 2003 (the "2003 nine months").

During the 2004 nine months, two license deals were completed.  One was the
result of a settlement of a prior years' claim in the amount of $20
thousand.  The license revenue from the $20 thousand cash payment is being
recognized ratably over a two year period pursuant to the contract terms.
In addition to the cash portion of the settlement, the Company received
9.9% of the outstanding common shares of the customer.  No economic value
was placed on the shares received due to the common shares being
subordinated to other securities of the customer.  The third component of
the settlement also contained provisions which entitle the Company to
receive up to $.3 million in royalties and maintenance from revenues
generated by the client from the use of IWH's products in the future.
Revenues from the royalty and maintenance arrangements will be recognized
on a cash basis due to their contingent nature.  The additional license
revenue was from the sale of additional capacity on an existing license
through IWH's reseller in Germany.

Professional services revenues were $.6 million for the 2004 nine months,
compared to $.4 million in the 2003 nine months.  The 2004 nine months
included five engagements, four of which were related to upgrading
functionality at existing clients and one training engagement.

The increased professional service revenues were offset by a decrease in
post contract maintenance support revenue, which decreased to $1.3 million
for the 2004 nine months from $1.7 million for the 2003 nine months.  The
decline was due to the combination of non-renewals and renegotiated rates
with certain customers.

Total cost of revenues:
Cost of revenues, which include direct labor costs related to professional
services and maintenance activities and imbedded third party customer
software maintenance fees, were $.5 million for the 2004 nine months, which
were approximately the same as the 2003 nine months costs.

Operating expenses:
Total operating expenses were $3.0 million for the 2004 nine months
compared to $5.4 million for the 2003 nine months.  The decrease of $2.4
million is due primarily to a $.9 impairment of property held for sale in
the 2003 nine months and staff reductions throughout the Company.  There
were a total of 29 employees at March 31, 2003 compared to 16 employees at
March 31, 2004.  Most of the reductions were in the software engineering
functions.  Certain savings associated with these staff reductions were
used to increase sales efforts.  The Company also benefitted from a
reduction in liability insurance and other operating costs for the 2004
nine months.

Other income:
Net other income, which consists of increases to the value of short-term
investments at Mariner, interest income on cash deposits and sublease
rental income, was $1.1 million for the 2004 nine months as compared to
$1.4 million for the 2003 nine months.  The 2003 nine months included two
components:  other income as described above of $.9 million and a $.5
million gain from the repurchase of the Company's convertible subordinated
notes (the "Notes") in July 2002.  Such gain was the result of a voluntary
offer by the Company to repurchase the Notes at face value, but excluding
any accrued interest on the Notes from March 31, 2002, the last interest
payment date.

The increase in interest and other income to $1.1 million for the 2004 nine
months from $.9 million for the 2003 nine months was due primarily to
higher cash and short term investment balances as of March 31, 2004
compared to the same period in the prior year.

Net loss:
The net loss was $.6 million for the 2004 nine months compared to a loss of
$2.7 million in the 2003 nine months.  The improvement is due primarily to
$2.3 million reduction in operating expenses from the prior year, with such
reduction being partially offset by the gain from the repurchase of the
Notes and the reduction in total revenues.

Capital Resources and Liquidity

Liquidity:
As of March 31, 2004, the Company had $17.4 million of cash and short term
investments and $.1 million of receivables. The Company estimates that it
will require approximately $1.7 million to fund its operations in fiscal
2004.  Such assumption is based on meeting revenue targets in E-Commerce
Operations. Sources of funds are derived from E-Commerce Operations sales,
interest on cash deposits, and returns on short term investments at
Mariner.  Management believes that its revenue projections are conservative
and that its costs can be managed to its budgets without difficulty.  As a
result, the existing cash and short term investments are adequate to
continue funding operations as required and provide resources for the
Company to pursue other business opportunities.

The Company's lease commitments as of March 31, 2004 are $3.2 million for
its office locations in Wyoming, Texas and New York.  An office lease in
New York has been subleased to an unrelated third party.  The remaining
cash inflows from the sublease, net of profit sharing arrangements with the
landlord are $3.7 million.  While the Company remains the primary
responsible party under terms of the original lease, it has no reason to
expect that the subtenant will default on its obligation under terms of the
sublease.  As a result, the Company's net lease commitments are profitable.
The following table sets forth the consolidated lease obligations as of
March 31, 2004 (dollars in thousands):

                                         Fiscal Years Ended June 30,
                                    ______________________________________
                        Remainder    2005 -   2008 -    2010 and
                        of FY 2004   2007     2010     thereafter   Total
                        __________  _______  _______   __________   ______

Lease obligations
  Gross operating
    leases                $ 166     $ 1,424  $ 1,442     $ 160     $ 3,192
  Sublease receipts        (133)     (1,660)  (1,744)     (194)     (3,732)
                          _____     _______  _______     _____     _______
    Net lease
      obligations
      (profit)            $  33     $  (236) $ (303)     $ (34)    $  (540)
                          =====     =======  ======      =====     =======

The Company has a remaining severance obligation to two former executives
in the amount of $.1 million.  Such obligation is being paid in semi-
monthly installments until June 2004, when the obligation will be paid in
full.  The liability is reflected as a component of accounts payable and
accrued liabilities on the unaudited condensed consolidated balance sheet
as of March 31, 2004.

The March 31, 2004 accounts payable and accrued liabilities include
approximately $1.7 million attributable to unsecured creditors of
InterWorld.  While these liabilities are included as part of the
consolidated group, they remain separate and distinct to InterWorld.
Although Management has actively negotiated with many of the significant
unsecured creditors to settle aged claims, no vendor settlements were
finalized during the previous twelve months.  Although there can be no
assurances, Management believes the remaining obligations will be settled
at amounts substantially less then their respective face values.  In May
2004, InterWorld Corporation will file for protection under Chapter 7 of
the U.S. Bankruptcy Code.

Cash flows:
For the 2004 nine months, consolidated net cash used in operations was $1.3
million, almost all of which was attributable to the Technology-Related
Businesses segment.  The decrease reflects payments of the Company's
severance obligation of approximately $.4 million and other working capital
components.

Investing and financing activities:
There were no significant investing or financial activities for the 2004
three months.  Activity during the 2003 nine months included the repurchase
of the Company's $27.8 million of Notes in July 2002.

Recently Issued Accounting Standards

There were no new accounting standards issued during the 2004 three months.
However, in March 2004, the FASB issued an exposure draft (the "ED") of a
proposed standard which could change the accounting for employee stock
options.

In the ED, the FASB states that it prefers public companies to use a
lattice, or bi-nominal model to calculate a cost for stock options granted.
The lattice model differs from the Black Scholes model because the lattice
model is an iterative calculation that allows for the use of multiple or
variable assumptions.  The most significant change in the ED, if adopted,
would be the treatment of the fair value of granted options as compensation
expense in the statement of operations.  The comment period for the ED ends
on June 30, 2004.  The Company will monitor the status of the ED and adopt
its provisions if the ED becomes a formal Statement of Financial Accounting
Standards.

Factors Which May Affect Future Results

The Company's financial and management resources have been concentrated on
its E-Commerce Operations.  For the past two years, the technology-related
markets have experienced significant declines in sales, market value, and
available capital resources to develop new products.  In addition, the
technology-related environment is extremely competitive.  The combination
of the above factors involves a number of risks and uncertainties.  Even
with the significant reductions to its cost structure, the Company's
operations will require an increase in sales of e-commerce products to
avoid further cost reductions.  Increases in sales are dependent on several
factors including (1) successfully closed deals from its channel partners
and resellers, (2) an increase in information technology spending by
businesses, (3) continued solvency of existing customers, (4) availability
of capital, (5) preservation of existing patents and trademarks, and (6)
the Company's ability to build and deliver products ahead of its
competitors.  There is no assurance that any of the events will occur, or
be sustainable if they do occur.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

The Company generally is exposed to market risk from adverse changes in
interest rates and interest income is affected by changes in the general
level of U.S. interest rates.  Changes in U.S. interest rates could affect
interest earned on the Company's cash equivalents, debt instruments and
money market funds.  A majority of the interest earning instruments earn a
fixed rate of interest over short periods (7-35 days).  The Company owns
short-term investments in Mariner.  Based upon the invested cash balances
at March 31, 2004, a 10% drop in interest rates or historical returns from
short-term investments at Mariner would not be material to the Company's
financial statements.

Item 4.  Controls and Procedures

Within the 90-day period prior to the filing of this Quarterly Report on
Form 10-Q, an evaluation was carried out under the supervision and with the
participation of the Company's management, including the Chief Executive
Officer (the "CEO") and Chief Financial Officer ("CFO"), of the
effectiveness and design of disclosure controls and procedures used to
prepare consolidated financial statements. Based on that evaluation, the
CEO and CFO have concluded the disclosure controls and procedures designed
to ensure that information required to be disclosed by the Company in
reports filed or to be filed with the SEC are adequate and are operating in
an effective manner.  While the CEO and CFO believe that the Company's
existing disclosure controls and procedures have been effective to
accomplish its objectives, the CEO and CFO intend to examine, refine and
formalize the Company's disclosure controls and procedures and monitor
ongoing developments.

There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to
the date of the most recent evaluation.

Notwithstanding the foregoing, there can be no assurance that the Company's
disclosure controls and procedures will detect or uncover all failures of
persons within the Company and its consolidated subsidiaries to disclosure
material information otherwise required to be set forth in the Company's
periodic reports.

                        PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

J Net is not a party to any legal matters that could have a material impact
on its operations as of March 31, 2004.  However, InterWorld, a 95.3% owned
subsidiary, is subject to two claims.

On March 8, 2001, as amended on May 29, 2001, InterWorld received notice
that the SEC commenced a formal order directing a private investigation by
the SEC with respect to whether InterWorld engaged in violations of Federal
Securities Laws as it relates to InterWorld's financial statements, as well
as its accounting practices and policies.  Also under review by the SEC is
certain trading in InterWorld stock.  All the above events are related to
periods prior to the Company's common stock ownership in InterWorld.

The investigation is confidential and the SEC has advised that the
investigation should not be construed as an indication by the SEC or its
staff that any violation of law has occurred nor should the investigation
be construed as an adverse reflection on any person, entity or security.

Although the Company is unaware of any activity with respect to the
investigation for more than the past year, InterWorld intends to fully
cooperate with the SEC.

PBS Realty ("PBS"), a real estate broker conducting business in New York
City filed a $1.2 million claim against InterWorld in April 2002.  The
claim alleged that PBS was owed commissions by InterWorld for services
related to PBS's attempts to sublease office space previously occupied by
InterWorld in New York City.   InterWorld  vigorously contested the claim.
In April 2004, InterWorld and PBS entered into a Settlement Agreement and
Release (the "Settlement").  Upon execution of the Settlement, InterWorld,
PBS and J Net agreed that J Net would pay $.2 million to PBS in exchange
for PBS discontinuing its litigation against InterWorld.  In addition, PBS
agreed to release InterWorld and J Net from any claims, charges, demands,
sums of money, actions, rights, and any other liabilities related to the
claims asserted by PBS.

From time to time, the Company or its subsidiaries are parties to claims,
legal actions and complaints arising in the ordinary course of business.
Presently, there are no such issues which would have a material adverse
affect on the Company's consolidated position.

Item 5.  Other Information

In May 2004, InterWorld Corporation will file for protection under Chapter
7 of the U.S. Bankruptcy Code.  InterWorld has no assets, and liabilities
of approximately $1.7 million.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:

              31.1  Principal Executive Officer Certification
              31.2  Principal Financial Officer Certification
              32.1  Certification Pursuant to 18 U.S.C. Section 1350 as
                    Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002.
              32.2  Certification Pursuant to 18 U.S.C. Section 1350 as
                    Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002.

         (b)        Reports on Form 8-K:

                    The Company filed no reports on Form 8-K during the
                    quarter ended March 31, 2004

                                        Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        J NET ENTERPRISES, INC.
                                             (Registrant)

                                        By:  /s/ Mark E. Wilson
                                             _______________________
                                             Mark E. Wilson
                                             Chief Financial Officer

Date: May 14, 2004