SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

Commission file number 333-94797

HUDSON'S GRILL INTERNATIONAL, INC.

(Name of small business issuer in its charter)

Texas

(State or other jurisdiction of incorporation)

75-2738727

(IRS Employer Identification Number)

16970 Dallas Parkway, Suite 402, Dallas, Texas 75248

(Address of Principal Executive Offices)

Issuer's telephone number, including area code:

(972) 931-9237

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

Yes X No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes No

APPLICABLE ONLY TO CORPORATE REGISTRANTS

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

7,256,986 shares of Class A Common Stock

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

See the attached statements at the end of this Form 10-QSB.

Item 2. Management Discussion and Analysis.

Material changes in the financial condition of the issuer and in the results of its operations since the end
of its last fiscal year and its results from the comparable period in its last fiscal year include the
following.

The issuer's cash at March 31, 2003 ("Q1") ($68,189) is $22,022 more than it was at December 31, 2002
("FYE") ($46,167). This reflects reduced general and administrative expenses during the period. Due to
the increase in cash and some smaller changes in accounts receivable and prepaid expenses, the current
assets at Q1 increased to $99,016 from $78,673 at FYE. Net property and equipment is roughly the
same at Q1 as it was at FYE; long term receivable has decreased $2,161 because of payments received
in Q1 in connection with the 1995 sale of a restaurant. Thus, total assets at Q1 increased by almost
$18,000 to $201,397 from $183,387 at FYE.

Current liabilities decreased by $11,878 to $128,969 at Q1 from $140,847 at FYE. This reflects the
continued progress the Company has made in reducing its line of credit and accounts payable from the
profits it has made during that time. Deferred revenue decreased slightly from $107,552 at FYE to
$104,282 at Q1, reflecting the continued amortization of income deferred from the advance payment of
royalties from certain franchisees and the gain from the 1995 sale of a restaurant.

Material changes in the results of operations of Q1 compared to the first quarter of 2002 ("Q02")
include the following: Because of the revenue received from the newly opened Hudson's franchisee in
Marshfield, Wisconsin, which opened September 9, 2002, revenues increased from $64,852 in Q02 to
$73,646 in Q1. Other than the Marshfield franchisee, franchise fees decreased slightly for the
restaurants open for more than a year. General and administrative expenses dropped by $23,114 during
Q1 to $50,246 from $73,360 during Q02, mostly as a result of lower legal expenses. Various legal
issues that had plagued the Company over the past few years were resolved by the middle of 2002, and
the Company hasn't had any since then. As a result, income from operations increased by $33,420 to
$23,229 during Q1 from a loss of ($10,191) during Q02. Because total other income changed only
slightly, net income for Q1 increased materially to $33,158 from $1,712 in Q02.

Income per common share (both basic and diluted) was less than $.01 per share for Q1 and for Q02.

Changes in the issuer's liquidity and capital will depend mostly on continuing royalty fees received from
franchisees using the issuer's trademark and restaurant concept. This in turn will be reflective of the
general economies in the areas where Hudson's Grill restaurants are located. The issuer does not
currently plan to raise any capital or borrow funds to meet liquidity needs, and thus, will rely solely on
cash flows from operations.

The issuer is currently allocating a major part of its cash flow to pay off accounts payable; it plans to
continue to do so until all of its past due debts are essentially paid off. This may take the next several
years to accomplish. The Company's cash balance of $68,189 at March 31, 2003, was $22,022 more
than at the year ended December 31, 2002.

The issuer does not sustain much seasonal volatility in revenues since its franchisees are dispersed
geographically and climactically. Additionally, it does not have any material commitments for capital
expenditures and doesn't plan any in the foreseeable future.

Item 3. Disclosures; Controls and Procedures.

With the participation of management, the Company's President evaluated the Company's disclosure
controls and procedures during the week before the date of this report. Based on this evaluation, the
President concluded that the disclosure controls and procedures are effective in connection with the
Company's filing of its quarterly report on Form 10-QSB for the quarterly period ended March 31, 2003.
Subsequent to May 8, 2003, through the date of this filing of Form 10-QSB for the quarterly period
ended March 31, 2002, there have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls, including any significant deficiencies or
material weaknesses of internal controls that would require corrective action.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The registrant incorporates by reference its response in its Form 10-KSB filed with the Securities and
Exchange Commission on April 17, 2003, and accepted by the Commission on April 17, 2003. The
Company is not involved in any legal proceedings and knows of no matters that have been threatened
against the Company.

Item 2. Changes in Securities.

There was no change in securities during the quarter ending March 31, 2003.

Item 3. Defaults Upon Senior Securities.

The registrant does not currently have any senior securities outstanding. Consequently, there are no
defaults on senior securities.

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

There were no matters submitted to a vote of security holders during Q1.

Item 5. Other Information.

The registrant does not have any material new information that has not already been disclosed in Forms
8-K, 10-QSB and 10-KSB.

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

(a) Exhibit Index. Following are the exhibits required under Item 601 of Regulation S-B for Form
10-QSB:

|Exhibit No. | Description                                                                  | Page Number
|----------- | ---------------------------------------------------------------------------- | -----------
|            |                                                                              |            
|(2)         | Plan of Acquisition,
Reorganization, Arrangement,
Liquidation, or Succession | n/a        
|(4)         | Instruments Defining the Rights
of Holders Including Indentures              | n/a        
|(6)         | No Exhibit Required                                                          | n/a        
|(11)        | Statement Re: Computation of
Per Share Earnings                              | n/a1       
|(12)        | No Exhibit Required                                                          | n/a        
|(15)        | Letter on Unaudited Interim
Financial Information                            | n/a2       
|(18)        | Letter on Change in Accounting
Principles                                    | n/a        
|(19)        | Previously Unfiled Documents                                                 | n/a        
|(20)        | Reports Furnished to Security
Holders                                        | n/a        
|(23)        | Published Report Regarding
Matters Submitted to Vote                         | n/a        
|(24)        | Consent of Experts and Counsel                                               | n/a        
|(25)        | Power of Attorney                                                            | n/a        
|(27)        | Financial Data Schedule                                                      | n/a        
|(28)        | Additional Exhibits                                                          | n/a        

1 No explanation of the computation of per share earnings on both the primary and fully diluted basis is
necessary because the computation can be clearly determined from the financial statements and the
notes to the financial statements.

2 No reports on unaudited interim financial information have been prepared by the Company's
independent accountants, and therefore, no letter is required from the Company's independent
accountants.

(b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter ending March 31, 2003,
or shortly thereafter.

SIGNATURES

I, David L. Osborn, the President of Hudson's Grill International, Inc., certify that: (i) this report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
(ii) the information contained in this report fairly presents, in all material respects, the financial
condition and results of operations of Hudson's Grill International, Inc.

| | (Registrant)

HUDSON'S GRILL INTERNATIONAL, INC.

By: s/s David L. Osborn

David L. Osborn, President

Date: May 15, 2003
| | -------------------------------------------------------------------------------------------------------------------------

I, David L. Osborn, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Hudson's Grill International, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons performing
the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

|Date: May 15, 2003 | /s/David L. Osborn

[Signature]

President
|------------------ | ------------------------------------------

f\sec\o01.030331

**BALANCE SHEETS**

ASSETS

| | March 31, |  | December 31,
| | --------- |  | ------------

| | 2003 |  | 2002
| | ---- |  | ----

| | (Unaudited) |  | 
| | ----------- |  | 

|**CURRENT ASSETS:** |  |  | 
|------------------- |  |  | 

|****************Cash | $ 68,189 |  | $ 46,167
|-------------------- | -------- |  | --------

|Accounts receivable | 21,103 |  | 22,371
|------------------- | ------ |  | ------

|Prepaid expenses and other | 9,724 |  | 10,135
|-------------------------- | ----- |  | ------

|Total current assets | 99,016 |  | 78,673
|-------------------- | ------ |  | ------

| |  |  | 
| |  |  | 

|**PROPERTY AND
EQUIPMENT**, at cost: |  |  | 
|------------------------------------ |  |  | 

|Furniture and office equipment | 17,868 |  | 17,869
|------------------------------ | ------ |  | ------

|Less accumulated depreciation | (16,328) |  | (16,157)
|----------------------------- | -------- |  | --------

|Property and equipment, net | 1,540 |  | 1,712
|--------------------------- | ----- |  | -----

| |  |  | 
| |  |  | 

|**LONG-TERM RECEIVABLE** | 100,841 |  | 103,002
|------------------------ | ------- |  | -------

| |  |  | 
| |  |  | 

|Total assets | $ 201,397 |  | $ 183,387
|------------ | --------- |  | ---------

| |  |  | 
| |  |  | 

|LIABILITIES AND STOCKHOLDERS' DEFICIT
|-------------------------------------

| |  |  | 
| |  |  | 

|**CURRENT
LIABILITIES:** |  |  | 
|------------------------ |  |  | 

|****************Line of credit | $ 4,825 |  | $ 9,037
|------------------------------ | ------- |  | -------

|Loan payable | 45,000 |  | 45,000
|------------ | ------ |  | ------

|Accounts payable and accrued expenses | 10,192 |  | 10,068
|------------------------------------- | ------ |  | ------

|Accounts payable to related parties | 68,952 |  | 76,452
|----------------------------------- | ------ |  | ------

|Advances from related parties | - |  | 290
|----------------------------- | - |  | ---

|Total current liabilities | 128,969 |  | 140,847
|------------------------- | ------- |  | -------

| |  |  | 
| |  |  | 

|**DEFERRED REVENUE** | 104,282 |  | 107,552
|-------------------- | ------- |  | -------

| |  |  | 
| |  |  | 

|**CONTINGENCIES**(Note 3 and 4) |  |  | 
|------------------------------- |  |  | 

| |  |  | 
| |  |  | 

|STOCKHOLDERS'
DEFICIT: |  |  | 
|---------------------- |  |  | 

|****************Common stock, Class A, no par value,
100,000,000 shares authorized, 7,256,986 shares
issued and outstanding at March 31, 2003 and
December 31, 2002, respectively | 142,545 |  | 142,545
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- |  | -------

|Common stock, Class B, no par value, 15,000,000
shares authorized, no shares issued and
outstanding | - |  | -
|--------------------------------------------------------------------------------------------------- | - |  | -

|Accumulated deficit | (174,399) |  | (207,557)
|------------------- | --------- |  | ---------

|Total stockholders' deficit | (31,854) |  | (65,012)
|--------------------------- | -------- |  | --------

| |  |  | 
| |  |  | 

|Total liabilities and stockholders' deficit | $ 201,397 |  | $ 183,387
|------------------------------------------- | --------- |  | ---------

**STATEMENTS OF OPERATIONS**

|                                                                | Three Months Ended

March 31,
|--------------------------------------------------------------- | -----------------------------
|                                                                | 2003                         
|                                                                | (Unaudited)                  
|                                                                |                              
|**REVENUE**                                                     | $ 73,646                     
|                                                                |                              
|**OPERATING COSTS:**                                            |                              
|General and administrative                                      | 50,246                       
|Depreciation and amortization                                   | 171                          
|Total operating costs                                           | 50,417                       
|                                                                |                              
|Income (loss) from operations                                   | 23,229                       
|                                                                |                              
|OTHER INCOME (EXPENSE):                                         |                              
|Settlement income                                               | 9,000                        
|Income from sale of assets                                      | 1,470                        
|Interest income                                                 | 1,086                        
|Interest expense                                                | (1,627)                      
|Total other income (expense)                                    | 9,929                        
|                                                                |                              
|NET INCOME                                                      | $ 33,158                     
|                                                                |                              
|NET INCOME PER SHARE - basic and diluted                        | *                            
|                                                                |                              
|WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING -

basic and diluted | 7,256,986                    
|                                                                |                              
|                                                                |                              

*Less than $.01 per share

**STATEMENTS OF CASH FLOWS**

| | Three Months Ended
| | ------------------

| | March 31,
| | ---------

| | 2003 | 2002
| | ---- | ----

| | (Unaudited) |  | (Unaudited)
| | ----------- |  | -----------

|**CASH FLOWS FROM
OPERATING ACTIVITIES:** |  | 
|----------------------------------------- |  | 

|Net income | $ 33,158 | $ 1,712
|---------- | -------- | -------

|Adjustments to reconcile net income to net cash
provided by (used in)

operating activities: |  | 
|-------------------------------------------------------------------------------------------- |  | 

|Depreciation and amortization | 171 | 1,683
|----------------------------- | --- | -----

|Amortization of deferred revenue | (3,270) | (3,861)
|-------------------------------- | ------- | -------

|Changes in operating assets and liabilities: |  | 
|-------------------------------------------- |  | 

|Accounts receivable | 1,268 | 8,360
|------------------- | ----- | -----

|Prepaid expenses and other | 411 | 19
|-------------------------- | --- | --

|Accounts payable and accrued expenses | 124 | (6,921)
|------------------------------------- | --- | -------

|Accounts payable to related parties | (7,500) | (6,360)
|----------------------------------- | ------- | -------

| |  | 
| |  | 

|Net cash provided by (used in) operating activities | 24,362 | (5,368)
|--------------------------------------------------- | ------ | -------

| |  | 
| |  | 

|**CASH FLOWS FROM INVESTING
ACTIVITIES -** |  | 
|------------------------------------------ |  | 

|Repayment of note receivable | 2,161 | 1,128
|---------------------------- | ----- | -----

| |  | 
| |  | 

|**CASH FLOWS FROM FINANCING
ACTIVITIES:** |  | 
|----------------------------------------- |  | 

|************Repayments of advances from related parties | (290) | (1,400)
|------------------------------------------------------- | ----- | -------

|Repayment of line of credit and notes payable | (4,211) | (2,317)
|--------------------------------------------- | ------- | -------

| |  | 
| |  | 

|Net cash used in financing activities | (4,501) | (3,717)
|------------------------------------- | ------- | -------

| |  | 
| |  | 

|**NET CHANGE IN CASH** | 22,022 | (7,957)
|---------------------- | ------ | -------

| |  | 
| |  | 

|**CASH**, beginning of period | 46,167 | 23,894
|----------------------------- | ------ | ------

| |  | 
| |  | 

|**CASH**, end of period | $ 68,189 |  | $ 15,937
|----------------------- | -------- |  | --------

| |  | 
| |  | 

|**SUPPLEMENTAL DISCLOSURES:** |  | 
|----------------------------- |  | 

|Income taxes paid | $ - | $ -
|----------------- | --- | ---

|Interest paid | $ 305 | $ 1,200
|------------- | ----- | -------

**1. Unaudited Information**

The balance sheet of Hudson's Grill International, Inc. (the "Company") as of March 31, 2003 and the
statements of operations for the three-month periods ended March 31, 2003 and 2002 were taken from
the Company's books and records without audit. However, in the opinion of management, such
information includes all adjustments (consisting only of normal recurring accruals) which are necessary
to properly reflect the financial position of the Company as of March 31, 2003 and the results of
operations for the three months ended March 31, 2003 and 2002.

Certain information and notes normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have been condensed or
omitted, although management believes that the disclosures are adequate to make the information
presented not misleading. Interim period results are not necessarily indicative of the results to be
achieved for an entire year. These financial statements should be read in conjunction with the financial
statements and notes to financial statements included in the Company's financial statements as filed on
Form 10-KSB for the year ended December 31, 2002.

In December 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 148, *Accounting for Stock-Based Compensation - Transition and
Disclosure - an amendment of FASB Statement 123*("SFAS 148"). SFAS 148 amends SFAS No.123,
*Accounting for Stock-Based Compensation*, ("SFAS 123"), to provide alternative transition methods for
an entity's voluntary change in their accounting for stock-based compensation from the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25, *Accounting for Stock Issued to
Employees*, ("APB No. 25") and related interpretations to the fair value method under SFAS 123. In
addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require disclosure of
the pro forma effects of using the fair value method of accounting for stock-based compensation in
interim as well as annual financial statements. The Company currently accounts for its stock-based
compensation using the intrinsic value method as prescribed by APB No. 25. The disclosure provisions
of SFAS No. 148 were adopted on December 31, 2002 and are discussed in Note 2.

**2. Stock Options**

The Company president's compensation includes the granting of stock options. Currently, the president
is granted 50,000 stock options per month. The Company also grants 10,000 stock options per month to
each of the two directors of the Company, as compensation for services as directors. All options were
fully vested when granted and expire in seven years.

The Company accounts for stock options granted to its directors and employees using the intrinsic value
method prescribed by APB No. 25 which requires compensation expense be recognized for stock
options when the quoted market price of the Company's common stock on the date of grant exceeds the
option's exercise price. No compensation cost has been reflected in net income for the granting of
director and employee stock options as all options granted had an exercise price greater than the quoted
market price of the Company's common stock on the date the options were granted.

Had compensation cost for the Company's stock options been determined consistent with the SFAS 123
fair value approach, the Company's net income and net income per common share for the three month
periods ended March 31, 2003 and 2002, on a pro forma basis, would have been as follows:

|                                                                            |  | Three Months Ended

March 31,
|--------------------------------------------------------------------------- |  | -----------------------------
|                                                                            |  | 2003                         
|                                                                            |  |                              
|Net income: as
reported                                                     |  | $ 33,158                     
|Add: Stock-based
compensation
expense included in
reported net income       |  | -                            
|Deduct:
Stock-based
compensation
expense determined
under fair value
method |  | (960)                        
|Net income: pro
forma                                                       |  | $ 32,198                     
|                                                                            |  |                              
|Net income per
share:                                                       |  |                              
|as reported - basic
and diluted                                             |  | $ *                          
|Pro forma - basic
and diluted                                               |  | $ *                          

* Less than $.01 per share

The fair values of stock options granted during fiscal years 2003 and 2002 were estimated on the dates
of grant using the Black-Scholes option pricing model with the following weighted average
assumptions:

| |  | 2003 |  | 2002
| |  | ---- |  | ----

|Volatility |  | 50% |  | 50%
|---------- |  | --- |  | ---

|Interest rate |  | 3.88% |  | 4.00%
|------------- |  | ----- |  | -----

|Dividend yield |  | - % |  | - %
|-------------- |  | --- |  | ---

|Expected life |  | 7 years |  | 7 years
|------------- |  | ------- |  | -------

**3. Continuing Operations**

The accompanying financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and liquidation of liabilities in the normal course of business. The
Company has a working capital deficit of $29,953 and a stockholders' deficit of $31,854 as of March 31,
2003. These issues raise substantial doubt about the Company's ability to continue as a going concern.
Management of the Company intends to continue to sell franchises in an attempt to improve operating
results. Management also intends to use excess profits to pay down the Company's debts. There can be
no degree of assurance that the Company will be successful in these efforts.

The accompanying financial statements do not include any adjustments to reflect the possible effects on
the recoverability and classification of assets or classification of liabilities which may result from the
inability of the company to continue as a going concern.

**4. Contingency**

The Company's former parent, Hudson's Grill of America, Inc. ("HGAI") has been involved in litigation
arising from a lease associated with a franchised restaurant location that has ceased operations. In
addition, HGAI is secondarily liable under other leases for restaurants it sold in prior years. None of
these restaurants, lease agreements or obligations were transferred to or assumed by the Company. The
Company, based upon consultation with its legal counsel, is of the opinion that the former parent's
actual and contingent obligations with respect to these leases will not ultimately be attributable to the
Company, but that if a creditor obtained a judgment against the former parent, stock in the Company
formerly held by HGAI could be subject to attachment or execution by the creditor under certain limited
circumstances. Accordingly, the Company believes these matters will not have a material adverse effect
on the Company's financial condition or results of operations, and no provision for any estimated loss is
reflected in the accompanying financial statements.

**5. Earnings Per Share**

Basic earnings per share are calculated on the weighted average number of common shares outstanding
during each period. No stock options exercisable at March 31, 2003 and 2002, had a dilutive effect on
earnings per share.

***************