UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                                 ________________

                                   FORM 10-QSB

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

                For the Quarterly Period Ended September 30, 2000

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

For the Transition Period From _______ to _________________________

                          Commission File Number 0-29351

                                HYBRID FUELS, INC.
              (Exact name of registrant as specified in its charter)

                                      NEVADA
          (State or other jurisdiction of incorporation or organization)

                                    88 0384399
                       (I.R.S. Employer Identification No.)

                PO Box 41118 RPOS Winfield, B.C., Canada, V4V 1Z7
              (Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code: 250-868-0600

Indicate by check mark whether 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 shorter period that registrant was required
to file such reports), and (2) has been subject to filing requirements for the
past 90 days.        Yes                No [X]

The number of shares outstanding of the registrant's common stock as of
November 5, 2001 was 20,853,600.

The number of shares issued of the registrant's common stock as of November 5,
2001 was 21,286,353.

Transitional Small Business Disclosure Format (Check one): Yes      No [X]



















===============================================================================

                                HYBRID FUELS, INC.

                                   FORM 10-QSB

                     For the quarter ended September 30, 2000

INDEX
Part I - Financial Information                                       Page

 Item 1. Financial Statements......................................F-3 to F-10

         Balance sheet as of September 30, 2000.......................F-3

         Statements of operations for the three months ended
         September 30, 2000 and June 2000.............................F-4

         Statements of cash flows for the three months ended
 	 September 30, 2000 and June 2000.............................F-5

         Notes to Financial Statements................................F-6

 Item 2. Management's Discussion and Analysis or Plan of Operation....11

Part II - Other Information...........................................15

 Item 6. Exhibits and Reports on Form 8-K.............................15






































===============================================================================
F-3

Hybrid Fuels, Inc.
(formerly Polo Equities, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets


                                              September 30,     June 30,
                                                  2000            2000
                                                   $                $
                                              (unaudited)       (audited)
-------------------------------------------------------------------------------
ASSETS

Current Assets
Cash                                               485            485
-------------------------------------------------------------------------------
Total Assets                                       485            485
-------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

Accounts payable                                 4,645          3,111
Accrued liabilities                              5,500             -
Note payable (Note 4)                           33,638             -
Advances payable (Note 5)                       51,746         42,013
Shareholder loan payable (Note 6(a))           178,098        163,748
Amounts owing to a Director (Note 6(b))         93,240         74,432
-------------------------------------------------------------------------------
Total Current Liabilities                      366,867        283,304
-------------------------------------------------------------------------------
Temporary Equity (Note 6(d))                   223,000        223,000
-------------------------------------------------------------------------------
Stockholders' Deficit

Common Stock (Note 7): $0.001 par value;
50,000,000 shares authorized 19,523,600 shares
are issued and outstanding                      19,524        19,524
Additional Paid-in Capital                     162,474       162,474
Donated Capital - Imputed Interest
(Notes 5 and 6)                                 68,837        56,735
Deficit Accumulated During
the Development Stage                         (840,217)     (744,552)
-------------------------------------------------------------------------------
Total Stockholders' Deficit                   (589,382)     (505,819)
-------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit        485           485
-------------------------------------------------------------------------------

Nature of Operations and Continuance of Business (Note 1)
Contingency - Disputed Compensation (Note 8)

(See Accompanying Notes to the Consolidated Financial Statements)










===============================================================================
F-4

Hybrid Fuels, Inc.
(formerly Polo Equities, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
(unaudited)

                               Accumulated from Three Months Three Months
                               February 26, 1960       Ended        Ended
                              (Date of Inception) September 30, September 30,
                                 to September 30,
                                       2000            2000       1999
                                         $               $           $
-------------------------------------------------------------------------------

Revenue                                  -               -          -
-------------------------------------------------------------------------------

Expenses
Advances written-off (Note 3)         42,076          42,076        -
Deposit on plant written-off
(Note 3)                             170,561             -          -
Disputed compensation (Note 8(b))    243,463             -          -
Executive compensation (Note 6(b))    90,000          18,000      18,000
Filing and regulatory fees            12,680           2,242        -
General and administration            56,216             240         190
Interest                                 110             110        -
Imputed interest (Notes 5 and 6)      68,837           12,102      5,897
Investor relations                    14,124            1,518       -
Professional fees                     86,199           17,250        127
Rent and telephone                    36,864            1,641        796
Research and development               8,000              -         -
Travel and promotion                  11,087              486         95
-------------------------------------------------------------------------------
                                     840,217           95,665     25,105
-------------------------------------------------------------------------------
Net Loss                            (840,217)         (95,665)   (25,105)
-------------------------------------------------------------------------------
Net Loss Per Share                                       (.01)     (.01)
-------------------------------------------------------------------------------

Weighted Average Shares Outstanding                 19,524,000 15,024,000
-------------------------------------------------------------------------------

(See Accompanying Notes to the Consolidated Financial Statements)



















===============================================================================
F-5

Hybrid Fuels, Inc.
(formerly Polo Equities, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)

                                             Three Months Three Months
                                                 Ended        Ended
                                             September 30, September 30,
                                                 2000          1999
                                                  $              $
-------------------------------------------------------------------------------

Cash Flows To Operating Activities

Net loss                                      (95,665)       (25,105)


Non-cash item
Imputed interest                               12,102          5,897

Adjustment to reconcile net loss to cash
Accounts payable and accrued liabilities        7,034            -
-------------------------------------------------------------------------------
Net Cash Used In Operating Activities         (76,529)       (19,208)
-------------------------------------------------------------------------------
Net Cash Used By Investing Activities             -              -
-------------------------------------------------------------------------------
Cash Flows From Financing Activities

Proceeds from notes payable                    33,638            -
Advances payable                                9,733            -
Amounts owing to a Director                    18,808         18,608
Shareholder loans payable                      14,350            600
-------------------------------------------------------------------------------
Net Cash Provided By Financing Activities      76,529         19,208
-------------------------------------------------------------------------------
Net Increase (Decrease) in Cash                   -              -

Cash - Beginning of Period                        485            -
-------------------------------------------------------------------------------
Cash - End of Period                              485            -
-------------------------------------------------------------------------------
Non-Cash Financing Activities                     -              -
-------------------------------------------------------------------------------
Supplemental Disclosures

Interest paid in cash                             -              -
Taxes paid in cash                                -              -
-------------------------------------------------------------------------------

(See Accompanying Notes to the Consolidated Financial Statements)











===============================================================================
F-6

Notes to Financial Statements

1.  Nature of Operations and Continuance of Business

    The Company was originally incorporated in the State of Florida on
    February 16, 1960. After a number of name changes the Company changed its
    name to Polo Equities, Inc. on June 3, 1993. Prior to May, 1998 the
    Company had no business operations.

    In May 1998, the Company caused a Nevada corporation to be formed under
    the name Polo Equities, Inc., (Polo) (a Nevada corporation), with
    authorized capital of 50,000,000 common shares of $.001 par value. The two
    companies then merged pursuant to Articles of Merger adopted May 28, 1998
    and filed with the State of Nevada on June 10, 1998, which changed its
    domicile to Nevada.

    On May 28, 1998, the Company acquired, by issuing 12,000,000 shares,
    Hybrid Fuels, USA, Inc. and 330420 B.C. Ltd., which changed its name to
    Hybrid Fuels (Canada) Inc. This acquisition was accounted for as a reverse
    merger whereby the shareholder of Hybrid Fuels, USA, Inc. and Hybrid Fuels
    (Canada) Inc. gained control of Polo Equities Inc. which changed its name
    to Hybrid Fuels, Inc. As part of the acquisition, three shareholders
    representing 12,000,000 previously issued shares returned their shares for
    cancellation. For accounting purposes the acquisition was treated as a
    business purchase by Hybrid Fuels, Inc. of Hybrid Fuels, USA, Inc. and
    Hybrid Fuels (Canada) Inc. No amount was allocated to the intellectual
    asset as it was acquired from a related party and the transfer had no cost
    basis associated with it. There was no public market for the shares of
    Polo Equities, Inc. at the time of the reverse merger. The Company
    operates through these two wholly-owned subsidiaries.

    On May 29, 1998 the Company changed its name to Hybrid Fuels, Inc., herein
    "the Company". On June 10, 1998 the Company began trading on the OTC
    Bulletin Board under the symbol "HRID" and in December, 1999 was moved to
    the "Pink Sheets". From May 1998 to June 1999 the Company operated out of
    an office in California which was set up for investor relations and to
    raise additional capital. This office was shut down in June and the new
    President and directors are operating out of Kelowna, BC, Canada and
    Calgary, Alberta, Canada.

    Pursuant to the acquisition, the Company acquired a number of proprietary
    technologies with the primary objective of the business being to build
    small farm scale ethanol facilities which involves a number of proprietary
    technologies exclusively owned by the Company. Other proprietary
    technology involves the use of a bio-gas burner which burns manure and
    bedding straw. This technology eliminates ground and ground-water
    contamination and produces most of the energy required for the facility by
    supplying heat for fermentation and vaporization and for the operation of
    a greenhouse, if desired. Another exclusive proprietary technology is a
    vegetable based formula which allows diesel and ethanol to emulsify. This
    hybrid fuel reduces particulate emissions without reduction in power when
    used in an unaltered diesel engine.

    The Company is in the early development stage. In a development stage
    company, management devotes most of its activities in investigating
    business opportunities and further advancing its technologies. Because of
    a deficiency in working capital and other current commitments and
    significant operating losses, there is substantial doubt about the ability
    of the Company to continue in existence unless additional working capital
    is obtained.

    Pursuant to a letter of intent and subject to a definitive agreement being
    consummated, the Company plans to sell a license to use its proprietary
===============================================================================
F-7
Nature of Operations and Continuance of Business (con't)

    technology in a specified territory. The agreement contemplates a 50% up
    front non-refundable fee which will be recognized as revenue when received
    and the balance will be paid over time. The Company will also need to rely
    on the forbearance of some creditors and related parties have agreed to
    continue to fund working capital as needed. The Company has entered into
    discussions with third parties to directly finance a facility in which the
        Company will then commence with its business plan.

2.  Summary of Significant Accounting Policies

    (a)	Consolidated Financial Statements

    These consolidated financial statements represent the consolidation of the
    Company and its two subsidiaries Hybrid Fuels, U.S.A., Inc, and Hybrid
    Fuels (Canada) Inc.

    (b)	Cash and Cash Equivalents

    The Company considers all highly liquid instruments with a maturity of
    three months or less at the time of issuance to be cash equivalents.

    (c) Use of Estimates

    The preparation of financial statement in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that effect certain reported amounts and disclosures.
    Accordingly, actual results could differ from those estimates.

    (d) Accounting for Stock-Based Compensation

    SFAS No. 123, "Accounting for Stock-Based Compensation," requires that
    stock awards granted be recognized as compensation expense based on fair
    values at the date of grant. Alternatively, a company may account for
    stock awards granted under Accounting Principles Board Opinion (APB) No.
    25, "Accounting for Stock Issued to Employees," and disclose pro forma
    income amounts which would have resulted from recognizing such awards at
    their fair value. The Company has elected to account for stock-based
    compensation for employees under APB No. 25 and make the required pro
    forma disclosures for compensation expense. Stock based compensation for
    non-employees are accounted for using SFAS No. 123.

3.  Deposit on Plant

    The Company deposited Cnd$250,000 ($170,561), with Mega Holdings, Inc.,
    pursuant to an option agreement to purchase a beef processing plant owned
    by Mega Holdings, Ltd. The Company agreed to purchase the beef processing
    plant facility including land, buildings and equipment for Cnd$3,000,000
    which was below appraised value. The purchase agreement required an
    additional payment of Cnd$150,000 on June 24, 2000, the parties agreed to
    extend the deadline for the payment until March 15, 2001. This payment was
    not made and the deposit was forfeited and the option agreement
    terminated. Upon anticipated completion of the purchase, this beef
    processing plant was to be operated by Blue Mountain Packers, Ltd. (a
    related company). The Company intended to acquire the issued and
    outstanding common shares of Blue Mountain Packers, Ltd. for a nominal
    amount and operate it as a wholly-owned subsidiary. Blue Mountain Packers,
    Ltd. had recently received certification by the Canadian Food Inspection
    Agency of the Government of Canada, Department of Agriculture for the
    processing of Canadian beef. Blue Mountain Packers is a related party due
    to having one common director. During the quarter ended September 30, 2000
    the Company advanced $42,076 to Blue Mountain Packers Ltd. and subsequent

===============================================================================
F-8

3.  Deposit on Plant (con't)

    to September 30, 2000 the Company advanced $42,876 to Blue Mountain
    Packers Ltd., all for plant refurbishing. These advances bear interest at
    8%. Due to the termination of the option agreement these advances are
    considered uncollectible and have been charged to operations.

4.  Note Payable

    On September 15, 2000, the Company issued a note for Cnd$50,000 ($33,638)
    due and payable on or before September 15, 2001 plus 8% interest.
    Repayment of the note has been extended until completion of a financing.
    Interest of $2,129 has been accrued at June 30, 2001 and is included in
    accounts payable.


5.  Advances Payable

    A non-related company coordinated investor relations services for the
    Company and paid expenses of $45,308 on behalf of the Company and loaned
    Cnd$10,000 ($6,438). Subsequent to September 30, 2000 this company paid
    additional expenses of $23,940 and loaned the Company Cnd$68,000 ($43,782)
    for a total amount owing of $119,468 as at June 30, 2001. This debt was
    settled on June 29, 2001 by the issuance of 1,000,000 restricted common
    shares of the Company. These advances were non-interest bearing and
    unsecured until the settlement date. Imputed interest of $1,757 was
    charged to operations and treated as donated capital.


6.  Related Party Transactions/Balances

    (a)	Cash loans of $498,402 were advanced to the Company by the major
    shareholder. A total of $365,590 was repaid with cash. The controlling
    shareholder also paid office, rent and professional fees totalling $45,206
    on behalf of the Company. The balance of $178,078 is owing without
    interest or specific repayment terms. Imputed interest of $200 (1999 -
    $5,200) was charged to operations and treated as donated capital.

    (b) The President who is also a Director of the Company, has paid office
    and related expenses from personal funds in the amount of $2,432.
    Effective July 1, 1999 the President is entitled to a deferred salary of
    US$6,000 per month and was owed a total of $90,000 at September 30, 2000.
    These amounts are unsecured, non-interest bearing and due on demand.
    Imputed interest of $3,145 (1999 - $697) was charged to operations and
    treated as donated capital.

    (c) See Note 3 for subsequent advances to Blue Mountain Packers Ltd.


7.  Stockholders' Equity

    (a)	On May 28, 1998, the Company acquired, by issuing 12,000,000 shares,
    Hybrid Fuels, USA, Inc. and 330420 B.C. Ltd., which changed its name to
    Hybrid Fuels (Canada) Inc. This acquisition was accounted for as a reverse
    merger whereby the shareholder of Hybrid Fuels, USA, Inc. gained control
    of Polo Equities Inc. As part of the acquisition three shareholders
    representing 12,000,000 previously issued shares returned their shares for
    cancellation. For accounting purposes the acquisition was treated as a
    business purchase by Hybrid Fuels USA Inc. of Polo Equities, Inc. No
    amount was allocated to the intellectual asset as it was acquired from a
    related party and the transfer had no cost basis associated with it. There
    was no public market for the shares of Polo Equities, Inc. at the time of
    the reverse merger.
===============================================================================
F-9

7.  Stockholders' Equity (con't)
    (b) On August 4, 1998 and March 23, 1999, the Company's former Board of
    Directors authorized the issuance of 1,000,000 and 900,000 shares
    respectively to individuals without consideration. On August 21, 1999, the
    current Board of Directors resolved that share certificates representing
    ownership of these 1,900,000 shares were issued without adequate
    consideration being paid to the Company and were therefore not fully paid
    and non-assessable. The Company cancelled the share certificates and
    indemnified the transfer agent, for any costs or liability it may incur in
    any way arising out of the cancellation of such shares and the transfer
    agent removed the 1,900,000 shares from the stockholder list effectively
    reversing the issuance. Six of the cancelled certificates, totalling
    550,000 shares, have been endorsed and returned to the Company for
    cancellation. The contingencies regarding the cancelled shares relate to
    anyone who may have subsequent holder rights, and possibly the individuals
    who were issued those shares who may claim that they were issued for due
    consideration. The Company has determined that there is no amount to be
    accrued for future liabilities associated with claims by subsequent
    shareholders. To date when these shares are delivered to a broker for
    possible resale the broker phones the Company or the transfer agent and
    the shares are kept and cancelled. The Company will continue to monitor
    this issue. No other contingent liabilities have been included as some of
    the previous directors have been informed verbally of the cancellation. No
    formal legal demand has been made as the former administration has failed
    to provide addresses despite a number of requests.

   (c)	On May 17, 2000 the Company issued 1,500,000 shares pursuant to a
   subscription agreement for $150,000 dated February 17, 2000. On February 17
   and 18, 2000, the Company accepted subscription agreements and notes
   whereby the Company would receive $300,000 for 3,000,000 shares. The
   3,000,000 shares were issued and were then held in escrow. These shares
   were subsequently released from escrow to the investors to facilitate
   financing. The notes were to bear interest at 8% and were to be paid within
   60 days or at the discretion of the President. In June 2000 the President
   extended the time for repayment to one week of the Company being re-listed
   on the Over-The-Counter Bulletin Board or other suitable exchange. When it
   became apparent there were going to be long delays the notes were demanded
   to be repaid by February 21, 2001. The notes were not paid as demanded, and
   the 3,000,000 shares have since been sold by the investors to innocent
   third parties. The investors did not and have not paid the Company for
   these shares, despite demands. Since these shares have been resold to
   innocent third parties they must be considered outstanding. The Company
   intends to sue the investors for the balance due on the notes, however the
   Company believes the balance is uncollectible.

   (d)	Between October 1998 and June 1999, the previous administration sold a
   total of 361,120 common shares of the Company to 34 subscribers on the
   basis of an Offering Memorandum that contained a significant number of
   inaccuracies. A total of $223,000 was raised pursuant to this Offering. The
   current administration has concerns regarding possible misstatements,
   omissions and misleading statements. On the advice of legal counsel, the
   Company offered these 34 subscribers the option of receiving restricted
   stock as the Company did not and does not have the funds to repay these
   subscribers. Those who opted to receive restricted stock were also given an
   undertaking that they would receive a rescission offer when the Company was
   in a position to repay their money plus appropriate interest, in return for
   a return of the restricted stock, or they could elect to retain the stock.
   As at June 30, 2000 79,820 shares were issued and subsequently a further
   152,933 shares were issued for a total subscription price of $158,000. The
   remaining subscribers, who paid $65,000 for 123,367 shares, have not
   responded to the offer. Shares issued will not be considered outstanding
   and received subscriptions are recorded as temporary equity until
   rescission rights have been revoked.
===============================================================================
F-10

7.  Stockholders' Equity (con't)
    (e) See Note 5 for 1,000,000 restricted common shares issued to a
    non-related company to settle debt of $119,468.


8. Legal Issues

   Although the Company is not involved in any legal proceedings, several
   issues may eventually lead to the Company instituting legal action as
   follows:

   (a) See Note 7(b) for contingencies relating to improperly issued
   shares that were later cancelled.

   (b) Unauthorized and/or unsupported payments in the amount of $243,463 were
   made from Company funds by past officers of the Company during the period
   May, 1998 to June, 1999. The Company has requested a full accounting from
   the past president. All amounts that were unauthorized by the board of
   directors or amounts that are not properly documented with invoices and
   receipts have been accounted for as disputed executive compensation.
   Actions of the previous administration have been reported to the Securities
   and Exchange Commission. At such time as Company resources permit, the
   Company will seek legal advice to determine whether or not it is possible
   to recover all such disputed and unauthorized amounts from the previous
   administration.

   (c) See Note 7 (d) for temporary equity and related rescission rights for
   subscribers of 361,120 shares of the Company.


9. Subsequent Events

   (a)	A further $18,157 was received from the major shareholder.

   (b) See Note 3 for forfeiture of the deposit on plant and advances to Blue
   Mountain Packers.

   (c)	See Note 5 for further advances from a non-related company and
   issuance of 1,000,000 restricted common shares to settle debt of $119,468.

   (d) On June 29, 2001, 100,000 restricted common shares, valued at $5,000,
   were issued to a non-related consultants for plant refurbishing work to
   March 15, 2001.

   (e)	On September 19, 2001, 200,000 restricted common shares valued at
   $10,000 were issued to a director and officer of the company for
   professional services rendered.
















===============================================================================
Page-11-


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

This Form 10-QSB contains forward-looking statements. The words "anticipate",
"believe", "expect", "plan", "intend", "estimate", "project", "could", "may",
"foresee", and similar expressions identify forward-looking statements that
involve risks and uncertainties.  You should not place undue reliance on
forward-looking statements in this Form 10-QSB because of their inherent
uncertainty.  The following discussion and analysis should be read in
conjunction with the Financial Statements and Notes thereto and other
financial information included in this Form 10-QSB and our Form 10-KSB for the
year ended June 30, 2000.  Actual results could differ materially from the
results discussed in the forward-looking statements.

Except for disclosures that report the Company's historical results, the
statements in this document are forward-looking statements. Actual results may
differ materially from those projected in the forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. The Company assumes no
obligation to update forward-looking statements or comments or the reasons why
actual results may differ therefrom.

The Company is a developmental stage company and has had no income since the
acquisition of the Hybrid Fuels technology in June 1998, nor is it likely to
have any significant cash flow until after the end of its current fiscal
period ending June 30, 2001. If the Company is unable to obtain funds from
external sources, it is probable that it will be unable to continue to operate
in the long term.

Although the Company is in the developmental stages, the process behind
Hybrid's proposed business has been researched and developed over more than a
decade. A plant that integrated the process described below was constructed
and operated near Dalum, Alberta from 1994 to 1996.  That operation is the
source of the actual operating results that are referred to later in this
report.

After that plant was closed in 1996, further research, development and
construction helped us discover ways to improve the buildings and equipment
and refine the process, which is now ready for market.

The Company's business plan is to sell and build farm scale plants that
produce ethanol and are integrated with a cattle finishing operation. Grain,
corn or other feedstock is fermented and then distilled to make the ethanol.
Left over from the ethanol production process are a high protein mash, called
"distillers grain" and water, called "stillage water".  These are used as feed
and water for beef animals because they contain nutrients. In addition, the
fermentation process frees a higher percentage of the total food value from
the feedstock and make it more "available" to the animals digestive system.
The result is higher than average weight gains for the animals without the use
of hormones.  By using the distillers grain and stillage water on site the
animals get the benefit of the nutrients in these byproducts and the plants
save the energy it would otherwise require to dry and transport the distillers
grain and dispose of the stillage water.

The manure and used bedding straw are cleaned up frequently, thus removing the
media in which disease would otherwise grow.  They are burned in a gasifier
and the heat produced is used in the fermentation and distillation processes,
with leftover heat being available to operate a greenhouse.  The ethanol is
mixed with a proprietary emulsifier and diesel.  When this emulsion was tested
at The British Columbia Institute of Technology, in June 1996, in an unaltered
diesel engine, it reduced the particulate (black smoke) emissions by over 62%
and the Nox emissions by over 22%, without any loss of power.

===============================================================================
Page-12-

Item 2.  Management's Discussion and Analysis or Plan of Operation (con't)

These plants are referred to as "micro energy food facilities" or "MEFFs",
because of the small amount of energy from outside sources that is necessary
to operate them.

Hybrid plans to earn revenue from several streams:
1. profit on the sale of each MEFF;
2. the lease of the column and spinner to each operator;
3. the royalties and service fees that each operator will pay;
4. the purchase of the ethanol mixture from the operator at 80 % of wholesale
   value and the sale to distributors or end-users;
5. the marketing of the finished animals.

Royalties and service fees are expected to be payable monthly in amounts yet
to be determined.  Incentives in the form of reduced royalties may be offered
to the first 10 to 20 operators who make early commitments to purchase plants.
Service fees to cover the cost of ongoing training, service, technical
support, and quality control are expected to  be in the $150 to $250 per month
range.

Initially it is anticipated that most of the finished beef will be sold at
auction until the Company develops specialty markets. The Company believes
that it will be able to generate premium prices for the beef because of its
high quality and taste. In the test trials at the prototype plant, the
purchaser of the first lot of beef agreed to pick up subsequent lots at the
plant and pay a premium of $0.10 per pound for all of the beef that could be
produced by this process. The Company anticipates entering into an agreement
with its operators which will pay the Company an incentive for obtaining
premium prices for the sale of the beef.  We anticipate this will be in the
form of a percentage of the premium realized.

Possible sources of premium prices that the Company has investigated include
markets in Europe and the Far East, high-end restaurants, cruise ships and
specialty meat markets that sell organic and hormone free meat to concerned
consumers.

Management has recognized that it would be advantageous to be able to control
the processing, marketing and distribution of the finished beef.  A number of
possibilities have been considered with the most promising being Company
operated or sponsored retail outlets, development of foreign markets and
specialty markets.  The first, and perhaps the most important, obstacle
encountered was the lack of meat processing facilities that could and would
process the beef to our specifications.

In the second quarter of 2000, Hybrid found a packing plant that was within a
two-hour drive of our head office and was not operating.  This plant seemed to
be perfect for our needs because of its size and the fact that it was
constructed to meet the specifications necessary in order to process beef for
shipment to Europe and the Far East.  The Company negotiated an agreement with
the owners to take possession of the plant, get it operating and obtain an
operating certificate from the Canadian Food Inspection Agency (CFIA).

The agreement contemplated the Company operating the plant for several months
before the balance of the purchase price was due to be paid.  That operating
period was necessary in order to satisfy the financial institutions who were
to advance the money to pay the balance of the purchase price of our ability
to generate cash flow from the operation.

Relying on written commitments of equity financing from investors, the Company
made the deposit on the packing plant just prior to the end of last fiscal
year.  For financing reasons, a new company, Blue Mountain Packers LTD., was
incorporated.  This company was intended to be the operating company and it
===============================================================================
Page-13

Item 2.  Management's Discussion and Analysis or Plan of Operation (con't)

did the work to get the plant operating.  It was further intended that Hybrid
would acquire all of the shares of Blue Mountain Packers LTD., for a nominal
amount and operate it as a wholly owned subsidiary. During the quarter, Hybrid
borrowed money and advanced it to Blue Mountain to pay start-up costs.

By the end of the quarter ended September 30, 2000, the plant was ready for
inspection by CFIA and an inspection had been scheduled for mid-October.
However, the investors failed to deliver the balance of money in a timely
manner and we were unable to commence operations until we receive money.
Therefore, as at the end of the quarter ended September 30, 2000, we were
unable to schedule commencement of operations as a result of the money
shortage. This could have a serious impact on future operations.

The Company and Blue Mountain Packers Ltd., continue to search for money to
acquire the plant and commence operations.  No commitment will be made to
purchase the plant until sufficient money is committed to pay the purchase
price and cover operating expenses, until positive cash flow is achieved. Cash
flow is expected to begin within 30 to 60 days after operations begin and it
is anticipated that it would take about six to nine months to achieve positive
cash flow.

At the beginning of the quarter, the Company was the holder and payee of two
outstanding promissory notes from two investors for shares that had been
issued pursuant to an Offering under Rule 504.  At their request, the makers
of the notes were granted an extension of time to pay and the shares were
delivered to the Investors to facilitate the raising of money.

If the notes are not paid when the extension is to expire, the Company may
have difficulty collecting the balance that is due on the promissory notes and
legal proceedings may need to be commenced to recover the shares.  At this
time, the Company does not have the financial resources to retain attorneys to
commence those legal proceedings.

Until such time as the Company sells and constructs MEFFs and recognizes
revenue, the Company will continue to experience a cash shortage.  Because the
Company is a developmental stage company, it is unlikely to be able to borrow
money from banks and other traditional financial institutions.  The lack of
long term, adequate financing continues to be of great concern to management.

The Company will require additional capital in the near future in order for it
to continue as a going concern in the long term.  For the coming quarter,
management anticipates spending most of its energies on raising money.

If the investors fail to advance the balance of funds as promised, the Company
will need to raise money in some other way to continue operating for the next
12 months.  To do so, it is likely that the Company will sell additional
shares of its common stock to pay operating expenses for the next 12 months.
The Company's general and administrative expenses for the next 12 months are
expected to be less than $1500 per month, exclusive of executive compensation,
which is deferred, and professional fees for legal and accounting services.

It is anticipated that related parties will continue to pay these operating
expenses and advance funds to pay legal and accounting fees, but no assurances
can be given.

Management is convinced that an environmentally friendly project such as ours,
which produces cleaner food, cleaner air and cleaner water is a sound basis
for a successful business.  For this and other reasons, we believe that
building and operating the first MEFF is essential to create cash flow and to
demonstrate to potential operators that the technology works as advertised.

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Page-14-

Item 2.  Management's Discussion and Analysis or Plan of Operation (con't)

The prospective operators want to see it in operation before they commit
themselves and so do the people who will approve the financing for the
construction of plants.

The Company has found a suitable location for its first MEFF, which will be
located near Kelowna, B.C., Canada.  The Company will own this first MEFF and
use it as a demonstration and training facility.  The Company is presently
negotiating with a private source to obtain the necessary financing to
construct this first MEFF but is not in a position to estimate accurately when
funds will be committed and construction started.  The lender is expected to
be given security on the plant in return for the loan.

We anticipate it will take approximately two to three months from the start of
construction until the plant is operational and five to six months before it
 is generating positive cash flow.  The financing that was being negotiated at
year end has been delayed as a result of circumstances beyond the control of
the Company and the investor and the Company is therefor looking for other
sources of money to build the first plant.

Until such time as we have succeeded in obtaining financing, the Company will
not proceed with construction and will keep operating costs to a minimum. Once
money is available to pursue our program, operating costs will be kept to a
minimum by using paid consultants as necessary on an ad hoc basis and no new
employees will be hired until the Company has sufficient revenues.

During the quarter ended September 30, 2000, the Company appointed two new
Directors.

John Morrison, Chartered Accountant, was appointed a Director, Secretary and
Chief Financial Officer on August 6, 2000.

Mr. Morrison has an extensive accounting background with over thirty years
experience with KPMG ("KPMG").  He graduated Summa Cum Laude, passed his CPA
exams in 1966, and was appointed to Beta Alpha Psi as a result of receiving a
GPA in excess of 3.5. He received his CA designation in 1968 and then worked
his way from partner in KPMG's Winnipeg Office in 1972 to a senior partner in
KPMG's Vancouver office in 1979.  From 1980 to 1989, Mr. Morrison was the
managing partner of KPMG's Kelowna office.  He was also Vice-President of
Thorne Ernst & Whinney Inc. from 1980 to 1989.  During his tenure with KPMG,
Mr. Morrison was involved in a large number of mergers, acquisitions and
reorganizations.  After his retirement from KPMG in 1989, he has provided
ongoing consulting services to a wide range of clients in diverse industries.

Gordon Colledge was appointed Vice-President and Director on September 26,
2000. He is a counselor and instructor in family studies at Lethbridge
Community College. Gordon Colledge has worked with dozens of towns and
communities in Western Canada on community development projects through
WESTARC, an applied research group at the University of Brandon, Manitoba.
Assigned to work with farm and ranch families, Mr. Colledge knows the value of
cost effective ranching and farming.

Mr. Colledge earned an international Teaching Excellence Award from the
University of Texas at Austin and has earned recognition on the Premier's
Council in Alberta for his support of Alberta families. He brings a wealth of
knowledge of farming to the Company.

It was in his counseling capacity that Mr. Colledge became knowledgeable with
the Issuer's proprietary technology and the positive effect that these
technologies could have for small to large farms and ranches. He has been an
energetic and enthusiastic supporter of the Hybrid process for the last ten
years.
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Page-15-

Item 2.  Management's Discussion and Analysis or Plan of Operation (con't)

Also during the quarter ended September 30, 2000, the Company consolidated its
connections with suppliers of bison and cattle for processing through the
packing plant and feeder cattle for finishing in the MEFFs.

PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
    Exhibit No. 3.1* - Articles of Incorporation
                3.2* - Bylaws
                4.1~  - Specimen Stock Certificate

*Incorporated by reference from the registrant's Form 10-SB filed with the
Commission on February 4, 2000.

~ Incorporated by reference from the registrant's Form 10-KSB for the period
ended June 30, 2000 and filed with the Commission on June 12, 2001.

(b) Reports on Form 8-K. None.

SIGNATURE

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

HYBRID FUELS, INC.


/s/Clay Larson		November 5, 2001
By Clay Larson          Date
Its President





























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