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







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



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

6,956,986 shares of Class A Common Stock



Item 1. Financial Statements.



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

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

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 decreased to $15,962 at Q1
from $21,054 at FYE. Its other assets at March 31, 2001 ("Q1")
were about the same when compared to December 31, 2000 ("FYE").

Accounts payable decreased at Q1 to $47,526
from $58,752 at FYE. Accrued liabilities decreased at Q1 to $25,051
from $35,055 at FYE. The issuer's other liabilities at March 31,
2001 ("Q1") were about the same when compared to December
31, 2000 ("FYE"). The decreases resulted from debts
being paid off from profits earned by the issuer during Q1.

Material changes in the results of operations
of Q1 compared to the first quarter of 2000 ("Q00")
include the following. Interest expense decreased in Q1 to $1,712
from $36,858 in Q00. The issuer's revenue and its other expenses
during Q1 were about the same when compared to Q00. Thus, as a
result of the decrease in interest expense, income before income
taxes and net income increased substantially from a loss of ($4,785)
in Q00 to net income of $23,716 in Q1.

Income (loss) per common share (both basic
and diluted) was 0.00 for both Q1 and Q00.

Changes in its 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 most 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 $15,962 at March 31, 2001, was $5,092 less than
at the year ended December 31, 2000.

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. The issuer has reported in an 8-K filing with
the Securities and Exchange Commission that its Wausau, Wisconsin,
franchisee sustained fire damage that will keep it closed for
about two months, resulting in decreased revenue from that franchisee
for the time period it is closed.



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 16, 2001, and accepted by the Commission on
April 19, 2001.

Item 2. Changes in Securities.

There was an increase in securities and in
the rights of the holders of the registrant's securities during
Q1. David Osborn was issued 300,000 shares of common stock; this
was done to satisfy the issuer's obligation under an agreement
with Mr. Osborn made in December 1999 when Mr. Osborn agreed to
stay on as interim president of the issuer. Additionally, the
directors continued to receive each month options to purchase
10,000 shares of the issuer's stock, exercisable at $.10 per share,
and the president continued to receive options for 100,000 shares
if not paid any cash compensation, for 50,000 shares if paid $1,000
per month, and for 25,000 shares if paid $2,000 per month. The
president received options for 200,000 shares in Q1, and the directors,
as a group, received options for 60,000 shares in Q1.

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 filed since April 16, 2001.

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. The following reports
on Form 8-K were filed during the quarter ending March 31, 2001,
or shortly thereafter:

1. Form 8-K filed May 4, 2001. The issuer announced
that Wien Securities Corp. would make a market in the NASD's over
the counter bulletin board for the issuer's Class A Common Stock,
and that a fire had closed down the issuer's franchisee in Wausau,
Wisconsin, which franchisee hopes to re-open in several months.



In accordance with Section 13 or 15(d) of the
Exchange Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



| | (Registrant)

    HUDSON'S GRILL INTERNATIONAL, INC.

    By: s/s David L. Osborn

    David L. Osborn, President

    Date: May 15, 2001
| | -----------------------------------------------------------------------------------------------------------------------------------------

f\sec\o01.010331











|                                           |                                       |                              |                            |          | (Unaudited)

    March 31,

    2001 |          | December 31,

    2000
|------------------------------------------ | ------------------------------------- | ---------------------------- | -------------------------- | -------- | ------------------------------------ | -------- | ----------------------
|CURRENT ASSETS                             |                                       |                              |                            |         
|                                           | Cash                                  |                              |                            | $ 15,962 |                                      | $ 21,054
|                                           | Accounts receivable                   |                              | 16,869                     |          | 16,080                              
|                                           | Long-term receivable, current portion |                              | 27,176                     |          | 26,476                              
|                                           | Other current assets                  |                              | 8,746                      |          | 10,697                              
|                                           |                                       |                              | Total current assets       |          | 68,753                               |          | 74,307                
|                                           |                                       |                              |                            |          |                                      |          |                       
|PROPERTY AND EQUIPMENT                     |                                       |                              |                            |         
|                                           | Furniture and office equipment        |                              | 15,813                     |          | 15,813                              
|                                           | Restaurant furniture and equipment    |                              | 23,416                     |          | 23,416                              
|                                           |                                       | Total property and equipment |                            | 39,229   |                                      | 39,229  
|                                           |                                       | Accumulated depreciation     |                            | (28,910) |                                      | (27,227)
|                                           |                                       |                              | Net property and equipment |          | 10,319                               |          | 12,002                
|                                           |                                       |                              |                            |          |                                      |          |                       
|LONG-TERM RECEIVABLE, LESS CURRENT PORTION |                                       | 94,660                       |                            | 98,999  
|                                           |                                       |                              |                            |          |                                      |          |                       
|TOTAL ASSETS                               |                                       |                              | $ 173,732                  |          | $ 185,308                           









|                                            |                                                             |                                                           |                             |           | (Unaudited)

    March 31,

    2001 |         | December 31,

    2000
|------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------------- | --------------------------- | --------- | ------------------------------------ | ------- | ----------------------
|CURRENT LIABILITIES                         |                                                             |                                                           |                             |          
|                                            | Bank overdraft                                              |                                                           |                             | $ -       |                                      | $ 2,874
|                                            | Bank loans                                                  |                                                           |                             | 16,192    |                                      | 16,982 
|                                            | Line of credit                                              |                                                           |                             | 16,902    |                                      | 17,959 
|                                            | Loans payable                                               |                                                           |                             | 45,000    |                                      | 45,000 
|                                            | Accounts payable                                            |                                                           | 47,526                      |           | 58,752                              
|                                            | Accounts payable - related party                            |                                                           | 115,612                     |           | 119,612                             
|                                            | Accrued liabilities                                         |                                                           | 25,051                      |           | 35,055                              
|                                            | Advances from related parties                               |                                                           | 17,190                      |           | 17,190                              
|                                            |                                                             |                                                           | Total current liabilities   |           | 283,473                              |         | 313,424               
|                                            |                                                             |                                                           |                             |           |                                      |         |                       
|DEFERRED REVENUE                            |                                                             | 152,789                                                   |                             | 158,130  
|                                            |                                                             |                                                           |                             |           |                                      |         |                       
|                                            |                                                             |                                                           | Total liabilities           |           | 436,262                              |         | 471,554               
|                                            |                                                             |                                                           |                             |           |                                      |         |                       
|STOCKHOLDERS' DEFICIT                       |                                                             |                                                           |                             |          
|                                            | Common stock, Class A, no par value; 100,000,000
    shares |                                                           |                             |           |                                     
|                                            |                                                             | authorized, 6,956,986 and 6,656,986 shares issued
    and |                             |           |                                      |        
|                                            |                                                             | outstanding at March 31, 2001 (unaudited) and             |                             |           |                                      |        
|                                            |                                                             | December 31, 2000, respectively                           |                             | 118,545   |                                      | 118,545
|                                            | Common stock, Class B, no par value; 15,000,000
    shares  |                                                           |                             |           |                                     
|                                            |                                                             | authorized, no shares issued and outstanding              |                             | -         |                                      | -      
|                                            | Additional paid-in capital                                  |                                                           | 5,289                       |           | 5,289                               
|                                            | Accumulated deficit                                         |                                                           | (386,364)                   |           | (410,080)                           
|                                            |                                                             |                                                           |                             |           |                                      |         |                       
|                                            |                                                             |                                                           | Total stockholders' deficit |           | (262,530)                            |         | (286,246)             
|                                            |                                                             |                                                           |                             |           |                                      |         |                       
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |                                                             | $ 173,732                                                 |                             | $ 185,308







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

|                                           |                            |                                   |           | Three Months Ended March 31,
|------------------------------------------ | -------------------------- | --------------------------------- | --------- | ----------------------------
|                                           |                            |                                   |           | 2001                        
|                                           |                            |                                   |           |                             
|REVENUE                                    |                            | $ 91,954                          |           | $ 90,269                    
|                                           |                            |                                   |           |                             
|OPERATING COSTS                            |                            | 71,833                            |           | 68,253                      
|                                           | Income from operations     |                                   | 20,121    |                             
|                                           |                            |                                   |           |                             
|OTHER INCOME (EXPENSE)                     |                            |                                   |           |                             
|                                           | Income from sale of assets |                                   | 2,422     |                             
|                                           | Interest income            |                                   | 2,885     |                             
|                                           | Interest expense           |                                   | (1,712)   |                             
|                                           |                            | Total other income (expense), net |           | 3,595                       
|                                           |                            |                                   |           |                             
|                                           |                            | Income (loss) before income taxes |           | 23,716                      
|                                           |                            | Income taxes                      |           | -                           
|                                           |                            |                                   |           |                             
|NET INCOME (LOSS)                          |                            | $ 23,716                          |           | $ (4,785)                   
|                                           |                            |                                   |           |                             
|Income (loss) per common share:            |                            |                                   |           |                             
|                                           | Basic and diluted          |                                   | $ -       |                             
|                                           |                            |                                   |           |                             
|Weighted average common shares outstanding |                            |                                   |           |                             
|                                           | Basic and diluted          |                                   | 6,854,788 |                             







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

|                                     |                                             |                                        |                                            |          | Three Months Ended March 31,
|------------------------------------ | ------------------------------------------- | -------------------------------------- | ------------------------------------------ | -------- | ----------------------------
|                                     |                                             |                                        |                                            |          | 2001                        
|                                     |                                             |                                        |                                            |          |                             
|CASH FLOWS FROM OPERATING ACTIVITIES |                                             |                                        |                                            |         
|                                     | Net income (loss)                           |                                        | $ 23,716                                   |          | $ (4,785)                   
|                                     | Non cash charges included in operations     |                                        |                                            |          |                             
|                                     |                                             | Depreciation                           |                                            | 1,683    |                             
|                                     |                                             | Write off of accrued liabilities       |                                            | -        |                             
|                                     |                                             | Amortization of deferred revenue       |                                            | (2,865)  |                             
|                                     |                                             | Amortization of gain on sale on assets |                                            | (2,476)  |                             
|                                     |                                             | Stock issuance for debt forbearance    |                                            | -        |                             
|                                     | (Increase) decrease in assets               |                                        |                                            |          |                             
|                                     |                                             | Accounts receivable                    |                                            | (789)    |                             
|                                     |                                             | Other assets                           |                                            | 1,951    |                             
|                                     |                                             | Other long-term assets                 |                                            | -        |                             
|                                     | Increase (decrease) in liabilities          |                                        |                                            |          |                             
|                                     |                                             | Accounts payable                       |                                            | (11,226) |                             
|                                     |                                             | Accounts payable - related party       |                                            | (4,000)  |                             
|                                     |                                             | Accrued liabilities                    |                                            | (10,004) |                             
|                                     |                                             |                                        | Net cash used by operating activities      |          | (4,010)                     
|                                     |                                             |                                        |                                            |          |                             
|CASH FLOWS FROM INVESTING ACTIVITIES |                                             |                                        |                                            |         
|                                     | Repayment of notes receivable               |                                        | 3,639                                      |          | 8,619                       
|                                     |                                             |                                        | Net cash generated by financing activities |          | 3,639                       
|                                     |                                             |                                        |                                            |          |                             
|CASH FLOWS FROM FINANCING ACTIVITIES |                                             |                                        |                                            |         
|                                     | Borrowings of bank loans                    |                                        | -                                          |          | 19,213                      
|                                     | Repayments of bank loans                    |                                        | (790)                                      |          | -                           
|                                     | Advances from related parties               |                                        | -                                          |          | 43,000                      
|                                     | Repayments of advances from related parties |                                        | -                                          |          | (45,524)                    
|                                     | Borrowings on line-of-credit                |                                        | -                                          |          | 22,983                      
|                                     | Repayments on line-of-credit                |                                        | (1,057)                                    |          | -                           
|                                     | Decrease in bank overdraft                  |                                        | (2,874)                                    |          | -                           
|                                     |                                             |                                        | Net cash (used) provided by financing      |          |                             
|                                     |                                             |                                        | activities                                 |          | (4,721)                     
|                                     |                                             |                                        |                                            |          |                             
|Decrease in cash                     |                                             | (5,092)                                |                                            | (8,115) 
|Cash at beginning of period          |                                             | 21,054                                 |                                            | 28,680  
|                                     |                                             |                                        |                                            |          |                             
|CASH AT END OF PERIOD                |                                             | $ 15,962                               |                                            | $ 20,565
|                                     |                                             |                                        |                                            |          |                             
|SUPPLEMENTAL DISCLOSURES             |                                             |                                        |                                            |         
|Cash flow information:               |                                             |                                        |                                            |         
|                                     | Interest paid                               |                                        | $ 1,712                                    |          | $ 36,858                    





**NOTE A - BASIS OF PRESENTATION**

The interim financial statements of Hudson's
Grill International, Inc. (the "Company") at March 31,
2001, and for the three months ended March 31, 2001 and 2000,
are unaudited, and include all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary
for a fair presentation. The December 31, 2000, balance sheet
was derived from the balance sheet included in the Company's audited
financial statements as filed on Form 10-KSB for the year ended
December 31, 2000.

The accompanying unaudited interim financial
statements are for interim periods and do not include all disclosures
normally provided in annual financial statements, and should be
read in conjunction with the Company's audited financial statements.
The accompanying unaudited interim financial statements for the
three months ended March 31, 2001, are not necessarily indicative
of the results which can be expected for the entire fiscal year.



**NOTE B - GOING CONCERN**

These financial statements have been prepared
on the assumption that the Company will continue as a going concern.
Current liabilities at March 31, 2001 of $283,473 exceed current
assets of $68,753. Total liabilities at March 31, 2001 of $436,262
exceed total assets of $173,732. Additionally, the Company generated
negative cash flows from operations totaling $4,010 during the
quarter ended March 31, 2001. The Company's continued existence
depends upon the success of management's efforts to meet the Company's
obligations as they come due. There can be no degree of assurance
given that the Company will be successful in these efforts.

The 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.



**NOTE C - LITIGATION**



The Company's former Parent ("HGAI")
is involved in litigation with two landlords in connection with
two franchisees that have ceased operations. There is only a remote
likelihood of the Company incurring any liability in this matter
and accordingly, no related costs have been accrued in these financial
statements.



HGAI was, in most cases, party to the leases
entered into by franchisees during the period in which it owned
the franchise rights to *Hudson's Grill*. None of these
restaurants' lease obligations were transferred to or assumed
by the Company. The Company, based on consultation with legal
counsel, is of the opinion that it will not be subject to any
liability with respect to leases entered into by HGAI. HGAI lacks
financial resources and has substantial contingent obligations.
HGAI's creditors, to the extent that they can obtain judgments
against HGAI in excess of the liquidated assets of HGAI, could
argue for the return of assets formerly held by HGAI. This could
include any or all of the stock of the Company formerly held by
HGAI.

The Company believes that these matters will
not have a materially adverse effect on the Company's financial
position and no provision for any estimated loss is reflected
in the accompanying financial statements.



In January 2001, the Company received a judgment
with respect to assets previously written off. The judgment and
subsequent agreed settlement provide for $118,000 to be paid by
the defendant to the company in thirty-six installments of $3,000
per month and two initial installments of $5,000. During the quarter
ended March 31, 2001, the Company recorded $16,000 related to
the settlement as revenue in the accompanying unaudited statements
of operations.





**NOTE D - RELATED PARTY TRANSACTIONS**

During 2000 the Company entered into an employment
agreement with the President of the Company. The terms of the
agreement state that the Company will grant the interim President
100,000 stock options per month in lieu of salary and in the event
of his receiving a salary of $1,000 or $2,000 per month this allocation
will be reduced to 50,000 or 25,000 stock options per month, respectively.
The Company also agreed to grant 10,000 stock options per month
to each of the two directors of the Company, as compensation for
services as directors.

**NOTE E - 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, 2001 and
2000, had a dilutive effect on earnings per share.

The following table provides a reconciliation
between basic and diluted earnings per share:



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

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

|                                              |                                             |          | 2001      |           | 2000     
|--------------------------------------------- | ------------------------------------------- | -------- | --------- | --------- | ---------
|                                              |                                             |          |           |           |          
|Net income (loss)                             |                                             | $ 23,716 |           | $ (4,785)
|                                              |                                             |          |           |           |          
|Weighted average number of shares outstanding |                                             |          |           |          
|                                              | Basic                                       |          | 6,854,788 |           | 6,656,986
|                                              | Dilutive effect of common stock equivalents |          | -         |           | -        
|                                              | Diluted                                     |          | 6,854,788 |           | 6,656,986
|                                              |                                             |          |           |           |          
|Earnings per share:                           |                                             |          |           |          
|                                              | Basic net income (loss)                     |          | $ -       |           | $ -      
|                                              | Diluted net income (loss)                   |          | $ -       |           | $ -