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 September 30, 2000



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.       6,656,986



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 and equivalents at September 30, 2000 ("Q3") were $30,620 as
compared to $28,680 at December 31, 1999 ("FYE"). This reflects a $25,000 payment
for an initial franchisee fee for a restaurant expected to open in December 2000 or
January 2001. Its long term portion of note receivable at Q3 was $83,904 as compared
to $119,397 at FYE.  This reflects payments made to the company on its notes
receivable.



Accounts payable and accrued liabilities decreased at Q3 to $201,901 from
$294,290 at FYE. On the other hand, advances from related parties increased to
$104,791 at Q3 from $53,328 at FYE; this reflects the payment of debts owed to
creditors while at the same time the company needed to obtain funds in the beginning of
the year for its parent to keep an affiliated company open for business.  The affiliated
company has since been closed down by the parent company. Other long term liabilities
decreased at Q3 to $31,042 from $65,335 at FYE, which reflects the company's
continued progress in paying its creditors.

Material changes in the results of operations of Q3 compared to the third quarter
of 1999 ("Q99") include the following.  Franchising revenues from restaurants increased
slightly from $85,906 in Q99 to $98,600 in Q3, while other income remained about the
same; it was $16,803 in Q99 and $16,330 in Q3.   General and Administrative expenses
decreased from  $113,500 in Q99 to $73,831 in Q3.  Thus, income from operations
increased somewhat from a loss of ($12,494) in Q99 to income of $39,416 in Q3.



Other income (expense) decreased from income of $16,652 in Q99 to $10,520 in
Q3, but the decrease did not offset the increase in income from operations, and thus, net
income increased to $49,936 in Q3 from income of $4,158 in Q99.

Thus, the Company had income of $49,936 ($.01 per share) in Q3 as compared
to income of $4,158 ($ -  per share) in Q99.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.



The Company is not aware of any legal proceedings against it at this time that
have not been settled or in the process of being settled for de minimus amounts..

Item 2.  Changes in Securities.

There were no changes in securities or in the rights of the holders of the
registrant's securities during Q3.  Since the end of Q3, the directors decided to issue
300,000 shares owed to David Osborn, as interim president, and also to continue monthly
grants of 100,000 options until 2001, at which time the Company will pay Mr. Osborn
$1,000 per month and the grant of options will be reduced to 50,000 per month until such
time as the Company can afford to pay Mr. Osborn $2,000 per month, when the monthly
grant of options will become 25,000.  The directors will be receiving 10,000 options to
purchase shares for each month served as a director.  The grants will be on the first of
each month in which service was made.  The exercise price for all of the foregoing
options will be one (1) cent above the market price at the time of grant so that no
expense will need to be accounted for by the Company.

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 Q3.

Item 5.  Other Information.

The registrant does not have any material new information since the effectiveness
of its SB-1 registration statement on August 14, 2000 or the last Form 10-QSB was filed.

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



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

|Item 601
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                                                      | attached   
|(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 June 30, 2000, or shortly thereafter:   none.

SIGNATURES

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, Interim President

Date:     November 20, 2000

**BALANCE SHEET**

**ASSETS**

September 30, 2000

(Unaudited)

|**CURRENT ASSETS:**                                                    |          
|---------------------------------------------------------------------- | ---------
|Cash and cash equivalents                                              | $	30,620 
|Accounts receivable, net of allowance for doubtful accounts of $62,000 | 8,431    
|Current portion of note receivable                                     | 45,000   
|Prepaid expenses and other                                             | 9,519    
|Total current assets                                                   | 93,570   
|                                                                       |          
|**PROPERTY AND EQUIPMENT**, at cost:                                   |          
|Restaurant equipment                                                   | 33,378   
|Furniture and fixtures                                                 | 5,851    
|Total property and equipment                                           | 39,229   
|Less accumulated depreciation                                          | (25,544) 
|Property and equipment, net                                            | 13,685   
|                                                                       |          
|******LONG-TERM PORTION OF NOTE RECEIVABLE**                           | 83,904   
|                                                                       |          
|**OTHER ASSETS**, net                                                  | 6,221    
|Total assets                                                           | $	197,380
|                                                                       |          

|******LIABILITIES AND SHAREHOLDERS' DEFICIT**
|---------------------------------------------

|                                                                                                           |          
|---------------------------------------------------------------------------------------------------------- | ---------
|**CURRENT LIABILITIES:**                                                                                   |          
|Accounts payable and accrued liabilities                                                                   | 201,901  
|Advances, related parties                                                                                  | 104,791  
|Total current liabilities                                                                                  | 306,692  
|                                                                                                           |          
|******OTHER LONG-TERM LIABILITIES**                                                                        | 31,042   
|                                                                                                           |          
|******DEFERRED INCOME**                                                                                    | 163,329  
|                                                                                                           |          
|**CONTINGENCIES**(Notes 2 and 3)                                                                           |          
|                                                                                                           |          
|**SHAREHOLDERS' DEFICIT:**                                                                                 |          
|Class A common stock, no par value, 100,000,000 shares authorized, 6,656,986
shares issued and outstanding | 118,545  
|Additional paid-in capital                                                                                 | 54,000   
|Accumulated deficit                                                                                        | (476,228)
|Total shareholders' deficit                                                                                | (303,683)
|Total liabilities and shareholders' deficit                                                                | $	197,380

******STATEMENTS OF OPERATIONS**

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

|                                                 | September
30,  |  | September 30, |      | September 30, |      | September
30,
|------------------------------------------------ | -------------- |  | ------------- | ---- | ------------- | ---- | -------------
|                                                 | 2000           |  | 1999          |      | 2000          |      | 1999         
|                                                 | (Unaudited)    |  | (Unaudited)   |      | (Unaudited)   |      | (Unaudited)  
|**REVENUES:**                                    |                |  |               |      |               |      |              
|******Franchising revenues**                     | $	98,600       |  | $	85,906      |      | $	240,041     |      | $	190,106    
|Other                                            | 16,330         |  | 16,803        |      | 35,846        |      | 60,183       
|Total revenues                                   | 114,930        |  | 102,709       |      | 275,887       |      | 250,289      
|                                                 |                |  |               |      |               |      |              
|**COSTS AND EXPENSES:**                          |                |  |               |      |               |      |              
|General and administrative                       | 73,831         |  | 113,500       |      | 206,800       |      | 274,309      
|Depreciation and amortization                    | 1,683          |  | 1,703         |      | 5,049         |      | 5,109        
|Total costs and expenses                         | 75,514         |  | 115,203       |      | 211,849       |      | 279,418      
|                                                 |                |  |               |      |               |      |              
|Income (loss) from
operations                    | 39,416         |  | (12,494)      |      | 64,038        |      | (29,129)     
|                                                 |                |  |               |      |               |      |              
|**OTHER INCOME (EXPENSE):**                      |                |  |               |      |               |      |              
|Gain on sale of assets                           | 8,157          |  | 13,218        |      | 24,153        |      | 24,918       
|Interest expense                                 | (1,857)        |  | (418)         |      | (4,574)       |      | (956)        
|Interest income                                  | 4,220          |  | 3,852         |      | 12,728        |      | 12,102       
|Total other income
(expense)                     | 10,520         |  | 16,652        |      | 32,307****    | **** | 36,064****   
|****                                             |                |  |               |      |               |      |              
|**NET INCOME**                                   | $	49,936       |  | $	4,158       |      | $	96,345      |      | $	6,935      
|                                                 |                |  |               |      |               |      |              
|**NET INCOME PER SHARE**

(basic and diluted)    | ****	.01       |  | *	****        | **** | .01****       | **** | *            
|**WEIGHTED AVERAGE**

**OUTSTANDING SHARES****** | ****	6,656,986 |  | 6,056,986**** | **** | 6,656,986**** | **** | 6,056,986    
|                                                 |                |  |               |      |               |      |              

*Less than $.01 per share

******STATEMENTS OF CASH FLOWS**

| | Nine Months Ended
| | -----------------

|                                                                                | September
30,

2000 |  | September
30,

1999
|------------------------------------------------------------------------------- | ------------------- |  | -------------------
|**CASH FLOWS FROM OPERATING ACTIVITIES:**                                       |                     |  |                    
|Net income                                                                      | $	96,345            |  | $	6,935            
|Adjustments to reconcile net income to net cash used in 

operating activities: |                     |  |                    
|Depreciation and amortization                                                   | 5,049               |  | 5,109              
|Recognition of compensation expense                                             | 18,000              |  | -                  
|Changes in current assets and liabilities                                       | (92,464)            |  | (66,731)           
|Gain on sale of assets                                                          | (24,153)            |  | (24,918)           
|Other                                                                           | (39,142)            |  | -                  
|                                                                                |                     |  |                    
|Net cash used in operating activities                                           | (36,365)            |  | (79,605)           
|                                                                                |                     |  |                    
|**CASH FLOWS FROM INVESTING ACTIVITIES:**                                       |                     |  |                    
|Notes receivable principal payments                                             | 35,493              |  | 34,449             
|Other assets                                                                    | 1,060               |  | 941                
|                                                                                |                     |  |                    
|Net cash provided by investing activities                                       | 36,553              |  | 35,390             
|                                                                                |                     |  |                    
|******CASH FLOWS FROM FINANCING ACTIVITIES -**                                  |                     |  |                    
|Advances from related parties                                                   | 51,463              |  | 35,174             
|Distributions to Parent and affiliate                                           | (49,711)            |  | -                  
|                                                                                |                     |  |                    
|Net cash provided by financing activities                                       | 1,752               |  | 35,174             
|                                                                                |                     |  |                    
|******NET DECREASE IN CASH AND CASH EQUIVALENTS**                               | 1,940               |  | (9,041)            
|                                                                                |                     |  |                    
|**CASH AND CASH EQUIVALENTS**, beginning of period                              | 28,680              |  | 19,771****         
|****                                                                            |                     |  |                    
|******CASH AND CASH EQUIVALENTS**, end of period                                | $	30,620            |  | $	10,730           
|                                                                                |                     |  |                    

**NOTES TO FINANCIAL STATEMENTS**

**1.	Unaudited Information**



The consolidated balance sheet as of September 30, 2000 and the consolidated statements of
operations for the three and nine month periods ended September 30, 2000 and 1999 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 consolidated financial position of the Company as of September 30,
2000 and the results of operations for the three and nine months ended September 30, 2000 and 1999.

Certain information and notes normally included in financial statements prepared in accordance with
generally accepted accounting principles 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 for the year ended December 31, 1999.



**2.**	**Continued Operations**

The accompanying consolidated 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 incurred recurring losses from operations and has a shareholders' deficit
of $303,683, as of September 30, 2000.  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.

**3.	Contingency**

As a result of its closure of two restaurants, the Parent has recorded an $83,000 liability for the
settlement of a lawsuit by the landlord of one restaurant and is a party to a legal proceeding by the
landlord of the other restaurant in connection with its obligations under a noncancelable lease
agreement.  In addition, the Parent 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.  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.

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