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

                                   FORM 10-QSB/A/2

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

                 For the Quarterly Period Ended September 30, 2001

      []  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                                                    88 0384399
   (State or other jurisdiction
   of incorporation or organization)        (I.R.S. Employer Identification No.)

PO Box 41118 RPOS Winfield, B.C.,                           V1V 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 [X]               No[]

The number of shares outstanding of the registrant's common stock as of November
13, 2001 was 21,053,600.

The number of shares issued of the registrant's common stock as of November 13,
2001 was 21,286,353.

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

















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                                 HYBRID FUELS, INC.

                                    FORM 10-QSB/A/2

                      For the quarter ended September 30, 2001

INDEX


Part I - Financial Information

      Item 1.  Financial Statements                                    Page

        Balance sheet as of September 30, 2001..........................F-3

        Statements of operations for the quarters ended
        September 30, 2001 and 2000.....................................F-4

        Statements of cash flows for the three months ended
        September 30, 2001 and 2000.....................................F-5

        Notes to Financial Statements...................................F-6-F-10

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

Part II - Other Information..............................................16

Signature............................................................... 16




































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                                        F-3
Hybrid Fuels, Inc.
(formerly Polo Equities, Inc.)
(A Development Stage Company)

Consolidated Balance Sheets


                                                September    June
                                                      30,     30,
                                                     2001    2001
                                                        $       $
                                             (unaudited) (audited)
--------------------------------------------------------------------------------
ASSETS

Current Assets
Cash                                                    5       2
Total Assets                                            5       2
--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable                                   22,692  14,807
Accrued liabilities (Note 6(d))                     6,600  15,000
Note payable (Note 4)                              33,638  33,638
Shareholder loan payable (Note 6(a))              197,745 196,255
Amounts owing to a Director (Note 6(b))           168,106 152,111

Total Current Liabilities                         428,781 411,811

Temporary Equity (Note 7(d))                      223,000 223,000

Stockholders' Deficit

Common Stock (Note 7): $0.001 par value;           20,824  20,624
50,000,000 shares authorized 20,823,600 and
20,623,600 shares are issued and outstanding
respectively

Additional Paid-in Capital                        295,642 285,842

Common Stock paid for but unissued                  6,300       -
(representing 130,000 shares)

Donated Capital - Imputed Interest (Notes 5 and   123,249 115,937
6)

Deficit Accumulated During the Development
Stage                                         (1,097,791)(1,057,212)

Total Stockholders' Deficit                     (651,776) (634,809)


Total Liabilities and Stockholders' Equity              5       2



Nature of Operations and Continuance of Business (Note 1)
Other Contingencies (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     Three     Three
                                       from    Months    Months
                               February 26,     Ended     Ended
                                       1960
                                   (Date of  September  September
                                   Inception)    30,      30,
                                   to September
                                      30,
                                      2001     2000       2001
                                      $         $           $
--------------------------------------------------------------------------------
Revenue                                 -           -       -
--------------------------------------------------------------------------------
Expenses

Advances written-off (Note           84,951         -    42,076
3)
Consulting fees                       5,473     5,473         -
Deposit on plant written-off        170,561         -         -
(Note 3)
Disputed compensation (Note         243,463         -         -
8(b))
Executive compensation (Note        162,000    18,000    18,000
6(b))
Filing and regulatory fees           17,091     1,561     2,242
General and administration           58,982        33       240
Imputed interest (Notes 5           123,249     7,312    12,102
and 6)
Interest                              4,173     2,044       110
Investor relations                   16,698         -     1,518
Professional fees                   147,170     5,802    17,250
Rent and telephone                   42,059       137     1,641
Research and development              8,000         -         -
Travel and promotion                 13,921       217       486

                                  1,097,791    40,579    95,665

Net Loss                        (1,097,791)  (40,579)  (95,665)

Net Loss Per Share                              (.01)     (.01)


Weighted Average Shares                      20,657,0  19,524,0
Outstanding                                        00        00



(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


                                              Three       Three
                                             Months      Months
                                              Ended       Ended
                                          September   September
                                                30,         30,
                                               2001        2000
                                                  $           $
--------------------------------------------------------------------------------
Cash Flows To Operating Activities

Net loss                                   (40,579)    (95,665)

Non-cash item
Imputed interest                              7,312      12,102

Adjustment to reconcile net loss to cash
Accounts payable and accrued liabilities      9,485       7,034

Net Cash Used In Operating Activities      (23,782)    (76,529)

Net Cash Used By Investing Activities             -           -

Cash Flows From Financing Activities

Common stock subscribed for                   6,300           -
Proceeds from notes payable                       -      33,638
Advances payable                                  -       9,733
Amounts owing to a Director                  15,995      18,808
Shareholder loans payable                     1,490      14,350

Net Cash Provided By Financing               23,785      76,529
Activities

Net Increase (Decrease) in Cash                   3           -

Cash - Beginning of Period                        2         485

Cash - End of Period                              5         485

Non-Cash Financing Activities

Value of common shares issued for            10,000           -
settlement of debt

Supplemental Disclosures

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


(See Accompanying Notes to the Consolidated Financial Statements)







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

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, B.C., Canada after the Calgary, Alberta, Canada
  office was shut down on May 3, 2001.

  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
  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
================================================================================
                                        F-7

  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.

  (e)  Interim Financial Statements

     These interim unaudited financial statements have been prepared  on the
     same basis as the annual financial statements and in the opinion of
     management, reflect all adjustments, which include only normal recurring
     adjustments, necessary to present fairly the Company's financial position,
     results of operations and cash flows for the periods shown. The results of
     operations for such periods are not necessarily indicative of the results
     expected for a full year or for any future period.


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
================================================================================
                                        F-8
  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.  The Company advanced $84,951 to Blue
  Mountain Packers  Ltd., 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 $4,148
  has been accrued at September 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 $69,248 on behalf of the Company and loaned the Company
  Cnd$78,000 ($50,220) for a total amount owing of $119,468. This debt was
  settled in June 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 $Nil (2001 - $13,326) was charged to
  operations and treated as donated capital.


6.   Related Party Transactions/Balances

  (a)     Cash loans of $499,059 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 $64,276
     on behalf of the Company. The balance of $197,745 is currently owing
     without interest or specific repayment terms. Imputed interest of $3,950
     (2001 - $29,041) 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 $14,799 of which
     $8,693 has been reimbursed with cash. Effective July 1, 1999 the President
     is entitled to a deferred salary of US$6,000 per month and was owed a total
     of $162,000 at September 30, 2001. These amounts are unsecured,
     non-interest bearing and due on demand.  Imputed interest of $3,362 (2001
     -  $16,835) was charged to operations and treated as donated capital.

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

  (d)    Pursuant to a directors' consent, dated June 11, 2001, a total of
     200,000 shares was issued on September 19, 2001 to a director/officer of
     the Company to settle a $10,000 debt.


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 (continued)

  (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 351,120 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.
     To date, 23 subscribers, have, pursuant to this offer received 237,753
     shares, representing $158,000. These shares are issued but not considered
     outstanding. The remaining 11 subscribers, who paid $65,000 for 113,367
     shares, have not responded to the offer. These subscriptions are recorded
     as temporary equity until rescission rights have been revoked.

================================================================================
                                        F-10
7. Stockholders' Equity (continued)
(e) See Note 5 for 1,000,000 restricted common shares issued to a non-related
company to settle debt of $119,468.

(f) A total of 100,000 restricted common shares, valued at $5,000, were issued
     to the plant manager of Blue Mountain Packers Ltd. for plant refurbishing
     work to March 15, 2001.

(g) On September 19, 2001, 200,000 shares were issued to settle debt referred to
     in Note 6(d).


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 351,120 shares of the Company.


9.   Subsequent Events

  On October 18, 2001 130,000 shares were issued for cash proceeds of $6,300 and
  100,000 shares were issued to settle debt of $5,000.

























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Page-11-

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

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.

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, 2002. 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
intended  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 facility was designed to prove the
concepts and included all of the ethanol-making and cattle-feeding features of
a full-scale commercial operation. 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 enabled us modify construction materials and layout to improve the
buildings and equipment and refine the process, which is now ready for market.

The Company's intended business is to sell and build farm scale plants that
produce ethanol 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 contain nutrients and are
therefore used as feed and water for livestock. By using the distillers grain
and stillage water on site the animals get the benefit of the nutrients in these
byproducts.  In addition, the plants do not incur the costs of drying the
distillers grain and transporting it as would be necessary if it was  to be used
at another site. A further benefit is  that no costs are incurred to dispose of
the stillage water. Rather than it being something that is costly to be disposed
of, it becomes a valuable feed product.

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. From
discussions with the gasifier manufacturer, management believes that there will
be sufficient heat leftover to operate a greenhouse, if the operator so desires.

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.

For a more detailed description of the entire process, plus sources of
information and references, the reader is referred to the Company's Form 10-KSB
for the year ended June 30, 2001, as amended and filed with the SEC.
================================================================================
Page-12-

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. Although there are no operating plants at the moment, the Company
is expecting to have the first one operating in the spring of 2002, as described
below.

The Company intends to sell these facilities (except the column and spinner) to
farm operators, preferably those who grow or have access to sufficient grain to
supply the  plant.  Management believes this would be about 40,000 bushels of
barley or other suitable grain for a plant which would feed 200 head of cattle
on a continually rotating basis. Hybrid plans to earn revenue from the sale and
operation of these facilities in the following manner:

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

The Company expects to earn a profit and recognize revenue on the sale of each
plant. The Company intends to sell each MEFF at a profit that is sufficient to
cover overhead and operating costs and the costs of screening applicants,
training them and assisting them until they are able to operate on their own.
The profit on the sale of each plant is expected to be sufficient to cover all
of the operating expenses the Company will incur until revenues are received
from royalties.

Once they are operating, it is intended that the operator of each plant will pay
royalties for the license to use the technology. Initially this royalty is
expected to be $2500US per month per plant starting when each MEFF begins
operation. The Company is considering offering incentives in the form of reduced
royalties to the first operators who make early commitments to purchase plants.

In addition, the Company anticipates that it will charge each operator a service
fee to cover the Company's costs of regular visits for ongoing training,
service, technical support, and quality control. These fees are expected to be
in the $150 to $250 US per month range.

The column and spinner, which are the most sensitive parts of the technology,
will not be sold. The Company will lease these parts of the technology to the
operators on a permanent basis to protect the secrecy of the design and
operation of these most vital pieces of the technology. These leases are
expected to create another source of revenue for the Company.

Other revenue for the Company is expected to come from obtaining premium prices
for the beef. The Company anticipates entering into an agreement with its
operators to 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.

The Dalum test trials demonstrated the quality of the beef produced by this
process. As a result, Cargill  Foods, which purchased the first lot, agreed to
pay a premium of $0.10 per pound for all of the beef that could be produced by
this process. They also agreed to pick up subsequent lots at the plant, which
eliminated freight and auction costs. The Company anticipates that the beef
produced by the process will be top quality, which the Company will be able to
market at premium prices.

The Company has investigated a number of possible sources of premium prices,
including markets in the Far East and Europe, high-end restaurants, cruise ships
and specialty meat markets that sell organic and hormone free meat. As a result
of making these contacts, the Company believes that it will be able to generate
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premium prices from that sale of the beef and earn revenue from doing so.

Management has recognized that premium prices would be most likely if the
Company were 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, known as Blue
Mountain Packers, 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. At the date of
this report, the packing plant is still available, although we do not have an
agreement to purchase it at this time, and are not negotiating  to acquire it.

There is no relationship between the Company, its officers, directors and
affiliates and the packing plant, its officers, directors or beneficial owners.

The Company also believes that it has a workable business plan to operate the
packing plant profitably by custom processing finished beef and bison until the
MEFFs begin producing. We have contacts with an Alberta company, Canadian
Rangeland Beef and Bison Inc., that deals in hormone free beef and bison. The
Company and its officers, directors and affiliates are not related to Canadian
Rangeland or any of its Officers, Directors or beneficial owners. That company
has assured us that they are able to supply the packing plant with sufficient
animals for custom processing to keep it operating at full capacity until
sufficient MEFFs are operating. We do not have any agreement that would obligate
them to supply us with hormone free beef.  We anticipate we would enter into
such an agreement as part of the process of acquiring the packing plant, if and
when we are able to raise the money to purchase it. If we are able to acquire
the packing plant, the Company's intention is to sell enough MEFFs to be built
in close proximity to the packing plant to keep it operating at full capacity.
From discussions which we have had with ranchers, cattle brokers and others that
grow or market hormone free beef, the Company believes that it will be able to
obtain enough hormone free feeder cattle to keep the MEFFs and the packing plant
running at full capacity.

As a consequence, the Company continues to search for money to acquire the
packing plant. 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. The Company anticipates that the packing plant
would begin to produce cash flow within 30 to 60 days after operations begin and
is projected to achieve positive cash flow in six to nine months.

A small amount of diesel is added to the ethanol in the distillation column to
"de-nature" it so that no pure ethanol is detectable or accessible in the MEFF.
This mixture is then stored on site in an appropriate tank and then picked like
bulk milk and transported to a mixing facility to be further mixed into the
appropriate ratio.  The Company intends to generate revenue by purchasing the
fuel mixture from the operators at a discount from wholesale value, and selling
the end product to end users and distributors after mixing is completed.

In the beginning, with the small quantities from the first MEFF, the plan is to
mix locally and use the fuel for testing and evaluation by local users. Two
local firms have agreed to evaluate the fuel made by the first plant as soon as
we produce it. This is expected to generate some revenue.

After the first plant is operating, the location of the next MEFFs will be
determined to some extent on being able to economically deliver the fuel mixture
to commercial mixing facilities that can handle the production from the MEFFs on
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a contract basis.  The plan is for the Company to purchase the chemical mixture
from each MEFF, and transport it to mixing plants for further mixing to achieve
the appropriate ratio.  The availability of an end user to take the finished
fuel will be a consideration in choosing the mixing facility.

When a larger number of plants are operating and are producing sufficient
quantities, the Company plans to sell the mixed fuel to end users and diesel
fuel distributors encompassing  all industries.  The Company estimates it will
be more than a year after completion of the second plant before we get to that
stage, at which time the Company intends to target the trucking and railway
industries. Ultimately the Company may consider building and operating its own
mixing facilities, if that becomes economically feasible.

Because the hybrid fuel can be used in an unaltered diesel engine, it can be
used economically where it is available and no modifications or changes need be
made to engines to switch back to regular diesel fuel when the hybrid fuel is
not available.

Some potential users may be concerned about using this product. Ethanol-diesel
mixes are presently being evaluated by Archer Midland Daniels, The Chicago
Transit Authority and The University of Illinois.  Their reports either are or
are expected to be available on The University of Illinois website. In addition,
the City of Winnipeg Transit Authority and Husky Oil are conducting an
evaluation of an ethanol-diesel mix to see how it performs in very cold weather.
The Company plans to provide end users with access to all  of these and
subsequent evaluation reports in order to help alleviate potential users
concerns about the safety and performance of the fuel.

As regulators work to decrease engine emissions and users look for less
expensive fuels that burn cleaner, the Company believes it will be able to
attract users for the hybrid fuel.

Until such time as the Company sells and constructs MEFFs and recognizes
revenue, the Company is likely to 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 develop operational activities and to continue as a going
concern in the long term. For the coming quarter, management anticipates
spending most of its energies on raising money for the purpose of developing
operating activities and complying with public reporting requirements.

To solve the cash shortage problem, the Company entered into discussions to sell
a license to use the technology in the Province of Quebec, Canada. The
discussions contemplated payment of an up-front fee plus royalties for the use
of the technology.

Although the parties signed a letter of intent, no definitive agreement was
signed and no money changed  hands.  At the time of filing this amended report,
it had become apparent that we would be unable to complete a deal with the
proposed licensee, so on  March 28, 2002, we broke off negotiations.

If the Company is unable to realize income by selling a license to use the
technology, the Company may need to raise money in some other way. To do so, the
Company may 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 $500 per month, exclusive of
executive compensation, which is deferred, and professional fees for legal and
accounting services. At May 31, 2002, the Company had over $8,900.00 in cash
reserves which should  be sufficient to meet our cash requirements for the next
12 months, barring any significant unforeseen cash expenses.

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Management believes 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 so that the Company can begin to develop operating
activities.

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 MEFFs. To date, the Company has received applications from more
than fifty farmers who are interested in acquiring  MEFFs. The Company is
currently developing a screening process to select suitable candidates and
assist them in obtaining financing, if necessary, for plant construction. The
intention is to have at least four candidates approved for training by the time
the demonstration MEFF is operating.

The Company has found a suitable location for its  first MEFF, which will be
located near Kelowna, B.C., Canada. This first MEFF was to be built by an
outside contractor who was to arrange  all of the financing, complete the
construction and deliver an operational plant to our operating subsidiary,
Hybrid Fuels (Canada) Inc., to be used as a demonstration and training facility.
Neither we nor Hybrid (Canada) were to have any liability for the MEFF until it
was operational.

Unfortunately, the Contractor who was to do the  building, ran into difficulties
on another project that had nothing to do with us, and was unable to keep his
commitment to build the MEFF for Hybrid  Fuels (Canada) Inc. Hybrid (Canada) has
made preliminary contact with a new contractor to construct this first MEFF. No
agreement has been reached as of the date of this report.

We anticipate it will take approximately two to four months from the start of
construction until the plant is operational and four to five months before it is
generating positive cash flow.  The financing that is being sought is expected
to be sufficient to cover all construction and operating expenses until positive
cash flow is achieved. Once the first MEFF is operating we expect to receive
approval for financing subsequent plants within two to three weeks.

By that time, the Company expects it will have qualified and trained two or more
operators.

We have also approached Farm Credit Corporation, which has recently approved a
program to provide leasing to farmers for the acquisition or upgrading of
buildings and equipment. At this time we are in the very preliminary stages of
discussion to determine the  best way to obtain approval for lease financing to
construct the first MEFF and subsequent MEFFs. As a result of slow-downs that
are showing up throughout the economy, there seems to be a willingness to assist
in the furthering of this new process which could contribute greatly to farm
income. It is likely to take two to three months to complete the "due diligence"
process with FCC.

The institution that finances the construction of each MEFF is expected to be
given security on the plant in return for the financing. No financing has been
committed as at the date of this report.

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, the Company issued 200,000 shares to a Director and Officer
for services rendered to the end of June, 2001. These shares were authorized at
a Directors meeting on June 11, 2001. However, the transfer agent failed to
issue them due to misreading  the resolution. Also during the quarter, the
Company sold 130,000 restricted shares in a private placement to an accredited
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investor to raise money to pay professional fees and other operating expenses.
These shares were issued after the end of the quarter. In addition, the Company
authorized the issuance of 100,000 restricted shares to pay an independent
consultant for services rendered to the end of September, 2001. These shares
were also issued after the end of the quarter.

The loss for the present quarter is $40,759 compared to $95,665 for the
comparable quarter last year. The loss for the same quarter last year was higher
largely due to advances written, which is not likely to reoccur, plus higher
imputed interest and professional fees.  The loss for this quarter is made up of
consulting fees for filings with the SEC, which have been paid by cash of $473
and the issuance of shares for a value of $5,000. Another $18,000 is salary for
the President which is deferred until money is available, and does not represent
a cash  outlay. Other items not requiring cash are interest which is accrued and
imputed interest. All of these non-cash items total $32,829.

The working capital deficiency of roughly $8,000 was made up from cash from the
sale of shares and by a major shareholder or the President. If no revenue is
received from the sale of a license as discussed above, or from operating
activities, it is anticipated that a major shareholder or the President will
continue to fund the Company's working capital deficiency for the foreseeable
future. Operating expenses will be kept to a  minimum until revenue is
generated.

PART II   Other Information

Item 6.   Exhibits and Reports on Form 8K
      (a) Exhibits None
      (b) Reports on Form 8-K None
Signatures
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.

Dated: May 23, 2002

HYBRID FUELS, INC.

By: /s/ Clay Larson             By: /s/ John Morrison
Director, CEO & President       Director & CFO























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