U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)
               [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

               [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                                THE EXCHANGE ACT

                       For the transition period from to

                               Commission File No.

                        DIAMOND INTERNATIONAL GROUP, INC.
                 (Name of Small Business Issuer in Its Charter)

<TABLE>
<S>                                                       <C>
Delaware                                                73-1556428
(State of Other Jurisdiction of                       (I.R.S. Employer
Incorporation or Organization)                       Identification No.)
</TABLE>

                6 Commercial Street, Hicksville, New York 11801
              (Address of Principal Executive Offices) (Zip Code)

                                 (516) 433-3800
                (Issuer's Telephone Number, Including Area Code)

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 14, 2001, the Company
had 28,805,071 shares of Common Stock outstanding, $0.0001 par value.

<PAGE>

                              DIAMOND INTERNATIONAL

                                   GROUP, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                                TABLE OF CONTENTS

                             June 30, 2001 and 2000
<TABLE>
<CAPTION>
                                                                   PAGE
CONSOLIDATED FINANCIAL STATEMENTS
<S>                                                                <C>
    Consolidated Balance Sheets                                    2

    Consolidated Statements of Operations                          3

    Consolidated Statements of Stockholders' Equity                4

    Consolidated Statements of Cash Flows                          5

    Notes to Consolidated Financial Statements                     6 - 10

Item 2. Management's Discussion and Analysis of Financial
        Conditions and Results of Operations

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Signatures

</TABLE>

<PAGE>

           PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BASIS OF PRESENTATION

The accompanying reviewed financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The accompanying statements should be read in conjunction with the audited
financial statements for the years ended December 31, 2000 and 1999. In the
opinion of management, all adjustments (consisting only of normal occurring
accruals) considered necessary in order to make the financial statements not
misleading, have been included. Operating results for the three months and six
months ended June 30, 2001 are not necessarily indicative of results that may be
expected for the year ending December 31, 2001. The financial statements are
presented on the accrual basis.

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                            June 30,              December 31,
                                                              2001                    2000
                                                     --------------------     -------------------
CURRENT ASSETS
<S>                                 <C>              <C>                      <C>
   Cash and cash equivalents - note 1                $            48,634      $           10,876
   Accounts receivable - note 2                                1,188,375               1,268,678
   Prepaid expenses                                               73,151                  50,728
                                                     --------------------     -------------------

           Total Current Assets                                1,310,160               1,330,282
                                                     --------------------     -------------------

FIXED ASSETS - notes 1 and 6
   Furniture and fixtures                                         98,611                  98,611
   Machinery and equipment                                       696,438                 608,828
   Leasehold improvements                                        870,078                 870,078
   Delivery equipment                                             10,404                  10,404
   Equipment held under capital leases                         1,124,969               1,103,469
                                                     --------------------     -------------------
                                                               2,800,500               2,691,390
    Less:  Accumulated Depreciation                           (1,043,281)               (872,281)
                                                     --------------------     -------------------

           Fixed Assets , net                                  1,757,219               1,819,109
                                                     --------------------     -------------------
OTHER ASSETS

   Goodwill - note 1                                              88,139                  91,306
   Security deposits and other assets                             44,241                  46,691
                                                     --------------------     -------------------

           Total Assets                              $         3,199,759      $        3,287,388
                                                     ====================     ===================
</TABLE>

                                      F-1

<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                       June 30,                December 31,
                                                                         2001                      2000
                                                                 --------------------      -------------------
CURRENT LIABILITIES
<S>                                                              <C>                       <C>
   Loans payable - State Bank of Long Island - note 3            $           782,770       $          874,806
   Obligations under capital leases -current - note 6                        188,907                  199,646
   Accounts payable                                                          303,396                  447,921
   Accrued expenses and taxes                                                380,213                  358,751
   Deferred tax liability - note 8                                            15,974                   15,974
                                                                 --------------------      -------------------
           Total Current Liabilities                                       1,671,260                1,897,098
                                                                 --------------------      -------------------
LONG-TERM LIABILITIES
   Loans payable - stockholders- note 4                                            -                  522,203
   Obligations under capital leases - long-term - note 6                     134,609                  203,842
   Deferred tax liability - note 8                                           317,684                  317,684
                                                                 --------------------      -------------------
           Total Long-term Liabilities                                       452,293                1,043,729
                                                                 --------------------      -------------------
           Total Liabilities                                               2,123,553                2,940,827
                                                                 --------------------      -------------------

COMMITMENTS AND CONTINGENCIES  - note 6

STOCKHOLDERS' EQUITY
   Common stock - $.0001 par value;100,000,000 shares
      authorized; 28,655,000 and 23,005,000 shares issued and
      outstanding in 2001 and 2000, respectively                               2,865                    2,300
   Additional paid-in capital                                              2,016,737                1,550,237
   Accumulated deficit                                                      (872,957)                (890,976)
   Notes receivable from stock sales                                         (70,439)                (315,000)
                                                                 --------------------      -------------------
           Total Stockholders' Equity                                      1,076,206                  346,561
                                                                 --------------------      -------------------
           Total Liabilities and Stockholders' Equity            $         3,199,759       $        3,287,388
                                                                 ====================      ===================
</TABLE>

                                      F-2

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                       Three Months Ended June 30,       Six Months Ended June 30,
                                                          2001             2000              2001            2000
                                                    ---------------   ---------------  ---------------   -------------
<S>                                                 <C>              <C>               <C>             <C>
Fulfillment Income                                  $    1,895,774   $     2,079,245   $    3,760,992  $    3,712,961

Cost of Operations                                       1,335,064         1,299,665        2,738,077       2,488,583
                                                    ---------------  ----------------  --------------- ---------------

Gross Profit                                               560,710           779,580        1,022,915       1,224,378

Selling, general and administrative expenses               382,204           427,654          726,570         876,809
                                                    ---------------  ----------------  --------------- ---------------

Income (loss) before other expenses                        178,506           351,926          296,345         347,569
                                                    ---------------  ----------------  --------------- ---------------

Other Expenses

    Interest expense                                        55,975            72,714          102,149         130,809
    Depreciation and amortization                           88,667            60,000          174,167         120,000
                                                    ---------------  ----------------  --------------- ---------------

         Total Other Expenses                              144,642           132,714          276,316         250,809
                                                    ---------------  ----------------  --------------- ---------------

Income before provision for income taxes                    33,864           219,212           20,029          96,760

Provision for income taxes - notes 1 and 8                       -                 -            2,010             525
                                                    ---------------  ----------------  --------------- ---------------

Net income                                          $       33,864   $       219,212   $       18,019  $       96,235
                                                    ===============  ================  =============== ===============

Basic and diluted net income per common share - note$1        0.00   $          0.01   $         0.00  $         0.00
                                                    ===============  ================  =============== ===============

Weighted average common shares used in computing
 net income per common share                            25,305,000        30,668,333       24,155,000      38,334,167
                                                    ===============  ================  =============== ===============
</TABLE>

                                      F-3

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     Six Months Ended June 30, 2001 and 2000
<TABLE>
<CAPTION>
                                                                   Additional                     Notes
                                                     Common        Paid-In         Accumulated    Receivable
                                     Shares          Stock         Capital         Deficit        from Stock Sales   Total
                                     ------          -----         -------         -------        ----------------   -----
<S>                                 <C>             <C>          <C>            <C>              <C>            <C>
Balance at January 1, 2000          46,000,000      $ 4,600      $1,550,237     $(1,332,490)     $(560,000)     $  (337,653)

Repayment of notes receivable               --           --              --              --        245,000          245,000

Retirement of common stock         (23,000,000)      (2,300)             --              --             --           (2,300)

Purchas of Segway I Corp.                5,000           --              --              --             --               --

Net income                                  --           --              --          96,235             --           96,235
                                   -----------      -------      ----------     -----------      ---------      -----------

Balance at June 30, 2000            23,005,000        2,300       1,550,237      (1,236,255)      (315,000)           1,282
                                   ===========      =======      ==========     ===========      =========      ===========

Balance at January 1, 2001          23,005,000        2,300       1,550,237        (890,976)      (315,000)         346,561

Issuance of common stock             5,650,000          565         466,500              --             --          467,065

Proceeds from notes receivable              --           --              --              --        244,561          244,561

Net income                                  --           --              --          18,019             --           18,019
                                   -----------      -------      ----------     -----------      ---------      -----------

Balance at June 30, 2001            28,655,000      $ 2,865      $2,016,737     $  (872,957)     $ (70,439)     $ 1,076,206
                                   ===========      =======      ==========     ===========      =========      ===========
</TABLE>

                                      F-4

<PAGE>

                            DIAMOND INTERNATIONAL GROUP, INC.

                          CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                           Three months ended June 30,      Six months ended June 30,
                                                              2001             2000            2001            2000
                                                         --------------   --------------  -------------   --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                      <C>              <C>             <C>             <C>
Net income                                               $      33,864    $     219,212   $     18,019    $      96,235
                                                         --------------   --------------  -------------   --------------

Adjustments to reconcile net income to net cash provided by operating
    activities:

      Depreciation and amortization                             88,667           60,000        174,167          120,000
      Changes in assets and liabilities:
        Accounts receivable                                    209,617           71,613         80,303          (86,085)
        Prepaid expenses                                         7,951          (10,128)       (22,423)          (4,137)
        Security deposits and other assets                       3,402                -          2,450                -
        Accounts payable                                      (140,087)          15,619       (144,525)         110,553
        Accrued expenses and taxes                             (50,098)         (89,725)        21,462         (186,449)
                                                         --------------   --------------  -------------   --------------
           Total adjustments                                   119,452           47,379        111,434          (46,118)
                                                         --------------   --------------  -------------   --------------
            Net Cash Provided by Operating Activities          153,316          266,591        129,453           50,117
                                                         --------------   --------------  -------------   --------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of Segway I Corp.                                        -          (95,000)             -          (95,000)
   Purchases of machinery and equipment                        (37,799)         (42,482)       (87,610)        (130,817)
                                                         --------------   --------------  -------------   --------------
            Net Cash Used in Investing Activities              (37,799)        (137,482)       (87,610)        (225,817)
                                                         --------------   --------------  -------------   --------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Change in loan payable - State Bank of Long Island         (177,967)         (90,216)       (92,036)          41,574
   Principal payments of capital lease obligations             (51,287)         (60,509)      (101,472)        (112,307)
   Proceeds from notes receivable                              207,811           95,000        244,561          245,000
   Issuance (retirement) of common stock                            65           (2,300)            65           (2,300)
   Repayments of loans payable - stockholders                  (55,203)               -        (55,203)          (1,285)
                                                         --------------   --------------  -------------   --------------

         Net Cash (Used in) Provided by Financing Activities   (76,581)         (58,025)        (4,085)         170,682
                                                         --------------   --------------  -------------   --------------
Net increase (decrease) in cash and cash equivalents            38,936           71,084         37,758           (5,018)

Cash and cash equivalents - beginning of period                  9,698            3,138         10,876           79,240
                                                         --------------   --------------  -------------   --------------

Cash and cash equivalents - end of period                $      48,634    $      74,222   $     48,634    $      74,222
                                                         ==============   ==============  =============   ==============
SUPPLEMENTAL CASH FLOW INFORMATION
   Interest paid                                         $      55,975    $      72,714   $    102,149    $     130,809
                                                         ==============   ==============  =============   ==============
   State income tax paid                                 $           -    $           -   $      2,010    $         525
                                                         ==============   ==============  =============   ==============
   New capital lease obligations                         $      21,500    $      45,742   $     21,500    $      75,073
                                                         ==============   ==============  =============   ==============
</TABLE>

                                      F-5

                        DIAMOND INTERNATIONAL GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business
-------------------

Diamond International Group, Inc. ("Diamond") was incorporated on November 5,
1998 for the express purpose of acquiring all of the outstanding common stock of
H. Y. Applied Inter-Data Services, Inc. ("Hyaid"). Hyaid operates a computerized
order fulfillment service for clients in the direct mail order business.

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of Diamond and Hyaid
(together, the "Company"). All significant intercompany accounts and
transactions have been eliminated.

Acquisition
-----------

On June 9, 2000, Diamond acquired all of the outstanding common stock of Segway
I Corp. ("Segway") for $95,000 and 5,000 shares of Diamond common stock. In
connection with the acquisition, the Company recorded goodwill for the excess of
the cost over the fair market value of the net assets acquired in the amount of
$95,000. Goodwill is being amortized over fifteen years using the straight-line
method.

Use of Estimates
----------------

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Revenue Recognition
-------------------

Revenue is recorded upon the performance of fulfillment and other services for
the Company's clients. Revenue from reimbursable expenses is recorded in the
same period as the corresponding expenses.

Concentrations
--------------

Sales to three major customers during the six months ended June 30, 2001
amounted to 44%, 16% and 15% of sales. Sales to three major customers during the
six months ended June 30, 2000 amounted to 38%, 15% and 14% of sales.

                                     Page 6
<PAGE>
                        DIAMOND INTERNATIONAL GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fixed Assets and Leases
-----------------------

Fixed assets are recorded at cost and are depreciated using the straight-line
method over the estimated useful lives of the assets, generally 3 to 10 years.
Computer and office equipment that are acquired under leases that meet certain
criteria evidencing substantive ownership by the Company are capitalized and the
related capital lease obligations are included in current and long-term
liabilities. Related amortization and interest are charged to expense over the
lease term. Leases not meeting the criteria are accounted for as operating
leases, with rent payments being charged to expense as incurred.

Income Taxes
------------

The Company applies the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires
a company to recognize deferred tax liabilities and assets for the expected
future tax consequences of events that have been recognized in a company's
financial statements or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement carrying amounts and tax bases of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse. Differences between taxable income and income for financial statement
purposes result from the recognition of certain income and expense items for tax
purposes in periods which differ from those used for financial statement
purposes.

Advertising
------------

The Company expenses advertising costs as they are incurred.

Cash and cash equivalents
-------------------------

The Company considers all short-term investments with an original maturity of
three months or less to be cash equivalents.

Earnings per share
------------------

The calculation of earnings per share is based upon the weighted average number
of common shares outstanding. There is no difference between basic and diluted
earnings per share for the six months ended June 30, 2001 and 2000.

NOTE 2 - ACCOUNTS RECEIVABLE

At June 30, 2001, accounts receivable from three major customers amounted to
28%, 26% and 22% of total accounts receivable. At June 30, 2000, accounts
receivable from three major customers amounted to 27%, 22% and 21% of total
accounts receivable.

                                     Page 7

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

NOTE 3 - LOAN PAYABLE - STATE BANK OF LONG ISLAND

The Company entered into a revolving line of credit agreement with State Bank of
Long Island (the "Line of Credit") in the amount of $1,100,000. The Line of
Credit provides for advances subject to a limit of 70% of eligible accounts
receivable, as defined. Repayments of interest must be made on a monthly basis
at the rate of 2.5% per annum in excess of State Bank of Long Island's prime
rate of interest. Principal payments are payable on demand at any time during
the term of the Line of Credit. The Line of Credit is secured by a security
interest in all of the assets of the Company, as well as a $200,000 life
insurance policy on the primary stockholder of the Company. Additionally,
advances by the stockholder in the amount of $467,000 have been subordinated to
this loan (Note 4).

The Line of Credit provides for certain covenants which (a) prevent the Company
from incurring, without prior written consent, capital expenditures in excess of
$100,000 per year, (b) prevent the Company from paying cash dividends to its
stockholders and (c) report the operating results of the Company on a timely
basis. The Company is in compliance with these covenants.

The Line of Credit expired on June 13, 2001 and was renewed at substantially
identical terms through August 13, 2001.

NOTE 4 - LOANS PAYABLE - STOCKHOLDERS

The primary stockholder of the Company had made unsecured advances to the
Company for working capital purposes. In connection with the Line of Credit
(Note 3), $467,000 of these advances were subordinated. During June 2001, the
balance of the unsecured advances, which at the time was approximately $520,000,
were repaid. The stockholder exchanged $467,000 of the advances for common stock
in the Company. The balance was repaid in cash.

NOTE 5 - RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2001 and 2000, the Company paid salaries
and other fees to its primary stockholder in the approximate amount of $352,000
and $171,000, respectively.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Leases
------

The Company has entered into various non-cancelable capital lease agreements for
computer and office equipment. The Company has also entered into non-cancelable
operating lease agreements for their three operating facilities and computer
equipment. The leases expire in varying periods through 2005. Rent expense
recorded under such operating leases amounted to $264,339 and $227,495 for the
six months ended June 30, 2001 and 2000, respectively.

                                     Page 8

<PAGE>

                        DIAMOND INTERNATIONAL GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

The Company has entered into a sub-lease agreement with an unrelated party to
sub-lease a portion of one of their operating facilities.

Future minimum capital lease payments at June 30, 2001 are as follows:
<TABLE>
<CAPTION>
                       Year Ended

<S>                                           <C>
June 30, 2002                                 $      229,291
June 30, 2003                                        96,360
June 30, 2004                                        40,764
June 30, 2005                                        16,688
                                          -----------------------
Total Minimum Lease Payments                         383,103
Less:  Amount Representing Interest                   59,587
                                          -----------------------
Present Value of Minimum Lease Payments       $      323,516
                                          =======================
</TABLE>

Accumulated amortization for assets under capital leases was $835,556 and
$641,998 as of June 30, 2001 and 2000, respectively.

Future minimum operating lease payments at June 30, 2001 are as follows:
<TABLE>
<CAPTION>
                                            Minimum                       Minimum
                                             Rental                       Sublease
       Year Ended                           Payments                       Income                          Net
---------------------------            ------------------            ------------------             -----------------
<S>                                <C>                            <C>                           <C>
June 30, 2002                      $        400,042               $        41,055               $        358,987
June 30, 2003                               192,127                        27,370                        164,757
June 30, 2004                                89,884                          -                           89,884
June 30, 2005                                51,468                          -                           51,468
June 30, 2006                                12,867                          -                           12,867
                                -------------------------      ------------------------      ------------------------
                                   $        746,388               $        68,425               $        677,963
                                =========================      ========================      ========================
</TABLE>

Going Concern
-------------

As shown in the accompanying financial statements, as of June 30, 2001, the
Company's current liabilities exceeded its current assets by $361,100. This
factor creates an uncertainty as to the Company's ability to continue as a going
concern. The Company's plans include vigorous cost controls, aggressive
marketing strategies and additional financing on an as needed basis.

                                     Page 9

<PAGE>
                        DIAMOND INTERNATIONAL GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

NOTE 7 - PROFIT SHARING PLAN

The Company maintains a 401(k) plan for substantially all full-time employees of
the Company. Employer contributions are voluntary and at the discretion of the
stockholder. The Company did not contribute to the plan for the six months ended
June 30, 2001 and 2000.

NOTE 8 - INCOME TAXES

The provision for income taxes for the six months ended June 30, 2001 is as
follows:
<TABLE>
<CAPTION>
                                 Federal           State
<S>                             <C>                  <C>
         Current                 $3,004              $3,813
         Deferred               ( 3,004)             (1,803)
                                 -------            --------
                                $     0              $2,010
                                ========            ========
</TABLE>
A reconciliation of the tax provision at the federal statutory rate to the
effective tax rate is as follows:

         Tax provision at federal statutory rate      34.0 %
         Net operating loss valuation allowance      (34.0) %
         Minimum state income taxes                   10.0 %
                                                     -------
                                                      10.0 %

The effects of temporary differences that give rise to significant portions of
the deferred tax assets and liabilities at June 30, 2001 are presented below:
<TABLE>
<CAPTION>
                                                                Federal                         State
                                                           -----------------              -----------------
Deferred tax assets:
<S>                                                      <C>                          <C>
     Net operating loss carryforward                     $       45,069               $        11,887
               Contribution carryover                               152                            85
        Property and equipment, principally
         due to differences in depreciation                      11,237                          6,299
             Less: Valuation Allowance                          (45,069)                       (11,887)
                                                    ------------------------       ------------------------
                                                                 11,389                          6,384
             Deferred tax liabilities:
     Property and equipment, principally
       due to differences in the treatment
       of involuntary conversions                              (281,145)                      (70,286)
                                                    ------------------------       ------------------------
Net deferred tax liability                               $     269,756                $         63,902
                                                    ========================       ========================
</TABLE>
Net operating loss carryforwards for federal income taxes of approximately
$153,000 expire in varying years through 2020.

                                     Page 10

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Conditions and
        Results of Operations
------------------------------------------------------------------------

                        DIAMOND INTERNATIONAL GROUP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Forward-Looking Statements
--------------------------

Forward-looking statements, based on management's current views and assumptions,
are made throughout the Management's Discussion and Analysis and elsewhere in
this report to stockholders. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results and those presently anticipated or projected. Among the
factors that may affect operating results are the following: success of the
Company's change in focus; competitive environment; and general economic
conditions.

Results of Operations
---------------------

<TABLE>
<S>                          <C>                       <C>
                                 Quarter Ended June 30,
                             2001                      2000
                             ----                      ----
     Net Sales             $   1,895,774           $    2,079,245

     Cost of Operations        1,335,064                1,299,665

     Gross Profit                560,710                  779,580

     Selling, General and
     Administrative

     Expenses                    382,204                  427,654
</TABLE>

Revenues from operations during the six months ended June 30, 2001 were
$1,895,774 as compared to $2,079,245 for the six months ended June 30,
2000. The decrease in sales was due to the timing of certain services performed
for clients.

Selling, general and administrative expenses decreased to $382,204 for the three
months ended June 30, 2001 as compared to $427,654 for the three months ended
September 30, 2000. This decrease is a result of management's successful efforts
to reduce overhead expenses including office expenses and outside consulting
services.

<PAGE>

Liquidity
---------

<TABLE>
<CAPTION>
                                June 30,            June 30,
                                  2001                2000
                                  ----                ----
<S>                               <C>              <C>
     Net Cash Provided by

      Provided by Operations      $153,316         $266,591
</TABLE>

<TABLE>
<CAPTION>
                                June 30,            December 31,
                                  2001                2000
                                  ----                ----
<S>                               <C>              <C>
     Working Capital              (361,000)        (567,000)

</TABLE>

Net cash flow from operations decreased from $266,591 during the three months
ended June 30, 2000 to $153,316 during the three months ended June 30, 2001.
This increase was primarily due to the decrease in net income and the timing
of collections and payments.

The Company had a working capital deficit of $361,000 as of June 30, 2001 as
compared to a working capital deficit of $567,000 as of December 31, 2000. The
improvement in working capital deficit is primarily due to the Company's net
income together with collections of notes receivable from stock sales.

Future Outlook
--------------

The Company is aggressively looking for profitable companies to acquire as well
as to joint venture and/or partner with all in the direct mail marketing sales
and servicing industry. The businesses that the Company acquires, joint venture
and/or partners with will be mainly in the area of product sales either in the
direct mail, space, internet, infomercial and other large scale consumer
penetration mediums. This is the most natural fit, given the experiences of
management in the success running of types of businesses and the proprietary
software and systems developed to service these businesses. In addition, the
Company is in the process of expanding its operations to include the licensing
of its custom service software. Currently, the Company has a contract to license
this software to a major credit and collections company and anticipates entering
into additional contracts in the near future.
<PAGE>

              Part II.   OTHER INFORMATION

Item   1.  Legal Proceedings

The Company is not involved in any legal proceedings.

Item 2. Changes in Securities. None for the Quarter.

On May 21, 2001, the Company issued 50,000 restricted common shares to Richard
Anslow pursuant to a retainer agreement for legal services dated January 17,
2001. The 50,000 shares of common stock were issued in reliance on the exemption
under Section 4(2) of the Securities Act of 1933, as amended (the "Act") and
therefore the share certificate bears a restrictive legend in compliance with
Section 4(1) of the1933 Securities Act

On June 5, 2001, the Company issued 5,000,000 restricted common shares to Janine
Levinson pursuant to an agreement for payment on past due promissory notes to
HYAID, Inc. The 5,000,000 shares of common stock were issued in reliance on the
exemption under Section 4(2) of the Securities Act of 1933, as amended (the
"Act") and therefore the share certificate bears a restrictive legend in
compliance with Section 4(1) of the 1933 Securities Act.

On June 19, 2001, the Company issued 50,000 restricted common shares to Market
Surveys International, Inc. for services rendered pursuant to a Financial
Consulting Agreement. The 50,000 shares of common stock were issued in reliance
on the exemption under Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and the share certificate bears a restrictive legend in compliance
with Section 4(1) of the 1933 Securities Act.

Item  3.   Defaults Upon Senior Securities.  Not applicable.

Item  4.   Submission of Matters to a Vote of Security Holders.    None

Item  5.   Other information.  None.

Item  6.   None.

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed in its
behalf by the undersigned, thereunto duly authorized, on August 14, 2001.

                       DIAMOND INTERNATIONAL GROUP, INC.
                         (Registrant)

Date: August 14, 2001      /s/ Richard Levinson
                         -------------------------------
                               Richard Levinson
                               Chairman and President