SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

      For the quarterly period ended September 30, 2004

[ ]   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: 000-29611

                          THE CHILDREN'S INTERNET, INC.
        (Exact name of small business issuer as specified in its charter)

            Nevada                                        20-1290331
            ----------                                    -----------
(State or other jurisdiction of                         (IRS Employer
incorporation or organization)                           Identification No.)

            5000 Hopyard Rd., Suite 320, Pleasanton, California 94588
                    (Address of principal executive offices)

                                 (925) 737-0144
                           (Issuer's telephone number)


                ------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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 [ ]

As of November 1, 2004, the number of shares of Common Stock issued and
outstanding was 2,287,755.

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

<PAGE>

                          THE CHILDREN'S INTERNET, INC

                                      INDEX

<TABLE>
<CAPTION>
                                                                                               Page
                                                                                              Number
                                                                                              ------
<S>                                                                                           <C>
PART I - FINANCIAL INFORMATION                                                                   1

Item 1.  Financial Statements (Unaudited)                                                        1

         Unaudited Condensed Balance Sheet -September 30, 2004                                   1
         Unaudited Condensed Statements of Operations - For the nine
         months ended September 30, 2004 and 2003, and the period from
         inception to September 30, 2004                                                         2

         Unaudited Condensed Statements of Stockholders' Deficit - For the nine
         months ended September 30, 2004 and the period
         from inception to September 30, 2004                                                    3

         Unaudited Condensed Statements of Cash Flows - For the nine months
         ended September 30, 2004 and 2003, and the period from
         inception to September 30, 2004                                                         4

         Notes to Unaudited Condensed Financial Statements                                       5

Item 2.  Management's Discussion and Analysis of Financial
         Conditions and Plan of Operation                                                        7

Item 3.  Controls and Procedures                                                                 10

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                                       10

Item 2.  Changes in Securities and Use of Proceeds                                               11

Item 3.  Defaults Upon Senior Securities                                                         11

Item 4.  Submission of Matters to a Vote of Security Holders                                     11

Item 5.  Other Information                                                                       11

Item 6.  Exhibits and Reports on Form 8-K                                                        11

SIGNATURES                                                                                       12
</TABLE>

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          THE CHILDREN'S INTERNET, INC.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    September 30,
                                                                                        2004
                                                                                     -----------
                                     ASSETS
<S>                                                                                  <C>
Current Assets Prepaid Rent                                                          $     4,000
                                                                                     -----------
                       Total Current Assets                                                4,000
                                                                                     -----------

Non-Current Prepaid Rent                                                                   7,000
                                                                                     -----------
TOTAL ASSETS                                                                         $    11,000
                                                                                     ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts Payable and Accrued Expenses                                                $    79,000
Due to Parent Company                                                                    377,000
                                                                                     -----------
                       Total Current Liabilities                                         456,000
                                                                                     -----------

                                                                                         456,000
                                                                                     -----------

STOCKHOLDERS' DEFICIT

              Preferred Stock, $0.001 par value; 10,000,000 shares authorized;
              zero shares issued and outstanding Common stock, $0.001 par value;
              75,000,000 shares authorized;
              2,287,755 shares issued outstanding                                          2,000
              Additional paid-in capital                                                 708,000
              Deficit accumulated during the development stage                        (1,155,000)
                                                                                     -----------
TOTAL STOCKHOLDERS' DEFICIT                                                             (445,000)
                                                                                     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                          $    11,000
                                                                                     ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       1
<PAGE>

                          THE CHILDREN'S INTERNET, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     For the Period
                                          For The Three Months          For The Nine Months        September 25, 1996
                                          Ended Septemember 30,         Ended September 30,          (inception) to
                                      ---------------------------     ----------------------------    September 30,
                                         2004            2003            2004            2003            2004
                                      -----------     -----------     -----------     -----------     -----------
<S>                                   <C>             <C>             <C>             <C>             <C>
REVENUE                               $        --     $        --     $        --     $        --     $        --

General Selling and
  Administrative Expenses                 123,000         138,000         312,000         374,000      (1,191,000)
                                      -----------     -----------     -----------     -----------     -----------
Operating Loss                           (123,000)       (138,000)       (312,000)       (374,000)     (1,191,000)

Other Income--Gain from
  Forgiveness of Rent                          --              --          36,000              --          36,000

Provision for Income Taxes                     --              --              --              --              --
                                      -----------     -----------     -----------     -----------     -----------
NET LOSS                              $  (123,000)    $  (138,000)    $  (276,000)    $  (374,000)    $(1,155,000)
                                      ===========     ===========     ===========     ===========     ===========

Net Loss per Common Share
         - basic and diluted          $     (0.05)    $     (0.06)    $     (0.12)    $     (0.16)    $     (0.79)
                                      ===========     ===========     ===========     ===========     ===========

Weighted Average Number of Common
         Shares Outstanding
         - basic and diluted            2,287,755       2,287,755       2,287,755       2,287,755       1,454,129
                                      ===========     ===========     ===========     ===========     ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       2
<PAGE>

                         THE CHILDREN'S INTERNET, INC.
                         (A Development Stage Company)
                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                                  Accumulated
                                                       Common Stock              Additional         During
                                               ----------------------------       Paid-In       the Development   Stockholders'
                                                  Shares           Amount         Capital           Stage            Deficit
                                               -----------      -----------      -----------     -----------      -----------
<S>                                            <C>              <C>              <C>             <C>              <C>
Balance, September 25, 1996                             --      $        --      $        --     $        --      $        --

Issuance of common stock
for cash on September 24, 1996
at $0.005 per share                              1,121,000            1,000            4,000              --            6,000

Net Loss                                                                                              (6,000)          (6,000)
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 1996                       1,121,000            1,000            4,000          (6,000)              --

Net Loss                                                --               --               --              --               --
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 1997                       1,121,000            1,000            4,000          (6,000)              --

Net Loss                                                --               --               --              --               --
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 1998                       1,121,000            1,000            4,000          (6,000)              --

Net Loss                                                --               --               --              --               --
                                               -----------      -----------      -----------     -----------      -----------
Balance, December 31, 1999                       1,121,000            1,000            4,000          (6,000)              --

Net Loss                                                --               --               --          (3,000)          (3,000)
Expenses paid by former
  office on behalf of
  company                                                                              3,000                            3,000
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 2000                       1,121,000            1,000            7,000          (9,000)              --

Net Loss                                                --               --               --              --               --
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 2001                       1,121,000            1,000            7,000          (9,000)              --

Issuance of common stock
for cash on July 3, 2002
at $0.1286 per share                             1,166,755            1,000          149,000                          150,000

Expenses paid by former
  officer on behalf
  of company                                                                           2,000                            2,000

Services performed as
  capital contribution                                                               125,000                          125,000

Net Loss                                                --               --               --        (392,000)        (392,000)
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 2002                       2,287,755            2,000          283,000        (401,000)        (116,000)

Services performed as capital contribution                                           290,000                          290,000

Net Loss                                                --               --               --        (478,000)        (478,000)
                                               -----------      -----------      -----------     -----------      -----------

Balance, December 31, 2003                       2,287,755            2,000          573,000        (879,000)        (304,000)

Services performed as capital contribution                                           135,000                          135,000

Net Loss                                                                                            (276,000)        (276,000)
                                               -----------      -----------      -----------     -----------      -----------
Balance, September 30, 2004                      2,287,755      $     2,000      $   708,000     $(1,155,000)     $  (445,000)
                                               ===========      ===========      ===========     ===========      ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       3
<PAGE>

                          THE CHILDREN'S INTERNET, INC.
                         (Formerly D.W.C. Installations)
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                               For the Period
                                                                   For The Nine Months       September 25, 1996
                                                                    Ended September 30,        (inception) to
                                                               ----------------------------     September 30,
                                                                   2004             2003            2004
                                                               -----------      -----------      -----------
<S>                                                            <C>              <C>              <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:

Net Loss                                                       $  (276,000)     $  (374,000)     $(1,155,000)

Adjustments to reconcile net loss to net
  cash used in operating activities:
      Services performed as capital contribution                   135,000          225,000          549,000
      Expenses paid by former officer on behalf of company                                             5,000
      Increase in Assets
           Current and non-current prepaid rent                    (11,000)                          (11,000)
      Increase in liabilities
           Accounts payable and accrued expenses                   (20,000)          25,000           79,000
           Due to Parent Company                                   172,000          124,000          377,000
                                                               -----------      -----------      -----------

Net cash used in operating activities                                   --               --         (156,000)
                                                               -----------      -----------      -----------

CASH PROVIDED BY FINANCING ACTIVITIES:
      Issuance of common stock                                                                       156,000
                                                               -----------      -----------      -----------

Net cash provided by financing activities                               --               --          156,000
                                                               -----------      -----------      -----------

Net change in cash and cash equivalents                                 --               --               --

Cash and cash equivalents - beginning of period                         --               --               --
                                                               -----------      -----------      -----------
Cash and cash equivalents - end of period                      $        --      $        --      $        --
                                                               ===========      ===========      ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       4
<PAGE>

                          THE CHILDREN'S INTERNET, INC.
                          (A Development Stage Company)
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                               September 30, 2004

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Children's  Internet,  Inc. (formerly D.W.C.  Installations)  ("Company") is
currently a  development  stage  company  under the  provisions  of Statement of
Financial  Accounting  Standards  ("SFAS")  No. 7. The Company was  incorporated
under the laws of the State of Nevada on September 25, 1996.

On July 3, 2002, Shadrack Films, Inc. purchased 1,166,755 newly issued shares of
our common stock for $150,000,  thereby obtaining a majority  ownership interest
and  becoming  our parent  company.  Total  issued and  outstanding  shares were
increased to 2,287,755 as a result of this sale.

Interim Financial Information

The accompanying  unaudited interim  financial  statements have been prepared by
the Company in accordance with accounting  principles  generally accepted in the
United  States of America  pursuant  to  Regulation  S-B of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed or omitted. Accordingly,  these interim financial statements should be
read in conjunction with the Company's audited financial  statements and related
notes as contained in the Company's  Form 10-KSB for the year ended December 31,
2003. In the opinion of management, the interim financial statements reflect all
adjustments,   including  normal  recurring  adjustments,   necessary  for  fair
presentation of the interim periods presented. The results of operations for the
nine months ended September 30, 2004 are not  necessarily  indicative of results
of operations to be expected for the full year.

Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States, which contemplate
continuation of the Company as a going concern. At present, although the Company
has signed contracts establishing revenue sources, the Company has not generated
any  revenues  from these  established  sources of revenue.  This factor  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
Without  realization of additional  capital or established  revenue sources,  it
would be unlikely for the Company to continue as a going concern.  The financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of  recorded  asset  amount,  or amounts and  classification  of
liabilities  that might be necessary should the Company be unable to continue in
existence.  It is management's  objective to seek additional capital through the
sale of its securities. (See Note 3 - SB-2 Registration statement)

                                       5
<PAGE>

NOTE 2 - RELATED PARTY TRANSACTIONS

The Company's principal office is leased by the parent company,  Shadrack Films,
Inc.  Shadrack  Films pays for and  provides  the office  space  utilized by the
Company as well as pays for the Company's  telecommunications and utility costs.
The Company has agreed to reimburse Shadrack Films for these costs and any other
direct  costs paid on its behalf.  As of  September  30,  2004,  the Company had
accrued a payable  due to  Shadrack  Films of  approximately  $377,000  for such
costs.

In April 2004,  the Company moved to a new office  location and the monthly rent
approximates  $3,600.  The Company has Shadrack Film's verbal  permission to use
this office  space,  but this  permission is revocable at any time without prior
notice.  These  offices are 2,059  square feet and are leased by Shadrack  Films
from the landlord,  Principal Life Insurance Company, an Iowa corporation.  From
March 22, 2004 until April 30, 2004, Shadrack Films received the office space on
a rent-free basis. From month two (May 2004) through thirteen the basic rent per
month is $3,603;  for months fourteen  through  twenty-five,  the basic rent per
month will be $3,706; and for months twenty-six through thirty-seven,  the basic
rent per month will be $3,809  under a lease  agreement  that  expires on May 1,
2007.  Shadrack  Films  is  responsible  for  making  all rent  payments  to the
landlord,  but the cost of these rent payments are being added to the balance of
the accrued account payable due to Shadrack Films for the expenses that Shadrack
Films has been paying on the Company's behalf.

The Company,  Shadrack Films and Two Dog Net, Inc. (TDN) are related parties, in
that, the Company's President, Chief Executive Officer, Chief Financial Officer,
and Director,  Sholeh  Hamedani,  is the sole shareholder of Shadrack which owns
51% of the  Company's  common  stock.  Ms.  Hamedani was  President of TDN until
August 1, 2002. In addition, the current President, Chairman and Founder of TDN,
Nasser  Hamedani,  is the father of the  Company's  President,  Chief  Executive
Officer,  Chief Financial Officer, and Director,  Sholeh Hamedani. The Company's
President,  Chief  Executive  Officer,  Chief Financial  Officer,  and Director,
Sholeh  Hamedani,  provided  services to the  Company at a fair market  value of
$135,000  during the nine  months  ended  September  30,  2004 and will not seek
payment for the services provided through that date.

On June 28, 2002,  the Company  entered into a  Consulting  Agreement  with Alan
Schram.  This agreement provides for Alan Schram to provide consulting  services
to the Company.  In return for his services,  the agreement entitles Alan Schram
to receive 25,000 shares of the Company's  common stock at the completion of the
agreement's  four-month term. The consulting services have been accrued in other
expenses. The Company is currently in negotiations with Mr. Schram to settle its
obligations  under the terms of this  agreement.  As of the date  hereof,  these
shares have not been  issued.  Alan Schram is the  Company's  former  President,
Secretary, Chief Financial Officer and Director.

NOTE 3 - SB-2 REGISTRATION STATEMENT

On February  10,  2003,  the Company  filed a Form SB-2  Registration  Statement
offering for sale up to a maximum of 4,000,000  shares of the  Company's  common
stock directly to the public.  The Company  received  notification  from the SEC
that their SB-2 Registration  Statement No. 333-103072 was declared effective on
May  5,  2004.   Subsequently,   on  October  19,  2004,  the  Company  filed  a
post-effective  amendment to the SB-2  Registration  Statement to deregister the
4,000,000 shares. (See Note 6 - Subsequent Events)

                                       6
<PAGE>


NOTE 4 - GAIN FROM FORGIVENESS OF RENT

On February 13, 2004,  the Company  received  notice that their  landlord,  Hill
Physicians  Medical Group,  Inc., had filed an unlawful  detainer action against
the Company on February 6, 2004 in the Contra  Costa  County  Superior  Court as
case  number  WS04-0238.  On February  19,  2004,  the  Company  signed a Mutual
Settlement  Agreement and Release.  The effect of the release has been reflected
in the  operating  statements  as a gain from  forgiveness  of rent for the nine
months ended September 30, 2004 in the approximate amount of $36,000.

NOTE 5 - ARBITRATION PROCEEDING

On September  30, 2004 the Company  received a demand for  arbitration  from its
former   auditor,   Stonefield   Josephson,   relating  to  the   collection  of
approximately  $21,700 in fees  allegedly  owed by the  Company  for  accounting
services  which are  disputed  by the  Company.  The parties  are  currently  in
discussions to settle the matter and the Company has filed a request to continue
the arbitration and to respond to the demand by November 21, 2004.

NOTE 6 - SUBSEQUENT EVENTS

On October 19, 2004,  the Company filed a  post-effective  amendment to the SB-2
Registration  Statement to deregister  the  4,000,000  shares of common stock it
intended  to  sell  to  the  public  through  a  direct  public  offering.   The
post-effective amendment was declared effective by the SEC on October 25, 2004.


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATION

The following  discussion and analysis  should be read in  conjunction  with our
financial statements,  including the notes thereto,  appearing elsewhere in this
Report.

Forward-Looking Statements

This  quarterly  report on Form 10-QSB  contains  statements  relating to future
results of the Company (including certain  projections and business trends) that
are "forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of  certain  risks and  uncertainties,  including  but not  limited  to
changes in political and economic  conditions;  demand for and market acceptance
of new and existing products, as well as other risks and uncertainties  detailed
from time to time in the filings of the Company with the Securities and Exchange
Commission.

Critical Accounting Policies and Estimates

The  Company's  financial  statements  have been  prepared  in  accordance  with
accounting principles generally accepted in the United States of America,  which
contemplate  continuation of the Company as a going concern.  The preparation of
these financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

                                       7

<PAGE>

Selected Financial Data

The following  selected  statement of operations  and balance sheet data for the
period from September 25, 1996, the date of our inception, through September 30,
2004 and for the nine months  ended  September  30, 2004 as compared to the nine
months ended  September 30, 2003 were derived from our financial  statements and
notes  thereto  included  in this report  which are  unaudited.  The  difference
between  the  periods  was partly  due to the  forgiveness  of rent.  Historical
results are not  necessarily  indicative of results that may be expected for any
future period.  The following  data should be read in conjunction  with "Plan of
Operation" and our unaudited financial  statements,  including the related notes
to the financial statements.

<TABLE>
<CAPTION>
---------------------------------------------- ---------------------- ----------------------- -----------------------
                                                                                               For the period from
                                                                                                September 25, 1996
                                                For the nine months     For the nine months    (inception) through
                                                   September 30,           September 30,           September 30,
                                                       2004                    2003                    2004
---------------------------------------------- ---------------------- ----------------------- -----------------------
Statement of Operations Data
---------------------------------------------- ---------------------- ----------------------- -----------------------
<S>                                             <C>                   <C>                     <C>
Net sales                                                -                      -
---------------------------------------------- ---------------------- ----------------------- -----------------------
Operating expenses:                                   312,000                374,000                1,191,000
---------------------------------------------- ---------------------- ----------------------- -----------------------
Operating loss                                       (312,000)              (374,000)              (1,191,000)
---------------------------------------------- ---------------------- ----------------------- -----------------------
Net Loss                                             (276,000)              (374,000)              (1,155,000)
---------------------------------------------- ---------------------- ----------------------- -----------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------- --------------------------------------------------------
                                                                       As of September 30, 2004
------------------------------------------------------- --------------------------------------------------------
<S>                                                                    <C>
Balance Sheet Data:
------------------------------------------------------- --------------------------------------------------------
Total assets                                                                     11,000
------------------------------------------------------- --------------------------------------------------------
Current liabilities                                                             456,000
------------------------------------------------------- --------------------------------------------------------
Total stockholders' deficit                                                    (445,000)
------------------------------------------------------- --------------------------------------------------------
</TABLE>

Plan of Operation

The plan of operation should be read in conjunction with the Company's financial
statements, including the notes thereto, appearing elsewhere in this Report.

The  following  information  contains  certain  forward-looking   statements  of
management  of the  Company.  Forward-looking  statements  are  statements  that
estimate the happening of future  events and are not based on  historical  fact.
Forward-looking  statements  may be  identified  by the  use of  forward-looking
terminology, such as "may," "could," "expect," "estimate," "anticipate," "plan,"
"predict,"  "probable,"  "possible,"  "should,"  "continue,"  or similar  terms,
variations  of those terms or the negative of those terms.  The  forward-looking
statements  specified in the  following  information  have been  compiled by our
management  on the basis of  assumptions  made by management  and  considered by
management  to  be  reasonable.  Our  future  operating  results,  however,  are
impossible  to predict  and no  representation,  guaranty,  or warranty is to be
inferred from those forward-looking statements.

Through a wholesale  sales and marketing  agreement with Two Dog Net, Inc. ("Two
Dog Net"),  we are the  exclusive  marketers  of Two Dog Net's  proprietary  and
patent  pending  secured  Internet  service for pre-school to junior high school
aged children called The Children's Internet(R). We plan to introduce this

                                       8
<PAGE>

Internet  service  designed  specifically  for children that allows them to have
completely safe,  unrestricted  live access to the Internet.  The cornerstone of
our consumer marketing plan is a national television  advertising campaign which
includes a 30-minute infomercial that was produced over a two-year period by Two
Dog Net and is ready to air. We intend to utilize the  infomercial  to introduce
The  Children's  Internet(R)  service  to the  public,  as well as  build  brand
recognition  and generate  customer  subscriptions.  We plan to first  conduct a
media test in the fourth  quarter of 2004. We believe the results from the media
test will give us the platform to launch the advertising  campaign on a national
basis thereafter.

In a Stock Purchase Agreement dated October 11, 2002, our original  shareholders
sold 1,118,500 of their shares of our common stock to various purchasers, two of
whom are related parties to our management,  Nasser Hamedani,  Sholeh Hamedani's
father, and Soraiya Hamedani, Sholeh Hamedani's sister. Some of these purchasers
were introduced to the original shareholders by Sholeh Hamedani,  our President,
Chief Financial Officer,  and a Director.  Some of these purchasers resold their
shares to unrelated third parties.  A portion of the proceeds  received from the
stock sales by the  purchasers was in turn loaned to Shadrack  Films,  Inc., our
parent  company,  to finance our initial  operations thus far. These amounts are
reflected on the financial statements as "Due to Parent Company." Our President,
Chief Executive Officer, and one of our Directors,  Sholeh Hamedani, is the sole
shareholder of our parent company, Shadrack Films, Inc.

As of September 30, 2004, we had an accumulated  total net loss of approximately
$1,155,000. Of this amount, approximately $549,000 represents the estimated fair
market value for the cost of wages,  if paid,  for the services  rendered by our
President,  Chief Executive Officer and an outside  consultant (we have recorded
these  amounts  for the  cost of  wages  as  contributed  capital,  since  these
individuals did not charge the Company),  $402,000 represents  professional fees
such as legal and  accounting  expenses,  and the balance of  $204,000  consists
primarily of occupancy and telecommunications costs including internet costs. To
date, our parent company, Shadrack Films, has funded all of our expended costs.

Currently,  we do not have any cash on hand and are  dependent  on funding  from
Shadrack  Films for our current  operations  and for providing  office space and
utilities  that, for the nine months ended  September 30, 2004,  averaged $9,000
per month in operating costs exclusive of professional  fees and time donated by
employees.  The accrued account payable due to Shadrack Films is an open account
payable.  Currently,  the  accrued  balance  of this  account  is  approximately
$377,000.  Our parent  company is under no  obligation  to  continue to fund our
operations and could stop at any time without notice. We estimate that we need a
minimum of  $180,000  in cash to  continue  our  operations  for the next twelve
months.

Our  registration  statement  filed with the Securities and Exchange  Commission
("SEC") was  declared  effective  on May 5, 2004.  This  registration  statement
registered  4,000,000  shares of our common stock to be sold by us at a price of
$2.00 per share in a direct public offering.  We did not raise any funds in this
offering.  We  determined  not to proceed with this  offering and on October 19,
2004,  we filed a  post-effective  amendment  to the  registration  statement to
deregister  all  4,000,000  shares.  On October  25,  2004,  the  post-effective
amendment  was  declared  effective  by the SEC and  only the  4,000,000  shares
registered by us were  deregistered.  We do not currently have any  arrangements
for alternative financing.

Where practicable,  we plan to contract with third party companies to market The
Children's  Internet(R)  Service  as well as to provide  administrative  support
services  such as  billing  and level one  technical  support.  We have  already
entered into two agreements  with Infolink  Communications,  Ltd., a third party
company, for the marketing of our service. However, there is no assurance that

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<PAGE>

we  will be able  to  enter  into  additional  arrangements  for  marketing  and
administrative support services.

Need for Additional Funds

We will need additional funds in the event Shadrack Films  discontinues  funding
our operations. We would attempt to raise these funds through additional private
placements or by borrowing money. We do not have any arrangements with potential
investors or lenders to provide  such funds and there is no assurance  that such
additional  financing  will be available  when required in order to proceed with
the business  plan or that our ability to respond to  competition  or changes in
the  marketplace  or to  exploit  opportunities  will not be  limited by lack of
available capital  financing.  If we are unsuccessful in securing the additional
capital needed to continue  operations within the time required,  we will not be
in a position to continue operations.

We will  continue  to look  to our  parent  company  to fund  operations  and to
employees to donate their time. If our parent company, Shadrack Films, a company
controlled by Sholeh Hamedani, discontinues the funding of our operations and/or
if our key  employees  discontinue  donating  their  time,  we will  not be in a
position to continue  operations.  In this event,  we would  attempt to sell the
company or file for bankruptcy.

Off-Balance Sheet Arrangements

None.

ITEM 3. CONTROLS AND PROCEDURES

Our  Chief  Executive  Officer  and Chief  Financial  Officer  (the  "Certifying
Officers") are responsible for establishing and maintaining  disclosure controls
and procedures and internal controls and procedures for financial  reporting for
the Company.  The Certifying Officers have designed such disclosure controls and
procedures  and internal  controls and  procedures  for  financial  reporting to
ensure that material information is made known to them,  particularly during the
period in which this report was prepared. The Certifying Officers have evaluated
the  effectiveness  of the  Company's  disclosure  controls and  procedures  and
internal  controls and procedures  for financial  reporting as of the end of the
period covered by this report and believe that the Company's disclosure controls
and procedures and internal controls and procedures for financial  reporting are
effective  based on the required  evaluation.  During the period covered by this
report,  there  were  no  changes  in  internal  controls  and  procedures  that
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control and procedures over financial reporting.

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<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On September 30, 2004, the Company  received a demand for  arbitration  from its
former   auditor,   Stonefield   Josephson,   relating  to  the   collection  of
approximately  $21,700 in fees  allegedly  owed by the  Company  for  accounting
services  which is  disputed  by the  Company.  The  parties  are  currently  in
discussions to settle the matter and the Company has filed a request to continue
the  arbitration  and to respond to the demand by November 21, 2004. The Company
disputes the amount of the claim and will proceed  with the  arbitration  if the
matter cannot be satisfactorily settled.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On May 5, 2004, the SEC declared our SB-2 registration  statement effective.  We
did not sell any of the 4,000,000 shares of common stock registered by us in the
SB-2  registration  statement.  On October 19, 2004,  we filed a  post-effective
amendment to the SB-2  registration  statement to deregister  only the 4,000,000
shares  registered by us for sale to the public in a direct public offering.  On
October 25, 2004, the SEC declared the  post-effective  amendment  effective and
the 4,000,000 shares were deregistered.  None of the 1,118,500 shares registered
on behalf of the selling  stockholders were  deregistered by the  post-effective
amendment.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as part of this report:

1.    The following Exhibits are filed herein:

         No.         Title
         ---         -----

         31.1     Certification  of  Chief  Executive  Officer  Pursuant  to the
                  Securities  Exchange Act of 1934, Rules 13a-14 and 15d-14,  as
                  adopted pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                  2002

         31.2     Certification  of  Chief  Financial  Officer  Pursuant  to the
                  Securities  Exchange Act of 1934, Rules 13a-14 and 15d-14,  as
                  adopted pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                  2002

         32       Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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<PAGE>

2.    Reports on Form 8-K filed:

            On July 30,  2004,  the Company  filed a Current  Report on Form 8-K
            disclosing that it had changed independent  auditors.  On August 13,
            2004 it filed an amendment to this report.


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<PAGE>


                                   SIGNATURES


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


DATED: November 15, 2004           The Children's Internet, Inc.


                                   /S/ SHOLEH HAMEDANI
                                   ----------------------------------
                                   By: Sholeh Hamedani
                                   Its: President, Chief Executive Officer, and
                                        Chief Financial Officer
                                        (Principal Executive Officer, Principal
                                        Financial Officer and Principal
                                        Accounting Officer)


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