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 Quarterly period ended September 30, 2000 or

 [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934
     For the Transition period from _________ to _________

 Commission File No. 0-21534

                             iNTELEFILM Corporation
       (Exact name of small business issuer as specified in its charter)

     Minnesota                                                   41-1663712
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                            Identification Number)

                   5501 Excelsior Blvd., Minneapolis, MN 55416
           (Address of principal executive office, including zip code)

                                 (612) 925-8840
                (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_______


         As of November 11, 2000, there were outstanding 6,511,366 shares of
common stock, $.02 par value, of the registrant.



<PAGE>


INDEX

iNTELEFILM CORPORATION

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Consolidated Balance Sheets -- September 30, 2000 and December 31,
         1999.

         Consolidated Statements of Operations - Three and nine months ended
         September 30, 2000 and 1999.

         Consolidated Statements of Cash Flows -- Nine months ended June 30,
         2000 and 1999.

         Condensed Notes to Consolidated Financial Statements -- September 30,
         2000.


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



PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
Item 2.  Changes in Securities and Use of Proceeds
Item 3.  Defaults upon Senior Securities
Item 4.  Submission of Matters to a Vote of Security Holders
Item 5.  Other Information
Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES

EXHIBIT INDEX







<PAGE>

iNTELEFILM CORPORATION
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 30,
                                                                      2000           DECEMBER 31,
                                                                   (UNAUDITED)          1999
                                                                  ------------     ------------
              ASSETS
<S>                                                               <C>              <C>
Current assets:
      Cash and cash equivalents                                   $  5,682,127     $ 15,986,385
      Accounts receivable                                            3,137,156        8,965,467
          Allowance for doubtful accounts                              (38,458)        (199,164)
      Accounts receivable - affiliates                                 377,257          373,239
      Other accounts receivable                                      1,039,198          502,024
      Prepaid expenses                                               1,237,293        1,563,122
                                                                  ------------     ------------
              Total current assets                                  11,434,573       27,191,073

Property and equipment, net                                          4,373,024        2,957,455
Goodwill, net                                                        6,872,460        6,730,446
Other Assets                                                         1,540,207          738,878
                                                                  ------------     ------------
              Total assets                                        $ 24,220,264     $ 37,617,852
                                                                  ============     ============

              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable                                            $  2,660,577     $  4,010,891
      Accrued income taxes                                             253,244        1,032,520
      Deferred revenue                                                  12,590        2,392,785
      Other accrued expenses                                         3,850,111        4,650,835
      Line of credit                                                   394,737        3,548,911
      Short-term debt                                                       --        1,500,000
      Long-term debt - current portion                               1,264,328          191,933
                                                                  ------------     ------------
              Total current liabilities                              8,435,587       17,327,875

Long-term debt, less current maturities                                640,404          679,885
                                                                  ------------     ------------
              Total liabilities                                      9,075,991       18,007,760
                                                                  ------------     ------------

Commitments and Contingencies                                               --               --

Minority interest                                                      417,629          139,447

Shareholders' equity
      Common stock                                                     130,227          125,772
          Authorized shares - 50,000,000
          Issued & outstanding shares - voting: 6,322,325
          September 30, 2000 and 6,099,577 - December 31, 1999
          Issued and outstanding shares - nonvoting:
          189,041 - September 30, 2000 and December 31, 1999
      Additional paid-in capital                                    46,720,253       45,625,300
      Accumulated deficit                                          (31,757,673)     (25,952,927)
      Stock subscriptions receivable                                  (366,163)        (327,500)
                                                                  ------------     ------------
              Total Shareholders' Equity                            14,726,644       19,470,645
                                                                  ------------     ------------

      Total Liabilities & Shareholders' Equity                    $ 24,220,264     $ 37,617,852
                                                                  ============     ============


</TABLE>

    See accompanying condensed notes to the consolidated financial statements


<PAGE>





iNTELEFILM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                           SEPTEMBER 30,                     SEPTEMBER 30,
                                                                       2000             1999             2000             1999
                                                                   ------------     ------------     ------------     ------------
<S>                                                                <C>              <C>              <C>              <C>
Production contract revenues                                       $ 14,012,221     $ 21,492,732     $ 51,188,954     $ 45,732,020

Costs and expenses:
    Cost of production                                               11,865,234       18,024,181       42,730,649       38,317,499
    General selling and administrative
     (exclusive of items shown below)                                 3,125,644        2,836,876        9,219,723        5,986,299
    Stock option compensation                                            84,952           60,000          310,697        2,018,250
    Corporate                                                           906,895          893,382        3,263,830        2,278,010
    Depreciation and amortization                                       557,567          440,140        1,597,866          902,193
                                                                   ------------     ------------     ------------     ------------
Loss from continuing operations                                      (2,528,071)        (761,847)      (5,933,811)      (3,770,231)

Gain (loss) on sale of subsidiary stock & assets                        (18,078)         149,964          (18,078)         149,964
Equity loss in Harmony                                                       --               --               --       (1,930,942)
Interest income net of interest (expense)                                23,731          296,150          198,501          165,182
                                                                   ------------     ------------     ------------     ------------

Net loss from continuing operations before income taxes              (2,522,418)        (315,733)      (5,753,388)      (5,386,027)
Income tax provision (benefit)                                           39,514          (40,000)          51,358         (698,108)
                                                                   ------------     ------------     ------------     ------------

Net loss from continuing operations                                  (2,561,932)        (275,733)      (5,804,746)      (4,687,919)

Gain(loss) on the disposal of discontinued operations,
    net of income taxes of $40,000 (three months ended
    September 30, 1999) and $3,800,000 nine months ended
    September 30, 1999)                                                      --          (54,987)              --       12,520,119
                                                                   ------------     ------------     ------------     ------------

Net income (loss)                                                    (2,561,932)        (330,720)      (5,804,746)       7,832,200
Accretion of preferred stock and minority interest                           --          (21,387)              --          (21,387)
                                                                   ------------     ------------     ------------     ------------

 Net income (loss) to common shareholders                          $ (2,561,932)    $   (352,107)    $ (5,804,746)    $  7,810,813
                                                                   ============     ============     ============     ============

Basic and diluted net loss per share from continuing operations    $      (0.40)    $      (0.04)    $      (0.91)    $      (0.73)
                                                                   ============     ============     ============     ============

Basic and diluted net income (loss) per share                      $      (0.40)    $      (0.05)    $      (0.91)    $       1.21
                                                                   ============     ============     ============     ============

Weighted average number of shares outstanding                         6,484,000        6,410,305        6,412,000        6,463,852
                                                                   ============     ============     ============     ============

</TABLE>


    See accompanying condensed notes to the consolidated financial statements
<PAGE>

iNTELEFILM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                   NINE MONTHS ENDED
                                                                                                     SEPTEMBER 30,
                                                                                                2000             1999
                                                                                            ------------     ------------
<S>                                                                                         <C>              <C>
Operating activities:
Net income (loss)                                                                           $ (5,804,746)    $  7,832,200
Adjustments to reconcile net income (loss) to net
      cash used in operating activities net of disposition
      and discontinued operations:
          Gain on disposal of discontinued operations, net of taxes                                   --      (12,520,119)
          (Gain) loss on sale of subsidiary stock & assets                                        18,078         (149,964)
          Provision for doubtful accounts & director advances                                    731,475           96,947
          Depreciation & amortization                                                          1,597,866          902,193
          Stock option compensation                                                              310,697        2,018,250
          Non cash income tax benefit                                                                 --         (700,000)
          Amortization and write-off of deferred debt issue costs                                     --          742,737
          Equity loss in Harmony                                                                      --        1,930,942
          Non-cash interest payment related to sale of stations                                       --           92,008
          Decrease (increase) in:                                                                     --
               Accounts receivable                                                             5,853,105         (688,211)
               Other receivables                                                              (1,436,373)          75,753
               Prepaid expenses                                                                  335,264           89,483
          Increase (decrease) in:                                                                     --
               Accounts payable                                                               (1,354,887)      (2,997,172)
               Deferred income                                                                (2,399,512)        (352,078)
               Other accrued expenses                                                         (1,635,011)       4,156,992
                                                                                            ------------     ------------
               Net cash provided by (used in) operating activities                            (3,784,044)         529,961
                                                                                            ------------     ------------

Investing activities:
      Sale/purchase of property & equipment                                                   (1,194,601)        (494,577)
      Net investment in & notes receivable from Harmony                                               --         (939,230)
      Other capital expenditures                                                                (891,353)      (2,344,938)
      Proceeds from sale of radio stations                                                            --       13,720,358
                                                                                            ------------     ------------
               Net cash provided by (used in) investing activities                            (2,085,954)       9,941,613
                                                                                            ------------     ------------

Financing activities:
      Payment of line of credit                                                               (3,154,174)              --
      Payment of debt                                                                         (1,776,270)      (1,556,468)
      Proceeds from debt financings                                                              221,454               --
      Redemption of convertible preferred stock                                                       --       (2,450,002)
      Repurchase of common stock                                                                 (32,223)        (825,123)
      Proceeds from issuance of common stock                                                     306,953               --
      Proceeds from stock subscriptions receivable                                                    --           21,500
                                                                                            ------------     ------------
               Net cash used in  financing activities                                         (4,434,260)      (4,810,093)
                                                                                            ------------     ------------

Cash used in discontinued operations                                                                  --       (3,391,127)
                                                                                            ------------     ------------

Increase (decrease) in cash and cash equivalents                                             (10,304,258)       2,270,354
Cash and cash equivalents at beginning of period                                              15,986,385          253,905
                                                                                            ------------     ------------

Cash and cash equivalents at end of period                                                  $  5,682,127     $  2,524,259
                                                                                            ============     ============

</TABLE>


    See accompanying condensed notes to the consolidated financial statements


<PAGE>







iNTELEFILM Corporation
Condensed Notes to Consolidated Financial Statements (unaudited)
September 30, 2000

Note 1   Basis of Presentation

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310 of
Regulation S-B. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals with the exception of the adjustments discussed in
Note 2) considered necessary for a fair presentation have been included.
Operating results for the three and nine-month periods ended September 30, 2000,
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Form
10-KSB/A for the year ended December 31, 1999.

         In April 1999, iNTELEFILM ("the Company") acquired a majority interest
in Harmony Holdings, Inc. ("Harmony"), thereby allowing the Company to
consolidate Harmony, for financial statement purposes, beginning April 1, 1999,
rather than accounting for the investment under the equity method as it had for
all previous periods.

Note 2   Significant Transactions and Subsequent Events

         The following significant transactions occurred during 2000 and are
considered non-recurring:

A.       In January 2000, the Company formed webADTV.com, Inc. ("webADTV") under
         the laws of the state of Minnesota. The Company is the principal
         shareholder in webADTV. webADTV hosts a suite of web-based applications
         designed to increase productivity and communication between the
         advertising agency, the client, the production companies and the media
         channels. iNTELESOURCE, designed specifically for adverting agencies,
         is the first online tool of webADTV. iNTELESOURCE is a digital video
         archiving and retrieval service that uses a web enabled, video asset
         management system to provide agencies and production companies with the
         ability to digitize, encode, archive and stream television commercials
         from their desktop.

B.       In February 2000, webADTV adopted the 2000 Incentive Stock Option Plan
         and the 2000 Non-Qualified Stock Option Plan whereby 5,000,000 shares
         of the subsidiary's common stock have been reserved under each plan.
         The options can be either incentive stock options or non-statutory
         options as indicated by the plan name and are generally valued at the
         fair market value of the stock on the date of grant. The plans allow
         various vesting options and the ability for the employee to immediately
         exercise the options for consideration of cash or a subscription
         receivable. The subsidiary is able to repurchase stock issued on
         immediate exercises at the exercise price and/or at the fair market
         value of such stock if the employee does not meet certain



<PAGE>

         service period requirements. As of October 30, 2000, approximately 4.5
         million options had been granted under the plans of which approximately
         2.9 million options had been exercised. Stock subscription receivable
         related to these exercises aggregated approximately $55,000. If all
         options were exercised, the Company's ownership in webADTV would be
         diluted to 79%.

C.       In March 2000, the Company proposed to commence an exchange offer to
         the shareholders of Harmony to acquire all of the outstanding shares of
         Harmony's common stock that it does not currently own, in exchange for
         shares of the Company's common stock. The Company proposes to offer one
         share of its common stock for every 13.75 shares of Harmony common
         stock and the offer is conditioned upon the Company obtaining at least
         90% ownership of Harmony. If the Company is successful in its exchange
         offer, Harmony will become a wholly owned subsidiary of the Company.

D.       On March 23, 2000, the Company called its notes payable due from
         Harmony. As a result of Harmony's inability to repay the notes within
         the 30-day demand period, on May 1, 2000, the Company granted Harmony a
         forbearance for an indeterminate amount of time to allow the
         independent directors of Harmony to further consider and propose cure
         alternatives.

E.       During the nine months ended September 30, 2000, the Company recorded a
         valuation allowance associated with commercial director advances in
         excess of earnings totaling $895,000, of which $461,000 relates to
         advances paid in 1999. Such advances are regularly paid to established
         commercial directors on a monthly basis and are offset against the
         actual earnings from commercial directorial services. The Company
         accounts for these monthly payments as prepaid compensation and
         recognizes them as an expense in the period that they are offset
         against a commercial director's actual earnings. Capitalized amounts
         were evaluated for collectibility based on anticipated future
         commercial project awards for individual commercial directors and an
         allowance was established for capitalized amounts believed to be
         uncollectible. The valuation allowance was primarily necessitated by
         changes in the workflow and contractual relationships of the majority
         of the commercial directors at Harmony's wholly-owned subsidiary, The
         End, Inc. ("The End").

F.       On May 1, 2000, members of the Screen Actors Guild ("SAG") began a
         strike against the advertising agencies that represent the Company's
         customer base. On October 28, 2000, this strike was settled. During
         this six-month strike, the Company's ability to produce television
         commercials domestically was limited. The Company attempted to reduce
         the effects the strike had on its operations by utilizing non-union
         talent and producing its commercials outside of the United States
         whenever possible. However, the Company did lose business as a result
         of the strike. No assurance can be given that the Company's operations
         and liquidity will not continue to be affected by the relations between
         such parties in the near future.


<PAGE>

G.       In July 2000, the Company discontinued the operations of Populuxe
         Pictures, Inc. ("Populuxe"). There are no significant continuing
         obligations related to this subsidiary.

H.       In July 2000, webADTV entered into a software license agreement with
         Excalibur Technologies Corporation ("Excalibur"). Under the agreement,
         Excalibur received 200,000 shares of webADTV's common stock, valued at
         $2.50 per share, and $100,000 in cash. In addition, webADTV agreed to
         pay Excalibur $400,000 within 10 days of certain conditions being met.
         In return, webADTV received a three-year, pre-paid license for, and the
         right to exclusively market to advertising agencies through
         iNTELESOURCE, the Excalibur Screening Room(R) and RetrievalWare(R)
         product lines. webADTV believes that these products will provide the
         tools necessary to provide its web-based services to the advertising
         agencies.

I.       In August 2000, the Company signed an accounts receivable-based loan
         and security agreement with General Electric Capital Corporation ("GE
         Capital"). This loan and security agreement provides for borrowings for
         working capital under a revolving line of credit with maximum
         availability of $7.0 million based on acceptable accounts receivable.
         The line of credit bears interest at a variable rate (10.24% at
         September 30, 2000). The agreement requires the Company to comply with
         certain restrictive covenants and will provide financing for Curious
         Pictures Corporation ("Curious Pictures"), Chelsea Pictures, Inc.
         ("Chelsea") and The End.

J.       On September 1, 2000, webADTV completed its acquisition of Cosmic
         Inventions, LLC ("Cosmic Inventions") based on a letter of intent dated
         June 13, 2000. Consideration for the acquisition included 660,000
         shares of webADTV common stock valued at $.10 per share, warrants to
         purchase 20,000 additional shares of webADTV common stock at $.10 per
         share, and a $650,000 promissory note due upon certain conditions being
         met, but not later than April 30, 2001. The valuation was based on the
         fair market value of the stock on the date the letter of intent was
         executed. This promissory note bears interest at a rate of 8% per
         annum. Cosmic Inventions' leading product, Spot Rocket, facilitates the
         transmittal of approval-quality video, CD-quality audio tracks,
         animatics, photographs, storyboards, animations and various multimedia
         components. Additionally, Cosmic Inventions has developed a product
         that enables simplified delivery and receiving of large files via
         standard e-mail addressing. These products provide high quality
         transmittal, eliminating costly production errors, travel expenses and
         last minute revisions.

K.       Currently, $750,000 of the Company's cash balance secures a line to be
         used to issue import letters of credit. As of November 11, 2000, the
         Company is not exposed to a significant credit risk as a result of
         these letters of credit.

Note 3   Investment in Harmony

         The Company holds a majority interest in Harmony through the ownership
of 4,139,562 shares of Harmony's common stock. Harmony's most recent reported
fiscal year-end was December 31, 1999. Harmony's operations prior to the


<PAGE>

Company consolidating Harmony's financial statements, are summarized as follows
for the quarter ended March 31, 1999:

                                                    Three Months
                                                    Ended 3/31/99
                                                   (in thousands)

                  Contract revenues                  $ 16,275
                  Cost of production                   13,889
                                                     --------

                  Gross profit                          2,386
                  Production expenses                   2,851
                                                     --------

                  Loss from productions                  (465)
                  Corporate, depreciation
                     & amortization                       836
                  Restructuring cost &
                     impairment of assets                (175)
                                                     ---------

                  Loss from
                     Operations                        (1,126)
                  Interest expense                        (79)
                                                     ---------

                  Net loss                          $  (1,205)
                                                    ----------

         Harmony's results from operations are consolidated for the period
beginning April 1, 1999 and all periods thereafter. Previous periods are
accounted for under the equity method.

         No minority interest is currently shown related to Harmony, as the
minority shareholders no longer have any equity basis in their investment. As of
September 30, 2000, the Company had recognized losses in excess of its prorata
share totaling $3.4 million.

Note 4   Reclassifications

         Certain amounts in the 1999 financial statements have been reclassified
to conform to the 2000 presentation. These reclassifications have no effect on
the accumulated deficit or net income or loss previously reported.

         In accordance with Accounting Principles Board Opinion 30, "Reporting
the Results of Operations - Discontinued Events and Extraordinary Items" (APB
30), certain reclassifications have been made to the previously reported 1999
financial statements to reflect the disposition of the radio stations as a
discontinued operation.

Note 5   Business Segments

         The Company classifies its operations into two major business segments:
television commercial production and webADTV. The television and commercial
production segment consists of the Company's production companies: Curious
Pictures, Chelsea, and The End and its subsidiaries through Harmony. The webADTV
segment is comprised of Cosmic Inventions, INTELESOURCE and other online digital
tools designed to web-enable all aspects of the advertising campaign process.

         The Company evaluates performance of its segments based on several
measurements. The primary financial measure use by the Company is production
service income, which is defined as earnings before interest, taxes, stock-



<PAGE>

based compensation, corporate overhead, depreciation and amortization.
Production service income measures the contribution margin generated by each of
its segments. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies contained in the
Company's Annual Report on Form 10-KSB/A for the year ended December 31, 1999.

                     Nine months ended September 30, 2000 (in thousands)

                     Television
                     Commercial                              Total
                     Production    webADTV    Corporate    iNTELEFILM
                     ----------    -------    ---------    ----------
Revenues
 from external
 sources              $ 51,161     $     28     $     --     $ 51,189
Inter-segment
 Revenues                   --          137          700          837

Production
 service income/
 (loss)               $   (100)    $ (1,361)    $    700     $   (761)
Stock option
 compensation              255           --           56          311
Depreciation and
 amortization              716           54          828        1,598
                      --------     --------     --------     --------
Income (loss) from
 operations           $ (1,166)    $ (1,415)    $ (3,223)    $ (5,804)
                      --------     --------     --------     --------

Additions to long-
 lived assets         $    434     $  1,515     $    245     $  2,194
                      --------     --------     --------     --------


Note 6   Discontinued Operations

         On January 6, 1998, the Company's shareholders approved the sale of all
of the Company's owned and operated radio stations which represents the
measurement date for the Company's exit from the children's entertainment and
radio broadcasting industries. Accordingly, the operation and disposition of the
radio stations has been classified as discontinued operations in the
accompanying financial statements. During the nine months ended September 30,
1999, the Company recognized a gain on the disposal of discontinued operations
of $12,520,000. This overall gain includes a $209,000 loss from discontinued
operations on revenues of $100,000 and a tax provision of $3,800,000. The basic
and diluted income per share related to the gain from the disposal of
discontinued operations was $1.94 for the nine months ended September 30, 1999.

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

         This discussion and analysis contains certain non-historical
forward-looking terminology such as "believes," "expects," "anticipates," and
"intends," or comparable terminology. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. Potential purchasers of the Company's securities are
cautioned not to place undue reliance on such forward-looking statements, which
are qualified in their entirety, by the cautions and risks described herein.


<PAGE>

General Overview

         On January 6, 1998, the Company's shareholders approved the sale of all
of the Company's owned and operated radio stations which represents the
measurement date for the Company's exit from the children's entertainment and
radio broadcasting industries. Accordingly, the operation and disposition of the
radio stations has been classified as discontinued operations in the
accompanying financial statements. The transition was finalized with the
completion of the sale of the Company's radio stations in January 1999 and with
increases in the Company's ownership in Harmony to 55%, in Curious Pictures to
51%, and in Chelsea to 100%.

         The Company believes it is one of the leading sources of services for
television commercial production within the entertainment industry, offering
extensive production capability and the exclusive services of certain
established industry talent. The Company intends to seek additional acquisitions
to further broaden its offering of services with the objective of enhancing
overall profit margins and leveraging its pool of talent and technical expertise
to capitalize on the convergence of short-form video content and technologies of
broadband internet delivery systems.

         The Company is also expanding services offered through its subsidiary,
webADTV. webADTV is an online digital suite of tools designed to web-enable all
aspects of the global advertising process. webADTV believes it will enhance and
streamline the workflow process for advertising agencies and their clients.
webADTV's first tool, iNTELESOURCE, is an internet based, video asset management
system that provides agencies and production companies with the ability to
digitize, encode, archive and stream television commercials that they produce.
With the acquisition of Cosmic Inventions, webADTV has added more tools
including Spot Rocket, a product which facilitates the transmittal of
approval-quality video, CD-quality audio tracks, animatics, photographs,
storyboards, animations and various multimedia components. Additionally, Cosmic
Inventions has developed DigiExpress, a product that enables simplified delivery
and receipt of large files via standard e-mail addressing.

         As a result of acquiring a majority interest in Harmony and Curious
Pictures, the Company began consolidating these companies under the purchase
method of accounting for the acquisition of majority-owned subsidiaries. Harmony
and Curious Pictures' results from operations are consolidated for the period
beginning April 1, 1999. Previous periods are accounted for under the equity
method. Chelsea's operations are consolidated for the period beginning March 1,
1999. Because of this transition, a comparison of the changes in the revenue and
expense categories from the first nine months of 1999 to the first nine months
of 2000 would not be meaningful without including additional information related
to Harmony's results of operations for the first quarter of 1999. Accordingly,
information related to Harmony's first quarter 1999 performance has been
provided.

         Results of Operations for the Three and Nine Months Ended September 30,
2000 Compared to the Three and Nine Months Ended September 30, 1999:

         The Company's total revenues decreased $7,481,000 from $21,493,000 in
the third quarter of 1999 to $14,012,000 in the third quarter of 2000, while in
the first nine months of 2000 revenues increased $5,457,000 or 12% from
$45,732,000 in 1999 to $51,189,000 in 2000. During the third quarter of 2000,
revenues at Chelsea increased $1.9 million while revenues at The End and


<PAGE>

Curious Pictures decreased $9.2 million. Compared to revenues of $490,000 in the
third quarter of 1999, Populuxe had no revenues in the third quarter of 2000 as
it shut down its operations in July 2000. webADTV produced revenues of $27,000
during the quarter ended September 30, 2000. The End and Curious Pictures
produced revenues of $13.5 million in the first quarter of 1999, although those
revenues were not consolidated in the Company's financial statements at that
time. The Company believes that the decrease in revenues at The End resulted
from the effects of the SAG strike, which began in May 2000. In reaction to the
initial strike announcement, many agencies withheld production as they assessed
the situation in an attempt to determine when a settlement might be reached.
Although the agencies began gradually sending more jobs into production, there
continued to be fewer jobs on which to bid through October 28, 2000 when the
strike was settled. The strike had a lesser effect on Curious Pictures as
Curious Pictures' productions primarily use animation and digigraphics. Although
revenues at Curious Pictures decreased slightly during the third quarter of 2000
compared to the same period in 1999, year-to-date revenues increased $1.7
million as of September 30, 2000 compared to the same period in 1999. Chelsea
was able to avoid much of the strike's impact by producing commercials outside
of the United States. Additionally, a portion of the decrease in revenues at The
End may be attributed to the commercial director and sales representative
contracts that were not renewed and the signing of new commercial directors and
sales representatives to replace them.

     Cost of production is directly related to revenues and includes all direct
costs incurred in connection with the production of television commercials
including film, crews, location fees, production insurance and commercial
directors' fees. Cost of production as a percentage of revenues increased from
84% in the third quarter of 1999 to 85% in the third quarter of 2000, while it
remained constant at 84% for the nine months ended September 30, 2000 and 1999.
Included in the cost of production for the first nine months of 2000 was
$895,000 in charges related to the Company's change in estimated valuation for
the advances paid to its commercial directors (see Note 2E to the financial
statements). The Company believes the cost of production, as a percentage of
revenues, will continue to decrease as its production companies retain more
commercial directors and are able to charge greater premiums for these
commercial directors as the demand for their work increases. Additionally, the
Company believes it will continue to realize greater cost benefits on a
consolidated basis, such as vendor discounts, which may lower the overall cost
of production.

         General selling and administrative expenses at the production companies
consist of sales commissions, advertising and promotional expenses, travel and
other expenses incurred in the securing of television commercial contracts, as
well as overhead costs such as office rent and expenses, executive, general and
administrative payroll, and related items. General selling and administrative
expenses increased $289,000 from $2,837,000 during the third quarter of 1999 to
$3,126,000 during the third quarter of 2000. These expenses increased $3,233,000
during the first nine months of 2000 compared to the same period in 1999,
although The End and Curious Pictures incurred selling and administrative costs
of $2.0 million in the first quarter of 1999, which were not consolidated in the
Company's financial statements at that time. Increases at the commercial
production divisions of approximately $700,000 were due primarily to the recent
investment the Company made to its managerial infrastructure to allow for
improvements in its sales representation and commercial director rosters.
Additionally, during the first nine months of 2000, the Company's newest
subsidiary, webADTV, incurred



<PAGE>

$546,000 in selling and administrative costs associated with iNTELESOURCE and
Cosmic Inventions.

         Stock option compensation increased $25,000 during the third quarter of
2000 and decreased $1,708,000 during the first nine months of 2000 compared to
the respective periods of 1999. Stock option compensation expense in the first
nine months of 2000 and 1999 included expense related to options granted to
members of the Company's Board of Directors in the amount of $56,000 and
$50,000, respectively, and expense related to options granted to Curious
Management of $255,000 and $2.3 million, respectively.

         Corporate charges incurred in the third quarter of 2000 were $907,000
and $893,000 in the third quarter of 1999. During the first nine months of 2000,
corporate charges increased from $2,278,000 in 1999 to $3,264,000 in 2000.
Corporate charges related to the Harmony divisions were $530,000 in the first
quarter of 1999 and were not consolidated in the Company's financial statements
for that period. Overall, the increase in corporate charges on a comparable
basis was $456,000 from the first nine months of 1999 to the first nine months
of 2000, due to an increase in activities related to the promotion of the
Company, outside professional consultant fees, travel expenses and expense
related to the production of the Company's newsletter.

         Depreciation and amortization increased to $558,000 in the third
quarter of 2000 from $440,000 in the third quarter of 1999, and increased
$696,000 during the first nine months of 2000 compared to the same period in
1999. Depreciation and amortization related to the Harmony divisions was
$197,000 in the first quarter of 1999 and was not consolidated in the Company's
financial statements for that period. This increase was related primarily to the
excess of the investment cost over the value of the underlying net assets
(goodwill) of Harmony. Prior to the Company obtaining a majority interest in
Harmony, this expense was reported as a portion of the equity loss in Harmony.

         Net interest income was $24,000 in the third quarter of 2000 compared
to $296,000 in the third quarter of 1999. Interest income of $199,000 was
reported in the first nine months of 2000 compared to $165,000 in the same
period of 1999. The interest income in 2000 was due primarily to interest earned
on the Company's cash.

         Income tax benefits of $700,000 were recognized in the nine months
ended September 30, 1999. These income tax benefits were derived primarily from
the ability to offset the taxable loss from operations against the sale of
discontinued operations.

         A net loss from continuing operations of $2,562,000 was recognized in
the third quarter of 2000 compared to $276,000 during the same period of 1999.
Net loss from continuing operations of $5,805,000 was recognized in the first
nine months of 2000 compared to $4,688,000 during the first nine months of 1999.

         During the nine months ended September 30, 1999, the Company recognized
a gain on the disposal of discontinued operations of $12,520,000. This overall
gain included a $209,000 loss from discontinued operations on revenues of
$100,000 and a tax provision of $3,800,000. This represented taxes estimated to
be due as a result of the sale of the radio stations at the time. This estimate
was subsequently reduced to approximately $1,802,000 in the fourth quarter of
1999 by employing certain income tax strategies not in place in the first three
quarters of 1999.




<PAGE>

         A net loss of $2,562,000 was recognized in the third quarter of 2000
compared to a net loss of $352,000 in the third quarter of 1999. A net loss of
$5,805,000 was recognized in the first nine months of 2000, while net income of
$7,811,000 was recognized in the first nine months of 1999.

Liquidity and Capital Resources

         The Company's liquidity, as measured by its working capital, was
$2,999,000 at September 30, 2000, compared to $9,863,000 at December 31, 1999.

         In January 2000, the Company organized webADTV as a subsidiary. webADTV
is an online digital suite of tools designed to increase productivity and
communication between the advertising agency, the client, the production
companies and the media channels. One such tool is iNTELESOURCE, which was
designed to give advertising agencies and production companies the opportunity
to digitize, encode, archive, and stream television commercials from their
desktop. webADTV intends to focus on the workflow needs critical to advertising
agencies in the $250 billion advertising arena. webADTV believes the development
of its tools for the advertising agency will generate revenues through a tiered
subscription model, service income and commissions. WebADTV believes it will
differentiate itself from competitors by applying the depth of its industry
expertise, incorporating its various proprietary tools, and by increasing the
range of its strategic relationships.

         On September 1, 2000, webADTV completed it acquisition of Cosmic
Inventions based on a letter of intent dated June 13, 2000. Cosmic Inventions'
leading product, Spot Rocket, facilitates the transmittal of approval-quality
video, CD-quality audio tracks, animatics, photographs, storyboards, animations
and various multimedia components. Additionally, Cosmic Inventions has developed
DigiExpress, a product that enables simplified delivery and receiving of large
files via standard e-mail addressing. These products are designed to provide
high quality transmittal, eliminating costly production errors, travel expenses
and last minute revisions. Consideration for the acquisition included 660,000
shares of webADTV common stock valued at $.10 per share, warrants to purchase
20,000 additional shares of webADTV common stock at $.10 per share, and a
$650,000 promissory note due upon certain conditions being met, but not later
than April 30, 2001. This promissory note bears interest at a rate of 8% per
annum. The valuation was based on the fair market value of the stock on the date
the letter of intent was executed.

         As of October 27, 2000, approximately 84% of the outstanding shares of
common stock of webADTV were held by iNTELEFILM and approximately 16% of the
outstanding shares of webADTV common stock had been issued directly to third
parties and to employees and consultants pursuant to stock option plans. The
Company is seeking separate financing for webADTV in order to expand and brand
its infrastructure. If webADTV is unable to obtain such financing, the Company's
efforts to enter into e-commerce with advertising agencies would be
substantially impaired. However, no assurance can be given that webADTV will be
able to obtain such financing or that such financing, if obtained, will be
sufficient to fully implement its business plan. In that event, webADTV may have
to seek alternative methods of financing, including the continued use of
iNTELEFILM funds. Additionally, outside financing may result in the issuance of
additional shares, thereby diluting the Company's investment. There can be no
assurance that webADTV's business plan will be completed, or if completed, that
the business plan will be successful.


<PAGE>

         In March 2000, the Company proposed to commence an exchange offer to
the shareholders of Harmony to acquire all of the remaining outstanding shares
of Harmony's common stock in exchange for shares of the Company's common stock.
The Company proposes to offer one share of its common stock for every 13.75
shares of Harmony common stock and the offer is conditioned upon the Company
obtaining at least a 90% ownership in Harmony. If the exchange offer were fully
completed according to these terms, the Company would exchange approximately
244,880 shares of its common stock for 3,367,098 shares of Harmony's common
stock, thereby owning 100% of Harmony. Based on the stock prices of Harmony and
the Company at November 11, 2000, and assuming approximately $200,000 in
transaction costs, the Company would recognize approximately $475,000 of
goodwill. No assurance can be given that the Harmony shareholders will accept
the offer once it is made. If the exchange offer is unsuccessful, the Company
currently does not intend to continue funding Harmony's operating losses.

         On March 23, 2000, the Company demanded payment on the notes payable
from Harmony, aggregating approximately $3.2 million at March 31, 2000. On May
1, 2000, the Company granted Harmony a forbearance for an indeterminate amount
of time to allow the independent directors of Harmony to consider and propose
cure alternatives.

         In April 2000, all advances made through the credit facility
established between Finova Capital Corporation ("Finova") and Harmony were paid
in full as Finova terminated its relationship with Harmony. As a result, all of
the Company's obligations as a guarantor of this facility have been fulfilled.

         On May 1, 2000, members of SAG began a strike against the advertising
agencies that represent the Company's customer base. As of October 28, 2000,
this strike was settled. During this six-month strike, the Company's ability to
produce television commercials domestically was limited. Although the Company
made an effort to reduce the effects the strike had on its operations by
utilizing non-union talent and producing commercials outside of the United
States whenever possible, the Company did lose business as a result of strike.
No assurance can be given that the Company's operations and liquidity will not
continue to be affected by the relations between such parties in the near
future. It is possible that some of the Company's future business activities
will be affected by the existence of collective bargaining agreements because
many of the performing artists and technical personnel, such as cameramen and
film editors, which the Company employs on a free-lance basis, are members of
unions who are parties to collective bargaining agreements.

         During 2000, one operating division in particular, The End and its
subsidiaries through Harmony, has been adversely affected as a result of a
variety of factors including the SAG strike, the reorganization of its
management, and the negotiations of commercial director and sales representation
agreements. Given these circumstances, the Company has taken steps to reduce The
End's ongoing operating expenses and has recently negotiated several commercial
director and sales representative agreements. Management believes that with
improved sales representation and the addition of commercial directors to its
roster, the operating losses and the overall operating cash needs of The End may
lessen. However, there can be no assurance that The End will reach profitability
or that it will be able to retain its commercial directors and sales
representatives or that its commercial directors and sales representatives will
fulfill their obligations to The End, which in turn could adversely affect the
Company's overall liquidity and acquisition strategy.


<PAGE>

         The Company intends to further expand its television commercial
production business and holdings through acquisitions and opportunities within
its present divisions. The Company seeks to explore the consolidation of
commercial production companies in an effort to increase its commercial director
pool. In addition, the Company intends to acquire production service companies,
such as rental, editing, design/marketing, post-production and music companies.
The Company believes that gross revenues and profits can be increased through
the acquisition of private production companies and related service companies.
The availability of capital may limit the Company's ability to complete future
acquisitions and the Company may have to seek additional financing in order to
fully execute this business strategy. There can be no assurance that the Company
will obtain such financing when required, or that such financing, if available,
will be on terms acceptable or favorable to the Company. Additional financing
could require the sale of equity securities, which could result in dilution to
current shareholders.

         Management believes that with $2,999,000 of working capital, the
Company should have adequate capital to meet its ongoing working capital needs
and continue its business plan and acquisition strategy in the near term.
Anticipated uses of cash in the near term include funding operating losses and
funding costs incurred by webADTV, which is currently in its initial start-up
phase. Additionally, the Company further replenished its acquisition capital in
August 2000 by entering into an accounts receivable-based loan and security
agreement with GE Capital. This loan and security agreement provides for
borrowings for working capital under a revolving line of credit (see note 2I to
the financial statements), thereby enabling the divisions to operate their
business through a line of credit instead of depending on the Company to fund
their operations. The line will provide working capital for all of the Company's
existing divisions, excluding webADTV, which the Company currently finances
internally. However, should a potential acquisition require greater capital than
the Company's cash sources, the Company may need to obtain additional financing.
If the Company is not able to obtain adequate financing, or financing on
acceptable terms, it could possibly cause a delay in the full implementation of
its business plan.

         Consolidated cash was $5,682,000 at September 30, 1999 and $15,986,000
at December 31, 1999, a decrease of $10,304,000.

         Cash used in operating activities during the first nine months of 2000
was $3,784,000. Accounts receivable at September 30, 2000 decreased $5,853,000
from December 31, 1999, other receivables at September 30, 2000 increased
$1,436,000 from December 31, 1999 and prepaid expenses at September 30, 2000
decreased $335,000 during the same period. Accounts payable at September 30,
2000 decreased $1,355,000 from December 31, 1999, accrued expenses at September
30, 2000 decreased $2,400,000 from December 31, 1999, and deferred income
decreased $1,635,000 during the same period.

         During the first nine months of 2000, net cash used in investing
activities was $2,086,000 and was used for capital expenditures.

         Cash used in financing activities amounted to $4,434,000 during the
first nine months of 2000. This represented primarily the payoff of the line of
credit and the short-term note payable to the four principals of Curious
Pictures, net of the proceeds from the exercise of options to purchase common
stock.

Seasonality and Inflation



<PAGE>

         The Company does not believe that seasonality or inflation has affected
the results of its operations, and does not anticipate that inflation will have
an impact on its future operations.
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

On September 30, 1998, a jury in the United States District Court for the
District of Minnesota (the "Court") ruled in favor of the Company in connection
with litigation for breach of contract and misappropriation of trade secrets
that the Company had commenced against ABC/Disney and awarded the Company $20
million for breach of contract against ABC Radio, $10 million for
misappropriation of trade secret by ABC Radio and $10 million for
misappropriation of trade secret against Disney. On January 15, 1999, the Court
upheld the jury's findings that ABC Radio had breached its contract with the
Company and that ABC/Disney both misappropriated the Company's trade secret
information, the Court disagreed with the jury's conclusion that the evidence
showed that those actions caused the Company's damages or that the amount of
damages awarded by the jury was supported by the evidence, and set aside the
jury's verdict. The Court further ruled that in the event that the decision is
reversed or remanded on appeal, that the defendants be granted a new trial on
the issues of causation and damages. The Company filed a Notice of Appeal in
February 1999. On February 16, 2000, the Company presented its oral argument to
the 8th Circuit Court of Appeals in St. Paul, Minnesota. To date, the 8th
Circuit Court of Appeals had not yet ruled on the appeal. The Company intends to
pursue its appeal of the judgment and, to this end, certain personnel and
financial resources will be used.

Item 2.  Changes in Securities.

         Not applicable

Item 3.  Defaults Upon Senior Securities

         Not applicable

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

         Not applicable

Item 5.  Other Information.

         Not applicable

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

         a.       Exhibits

                  27.1     Financial Data Schedule

                  99.1     Loan and Security Agreement with GE Capital
                           Corporation effective as of July 31, 2000.

         b.       Current Reports on Form 8-K

                  The Company filed the following Current Reports on Form 8-K
         (File No. 0-21534) with the Commission during the quarter for which
         this report is filed:


<PAGE>

1.                    The Company's Current Report on Form 8-K filed on July 10,
                      2000 relating to webADTV.com, Inc.'s worldwide
                      iNTELESource test agreement with J. Walter Thompson, an
                      international advertising agency.

2.                    The Company's Current Report on Form 8-K filed on
                      September 11, 2000 regarding webADTV.com, Inc.'s
                      completion of its acquisition of Cosmic Inventions, LLC.


<PAGE>



                                   SIGNATURES




         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on November 14, 2000.

                                          iNTELEFILM CORPORATION


                                 BY:      /s/ Steven C. Smith
                                          --------------------------------------
                                          Steven C. Smith
                                 ITS:     Chief Financial Officer




EXHIBIT INDEX

27.1     Financial Data Schedule
99.1     Loan and Security Agreement with GE Capital Corporation effective as of
         July 31, 2000