UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
[Mark One]

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended March 31, 2001.
                                OR

[ ]  Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
     Exchange Act of 1934 For the transition period from to .

                           Commission File No. 0-19727

                          CUMBERLAND TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

     Florida                                             59-3094503
     ---------------------------------------------       -----------------------
     (State or other jurisdiction of incorporation)      (I.R.S. Employer
                                                          Identification No.)

     4311 West Waters Avenue, Suite 501
     Tampa, Florida                                      33614
     ---------------------------------------------       -----------------------
     (Address of principal executive office)             (Zip code)

                                 (813) 885-2112
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
              (Former name, former address and formal fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
                                 Yes [x] No [ ]

               Applicable Only to Insurers Involved in Bankruptcy
                   Proceedings During the Preceding Five Years

Indicate by a check mark  whether the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                 Yes [x] No [ ]

                      Applicable Only to Corporate Issuers

The  number  of shares  of the  Registrant's  common  stock,  $.001  par  value,
outstanding as of March 31, 2001 was 5,597,244 shares.

<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                                    FORM 10-Q

                                      INDEX

PART I    FINANCIAL INFORMATION
------    ---------------------
                                                                            Page
                                                                            ----

          Item 1.   Condensed consolidated balance sheets at
                      March 31, 2001(unaudited) and December 31, 2000 .......1-2

                    Condensed unaudited consolidated statements
                      of operations for the three months ended
                      March 31, 2001 and March 31, 2000 .......................3

                    Condensed consolidated statements of
                      stockholders' equity for the three months ended
                      March 31, 2001  (unaudited) and for the year
                      ended December 31, 2000 .................................4

                    Condensed unaudited consolidated statements of
                      cash flows for the three months ended March 31, 2001
                      and March 31, 2000 ......................................5

                    Notes to condensed unaudited consolidated financial
                      statements ...........................................6-12

         Item 2.    Management's Discussion and Analysis of financial
                      condition and results of operations .................13-14

         Item 3.    Quantitative and Qualitative Disclosures about
                      Market Risk.............................................15


PART II  OTHER INFORMATION
-------  -----------------

        Item 1.     Legal proceedings.........................................16

        Item 2.     Changes in securities.....................................16

        Item 3.     Defaults upon senior securities...........................16

        Item 4.     Submission of matters to a vote of security holders.......16

        Item 5.     Other information.........................................16

        Item 6.     Exhibits and Reports of Form 8-k..........................16

                    Signatures................................................17


<PAGE>

           UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                         PART I - FINANCIAL INFORMATION


Item 1.    FINANCIAL STATEMENTS
------     --------------------

                          CUMBERLAND TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------


                                                       -------------------------
                                                        March 31,   December 31,
                                                          2001          2000
                                                       -------------------------
                                                       (unaudited)
Investments:
-----------
   Securities available-for-sale at fair value:
     Debt securities ...............................   $ 7,945,741   $ 7,553,010
     Equity securities .............................         4,197         2,716
   Debt securities held-to-maturity at amortized
     cost (fair value, 2001 - $1,232,013
     2000 - $1,227,130) ............................     1,224,214     1,223,593
   Mortgage loans on real estate, at unpaid
     principal .....................................       741,747       742,068
   Short-term investments ..........................       433,993       433,993
                                                       -----------   -----------
     Total investments .............................    10,349,892     9,955,380

Cash and cash equivalents ..........................     1,195,347       693,778
Accrued investment income ..........................       120,628       185,011

Reinsurance recoverable ............................     4,208,726     4,910,443

Accounts receivable:
-------------------
   Nonaffiliate less allowance for doubtful
     accounts of $13,750............................     4,250,930     3,821,206
   Affiliate .......................................       437,636       436,997
Income tax recoverable .............................       186,588       167,588
Deferred income tax asset ..........................       175,234       175,234
Deferred policy acquisition costs ..................     2,073,219     1,955,018
Intangibles, net ...................................     1,079,163     1,115,316
Other investment ...................................       595,496       582,532
Other assets .......................................       360,248       311,082
                                                       -----------   -----------
                                                       $25,033,107   $24,309,585
                                                       ===========   ===========


            See notes to condensed consolidated financial statements.


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY



                                                   -----------------------------
                                                    March 31,       December 31,
                                                      2001              2000
                                                   -----------------------------
                                                   (unaudited)
Policy liabilities and accruals:
-------------------------------
   Loss and loss adjustment expenses ............   $  4,694,374    $ 5,185,626
   Unearned premiums ............................      6,047,266      5,775,524
Ceded reinsurance payable .......................        638,631        721,513
Derivative instruments ..........................        944,034            --
Accounts payable and other liabilities ..........      2,726,488      2,637,748
Debt:
----
   Nonaffiliate .................................        963,885      1,102,683
   Affiliate ....................................      1,000,000      1,000,000
                                                    ------------    ------------
   Total liabilities ............................     17,014,678     16,423,094
                                                    ------------    ------------
Stockholders' equity:
--------------------
   Preferred stock, $.001 par value; 10,000,000
       shares authorized, no shares issued ......           --              --
   Common stock, $.001 par value; 10,000,000
       shares authorized; 5,915,356 and 5,871,356
       shares issued, respectively ..............          5,916          5,872
   Capital in excess of par value ...............      7,270,316      7,264,860
   Accumulated other comprehensive income........          8,906        104,485
   Retained earnings.............................        997,010        774,993
                                                    ------------    ------------
                                                       8,282,148      8,150,210
   Less treasury stock, at cost, 318,112  shares        (263,719)      (263,719)
                                                    ------------    ------------
   Total stockholders' equity ...................      8,018,429      7,886,491
                                                    ------------    ------------
                                                    $ 25,033,107    $24,309,585
                                                    ============    ============



            See notes to condensed consolidated financial statements.

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

            CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   -----------------------------
                                                    Three Months Ended March 31,
                                                         2001           2000
                                                   -----------------------------

Revenue:
-------
Direct premiums earned .........................    $ 3,385,153     $ 2,724,631
Reinsurance premiums assumed ...................        751,015         702,865
Less reinsurance ceded .........................     (1,051,471)       (716,609)
                                                    -----------     -----------
Net premium income .............................      3,084,697       2,710,887
Net investment income ..........................        155,934         139,570
Net realized investment gains...................           --           213,258
Other income ...................................        599,438         396,414
                                                    -----------     -----------
Total revenue ..................................      3,840,069       3,460,129

Benefits and Expenses:
---------------------
Losses and loss adjustment expenses ............        882,392         750,096
Amortization of deferred policy acquisition
    costs ......................................      1,096,621         886,483
Operating expenses .............................      1,466,300       1,109,983
Interest expense ...............................         62,319          52,802
                                                    -----------     -----------
Total expenses .................................      3,507,632       2,799,364

Income before income tax expense ...............        332,437         660,765
Income tax expense .............................        110,420         222,091
                                                    -----------     -----------
Net income......................................    $   222,017     $   438,674
                                                    ===========     ===========
Weighted average number of shares
    outstanding ................................      5,564,488       5,447,966
                                                    ===========     ===========
Net income per share - basic ...................    $      0.04     $      0.08
                                                    ===========     ===========




            See notes to condensed consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                          CUMBERLAND TECHNOLOGIES, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                                                         Accumulated
                                                            Capital in      Other         Retained
                                    Common Shares           Excess of   Comprehensive     Earnings                      Total
                                 --------------------          Par          Income      (Accumulated    Treasury     Stockholders'
                                 Stock         Amount         Value         (Loss)        Deficit)       Stock         Equity
                                 -----         ------       ---------      ---------     --------        -----         ------
<S>                             <C>           <C>            <C>           <C>            <C>            <C>            <C>

Balance at January 1, 2000 ..    5,815,356    $ 5,816       $ 7,257,916    $  (40,897)    $(266,756)     $ (263,719)   $ 6,692,360

   Exercise of 56,000 shares
       under 1991 stock
       option plan...........       56,000         56             6,944                                                      7,000

   Net increase in unrealized
       depreciation of
       available-for-sale
       securities, net of
       income tax ...........                                                 145,382                                      145,382

   Net income ...............                                                             1,041,749                      1,041,749
                                                                                                                         -----------

   Comprehensive income .....                                                                                            1,187,131
                                 -----------   -----------   -----------    -----------    -----------    -----------    -----------
Balance at December 31, 2000      5,871,356      5,872        7,264,860       104,485       774,993        (263,719)     7,886,491

   Exercise of 44,000 shares
       under 1991 stock
       option plan...........        44,000         44            5,456                                                      5,500


   Net (decrease) in
       unrealized depreciation
       available-for-sale
       securities ...........                                                 (95,579)                                     (95,579)



   Net income ...............                                                               222,017                        222,017
                                                                                                                         -----------

   Comprehensive income .....                                                                                               126,438
                                -----------    -----------   ------------   -----------    -----------    -----------    -----------
Balance at March 31, 2001 ...     5,915,356    $ 5,916       $ 7,270,316   $    8,906      $997,010       $ (263,719)   $ 8,018,429
                                ===========    ===========   ============   ===========    ===========    ===========    ===========




            See notes to condensed consolidated financial statements.
</TABLE>

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

            CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    ----------------------------
                                                    Three Months Ended March 31,
                                                          2001           2000
                                                    ----------------------------
Operating activities:
--------------------
Net income..........................................  $   222,017   $   438,674
Adjustments to reconcile net income to cash
   provided by (used in) operating activities:
       (Accretion) amortization of investment
           discounts and premiums ..................       (8,979)         (125)
       Policy acquisition costs amortized ..........    1,096,621       886,483
       Policy acquisition costs deferred ...........   (1,214,822)   (1,094,986)
       Amortization ................................       36,153        40,882
       Net realized (gains) losses on sales of
           investments .............................         --        (213,258)
       (Increase) decrease in:
           Accrued investment income ...............       64,383       (32,920)
           Reinsurance recoverable .................      701,717       102,111
           Accounts receivables ....................     (430,363)     (795,122)
           Income tax recoverable ..................      (19,000)         --
           Other assets ............................      (49,166)      (58,534)
       Increase (decrease) in:
           Policy liabilities and accruals .........      724,524       588,553
           Ceded reinsurance payable ...............      (82,882)      115,716
           Accounts payable and other liabilities ..       88,740
           Income tax payable ......................         --          70,000
                                                      -----------   -----------
Net cash provided by (used in) operating activities     1,128,943        47,474
Investing activities:
--------------------
Securities available-for-sale:
       Purchases - fixed maturities ................     (481,433)   (3,795,509)
       Proceed from sales - fixed maturities .......         --       1,999,256
       Purchases - equities ........................         --         354,952
Securities held-to-maturity:
       Purchases- fixed maturities .................         --       1,500,000
Payments on mortgage loan ..........................          321           298
Other investment ...................................      (12,964)       (4,781)
                                                       ----------     ----------
Net cash (used in) provided by  investing activities     (494,076)       54,216
Financing activities:
--------------------
Payments on debt, affiliate and
   non-affiliate ...................................     (138,798)      (12,994)
Stock options exercised ............................        5,500          --
Net change in advances to (from) affiliates ........         --         (28,502)
                                                      -----------   -----------
Net cash (used in ) provided by financing activities     (133,298)      (41,496)
                                                      -----------   -----------
Increase in cash and cash equivalents ..............      501,569        60,194
Cash and cash equivalents, beginning of period .....      693,778     2,000,147
                                                      -----------   -----------
Cash and cash equivalents, end of period ...........  $ 1,195,347   $ 2,060,341
                                                      ===========   ===========

Supplemental cash flows disclosure:
----------------------------------
Cash paid for interest .............................  $    24,498   $    52,802
                                                      -----------   -----------
Cash paid for income taxes .........................  $      --     $   144,650
                                                      ===========   ===========



            See notes to condensed consolidated financial statements.

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2001

1.       Ownership and Organization
         --------------------------

         Cumberland Technologies, Inc. ("CTI" or the "Company") f/k/a Cumberland
         Holdings, Inc., a Florida corporation, was formed on November 18, 1991,
         to be a Holding company and a wholly-owned  subsidiary of Kimmins Corp.
         ("KC").   Effective   October  1,  1992,  KC  contributed  all  of  the
         outstanding common stock of two of its other wholly-owned subsidiaries,
         Cumberland  Casualty & Surety Company  ("CCS") and Surety  Specialists,
         Inc.  ("SSI") to CTI. KC then  distributed  to its  stockholders  CTI's
         common  stock on the basis of one share of common stock of CTI for each
         five  shares of KC common  stock and Class B common  stock  owned  (the
         Distribution).  Effective January 30, 1997,  Cumberland Holdings,  Inc.
         changed its name to  Cumberland  Technologies,  Inc.  CTI  conducts its
         business through five subsidiaries.  CCS, a Florida  corporation formed
         in May 1988, provides underwriting for specialty surety and performance
         and payment bonds for contractors. The surety services provided include
         direct  surety  and to a lesser  extent,  assumed  reinsurance.  SSI, a
         Florida  corporation  formed in August 1988,  is a general lines agency
         which  operates as an  independent  agent.  The Surety Group ("SG"),  a
         Georgia  corporation,  and Associates  Acquisition  Corp.  d/b/a Surety
         Associates ("SA"), a South Carolina corporation,  purchased in February
         and July 1995,  respectively,  are general lines agencies which operate
         as  independent  agencies.  Official  Notary  Service  of  Texas,  Inc.
         ("ONS"),  a Texas  corporation  formed in February 1994, is an inactive
         corporation.  Qualex  Consulting  Group,  Inc.  ("Qualex"),  a  Florida
         corporation  formed in November 1994,  provides  claim and  contracting
         consulting services. CTI and its subsidiaries are referred to herein as
         the "Company."

2.       Summary of Significant Accounting Policies
         ------------------------------------------

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

         The consolidated  financial  statements include the accounts of CTI and
         its wholly owned subsidiaries.  All material intercompany  transactions
         and balances have been eliminated in consolidation.

         Basis of Presentation
         ---------------------

         The accompanying  consolidated  financial statements have been prepared
         in conformity  with  accounting  principles  generally  accepted in the
         United States of America which, as to the subsidiary insurance company,
         differ from statutory  accounting  practices prescribed or permitted by
         regulatory authorities. The significant accounting policies followed by
         CTI and subsidiaries that materially affect the consolidated  financial
         statements are summarized in this note.

         Reclassifications
         -----------------

         Certain amounts in the 2000 financial statements have been reclassified
         to conform to the 2001 financial statement presentations.

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


2.       Summary of Significant Accounting Policies (continued)
         ------------------------------------------------------

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

         The preparation of consolidated financial statements in conformity with
         generally accepted  accounting  principles  requires management to make
         estimates  and  assumptions  that  affect the  amounts  reported in the
         consolidated   financial   statements  and  accompanying   notes.  Such
         estimates  and   assumptions   could  change  in  the  future  as  more
         information  becomes known which would affect the amounts  reported and
         disclosed herein.

3.       Earnings Per Share
         ------------------

         Earnings  per share for the three  months ended March 31, 2001 and 2000
         is based on the weighted average number of shares outstanding, adjusted
         for the  dilutive  effect of stock  options,  and is the same on both a
         basic and fully diluted basis.

4.       Investments
         -----------

         Change  in  unrealized   appreciation   (depreciation):   The  increase
         (decrease)  in  unrealized  appreciation  of  investments  recorded  in
         stockholders' equity was as follows:

                                               Three Months     Twelve Months
                                                  Ended               Ended
                                              March 31, 2001   December 31, 2000
                                              ----------------------------------
         Fixed maturities, net of
          income tax .........................   $  29,547        $ 126,607
         Equities ............................     (20,641)         (22,122)
                                                 ---------        ---------
         Total change in unrealized
          appreciation, net of taxes .........   $   8,906        $ 104,485
                                                 =========        =========

5.       Income Taxes
         ------------

         The  Company's  provision  for income taxes for the quarter ended March
         31, 2001 has been calculated using an effective rate of 34%.

6.       Related Party Transactions
         --------------------------

         In  1988,  CCS  issued  a  surplus  debenture  to  KC in  exchange  for
         $3,000,000  which bears interest at 10 percent per annum.  Interest and
         principal payments are subject to approval by the Florida Department of
         Insurance.  On April 1, 1997,  CTI forgave  $375,000 of its  $3,000,000
         surplus  debenture  due to CCS.  As a  result,  CCS  increased  paid in
         capital by  $375,000.  On June 30,  1999,  CTI forgave  $576,266 of its
         $2,625,000  surplus debenture due from CCS. As a result,  CCS increased
         paid-in  capital to  $1,000,000.  As of December 31, 2000,  no payments
         could be made under the terms of the debenture.


<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


6.       Related Party Transactions (continued)
         --------------------------------------

          KC and SSI entered into an agreement with an  independent  contractor,
          AEC, on August 16,  1989 on a  construction  contract  with the United
          States Navy (the Navy).  Pursuant to this  contract,  the Company,  as
          surety,  executed and  delivered to the Navy certain  performance  and
          payment bonds (the Bonds).  At the time that the Bonds were issued, KC
          entered into an indemnification agreement with the Company, whereby KC
          indemnified the Company from any and all losses,  costs,  and expenses
          incurred  related  to  the  Bonds.  In  1991,  the  Navy  default  and
          terminated  AEC on the  contract.  The contract has been in litigation
          since the termination in 1991  generating a subrogation  receivable in
          the amount of  approximately  $1,851,000 and $1,768,000 as of December
          31,  2000,  and 1999,  respectively.  In the event that the Company is
          unsuccessful in its litigation activities with the Navy, management of
          the Company believes that KC will reimburse the Company for the losses
          and expenses incurred related to the Bonds.

7.       Notes Payable
         -------------

         Affiliate
         ---------

         Effective November 10, 1998, CTI entered into a $1,000,000  convertible
         term note agreement with TransCor Waste Services, Inc., a subsidiary of
         KC. The note is due  November  10, 2001 and bears  interest at 10%. The
         lender  may  convert  the  principal  amount  of the note or a  portion
         thereof  into a  common  stock  at  $3.00  per  share  subsequent  to a
         six-month anniversary and prior to the maturity date.

         Nonaffiliate
         ------------

         In connection with the acquisition of certain agencies during 1995, the
         Company  entered  into two notes  payable  with the  agencies  previous
         owners.  One note is due March 1, 2002 and bears interest at 8% through
         February 28, 2001 and 10%  thereafter.  Principal  payments of $150,000
         are due  annually  beginning  March 1, 2000.  The other is due June 30,
         2010 and bears  interest  at 9%.  Principal  and  interest  payments of
         $11,104 are due monthly beginning April 1, 1997.

8.       Intangibles
         -----------

         Intangible  assets  are  stated  at  cost  and  principally   represent
         purchased customer accounts, noncompete agreements,  purchased contract
         agreements, and the excess of costs over the fair value of identifiable
         net  assets   acquired   ("Goodwill").   Goodwill  is  amortized  on  a
         straight-line  basis over 15 years and all other intangible  assets are
         amortized on a straight-line basis over the related estimated lives and
         contract periods,  which range from 3 to 15 years.  Purchased  customer
         accounts are records and files obtained from acquired  businesses  that
         contain  information  on  insurance  policies  and the related  insured
         parties that is essential to policy renewals.

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


8.       Intangibles (continued)
         -----------------------

         The carrying value of Goodwill and other intangible assets are reviewed
         periodically  for  impairment.   If  this  review  indicates  that  the
         intangible  assets will not be recoverable,  as determined based on the
         undiscounted  cash  flows of the  entity  acquired  over the  remaining
         amortization  period,  the Company's carrying value of the Goodwill and
         other intangible  assets will be reduced by the estimated  shortfall of
         cash flows.

9.       Loss and Loss Adjustment Expenses
         ---------------------------------

         The  liability for unpaid  claims  including  incurred but not reported
         losses is based on the  estimated  ultimate  cost of settling the claim
         (including  the effects of  inflation  and other  societal and economic
         factors),  using past  experience  adjusted for current  trends and any
         other factors that would modify past  experience.  These  estimates are
         subject  to the  effects  of trends  in loss  severity  and  frequency.
         Although  considerable  variability  is  inherent  in  such  estimates,
         management  believes  that the  reserves  for loss and loss  adjustment
         expenses are  adequate.  The  estimates  are  continually  reviewed and
         adjusted as necessary as experience develops or new information becomes
         known. Such adjustments are included in current operations. A liability
         for all costs expected to be incurred in connection with the settlement
         of unpaid claims (loss adjustment  expense) is accrued when the related
         liability for unpaid loss is accrued.  Loss adjustment expenses include
         costs  associated  directly with specific claims paid or in the process
         of  settlement,  such as legal and  adjusters'  fees.  Loss  adjustment
         expenses  also  include  other  costs that  cannot be  associated  with
         specific  claims but are  related to claims  paid or in the  process of
         settlement, such as internal costs of the claims function.

         The  Company  does  not  discount  its  reserves  for  losses  and loss
         adjustment  expenses.  The Company writes  primarily  surety  contracts
         which are of short duration.

         The Company does not consider  investment  income in  determining  if a
         premium deficiency relating to short duration contracts exists.

10.      Unearned Premiums
         -----------------

         Unearned  premiums are calculated  using the monthly pro rata basis for
         miscellaneous   bonds  and  contract  completion  date  or  anticipated
         contract completion date for contract bonds.

11.      Reinsurance
         -----------

         The Company assumes and cedes  reinsurance and  participates in various
         pools.  The  financial   statements  reflect  premiums,   benefits  and
         settlement  expenses,  and deferred policy  acquisition  costs,  net of
         reinsurance ceded. Amounts recoverable from reinsurers are estimated in
         a manner  consistent with the future policy benefit and claim liability
         associated with the reinsured policies.

<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


11.      Reinsurance (continued)
         -----------------------

         Accounts recoverable from reinsurers for unpaid losses are presented as
         an asset in the accompanying consolidated financial statements.

12.      New Accounting Standards
         ------------------------

         SFAS  No.  133,  Accounting  for  Derivative  Instruments  and  Hedging
         Activities is effective for all fiscal years  beginning  after June 15,
         2000.  SFAS No. 133, as amended,  establishes  accounting and reporting
         standards for  derivative  instruments,  including  certain  derivative
         instruments  embedded in other contracts,  and for hedging  activities.
         Under SFAS No. 133, certain contracts that were not formerly considered
         derivatives  now meet  the  definition  of a  derivative.  The  Company
         identified  one  product  that  meets the  definition  of a  derivative
         instrument as defined in SFAS No. 133. The  identified  derivative  was
         formerly  accounted  for as an  insurance  contract  within  the policy
         liabilities  for loss  and  loss  adjustment  expenses  account  in the
         consolidated  balance  sheet.  Effective  January  1, 2001 the  Company
         adopted  SFAS No.  133.  The  transition  adjustment  of  $600,000  was
         reclassified  from the policy  liabilities for loss and loss adjustment
         expenses account to a liability for derivative  instruments  account on
         the  consolidated  balance sheet at March 31, 2001. The increase in the
         derivative instruments account in the amount of $344,034 is included in
         losses  and loss  adjustment  expenses  on the  March 31,  2001  income
         statement.  Estimates  and  assumptions  were used in  determining  the
         valuation of derivative  instruments.  Such  estimates and  assumptions
         could  change in the future as more  information  becomes  known  which
         would effect the amounts reported and disclosed herein.

         In  assessing  the value of the  derivative  instruments,  the Company
         estimated  the  cash  flows  from  the  derivative  based  on the data
         obtained from its insurance  agency  regarding the  composition of the
         insured  portfolios and discount  factors  obtained from its actuaries
         which take into  account  lapse  rates and the  probability  of claims
         under the policy.  The Company  applied these factors to market values
         of the insured  portfolio's  as of December 31, 2000,  as adjusted for
         additions  to the  portfolio  during the first  quarter  of 2001.  The
         Company is in the process of obtaining an independent appraisal of the
         derivative  instruments  as of  March  31,  2001.  The  appraisal  may
         indicate that the value of the derivative  instruments is greater than
         the amount recorded in the March 31 financial statements,  and require
         the Company to record an additional loss to reflect that value.


<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


13.      Statutory Accounting Practices
         ------------------------------

         CCS  is  domiciled   in  Florida  and  prepares  its   statutory-basis
         consolidated   financial  statements  in  accordance  with  accounting
         practices prescribed or permitted by the Florida Insurance Department.
         "Prescribed"   statutory  accounting  practices  include  state  laws,
         regulations, and general administrative rules, as well as a variety of
         publications  of the National  Association of Insurance  Commissioners
         ("NAIC").  "Permitted"  statutory  accounting  practices encompass all
         accounting  practices  that are not  prescribed;  such  practices  may
         differ from state to state,  may differ from company to company within
         a  state,  and  may  change  in the  future.  In  1998,  the  National
         Association  of Insurance  Commissioner  adopted the  Codification  of
         Statutory   Accounting   Principles   (Codification)   for   insurance
         companies.  Codification,  which is intended to standardize regulatory
         accounting  and  reporting for the  insurance  industry,  is effective
         January 1, 2001. The Company  implemented  codification  at January 1,
         2001. On a statutory  accounting basis, CCS's underwriting  operations
         reported  income net of taxes of ($191,483)  for the three months ended
         March 31, 2001 and  $511,624  for the year ended  December  31,  2000.
         Statutory  surplus  (shareholders'  equity)  of these  operations  was
         $5,586,139  and $5,441,336 as of March 31, 2001 and December 31, 2000,
         respectively.

14.      Comprehensive Income
         --------------------

         The Company  adopted  the  provisions  of the SFAS No. 130,  "Reporting
         Comprehensive Income," in 1998.  Comprehensive income is defined as any
         change in equity from  transactions  and other events  originating from
         nonowner sources.  In the Company's case, those changes are principally
         comprised  of our  reported  net income and  changes in the  unrealized
         appreciation  and  depreciation  of  the  Company's  available-for-sale
         securities.   SFAS  No.  130  requires  that  the  Company  report  all
         components of comprehensive income. The following summaries present the
         components of our comprehensive  income, other than net income, for the
         three months ended March 31, 2001 and March 31, 2000, respectively.

                                                        Consolidated Statements
                                                        of Comprehensive Income
                                                        ------------------------
                                                            Three Months Ended
                                                                  March 31,
                                                             2001         2000
                                                        ------------------------
         Net income ....................................    $222,017    $438,674
         Other comprehensive income:
           Unrealized (depreciation) appreciation of
             available-for-sale securities arising
             during period .............................     (95,579)     38,007
           Less: reclassification adjustment for
                 gains included in net income ..........        --       213,308
                                                            --------    --------
         Comprehensive income ..........................    $126,438    $263,373
                                                            ========    ========


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Forward-looking Statement Disclosure
------------------------------------

All  statements,   other  than  statements  of  historical  facts,  included  or
incorporated by reference in this Form 10-Q which address activities,  events or
developments  which the Company expects or anticipates  will or may occur in the
future,  including  statements  regarding  the Company's  competitive  position,
changes  in  business   strategy  or  plans,   the  availability  and  price  of
reinsurance,  the Company's ability to pass on price increases, plans to install
the  Bond-Pro(R)  program  in  independent  insurance  agencies,  the  impact of
insurance laws and regulation,  the  availability of financing,  reliance on-key
management  personnel,  ability to manage  growth,  the  Company's  expectations
regarding the adequacy of current  financing  arrangements,  product  demand and
market  growth,  and other  statements  regarding  future plans and  strategies,
anticipated events or trends similar expressions concerning matters that are not
historical facts are forward-looking  statements.  These statements are based on
certain  assumptions and analysis made by the Company in light of its experience
and its perception of historical trends,  current conditions and expected future
developments   as  well  as  factors  it  believes   are   appropriate   in  the
circumstances.  However,  whether actual results and  developments  will conform
with the Company's  expectations and predictions is subject to a number of risks
and uncertainties  which could cause actual results to differ  significantly and
materially  from past results and from the  Company's  expectations.  All of the
forward-looking  statements  made in this  Form  10-Q  are  qualified  by  these
cautionary  statements  and there can be no assurance that the actual results or
development   anticipated   by  the  Company   will  be  realized  or,  even  if
substantially  realized  that  they will have the  expected  consequences  to or
effects on the Company or its business or operations.

The Company's  independent  accountants  have not performed an interim review of
the financial statements included in this Report. The Company intends to request
that the accountants complete such a review once an independent appraisal report
is obtained on the  derivative  instruments.  There can be no assurance that the
review will not cause the Company to adjust its financial statements as of March
31, 2001, for changes in the value of the derivative, or for other items.



<PAGE>


Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------

     The capacity of a surety company to underwrite insurance and reinsurance is
based on maintaining  liquidity and capital  resources  sufficient to pay claims
and expenses as they become due. Based on standards  established by the National
Association  of Insurance  Commissioners  (NAIC) and  promulgated by the Florida
Department of Insurance, the Company is permitted to write net premiums up to an
amount equal to three times its statutory surplus, or approximately  $16,300,000
at December 31, 2000.  Statutory  guidelines impose an additional  limitation on
increasing net written  premiums to no more than 33% of prior year's net written
premiums.  Under  these  guidelines,  the  Company  could  increase  net written
premiums by  approximately  $4,200,000  in the year 2001  subject to  risk-based
capital limitations.

     At March 31, 2001,  $25,033,107  of the Company's  total assets  calculated
based on generally accepted accounting  principles were comprised as follows: 47
percent  in cash and  investments  (including  accrued  investment  income),  36
percent in receivables and reinsurance  recoverables,  13 percent in intangibles
and deferred policy acquisition costs and 4 percent in other assets.

     The Company follows  investment  guidelines that are intended to provide an
acceptable return on investment while maintaining  sufficient  liquidity to meet
its obligations.

     Net cash  provided by (used in) operating  activities  was  $1,128,943  and
$47,474 for the three  months ended March 31, 2001 and 2000,  respectively.  Net
cash  provided by operating  activities  is  attributed  to a decrease in policy
liabilities and accruals which is offset by an increase in reinsurance  payables
and recoverables, accounts receivable and depreciation.

     Net cash provided by investing  activities  was  ($494,076) and $54,216 for
the three  months  ended  March 31,  2001,  and  2000,  respectively.  Investing
activities consist of purchases and sales and maturities of investments.

     As of March 31, 2001 the Company had sufficient  capital  resources to fund
foreseeable future requirements.


<PAGE>


Item 2.             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------           FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                              RESULTS OF OPERATIONS

            COMPARISON OF THREE MONTHS ENDED MARCH 31, 2001 AND 2000
            --------------------------------------------------------

     During the three months ended March 31, 2001,  net premium  income  totaled
$3,084,697  representing  a net  increase  of 14  percent  from that of the same
period  in 2000  ($2,710,887).  The  increase  is  attributed  to the  marketing
direction  of the  Company,  which  is to  penetrate  the  direct  market  while
decreasing  the  volume  of  reinsurance   premiums   assumed   through  Pooling
Agreements. During the first three months of 2001 as compared to the same period
in 2000,  direct premiums earned  increased  $660,522  (24%);  assumed  premiums
increased  $48,150  (7%) and ceded  premiums  increased  $334,862  (47%).  Ceded
premiums  increase as the volume of direct and assumed premiums  increased based
on their relationship under the Company's reinsurance treaties.

     Net  investment  income for the first quarter of 2001  remained  consistent
when  compared to the same  period in the first  quarter of 2000.  Other  income
increased  by $203,024  during the first three  months of 2001 when  compared to
2000. The increase is attributable to subsidiary company's earnings.

     During  the  three  months  ended  March 31,  2001 and 2000,  loss and loss
adjustment expenses increased to $882,392 from $750,096, respectively.  Incurred
loss and loss  adjustment  expenses  represent  the net reserve  increase  after
deduction of paid claims and fluctuates  based on premiums written and earned as
well as claims  incurred and paid.  The increase of $132,296 is consistent  with
the flow of premiums when comparing the first quarter of 2001 to the same period
of 2000.

     During the three  months  ended  March 31, 2001 and 2000,  amortization  of
deferred policy  acquisition costs increased to $1,096,621 in 2001 from $886,483
in 2000.  The  amortization  of deferred  policy  acquisition  costs increase is
attributed to the increase in premiums written and earned.

     Operating  expenses increased by $356,317 or 32% for the three months ended
March 31,  2001  when  compared  to the same  period in 2000.  The  increase  is
attributed to salary  expenses  $232,300;  legal fees $73,000;  travel  expenses
$26,100;  rent $11,700;  taxes,  license and fees $6,900 and other miscellaneous
expenses of $6,300. The increases are attributed to growth.

     Interest  expense  is  attributed  to the  interest  on  notes  payable  to
affiliates.

     Income  taxes in the  three  months  ending  March  31,  2001 and 2000 were
included based on the effective rate of 34%.



<PAGE>




Item 3.               QUANTITATIVE AND QUALITATIVE DISCLOSURES
------                          ABOUT MARKET RISK
                                -----------------

     The Company had approximately  $10.3 million of investments as of March 31,
2001. These investments  largely  consisted of state government  obligations and
had either  variable  rates of interest or stated  interest  rates  ranging from
4.75% to 8.5%.  The Company's  investments  are exposed to certain  market risks
inherent  with such assets.  This risk is mitigated by the  Company's  policy of
investing in securities  with high credit  ratings and  investing  through major
financial institutions with high credit ratings.

     The Company has notes payable of $2 million at an average  interest rate of
8.5%. The terms of the note agreement are such that pre-payment of such debt may
not be  advantageous  to the Company in the event that funds may be available to
the Company at a lower rate of interest.



<PAGE>

                           PART II - OTHER INFORMATION
                           ---------------------------


Item 1.       Legal proceedings
              -----------------

              None

Item 2.       Changed in securities
              ---------------------

              None

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
              --------------------------------

              (a)   None

              (b)   No reports on Form 8-K were filed during the quarter for
                    which this report is filed.


<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Company  has  duly  caused  this  report  to be  signed  on  its  behalf  by the
undersigned thereunto duly authorized.


                                    CUMBERLAND TECHNOLOGIES, INC.
                                    -----------------------------


Date:    May 22, 2001               By:  /s/  Joseph M. Williams
                                    --------------------------------------------
                                    Joseph M. Williams
                                    President and Chief Executive Officer
                                    (Principle Executive Officer)

Date:    May 22, 2001               By:  /s/  Carol S. Black
                                    --------------------------------------------
                                    Carol S. Black
                                    Secretary and Chief Financial Officer
                                    (Principle Accounting and Financial Officer)