U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(MarkOne)

[X]  QUARTERLY  REPORT  UNDER  SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 For the period ended October 31, 2000
                                               -----------------


[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
    ACT  OF  1934  [No  Fee  Required]  For  the  transition
    period  from ____  to _____


     Commission File number 0-21019
                            -------


                           INNOVATIVE MEDICAL SERVICES
                           ---------------------------
                 (Name of small business issuer in its charter)


                  California                          33-0530289
         ------------------------------    -------------------------------
        (State or other jurisdiction      (IRS Employer Identification No.)
       of incorporation or organization)



                 1725 Gillespie Way, El Cajon, California 92020
                 ----------------------------------------------
                    (Address of principal executive offices)


                                  619 596 8600
                            -------------------------
                            Issuer's telephone number

     Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter  period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No

     State the number of shares  outstanding of each of the issuer's  classes of
common equity as of the latest  practicable  date:  6,257,739 as of December 12,
2000.


<PAGE>



INNOVATIVE MEDICAL SERVICES

INDEX

PART 1. FINANCIAL INFORMATION
        Item 1. Financial Statements
                Balance Sheets as of July 31, 2000 and October 31, 2000
                Statements of Operations for the three months ended
                 October 31, 1999 and 2000
                Statements of Cash Flows for the three months ended
                 October 31, 1999 and 2000
       Item 2.  Management's Discussion and Analysis of Financial Condition and
                 Results of Operations

PART 2. OTHER INFORMATION

        Item 1. Legal Proceedings
        Item 2. Changes in Securities
        Item 3. Defaults Upon Senior Securities: None
        Item 4. Submission of Matters to a Vote of Security Holders: None
        Item 5. Other information
        Item 6. Exhibits and Reports on Form 8-K
        Signatures







The interim financial statements include all adjustments which in the opinion of
     management are necessary in order to make the financial statements not
                                  misleading.


<PAGE>
Item 1

<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS

------------------------------------------------------------------------------------------------
                                                                 (Unaudited)
                                                                 October 31           July 31
ASSETS                                                               2000               2000
                                                             ----------------   ----------------
Current Assets
<S>                                                               <C>             <C>
      Cash and cash equivalents                                   $ 614,440       $ 1,121,316
      Restricted cash                                               207,923           204,887
      Accounts receivable, net of allowance for doubtful
          accounts of $ 225,000                                     305,657           411,322
      Notes receivable                                              233,321           226,729
      Inventories                                                   888,779           796,136
      Prepaid expenses                                              101,789            33,975
                                                                   --------           -------
          Total current assets                                    2,351,909         2,794,365
                                                                 ----------         ---------

Property, Plant and Equipment

      Property, plant and equipment                               1,009,462         1,056,252
                                                                 ----------         ---------
          Total property, plant and equipment                     1,009,462         1,056,252
                                                                 ----------         ---------
Noncurrent Assets
      Deposits                                                        8,127            13,083
      Patents and license                                           536,065           498,181
      Goodwill                                                      248,256           250,889
      Other intangible assets                                       342,000           344,250
      Deferred acquisition costs                                    403,694           202,542
                                                                   --------           -------
          Total noncurrent assets                                 1,538,143         1,308,946
                                                                 ----------         ---------

      Total assets                                              $ 4,899,514       $ 5,159,563
                                                                ============      ===========

LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities

      Accounts payable                                            $ 413,829         $ 308,812
      Accrued liabilities                                            55,994            36,880
      Notes payable                                                 196,009           210,592
                                                                   --------           -------

          Total current liabilities                                 665,831           556,284
                                                                   --------           -------

Minority interest payable                                            46,726            61,697
                                                                    -------            ------

Stockholders' Equity
      Class A common stock, no par value: authorized
          20,000,000 shares, issued and outstanding
           6,077,068 at October 31, 2000 and
           5,942,903 at July 31, 2000                            10,103,805        10,018,873
      Class A warrants: issued and outstanding 3,686,000
          warrants                                                  108,750           108,750
      Accumulated deficit                                        (6,025,597)       (5,586,041)
                                                                 -----------      -----------
          Total stockholders' equity                              4,186,958         4,541,582
                                                                 ----------         ---------

      Total liabilities and stockholders' equity                $ 4,899,514       $ 5,159,563
                                                               ============       ===========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
-----------------------------------------------------------------------------------------
                                                              For the Three Months Ended
                                                                      October 31
                                                                  2000          1999
                                                              ------------   -----------
<S>                                                            <C>           <C>
Net sales                                                      $ 366,126     $ 904,888
Cost of sales                                                    164,077       410,213
                                                                --------       -------

Gross profit                                                     202,049       494,675
                                                                --------       -------

Selling expenses                                                 174,518       112,704
General and administrative expenses                              445,473       263,321
Research and development                                          50,985        38,603
                                                                 -------       -------

Total operating costs                                            670,976       414,628
                                                                --------       -------

Operating income (loss)                                         (468,927)       80,047
                                                                ---------       ------
Other income and (expense):
Interest income                                                   14,599         1,078
                                                                  ------        ------

Total other income (expense)                                      14,599         1,078
                                                                  ------        ------
Income (loss) before income taxes, minority
     Interest in subsidiary operations and
     change in accounting principle                             (454,328)       81,125

Federal and state income taxes                                       200           200
                                                                 -------        ------
Income (loss) before minority interest in subsidiary
     operations and change in accounting principle              (454,528)       80,925

Minority interest in subsidiary operations                        14,972             -
                                                                 -------       ------
Net income (loss) before cumulative
     change in accounting principle                             (439,556)       80,925
Cumulative effect of change
     in accounting principle                                           -        79,896
                                                                 -------       -------
Net income (loss)                                              $(439,556)   $  160,821
                                                              ===========   ==========
Net income (loss) per common share before change
     in accounting principle (basic)                           $   (0.07)   $     0.02
Cumulative effect of change
     in accounting principle                                           -          0.02
                                                                  ------         -----
Net income (loss) per common share (basic)                     $   (0.07)   $     0.04
                                                                ========      ========
Net income (loss) per common share before change
     in accounting principal (diluted)                         $   (0.07)   $     0.01
Cumulative effect of change
     in accounting principle                                           -          0.01
                                                                  ------        ------
Net income (loss) per common share (diluted)                   $   (0.07)   $     0.02
                                                                ========      ========


                                                             Three Months
                                                                Ended       Year Ended
                                                             October 31      July 31
CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICITS                 2000           2000

Balance, beginning of period                                $ (5,586,041)  $(3,840,610)

Net income (loss)                                               (439,556)   (1,745,431)
                                                                ---------   -----------
Balance, end of period                                      $ (6,025,597)  $(5,586,041)
                                                            ============= =============
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
------------------------------------------------------------------------------------------------------------

                                                                           For the Three Months Ended
                                                                                  October 31
                                                                           2000                 1999
                                                                     -----------------   -------------------

Cash flows from operating activities
<S>                                                                     <C>                <C>
       Net income (loss)                                                $ (439,556)        $ 160,821

       Adjustments  to  reconcile  net income to net cash
       provided by operating activities:
           Amortization                                                     21,192                 -
           Depreciation                                                     47,500            42,824
           Minority interest in subsidiary operations                      (14,972)                -
       Changes in assets and liabilities:
           (Increase) decrease in restricted cash                           (3,036)            4,113
           (Increase) decrease in accounts receivable                      105,665          (311,123)
           (Increase) decrease in notes receivable                          (6,592)             (452)
           (Increase) decrease in prepaid expense                          (67,814)          (28,481)
           (Increase) decrease in inventory                                (92,644)          (56,861)
           (Increase) decrease in deposits                                   4,956            (6,508)
           (Increase) decrease in patent and licenses                      (37,884)           (3,000)
           (Increase) decrease in deferred acquisition costs              (201,152)                -
           (Increase) decrease in goodwill                                   2,633             1,633
           (Increase) decrease in intangible assets                          2,250             2,250
           Increase (decrease) in accounts payable                         105,017            88,353
           Increase (decrease) in accrued liabilities                       19,114           (29,980)
                                                                        ----------        -----------

                Net cash provided (used) by operating
                      activities                                          (555,322)         (136,751)
                                                                        ----------        -----------

Cash flows from investing activities
       Purchase of property, plant and equipment                           (21,903)         (201,107)
                                                                        ----------        -----------

                Net cash (used) in investing activities                    (21,903)         (201,107)
                                                                        ----------        -----------
Cash flows from financing activities
       Increase (decrease) in notes payable                                (14,583)          121,300
       Proceeds from sale of common stock                                   84,932           216,750
                                                                        ----------        -----------

                Net cash provided by financing activities                   70,349           338,050
                                                                        ----------        -----------
                Net increase (decrease) in cash and cash
                      equivalents                                         (506,876)              192

Cash at beginning of period                                              1,121,316            22,056
                                                                        ----------        -----------
Cash at end of period                                                    $ 614,440         $  22,248
                                                                        ==========        ==========

Interest paid                                                            $   5,462         $  16,299
Taxes paid                                                               $     800         $     800

</TABLE>



<PAGE>
NOTES TO FINANCIAL STATEMENTS

Note 1. Financial Statements

          The  financial  statements  included  herein  have  been  prepared  by
          Innovative  Medical Services (the Company) without audit,  pursuant to
          the rules and  regulations of the Securities and Exchange  Commission.
          Certain information and footnote  disclosures normally included in the
          financial  statements  prepared in accordance with generally  accepted
          accounting  principles  have been  condensed  or omitted as allowed by
          such rules and regulations,  and Innovative  Medical Services believes
          that the disclosures  are adequate to make the  information  presented
          not  misleading.  It is suggested that these  financial  statements be
          read  in  conjunction  with  the  July  31,  2000  audited   financial
          statements  and  the  accompanying  notes  thereto.  While  management
          believes  the  procedures   followed  in  preparing   these  financial
          statements  are  reasonable,  the  accuracy of the amounts are in some
          respects  dependent upon the facts that will exist and procedures that
          will be accomplished by Innovative Medical Services later in the year.
          The results of operations for the interim  periods are not necessarily
          indicative of the results of operations for the full year.

Note 2. Stock Dividend

          On October 26, 2000  Innovative  Medical  Services  announced that the
          Board of Directors  voted to declare a dividend in kind of  Innovative
          Medical  Services'  common  stock.  This  common  stock  dividend  was
          declared and distributed in lieu of the previously  announced dividend
          of  Nutripure.com   shares.  The  Company  distributed  one  share  of
          Innovative  Medical Services' common stock for every fifty shares held
          of record on November 6, 2000,  with  fractional  shares rounded up to
          the nearest whole share, for a total of 121,961 shares.

          In December 1999,  Innovative  Medical  Services formed a wholly owned
          subsidiary,   Nutripure.com,   to  capitalize  on  internet   commerce
          opportunities  focusing  on health  and  wellness.  In  January  2000,
          Innovative   Medical   Services   declared  a  dividend   in  kind  of
          Nutripure.com  common  stock as the Company  began the process to spin
          off  Nutripure.com  as a separate public company.  The record date and
          distribution  date  were  to  be  set  following   completion  of  the
          registration  of   Nutripure.com   as  a  reporting  issuer  with  the
          Securities and Exchange  Commission.  During the last several  months,
          however,  adverse market conditions for solely internet-based ventures
          have  eroded  Management's  confidence  in the  viability  of a public
          market  for  Nutripure.com  common  stock.  Therefore,  the  Board has
          amended its declaration of a  Nutripure.com  dividend to a dividend of
          Innovative  Medical  Services'  common stock.  The Company will retain
          Nutripure.com as an operating  division of Innovative Medical Services
          in order to minimize the substantial administrative expense associated
          with launching and operating a public company.

Note 3. Subsequent Events

          In November of 2000 Innovative  Medical Services  acquired 100% of the
          stock of  ETIH2O,  Inc.,  a  Florida  corporation,  for  approximately
          $228,000.  The  transaction  was recorded using the purchase method of
          accounting.  The Company  intends to place the assets of ETIH2O into a
          newly  formed  Nevada  corporation  of similar  name and  dissolve the
          Florida corporation. ETI-H2O, a privately held technology corporation,
          developed   Axenohl  and  previously   manufactured   the  product  in
          cooperation  with NVID.  ETI-H2O is an industry leader in research and
          development  of  varied  water   treatment   applications,   including
          electronic RF scale control,  copper/silver  ionization and filtration
          technologies.


<PAGE>

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

The following  discussion and analysis  should be read in  conjunction  with the
audited and unaudited financial statements of the Company.

OVERVIEW

Innovative   Medical   Services  (the   Company)  is  the  nation's   leader  in
pharmaceutical  water  purification.  The  Company has  expanded  from its niche
pharmacy  market  into  other,  broader  markets  with new  products,  including
residential and commercial water filtration systems, health and wellness-related
retail merchandise, e-commerce products, and silver ion bioscience technologies.

The Fillmaster(R)  pharmaceutical  water purification,  dispensing and measuring
products  include  the  Pharmapure(R)  water  purification  system,  the FMD 550
dispenser, the patented Fillmaster 1000e computerized dispenser and the patented
Scanmaster(TM)  bar code  reader.  The  Company  also  markets  proprietary  NSF
certified replacement filters for the Fillmaster Systems.

The Company's "Pharmacist Recommended"  Nutripure(R) line of water treatment and
filtration  systems  includes  the  Nutripure  3000S-Series   whole-house  water
softening systems, the Nutripure Elite reverse osmosis point-of-use systems, the
Nutripure  2000  countertop  water  filtration  system and the  Nutripure  Sport
filtered sport bottle. The Company distributes its various Nutripure products in
several ways, including retail sales, catalogue placement,  business-to-business
sales, internet promotion and in-home sales presentations.

The Company,  through its  subsidiary  Nutripure.com(R),  operates an e-commerce
health supersite, which provides consumers a wide variety of vitamins, minerals,
nutritional supplements,  homeopathic remedies and natural products. In addition
to  merchandise,   the  supersite  offers   comprehensive  health  and  wellness
information in an easy-to-access, intuitive reference format.

Innovative Medical Services has obtained  worldwide  manufacturing and marketing
rights for advanced silver ion  technologies.  Potential  applications for these
products include municipal and point-of-use/point-of-entry water treatment, food
processing,  personal  disinfecting  retail products,  and commercial and retail
hard surface disinfecting products. In addition, these technologies may prove to
be revolutionary  in the healthcare  market for treatment of including human and
animal  infections  and  wounds,  and  for  and  disinfecting   applications  in
hospitals,  clinics,  surgical  centers  and other  medical  and health  related
facilities.

In the first  quarter of fiscal year 2001,  Innovative  Medical  Services  began
realizing  revenues from the new Nutripure water treatment  dealer program.  The
dealer base grows  steadily,  and  Management  believes  that the  program  will
produce  notably  increased  revenues  and earnings in the coming  quarters.  In
addition to the ongoing  expansion of the water dealer program,  retail products
currently in distribution are  experiencing  increased  growth,  and the Company
expects to see revenue  from new  products and new  distribution  channels  this
year.  The Company  recently  received  notice from Wal-Mart that the rollout of
Nutripure 2000 will continue to additional stores in the coming year.

Regarding silver ion technologies,  regulatory approval is a threshold event for
the Company's commercial launch of Axenohl and related products. EPA approval of
Axenohl  for  use  as a hard  surface  disinfectant  is  believed  imminent.  If
approvals are received,  Management expects revenues from Axenohl to rapidly and
substantially develop.


<PAGE>
RESULTS OF  OPERATIONS  FOR THE THREE MONTHS ENDED OCTOBER 31, 2000 VERSUS THREE
MONTHS ENDED OCTOBER 31, 1999

Total  revenues of $366,100 in the first quarter ended October 31, 2000 were 60%
lower than the $904,900 in revenues  reported for the same quarter ended October
31, 1999. Fillmaster Purification System sales in the 2000 quarter were $239,400
and  replacement  filter sales were  $121,700.  In the 1999 quarter,  Fillmaster
Purification  System  sales were  $609,100  and  replacement  filter  sales were
$192,300.  Management  believes  the  decline in  Fillmaster  revenues is due to
multiple  factors,  including the fact that the market for pharmacy  products is
maturing in that there is a  decreasing  number of  pharmacy  chains that do not
have water  filtration  products,  and that the Company has sold systems to most
major chains.  The focus for further Fillmaster sales will be on incremental and
upgrade sales to individual  pharmacies within current chain accounts,  although
the Company is still actively  pursuing  Fillmaster  sales to remaining  chains.
Management  expects to close such volume sales to new chains in the coming year,
and,  as in prior  years,  those  sales  will  result in  spikes  in  Fillmaster
revenues.  The Company works to retain  customers with its Customer Service Plan
2000, a multi-year service and warranty contract (please see "Principal Products
and Markets).

Gross  profit in the most recent  quarter was  $202,000  versus  $494,700 in the
year-earlier  quarter.  Gross  profit  percentage  of 55% in  the  2000  quarter
remained unchanged from the gross profit percentage in the 1999 quarter.

Net loss for the quarter ended October 31, 2000 was $439,600 versus a net income
of  $160,800  for the same  quarter  in 1999.  The  decreased  income was due to
decreased sales and to an increase in General and Administrative expenses as the
Company positions for anticipated rapid growth activity related to new ventures,
including expanded retail  distribution of the Nutripure 2000 home water system,
Nutripure.com.  and the new silver ion technologies.  General and Administrative
expenses  increased  $182,200 from $263,300 in fiscal 1999 to $445,500 in fiscal
2000,  $75,100 of these expenses were related to  Nutripure.com,  a wholly owned
subsidiary  incorporated in the state of Nevada in December 1999.  Nutripure.com
is an e-commerce web supersite  providing  consumers a wide variety of vitamins,
minerals, nutritional supplements, homeopathic remedies and natural products. In
addition to  products,  the website  offers  comprehensive  health and  wellness
information in an easy-to-access,  intuitive  reference format. The website also
presents the Nutripure line of water filtration systems.

Throughout the quarter,  Innovative  Medical  Services  focused its resources on
expanding the current and future scope of business and related growth potential.
The Company's increased selling expenses and general and administrative expenses
reflect the Company's transition from a niche market company that provides water
purification  equipment to pharmacies  to an  international  company  containing
several divisions to manage new products and programs in consumer and commercial
water  treatment,  direct-to-consumer  e-commerce  and  retail  distribution  of
multiple product lines.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended October 31, 2000 the Company's  current  assets to
liabilities ratio decreased from 5.02 to 3.53. Current assets decreased $442,500
from  $2,794,400 to  $2,351,900.  Current  liabilities  increased  $109,600 from
$556,300 to $665,800.

Cash flows used by  operations  were $555,30 in the first three months of fiscal
year 2000.  Cash flows used by  operations  were $136,800 for the same period in
1999.  For those  periods,  cash flows used in  investing  activities  included,
respectively,  $21,900 and $201,100 for the purchase of machinery  and equipment
and for  leasehold  improvements.  Financing  activities  included a decrease of
$14,600 in notes  payable in the  current  quarter  compared  to an  increase of
$121,300 in the prior quarter ending October 31, 1999. The Company also received
$84,900 from the sale of common stock resulting from the exercising of employees
options.
<PAGE>
The total  decrease in cash and cash  equivalents  for the quarter ended October
31, 2000 was $506,900 as compared to an increase of cash and cash equivalents of
$200 for the same period in the prior fiscal year.


<PAGE>


PART 2      OTHER INFORMATION

ITEM 1
LEGAL PROCEEDINGS

The  following  is  an  update  of  developments  in  the  previously  disclosed
litigation  involving the Company filed in the Circuit Court of Pinellas County,
Florida by Zedburn  Corporation,  against  the Company for breach of contract in
October  1997.  The Company  has filed  counterclaims  based upon the  Racketeer
Influenced  and  Corrupt  Organization  (RICO) Act against  Mr.  Reitz,  Zedburn
Corporation,  Capital Development Group, Steven Durland and other defendants. It
is the  Company's  position  that Mr. Reitz and others  perpetrated  a scheme to
defraud the Company of cash fees and  securities  in connection  with  purported
services  of  arranging a public  offering of the  Company's  common  stock.  In
October  1997,  Mr.  Reitz and Zedburn  filed for  protection  under the Federal
bankruptcy laws. In August 1998, Mr. Reitz voluntarily  dismissed his bankruptcy
and as a result  thereof the Company has named Mr.  Reitz as a defendant  to its
counterclaims.

The Company believes that the defendants had perpetrated similar schemes against
other  parties.  The  Company  also  believes  it  has  substantially  completed
discovery and complied compelling evidence to prove its claims.

Several of the Defendants filed Motions to Dismiss the Company's  counterclaims.
A hearing on the  Motions  was held on October 1, 1998.  Certain of the  Motions
were granted pending the Company's  amendment of its  Counterclaim.  The Company
amended  its  Counterclaims  in  accordance  with the judge's  rulings.  Certain
Defendants filed second Motions to Dismiss the amended Counterclaims.  A hearing
on these latest  motions was held in March 1999,  before a different  judge than
the judge who ruled on the first motions. On April 20,1999,  Orders were entered
granting the Defendants' Motions to Dismiss.  However these Orders did not state
the basis for the Orders, nor was the Company's legal counsel provided notice of
the  Orders  or a copy of the new  judge's  correspondence  offering  a  "formal
ruling" upon request.  In May 1999 the Company filed an Appeal of the Orders and
Motions  for  Reconsideration  based upon  inconsistency  of the Orders with the
previous  judge's  rulings  and the lack of notice to the  Company.  The Company
believes  that its Appeal and  Motions  have merit and will be  granted.  In any
event the Company  intends to pursue a trial as soon as possible. As of December
12, 2000, no ruling has been received on the Company's Appeal.

The  Company  has  neither  accrued  a  liability  in its  financial  statements
regarding this litigation nor disclosed the matter in the footnotes thereof. The
Company  has not done so because it does not  believe  there is any merit to Mr.
Reitz's claims and that the likelihood that the Company will realize a loss from
these matters is believed remote. In addition,  the Company believes that in the
unlikely event that the Company settles, the amount of any such settlement would
not be material to the Company's financial statements.

The Company has filed an action  against John Woodard,  former Vice President of
Sales,  in Superior  Court in the State of California in April 2000. The Company
has alleged Mr. Woodard  violated his  non-competition/non-disclosure  agreement
and  provided  proprietary  information,  including  information  regarding  the
Company's  Fillmaster  line of products and  Fillmaster  customer base, to Fresh
Water  Systems,  Inc.  The Company is seeking  monetary  damages and  injunctive
relief.

The Company has also filed an action against Fresh Water Systems,  Inc.,  Steven
Norvell,  Brian  Folk  and  Eric  Norvell  in  Superior  Court  in the  State of
California. The action was filed in August 2000 and amended in October 2000. The
Company   alleges   Fresh  Water   Systems  and  it's   officers  and  directors
misappropriated  trade secrets of the Company  obtained from former employees of
the Company, engaged in unfair competition in violation of the California Unfair
Practices  Act,  tortious  interference  with  contractual  relations,  tortious
interference  with  prospective  business  advantage,  fraud,  trade  libel  and
conspiracy  with  regard  to the  Fillmaster  line of  products  and  Fillmaster
customer base. The Company is seeking monetary damages and injunctive relief.
<PAGE>
The Company filed an action against Eckerd  Corporation in Superior Court in the
State of California in August 2000. The Company  alleges Eckerd  Corporation has
not paid for Fillmaster  products  ordered by and shipped to Eckerd  pharmacies.
The Company  seeks  monetary  damages not less than  $170,000  plus interest and
attorney's fees.

ITEM 2.
CHANGES IN SECURITIES

In November 2000, the Company issued 94,340 shares of common stock at $2.625 per
share for $1,896,500 in a private placement to five investors.

In November  2000,  the Company  issued  31,240  shares of common stock to eight
investors  in exchange  for their shares in ETI H2O,  Inc. An  additional  3,143
shares were issued to a single investor in satisfaction of debt of ETI H2O, Inc.

Also in November 2000,  the Company issued 121,961 shares in a dividend  payment
to holders of Innovative Medical Services common stock. The Company  distributed
one share of  Innovative  Medical  Services  common stock for every fifty shares
held of record on November 6, 2000

With  respect to the sales  made,  the  Company  relied on  Section  4(2) of the
Securities Act of 1933, as amended.  No advertising or general  solicitation was
employed in offering the  securities.  The  securities  were  offered  solely to
accredited  or  sophisticated  investors  who were  provided  all of the current
public information available on the Company.


<PAGE>


ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
Not applicable.

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.

ITEM 5.
OTHER INFORMATION
Not applicable.

ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
         (A)  EXHIBITS
              EXHIBITS DESCRIPTION
                11   Statement re: computation of per share earnings
                27   Financial data schedule
(B)      REPORTS ON FORM 8-K
                  None

SIGNATURES

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

INNOVATIVE MEDICAL SERVICES
(Registrant)

By:  /s/ Michael L. Krall
-------------------------------
Michael L. Krall, President/CEO

By: /s/ Gary Brownell
--------------------------------------
Gary Brownell, Chief Financial Officer


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