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

                                   Form 10-QSB

(Mark One)

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 For the period ended January 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: 5,152,117 as of March 14, 2000.


<PAGE>


INNOVATIVE MEDICAL SERVICES

INDEX

PART 1.  FINANCIAL INFORMATION

         Item 1.   Financial Statements

                   Balance Sheets as of July 31, 1999 and January 31, 2000
                   Statements  of  Operations  for the three  months  ended
                   January 31, 1999 and 2000  Statements  of Cash Flows for
                   the three months ended January 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

<PAGE>


ITEM 1


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



<TABLE>
<CAPTION>

INNOVATIVE MEDICAL SERVICES

CONSOLIDATED BALANCE SHEETS


                                                           (Unaudited)
                                                           January 31           July 31
ASSETS                                                        2000                1999
                                                          --------------------------------
<S>                                                       <C>                <C>
Current Assets

     Cash and cash equivalents                            $     79,400       $     22,056
     Restricted cash                                           203,611            205,574
     Accounts receivable, net of allowance for doubtful
         accounts of $ 17,850                                1,015,258            790,166
     Notes receivable                                          406,677            339,524
     Inventories                                               716,800            719,972
     Prepaid expenses                                           50,324             37,078
                                                          -------------      -------------

         Total current assets                                2,472,069          2,114,370
                                                          -------------      -------------

Property, Plant and Equipment

     Property, plant and equipment                           1,067,846            805,523
                                                          -------------      -------------

         Total property, plant and equipment                 1,067,846            805,523
                                                          -------------      -------------

Noncurrent Assets

     Deposits                                                   13,083              6,575
     Patents and license                                       493,950            425,550
     Goodwill                                                  253,156            256,422
     Other intangible asstes                                   348,750            353,250
     Deferred acquisition costs                                 53,851             53,851
                                                          -------------      -------------

         Total noncurrent assets                             1,162,790          1,095,648
                                                          -------------      -------------

     Total assets                                         $  4,702,705       $  4,015,541
                                                          -------------      -------------

LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities

     Accounts payable                                     $    376,992          $ 594,948
     Accrued liabilities                                         9,602             43,068
     Notes payable                                             425,538            446,067
                                                          -------------      -------------

         Total current liabilities                             812,131          1,084,083
                                                          -------------      -------------

Stockholders' Equity

     Class A common stock, no par value: authorized
         20,000,000 shares, issued and outstanding
          4,704,117 at January 31, 2000 and
          4,392,242 at July 31, 1999                         7,435,093          6,663,318
     Class A warrants: issued and outstanding 3,687,500
         warrants                                              108,750            108,750
     Accumulated deficit                                    (3,653,268)        (3,840,610)
                                                          -------------      -------------

         Total stockholders' equity                          3,890,575          2,931,458
                                                          -------------      -------------

     Total liabilities and stockholders' equity           $  4,702,705       $  4,015,541
                                                          =============      =============
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

INNOVATIVE MEDICAL SERVICES

CONSOLIDATED STATEMENTS OF INCOME (Uuaudited)

                                                           For the Six Months Ended             For the Three Months Ended
                                                                  Jaunuary 31                          Jaunuary 31
                                                              2000              1999                2000               1999
                                                          ---------------------------------------------------------------------
<S>                                                       <C>                <C>                  <C>                <C>
Net sales                                                 $ 1,551,745        $ 1,563,498          $  646,857         $  767,979
Cost of sales                                                 575,053            553,920             164,840            271,631
                                                          -------------      -------------        ----------         ----------
Gross profit                                                  976,692          1,009,578             482,017            496,348
                                                          -------------      -------------        ----------         ----------

Selling expenses                                              258,430            187,772             145,726            116,466
General and administrative expenses                           488,909            447,705             290,824            179,067
Research and development                                       44,116             84,939               5,513             46,902
                                                          -------------      -------------        ----------         ----------
                                                                    -
Total operating costs                                         791,455            720,416             442,063            342,435
                                                          -------------      -------------        ----------         ----------

Operating income (loss)                                       185,237            289,162              39,954            153,913
                                                          -------------      -------------        ----------         ----------
Other income and (expense):
Interest income                                                 2,504              5,381               1,426              2,688
                                                          -------------      -------------        ----------         ----------

Total other income (expense)                                    2,504              5,381               1,426              2,688
                                                          -------------      -------------        ----------         ----------

Income (loss) before income taxes                             187,741            294,543              41,380            156,601
Federal and state income taxes                                    400                400                 200                200
                                                          -------------      -------------        ----------         ----------
Net income (loss)                                         $   187,341        $   294,143          $   41,180         $  156,401
                                                          =============      =============        ==========         ==========


Net income (loss) per common share (basic)                $     0.04         $     0.07           $    0.01          $    0.04
                                                          =============      =============        ==========         ==========
Net income (loss) per common share (diluted)              $     0.02         $     0.04           $    0.01          $    0.02
                                                          =============      =============        ==========         ==========
</TABLE>



<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICITS

                                                                                                  Six Months
                                                                                                    Ended           Year Ended
                                                                                                  January 31       Ended July 31
                                                                                                     2000               1999
                                                                                                 -------------------------------
<S>                                                                                              <C>               <C>
Balance, beginning of period                                                                     $(3,840,610)      $ (4,101,330)

Net income (loss)                                                                                    187,341            260,720
                                                                                                 ------------      -------------
Balance, end of period                                                                           $(3,653,269)      $ (3,840,610)
                                                                                                 ============      =============
</TABLE>

<PAGE>


<TABLE>
<CAPTION>


INNOVATIVE MEDICAL SERVICES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                                      For the Six Months Ended
                                                                              January 31
                                                                ---------------------------------
                                                                     2000                1999
                                                                -------------         -----------
<S>                                                             <C>                   <C>
Cash flows from operating activities
      Net income (loss)                                         $   187,341           $  294,143
      Adjustments to reconcile net income to net cash
      provided by operating activities:
           Depreciation                                               67,301              70,550
      Changes in assets and liabilities:                                                    -
           (Increase) decrease in restricted cash                      1,963               2,641
           (Increase) decrease in accounts receivable               (225,092)           (442,744)
           (Increase) decrease in notes receivable                   (67,153)            (18,161)
           (Increase) decrease in prepaid expense                    (13,245)            (12,545)
           (Increase) decrease in inventory                            3,172            (203,716)
           (Increase) decrease in deposits                            (6,508)             (4,450)
           (Increase) decrease in patent and licenses                (68,400)           (347,271)
           (Increase) decrease in deferred acquisition costs            -              1,051,422
           (Increase) decrease in goodwill                             3,267            (261,322)
           (Increase) decrease in intangible assets                    4,500            (360,000)
           Increase (decrease) in accounts payable                  (217,957)             49,999
           Increase (decrease) in accrued liabilities                (33,467)            (41,611)
                                                                -------------         -----------
                                                                                            -
                Net cash provided (used) by operating                                       -
                     activities                                     (364,278)           (223,065)
                                                                -------------         -----------

Cash flows from investing activities
      Purchase of property, plant and equipment                     (329,624)            (87,539)
                                                                -------------         -----------

                Net cash (used) in investing activities             (329,624)            (87,539)
                                                                -------------         -----------

Cash flows from financing activities
      Increase (decrease) in notes payable                           (20,529)            257,216
      Proceeds from sale of common stock                             771,775              24,015
                                                                -------------         -----------

                Net cash provided by financing activities            751,246             281,231
                                                                -------------         -----------

                Net increase (decrease) in cash and cash
                     equivalents                                      57,344             (29,373)

Cash at beginning of period                                           22,056              48,250
                                                                -------------         -----------

Cash at end of period                                           $     79,400          $   18,877
                                                                =============         ===========

Interest paid                                                   $     35,514          $    4,807
Taxes paid                                                      $        400          $      400

</TABLE>


<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),  based in El  Cajon,  California,
markets unique water  treatment and  disinfecting  solutions to a broad range of
customers, including pharmaceutical, healthcare and consumer markets.

The Company is the nation's leader in  pharmaceutical  water  purification.  The
Company's cornerstone products have been the Fillmaster(R),  Fillmaster(R) 1000e
and Scanmaster(TM)  water  purification,  measuring and dispensing  technologies
used in pharmacies to reconstitute  oral antibiotic  prescriptions.  The Company
markets  proprietary  filters for the aforementioned  products,  thereby gaining
another significant source of revenues and cash flow.

Innovative  Medical  Services  has also  entered  the  consumer  market with its
Nutripure(R) line of residential drinking water systems, including the Nutripure
Elite  reverse  osmosis water system  available as either a convenient,  compact
unit easily installed beneath the sink, or as an attractive countertop appliance
requiring no  installation.  Brand  recognition  for the  Nutripure  products is
driven by the Nutripure 2000 countertop water filtration system.  Nutripure 2000
competes with PUR(R),  Brita(R) and Culligan(R)  products,  delivering  superior
product quality and capacity to consumers.

The  Company  has  licensed   silver  ion  water   treatment  and   disinfecting
technologies for the healthcare market, including hospitals,  clinics,  surgical
centers,  dentists' and doctors'  offices and other  medical and health  related
facilities.  Innovative  Medical  Services has also secured rights to market the
Axenohl(TM) disinfectant technology to the healthcare, food processing,  dental,
point-of-use and point-of-entry drinking water markets.

During the second  quarter of the fiscal year, the Company made great strides in
three new  markets  which  should  create  significant  quantum  growth  for the
Company:  1) Expansion of the Company's online retailing  initiative through the
addition of vitamins and supplements to the Company's  existing product line; 2)
Licensing  and  marketing of patented  ionic water  treatment  and  disinfecting
technologies;  and 3) Retail rollout of the Nutripure  2000CT  countertop  water
filtration system.

In February,  Innovative Medical Services launched Nutripure.com:  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 will also present the
Nutripure line of water filtration systems.

During  the  quarter,  the  Company  formed  Nutripure.com  as  a  wholly  owned
subsidiary and declared a dividend in kind of Nutripure.com  shares.  Holders of
Innovative Medical Services Common Stock will receive one share of Nutripure.com
Common Stock for each ten shares of  Innovative  Medical  Services  Common Stock
held as of a record date to be specified.  The record date and distribution date
for  the  dividend  will  promptly  follow  completion  of the  registration  of
Nutripure.com as a reporting issuer with the Securities and Exchange Commission.
A registration statement on Form 10SB relating to these securities will be filed
with  the  SEC  in  March,   pending   completion  of  the  required   audit  of
Nutripure.com.

Also during the quarter  Innovative  Medical  Services  entered  into  licensing
agreements  for several  ionic water  treatment and  disinfecting  technologies.
Innovative Medical Services expects to generate

<PAGE>


immediate  revenues from sales of RMS technology in the hospital  market because
the system solves a very serious problem in hospital  infrastructures.  Hospital
water  systems  can  harbor  bacteria,  including  Legionella  --  the  bacteria
responsible  for  Legionnaires'  disease,  which can be deadly to patients  with
compromised immune systems. The RMS integrates with a hospital's water system to
control and eliminate bio-film buildup. Treatment of hospital water could reduce
or  eliminate  patient  infections  and death  resulting  from  Legionella,  and
national attention has focused on Legionnaires'  disease as a critical threat to
hospital patients.

Axenohl  is  a  patent-pending,   non-toxic  aqueous  disinfectant.  Based  upon
proprietary ionization  stabilization  technology,  Axenohl does not include the
use of traditional  disinfectants  such as quaternary  ammonium salts,  phenols,
glutaraldehyde, chlorine or bromine compounds. Axenohl enhances the disinfection
properties  of halogens  (chlorine) at reduced  levels and is a cost  effective,
stand  alone  alternative  to  halogens  in  many  markets  where   conventional
disinfection methodologies are employed. Innovative Medical Services will market
Axenohl to the medical,  dental and food  processing  markets in addition to the
commercial  and  consumer  drinking  water  markets  in  conjunction  with  IMS'
Nutripure line of water treatment systems.

The Company  continues its marketing  campaigns to expand into new markets while
pursuing development of future products.


RESULTS OF  OPERATIONS  FOR THE THREE MONTHS ENDED JANUARY 31, 2000 VERSUS THREE
MONTHS ENDED JANUARY 31, 1999
--------------------------------------------------------------------------------
During the second quarter, Innovative Medical Services experienced an unexpected
turnover in sales  personnel.  Revenues of $646,900 in the first  quarter  ended
January 31, 2000 were 16% lower than the  $768,000 in revenues  reported for the
same quarter ended January 31, 1999. Fillmaster Purification System sales in the
2000 quarter were $234,600 and  replacement  filter sales were  $74,000.  In the
1999 quarter, Fillmaster Purification System sales were $475,400 and replacement
filter sales were  $260,100.  Net income for the quarter  ended January 31, 2000
was $41,200 versus  $156,400 for the same quarter in 1999. The decreased  income
was due to decreased  sales as outlined  above 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.  Management  believes that the quarter's results are an aberration
and not a trend.  The  Company  took  immediate  action  to  fortify  the  sales
department with highly qualified and experienced  sales people who will lead the
Company to greater markets and increased results.  Fillmaster sales are expected
to return to normal levels.

The decrease in Fillmaster  Purification System and replacement filter sales was
partially offset by the sale of an internally  developed  e-commerce  supersite.
During  the  period  the  Company  sold  the  website  to  its  new  subsidiary,
Nutripure.com, an initial purchase price of $1,000,000. Of this amount, $665,200
was  eliminated  from  sales in  inter-company  consolidation  adjustments.  The
remaining  $334,800   represents  the  cost  of  the  website   development  not
capitalized  in previous  quarters.  During the quarter  Nutripure.com  paid the
Company $350,000 of the purchase price for the website.

Gross  profit in the most recent  quarter was  $482,000  versus  $496,300 in the
year-earlier  quarter.  Gross profit  percentage  of 74% in the 2000 quarter was
higher versus the 65% gross profit  percentage  in the 1999  quarter.  The gross
profit percentage increase reflects profit on the sale of the website.


RESULTS OF  OPERATIONS  FOR THE SIX MONTHS  ENDED  JANUARY  31,  2000 VERSUS SIX
MONTHS ENDED JANUARY 31, 1999
--------------------------------------------------------------------------------
Revenues of  $1,551,700  in the six months ended  January 31, 1999 were 1% lower
than the  $1,563,500  in revenues  reported for the six months ended January 31,
1999.  Fillmaster  Purification System sales in the six months ended January 31,
2000 were  $843,600 and  replacement  filter sales were  $266,000.  In the prior
period,  Fillmaster  Purification  System sales were  $1,099,500 and replacement
filter sales

<PAGE>


were $417,700.  Sales of Fillmaster  Purification System decreased 23% and sales
of filter  replacements  decreased 36% during the fiscal quarter 1999/2000.  The
sale of the website during the period increased sales 27%.

Gross  profits for the six months ended  January 31, 2000 were  $976,700  versus
$1,009,600  in 1999.  The gross  profit of 63% in 2000 was lower  versus the 65%
gross  profit in 1999.  The  gross  profit  decrease  resulting  from  decreased
Fillmaster and  replacement  filter sales was largely offset by the website sale
described above.

Net income for first six months  ended  January  31,  2000 was  $187,300  versus
$294,100 for the same period last year.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During the six months ended January 31, 2000,  the Company's  current  assets to
liabilities ratio rose from 1.95 to 3.04. Current assets increased $357,700 from
$2,114,400 to $2,472,100. Current assets at January 31, 2000 include an increase
of $57,300 in cash on hand, $225,100 of accounts receivable and $67,200 of notes
receivable..   Inventories   remained   constant  during  the  period.   Current
liabilities  decreased  $272,000 from  $1,084,100  to $812,100.  The decrease in
current liabilities was the result of the Company's ability to pay down accounts
payable by $218,000 during the recent quarter.

Cash flows used from  operations were $364,300 in the first six months of fiscal
year 2000.  Cash flows used from operations were $223,100 for the same period in
1999.  For those  periods,  cash flows used in  investing  activities  included,
respectively,  $364,300 and $87,500 for the purchase of fixed assets. Cash flows
used  in  investing   activities  for  the  recent  quarter  included   $334,800
capitalized website cost by Nutripure.com.  Cash flows from financing activities
were  $771,800  from the sale of common stock  including  $500,000 from proceeds
received through a Nutripure.com private placement.  In addition,  approximately
$271,800  was  received  from  exercise  of  outstanding   stock  options  which
management  believes were largely exercised in anticipation of the Nutripure.com
stock  dividend.  The total increase in cash and cash  equivalents  for the 2000
six-month  period was $79,400 as compared to increase of $18,900 during the same
period in 1999.

<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 October
26, 1999, 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.


ITEM 2.
CHANGES IN SECURITIES
---------------------
None.


<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.


<PAGE>


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