U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                            FORM 10-QSB SEC File No:
                                   33-14982-LA

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ___________




                           DIGITAL D.J. HOLDINGS, INC.
                                formerly known as

                         BREAKTHROUGH ELECTRONICS, INC.
                         -------------------------------
             (Exact name of registrant as specified in its charter)


   Nevada                       33-14982-LA                      77-0530472
   ------                       -----------                      ----------
(State or other                 (Commission                    (IRS Employer
jurisdiction of                 File Number)                 Identification No.)
incorporation)


          1658 E. Capitol Expressway, #294, San Jose, California 95121
          ------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)


Company's telephone number, including area code:      (408) 946-8500
                                                --------------------


                         Breakthrough Electronics, Inc.
             2612 East Kentucky Avenue, Salt Lake City, Utah 84117
             -----------------------------------------------------
          (Former name or former address, if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during  the past 12 months  (or 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.

                                                          [ X ] Yes     [   ] No

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:

     13,177,528 Shares as of the date of this report.

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

                                        1


<PAGE>




                            BREAKTHROUGH ELECTRONICS

                Form 10-QSB for the Quarter ended March 31, 2000

                                Table of Contents

                                                                           Page

PART 1 - ITEM 2...............................................................4
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS FOR DIGITAL D.J. HOLDINGS, INC.............4

     CAUTION REGARDING FORWARD-LOOKING INFORMATION............................4
     ---------------------------------------------
     OVERVIEW OF THE COMPANY..................................................4
     -----------------------

PART II - OTHER INFORMATION...................................................8
     ITEM 1 - LEGAL PROCEEDINGS...............................................8
     ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS.......................9
     ITEM 3 - DEFAULTS UPON SENIOR SECURITIES.................................9
     ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............9
     ITEM 5 - OTHER INFORMATION...............................................9
     ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K................................9
     SIGNATURES...............................................................9





                                        2


<PAGE>



PART 1 - ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR DIGITAL D.J. HOLDINGS, INC.

     The  following  discussion  of the  financial  conditions  and  results  of
operations  of the  Company  should be read in  conjunction  with the  financial
statements, including notes thereto, for the Company.

CAUTION REGARDING FORWARD-LOOKING INFORMATION
---------------------------------------------

         This quarterly report contains certain  forward-looking  statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to  the  Company  or  management.   When  used  in  this  document,   the  words
"anticipate,"   "believe,"   "estimate,"   "expect"  and  "intend"  and  similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward- looking  statements.  Such statements reflect the current view
of the  Company  regarding  future  events and are  subject  to  certain  risks,
uncertainties  and  assumptions,  including  the risks or  uncertainties  noted.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying  assumption prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended. In each instance,  forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.

OVERVIEW OF THE COMPANY
-----------------------

         Digital D.J. Holdings, Inc. (the "Company") was incorporated as "Golden
Queens  Mining  Company" on July 31, 1986 under the laws of the State of Nevada,
primarily for the purpose of exploration,  development and production of certain
mining  properties  located in Esmeralda  County,  Nevada.  In July,  1987,  the
Company changed its name to  "Breakthrough  Electronics,  Inc.,"  terminated its
activities  in the mining  business,  and began  efforts  to develop  and market
electronic  products,  including a telephone device designed to screen telephone
calls,  acquired from its then President.  This business was terminated  several
years ago. On November  22,  1999,  the Company  acquired  Digital  D.J.,  Inc.,
pursuant to a reverse triangular merger in a transaction in which  approximately
12,466,992  shares of the Company's common stock were issued to the shareholders
of Digital D.J., Inc. (the  "Reorganization").  The  Reorganization  resulted in
control of the Company  transferring from the former  shareholders to the former
shareholders   of  Digital   D.J.,   Inc.  The  terms  and   conditions  of  the
Reorganization are set forth in the Company's Form 8-K filed with the Commission
for the period beginning on November 22, 1999.

         Digital DJ Inc. was incorporated in December 1991. Its primary business
activity  was the  development  and  marketing  of a digital  data  system  that
provides  a  variety  of  information  services  to  radio  listeners  using  FM
subcarrier technology.  On April 1, 1999, the Company established a wholly owned
subsidiary, FM Intelligent  Transportation Systems, Inc. (FMITS), which provided
a




                                       3
<PAGE>





traffic  information service in the mobile market, with an initial investment of
$5,000  for  5,000,000  shares of common  stock.  On June 1, 1999,  the  Company
transferred  1,142,376  shares of the common stock of FMITS  (approximately  23%
interest)  to  Nichimen  America,   Inc.  (Nichimen)  in  consideration  of  the
cancellation of accounts payable to Nichimen in the amount of $951,980.

Results of Operations

         As of March 31, 2000,  the Company is in the  development  stage and is
primarily  engaged in research  and  development  activities.  Accordingly,  the
accompanying  consolidated  statements of  operations  should not be regarded as
typical for normal periods of operation. The Company's development stage status,
recurring  net losses and  capital  deficit  raise  substantial  doubt about its
ability to continue as a going concern. Additional financing or restructuring of
its  liabilities  will be  required  in order for the  Company to  complete  its
development stage activities. Management believes that it will be able to obtain
such financing from new investors, and restructure its liabilities.

         The Company had no operations  or revenues,  or  significant  assets or
liabilities over the past several years until  completion of the  Reorganization
on November 22, 1999. All  representations  of the Company prior to November 22,
1999,  set forth in this  Management's  Discussion  and Analysis  are  therefore
provided  on a pro forma  basis as if the  Reorganization  had  occurred in such
period.  In August,  1998,  the Company  entered into a License  Agreement  with
Deutsche  Telekom  AG to use the  Company's  Radio  Information  System - Europe
Version,  for a term of 5 years  for a total  license  fee of  $1,625,000,  paid
$1,250,000 in 1998, and $125,000, in March of the years 1999, 2000 and 2001 (the
"DT Contract"). The DT Contract constituted the Company's sole source of revenue
in 1998. In January 1999, the Company entered into a license  agreement with its
only other customer, the Netherlands Broadcasting  Transmission Company, for the
same technology for a five year contract,  which  constituted the Company's sole
new source of revenue in 1998. The Netherlands  Broadcasting  contract was for a
five year term for total  license  fees of $300,000,  paid  $200,000 in 1999 and
$25,000 per year in 2000, 2001, 2002 and 2003.  Because the Company licensed its
technology over a five year term it was forced to recognize the revenue from the
licenses over a five year period, rather than on a cash basis.

Three Months Ended March 31, 2000, Compared to Three Months Ended March 31, 1999

         Revenue.  During the  quarter  ended  March 31,  2000,  the Company had
revenues of $130,799,  which  constituted a decrease in revenue of $164,201 from
$295,000 for the quarter ended March 31, 1999.  Revenue  during this quarter was
from payment  received for sales made in prior periods.  The decrease in revenue
is the result of the lack of new sales in the quarter ended March 31, 2000.

         Cost of Sales. The Company incurred cost of sales for the quarter ended
March 31, 2000,  of $245  compared to cost of sales for the quarter  ended March
31, 1999,  of  $288,236.  This  decrease is  primarily  due to the fact that the
Company did not sell any new products during the quarter ended March 31, 2000.

         Gross Profit.  Gross profit as a percentage of revenue increased to 99%
for the  three  months  ended  March  31,  2000,  from 2% of net  sales  for the
corresponding  period ended March 31, 1999. The gross profit percentage decrease
is  attributed  to the fact that the Company  had minimal  cost of sales for the
revenues incurred in the three months ended March 31, 2000.




                                       4
<PAGE>






         Operating  Expenses.  Operating  expenses  increased by $131,255 or 79%
from $166,074 in the three months ended March 31, 1999, to $297,329 in the three
months ended March 31,  2000.  The  increase  was  attributable  to increases in
selling,   general   and   administrative   expenses.   Selling,   general   and
administrative  expenses  increased  by $143,651 or 241%,  from  $45,652 for the
three months ended March 31, 1999,  to $189,303 for the three months ended March
31, 2000.  This  increase was primarily  attributable  to an increase in salary,
legal  expenses and the costs  associated  with the  acquisition  of Breathrough
Electronics,  Inc. Research and development expenses decreased by $12,396 or 10%
from  $120,422  for the three  months  ended March 31, 1999 to $108,026  for the
three months ended March 31, 2000.  The decrease was primarily  attributable  to
fewer  modifications  of the  Company's  hardware  and  software to  accommodate
changes in its business plan.

         Other Income (Expense).  Other income (expense) decreased by $17,358 or
approximately  1721% from ($17,662) in the three months ended March 31, 1999, to
($304) in the three months ended March 31, 2000.  Interest expense  decreased by
$22,629 from  $22,629 in the three  months ended March 31, 1999,  to no interest
expense in the three  months  ended March 31,  2000,  due to  conversion  of all
outstanding debt to equity in the previous quarter ending December 31, 1999. The
Company experienced  interest income of $304 in the three months ended March 31,
2000, compared to income from interest of $4,967 in the three months ended March
31, 1999.

Nine Months Ended March 31, 2000, Compared To Nine Months Ended March 31, 1999

         Revenues.  Revenues  decreased  by $118,030 or  approximately  24% from
$485,000  for the nine  months  ended  March 31,  1999,  to $366,970 in the nine
months  ended March 31, 2000.  The decrease is primarily  due to the lack of any
new sales in that  period and the large down  payment on the DT  Contract in the
nine months ended March 31, 1999.

         Cost of Sales.  The cost of sales for the nine  months  ended March 31,
2000,  decreased to zero from $245 for the nine months ended March 31, 1999. The
decrease  is  primarily  due to the fact that the costs  associated  with the DT
Contract  sale were not  incurred  during this nine month period and the Company
made no other sales during the period.

         Gross  Profit.  Gross profit as a percentage  of revenues  increased to
approximately  100%  for the nine  months  ended  March  31,  2000,  from 35% of
revenues  for the  corresponding  period in 1999,  increasing  by $197,200 for a
gross profit of $366,725 in the nine months  ended March 31,  2000,  compared to
gross profit of $169,529  for the same period  ended March 31,  1999.  The gross
profit percentage  increase is attributed  primarily to the fact that no cost of
sales were incurred during the current period.

         Operating  Expenses.  Operating  expenses increased by $675,096 or 124%
from $546,253 in the nine months ended March 31, 1999 to $1,221,349, in the nine
months ended March 31, 2000.  The  increase was  attributable  to an increase in




                                       5
<PAGE>




selling, general and administrative expenses.  Research and development expenses
decreased slightly by $27,384 or 8% from $350,697 in the nine months ended March
31, 1999, to $323,313 in the nine months ended March 31, 2000. Selling,  general
and  administrative  expenses increased by $702,480 or 359% from $195,556 in the
nine months ended March 31, 1999, to $898,036 in the nine months ended March 31,
2000.  The increase was  primarily  attributable  to costs  associated  with the
Reorganization.

         Other  Income  (Expense).  Other  expense  increased  by  $29,629  from
($56,740)  in the nine months  ended March 31,  1999,  to  ($89,099) in the nine
months ended March 31, 2000, due to the following.  Interest income increased by
$2,487 or 48% from $5,180 in the nine months ended March 31, 1999,  to $7,667 in
the nine months ended March 31, 2000,  due  primarily to higher cash deposits on
hand resulting from the Company's recent  financing.  Interest expense increased
by $50,825 or 79% from  $64,784 in the nine  months  ended  March 31,  1999,  to
$115,609 in the nine  months  ended March 31,  2000,  primarily  due to interest
accruing on the Company's debt  financing.  Gain on sale of assets  increased by
$18,709  from $134 in the nine  months  ending  March 31, 1999 to $18,843 in the
nine months ended March 31, 2000, primarily due to sale of certain assets.

Liquidity and Capital Resources

         Cash and cash  equivalents  and net working capital  (deficit)  totaled
$64,933 and ($658,200),  respectively,  as of March 31, 2000. The primary source
of cash has been net proceeds  generated from debt  financings.  The Company has
relied upon loan proceeds from convertible  promissory notes and annual payments
under its two  license  agreements  to fund its  operations  during the  periods
discussed.  The Company received $575,000 and $208,090 in debt financing for the
year  ended  June  30,  1999,   and  the  nine  months  ended  March  31,  2000,
respectively.

         The Company  anticipates  that its  primary  use of working  capital in
future  periods  will be for  increases  in product  research  and  development,
expansion of its marketing plan and general and administrative expenses.

         The Company believes that existing cash and cash equivalents, cash flow
from operations and cash raised through private placements will be sufficient to
meet the Company's  presently  anticipated working capital needs for the next 13
months.  To the extent the Company uses its cash  resources for its  operations,
the Company will be required to obtain additional  funds, if available,  through
borrowings  or equity  financings.  There can be no assurance  that such capital
will be  available  on  acceptable  terms.  If the  Company  is unable to obtain
sufficient financing, it may be unable to fully implement its growth strategy.

         The Company also began  operations of its subsidiary in Japan,  Digital
D.J. Internet Solutions,  Inc., a Japan corporation,  to market the licensing of
the Company's technology in Japan. The Company anticipates that its subsidiary's
operational  costs will be approximately  $40,000 per month and that the Company
will need to raise additional  funds of approximately  $500,000 to $1,000,000 to
fund the operations of its Japanese  subsidiary.  The Company intends to attempt
to raise capital  necessary to operate the subsidiary in Japan,  but the Company
does not have any definitive  capital raising plan or agreement with any sources
of such capital at this time.




                                       6
<PAGE>






         In  addition  to the  uncertainties  of  sources  of  capital  for  the
Company's  operations,  the Company  continues to experience  uncertainties  and
difficulties  within the marketplace for its technology.  The Company originally
sought to offer high speed  data  broadcasting  systems  using  conventional  FM
subcarrying, which would provide stock market and other data to subscribers on a
real time  basis for a  monthly  fee.  Shortly  after  the  introduction  of the
Company's  product and services,  several  online  brokerages  and pager service
began offering free real time stock market quotations. The Company then modified
its business  plan to license its  technology  to users in Europe and attempt to
joint  venture  with a  major  broadcasters  in the  United  States  to  provide
subcarrier textual information in addition to the audio broadcasts.  The Company
competes with numerous  other types of carriers in this  marketplace,  including
Digital  FM   broadcasters,   satellite  FM  broadcasters   and  competitors  in
conventional FM subcarrier  systems which claim to offer the ability to transmit
at higher speeds than that of the Company. The Company has no active sales force
within the U.S. and sales and marketing  depends upon the Company's CEO,  Thomas
Takahisa.  There are no  assurances  that the  Company  will be able to  compete
successfully within this marketplace.

Material Changes in Operations

         As  discussed  above,  in the nine  months  ended March 31,  2000,  the
Company  changed  the focus of its  marketing  plan to shift  from a retail  and
wholesale  provider of FM  subcarrier  content and hardware and  software,  to a
licensor of the Company's technology to individual users and resellers in Europe
and Asia.  The Company also completed the  Reorganization  on November 22, 1999,
which resulted in the Company's  combination  with Digital D.J. The Company also
formed its Japan  subsidiary  for the marketing of licenses of its technology in
Japan.

Year 2000 Compliance

         The Company experienced no Year 2000 complications with its products or
services and experienced no problems due to Year 2000  complications with any of
its key customers, licensees, licensors or vendors.

PART II - OTHER INFORMATION

         ITEM 1 - LEGAL PROCEEDINGS

         The  Company  is not a  party  to or  aware  of any  legal  proceeding,
involving the Company and the Company is not aware of any proceedings  involving
any of the Company's  directors,  officers,  agents,  representatives or persons
that beneficially own 5% or more of the Company's voting securities.




                                       7
<PAGE>





         ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

         The Company did not  experience  any changes in its  securities  in the
three months ended March 31, 2000.

         ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.


         ITEM 5 - OTHER INFORMATION

         None.


         ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         The Company's financial statements for the periods described herein are
attached.

         The  Form  8-K  filed by the  Company  as of  November  22,  1999,  and
amendments  thereto and  exhibits  and  financial  statements  filed  therewith,
including a copy of the Company's  Agreement  and Plan of Merger,  the Company's
Proxy,  and pro forma financial  information are hereby  incorporated  herein by
reference.



                                       8
<PAGE>
                            DIGITAL DJ HOLDINGS, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                      AS OF MARCH 31, 2000 (UNAUDITED) AND]
                            FOR THE NINE MONTHS ENDED
                       MARCH 31, 2000 AND 1999 (UNAUDITED)

<PAGE>


                                                       DIGITAL DJ HOLDINGS, INC.
                                                                AND SUBSIDIARIES
                                                                        CONTENTS
                                                      March 31, 2000 (unaudited)
--------------------------------------------------------------------------------

                                                                     Page

FINANCIAL STATEMENTS

     Consolidated Balance Sheet                                       1

     Consolidated Statements of Operations                          2 - 3

     Consolidated Statements of Cash Flows                            4

     Notes to Consolidated Financial Statements                     5 - 7



<PAGE>

                                                      DIGITAL DJ HOLDINGS, INC.
                                                               AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEET
                                                     March 31, 2000 (unaudited)
--------------------------------------------------------------------------------

                                     ASSETS

Current assets

     Cash and cash equivalents                                 $         64,933
     Accounts receivable                                                131,467
     Prepaid expenses                                                     1,519
                                                               ----------------

         Total current assets                                           197,919

Property and equipment, net                                              42,986
Other assets                                                             29,420
                                                               ----------------

                  Total assets                                 $        270,325
                                                               ================


                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities

     Accounts payable                                          $        151,201
     Deferred revenue                                                   465,000
     Short term loans                                                    13,389
     Accrued liabilities                                                236,529
                                                               ----------------

         Total current liabilities                                      866,119

Deferred revenue                                                        860,000
Notes payable                                                           100,000
Other liabilities                                                        18,894
                                                               ----------------

              Total liabilities                                       1,845,013
                                                               ----------------

Minority interest                                                         1,142
                                                               ----------------

Shareholders' deficit
     Common stock, $0.001 par value
         50,000,000 shares authorized
         13,177,528 shares issued and outstanding                        13,178
     Paid-in capital                                                 13,260,143
     Accumulated deficit                                            (14,849,151)
                                                               ----------------

              Total shareholders' deficit                            (1,575,830)
                                                               ----------------

                  Total liabilities and shareholders' deficit  $        270,325
                                                               ================

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

                                       F-1
<PAGE>


                                                       DIGITAL DJ HOLDINGS, INC.
                                                                AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
         For the Three and Nine Months Ended March 31, 2000 and 1999 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                        Three Months Ended                 Nine Months Ended
                                                             March 31,                          March 31,
                                               ---------------------------------  ---------------------------------
                                                     2000             1999              2000             1999
                                               ---------------  ----------------  ---------------  ----------------
<S>                                            <C>              <C>               <C>               <C>
Revenues $                                     $       130,799  $        295,000  $       366,970   $       485,000

Cost of sales                                              245           288,236              245           315,741
                                               ---------------  ----------------  ---------------   ---------------

Gross profit                                           130,554             6,764          366,725           169,529
                                               ---------------  ----------------  ---------------   ---------------

Operating expenses

   Research and development                            108,026           120,422          323,313           350,697
   Selling, general, and administrative                189,303            45,652          898,036           195,556
                                               ---------------  ----------------  ---------------   ---------------

     Total operating expenses                          297,329           166,074        1,221,349           546,253
                                               ---------------  ----------------  ---------------   ---------------

Loss from operations                                  (166,775)         (159,310)        (854,624)         (376,724)
                                               ---------------  ----------------  ---------------   ---------------

Other income (expense)
   Interest expense                                          -           (22,629)        (115,609)          (64,784
   Interest income                                         304             4,967            7,667             5,180
   Gain on sale of asset                                     -                 -           18,843               134
                                               ---------------  ----------------  ---------------   ---------------

     Total other income (expense)                          304           (17,662)         (89,099)          (59,470)
                                               ---------------  ----------------  ---------------   ---------------

Loss before provision for income
   taxes                                              (166,471)         (176,972)        (943,723)         (436,194)

Provision for income taxes                                   -                 -           30,800             1,180
                                               ---------------  ----------------  ---------------   ---------------

Loss before extraordinary item                        (166,471)         (176,972)        (974,523)         (437,374)

Extraordinary gain on early
   extinguishment of debt, net of
   income tax benefit of $0                                  -                 -           55,314                 -
                                               ---------------  ----------------  ---------------   ---------------

Net loss                                       $      (166,471) $       (176,972) $      (919,209)  $       (437,37)
                                               ===============  ================  ===============   ===============
</TABLE>

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

                                      F-2
<PAGE>


                                                      DIGITAL DJ HOLDINGS, INC.
                                                               AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF OPERATIONS
        For the Three and Nine Months Ended March 31, 2000 and 1999 (unaudited)

-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                        Three Months Ended                 Nine Months Ended
                                                             March 31,                          March 31,
                                               ---------------------------------  ---------------------------------
                                                     2000             1999              2000             1999
                                               ---------------  ----------------  ---------------  ----------------
<S>                                            <C>              <C>               <C>              <C>
Basic loss per share
   Loss before extraordinary item              $         (0.01) $          (0.35) $         (0.15) $          (0.87)
   Extraordinary item                                        -                 -             0.01                 -
                                               ---------------  ----------------  ---------------  ----------------

     Total basic loss per share                $         (0.01) $          (0.35) $         (0.14) $          (0.87)
                                               ===============  ================  ===============  ================

Weighted-average common shares
   outstanding                                      13,177,528           500,000        6,604,023           500,000
                                               ===============  ================  ===============  ================
</TABLE>

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

                                      F-3
<PAGE>


                                                      DIGITAL DJ HOLDINGS, INC.
                                                               AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                  For the Nine Months Ended March 31, 2000 and 1999 (unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                      2000               1999
                                                                                ---------------    ----------------
                                                                                   (unaudited)        (unaudited)
<S>                                                                             <C>                   <C>
Cash flows from operating activities
     Net loss                                                                   $      (919,209)   $       (437,374)
     Adjustments to reconcile net loss to net cash
         provided by (used in) operating activities
              Depreciation                                                               24,527              35,554
     (Increase) decrease in
         Accounts receivable                                                            130,563             310,529
         Prepaid expenses                                                                 2,088              26,551
     Increase (decrease) in
         Accounts payable                                                               (20,735)           (659,778)
         Accrued liabilities                                                            108,273            (345,783)
         Deferred revenue                                                              (232,500)          1,680,102
         Other liabilities                                                               (1,000)             94,490
                                                                                ---------------    ----------------
                  Net cash provided by (used in) operating activities                (1,169,119)            704,291
                                                                                ---------------    ----------------
Cash flows from investing activities
     Purchases of property and equipment                                                (16,306)            (33,454)
     Other assets                                                                           500)              18,201
                                                                                ---------------     ----------------
                  Net cash used in investing activities                                 (16,806)            (15,253)
                                                                                ---------------    ----------------
Cash flows from financing activities


     Payments on notes payable                                                                -             (14,731)
     Proceeds from notes payable                                                        221,479                   -
                                                                                ---------------    ----------------
                  Net cash provided by (used in) financing activities                   221,479             (14,731)
                                                                                ---------------    ----------------
                      Net increase (decrease) in cash and cash
                           equivalents                                                 (964,446)            674,307
Cash and cash equivalents, beginning of year                                          1,029,379               4,859
                                                                                ---------------    ----------------

Cash and cash equivalents, end of year                                          $        64,933    $        679,166
                                                                                ===============    ================
</TABLE>


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

                                      F-4

<PAGE>


                                                       DIGITAL DJ HOLDINGS, INC.
                                                                AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                      March 31, 2000 (unaudited)
--------------------------------------------------------------------------------


NOTE 1 - DESCRIPTION OF BUSINESS

         Digital  DJ  Holdings,   Inc.  ("DDJ  Holdings"),   formerly  known  as
         Breakthrough Electronics,  Inc., a Nevada publicly-traded  corporation,
         and  subsidiaries  (collectively,  the "Company") are in the design and
         development  stage of  developing a digital data system that provides a
         variety of information services to radio listeners using FM sub-carrier
         technology.

         Digital DJ, Inc.  ("DDJ") was formed  under the laws of  California  in
         December  1991.  On November  22, 1999,  DDJ  Holdings  entered into an
         Agreement  and  Plan  of  Merger,   whereby  it  acquired  all  of  the
         outstanding  common stock of DDJ in exchange for  12,466,992  shares of
         newly issued common stock.  The common stock of DDJ included  3,840,883
         shares  issued  upon   conversion  of  DDJ's   preferred  stock  (after
         anti-dilution),  6,031,700 issued shares of common stock, and 2,394,255
         shares  and  200,154  shares  issued  upon  conversion  of  convertible
         promissory  notes and  related  accrued  interest  for  $2,412,705  and
         $215,473,  respectively.  In addition,  800,000  unissued shares of DDJ
         common stock held in escrow for a consultant  agreement  with MacKenzie
         Shea, Inc. were exchanged for an equal number of unissued shares of DDJ
         Holdings common stock, and 1,279,917 stock options and 615,000 warrants
         for the purchase of DDJ common  stock were  converted on a 1-to-1 basis
         into stock options and warrants for the purchase of DDJ Holdings common
         stock. The aforementioned  preferred stock,  common stock,  convertible
         promissory  notes and related  accrued  interest,  common stock held in
         escrow,  stock options,  and warrants were converted as a result of and
         concurrently  with the  Agreement and Plan of Merger with DDJ Holdings.
         For  accounting  purposes,  the  transaction  has  been  treated  as  a
         recapitalization  of DDJ, with DDJ as the accounting  acquirer (reverse
         acquisition),  and has  been  accounted  for in a manner  similar  to a
         pooling of interests. The operations of DDJ Holdings have been included
         with those of DDJ from the acquisition date.

         DDJ Holdings was  incorporated in Nevada on July 31, 1986. DDJ Holdings
         had minimal assets and  liabilities at the date of the  acquisition and
         did  not  have   significant   operations  prior  to  the  acquisition.
         Therefore, no pro forma information is presented.

                                      F-5

<PAGE>
                                                       DIGITAL DJ HOLDINGS, INC.
                                                                AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                      March 31, 2000 (unaudited)
--------------------------------------------------------------------------------

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation
         ---------------------
         The accompanying  consolidated  financial statements have been prepared
         in conformity with generally accepted accounting principles for interim
         financial  information  and with the  instructions  to Form  10-QSB and
         Regulation S-B. Accordingly, they do not include all of the information
         and footnotes required by generally accepted accounting  principles for
         complete  financial  statements.  In the  opinion  of  management,  all
         normal,   recurring   adjustments   considered  necessary  for  a  fair
         presentation  have been included.  The financial  statements  should be
         read in conjunction with the audited financial  statements  included in
         the Company's  annual report on Form 10-KSB for the year ended June 30,
         1999.  The results of  operations  for the nine months  ended March 31,
         2000 are not necessarily indicative of the results that may be expected
         for the year ended June 30, 2000.

         Principles of Consolidation
         ---------------------------
         The accompanying consolidated financial statements include the accounts
         of Digital DJ Holdings,  Inc. and its  wholly-owned  or majority  owned
         subsidiaries.  All  intercompany  balances and  transactions  have been
         eliminated.

         Loss per Share
         --------------
         The  Company  calculates  loss  per  common  share in  accordance  with
         Statement of Financial  Accounting  Standards  No. 128,  "Earnings  per
         Share." Basic loss per share is computed by dividing the loss available
         to common shareholders by the weighted-average  number of common shares
         outstanding.  Diluted loss per share is computed  similar to basic loss
         per share,  except that the  denominator  is  increased  to include the
         number of additional  common shares that would have been outstanding if
         the  potential  common  shares had been  issued  and if the  additional
         common  shares were  dilutive.  Because the  Company has  incurred  net
         losses, basic and diluted loss per share are the same.

NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment at March 31, 2000 consisted of the following:

                  Computers and software               $        186,670
                  Furniture and fixtures                          1,571
                                                       ----------------

                                                                188,241
                  Less accumulated depreciation                 145,255
                                                       ----------------

                      Total                            $         42,986
                                                       ================

                                      F-6

<PAGE>

                                   SIGNATURES

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

May 15, 2000                               DIGITAL DJ HOLDINGS, INC.



                                           By:/s/ Thomas Takahisa
                                              -------------------
                                                  Thomas Takahisa
                                                  President

                                           DIGITAL DJ HOLDINGS, INC.


                                           By:/s/ Thomas Takahisa
                                              -------------------
                                                  Thomas Takahisa
                                                  Secretary/Treasurer


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