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

                                 FORM 10-QSB

           [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarter ended September 30, 2002

           [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from _________to_________

                        Commission File No. 000-16534


                               Digital Fuel, Inc.
                               ------------------
             (Exact Name of Registrant as Specified in its Charter)


         Delaware                                             45-0375367
         --------                                             ----------
 (State or other jurisdiction of                            (IRS Employer
  incorporation or organization)                          Identification No.)


 6601 East Grant Road, Suite 101, Tucson, Arizona                  85715
 ------------------------------------------------                  -----
    (Address of principal executive offices)                     (Zip code)


                               (520) 886-5354
                                -------------
              (Registrant's telephone number including area code)


Indicate by check mark whether the Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.

                         Yes  [ X ]         No  [   ]

Number of shares of common stock outstanding: 4,343,262 Shares of Common
Stock, par value $.01 per share, were outstanding as of November 13, 2002.



                              DIGITAL FUEL, INC.



PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS




                         INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors
Digital Fuel, Inc.

We have reviewed the accompanying condensed balance sheet of Digital Fuel,
Inc. as of September 30, 2002, and the related condensed statements of
operations and statement of cash flows for the nine-month period then ended.
These financial statements are the responsibility of the Company's
management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.

WATSON & WATSON CPAs, P.C.

Tempe, Arizona
November 12, 2002





                                     F-2


                              DIGITAL FUEL, INC.
                            CONDENSED BALANCE SHEET
                              SEPTEMBER 30, 2002
                                 (Unaudited)

                                    ASSETS

Current assets:
   Cash                                                      $137
                                                              ---
Total current assets                                          137
                                                              ---
Investments (Note 4):
   Preferred Stock, SiteScape                                 -0-
                                                              ---
Total Assets                                                 $137
                                                              ===

                LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY

Current liabilities:
   Notes payable:
      Related parties (Note 2)                         $1,210,441
      Other (Note 3)                                      250,000

   Accounts payable:
      Related parties                                      52,900
      Other                                               170,120
   Accrued management fees (Note 7)                       256,667
   Accrued interest expense, related parties (Note 2)     291,508
                                                          -------
Total current liabilities                               2,231,636
                                                        ---------
Shareholders' equity deficiency:
   Preferred stock, $.01 par value;
      authorized 10,000,000 shares;
      issued -0- shares
   Common stock, $.01 par value;
      authorized 20,000,000 shares;
      issued 4,343,262 shares                              43,433
   Capital in excess of par value                       2,370,312
   Accumulated deficit                                 (4,645,244)
                                                        ---------
Total shareholders' equity deficiency                  (2,231,499)
                                                        ---------
Total Liabilities and Shareholders' Equity Deficiency        $137
                                                              ===


                 See Notes to Condensed Financial Statements



                                     F-3


                              DIGITAL FUEL, INC.

                      CONDENSED STATEMENTS OF OPERATIONS

                THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                  (Unaudited)



                                                     2002            2001
                                                     ----            ----
Expenses:
   General and administrative                    $  2,815        $  2,995
                                                    -----           -----
Operating loss                                     (2,815)         (2,995)
                                                    -----           -----
Interest expense:
   Related parties (Note 2)                        27,374          26,916
   Other (Note 3)                                   7,355           5,625
                                                   ------          ------
   Total interest expense                          34,729          32,541
                                                   ------          ------
Net loss                                         $(37,544)       $(35,536)
                                                   ======          ======

Basic and diluted loss per common share:             $*              $*


Weighted average number of shares outstanding   4,343,262       4,343,262
                                                =========       =========

*less than $.01 per share



                 See Notes To Condensed Financial Statements



                                     F-4


                              DIGITAL FUEL, INC.

                      CONDENSED STATEMENTS OF OPERATIONS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                  (Unaudited)



                                                     2002            2001
                                                     ----            ----

Expenses:
   General and administrative                    $  6,998        $ 12,788
                                                    -----          ------
Operating loss                                     (6,998)        (12,788)
                                                    -----          ------
Interest expense:
   Related parties (Note 2)                        81,016          80,055
   Other (Note 3)                                  18,605          16,875
                                                   ------          ------
   Total interest expense                          99,621          96,930
                                                   ------          ------
Net loss                                        $(106,619)      $(109,718)
                                                  =======         =======

Basic and diluted loss per common share             $(.02)          $(.02)


Weighted average number of shares outstanding   4,343,262       4,343,262
                                                =========       =========


                 See Notes To Condensed Financial Statements



                                     F-5



                              DIGITAL FUEL, INC.

                           STATEMENTS OF CASH FLOWS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                  (Unaudited)



                                                     2002            2001
                                                     ----            ----
Cash flows from operating activities:
   Net loss                                     $(106,619)      $(109,718)
                                                  -------         -------
   Adjustments to reconcile net loss
   to net cash used in operations:

   Change in operating liabilities:
      Increase (decrease) in accounts
         payable, related parties                 (12,751)          5,640
      Increase in accounts payable                    815           1,433
      Decrease in accrued salaries                                 (2,211)
      Increase in accrued interest                 18,605          16,875
      Increase in accrued interest,
         related parties                           81,016          80,054
                                                   ------          ------
   Total adjustments                               87,685         101,791
                                                   ------         -------
Net cash used in operating activities             (18,934)         (7,927)
                                                   ------           -----

Cash flows from financing activities:
   Proceeds from notes payable-related
      parties (Note 2)                             18,900             700
                                                   ------             ---
Net cash provided by financing activities          18,900             700
                                                   ------             ---
Increase (decrease) in cash                           (34)         (7,227)

Cash, beginning                                       171           7,316
                                                      ---           -----
Cash, ending                                         $137             $89



During the nine months ended September 30, 2002, $204.45 was paid for
interest.



                                     F-6


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



1.  Basis of presentation:

    The financial statements of Digital Fuel, Inc. (The "Company") included
    in this Form 10-QSB have been prepared without audit in accordance with
    the rules and regulations of the Securities and Exchange Commission.
    Although certain information and footnote disclosures normally included
    in financial statements prepared in accordance with generally accepted
    accounting principles have been condensed or omitted, the Company
    believes that the disclosures are adequate to make the information
    presented not misleading.  The accompanying financial statements should
    be read in conjunction with the audited financial statements and notes
    thereto included in the Company's Annual Report on Form 10-KSB for the
    fiscal year ended December 31, 2001.

    In the opinion of management, all adjustments, including normal recurring
    adjustments, necessary for a fair presentation of the results of
    operations for the three and nine-month periods ended September 30, 2002
    and 2001 have been included.  The results of operations for the interim
    periods presented are not necessarily indicative of the results to be
    expected for the full year.

    On June 1, 2000, Deucalion held a Special Meeting of its stockholders to
    consider and vote upon the reincorporation, recapitalization, and merger
    of Deucalion with and into its wholly owned Delaware subsidiary, Digital
    Fuel, Inc., as described in the Schedule 14C Information Statement filed
    with the Securities and Exchange Commission on May 9, 2000 and
    incorporated herein by reference.  The effect of the transaction approved
    at the Special Meeting included: changing the name of the Company from
    Deucalion Research, Inc. to Digital Fuel, Inc.; effecting a one-for-6,800
    reverse stock split; reducing the authorized capital of the Company from
    1,500,000,000 shares to 30,000,000 shares; increasing the par value of
    the Company's common stock from $.0001 to $.01 per share; and authorizing
    the Board of Directors to issue up to 10,000,000 shares of blank check
    preferred stock.  All share and per share amounts in the accompanying
    financial statements reflect the reverse stock split.

    There has not been any change in the significant accounting policies of
    the Company for the periods presented.



                                     F-7


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



2.  Notes payable, related parties:

    Short-term:

        Farley Family Partnership, 9%, unsecured,
        due on demand                                            $200,000

        Multiple advance promissory note, Metz Trust,
        maximum borrowings of $150,000, 9%, unsecured,
        due on demand                                             128,775

        Multiple advance promissory note, Grant
        Papanikolas, maximum borrowings of $100,000,
        9%, unsecured, due on demand                               85,000

        Multiple advance promissory note, Michael R.
        Farley, maximum borrowings of $100,000, 9%,
        unsecured, due on demand                                   57,746

        Multiple advance promissory note, Farley &
        Associates, Inc., maximum borrowings of
        $800,000, 9%, unsecured, due on demand                    738,920
                                                                  -------
                                                               $1,210,441
                                                                =========

    Under the terms of the short-term notes, upon completion of the
    recapitalization, the Company issued to Farley & Associates 100,000
    shares, Farley Family Partnership 200,000 shares and Metz Trust 100,000
    shares at par value of the Company's post recapitalization common stock.
    Management believes that these shares have nominal market value based on
    various factors including the Company's financial position and the fact
    that there is no current market for the Company's stock.

    The Farley Family Partnership note, entered into on September 30, 1999,
    provided the Company with working capital.  The Farley & Associates, Inc.
    (F&A) note was entered into in connection with the Company's investment
    activities.  Farley Family Partnership and F&A are entities controlled by
    Michael R. Farley, who is also an officer, director and major shareholder
    of the Company.  The Metz Trust note, entered into on October 28, 1999,
    provided the Company working capital.  The Metz Trust is an entity
    controlled by Forrest L. Metz, who is also a member of the board of
    directors and a major shareholder of the Company.  The Papanikolas note,
    entered into on February 22, 2000, provided the company with working
    capital.  Papanikolas is an officer of the Company.  The Farley note,
    entered into on April 28, 2000, provided the company with working
    capital.  Farley is an officer of the Company.

                                     F-8


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



3.  Notes payable, other:

    Short-term:

        Townsdin, 9%, unsecured, due on demand             $200,000

        Torrance, 9%, unsecured, due on demand               50,000
                                                             ------
                                                           $250,000
                                                            =======


    The short-term notes were entered into during the three months ended
    March 31, 2000, and provided the Company with working capital.

    Under the terms of the short-term notes, upon completion of the
    recapitalization, the Company issued to Torrance 50,000 shares at par
    value of the Company's post recapitalization common stock.  Management
    believes that these shares have nominal market value based on various
    factors including the Company's financial position and the fact that
    there is no current market for the Company's stock.  Additionally,
    Townsdin and Torrance had the option to convert, through December 31,
    2000, all or part of any outstanding principal to post recapitalization
    Units at the rate of $1.00 per Unit.  Each Unit is to consist of one
    share of common stock and one share of 8% preferred stock.

4.  Option to purchase shares of SiteScape:

    In February 2000, the Company exercised the remaining one-half of its
    SiteScape option shares and purchased 258,333 shares of Preferred Stock
    for $500,000.  At the completion of the above-described transactions, the
    Company owned 516,667 shares of SiteScape, Inc.'s Series A Convertible
    Preferred Stock (the "Preferred Stock"), which represents approximately
    20% of the voting stock of SiteScape.

    The Preferred Stock has, among other rights, the right to vote on general
    matters, the ability of a 1:1 conversion into Class A Voting Common Stock
    of SiteScape, dividend participation with common shares, and the right to
    elect two members to the Board of Directors of SiteScape.  The Preferred
    Stock is to be automatically converted to common stock if SiteScape
    completes an initial public offering and realizes at least $20,000,000.



                                     F-9


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



4.  Option to purchase shares of SiteScape (continued):

    The Preferred stock is also entitled to receive dividends, if and when
    declared by SiteScape's Board of Directors, at the cumulative rate of 8%
    per year compounded annually.  Dividends are due only if declared by the
    Board of Directors and the tangible net worth of SiteScape exceeds $25
    million.  SiteScape is an Internet based start up company that acquired
    AltaVista FORUM from Compaq Computer in April 1999.  FORUM is a
    collaboration software, which provides ways to communicate, share
    resources, and collaborate with groups of people within a company or
    across organizations.  SiteScape is currently engaged in research and
    development and marketing and advertising efforts to expand and grow
    their customer base.  The Company has and will continue to regularly
    review the assumptions underlying the operation performance and cash flow
    forecasts of SiteScape to assess the investment's recoverability.
    Although SiteScape has revenues, it has operated at a loss.  There are no
    assurances that SiteScape will achieve profitability or that its existing
    cash balances and cash flows from future operations will be sufficient to
    meet its working capital requirements.  SiteScape continues to consume
    cash as it executes its business plan.  During the second quarter of
    2000, these circumstances had indicated that the Company should charge a
    portion of SiteScape's research and development and marketing and
    advertising expenses against the carrying value of its investment.
    Therefore, during the three-month period ended June 30, 2000, the Company
    recorded a charge of $57,420 for research and development expenses and a
    charge of $203,580 for marketing and advertising expenses.  Relating to
    the six months ended June 30, 2000, the Company recorded a charge of
    $94,050 for research and development expenses and a charge of $610,950
    for marketing and advertising expenses.  As of June 30, 2000, these
    charges reduced the carry value of the Company's investment to zero.
    During the nine months ended September 30, 2002, SiteScape has continued
    to operate at a loss.

5.  Stock Purchase Agreement:

    Per the terms of the Stock Purchase Agreement, certain liabilities of
    Deucalion were settled including $38,836 owed for legal fees and $93,412
    owed for management service fees.  These liabilities were settled through
    the issuance of common stock equal to 1/2% or 10,538 shares and 1% or
    21,076 shares, respectively, after completion of the reincorporation,
    recapitalization and merger.  Effective August 31, 1999, the Stock
    Purchase Agreement between the Company and Michael Farley and Forrest
    Metz was closed.  Under the agreement, Farley and Metz purchased



                                     F-10


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



5.  Stock Purchase Agreement (continued):

    2,002,226 shares of common stock for $110,000.  Effective August 31,
    1999, the Company issued 147,766 shares in exchange for $100,000, and
    after the reincorporation, recapitalization and merger, the purchasers
    were issued 1,855,460 additional shares of the Company's common stock in
    exchange for the $10,000 in debt due to them.

6.  Extraordinary Income:

    From 1992 until July 1999 the Company was inactive.  The current
    management embarked on settling certain outstanding payables that were on
    the books in 1999.  During the three months ended March 31, 2000 and the
    three months ended September 30, 2000, the company settled accounts
    payable with a carrying value of $42,370 for $6,500, resulting in
    extraordinary income from the extinguishment of debt of $35,870.  The
    Company's net tax loss carryforward was reduced by the $35,870 gain.

    In December 2000, the Company entered into an agreement with the original
    license holders from whom we purchased the license agreements in late
    1999.  Because the Company was unable to successfully use this
    technology, the licenses were returned to the original owners and the
    $45,000 financed by the original owners was forgiven.  In addition, the
    $205,000 due to the licensor, M2Direct, Inc., for services that were
    never provided but charged on the Company's books as an expense in 1999,
    was reversed resulting in recognition of $205,000 of income in 2000.  The
    $45,000 due the original licensees was also recorded as income in 2000.
    The Company has an agreement with the current licensees that should the
    legal problems surrounding the licenses ever be resolved, the Company
    would have the option to re-purchase the licenses under new terms and
    conditions.

7.  Accrued salaries:

    For the year ended December 31, 2000, $165,000.00 of salary was accrued
    for Mr. Farley and $91,666.63 of salary was accrued for Mr. Papanikolas.



                                     F-11


                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001



8.  Income taxes:

    At December 31, 2001, the Company had net operating loss carryforwards of
    approximately $3,900,000 which are available to offset future taxable
    income, if any, through 2021.  Based on statutory rates, the Company's
    expected tax benefit arising from the net operating loss carryforward
    would be approximately $1,300,000.  A valuation allowance has been
    provided to reduce the deferred tax asset, as realization of the asset is
    not assured.  In addition, the Company's net operating loss carryforwards
    may be subject to annual limitations which could reduce or defer the
    utilization of the losses due to the Company's ownership changes that
    occurred in 1999.



PART I. FINANCIAL INFORMATION

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

FORWARD LOOKING STATEMENTS

This report may contain certain "forward-looking" statements as such term is
defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission in its rules, regulations and releases,
which represent our expectations or beliefs, including but not limited to,
statements concerning our operations, economic performance, financial
condition, growth and acquisition strategies, investments, and future
operational plans.  For this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements.  Without limiting the generality of the foregoing, words such as
"may," "will," "expect," "believe," "anticipate," "intent,"
"could," "estimate," "might," or "continue" or the negative or other
variations thereof or comparable terminology are intended to identify
forward-looking statements.  These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond our control,
and actual results may differ materially depending on a variety of important
factors, including uncertainty related to the registrant's operations,
mergers or acquisitions, governmental regulations, the value of the
registrant's assets and any other factors discussed in this and other
registrant filings with the Securities and Exchange commission.



                                     12



Management's Discussion and Analysis and Plan of Operation.

Plan of Operation

As a result of the bankruptcy of M2Direct, Inc. and the elimination of the
license agreements as discussed in this report under the heading "Licensed
Software," management decided to change the focus of the business.
Management will actively seek to acquire companies involved in the software
development business and/or Internet business.  Because of the difficulty in
raising working capital, management believes there are a number of small
companies seeking an opportunity to expand their ability to raise capital by
becoming part of Digital Fuel.  The Company plans to work with several
investment banking firms that can help us actively seek companies that fit
Digital Fuel's requirement.

Change in Control and Restructure of Deucalion

On July 29,1999 and effective August 31, 1999, the Stock Purchase Agreement
between the Company and Michael R. Farley and Forrest L. Metz was closed.
Effective August 31, 1999, we completed a transaction whereby we sold
approximately 95% of our post transaction voting common stock (2,002,226
shares) for an aggregate purchase price of $110,000.  Also, effective August
31, 1999, the former directors and officers of Deucalion resigned and the
purchasers were elected as directors and officers of the Company.  Pursuant
to the terms of the transaction, the purchasers paid in August 1999, $100,000
of the purchase price in exchange for 147,766 shares of the Company's common
stock.  After the reincorporation, recapitalization, and merger, the
purchasers were issued 1,855,460 additional shares of the Company's common
stock in exchange for $10,000 in debt due to them, which resulted in the
purchasers owning 95% of the Company.

Per the terms of the Stock Purchase Agreement, certain liabilities of
Deucalion were settled including $38,836 owed for legal fees and $93,412 owed
for management service fees.  These liabilities were settled through the
issuance of common stock equal to 1/2% or 10,538 shares and 1% or 21,076
shares, respectively, after completion of the reincorporation,
recapitalization and merger.

As a result of a special meeting of the Shareholders on June 1, 2000, and
effective June 22, 2000, the domicile of the Company was changed from the
State of North Dakota to the State of Delaware by merging Deucalion with and
into its recently formed and wholly owned Delaware subsidiary Digital Fuel,
Inc.  The merger also effected the following additional objectives:  a 1-for-
6,800 reverse stock split, with fractional shares being rounded up to the
nearest whole share; a reduction in the authorized capital stock from
1,500,000,000 shares to 30,000,000; an increase in the par value of capital
stock from $.0001 to $.01 per share; and the authorization of the Board of
Directors to issue up to 10,000,000 shares of blank check preferred stock.



                                     13




Licensed Software

In 1999, Digital Fuel purchased various software license agreements for
$250,000.  The license agreements were with M2Direct, Inc. and created an
opportunity for the Company to provide businesses with e-commerce tools to
develop alternative Internet distribution channels for their products and
services.  The technology accelerates the distribution and selling of goods
and services in e-commerce by enabling the secure delivery of digital
information via email, the largest single mechanism for communication on the
Internet.  The Company received a letter on May 5, 2000 (dated May 3, 2000)
informing it that M2Direct had filed for protection under Chapter 11 on April
25, 2000.  As a result of receiving this notification, the Company contacted
a bankruptcy attorney and pursued the protection of its rights under the
licenses.  The Company was informed that there was an intellectual properties
doctrine and legal precedents that could be interpreted to provide it with
the rights to the software, if its licenses do not survive the impending
bankruptcy proceedings.

Management has ceased all activity regarding the licenses as a result of the
bankruptcy filing by M2Direct, Inc., the licensor, and has turned over the
pursuit of all legal proceedings to the original licensees.  Management has
retained an option to re-acquire the licenses if the appropriate source code
can be obtained by the original licensees.

SiteScape, Inc. Investment

Effective September 1, 1999, the new management completed an agreement with
Farley & Associates, Inc., an Arizona corporation ("F & A"), wholly owned by
Michael R. Farley who is also chief executive officer, a director and a
majority shareholder of Digital Fuel, whereby Digital Fuel acquired from F &
A an option to purchase 516,667 shares of Series A Preferred Stock of
SiteScape, Inc. ("SiteScape").  Digital Fuel acquired this option in
exchange for a $200,000 draw on a multiple advance promissory note extended
to the Company by F & A of up to $800,000, bearing interest at 9% and due on
demand (the "F & A Note").  The option to purchase the SiteScape preferred
stock was originally agreed to through negotiations between F & A and
SiteScape and allows F & A (or its designee) to purchase 516,667 shares of
SiteScape preferred stock at an exercise price of $1.9354 per share.  The
$200,000 represents reimbursement of travel and other direct expenses
incurred by F & A in connection with their negotiations with SiteScape and
also a fee for F & A's services.  The $200,000 was recorded as a general and
administrative expense in the accompanying statement of operations.

SiteScape is an Internet based start up company that acquired AltaVista FORUM
from Compaq Computer in April 1999.  FORUM is collaboration software that
provides ways to communicate, share resources, and collaborate with groups of
people within a company or across organizations.

Prior to September 1999, F & A provided $400,000 to SiteScape as a deposit on
the option to purchase the preferred stock.  On September 1, 1999, Digital
Fuel acquired F & A's rights to this deposit in exchange for a $400,000 draw
on the F & A Note.



                                     14



Effective November 5, 1999, Digital Fuel exercised one-half of the SiteScape
option shares and purchased 258,334 shares of preferred stock at a total cost
of $500,000.   Digital Fuel paid $100,000 cash directly to SiteScape, and
applied the $400,000 SiteScape deposit described above.  In February 2000, we
exercised the remaining one-half of the SiteScape option shares and purchased
258,333 shares of preferred stock for $500,000.  At that point, Digital Fuel
owned approximately 20% of the voting stock of SiteScape.

On June 30, 2001, SiteScape issued to Digital Fuel options to purchase
103,338 shares of its common stock at $1.93 per share.  Based on the SAIC
investment described below, the common shares of SiteScape had a value
substantially less than the option price.

In October of 2001, SiteScape received a term sheet from SAIC Venture Capital
Corporation to purchase up to $2.5 million of its Series B Convertible
Preferred Stock.  On March 18, 2002 the first transaction was closed.  The
Series B stock sold to the new investors will be senior to Digital Fuel's
Series A Convertible Preferred Stock in both payment of dividends and
distribution.  Each share of Series B Preferred Stock was sold for $.4164 per
share and will be redeemed for $0.6246 per share or 1.5 times the original
investment.

As part of the investment agreement, the domicile of SiteScape was changed to
Delaware and the Series A Convertible Preferred Stock was split 5 for 1.
Digital Fuel now owns 2,583,335 shares of Series A Preferred which has, among
other rights, the right to vote on general matters and the election of one
member to the seven member Board of Directors of SiteScape, the ability of a
1:1 conversion into the common stock of SiteScape and dividend participation
with common shares.  Digital Fuel now owns approximately 7.9% of SiteScape on
a fully diluted basis.

In addition, both the Series B and Series A preferred stock shall also be
entitled to receive dividends if and when declared by SiteScape's Board of
Directors at the cumulative rate of 8% per year compounded annually.
Dividends are due only if the tangible net worth of SiteScape exceeds $25
million and if declared by the Board of Directors of SiteScape.  As of
December 31, 2001 no dividends have been declared by SiteScape.  The Series A
dividends are junior to the Series B dividends but senior to the common stock
dividends.

Rainbow Investment

In 1999, the Company identified this early stage enterprise and provided
Rainbow Country, Inc. (Rainbow) with advances of $25,245. These funds were
part of Rainbow's seed capital to continue exploring the feasibility of
delivering potable water to Tucson, Arizona. This feasibility study included
but was not limited to determining the costs associated with securing the
water rights, plus designing and building a delivery system. In addition,
some work was done to quantify the demand and price point for deliverable
water to Tucson.



                                     15



The result of this effort was that the scope of this project was beyond the
Company's technical and capital resources.  Therefore, the Company charged
off the entire advance of $25,245 as an expense in 1999.  A Settlement
Agreement was successfully negotiated providing the Company with a promissory
note in the amount of $25,245, due and payable not later than December 1,
2000.  However, the Settlement Agreement collapsed and the Company decided
not to pursue any legal action on the advice of legal counsel.

Management's Discussion and Analysis for the nine months ended
September 30, 2002

Results of Operations

From September 1992 until July 1999, the Company had no operations and
activities primarily consisted of maintaining the corporation's status as a
corporation in good standing with the state of North Dakota and negotiating
the Asset Purchase Agreement.  From July 29, 1999 through September 30, 2002,
activities primarily consisted of bringing the Company's filings under the
Securities and Exchange Act of 1934 current; closing the Asset Purchase
Agreement; effecting a reverse stock split, name change and reincorporation
into Delaware; seeking business opportunities in the software and Internet
businesses specifically the M2Direct licensing agreements, the SiteScape
investment and the Rainbow investment; and accounting for these transactions.
During the nine months ended September 30, 2002, the Company incurred general
and administrative expenses of $6,998 related to these activities.

SiteScape is currently engaged in research and development and marketing and
advertising efforts to expand and grow their customer base.  The Company has
and will continue to regularly review the assumptions underlying the
operation performance and cash flow forecasts of SiteScape to assess the
investment's recoverability.  Although SiteScape has revenues, it has
operated at a loss.  There are no assurances that SiteScape will achieve
profitability or that its existing cash balances and cash flows from future
operations will be sufficient to meet its working capital requirements.
SiteScape continues to consume cash as it executes its business plan.  During
the second quarter of 2000, the Company did charge a portion of SiteScape's
research and development and marketing and advertising expenses against the
carrying value of its investment, which reduced the investment to zero on its
Balance Sheet.  During the nine months ended September 30, 2002, SiteScape
has continued to operate at a loss.

The Company incurred interest expense for the nine months ended September 30,
2002 of $99,621 in connection with the various loans as described in the
notes to the financial statements.  Through September 30, 2002, entities
controlled by Mr. Farley and Mr. Farley himself have made loans to the
Company totaling $996,666 for certain investment transactions and the ongoing
cash needs of the Company.  Through September 30, 2002, an entity controlled
by Mr. Metz has made loans to the Company totaling $128,775 for certain
investment transactions and the ongoing cash needs of the Company.



                                     16



Liquidity and Capital Resources

The independent auditors' report on the Company's financial statements as of
December 31, 2001, and for each of the years in the two-year period ended
December 31, 2001, includes a "going concern" paragraph that describes
substantial doubt about the Company's ability to continue as a going concern.
As of September 30, 2002, the Company had a working capital deficiency of
$2,231,499.

The Company anticipates an increased need for working capital during
2002 as it continues to seek companies that are potential merger
candidates that have a requirement for additional capital.  The Company
is seeking additional working capital through debt and/or equity
offerings, which will be used for the above-described purposes.



PART II. OTHER INFORMATION

Item 1. Legal Proceedings
        None

Item 2. Changes in Securities

        Effective June 22, 2000, Deucalion Research, Inc.
        ("Deucalion") was merged into its wholly owned Delaware
        subsidiary in a reincorporation/recapitalization merger which,
        effected a one-for-6,800 reverse stock split, reduced the
        authorized capital of the Company from 1,500,000,000 shares to
        30,000,000 shares, increased the par value of the Company's
        common stock from $.0001 to $.01 per share, and authorized the
        Board of Directors to issue up to 10,000,000 shares of blank
        check preferred stock.

Item 3. Defaults Upon Senior Securities
        None

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

        On June 1, 2000, Deucalion held a special meeting of its
        stockholders to consider and vote upon the reincorporation/
        recapitalization merger of Deucalion with and into its wholly
        owned Delaware subsidiary, Digital Fuel, Inc. ("Special
        Meeting"), as described in the Schedule 14C Information
        Statement filed with the Securities and Exchange Commission on
        May 9, 2000 and incorporated herein by reference.  998,000,000
        shares were voted in favor of the reincorporation/
        recapitalization merger representing approximately 66.9% of the
        shares of common stock entitled to vote at the meeting.



                                     17



Item 4. Submission of Matters to a Vote of Security Holders (continued)

        Because the principal stockholders of the Company controlled
        enough shares to approve the transaction, no other votes were
        solicited and there were no votes against the proposal, no
        votes withheld, no broker non-votes and no abstentions.  The
        effect of the transaction approved at the Special Meeting
        included: changing the name of the Company from Deucalion
        Research, Inc. to Digital Fuel, Inc.; effecting a one-for-6,800
        reverse stock split, reducing the authorized capital of the
        Company from 1,500,000,000 shares to 30,000,000 shares;
        increasing the par value of the Company's common stock from
        $.0001 to $.01 per share; and authorizing the Board of
        Directors to issue up to 10,000,000 shares of blank check
        preferred stock.

Item 5. Other Information
        None

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibit Description:

            15  Letter on unaudited interim financial information. (See
                Independent Accountants' Report included herein).

        (b) The Company filed no reports on Form 8-K during the quarter
            covered by this report.



                                  SIGNATURES


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


                              DIGITAL FUEL, INC.
                                (Registrant)


By: /s/Michael R. Farley                  By: /s/Forrest L. Metz
    --------------------                      ------------------
    Michael R. Farley                         Forrest L. Metz,
    Chief Executive Officer                   President and Chief
                                              Financial Officer


Date: November 13, 2002



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