<PAGE>

                                 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, 1999

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

              For the transition period from _________to_________

                          Commission File No. 0-12374

                           Deucalion Research, Inc.
                      ----------------------------------
            (Exact Name of Registrant as Specified in its Charter)


        North Dakota                                            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 ____  No   X
                                             -----

Number of shares of common stock outstanding: 1,499,610,127 Shares of Common
Stock, par value $.0001 per share, were outstanding as of March 13, 1999.
<PAGE>

                           DEUCALION RESEARCH, INC.

Part 1.   FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

                           DEUCALION RESEARCH, INC.
                                 BALANCE SHEET
                              SEPTEMBER 30, 1999
                                  (Unaudited)

                                    ASSETS

<TABLE>
<S>                                                                <C>
Current assets:
 Cash                                                              $   191,171
 Deposit                                                           $   400,000
                                                                   -----------

  Total current assets                                                 591,171
                                                                   -----------

                                                                   $   591,171
                                                                   ===========

                LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY



Current liabilities:
 Notes payable, related parties (Notes 3 and 4)                    $   728,400
 Accounts payable:
  Related parties                                                        2,774
  Other                                                                 79,670
 Accrued management service fees, former president and CEO              92,400
                                                                   -----------

  Total liabilities (all current)                                  $   903,244
                                                                   -----------



Commitments (Note 4)

Shareholders' equity deficiency:
 Common stock, $.0001 par value; authorized 1,500,000,000
  shares; issued 1,499,610,127 shares                                  149,961
 Capital in excess of par value                                      2,130,216
 Accumulated deficit                                                (2,592,250)
                                                                   -----------

                                                                      (312,073)
                                                                   -----------

                                                                   $   591,171
                                                                   ===========
</TABLE>

                       See Notes to Financial Statements

                                      F-2
<PAGE>

                           DEUCALION RESEARCH, INC.

                           STATEMENTS OF OPERATIONS

                THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                     1999          1998
                                                 -----------    -----------
<S>                                              <C>            <C>
Expenses:
  General and administrative                     $   243,541    $        40
                                                 -----------    -----------

Operating loss                                      (243,541)           (40)
                                                 -----------    -----------

Interest expense, related parties                      3,911
                                                 -----------    -----------

Net loss                                         $  (247,452)   $       (40)
                                                 ===========    ===========

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

Weighted average number of shares outstanding    990,613,429    501,610,127
</TABLE>

*Less than $.01 per share


                       See Notes to Financial Statements

                                      F-3
<PAGE>

                           DEUCALION RESEARCH, INC.

                           STATEMENTS OF OPERATIONS

                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                      1999         1998
                                                   ----------   ------------
<S>                                                <C>          <C>
Expenses:
  General and administrative                       $  245,214    $     1,119
                                                   ----------    -----------

Operating loss                                       (245,214)        (1,119)
                                                   ----------    -----------

Interest expense                                        3,911
                                                   ----------    -----------

Net loss                                           $ (249,125)   $    (1,119)
                                                   ==========    ===========

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

Weighted average number of shares outstanding     666,402,449    501,610,127
</TABLE>

*Less than $.01 per share


                       See Notes to Financial Statements

                                      F-4
<PAGE>

                           DEUCALION RESEARCH, INC.

                 STATEMENTS OF SHAREHOLDERS' EQUITY DEFICIENCY

                     NINE MONTHS ENDED SEPTEMBER 30, 1999
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               Capital in
                                           Common stock         excess       Accumulated         Treasury stock
                                    -----------------------                                  ----------------------
                                        Shares      Amount      of par         deficit         Shares      Amount          Total
                                    ------------  ---------   ----------     -----------     ----------  ----------     ---------
<S>                                 <C>           <C>         <C>           <C>              <C>         <C>             <C>
Balances, January 1, 1999            517,859,353  $  51,786   $2,384,509    $ (2,343,125)    16,249,226  $ (256,118)    $(162,948)

Retirement of treasury shares        (16,249,226)    (1,625)    (254,493)                   (16,249,226)    256,118

Issuance of common shares            998,000,000     99,800          200                                                  100,000

Net loss                                                                        (249,125)                                (249,125)
                                    ------------  ---------   ----------    ------------    -----------  ----------     ---------
Balances, September 30, 1999       1,499,610,127  $ 149,961   $2,130,216    $ (2,592,250)                               $(312,073)
                                   =============  =========   ==========    ============    ===========  ==========     =========
</TABLE>

                       See Notes to Financial Statements

                                      F-5
<PAGE>

                           DEUCALION RESEARCH, INC.

                           STATEMENTS OF CASH FLOWS

                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                  (Unaudited)

<TABLE>
<CAPTION>


                                                          1999               1998
                                                      -------------       ------------
<S>                                                   <C>                 <C>
Cash flows from operating activities:
  Net loss                                            $    (249,125)      $     (1,119)
                                                      -------------       ------------
  Adjustments to reconcile net loss to net cash
   used in operating activities:
   Non-cash expense in connection with Site-
    Scape option (Note 4)                                   600,000
   Change in operating liabilities:
     Decrease in prepaid expense                              4,500
     Increase in deposits                                  (400,000)
     Increase in accounts payable and accrued
       expenses                                               1,881                964
                                                      -------------       ------------
  Total adjustments                                         206,381                964
                                                      -------------       ------------

Net cash used in operating activities                       (42,744)              (155)
                                                      -------------       ------------

Net cash provided by financing activities:

  Proceeds from notes payable, related parties
   (Note 3)                                                 200,000
  Repayments of notes payable, related parties
   (Note 3)                                                 (71,600)
  Proceeds from the issuance of common stock                100,000
                                                      -------------       ------------

Net cash provided by financing activities                   228,400
                                                      -------------       ------------

Increase (decrease) in cash                                 185,656               (155)

Cash, beginning                                               5,515              5,722
                                                      -------------       ------------

Cash, ending                                          $     191,171       $      5,567
                                                      =============       ============
</TABLE>

During the nine months ended September 30, 1999, $3,911 was paid for interest.


                       See Notes to Financial Statements

                                      F-6
<PAGE>

                           DEUCALION RESEARCH, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

1. Basis of presentation:

   The financial statements of Deucalion Research, 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, 1998.

   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, 1999
     and 1998 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.

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

2. Stock purchase agreement:

   Effective August 31, 1999, the Company completed a transaction whereby the
     Company sold approximately 67% of the post transaction voting common stock
     for an aggregate purchase price of $110,000.  Also, effective August 31,
     1999 ("the Initial Closing Date"), the directors and officers of the
     Company resigned and the purchasers were elected as directors and officers
     of the Company.

   Pursuant to the terms of the transaction, the purchasers paid the Company
     $100,000 of the purchase price in exchange for 998,000,000 of shares of the
     Company's common stock. Upon obtaining shareholder approval, the Company
     will effect a recapitalization of the Company, which may include a reverse
     stock split. After the reverse stock split and recapitalization, the
     purchasers have agreed to pay the remaining $10,000 purchase price in
     exchange for shares of the Company's common stock which will result in the
     purchasers owning 95% of the Company.

                                      F-7
<PAGE>

                           DEUCALION RESEARCH, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

2. Stock purchase agreement (continued):

   The stock purchase agreement also provided for the settlement of certain
     Company liabilities, including $38,836 owed for legal fees and $93,412 owed
     for management service fees. The Company intends to settle these
     liabilities through the issuance of common stock equal to 1/2% and 1%,
     respectively, of the total outstanding common stock of the Company after
     completion of the proposed transaction.

3.  Notes payable, related parties:

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

    Farley & Associates, Inc. 9%, due on demand                 528,400
                                                            -----------
                                                            $   728,400
                                                            ===========

    The Farley Family Partnership note arose on September 30, 1999 and provided
     the Company with $200,000 for cash needs of the Company. Farley Family
     Partnership is a limited partnership controlled by the immediate family of
     Michael R. Farley, who is also the president and CEO of the Company. The
     Farley & Associates, Inc. ("F & A") notes arose on September 1, 1999 and
     are described further in Note 4.

4. Option to purchase shares of SiteScape:

    Effective September 1, 1999, the Company completed an agreement with F & A,
     an Arizona corporation (which is wholly owned by Michael R. Farley, who is
     also President and CEO of the Company and the majority shareholder of the
     Company) whereby the Company acquired from F & A an option to purchase
     516,667 shares of SiteScape, Inc.'s (SiteScape) Series A Preferred Stock
     (the "Preferred Stock"). The Company acquired this option in exchange for a
     $200,000 note payable, bearing interest at 9% and due on demand. 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 has been recorded as general and administrative expense in the
     accompanying statement of operations.

    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, the
     Company acquired F & A's rights to this deposit in exchange for a $400,000
     note bearing interest at 9% and due on demand. This results in a total
     notes payable to F & A of $600,000 through September 30, 1999. Payments of
     $71,600 have been made on these notes.

                                      F-8
<PAGE>

                           DEUCALION RESEARCH, INC.

                         NOTES TO FINANCIAL STATEMENTS

                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

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

   Effective November 5, 1999, the Company exercised one-half of the SiteScape
     option shares and purchased 258,334 shares of Preferred Stock at a total
     cost of $500,000. The Company paid $100,000 cash directly to SiteScape, and
     applied the $400,000 SiteScape deposit described above. In February 2000,
     the Company exercised the remaining one-half of the SiteScape option shares
     and purchased 258,333 shares of Preferred Stock for $500,000. At the
     completion of the above described transactions, the Company owns
     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 voting on the
     election of the Board of Directors of SiteScape.

   In addition, the preferred stock shall also be entitled to receive dividends
     if, and which 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.

                                      F-9
<PAGE>

Part 1.  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 THE REGISTRANT'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED
TO, STATEMENTS CONCERNING THE REGISTRANT'S 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 THE REGISTRANT'S 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
REGULATION, THE VALUE OF THE REGISTRANT'S ASSETS AND ANY OTHER FACTORS DISCUSSED
IN THIS AND OTHER REGISTRANT FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.

Management's Discussion and Analysis and Plan of Operation

Plan of Operation

   Stock Purchase Agreement

   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. All
   of the officers and directors tendered their resignations and Messrs. Farley
   and Metz were elected to the Board of Directors. Mr. Metz was appointed
   Chairman of the Board, and Mr. Farley was appointed Chief Executive Officer.
   In August, the Company hired Grant S. Papanikolas as Chief Operating Officer.
   The new management is preparing the necessary documents to cause the Company
   to have a special shareholders meeting for the following purposes: 1) effect
   a recapitalization of the Company which will include a reverse stock split
   with a magnitude not yet determined; 2) change the name of the Company to
   Digital Fuel, Inc.; 3) appoint independent accountants; and 4) change the
   domicile of the Company to Delaware. As per the Stock Purchase Agreement, at
   the completion of the reverse stock split and recapitalization, Messrs.
   Farley and Metz will purchase additional shares of the common stock of the
   Company and will end up owning 95% of the common stock of the Company.

                                     F-10
<PAGE>

   SiteScape, Inc. Investment

   Effective September 1, 1999, the Company completed an agreement with Farley &
   Associates, Inc. (F & A), an Arizona corporation (which is wholly owned by
   Michael R. Farley, who is also President and CEO of the Company and the
   majority shareholder of the Company) whereby the Company acquired from F & A
   an option to purchase 516,667 shares of SiteScape, Inc.'s (SiteScape) Series
   A Preferred Stock (the "Preferred Stock"). The Company acquired this option
   in exchange for a $200,000 note payable, bearing interest at 9% and due on
   demand. 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 has been recorded as general and administrative expense in the
   accompanying statement of operations.

   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, the
   Company acquired F & A's rights to this deposit in exchange for a $400,000
   note bearing interest at 9% and due on demand. This results in a total notes
   payable to F & A of $600,000 through September 30, 1999. Payments of $71,600
   have been made on these notes.

   Effective November 5, 1999, the Company exercised one-half of the SiteScape
   option shares and purchased 258,334 shares of Preferred Stock at a total cost
   of $500,000. The Company paid $100,000 cash directly to SiteScape and applied
   the $400,000 SiteScape deposit described above. In February 2000, the Company
   exercised the remaining one-half of the SiteScape option shares and purchased
   258,333 shares of Preferred Stock for $500,000.

   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 voting on the
   election of the Board of Directors of SiteScape.

   In addition, the preferred stock shall also be entitled to receive dividends
   at the cumulative rate of 8% per year compounded annually. Dividends are due
   only if and when declared by the board of directors and the tangible net
   worth of SiteScape exceeds $25 million.

   SiteScape acquired AltaVista FORUM from Compaq Computer in April 1999, just
   prior to CMGI's acquisition of the popular AltaVista search engine. FORUM was
   conceived and developed by the Digital AltaVista team at a cost of tens of
   millions of dollars in product development. The transaction provides value to
   SiteScape in four areas.

     1. A product with five years of rich technical development and broad
        industry wide use.

     2. All intellectual property and technical resources, including the
        development team's senior engineering personnel.

     3. An estimated global installed base of over 1,200 customers, the best of
        the Fortune 1000.

     4. The rights to use AltaVista Search engine, which is embedded in the
        product.

                                     F-11
<PAGE>

   Originally, AltaVista created FORUM to fulfill a variety of "team
   collaboration" or "groupware" needs. Today, the product leverages the
   Internet for organizations that seek to enhance the functionality of existing
   application investments. In the near future, FORUM will be used to extend
   existing enterprise applications into the supply chain, the field and the
   front office. Because of its open source and platform independence, FORUM
   could become the standard web nervous system that provides the platform for
   web-based applications.

   Licensing Agreements

   In 1999, the Company purchased, through loans made to the Company, various
   software licensing agreements for $135,000. The software allows companies to
   send secure digital information via the internet to prospective customers,
   which can purchase the information by credit card.

Management's Discussion and Analysis for the three and nine months ended
September 30, 1999 and 1998

   Results of Operations

   During September 1992, the Company ceased active operations. Since that time
   and through July 29, 1999, the Company's activities have primarily consisted
   of maintaining the corporation's status as a corporation in good standing
   with the state of North Dakota and accounting for its investment in
   SiteScape. During the three and nine months ended September 30, 1999 the
   Company incurred $200,000 of expense related to the SiteScape option (as
   described above) and legal and accounting expense of approximately $23,500.
   The Company also incurred interest expense of $3,911, in connection with a
   related party loan of $600,000. In September 1999, entities controlled by Mr.
   Farley made loans of $800,000 to the Company for certain investment
   transactions and the ongoing cash needs of the Company of which $71,600 was
   repaid prior to September 30, 1999.

   Liquidity and Capital Resources

   The independent auditors' report on the Company's financial statements as of
   December 31, 1998, and for each of the years in the two-year period ended
   December 31, 1998, includes a "going concern" paragraph that describes
   substantial doubt about the Company's ability to continue as a going concern.
   In 1999, the Company received $100,000 for the sale of a majority of its
   common stock as described in Note 2 to the financial statements. The Company
   also received $800,000 of loans from related parties as described in Notes 3
   and 4 to the financial statements, of which $71,600 was repaid prior to
   September 30, 1999.

   As of September 30, 1999, the Company had a working capital deficiency of
   $312,073. As described in Note 2 to the financial statements, the Company has
   agreed to settle approximately $142,000 of current liabilities in exchange
   for one and one-half percent of the Company's post reverse stock split common
   stock as described in Note 2 to the financial statements.

   The Company anticipates a significantly increased need for working capital
   during the remainder of 1999 and 2000 as it brings its required filings under
   the Securities and Exchange Act of 1934 current and finalizes the items in
   the special shareholders meeting mentioned above. The Company also purchased
   software-licensing agreements through the issuance of notes as described
   above. The

                                     F-12
<PAGE>

   Company is seeking additional working capital through debt and/or equity
   offerings, which will be used for the above described purposes and to market
   and further develop the licensing agreement.

No capital expenditures have been made by the Company since December 1998.


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings
          None

Item 2.   Changes in Securities
          None

Item 3.   Defaults Upon Senior Securities
          None

Item 4.   Submission of Matters to a Vote of Security Holders
          None

Item 5.   Other Information
          None

Item 6.   Exhibits and Reports of Form 8-K

               (a)  Exhibit 27 - Financial data schedule

               (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.



                                 DEUCALION RESEARCH, INC.
                                 (Registrant)

                                 By  /s/ Michael R. Farley
                                   --------------------------------------------
                                     Michael R. Farley, Chief Executive Officer



                                 By  /s/ Forrest L. Metz
                                   ---------------------------------------------
                                     Forrest L. Metz, President and Chief
                                     Financial Officer
Date: March 14, 2000