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 March 31, 2001

               [   ] 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


                               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 May 11, 2001.




<PAGE>
                               DIGITAL FUEL, INC.


Part 1.   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 March 31, 2001, and the related condensed statements of operations
and statement of cash flows for the three-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
May 10, 2001










                                     F-2


<PAGE>
                               DIGITAL FUEL, INC.
                            CONDENSED BALANCE SHEET
                                MARCH 31, 2001
                                  (Unaudited)

                                     ASSETS

Current assets:
   Cash                                                           $867
                                                                   ---

Total current assets                                               867
                                                                   ---
Investments (Note 4):
   Preferred Stock, SiteScape                                      -0-
                                                                   ---

                                                                  $867
                                                                   ===

                    LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY

Current liabilities:
   Notes payable:
      Related parties (Note 2)                              $1,188,265
      Other (Note3)                                            250,000

Accounts payable:
   Related parties                                              60,014
   Other                                                       130,808
Accrued management fees (Note 7)                               256,667
Accrued interest expense, related parties (Note 2)             131,229
                                                               -------

Total current liabilities                                    2,016,983
                                                             ---------

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                                      (4,429,861)
                                                             ---------

                                                            (2,016,116)
                                                             ---------

                                                                  $867
                                                                   ===

                    See Notes to Condensed Financial Statements



                                     F-3


<PAGE>
                               DIGITAL FUEL, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                  (Unaudited)

                                                  2001              2000
                                                  ----              ----
Expenses:
   Research and development (Note 4)          $                   $ 36,630
   Marketing and advertising (Note 4)                              407,370
   General and administrative                    3,042              76,688
                                                 -----             -------
Operating loss                                  (3,042)           (520,688)
                                                 -----             -------
Interest expense:
   Related parties (Note 2)                     26,459              21,924
   Other (Note 3)                                5,625               2,926
                                                ------              ------
                                                32,084              24,850
                                                ------              ------
Loss before extraordinary item                 (35,126)           (545,538)

Other item:
   Gain on extinguishment of debt (Note 6)                          27,178
                                                ------              ------
Net loss                                      $(35,126)          $(518,360)
                                                ======             =======

Basic and diluted loss per common share:
   Loss before extraordinary item                 $*                  $*
   Extraordinary item                             .00                 .00
                                                  ---                 ---
Net Loss                                          $*                  $*
                                                  ===                 ===


Weighted average number of shares outstanding  4,343,262        1,499,610,127
                                               =========        =============

*less than $.01 per share

                   See Notes To Condensed Financial Statements



                                     F-4


<PAGE>
                               DIGITAL FUEL, INC.

                            STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Unaudited)

                                                        2001          2000
                                                        ----          ----
Cash flows from operating activities:
   Net loss                                          $(35,126)    $(518,360)
                                                       ------       -------
   Adjustments to reconcile net loss
   to net cash used in operations:

   Non-cash expense in connection with
      SiteScape investment (Note 4)                                 444,000

   Change in operating liabilities:
      Increase in accts payable, related parties        1,356         2,945
      Decrease in accounts payable                     (2,552)      (23,410)
      Decrease in accrued salaries                     (2,211)
      Increase in accrued interest                      5,625
      Increase in accrued interest, related parties    26,459        15,202
                                                       ------        ------
   Total adjustments                                   28,677       438,737
                                                       ------       -------
Net cash used in operating activities                  (6,449)      (79,623)
                                                       ------        ------

Cash flows from financing activities:
   Proceeds from notes payable-related parties (Note 2)             326,000
   Repayments of notes payable-related parties                       (7,031)
   Proceeds from notes payable, other (Note 3)                      250,000
                                                                    -------
Net cash provided by financing activities                           568,969
                                                                    -------

Cash flows from investing activities:
   SiteScape stock purchase (Note 4)                               (500,000)
                                                                    -------
Net cash used in investing activities                              (500,000)
                                                                    -------
Increase (decrease) in cash                            (6,449)      (10,654)

Cash, beginning                                         7,316        20,022
                                                        -----        ------
Cash, ending                                             $867        $9,368
                                                          ===         =====

During the three months ended March 31, 2001, $-0- was paid for interest.


                                     F-5


<PAGE>
                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000


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, 2000.

    In the opinion of management, all adjustments, including normal recurring
    adjustments, necessary for a fair presentation of the results of
    operations for the three-month periods ended March 31, 2001 and 2000 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 includes: 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-6


<PAGE>
                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000


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            107,000

    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             57,345

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

                                                                 $1,188,265
                                                                  ---------


    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-7


<PAGE>
                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000


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 may 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 owns 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-8


<PAGE>
                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000

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 ending 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 have reduced the carry value of the Company's investment to
    zero.  During the three months ending March 31, 2001, 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
    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.


                                     F-9


<PAGE>
                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000


6.  Extraordinary Income:

    From 1992 until July 1999 the Company was inactive. The current
    management has embarked on settling certain outstanding payables that
    have been on the books from 1992 to present. 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 will be reduced by
    this $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 has been 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,
    has been reversed, resulting in recognition of $205,000 of income in
    2000.  The $45,000 due the original licensees is 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 ending December 31, 2000, $165,000.00 of salary has been
    accrued for Mr. Farley and $91,666.63 of salary has been accrued for Mr.
    Papanikolas.

8.  Income taxes:

    At December 31, 2000, the Company had net operating loss carryforwards of
    approximately $4,000,000 which are available to offset future taxable
    income, if any, through 2019. Based on statutory rates, the Company's
    expected tax benefit arising from the net operating loss carryforward
    would be approximately $700,000. 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.



                                     F-10


<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 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.

Management's Discussion and Analysis and Plan of Operation.

Plan of Operation

As a result of the bankruptcy of M2Direct, Inc. and the possible elimination
of the license agreements as discussed in this report under the heading
"Licensed Software," management has decided to change the focus of the
business.  During the next twelve-month period, we 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 has entered into an agreement with an investment banking firm
that is actively seeking companies that fit Digital Fuel's requirement, and
several possibilities are under discussion.

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


                                       11


<PAGE>

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 us $100,000, in August
1999, of the purchase price in exchange  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.

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.  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.

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.

Licensed Software

The Company received a letter on May 5, 2000 (dated May 3, 2000) informing us
that M2Direct had filed for protection under Chapter 11 on April 25, 2000 in
the Bankruptcy Court of the Northern District of Georgia, Atlanta Division.
As a result of receiving this notification, we have contacted a bankruptcy
attorney and will pursue the protection of our rights under these licenses.
We have been informed that there is an intellectual properties doctrine and
legal precedents that can be interpreted to provide us with the rights to the
software, if our licenses do not survive the impending bankruptcy
proceedings.  All costs related to the Company's acquisition of the M2Direct
license rights were previously expensed in 1999.

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.  Management feels that it is an
opportunity worth pursuing.



                                      12


<PAGE>

SiteScape, Inc. Investment

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.

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
owns 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 5:1 conversion into Class A Voting Common Stock of
SiteScape, dividend participation with common shares and the right to elect
one member 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.  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.

Rainbow Investment

Consistent with our business strategy, our management identified this early
stage company and provided Rainbow Country, Inc. (Rainbow) with advances of
$25,245 in 1999. 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.

The results of this effort has been the determination that the scope of this
project is beyond our technical and capital resources.  Therefore, the
Company charged off the entire advance of $25,245 as expense in 1999.  A
Settlement Agreement  had been 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 has ceased all activity with Rainbow Country, Inc.

Management's Discussion and Analysis for the three months ended March 31,
2001

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


                                      13


<PAGE>

the Asset Purchase Agreement.  From July 29, 1999 through March 31, 2001,
activities primarily consisted of bringing the Company's filings under the
Securities and Exchange Act of 1934 current, closing the Asset Purchase
Agreement, beginning the process to effect 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 three-months ended March 31,
2001, the Company incurred general and administrative expenses of $3,042
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 three months ending March 31, 2001, SiteScape has continued to
operate at a loss.

The Company also incurred interest expense for the three months ended March
31, 2001 of approximately $32,084 in connection with the various loans as
described in the notes to the financial statements. Through March 31, 2001,
entities controlled by Mr. Farley and Mr. Farley himself have made loans to
the Company totaling $996,265 for certain investment transactions and the
ongoing cash needs of the Company.

Liquidity and Capital Resources

The independent auditors' report on the Company's financial statements as of
December 31, 2000, and for each of the years in the two-year period ended
December 31, 2000, includes a "going concern" paragraph that describes
substantial doubt about the Company's ability to continue as a going concern.
As of March 31, 2001, the Company had a working capital deficiency of
$2,016,116.

The Company anticipates a significantly increased need for working capital
during the remainder of 2001 to maintain the required filings under the
Securities and Exchange Act of 1934 in a timely fashion. The 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 M2Direct technology once the bankruptcy proceedings have been
resolved.


                                      14


<PAGE>

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.
         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 includes: 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



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<PAGE>

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, President
    Chief Executive Officer                   and Chief Financial Officer


Date:  May 11, 2001



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