<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 June 30, 2000

            ( ) 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)

                           Deucalion Research, Inc.
                           ------------------------
  (Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                    Report)

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: 2,558,278 Shares of Common Stock,
par value $.01 per share, were outstanding as of August 15, 2000.
<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 June 30, 2000, and the related condensed statements of operations for the
three-month and six-month periods then ended; and the statement of cash flows
for the six-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.

GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
August 17, 2000
<PAGE>

                              DIGITAL FUEL, INC.
                            CONDENSED BALANCE SHEET
                                 June 30, 2000
                                  (Unaudited)

                                    ASSETS

Current assets:
Cash                                                              $   1,661
                                                                      -----

Total current assets                                                  1,661
                                                                      -----

Investments (Note 4):
Preferred Stock, SiteScape                                              -0-
                                                                        ---


                                                                  $   1,661
                                                                  =========

                LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY

Current liabilities:
Notes payable:
   Related parties (Note 2)                                       $ 1,142,420
   Other (Note3)                                                      250,000

Accounts payable:
   License agreements                                                 205,000
   Related parties                                                     37,425
   Other                                                               65,775
Accrued management fees                                               118,895
Accrued interest expense, related parties (Note 2)                     48,112
                                                                  -----------

Total current liabilities                                           1,867,627
                                                                  -----------

Long-term notes payable:
   Related parties (Note 2)                                            25,000
   Other (Note 3)                                                      15,000
                                                                  -----------

Shareholders' equity deficiency:                                       40,000
                                                                  -----------

Preferred stock, $.01 par value; authorized 10,000,000 shares;
issued -0- shares
Common stock, $.01 par value; authorized 20,000,000 shares;
issued 2,558,278 shares                                                25,583
Capital in excess of par value                                      2,396,842
Accumulated deficit                                                (4,328,391)
                                                                  -----------

                                                                   (1,905,966)
                                                                  -----------

                                                                  $     1,661
                                                                  ===========

                  See Notes to Condensed Financial Statements

                                      F-3
<PAGE>

                              DIGITAL FUEL, INC.

                      CONDENSED STATEMENTS OF OPERATIONS

                   THREE MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (Unaudited)



                                                          2000            1999
                                                          ----            ----
Expenses:
Research and development (Note 4)                    $  57,420
Marketing and advertising (Note 4)                     203,580
General and administrative                             188,586      $       70
                                                     ---------      ----------

Operating loss                                        (449,586)      (      70)
                                                     ---------      ----------

Interest expense:
Related parties (Note 2)                                25,677
Other (Note 3)                                           6,425
                                                     ---------

                                                        32,102
                                                     ---------

Net loss                                             $(481,688)     $(      70)
                                                     =========      ==========

Basic and diluted loss per common share              $    (.49)     $        *
                                                     =========      ==========


Weighted average number of shares outstanding          990,995          73,766
                                                     =========      ==========

*Less than $.01 per share

                  See Notes To Condensed Financial Statements

                                      F-4
<PAGE>

                              DIGITAL FUEL, INC.

                      CONDENSED STATEMENTS OF OPERATIONS

                    SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (Unaudited)

                                                           2000         1999
                                                           ----         ----
Expenses:
Research and development (Note 4)                   $    94,050
Marketing and advertising (Note 4)                      610,950
General and administrative                              265,274      $ 1,673
                                                    -----------      -------

Operating loss                                         (970,274)      (1,673)
                                                    -----------      -------

Interest expense:
Related parties (Note 2)                                 47,601
Other (Note 3)                                            9,351
                                                    -----------

                                                         56,952
                                                    -----------

Loss before extraordinary item                       (1,027,226)      (1,673)

Other item:
Gain on extinguishment of debt (Note 6)                  27,178       ______
                                                    -----------

Net loss                                            $(1,000,048)     $(1,673)
                                                    ===========      =======

Basic and diluted loss per common share:
Loss before extraordinary item                      $     (1.69)     $  (.02)
Extraordinary item                                          .04
                                                    -----------      -------
Net Loss                                            $     (1.65)     $  (.02)
                                                    ===========      =======


Weighted average number of shares outstanding           607.891       73,766
                                                    ===========      =======

                  See Notes To Condensed Financial Statements

                                      F-5
<PAGE>

                              DIGITAL FUEL, INC.

                           STATEMENTS OF CASH FLOWS

                    SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (Unaudited)



                                                                2000      1999
                                                                ----      ----
Cash flows from operating activities:
Net loss                                                 $(1,000,048)  $(1,673)
                                                         -----------   -------

Adjustments to reconcile net loss
to net cash used in operations:

Non-cash expense in connection with
SiteScape investment (Note 4)                                705,000

Change in operating liabilities:
Increase in accounts payable, related parties                 19,846
Increase in accounts payable                                  16,083
Increase in accrued salaries                                 112,899
Increase in accrued interest, related parties                 41,390
                                                         -----------

Total adjustments                                            895,218         0
                                                         -----------   -------

Net cash used in operating activities                       (104,830)   (1,673)
                                                         -----------   -------

Cash flows from financing activities:
Proceeds from notes payable-related parties (Note 2)         343,500
Repayments of notes payable-related parties                   (7,031)
Proceeds from notes payable, other (Note 3)                  250,000
                                                         -----------

Net cash provided by financing activities                    586,469
                                                         -----------

Cash flows from investing activities:
SiteScape stock purchase (Note 4)                           (500,000)
                                                         -----------

Net cash used in investing activities                       (500,000)
                                                         -----------

Decrease in cash                                             (18,361)   (1,673)

Cash, beginning                                               20,022     5,515
                                                         -----------   -------

Cash, ending                                             $     1,661   $ 3,842
                                                         ===========   =======

During the six months ended June 30, 2000, $6,469 was paid for interest.

Non-cash financing activities:
 Issuance of common stock in exchange for accounts payable    $  38,836
 Issuance of common stock in exchange for management fees        93,412
 Issuance of common stock in exchange for notes payable          10,000
                                                              ---------
                                                              $ 142,248
                                                              ---------
                                      F-6
<PAGE>

                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED JUNE 30, 2000 AND 1999

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, 1999.

      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 six month periods ended June 30, 2000 and
      1999 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.

      During the quarter ended June 30, 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-7
<PAGE>

                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
<S>                                                                     <C>
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                  6,500

         Multiple advance promissory note Farley & Associates, Inc.,
         maximum borrowings of $800,000, 9%, unsecured,
         due on demand                                                       743,920
                                                                          ----------

                                                                          $1,142,420
                                                                          ==========

         Long-term:

         Promissory note, Email Catalogue, LLC, 8%, unsecured,
         due October, 2001                                                $   25,000
                                                                          ==========
</TABLE>


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.


                                      F-8
<PAGE>

                               DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                   THREE MONTHS ENDED JUNE 30, 2000 AND 1999

2. Notes payable, related parties (Continued):

     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 Email Catalogue, LLC note was
     entered into in connection with license agreements. The Metz Trust and
     Email Catalogue, LLC are entities 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.

3. Notes payable, other

     Short-term:

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

     Torrance, 9%, unsecured, due on demand                        50,000
                                                                 --------

                                                                 $250,000
                                                                 ========

     Long-term:

     Comm Enterprises, 8%, unsecured, due October 15, 2001.      $ 10,000

     Port Ability, 8%, unsecured, due October 15, 2001.             5,000
                                                                 --------

                                                                 $ 15,000
                                                                 ========

   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.

                                      F-9
<PAGE>

                              DIGITAL FUEL, INC.

                         NOTES TO FINANCIAL STATEMENTS

                    SIX MONTHS ENDED JUNE 30, 2000 AND 1999

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 to 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.

     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. As of June 30, 2000 these circumstances have 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, 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.

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 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 2,003,225 shares of
     common stock for $110,000. Effective August 31, 1999, the Company issued
     147,765 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 $10,000 in
     debt due to them.

                                      F-10
<PAGE>

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,
     the company settled accounts payable with a carrying value of $33,678 for
     $6,500, resulting in extraordinary income from the extinguishment of debt
     of $27,178. The Company's net tax loss carryforward will be reduced by this
     $27,178 gain.

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

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 (2,003,225 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 us $100,000, in August 1999, of the purchase
price in exchange for 147,765 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.

                                     F-11
<PAGE>

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 merger.
After the reincorporationr/recapitalization 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

In our continuing efforts to market the M2Direct licensed technology, meetings
have either been conducted or are scheduled with companies that have a need to
protect copyrighted books, newspapers, and analyst's reports. Efforts are also
currently underway to explore the secure envelope application in the security of
patient recorders, to comply with health insurance legislation.

In addition to the digital rights management market, our plan of operation
includes exploring the feasibility of combining this envelope technology with
collaboration and data mining software products and companies. As an example,
documents can be securely delivered, such as bids, in the business-to-business
construction management and collaboration market segment. In fact, technical
discussions are underway to combine this licensed software with two specific
software products that will enhance our capabilities to compete in the business-
to-business market space.

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.

Based on M2Direct filing bankruptcy and the violations that M2Direct heretofore
created within the license agreements, we have suspended all license payments.
In anticipation of our rights under these licenses and the technology itself
surviving the bankruptcy proceedings, we are continuing our efforts to explore
and develop business opportunities that will potentially create revenue for the
Company.

We are currently developing business plans to utilize the M2Direct licensed
technology in a variety of ways. Even though we have presented the technology
and our ideas to several companies and have more meetings scheduled, we have no
contracts with other companies at this time. Even though we will continue to
have discussions about the application of the envelope technology with prospect
companies, no contracts will be entered into until and unless our licenses
survive the M2Direct bankruptcy.

Based on the legal precedents that exist protecting our ongoing and post
bankruptcy rights to the envelope technology and software, the Company has
developed a dialogue with the Bankruptcy Trustee, written a business plan and
submitted a bid to purchase this technology from the Bankruptcy Court. The
Company is embarking on raising the necessary capital required to purchase this
technology, if we are selected as the successful bidder. If we are not
successful in purchasing this technology from the Bankruptcy Court, we will
continue to pursue any and all legal remedies that will provide the Company full
access to this technology, up to and including obtaining the source code and
setting up our own servers. This would be done for purposes of maintaining the
Company's ability to implement its business plans for these licenses and the
pursuit of revenue from the application of this technology in the electronic
commerce marketplace.

                                      F-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 1:1 conversion into Class A Voting Common Stock of
SiteScape, dividend participation with common shares, and the right to elect to
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. 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 six-month 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 has 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. Documents have been drawn and Mr. Farley has approved and
signed them, on behalf of the Company. These documents have been sent to the
principals of Rainbow Country and have not been executed as of this date.

Management's Discussion and Analysis for the three and six months ended June 30,
2000

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 December 31, 1999
activities primarily consisted of bringing the Company's filings under the

                                      F-13
<PAGE>

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 June 30, 2000, the Company
incurred general and administrative expenses of $188,586 related to these
activities, which includes payroll expense of approximately $130,140.  For the
six-months ended June 30, 2000, the Company incurred general and administrative
expenses of $265,274, which included payroll expense of approximately $178,760.

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. As of June 30, 2000 these circumstances have
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, 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.  For the six months
period ending June 30, 2000 the Company recorded combined charges, associated
with its SiteScape investment, of $705,000.

The Company also incurred interest expense for the three months and six months
ended June 30, 2000 of approximately $32,000 and $57,000 respectively, in
connection with the various loans as described in the notes to the financial
statements. Through June 30, 2000, entities controlled by Mr. Farley and Mr.
Farley himself have made loans to the Company totaling $950,420 for certain
investment transactions and the ongoing cash needs of the Company.  During the
three months ended March 31, 2000, the Company recognized a $27,178
extraordinary gain from the extinguishments of debt upon the settlement of
$38,678 of accounts payable (that had been outstanding since 1992) for $6,500.


Liquidity and Capital Resources

The independent auditors' report on the Company's financial statements as of
December 31, 1999, and for each of the years in the two-year period ended
December 31, 1999, includes a "going concern" paragraph that describes
substantial doubt about the Company's ability to continue as a going concern. As
of June 30, 2000, the Company had a working capital deficiency of $1,865,966.

The Company anticipates a significantly increased need for working capital
during remainder of 2000 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.

                                      F-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

Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibit Description
     -------------------

            2     Agreement and Plan of Merger dated June 16, 2000, between
                  Digital Fuel, Inc. and Deucalion Research, Inc.

            3(i)  Certificate of Incorporation (Incorporated by reference to
                  Exhibit A of the Schedule 14C Information Statement filed with
                  the SEC on May 9, 2000).

            3(ii) Bylaws of Digital Fuel, Inc.

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

            27    Financial data schedule

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

                                     F-15
<PAGE>

                                   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, Chief Executive Officer    Forrest L. Metz, President and
                                                Chief Financial Officer

Date: August 17, 2000

                                      F-16
<PAGE>

                                   Exhibit 2
                                   ---------
                         AGREEMENT AND PLAN OF MERGER
                                      OF
                           DEUCALION RESEARCH, INC.
                         (a North Dakota corporation)
                                      AND
                              DIGITAL FUEL, INC.
                           (a Delaware corporation)

          THIS AGREEMENT AND PLAN OF MERGER, dated as of June 16, 2000 (this
"Agreement") is between Digital Fuel, Inc., a Delaware corporation ("Digital
Fuel"), and Deucalion Research, Inc., a North Dakota corporation ("Deucalion").
Digital Fuel and Deucalion are sometimes referred to herein as the "Constituent
Corporations."

                                   RECITALS

A.   Digital Fuel is a corporation duly organized and existing under the laws of
     the State of Delaware and has a total authorized capital stock of
     30,000,000 shares.  The number of shares of Preferred Stock authorized to
     be issued is 10,000,000, par value $.01.  No shares of Preferred Stock were
     outstanding as of the date hereof and prior to giving effect to the
     transactions contemplated hereby.  The number of shares of Common Stock
     authorized to be issued is 20,000,000, par value $.01.  As of the date
     hereof, and before giving effect to the transactions contemplated hereby,
     1,000 shares of Common Stock were issued and outstanding, all of which were
     held by Deucalion.

B.   Deucalion is a corporation duly organized and existing under the laws of
     the State of North Dakota and has an authorized capital stock of
     1,500,000,000 shares all of which are common stock, $.0001 par value, of
     which 1,499,610,127 shares are issued and outstanding.

C.   The Board of Directors of Deucalion has determined that, for the purpose of
     effecting the reincorporation of Deucalion in the State of Delaware, it is
     advisable and in the best interests of Deucalion, that Deucalion merge with
     and into Digital Fuel upon the terms and conditions herein provided.

D.   The respective Boards of Directors of Digital Fuel and Deucalion have
     approved this Agreement and Deucalion, as the sole shareholder of Digital
     Fuel has approved this Agreement and a majority of the outstanding shares
     of Deucalion approved the terms of the merger herein provided at a special
     meeting of the shareholders held June 1, 2000.

E.   Digital Fuel is a wholly-owned subsidiary of Deucalion

     NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Digital Fuel and Deucalion hereby agree, subject to the terms and
conditions hereinafter set forth, as follows:


                                  I.  MERGER

1.1  Merger.  In accordance with the provisions of this Agreement, the Delaware
              General Corporation Law and the Business Corporation Act of the
              State of North Dakota, Deucalion shall be merged with and into
              Digital Fuel (the "Merger"), the separate existence of Deucalion
              shall cease and Digital Fuel shall be, and is herein sometimes
              referred to as, the "Surviving Corporation," and the name of the
              Surviving Corporation shall continue to be Digital Fuel, Inc.

     1.2      Filing and Effectiveness. The Merger shall not become effective
              until the following actions shall be completed:
<PAGE>

          a.   All of the conditions precedent to the consummation of the Merger
               specified in this Agreement shall have been satisfied or duly
               waived by the party entitled to satisfaction thereof:

          c.   An executed Certificate of Merger or an executed counterpart of
               this Agreement meeting the requirements of the Delaware General
               Corporation Law shall have been filed with the Secretary of State
               of the State of Delaware; and

          d.   An executed counterpart of this Agreement, Articles of Merger or
               any other document filed with the Secretary of State of the State
               of Delaware pursuant to section (c) above, shall have been filed
               with the Secretary of State of the State of North Dakota.

          The date and time when the Merger shall become effective as aforesaid,
     is herein called the "Effective Date of the Merger."

     1.3  Effect of the Merger.  Upon the Effective Date of the Merger, the
          separate existence of Deucalion shall cease and Digital Fuel, as the
          Surviving Corporation (i) shall continue to possess all of its assets,
          rights, powers and property as constituted immediately prior to the
          Effective Date of the Merger, (ii) shall be subject to all actions
          previously taken by its and Deucalion's Board of Directors, (iii)
          shall succeed, without other transfer, to all of the assets, rights,
          powers and property of Deucalion in the manner more fully set forth in
          Section 259 of the General Corporation Law of the State of Delaware,
          (iv) shall continue to be subject to all of the debts, liabilities and
          obligations of Digital Fuel as constituted immediately prior to the
          Effective Date of the Merger, and (v) shall succeed, without other
          transfer, to all of the debts, liabilities and obligations of
          Deucalion in the same manner as if Digital Fuel had itself incurred
          them, all as more fully provided under the applicable provisions of
          the General Corporation Law of the State of Delaware and the Business
          Corporation Act of the State of North Dakota.

                II.  CHARTER DOCUMENTS, DIRECTORS AND OFFICERS

     2.1  Certificate of Incorporation.  The Certificate of Incorporation of
          Digital Fuel as in effect immediately prior to the Effective Date of
          the Merger shall continue in full force and effect as the Certificate
          of Incorporation of the Surviving Corporation until duly amended in
          accordance with the provisions thereof and applicable law.

     2.2  Bylaws.  The Bylaws of Digital Fuel as in effect immediately prior to
          the Effective Date of the Merger shall continue in full force and
          effect as the Bylaws of the Surviving Corporation until duly amended
          in accordance with the provisions thereof and applicable law.

     2.3  Directors and Officers.  The directors and officers of Digital Fuel
          immediately prior to the Effective Date of the Merger shall be the
          directors and officers of the Surviving Corporation until their
          successors shall have been duly elected and qualified or until as
          otherwise provided by law, the Certificate of Incorporation of the
          Surviving Corporation or the Bylaws of the Surviving Corporation.

                      III.  MANNER OF CONVERSION OF STOCK

     3.1  Deucalion Common Shares.  Upon the Effective Date of the Merger, every
          6,800 shares of Deucalion Common Stock, $.0001 par value, issued and
          outstanding immediately prior thereto shall by virtue of the Merger
          and without any action by the Constituent Corporations, the holder of
          such share or any other person, be converted into and exchanged for
          one fully paid and nonassessable share of Common Stock, par value $.01
          per share, of the Surviving Corporation with any fractional interests
          therein being rounded to the next highest share so as to ensure that
          no shareholder of Deucalion shall be reduced to less than one fully
          pain and nonassessable share of the Surviving Corporation.

     3.3  Digital Fuel Common Stock.  Upon the Effective Date of the Merger,
          each share of Common Stock, par value $.01 per share, of Digital Fuel
          issued and outstanding immediately prior thereto shall, by virtue of
          the Merger and without any action by Digital Fuel, the holder of such
          shares or any other person, be canceled and returned to the status of
          authorized but unissued shares.

     3.4  Exchange of Certificates.  After the Effective Date of the Merger,
          each holder of an outstanding certificate representing shares of
          Deucalion Common Stock may be asked to surrender the same for
          cancellation to an
<PAGE>

          exchange agent, whose name will be delivered to such holders prior to
          any requested exchange (the "Exchange Agent"), and each such holder
          shall be entitled to receive in exchange therefore a certificate or
          certificates representing the number of shares of the Surviving
          Corporation's Common Stock into which the surrendered shares were
          converted as herein provided. Until so surrendered, each outstanding
          certificate theretofore representing shares of Deucalion Common Stock
          shall be deemed for all purposes to represent the number of shares of
          the Surviving Corporation's Common Stock into which shares of
          Deucalion Common Stock were converted in the Merger.

          The registered owner on the books and records of the Surviving
     Corporation or the Exchange Agent of any such outstanding certificate
     shall, until such certificate shall have been surrendered for transfer or
     conversion or otherwise accounted for to the Surviving Corporation or the
     Exchange Agent, have and be entitled to exercise any voting and other
     rights with respect to and to receive dividends and other distributions
     upon the shares of Common Stock of the Surviving Corporation represented by
     such outstanding certificate as provided above.

          Each certificate representing Common Stock of the Surviving
     Corporation so issued in the Merger shall bear the same legends, if any,
     with respect to the restrictions on transferability as the certificates of
     Deucalion so converted and given in exchange therefore, unless otherwise
     determined by the Board of Directors of the Surviving Corporation in
     compliance with applicable laws, or other such additional legends agreed
     upon by the holder and the Surviving Corporation.

          If any certificate for shares of Digital Fuel stock is to be issued in
     a name other than that in which the certificate surrendered in exchange
     therefore is registered, it shall be a condition of issuance thereof that
     the certificate so surrendered shall be properly endorsed and otherwise in
     proper form for transfer, that such transfer otherwise be proper and comply
     with applicable securities laws and that the person requesting such
     transfer pay to the Exchange Agent any transfer or other taxes payable by
     reason of issuance of such new certificate in a name other than that of the
     registered holder of the certificate surrendered or establish to the
     satisfaction of Digital Fuel that such tax has been paid or is not payable.

                                 IV.  GENERAL

     4.1  Covenants of Digital Fuel.  Digital Fuel covenants and agrees that it
          will, on or before the Effective Date of the Merger:

          4.1.2  File any and all documents with the North Dakota Franchise Tax
                 Board necessary for the assumption by Digital Fuel of all of
                 the franchise tax liabilities of Deucalion.

          4.1.3  Take such other actions as may be required by the Business
                 Corporation Law of the State of North Dakota.

     4.2  Further Assurances.  From time to time, as and when required by
          Digital Fuel or by its successors or assigns, there shall be executed
          and delivered on behalf of Deucalion such deeds and other instruments,
          and there shall be taken or caused to be taken by it such further and
          other actions as shall be appropriate or necessary in order to vest or
          perfect in or conform of record or otherwise by Digital Fuel the title
          to and possession of all the property, interests, assets, rights,
          privileges, immunities, powers, franchises and authority of Deucalion
          and otherwise to carry out the purposes of this Agreement, and the
          officers and directors of Digital Fuel are fully authorized in the
          name and on behalf of Deucalion or otherwise to take any and all such
          action and to execute and deliver any and all such deeds and other
          instruments.

     4.3  Abandonment.  At any time before the Effective Date of the Merger,
          this Agreement may be terminated and the Merger may be abandoned for
          any reason whatsoever by the Board of Directors of either Deucalion or
          of Digital Fuel, or of both, notwithstanding the approval of this
          Agreement by the shareholders of Deucalion.

     4.4  Amendment.  The Board of Directors of the Constituent Corporations may
          amend this Agreement at any time prior to the filing of this Agreement
          (or certificate in lieu thereof) with the Secretary of State of the
          State of Delaware, provided that an amendment made subsequent to the
          adoption of this Agreement by the stockholder or shareholders of
          either Constituent Corporation shall not: (1) alter or change the
          amount or kind of shares, securities, cash, property and/or rights to
          be received in exchange for or on conversion of all or any of the
          shares of any class or series thereof of such Constituent Corporation.
          (2) alter or change any term of
<PAGE>

          the Certificate of Incorporation of the Surviving Corporation to be
          effected by the Merger or (3) alter or change any of the terms and
          conditions of this Agreement if such alteration or change would
          adversely affect the holders of any class or series of capital stock
          or any Constituent Corporation.

     4.5  Registered Office.  The registered office of the Surviving Corporation
          in the State of Delaware is 1013 Centre Read, City of Wilmington,
          County of New Castle, State of Delaware 19805.  The name of its
          registered agent at such address is The United States Corporation
          Company.

     4.6  Agreement.  Executed copies of this Agreement will be on file at the
          principal place of business of the Surviving Corporation at 6601 East
          Grant Road, Tucson, Arizona 85715, and copies thereof will be
          furnished to any stockholder or shareholder of either Constituent
          Corporation, upon request and without cost.

     4.7  Governing Law.  This Agreement shall in all respects be construed,
          interpreted and enforced in accordance with and governed by the laws
          of the State of Delaware and, so far as applicable, the merger
          provisions of the Business Corporation Act of the State of North
          Dakota.

     4.8  Counterparts.  In order to facilitate the filing and recording of this
          Agreement, the same may be executed in any number of counterparts,
          each of which shall be deemed to be an original and all of which
          together shall constitute one and the same instrument.

          IN WITNESS WHEREOF, this Agreement having first been approved by the
     resolutions of the Boards of Directors of Digital Fuel, Inc., a Delaware
     corporation, and Deucalion Research, Inc., a North Dakota corporation, is
     hereby executed on behalf of each of such two corporations and attested by
     their respective officers thereunto duly authorized.


     DEUCALION RESEARCH, INC.                     DIGITAL FUEL, INC.
     a North Dakota corporation                   a Delaware corporation


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

<PAGE>

                                 Exhibit 3(ii)
                                 -------------

                                    BYLAWS
                                      OF
                              DIGITAL FUEL, INC.

                    (hereinafter called the "Corporation")

                                   ARTICLE I
                                    OFFICES
                                    -------

  Section 1.  Registered Office.  The registered office of the Corporation shall
  ---------   -----------------
be in the City of Wilmington, County of New Castle, State of Delaware.

  Section 2.  Other Offices.  The Corporation may also have offices at such
  ---------   -------------
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.

                                  ARTICLE II
                           MEETINGS OF STOCKHOLDERS
                           ------------------------

  Section 1.  Place of Meetings.  Meetings of the stockholders for the election
  ---------   -----------------
of directors or for any other purpose shall be held at such time and place,
either within or without the State of Delaware, as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting or in
a duly executed waiver of notice thereof.

  Section 2.  Annual Meeting.  The annual meetings of stockholders shall be held
  ---------   --------------
on such date and at such time as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meetings
the stockholders shall elect by a plurality vote a Board of Directors, and
transact such other business as may properly be brought before the meeting.
Written notice of the annual meeting stating the place, date and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting as
the laws of the State of Delaware shall provide.

  Section 3.  Special Meetings.  Unless otherwise prescribed by law or by the
  ---------   ----------------
Certificate of Incorporation, special meetings of stockholders, for any purpose
or purposes, may be called by either (i) the Chairman, if there be one, or (ii)
the President, (iii) any Vice President, if there be one or (iv) the Secretary
and shall be called by any such officer at the request in writing of a majority
of the Board of Directors or the holders of a majority of the outstanding voting
shares.  Such request shall state the purpose or purposes of the proposed
meeting.  Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called shall
be given to each stockholder entitled to vote at such meeting as the laws of the
State of Delaware shall provide.

  Section 4.  Quorum.  Except as otherwise provided by law or by the Certificate
  ---------   ------
of Incorporation, the holders of one-third of the common stock issued and
outstanding and entitled to vote, present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business.  If such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote, present in
person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented.  At such adjourned meeting, if a quorum
shall be present or represented, any business may be transacted, which might
have been transacted at the meeting as originally noticed.  If the adjournment
is for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder entitled to vote at the meeting.
<PAGE>

  Section 5.  Voting.  Unless otherwise required by law, the Certificate of
  ---------   ------
Incorporation or these Bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
stock represented and entitled to vote.  Each stockholder represented at a
meeting of stockholders shall be entitled to cast one vote for each share of the
common stock entitled to vote held by such stockholder.  Such votes may be cast
in person or by proxy but no proxy shall be voted on or after three years from
its date, unless such proxy provides for a longer period.  The Board of
Directors, in its discretion, or the officer of the Corporation presiding at a
meeting of stockholders, in his discretion, may require that any votes cast at
such meeting shall be cast by written ballot.

  Section 6.  Stock Ledger.  The stock ledger of the Corporation shall be the
  ---------   ------------
only evidence as to the stockholders who are entitled to examine the stock
ledger, any list required by the General Corporation Law of the State of
Delaware or the books of the Corporation, or to vote in person or by proxy at
any meeting of stockholders.

  Section 7.  Action by Consent of all Stockholders.  Any action required to be
  ---------   -------------------------------------
taken at any annual or special meeting of the stockholders may be taken without
a meeting, without prior notice and without a vote, if a consent in writing
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted.  Such written consent or consents shall be
filed with the minutes of the Corporation.  Prompt notice of the taking of
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.

                                  ARTICLE III
                                   DIRECTORS
                                   ---------

  Section 1.  Number of Directors.  The Board of Directors shall consist of not
  ---------   -------------------
less than one member, the exact number of which shall initially be fixed by the
Incorporator and thereafter from time to time by resolution of the Board of
Directors.  Any director may resign at any time upon notice to the Corporation.
Directors need not be stockholders.

  Section 2.  Removal of Directors.  Any Director may be removed, with or
  ----------  --------------------
without cause, by a majority vote of the stockholders entitled to vote. The
action for removal can be taken at an annual meeting, special meeting called for
that purpose, or by a consent action.

  Section 3.  Vacancies.  Vacancies and newly created directorships resulting
  ---------   ---------
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director.

  Section 4.  Duties and Powers.  The business of the Corporation shall be
  ---------   -----------------
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.

  Section 5.  Meetings.  The Board of Directors of the Corporation may hold
  ---------   --------
meetings, both regular and special, either within or without the State of
Delaware.  Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be fixed by the Board of
Directors.  Special meetings of the Board of Directors may be called by the
Chairman, if there be one, the President, or any two directors.  Notice thereof
stating the place, date and hour of the meeting shall be given to each director
either by mail not less than 48 hours before the date of the meeting, by
telephone or telegram on 24 hours notice, or on such shorter notice as the
person or persons calling such meeting may deem necessary or appropriate in the
circumstances.

  Section 6.  Quorum.  Except as may be otherwise specifically provided by law,
  ---------   ------
the Certificate of Incorporation or these Bylaws, at all meetings of the Board
of Directors, a majority of the entire Board of Directors shall constitute a
quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors.  If a quorum shall not be present at any meeting of the
<PAGE>

Board of Directors, the directors present may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

  Section 7.  Actions of Board.  Unless otherwise provided by the Certificate of
  ---------   ----------------
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all the members of the Board of Directors or committee, as
the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors or committee.

  Section 8.  Meetings by Means of Conference Telephone.  Unless otherwise
  ---------   -----------------------------------------
provided by the Certificate of Incorporation or these Bylaws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 7 shall constitute
presence in person at such meeting.

  Section 9.  Committees.  The Board of Directors may, by resolution passed by a
  ---------   ----------
majority of the entire Board of Directors, designate one or more committees,
each committee to consist of one or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any committee who may replace any absent or disqualified member at any
meeting of any such committee.  In the absence or disqualification of a member
of a committee, and in the absence of a designation by the Board of Directors of
an alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any absent or
disqualified member.  Any committee, to the extent allowed by law and provided
in the resolution establishing such committee, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation; but no such committee shall have the
power or authority to amend the certificate of incorporation, adopt an agreement
of merger or consolidation, recommend to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, amend the bylaws of the corporation, declare a dividend, or
issue stock. Each committee shall keep regular minutes and report to the Board
of Directors when required.

  Section 10. Compensation.  The directors may be paid their expenses, if any,
  ----------  ------------
of attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
as director.  No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefore.  Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

  Section 11. Interested Directors.  No contract or transaction between the
  ----------  --------------------
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders.  Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a
<PAGE>

committee, which authorizes the contract or transaction.

                                  ARTICLE IV
                                   OFFICERS
                                   --------

  Section 1.  General.  The officers of the Corporation shall be chosen by the
  ---------   -------
Board of Directors and shall be a President, a Secretary and a Treasurer.  The
Board of Directors, in its discretion, may also choose a Chairman of the Board
of Directors (who must be a director) and one or more Vice Presidents, Assistant
Secretaries, Assistant Treasurers and other officers.  Any number of offices may
be held by the same person, unless otherwise prohibited by law, the Certificate
of Incorporation or these Bylaws.  The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of the
Board of Directors, need such officers be directors of the Corporation.

  Section 2.  Election.  The Board of Directors at its first meeting held after
  ---------   --------
each annual meeting of stockholders shall elect the officers of the Corporation
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Directors; and all officers of the Corporation shall hold office until their
successors are chosen and qualified, or until their earlier resignation or
removal.  Any officer elected by the Board of Directors may be removed, with or
without cause, at any time by the affirmative vote of a majority of the Board of
Directors.  Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors.  The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.

  Section 3.  Voting Securities Owned by the Corporation.  Powers of attorney,
  ---------   ------------------------------------------
proxies, waivers of notice of meeting, consents and other instruments relating
to securities owned by the Corporation may be executed in the name of and on
behalf of the Corporation by the President or any Vice President and any such
officer may, in the name of and on behalf of the Corporation, take all such
action as any such officer may deem advisable to vote in person or by proxy at
any meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any and
all rights and powers incident to the ownership of such securities and which, as
the owner thereof, the Corporation might have exercised and possessed if
present.  The Board of Directors may, by resolution, from time to time confer
like powers upon any other person or persons.

  Section 4.  Chairman of the Board of Directors.  The Chairman of the Board of
  ---------   ----------------------------------
Directors, if there be one, shall preside at all meetings of the stockholders
and of the Board of Directors.  He shall be the Chief Executive Officer of the
Corporation, and except where by law the signature of the President is required,
the Chairman of the Board of Directors shall possess the same power as the
President to sign all contracts, certificates and other instruments of the
Corporation which may be authorized by the Board of Directors.  During the
absence or disability of the President, the Chairman of the Board of Directors
shall exercise all the powers and discharge all the duties of the President.
The Chairman of the Board of Directors shall also perform such other duties and
may exercise such other powers as from time to time may be assigned to him by
these Bylaws or by the Board of Directors.

  Section 5.  President.  The President shall have, subject to the control of
  ---------   ---------
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, general supervision of the business of the Corporation and shall see
that all orders and resolutions of the Board of Directors are carried into
effect.  He shall execute all bonds, mortgages, contracts and other instruments
of the Corporation requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except that the other officers of the Corporation may sign and execute documents
when so authorized by these Bylaws, the Board of Directors or the President.  In
the absence or disability of the Chairman of the Board of Directors, or if there
be none, the President shall preside at all meetings of the stockholders and the
Board of Directors.  If there be no Chairman of the Board of Directors, the
President shall be the Chief Executive Officer of the Corporation.  The
President shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these Bylaws or by the
Board of Directors.
<PAGE>

  Section 6.  Vice Presidents.  At the request of the President or in his
  ---------   ---------------
absence or in the event of his inability or refusal to act (and if there be no
Chairman of the Board of Directors), the Vice President or the Vice Presidents
if there is more than one (in the order designated by the Board of Directors)
shall perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President.  Each
Vice President shall perform such other duties and have such other powers as the
Board of Directors from time to time may prescribe.  If there be no Chairman of
the Board of Directors and no Vice President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President or
in the event of the inability or refusal of the President to act, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.

  Section 7.  Secretary.  The Secretary shall attend all meetings of the Board
  ---------   ---------
of Directors and all meetings of stockholders and records of all the proceedings
shall be properly kept or filed, as the case may be.

  Section 8.  Treasurer.  The Treasurer shall have the custody of the corporate
  ---------   ---------
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.  The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation.  If required by the Board of
Directors, the Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.

  Section 9.  Assistant Secretaries.  Except as may be otherwise provided in
  ---------   ---------------------
these Bylaws, Assistant Secretaries, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the President, any Vice President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his disability
or refusal to act, shall perform the duties of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Secretary.

  Section 10. Assistant Treasurers.  Assistant Treasurers, if there be any,
  ----------  --------------------
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of his disability or refusal to act, shall perform the duties of the
Treasurer, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Treasurer.  If required by the Board of Directors,
an Assistant Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.

  Section 11. Other Officers.  Such other officers as the Board of Directors
  ----------  --------------
may choose shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors.  The Board of Directors may
delegate to any other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and powers.
<PAGE>

                                   ARTICLE V
                                     STOCK
                                     -----

  Section 1.  Form of Certificates.  Every holder of stock in the Corporation
  ---------   --------------------
shall be entitled to have a certificate signed, in the name of the Corporation
(i) by the Chairman of the Board of Directors, the President or a Vice President
and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the number of shares owned by
him in the Corporation.

  Section 2.  Signatures.  Where a certificate is counter-signed by (i) a
  ---------   ----------
transfer agent other than the Corporation or its employee, or (ii) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile.  In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.

  Section 3.  Lost Certificates.  The Board of Directors may direct a new
  ---------   -----------------
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed.  When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.

  Section 4.  Transfers.  Stock of the Corporation shall be transferable in the
  ---------   ---------
manner prescribed by law and in these Bylaws.  Transfers of stock shall be made
on the books of the Corporation only by the person named in the certificate or
by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefore, which shall be canceled before a new certificate shall be
issued.

  Section 5.  Record Date.  In order that the Corporation may determine the
  ---------   -----------
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than 60 days nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action.  A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors fix a new record date for the adjourned
meeting.

  Section 6.  Beneficial Owners.  The Corporation shall be entitled to recognize
  ---------   -----------------
the exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and to hold liable for calls
and assessments a person registered on its books as the owner of shares, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.

                                  ARTICLE VI
                                    NOTICES
                                    -------

  Section 1.  Notices.  Whenever written notice is required by law, the
  ---------   -------
Certificate of Incorporation or these Bylaws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at his address
as it appears on the records of the Corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail.  Written notice may also be given
personally or by facsimile, telegram, telex or
<PAGE>

cable.

  Section 2.  Waivers of Notice.  Whenever any notice is required by law, the
  ---------   -----------------
Certificate of Incorporation or these Bylaws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed, by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.

                                  ARTICLE VII
                              GENERAL PROVISIONS
                              ------------------

  Section 1.  Dividends.  Dividends upon the common stock of the Corporation,
  ---------   ---------
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, and may be
paid in cash, in property or in shares of the common stock.  Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.

  Section 2.  Disbursements.  All checks or demands for money and notes of the
  ---------   -------------
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

  Section 3.  Fiscal Year.  The fiscal year of the Corporation shall be fixed by
  ---------   -----------
resolution of the Board of Directors.

  Section 4.  Corporate Seal.  The corporate seal shall have inscribed thereon
  ---------   --------------
the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware."  The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.

                                 ARTICLE VIII
                                INDEMNIFICATION
                                ---------------

  The Corporation shall indemnify any director, officer, employee or agent of
the Corporation or any person serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise to the fullest extent permitted by the
Delaware General Corporation Law and provided for in the Certificate of
Incorporation.

                                  ARTICLE IX
                                  AMENDMENTS
                                  ----------

  Section 1.  Amendments.  These Bylaws may be altered, amended or repealed, in
  ---------   ----------
whole or in part, or new bylaws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new bylaws be contained in the notice of such
meeting of stockholders or Board of Directors as the case may be.  All such
amendments must be approved by either the holders of a majority of the
outstanding common stock entitled to vote or by a majority of the entire Board
of Directors then in office.

  Section 2.  Entire Board of Directors.  As used in this Article IX and in
  ---------   -------------------------
these Bylaws generally, the term "entire Board of Directors" means the total
number of directors, which the Corporation would have if there were no
vacancies.

                                   ARTICLE X
                                   ADOPTION
                                   --------

          These Bylaws were adopted by the Directors of the Corporation on April
1, 2000.