SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 For the quarterly period ended September 30, 2000

         OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the transition period from       to

         Commission file number 0-9040

                               DRYCLEAN USA, Inc.

        (Exact name of small business issuer as specified in its charter)

                   DELAWARE                                      11-2014231
         (State of other jurisdiction of                     (I.R.S. Employer)
         incorporation or organization)                     Identification No.)

                    290 N.E. 68 Street, Miami, Florida 33138
                    (Address of principal executive offices)

                                 (305) 754-4551
                           (Issuer's telephone number)

                                 Not Applicable
                                  (Former name)

          Check whether the issuer:  (1) filed all reports  required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. Yes X. No

         State the number of shares  outstanding of each of the issuer's classes
of common equity as of the latest  practicable  date:  Common  Stock,  $.025 par
value per share - 7,001,250 shares outstanding as of November 10, 2000.


<PAGE>

DRYCLEAN USA, Inc.
Condensed Consolidated Statements of Income

--------------------------------------------------------------------------------
                                                    For the three months ended
                                                           September 30,
                                                        2000          1999
                                                     (Unaudited)    (Unaudited)
--------------------------------------------------------------------------------

Net sales                                    4,574,476             $  4,559,810
Management and franchise fees,
   commissions and other income                340,875                  174,958
--------------------------------------------------------------------------------
         Total revenues                      4,915,351                4,734,768

Cost of goods sold                           3,253,127                3,315,946
Selling, general and

    administrative expenses                  1,165,522                1,010,419
Research and development                        26,672                   62,411
--------------------------------------------------------------------------------
         Total                               4,445,321                4,388,776

Operating Income                               470,030                  345,992

Interest income                                 13,752                    9,378
Interest expense                               (38,300)                 (42,643)
--------------------------------------------------------------------------------
Earnings before provision for income taxes     445,482                  312,727
Provision for income taxes                     178,200                  125,091
--------------------------------------------------------------------------------
         Net earnings                      $   267,282                $  187,636
================================================================================
Basic earnings per share                   $       .04                     $.03
Diluted earnings per share                 $       .04                     $.03
================================================================================

Weighted average number of shares
      Basic                                  7,001,250                6,925,000
      Diluted                                7,252,856                7,308,768
================================================================================



                                       2

            See Notes to Condensed Consolidated Financial Statements

<PAGE>

DRYCLEAN USA, Inc
Condensed Consolidated Balance Sheets

ASSETS

--------------------------------------------------------------------------------
                                             September 30,            June 30,
                                                2000                    2000
                                            (Unaudited)

--------------------------------------------------------------------------------

Current Assets

         Cash and cash equivalents             $    479,280      $      982,588
         Accounts receivable, net                 2,515,155           2,065,761
         Inventories                              4,466,190           4,103,680
         Lease receivables                           82,500             105,394
         Deferred income taxes                       46,135              46,135
         Prepaid expenses and other                 261,447             270,170
--------------------------------------------------------------------------------
                  Total current assets            7,850,707           7,573,728

Lease receivables, due after one year                30,968              45,519

Equipment and improvements - net of
   accumulated depreciation and amortization        321,129             340,342
Franchise, trademarks and other
    intangible assets, net                          681,408             621,941
Deferred tax asset                                    2,514               2,514

--------------------------------------------------------------------------------
                                              $   8,886,726        $  8,584,044
================================================================================


                                       3

            See Notes to Condensed Consolidated Financial Statements
<PAGE>


DRYCLEAN USA, Inc.
Condensed Consolidated Balance Sheets

LIABILITIES AND
STOCKHOLDERS' EQUITY

--------------------------------------------------------------------------------
                                             September 30,
                                                 2000                June 30,
                                             (Unaudited)               2000
--------------------------------------------------------------------------------
Current Liabilities
      Accounts payable and

        accrued expenses                     $ 1,178,213         $   1,301,537
      Line of credit                             228,613                   ---
      Income taxes payable                       126,695               281,944
      Customer deposits                          568,505               374,396
      Current portion of long term debt          480,000               480,000
--------------------------------------------------------------------------------
                  Total current liabilities    2,582,026             2,437,877

Term loan, less current portion                1,040,000             1,160,000
--------------------------------------------------------------------------------
Total liabilities                              3,622,026             3,597,877

Stockholders' Equity
         Common stock, $.025 par value;
              15,000,000  shares  authorized;
              7,027,500  and  7,016,250  shares
              issued  and  outstanding  at
              September  30  and  June  30,  2000,
              respectively, including 26,250
              shares held in treasury            175,688               175,406
         Additional paid-in capital            2,048,571             2,037,602
         Retained earnings                     3,040,441             2,773,159

--------------------------------------------------------------------------------
Total stockholders' equity                     5,264,700             4,986,167
--------------------------------------------------------------------------------
                                            $  8,886,726           $ 8,584,044
================================================================================


            See Notes to Condensed Consolidated Financial Statements


                                       4
<PAGE>

<TABLE>
<CAPTION>

DRYCLEAN USA, Inc.
Condensed Consolidated Statements of Cash Flows

--------------------------------------------------------------------------------------------
                                                             For the three months ended
                                                                    September 30,
                                                             2000                1999
                                                          (Unaudited)          Unaudited)
--------------------------------------------------------------------------------------------
Operating activities:
<S>                                                         <C>                <C>
    Net earnings                                            $ 267,282          $  187,636
    Adjustments to reconcile net earnings
        to cash  (used) provided by operating activities
Depreciation and amortization                                  38,701              34,846
Bad debts                                                      81,619               1,383
(Increase) decrease in operating assets:
      Accounts and lease receivables                         (493,568)            261,369
      Inventories                                            (362,510)             24,033
      Prepaid expenses and other                                8,723              31,569
Increase (decrease) in operating liabilities:
      Accounts payable and accrued expenses                  (123,324)           (362,811)
      Income taxes payable                                   (155,249)             38,666
      Customer deposits                                       194,109             119,730
--------------------------------------------------------------------------------------------
Net cash (used) provided by operating activities             (544,217)            336,421
--------------------------------------------------------------------------------------------
Investing activities:
   Capital expenditures                                       (78,954)            (77,862)
   Acquisition of Franchise and Licensing
     agreements                                                   ---            (550,000)
--------------------------------------------------------------------------------------------
   Net cash used by investing activities                      (78,954)           (627,862)
--------------------------------------------------------------------------------------------
Financing activities:
  Borrowings under line of credit                             228,613              27,451
  Payments on term loan                                      (120,000)           (120,000)
  Proceeds from exercise of stock options                      11,250              ---
--------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities              119,863             (92,549)
--------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                    (503,308)           (383,990)
Cash and cash equivalents at beginning of period              982,588             964,768
--------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                $   479,280         $   580,778
============================================================================================
Supplemental disclosures of cash flow
     information
Cash paid during the period for
      Interest                                            $    38,300        $     42,643
      Income taxes                                        $   333,449         $   117,225
--------------------------------------------------------------------------------------------

</TABLE>


            See Notes to Condensed Consolidated Financial Statements


                                       5
<PAGE>

                               DRYCLEAN USA, Inc.

              Notes To Condensed Consolidated Financial Statements
              ----------------------------------------------------

Note (1) - General: The accompanying  unaudited condensed consolidated financial
statements have been prepared in accordance with generally  accepted  accounting
principles for interim financial  statements and the instructions to Form 10-QSB
related to interim period  financial  statements.  Accordingly,  these condensed
consolidated  financial  statements  do  not  include  certain  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. However, the accompanying unaudited condensed consolidated
financial  statements  contain  all  adjustments   (consisting  only  of  normal
recurring accruals) which, in the opinion of management,  are necessary in order
to make the financial  statements not misleading.  The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the  full  year.  For  further  information,  refer to the  Company's  financial
statements and footnotes  thereto in the Company's  Annual Report on Form 10-KSB
for the year ended June 30, 2000.  The June 30, 2000 balance  sheet  information
was derived  from  audited  consolidated  financial  statements  included in the
Company's Annual Report on Form 10-KSB as of that date.

Note  (2)  -  New  Accounting  Pronouncements:  In  March  2000,  the  Financial
Accounting   Standards   Board  (FASB)   issued  FASB   Interpretation   No.  44
(Interpretation  44),  Accounting  for  Certain  Transactions   Involving  Stock
Compensation.  Interpretation  44  provides  criteria  for  the  recognition  of
compensation expense in certain stock-based  compensation  arrangements that are
accounted for under Accounting  Principles Board Opinion No. 25,  Accounting for
Stock Issued to Employees.  Interpretation  44 is effective  July 1, 2000,  with
certain  provisions  that are effective  retroactively  to December 15, 1998 and
January  12,  2000.  Interpretation  44 did not have an impact on the  Company's
consolidated financial statements.

Note (3) - Segment Information:  The Company's reportable segments are strategic
businesses  that  offer  different  products  and  services.  They  are  managed
separately  because each business  requires  different  technology and marketing
strategies.  The Company  primarily  evaluates the operating  performance of its
segments  based on the categories  noted in the table below.  The Company has no
sales between segments.


                                       6
<PAGE>



Note (3)  continued

Financial information for the Company's business segments is as follows:

                                                   For the three months ended
                                                          September 30,
                                                     2000                1999
                                                  (Unaudited)       (Unaudited)
--------------------------------------------------------------------------------
Revenues:
   Commercial and industrial laundry and
      dry cleaning equipment                  3,803,088              $3,939,736
   Manufacturing and sales of telephone
      test equipment                            907,544                 754,793
   License and franchise operations             204,719                  40,239
--------------------------------------------------------------------------------
Total revenues                               $4,915,351              $4,734,768
================================================================================
Operating income (loss)
    Commercial and industrial laundry and
        dry cleaning equipment              $   260,307             $   360,225
    Manufacturing and sales of telephone
        test equipment                           32,843                 (30,859)
    License and franchise operations            176,880                  16,626
--------------------------------------------------------------------------------
Total operating income               $          470,030             $   345,992
===============================================================================
Identifiable assets:
   Commercial and industrial laundry and
       dry cleaning equipment                $5,570,320             $4,682,484
   Manufacturing and sales of telephone
       test equipment                         2,487,140              2,247,802
    License and franchise operations            829,266                661,624
--------------------------------------------------------------------------------
Total assets                                 $8,886,726             $7,591,910
================================================================================


                                       7
<PAGE>


            Management's Discussion and Analysis Or Plan of Operation

Liquidity and Capital Resources
-------------------------------

For the three months ended September 30, 2000,  cash decreased by $503,308.  For
the three month period ended September 30, 1999, cash decreased by $383,990.

For the first three months of fiscal  2001,  operating  activities  used cash of
$544,217,  principally to support an increase in accounts and lease  receivables
($493,568) and inventories ($362,510) and to reduce accounts payable and accrued
expenses  ($123,324)  and  income  taxes  payable  ($155,249).  These  uses were
partially offset by the Company's net income of $267,282,  non-cash  expenses of
$38,701 for  depreciation  and  amortization  and  $81,619 in bad debt  expense.
Additional  cash was provided by an increase in customer's  deposits  ($194,109)
and a decrease in prepaid expenses ($8,723).  Of the cash generated by operating
activities in the first quarter of fiscal 2000 ($336,421), $187,636 was provided
by net income and $34,846  and $1,383 was derived  from  non-cash  expenses  for
depreciation and amortization and bad debts,  respectively.  Additional cash was
provided by a decrease in accounts and lease receivables ($261,369), inventories
($24,033)  and  pre-paid  expenses  and other  assets  ($31,569).  Cash was also
provided by an increase in customer deposits ($119,730) and income taxes payable
($38,666)  which  partially  offset a decrease in  accounts  payable and accrued
expenses ($362,811).

During  the first  quarter of fiscal  2001,  investing  activities  used cash of
$78,954 to acquire  capital  assets.  During the first  quarter of fiscal  2000,
investing activities used cash of $627,862,  to fund the acquisition of Dryclean
USA License Corp. for $550,00 and $77,862 to purchase other capital assets.

Financing  activities provided cash of $119,863 for the three month period ended
September  30, 2000,  principally  due to the  borrowing  of $228,613  under the
Company's  line of credit and $11,250 from the exercise of stock  options.  This
was partially offset by the monthly  installment  payments made on the Company's
term loan ($120,000).  For the same period of fiscal 2000,  financing activities
consumed cash of $92,549,  mostly to make  payments on the  Company's  term loan
($120,000)  which was offset,  in part,  by the  borrowing of $27,451  under the
Company's line of credit.

The Company  believes  that its present  cash,  cash it expects to generate from
operations  and cash  borrowings  under its  $2,250,000  line of credit  will be
sufficient to meet its operational needs.

Results of Operations
---------------------

Total revenues for the three month period ended  September 30, 2000 increased by
$180,583 (3.8%) over the same period of fiscal 2000. Revenues of the laundry and
dry cleaning equipment segment decreased by $136,648 (3.5%) principally due to a
reduction  in sales  volume of  laundry  equipment.  Revenues  of the  Company's
telecommunication  segment increased by $152,751 (20.2%) mostly due to increased
sales  volume of  outside  plant  test  equipment.  The  Company's  license  and
franchise segment,  which was acquired in July 1999,  increased its revenues for
the



                                       8
<PAGE>

first quarter of fiscal 2001 by $164,480  (408.8%) over the first quarter in
fiscal 2000, mostly due to initial license fees and increased royalty payments

Costs of goods sold, expressed as a percentage of net sales improved to 71.1% in
the first  quarter  of fiscal  2001 from  72.7% for the first  quarter of fiscal
2000.  The  improvement  was  principally  due to the  increase  in sales in the
telecommunication  division,  which historically  carries a higher margin, and a
more profitable product mix than sales of laundry and dry cleaning equipment.

For the first  quarter  of fiscal  2001,  selling,  general  and  administrative
expenses  increased by $155,103 (15.4%) over the same period of fiscal 2000. The
increase was  attributable  to increased  advertising  and sales  expense in the
telecommunications  division and an increase in the reserve for bad debts in the
laundry and dry cleaning equipment segment.  The increase in the reserve for bad
debts was primarily attributable to a $50,000 reserve against amounts receivable
for management fees from an entity controlled by one of the Company's  principal
shareholders.

Research and development expenses, which relate solely to the telecommunications
operation,  decreased by $ 35,739  (57.3%) in the first  quarter of fiscal 2001,
mostly due to a reduction in salary  expense while the Company is continuing its
search to replace  its former  Director  of  Engineering.  In the  interim,  new
products are being  designed  with the help of outside  consultants.  The amount
expended for the outside  consultants  was less than the amount expended for the
former Director of Engineering.

As a result of the foregoing, operating income increased by $124,038 (35.8%) for
the first quarter of fiscal 2001 over the  comparable  period of fiscal 2000 and
as a percentage of total revenues increased to 9.6% from 7.3%, respectively.

Interest  income  increased by $4,374 (46.6%) during the first quarter of fiscal
2001 over the first  quarter of fiscal 2000 as a result of  additional  interest
earned on daily bank balances.

Interest expense decreased by $4,343 (10.2%) in the first quarter of fiscal 2001
from the same period in fiscal  2000,  primarily  due to a reduction  in average
amounts of outstanding  debt during the fiscal 2001 period,  which was partially
offset by higher interest rates.

The provision for income taxes  increased by $53,109  (42.5%) in the first three
months of fiscal 2001 over the same period of fiscal  2000,  due to the increase
in pre-tax profit. The effective tax rate in each period was 40.0%.

Net earnings  increased by $79,646  (42.4%) in the first  quarter of fiscal 2001
over the first quarter of fiscal 2000.

Inflation
---------

Inflation has not had a significant  effect on the Company's  operations  during
the reported periods.




                                       9
<PAGE>

New Accounting Pronouncements
-----------------------------


In March 2000,  the  Financial  Accounting  Standards  Board (FASB)  issued FASB
Interpretation No. 44 (Interpretation  44), Accounting for Certain  Transactions
Involving  Stock  Compensation.  Interpretation  44  provides  criteria  for the
recognition  of  compensation   expense  in  certain  stock-based   compensation
arrangements  that are accounted for under  Accounting  Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees. Interpretation 44 is effective
July 1, 2000,  with  certain  provisions  that are  effective  retroactively  to
December 15, 1998 and January 12, 2000. Interpretation 44 did not have an impact
on the Company's consolidated financial statements.

                           PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Securityholders.

     At the Company's 2000 Annual Meeting of  Stockholders  held on November 10,
2000, the Company's stockholders:

     (a) Reelected the Company's then existing Board of Directors by the
following votes:

                                                              Votes
                                                --------------------------------
                                                   For                Withheld
                                                 --------             --------
                  Michael S. Steiner             6,494,467               36,642
                  William K. Steiner             6,494,461               36,648
                  Venerando J. Indelicato        6,492,125               38,984
                  David Blyer                    6,492,171               38,938
                  Lloyd Frank                    6,494,559               36,550
                  Alan Grunspan                  6,494,559               36,550
                  Stuart Wagner                  6,494,559               36,550

         (b)  Approved  Company's  2000 Stock Option Plan by a vote of 5,602,314
shares in favor and 65,041  shares  against,  with 7,285 shares  abstaining  and
856,469 broker non-votes.

Item 7.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  27.      Financial Data Schedule

         (b)      Reports on Form 8-K

         No Current  Reports on Form 8-K were  filed by the  Company  during the
period covered by this report.

                                       10
<PAGE>



                                   SIGNATURES

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

                                                     DRYCLEAN USA, Inc.

Dated:   November 10, 2000           By:    /s/ Michael S. Steiner
                                            ---------------------------
                                                Michael S. Steiner, President
                                                and Chief Executive Officer

Date:    November 10, 2000           By:    /s/ Venerando J. Indelicato
                                            ---------------------------
                                                Venerando J. Indelicato
                                                Treasurer and
                                                Chief Financial Officer



                                       11
<PAGE>




                                  EXHIBIT INDEX

Exhibit Number             Description
--------------             ------------

         27                         Financial Data Schedule