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 quarterly period ended                  September 30, 2001
-------------------------------------------------------------------------------

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

For the transition period from  ____________________    to     ________________

For Quarter Ended    September 30, 2001       Commission File Number   0-25449
                   ----------------------                            -----------

                             PPI CAPITAL GROUP, INC.
-------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

             Utah                                       87-0401453
----------------------------------------   ------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

3655 Nobel Drive, Suite 540, San Diego, California            92122
-------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code          (858) 623-1600
-------------------------------------------------------------------------------

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 and 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 [ ]

        Class                          Outstanding as of November 13, 2001
     Common Stock                                   11,839,990

<PAGE>

                             PPI CAPITAL GROUP, INC.
                                   FORM 10-QSB
                                QUARTERLY REPORT
                               September 30, 2001

                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements:

           Consolidated Balance Sheets.....................................   3
           Consolidated Statements of Operations...........................   4
           Consolidated Statements of Cash Flows...........................   5
           Notes to Consolidated Statements................................   6

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations.......................................  13

PART II - OTHER INFORMATION

Item 2.    Changes in Securities and Use of Proceeds.......................  18

Item 6.    Exhibits and Reports on Form 8-K................................  19

SIGNATURES.................................................................  21

                                                                               2
<PAGE>
<TABLE>
<CAPTION>

                       PART I.    PPI CAPITAL GROUP, INC.

Item 1.  PPI CAPITAL GROUP, INC.
         FINANCIAL STATEMENTS (UNAUDITED)

                             PPI Capital Group, Inc.
                     Consolidated Balance Sheet (Unaudited)

                                                          September 30, 2001  December 31, 2000
                            ASSETS                              Unaudited           Audited
                                                          ------------------  -----------------
<S>                                                             <C>                <C>
Current Assets:
    Cash                                                        $    288,669       $    454,291
    Other Current Assets                                              96,765             40,065
                                                                ------------       ------------
        Total Current Assets                                         385,434            494,356

Fixed Assets, at cost:
    Equipment                                                        119,722            103,134
    Computer Software                                                 67,226             65,546
                                                                ------------       ------------
                                                                     186,948            168,680
    Less: Accumulated Depreciation                                   (49,060)           (25,088)

        Fixed Assets, net                                            137,888            143,592

Other Assets:
    Website Development, net of accumulated amortization of
      $276,542 and $145,786, respectively                            740,577            624,372
    Deferred Financing Cost, net                                          --            132,709
    Other                                                             48,302             48,302
                                                                ------------       ------------
Total Assets                                                    $  1,312,201       $  1,443,331
                                                                ============       ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts Payable and Accrued Liabilities                    $     79,143       $    168,974
    Deferred Revenues                                                136,987                 --
                                                                ------------       ------------
        Total Current Liabilities                                    216,130            168,974

Long-Term Liabilities:
    Convertible Notes Payable                                             --          1,525,000
    Note Payable - Related Party                                      50,000                 --

Stockholders' Equity (Deficit)
   Common Stock, $0.001 par value, 200,000,000
     authorized, 11,839,990 and 1,502,000 shares
     issued and outstanding, respectively                             11,840              1,248
   Additional Paid-in Capital                                      3,493,461          1,068,392
   Stock Subscription Receivable                                          --                 --
   Accumulated Deficit                                            (2,459,230)        (1,320,283)
                                                                ------------       ------------
   Total Stockholders' Equity (Deficit)                            1,046,071           (250,643)

Total Liabilities and Stockholders' Equity (Deficit)            $  1,312,201       $  1,443,331
                                                                ============       ============
</TABLE>

The accompanying notes are an integral part of these financial statements
                                                                               3
<PAGE>
<TABLE>
<CAPTION>

                             PPI Capital Group, Inc.
                Consolidated Statement of Operations (Unaudited)

                                         For Three Months ended        For Nine Months ended
                                              September 30,                September 30,
                                       ---------------------------   ---------------------------
                                           2001           2000           2001           2000
                                       ------------   ------------   ------------   ------------
<S>                                    <C>            <C>            <C>            <C>
Revenues:
  Placement Fees                       $    125,000   $    127,500   $    806,684   $    240,000
  Data Service Revenues                     179,808         17,504        414,282         53,332
                                       ------------   ------------   ------------   ------------
Total Revenues                              304,808        145,004      1,220,966        293,332

Operating Expenses:
  Payroll Expenses/Commissions              257,323        145,642      1,035,022        304,950
  Professional Fees                         260,286         49,990        481,528        132,990
  Depreciation & Amortization                57,045         24,822        154,728         74,466
  General & Administrative                  238,700        239,879        500,739        447,973
                                       ------------   ------------   ------------   ------------
Total Operating Expenses                    813,354        460,333      2,172,017        960,379

Operating Loss                             (508,546)      (315,329)      (951,051)      (667,047)

  Interest Income                            (2,123)       (10,847)        (6,279)       (20,977)
  Interest Expense                            6,527         21,714        194,175         95,541
Net Loss                              ($    512,950) ($    326,196) ($  1,138,947) ($    741,611)
                                       ============   ============   ============   ============

Loss per Share - Basic and Diluted           ($0.04)        ($0.25)        ($0.20)        ($0.68)

Weighted Average Number of Shares        11,814,257      1,280,454      5,775,485      1,088,692
</TABLE>
The accompanying notes are an integral part of these financial statements
                                                                               4
<PAGE>
<TABLE>
<CAPTION>

                             PPI Capital Group, Inc.
                Consolidated Statement of Cash Flows (Unaudited)

                                                                    For Nine Months ended
                                                                         September 30,
                                                                ---------------------------
                                                                    2001           2000
                                                                ------------   ------------
<S>                                                             <C>            <C>
OPERATING ACTIVITIES
  Net Loss                                                      ($ 1,138,947)  ($   741,611)
  Adjustments:
  Depreciation & Amortization
                                                                     154,728         74,466
  Non Cash Operating Expenses (primarily professional fees
       and interest)                                                 241,680         35,730
  Other Current Assets                                               (56,700)        (1,387)
  Accounts Payable and Accrued Liabilities                            61,858         70,129
  Deferred Subscription Revenue                                      136,987             --
                                                                ------------   ------------
Net Cash used in Operating Activities                               (600,394)      (562,673)

INVESTING ACTIVITIES
  Purchase of Investments                                                 --         (3,300)
  Subsidiary Cash at Acquisition                                          --         20,114
  Increase in Fixed Assets and Website Development Costs            (265,228)      (306,046)
                                                                ------------   ------------
Net Cash used in Investing Activities                               (265,228)      (289,232)

FINANCING ACTIVITIES
  Proceeds from Notes Payable                                         50,000             --
  Proceeds from Issuance of Convertible Note                              --      1,525,000
  Proceeds from Issuance of Common Stock                             650,000        175,000
                                                                ------------   ------------
Net Cash provided by Financing Activities                            700,000      1,700,000

Net Cash (Decrease) Increase for Period                             (165,622)       848,095

Cash at Beginning of Period                                          454,291         39,015
                                                                ------------   ------------
Cash at End of Period                                           $    288,669   $    887,110
                                                                ============   ============
</TABLE>
The accompanying notes are an integral part of these financial statements
                                                                               5
<PAGE>

                             PPI Capital Group, Inc.
                        Notes to Consolidated Statements
                           September 30, 2001 and 2000
                                   (Unaudited)

Note 1 - Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements of PPI Capital
Group, Inc. a Utah corporation, and subsidiary (the "Company") have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to those rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading. These consolidated
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's latest unaudited financial
statements for the six months ended June 30, 2001 filed on Form 10-QSB.

The accompanying consolidated financial statements have not been audited by
independent public accountants, but include all adjustments (consisting of
normal recurring adjustments), which are, in the opinion of management,
necessary for a fair presentation of the financial condition, results of
operations and cash flows for the periods presented. However, these results are
not necessarily indicative of results for a full year.

Certain prior period amounts have been reclassified to conform with the current
period presentation.

Note 2 - Organization and Significant Accounting Policies

Organization
------------

The primary operating unit of PPI Capital Group, Inc. is DirectPlacement, Inc.
("DPI") which was incorporated in the State of Delaware in May 1999. DPI is a
technology oriented financial services firm that is focused on serving middle
market public companies and institutional investors. Its current business method
centers around producing and marketing proprietary data-oriented institutional
research products and platforms and capitalizing on the investment banking
opportunities that arise from the wide-spread market acceptance of those
research and data products. DPI has become the recognized authority and leading
expert in the PIPE (Private Investment in Public Entity) market through its
proprietary data-oriented research product, PlacementTracker.com, and through
the successful completion of investment banking transactions in the PIPE market.

Liquidity
---------

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. DPI incurred a net loss of
$1,138,947 for the nine months ended September 30, 2001, and $1,043,227 for the
year ended December 31 2000. DPI had an accumulated deficit of $2,459,230 and
$1,320,283 at September 30, 2001 and December 31, 2000, respectively. These
conditions raise "substantial" doubt about DPI's ability to continue as a going
concern. During 2000 DPI raised $1,700,000 through the sale of equities and
convertible notes. DPI continues to seek additional

                                                                               6
<PAGE>

sources of equity funding. There is no assurance that additional equity
financing needed to fund operations will be obtained in sufficient amounts
necessary to meet DPI's needs.

As of June 8, 2001, DPI closed on the private placement of 662,500 shares of
common stock and 99,375 common stock purchase warrants to accredited investors,
in exchange for $122,500 which was paid in immediately available funds and a
$540,000 subscription receivable of which $490,000 was received by DPI in
August. The remaining $50,000 subscription receivable was canceled resulting in
a total of 612,500 shares of common stock and 91,875 common stock purchase
warrants issued in the private placement.

In connection with the Merger, the 612,500 shares of common stock of DPI were
exchanged into 765,625 shares of common stock of PPI. Similarly, in connection
with the Merger, the 91,875 common stock purchase warrants of DPI were exchanged
into 114,844 common stock purchase warrants of PPI. The securities were issued
pursuant to Section 4(2) of the Securities Act.

As of June 8, 2001, in connection with the exercise of 37,500 common stock
purchase warrants at an exercise price of $1.00 per share, DPI issued 37,500
shares of its common stock. The shares were issued pursuant to Section 4(2) of
the Securities Act.

The accompanying condensed consolidated financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the possible inability of DPI to continue as a going concern.

Reverse Merger
--------------

As of May 15, 2001, DPI, PPI Capital Group, Inc., a Utah corporation ("PPI"),
and DP Merger Corp., a Delaware corporation ("MergerSub"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which on June
11, 2001 (the "Effective Date") MergerSub was merged with and into DPI (the
"Merger") and DPI became a wholly owned subsidiary of PPI.

On the Effective Date, the holders of common stock of DPI received 1.25 shares
of PPI's common stock, par value $.001 per share ("Common Stock"), for each
outstanding share of common stock of DPI held thereby (the "Exchange Ratio"),
and the holders of options and warrants issued by DPI were exchanged for options
and warrants of PPI based upon the Exchange Ratio. Immediately following the
consummation of the Merger and the Share Exchange, the former stockholders of
DPI beneficially owned approximately 84% of the shares of Common Stock
outstanding. Specifically, PPI issued (i) to the stockholders of DPI an
aggregate of 19,567,231 shares of Common Stock and (ii) PPI issued 346,406
warrants and 1,462,813 options to the former warrantholders and optionholders of
DPI, respectively, at exercise prices ranging from $.80 to $1.20 per share. The
transaction will be accounted for using purchase accounting and has been
effected on a tax-free basis to stockholders. The securities issued in
accordance with the terms of the Merger Agreement were issued pursuant to
Section 4(2) of the Securities Act.

                                                                               7
<PAGE>

In a separate transaction, 11,531,250 shares of Common Stock were surrendered by
certain members of DPI's management following the consummation of the Merger in
exchange for certain PPI performance warrants exercisable for 11,531,250 shares
of Common Stock upon the satisfaction of certain performance targets (the "Share
Exchange").

Summary of Significant Accounting Policies
------------------------------------------

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of PPI Capital Group,
Inc. and its wholly owned subsidiary DirectPlacement, Inc., (which has a wholly
owned subsidiary, DP Securities, Inc.). All material inter-company accounts and
transactions have been eliminated.

Presentation of Interim Information
-----------------------------------

In the opinion of the management of DPI, the accompanying unaudited financial
statements include all normal adjustments considered necessary to present fairly
the financial position as of September 30, 2001, and the results of operations
for the three months and nine months ended September 30, 2001 and 2000, and cash
flows for the nine months ended September 30, 2001 and 2000. Interim results are
not necessarily indicative of results for a full year.

Use of Estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the period. Actual results could differ materially from those estimates.

Change in Fiscal Year
---------------------

On June 20, 2001, the Board of Directors of PPI approved the change in its
fiscal year end from October 31 to December 31.

Revenue Recognition
-------------------

Revenue from placement fees represent commissions earned for brokering private
placements of debt and equity instruments. Revenue from these services is
recognized when earned at the time the placement closes. Data services revenue
represents revenue from providing individual custom reports on a fee per report
basis, which is recognized when the report is provided and from providing
reports on a monthly subscription basis. Revenue from subscriptions is
recognized ratably over the contractual period. Deferred revenues on the
consolidated balance sheet consist of subscription revenues that have been
received but not yet earned.

                                                                               8
<PAGE>

Income Taxes
------------

DPI recognizes the amount of taxes payable or refundable for the current year
and recognizes deferred tax liabilities and assets for the expected future tax
consequences of events and transactions that have been recognized in DPI's
financial statements or tax returns. DPI currently has substantial net operating
loss carryforwards. DPI has recorded a 100% valuation allowance against net
deferred tax assets due to uncertainty of their ultimate realization.

Fixed Assets and Depreciation Method
------------------------------------

Property and equipment are recorded at cost. Expenditures for major additions
and improvements are capitalized and minor replacements, maintenance, and
repairs are charged to expense as incurred. When property and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is included in the
results of operations for the respective period. Depreciation is provided over
the estimated useful lives of the related assets using the straight-line method
for financial statement purposes. DPI uses other depreciation methods (generally
accelerated) for tax purposes where appropriate.

Website Development Costs
-------------------------

DPI capitalizes direct costs, including payroll and related expenses, to acquire
or develop software necessary for general web site operations, create content
and populate databases, and to add additional functionalities and features on an
ongoing basis in accordance with Statement of Position (SOP) 98-1. The costs are
being amortized on a straight-line basis over a period of five years.
Amortization expense was approximately $48,723 and $130,756 for the three and
nine months ended September 30, 2001, respectively.

Stock Based Compensation
------------------------

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123). The Company adopted SFAS 123 in 1998. DPI has elected
to measure compensation expense for its stock-based employee compensation plans
using the intrinsic value method prescribed by APB Opinion 25, "Accounting for
Stock Issued to Employees" (APB 25) and has provided pro forma disclosures as if
the fair value based method prescribed in SFAS 123 has been utilized.

Net Income (Loss) Per Common Share
----------------------------------

Net income (loss) per common share has been computed on the basis of the
weighted average number of shares outstanding, according to the rules of
Statement of Financial Accounting Standards No. 128, "Earnings per Share."

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

In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other
Intangible

                                                                               9
<PAGE>

Assets (SFAS 142). SFAS 141 requires the use of the purchase method of
accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that PPI recognize acquired intangible assets apart from goodwill
if the acquired intangible assets meet certain criteria. SFAS 141 applies to all
business combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS 142, that PPI reclassify the carrying amounts of intangible assets and
goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that PPI identify reporting units for the purposes
of assessing potential future impairments of goodwill, reassess the useful lives
of other existing recognized intangible assets, and cease amortization of
intangible assets with an indefinite useful life. An intangible asset with an
indefinite useful life should be tested for impairment in accordance with the
guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years
beginning after December 15, 2001 to all goodwill and other intangible assets
recognized at that date, regardless of when those assets were initially
recognized. SFAS 142 requires PPI to complete a transitional goodwill impairment
test six months from the date of adoption. PPI is also required to reassess the
useful lives of other intangible assets within the first interim quarter after
adoption of SFAS 142. DPI's previous business combinations were accounted for
using historical cost or reverse merger accounting in which no goodwill or other
intangible assets were recorded. As a result, the adoption of SFAS 141 and 142
will not affect the results of past transactions. However, all future business
combinations will be accounted for under the purchase method, which may result
in the recognition of goodwill and other intangible assets, some of which will
be recognized through operations, either by amortization or impairment charges,
in the future.

Note 3 - Noncash Investing and Financing Activities

During 2000, the Company issued 183,751 shares of common stock for services
provided in connection with the sale of convertible notes payable. In connection
with the Merger, the 183,751 shares of common stock of DPI were exchanged into
229,689 shares of common stock of PPI.

During 2001, $1,525,000 of convertible notes and accrued interest of $165,034
were converted into 1,690,034 shares of common stock. In connection with the
Merger, the 1,690,034 shares of common stock of DPI were exchanged into
2,112,543 shares of common stock of PPI.

During 2001, the Company issued 876,562 shares of common stock for consulting
services, of which 20,000 shares were surrendered. In connection with the
Merger, the 856,562 shares of common stock of DPI were exchanged into 1,070,703
shares of common stock of PPI.

                                                                              10
<PAGE>

Note 4 - Related Party Transactions

DPI issued an unsecured promissory note payable to a company controlled by an
officer/stockholder. As of September 30, 2001 and 2000, the outstanding balance
was $50,000 and $0, respectively, and the related accrued interest and premiums
amounted to $17,284 and $0, respectively. The note is due and payable on June
30, 2004 and bears interest at 12 percent per annum.

On June 15, 2001, DPI loaned an employee $20,000. DPI received an unsecured note
from such employee. As of September 30, 2001 and 2000, the outstanding balance,
including accrued interest was $20,713 and $0, respectively. The principal and
interest will be forgiven if certain revenue benchmarks are met in the year
ending December 31, 2001.

During the nine months ending September 30, 2001, the Company paid $103,825 and
issued 450,000 shares of common stock in consulting fee to a party related to
Brian Overstreet, the President, Chief Executive Officer and Director of PPI and
co-founder of DPI.

Note 5 - Securities Issued

PPI Capital Group, Inc.
-----------------------

Effective May 15, 2001, PPI implemented a 1-for-10 reverse stock split, reducing
its 15,020,000 issued and outstanding shares of common stock to 1,502,000
shares. In connection therewith, PPI received a new symbol, changing its trading
symbol on the OTC Bulletin Board from "PPIK" to "PPIM".

As of June 1, 2001, PPI closed on the private placement of 2,250,000 units to
accredited investors, each unit consisting of one (1) share of Common Stock and
(3) Performance Warrants (as hereinafter defined), in exchange for the aggregate
payment of $27,000 in immediately available funds. The units were issued
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). No underwriting discounts or commissions were paid in
connection with this private placement.

As of May 15, 2001, DPI, PPI, and MergerSub, entered into the Merger Agreement,
pursuant to which on the Effective Date MergerSub was merged with and into DPI
and DPI became a wholly owned subsidiary of PPI. On the Effective Date, the
holders of common stock of DPI received 1.25 shares of PPI's common stock, par
value $.001 per share ("Common Stock"), for each outstanding share of common
stock of DPI held thereby (the "Exchange Ratio"), and the holders of options and
warrants issued by DPI were exchanged for options and warrants of PPI based upon
the Exchange Ratio. Immediately following the consummation of the Merger and the
Share Exchange, the former stockholders of DPI beneficially owned approximately
84% of the shares of Common Stock outstanding. Specifically, PPI issued (i) to
the stockholders of DPI an aggregate of 19,567,231 shares of Common Stock and
(ii) PPI issued 346,406 warrants and 1,462,813 options to the former
warrantholders and optionholders of DPI, respectively, at exercise prices
ranging from $.80 to $1.20 per share. The transaction will be accounted for
using purchase accounting and has been effected on a tax-free basis to
stockholders. The securities issued in accordance with the terms of the Merger
Agreement were issued pursuant to Section 4(2) of the Securities Act.

                                                                              11
<PAGE>

In a separate transaction, 11,531,250 shares of Common Stock were surrendered by
certain members of DPI's management following the consummation of the Merger in
exchange for certain PPI performance warrants exercisable for 11,531,250 shares
of Common Stock upon the satisfaction of certain performance targets (the "Share
Exchange"). Following the consummation of the Merger and pursuant to the terms
of a Stock Exchange Agreement, Brian Overstreet, Robert Kyle and Midori USA
Corporation, a corporation controlled by Mr. Overstreet, surrendered 8,071,875,
1,153,125, and 2,306,250 shares of Common Stock, respectively, in exchange for a
like number of performance warrants (the "Performance Warrants"). The
Performance Warrants are exercisable until May 31, 2011 at an exercise price of
$.001 per share and vest based upon the satisfaction by PPI of certain
performance targets. The first fifty percent (50%) of the shares issuable upon
the exercise of the Performance Warrants (the "Warrant Shares") shall vest upon
(i) PPI (or any subsidiary thereof) reporting cumulative total revenues
commencing with the quarter ending June 30, 2001 (the "Initial Quarter") and
thereafter during the Exercise Period ("Cumulative Total Revenues") of not less
than $10 million, or (ii) PPI (or any subsidiary thereof) reporting cumulative
EBITDA (earnings before the payment of interest and taxes and before any
deduction for depreciation and amortization) commencing with the Initial Quarter
and thereafter during the Exercise Period ("Cumulative EBITDA") of not less than
$1 million; or (iii) PPI (or any subsidiary thereof) reporting cumulative Gross
Placements (as hereinafter defined) commencing with the Initial Quarter and
thereafter during the Exercise Period ("Gross Placements") of not less than $50
million. The remaining Warrant Shares shall vest upon (i) PPI (or any subsidiary
thereof) reporting Cumulative Total Revenues commencing with the Initial Quarter
and thereafter during the Exercise Period of not less than $20 million, or (ii)
PPI (or any subsidiary thereof) reporting Cumulative EBITDA commencing with the
Initial Quarter and thereafter during the Exercise Period of not less than $2
million; or (iii) PPI (or any subsidiary thereof) reporting Cumulative Gross
Placements commencing with the Initial Quarter and thereafter during the
Exercise Period of not less than $100 million (collectively, the "Remaining
Warrant Share Targets"). Satisfaction of 25% of either of the Remaining Warrant
Share Targets accelerates the vesting with respect to 25% of the remaining
Warrant Shares. "Gross Placements" means the gross proceeds received by third
party issuers resulting from the sale or placement of its securities by PPI
and/or its subsidiaries to investors without reduction, offset, or decrease for
any costs or expenses incurred by such issuer and its subsidiaries in connection
therewith. Since the performance warrants were valued at zero the cost of the
stock exchanged was also valued at zero and the shares were retired.

DirectPlacement, Inc.
---------------------

As of June 8, 2001, DPI closed on the private placement of 662,500 shares of
common stock and 99,375 common stock purchase warrants to accredited investors,
in exchange for $122,500 which was paid in immediately available funds and a
$540,000 subscription receivable of which $490,000 was received by DPI in
August. The remaining $50,000 subscription receivable was canceled resulting in
a total of 612,500 shares of common stock and 91,875 common stock purchase
warrants issued in the private placement.

In connection with the Merger, the 612,500 shares of common stock of DPI were
exchanged into 765,625 shares of common stock of PPI. Similarly, in connection

                                                                              12
<PAGE>

with the Merger, the 91,875 common stock purchase warrants of DPI exchanged into
114,844 common stock purchase warrants of PPI. The securities were issued
pursuant to Section 4(2) of the Securities Act.

As of June 8, 2001, in connection with the exercise of 37,500 common stock
purchase warrants at an exercise price of $1.00 per share, DPI issued 37,500
shares of its common stock. The shares were issued pursuant to Section 4(2) of
the Securities Act.

As a fee for this placement, DPI issued an aggregate of 76,562 shares of DPI
common stock to Melimar, Inc., David J. Harris Investment Trust, Sapphire Pure,
Inc. In addition, Midori USA issued options to purchase an aggregate of 76,562
shares of common stock of DPI to Melimar, Inc., David J. Harris Investment
Trust, and Sapphire Pure, Inc. The options have a five year term and are
exercisable at $1.00 per share (the "2001 Midori Options"). In connection with
the Merger, the 76,562 shares of common stock of DPI were exchanged into 95,703
shares of common stock of PPI. Similarly, the 2001 Midori Options were exchanged
into options to purchase 23,926 shares of common stock of PPI and 71,778
Performance Warrants of PPI. These new options have a five year term and are
exercisable at $0.80 per share or per Performance Warrant.

Note 6 - Subsequent Events

On October 26, 2001, the Company purchased certain assets of PCH Securities,
Inc. in exchange for 417,866 shares of Common Stock with a fair market value of
$1 million. Pursuant to an employment agreement with a former employee of PCH
Securities, the Company will issue up to one million common stock options should
PCH Securities, as a unit of the Company, reach certain revenue targets.

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

The following discussion of DPI's financial condition and results of operations
should be read in conjunction with the Financial Statements and Notes thereto
appearing elsewhere in this document.

Statements in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and elsewhere in this document as well as statements
made in press releases and oral statements that may be made by DPI or by
officers, directors or employees of DPI acting on DPI's behalf that are not
statements of historical or current fact constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other unknown factors that could cause the actual results of DPI to be
materially different from the historical results or from any future results
expressed or implied by such forward-looking statements. In addition to
statements which explicitly describe such risks and uncertainties, readers are
urged to consider statements labeled with the terms "believes", "belief",
"expects", "intends", "anticipates" or "plans" to be uncertain forward-looking
statements. The forward looking statements contained herein are also subject
generally to other risks and uncertainties that

                                                                              13
<PAGE>

are described from time to time in DPI's reports and registration statements
filed with the Securities and Exchange Commission.

Presentation of Interim Information
-----------------------------------

In the Opinion of the management of PPI, the accompanying unaudited financial
statements include all normal adjustments considered necessary to present fairly
the financial position as of September 30, 2001, and the results of operations
for the three months and nine months ended September 30, 2001 and 2000, and cash
flows for the nine months ended September 30, 2001 and 2000. Interim results are
not necessarily indicative of results for a full year.

The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in PPI's audited financial
statements and notes for fiscal year ended December 31, 2000.

OVERVIEW

The primary operating unit of PPI Capital Group, Inc. is DPI which was
incorporated in the State of Delaware in May 1999. DPI is a technology oriented
financial services firm that is focused on serving middle market public
companies and institutional investors. Its current business method centers
around producing and marketing proprietary data-oriented institutional research
products and platforms and capitalizing on the investment banking opportunities
that arise from the wide-spread market acceptance of those research and data
products. DPI has become the recognized authority and leading expert in the PIPE
(Private Investment in Public Entity) market through its proprietary
data-oriented research product, PlacementTracker.com, and through the successful
completion of investment banking transactions in the PIPE market that have
resulted from DPI's recognition as the leading research firm in the PIPE market.

DPI commenced operations in December 1999 with the launch of its PIPE data
service, PlacementTracker.com (www.placementtracker.com). As the leading web
site cataloging real-time developments in the PIPE market, PlacementTracker.com
has attracted over 4,000 registered members who purchase PIPE market data on the
basis of a single transaction report or a single investor report or a
compilation "custom report". In September 2000, DPI launched its flagship online
PIPE offering site (www.directplacement.com) and has since conducted six PIPE
offerings totaling $78,762,000 for middle market public companies. All PIPE
transactions are conducted through its wholly owned subsidiary, DP Securities,
Inc., a member of the NASD & SIPC.

STATEMENT OF OPERATIONS

Nine months ending September 30, 2001 vs. Nine months ending September 30, 2000

Total revenues increased $927,634, or 316.2%, to $1,220,966 for the nine months
ending September 30, 2001 from $293,332 for the nine months ending September 30,
2000. Placement fees increased $566,684, or 236.1%, to $806,684 for the nine
months ending September 30, 2001 from $240,000 for the nine months ending
September 30, 2000 as a

                                                                              14
<PAGE>

result of fees for three transactions that raised approximately $21 million in
gross proceeds during the nine months ending September 30, 2001. Data service
revenues increased $360,950, or 676.8%, to $414,282 for the nine months ending
September 30, 2001 from $53,332 for the nine months ending September 30, 2000 as
a result of approximately $341,400 of short-term subscription contracts that DPI
began to implement at the beginning of 2001.

Payroll expenses and commissions increased $730,072, or 239.4%, to $1,035,022
for the nine months ending September 30, 2001 from $304,950 for the nine months
ending September 30, 2000 due to an increase in the number of personnel and
commissions paid on increased revenues during the nine months ending September
30, 2001.

Professional fees increased $348,538, or 262.1%, to $481,528 for the nine months
ending September 30, 2001 from $132,990 for the nine months ending September 30,
2000 due to an increase in legal, accounting and professional fees relating to
the Merger.

Depreciation and amortization increased $80,262 to $154,728, or 107.8%, for the
nine months ending September 30, 2001 from $74,466 for the nine months ending
September 30, 2000 due to increase in website development cost.

General and administrative expenses increased $52,766, or 11.8%, to $500,739 for
the nine months ending September 30, 2001 from $447,973 for the nine months
ending September 30, 2000. General and administrative expenses as a percentage
of sales decreased to 41.0% for the nine months ending September 30, 2001 from
152.7% for the nine months ending September 30, 2000.

Operating loss increased $284,004 to ($951,051) for the nine months ending
September 30, 2001 from ($667,047) for the nine months ending September 30, 2000
as the increase in expenses exceeded the increase in revenues.

Interest income decreased $14,698, or 70.1%, to $6,279 for the nine months
ending September 30, 2001 from $20,977 due to the decrease in the balance of the
interest bearing cash account.

Interest expense increased $98,634, or 103.2%, to $194,175 for the nine months
ending September 30, 2001 from $95,541 for the nine months ending September 30,
2000 primarily related to the amortization of the deferred financing costs
related to the issuance of the convertible notes payable during the nine months
ended September 30, 2001.

Three months ending September 30, 2001 vs. Three months ending September 30,
2000

Total revenues increased $159,804, or 110.2%, to $304,808 for the three months
ending September 30, 2001 from $145,004 for the three months ending September
30, 2000. Placement fees decreased $2,500, or 2.0%, to $125,000 for the three
months ending September 30, 2001 from $127,500 for the three months ending
September 30, 2000. Data Service Revenues increased $162,304, or 927.2%, to
$179,808 for the three months ending September 30, 2001 from $17,504 for the
three months ending September 30,

                                                                              15
<PAGE>

2000 as a result of approximately $165,376 of short-term subscription contracts
that DPI began to implement at the beginning of 2001.

Payroll expenses and commissions increased $111,681, or 76.7%, to $257,323 for
the three months ending September 30, 2001 from $145,642 for the three months
ending September 30, 2000 due to an increase in the number of personnel and
commissions paid on increased revenues during the three months ending September
30, 2001. Payroll Expenses and Commissions as a percentage of sales decreased to
84.4% for the three months ending September 30, 2001 from 100.4% as the increase
in revenues was greater than the increase in payroll expenses and commissions.

Professional fees increased $210,296, or 420.7%, to $260,286 for the three
months ending September 30, 2001 from $49,990 for the three months ending
September 30, 2000 due to an increase in legal, accounting and professional fees
relating to the Merger.

Depreciation & amortization increased $32,223, or 129.8%, to $57,045 for the
three months ending September 30, 2001 from $24,822 for the three months ending
September 30, 2000 due to increase in website development cost.

General and administrative expenses decreased $1,179, or 0.5%, to $238,700 for
the three months ending September 30, 2001 from $239,879 for the three months
ending September 30, 2000. General and administrative expenses as a percentage
of sales decreased to 78.3% for the three months ending September 30, 2001 from
165.4% for the three months ending September 30, 2000 as the increase in
revenues was greater than the increase in general and administrative expenses.

Operating loss increased $193,217 to ($508,546) for the three months ending
September 30, 2001 from ($315,329) for the three months ending September 30,
2000 as the increase in expenses exceeded the increase in revenues.

Interest income decreased $8,724, or 80.4%, to $2,123 for the three months
ending September 30, 2001 from $10,847 due to the decrease in the balance of the
interest bearing cash account.

Interest expense decreased $15,187, or 69.9%, to $6,527 for the three months
ending September 30, 2001 from $21,714 for the three months ending September 30,
2000 primarily related to the convertible notes being converted into shares of
common stock on April 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

As of June 8, 2001, DPI closed on the private placement of 662,500 shares of
common stock and 99,375 common stock purchase warrants to accredited investors,
in exchange for $122,500 which was paid in immediately available funds and a
$540,000 subscription receivable of which $490,000 was received by DPI in
August. The remaining $50,000 subscription receivable was canceled resulting in
a total of 612,500 shares of common stock and 91,875 common stock purchase
warrants issued in the private placement.

In connection with the Merger, the 612,500 shares of common stock of DPI were

                                                                              16
<PAGE>

exchanged into 765,625 shares of common stock of PPI. Similarly, in connection
with the Merger, the 91,875 common stock purchase warrants of DPI were exchanged
into 114,844 common stock purchase warrants of PPI.

As of June 8, 2001, in connection with the exercise of 37,500 common stock
purchase warrants at an exercise price of $1.00 per share, DPI issued 37,500
shares of its common stock. In connection with the Merger, the 37,500 shares of
common stock of DPI were exchanged into 46,875 shares of common stock of PPI.

Capital expenditures, related to capitalized website development and computers,
were $265,228 for the nine months ending September 30, 2001.

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. DPI incurred a net loss of
$1,138,947 for the nine months ended September 30, 2001, and $1,043,227 for the
year ended December 31 2000. DPI had an accumulated deficit of $2,459,230 and
$1,320,283 at September 30, 2001 and December 31, 2000, respectively. These
conditions raise "substantial" doubt about DPI's ability to continue as a going
concern. During 2000 DPI raised $1,700,000 through the sale of equities and
convertible notes. DPI continues to seek additional sources of equity funding.
There is no assurance that additional equity financing needed to fund operations
will be consummated or obtained in sufficient amounts necessary to meet DPI's
needs.

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

In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other
Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method
of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that PPI recognize acquired intangible assets apart from goodwill
if the acquired intangible assets meet certain criteria. SFAS 141 applies to all
business combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS 142, that PPI reclassify the carrying amounts of intangible assets and
goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that PPI identify reporting units for the purposes
of assessing potential future impairments of goodwill, reassess the useful lives
of other existing recognized intangible assets, and cease amortization of
intangible assets with an indefinite useful life. An intangible asset with an
indefinite useful life should be tested for impairment in accordance with the
guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years
beginning after December 15, 2001 to all goodwill and other intangible assets
recognized at that date, regardless of when those assets were initially
recognized. SFAS 142 requires PPI to complete a transitional goodwill impairment

                                                                              17
<PAGE>

test six months from the date of adoption. PPI is also required to reassess the
useful lives of other intangible assets within the first interim quarter after
adoption of SFAS 142. DPI's previous business combinations were accounted for
using historical cost or reverse merger accounting in which no goodwill or other
intangible assets were recorded. As a result, the adoption of SFAS 141 and 142
will not affect the results of past transactions. However, all future business
combinations will be accounted for under the purchase method, which may result
in the recognition of goodwill and other intangible assets, some of which will
be recognized through operations, either by amortization or impairment charges,
in the future.

Deferred Tax Assets
-------------------

DPI recognizes the amount of taxes payable or refundable for the current year
and recognizes deferred tax liabilities and assets for the expected future tax
consequences of events and transactions that have been recognized in the
Company's financial statements or tax returns. DPI currently has substantial net
operating loss carryforwards. DPI has recorded a 100% valuation allowance
against net deferred tax assets, as it is not more likely than not that the
deferred tax asset will be realized.

There may be limitations on the annual amount of net operating losses which can
be utilized to offset income in future years if DPI experiences certain
ownership changes as defined by Internal Revenue Service Section 382.


                           Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

None

Item 2.  Changes in Securities and Use of Proceeds

On June 11, 2001, PPI issued 5,859 shares of its common stock to Sapphire Pure,
Inc. The shares were issued as a fee in connection with DPI's private placement
of 662,500 shares of common stock and 99,375 common stock purchase warrants to
accredited investors in exchange for $122,500 which was paid in immediately
available funds and a $540,000 subscription receivable of which $490,000 was
received by DPI in August. The securities were issued pursuant to Section 4(2)
of the Securities Act. The fee was originally 4,687 shares of DPI common stock.
In connection with the Merger, the 4,687 shares of DPI were exchanged into 5,859
shares of common stock of PPI.

On June 11, 2001, PPI issued 5,859 shares of its common stock to Melimar, Inc.
The shares were issued as a fee in connection with DPI's private placement of
662,500 shares of common stock and 99,375 common stock purchase warrants to
accredited investors in exchange for $122,500 which was paid in immediately
available funds and a $540,000 subscription receivable of which $490,000 was
received by DPI in August. The securities were issued pursuant to Section 4(2)
of the Securities Act. The fee was originally 4,687

                                                                              18
<PAGE>

shares of DPI common stock. In connection with the Merger, the 4,687 shares of
DPI were exchanged into 5,859 shares of common stock of PPI.

On June 11, 2001, PPI issued 5,859 shares of its common stock to David J. Harris
Investment Trust. The shares were issued as a fee in connection with DPI's
private placement of 662,500 shares of common stock and 99,375 common stock
purchase warrants to accredited investors in exchange for $122,500 which was
paid in immediately available funds and a $540,000 subscription receivable of
which $490,000 was received by DPI in August. The securities were issued
pursuant to Section 4(2) of the Securities Act. The fee was originally 4,687
shares of DPI common stock. In connection with the Merger, the 4,687 shares of
DPI were exchanged into 5,859 shares of common stock of PPI.

On August 10, 2001, PPI issued 78,125 shares of its common stock to Sapphire
Pure, Inc. The shares were issued as a fee in connection with DPI's private
placement of 662,500 shares of common stock and 99,375 common stock purchase
warrants to accredited investors in exchange for $122,500 which was paid in
immediately available funds and a $540,000 subscription receivable of which
$490,000 was received by DPI in August. The securities were issued pursuant to
Section 4(2) of the Securities Act. The fee was originally 62,500 shares of DPI
common stock. In connection with the Merger, the 62,500 shares of DPI were
exchanged into 78,125 shares of common stock of PPI.

Item 3.  Defaults Under Senior Securities

None

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

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

         a) Exhibits
         -----------

            None.

         b) Reports on Form 8-K
         ----------------------

            1. A Current Report on Form 8-K was filed with the Securities and
               Exchange Commission on August 9, 2001 with respect to Item 4.

            2. A Current Report on Form 8-K/A was filed with the Securities and
               Exchange Commission on August 24, 2001 with respect to Items 5
               and 7.

                                                                              19
<PAGE>

            3. A Current Report on Form 8-K/A was filed with the Securities and
               Exchange Commission on September 17, 2001 with respect to Items 5
               and 7.

                                                                              20
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned thereunto duly authorized.

                                       PPI CAPITAL GROUP, INC.



DATE:  November 14, 2001               By: /s/ BRIAN M. OVERSTREET
                                          --------------------------------------
                                       Name: Brian M. Overstreet
                                       Title: President and Chief Executive
                                              Officer

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