SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)

  X      Quarterly Report pursuant to Section 13 or 15(d) of the Securities
-----    Exchange Act of 1934

For the quarterly period ended May 31, 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.     000-27225
                    ----------------

                         CYBERSTAR COMPUTER CORPORATION
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

               Minnesota                                        41-1427445
---------------------------------------------            -----------------------
(State or other jurisdiction of incorporation or             (I.R.S. Employer
organization)                                               Identification No.)

6825 Shady Oak Road, Eden Prairie, Minnesota                      55344
--------------------------------------------             -----------------------
(Address of principal executive offices)                         (ZIP Code)

Issuer's telephone number, including area code:                (952) 943-1598
                                                         -----------------------

                                   No Change
--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
                                    report)

Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the past 12 months (or for such  shorter  period that the issuer was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No

     The number of shares of the issuer's  Common Stock  outstanding  at May 31,
2000 was 4,333,095 shares.



<PAGE>


                                      CYBERSTAR COMPUTER CORPORATION

                                            TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                             Page No.
                                                                                                           -----------
<S>               <C>                                                                                      <C>
                                               Part I. Financial Information

Item 1.           Financial Statements

                  Balance Sheets as of February 29, 2000 and May 31, 2000 (unaudited)                             3

                  Statements of Operations for the Three Months Ended May 31, 1999 and 2000 (unaudited)           4

                  Statements of Cash Flows for the Three Months Ended May 31, 1999 and 2000 (unaudited)           5
                  Notes to the Financial Statements (unaudited)                                                   6
Item 2.           Management's Discussion and Analysis                                                            8
                                                 Part II. Other Information
Item 1.           Legal Proceedings                                                                              10
Item 6.           Exhibits and Reports on Form 8-K                                                               10

Signature                                                                                                        11
</TABLE>

                                                          2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         CYBERSTAR COMPUTER CORPORATION

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                          MAY 31, 2000        FEBRUARY 29, 2000
                                                       -------------------    -----------------
<S>                                                    <C>                    <C>

                                   (Unaudited)
ASSETS
Current assets:
     Cash                                              $           327,864    $         496,486
     Accounts receivable, less allowance
     for doubtful accounts - $80,500
     at February 29, 2000 and
     $60,226 at May 31, 2000                                     1,603,324              574,506
     Inventories                                                   290,608              295,511
     Prepaid expenses                                              262,601               30,216
                                                       -------------------    -----------------
Total current assets                                             2,484,397            1,396,719

Property and equipment:
     Office equipment and furniture                                337,438              260,949
     Leasehold improvements                                         37,270               37,270
     Production equipment                                           47,010               46,915
                                                       -------------------    -----------------
                                                                   421,718              345,134
     Accumulated depreciation                                     (241,777)            (222,656)
                                                       -------------------    -----------------
                                                                   179,941              122,478
                                                       -------------------    -----------------
Total assets                                           $         2,664,338    $       1,519,197
                                                       ===================    =================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Note payable to bank, line of credit              $           300,000    $               -
     Notes payable other                                           976,550                    -
     Accounts payable                                              283,138              239,329
     Accrued payroll and payroll taxes                              39,168               39,874
     Accrued liabilities                                            13,313               38,176
                                                       -------------------    -----------------
Total current liabilities                                        1,612,169              317,379

Shareholders' equity:
     Common stock, $.01 par value
         Authorized shares - 20,000,000
         Issued and outstanding shares - 4,333,095
         at February 29, 2000 and May 31, 2000                      43,331               43,331
     Additional paid-in capital                                  3,069,049            3,069,049
     Deferred compensation                                        (203,191)            (237,370)
     Accumulated deficit                                        (1,857,020)          (1,673,192)
                                                       -------------------    -----------------
Total shareholders' equity                                       1,052,169            1,201,818
                                                       -------------------    -----------------

Total liabilities and shareholders' equity             $         2,664,338    $       1,519,197
                                                       ===================    =================
</TABLE>

SEE ACCOMPANYING NOTES
                                                 3
<PAGE>

                         CYBERSTAR COMPUTER CORPORATION

                      STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                THREE MONTHS ENDED
                                                                                      MAY 31
                                                       ----------------------------------------------------------------

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


                                                                     2000                               1999
                                                       -----------------------------      -----------------------------
<S>                                                    <C>                                <C>

Sales                                                  $                   3,257,421      $                   1,151,470
Cost of sales                                                              3,074,055                            955,564
                                                       -----------------------------      -----------------------------
Gross profit                                                                 183,366                            195,906

Operating Expenses:
     General and administrative                                              354,804                            245,490
     Sales and marketing                                                       7,811                             19,356
                                                       -----------------------------      -----------------------------
     Total                                                                   362,615                            264,846
                                                       -----------------------------      -----------------------------
Loss from operations                                                        (179,249)                           (68,940)

Other income (expense):
     Interest income                                                           2,857                              1,285
     Interest expense                                                         (5,712)                            (2,192)
     Other income (expense)                                                   (1,724)                              (626)
                                                       -----------------------------      ------------------------------
                                                                              (4,579)                            (1,533)
                                                       -----------------------------      ------------------------------

Net loss                                               $                    (183,828)     $                     (70,473)
                                                       =============================      ==============================

Net loss per common share--basic and diluted           $                       (0.04)     $                       (0.02)
                                                       =============================      =============================

Weighed average common shares outstanding--basic and                       4,333,095                          3,928,095
     diluted                                           =============================      =============================

</TABLE>


SEE ACCOMPANYING NOTES
                                                              4

<PAGE>


                         CYBERSTAR COMPUTER CORPORATION

                      STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                       THREE MONTHS ENDED
                                                                                             MAY 31
                                                                -----------------------------------------------------------------

                                                                            2000                               1999
                                                                ----------------------------        -------------------------
<S>                                                             <C>                                 <C>

CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss                                                        $                   (183,828)       $                 (70,473)

Adjustments to reconcile net cash provided
  by (used in) operating activities:
         Depreciation                                                                 19,121                           19,121
         Amortization of deferred compensation                                        34,179                            --
         Changes in operating assets and liabilities:
                  Accounts receivable                                             (1,028,818)                         209,201
                  Inventories                                                          4,903                           96,181
                  Prepaid expenses                                                  (232,385)                            (207)
                  Accounts payable                                                    43,809                          (78,438)
                  Accrued expenses                                                   (25,569)                         (84,289)
                                                                ----------------------------        -------------------------

Net cash provided by (used in) operating activities                               (1,368,588)                          91,096

CASH FLOWS USED IN INVESTING ACTIVITIES
Proceeds from sale of property and equipment                                            --                              8,428
Purchases of property and equipment
                                                                                     (76,584)                           --
                                                                ----------------------------        -------------------------
Net cash provided by (used in) investing activities                                  (76,584)                           8,428

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (payments on) line of credit                                       300,000                         (150,000)
Net proceeds from notes payable                                                      976,550                            --
                                                                ----------------------------        -------------------------
Net cash provided by (used in) financing activities                                1,276,550                         (150,000)


Decrease in cash                                                                    (168,622)                         (50,476)
Cash at beginning of period                                                          496,486                           73,191
                                                                ----------------------------        -------------------------

Cash at end of period                                           $                    327,864        $                  22,715
                                                                ============================        =========================


Supplemental information:
         Cash paid during the period for interest               $                      5,712        $                   2,192

</TABLE>

SEE ACCOMPANYING NOTES

                                                            5
<PAGE>



                         CYBERSTAR COMPUTER CORPORATION

                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Note 1.  BASIS OF PRESENTATION

The  accompanying   unaudited   financial   statements  of  CyberStar   Computer
Corporation  (the  "Company")  as of May 31, 2000 and for the three months ended
May 31, 2000 and 1999 have been prepared by the Company, without audit, pursuant
to rules and  regulations  of the Securities  and Exchange  Commission  ("SEC").
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted  pursuant to such rules and  regulations.  In the
opinion of  management,  the financial  statements  included in this Form 10-QSB
include all  adjustments,  consisting only of normal and recurring  adjustments,
considered  necessary for a fair presentation of the financial  position and the
results  of  operations  and cash  flows for the  periods  presented.  Operating
results for the three months ended May 31, 2000 are not  necessarily  indicative
of the results that may be expected for the year ending February 28, 2001. These
condensed  financial  statements  and  footnote  disclosures  should  be read in
conjunction  with the financial  statements  and footnotes  thereto for the year
ended  February 29, 2000,  included in the Company's  Form 10-KSB filed with the
SEC on May 30, 2000. The  preparation of the financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  effect  amounts  reported  in  the  financial
statements and accompanying  notes to the financial  statements.  Actual results
could differ from those estimates.

Note 2.  NOTE PAYABLE TO BANK, LINE OF CREDIT

The Company has a revolving line of credit of $300,000 with a bank. This line of
credit is secured by all of the  Company's  assets and the personal  guaranty of
the majority shareholder. Borrowings under the line accrue interest at a rate of
1.0% over the prime rate (9.5% at May 31,  2000) and amounted to $300,000 at May
31, 2000.

During fiscal 2000,  the Company had a revolving line of credit of $150,000 with
a bank. Borrowings under the line accrued interest at a rate of 1.5% over prime.
The line of credit expired April 25, 1999 and was not renewed.

Note 3. NOTES PAYABLE OTHER

During April and May 2000,  CyberStar borrowed $900,000 from a private investor.
The notes are due April and May 2001 and bear interest on the unpaid  balance at
a fluctuating  annual rate equal to 4.0% above the rate of interest  established
by Wells Fargo Bank NA, f/k/a Norwest Bank Minnesota N.A., as its base rate.

In May 1999  the  Company  entered  into an  agreement  whereby  it  could  sell
receivables  or  borrow  money in  amounts  up to 80% of the  eligible  accounts
receivable balance. The Company paid a 1% commission on all receivables sold and
was charged  interest at a rate of 8% or prime plus 1.5%,  whichever is greater,
for borrowings against receivables.  This agreement was for one year and expired
in May 2000.  Borrowings  against  receivables still outstanding at May 31, 2000
amounted to $76,550.

                                       6
<PAGE>

Note 4.  SEGMENT AND GEOGRAPHIC DATA

The Company has one  reportable  segment,  computer  systems and products.  This
segment, which is comprised of the CyberStar, VAR and International Trade Center
("ITC")  divisions,  distributes  branded and proprietary  computer  systems and
peripheral  equipment.  CyberStar  distributes its product throughout the United
States. The VAR division sells its products through resellers.  The ITC division
was  started  in April 2000 and  distributes  domestically  and  internationally
tier-one  computer   hardware,   software  and  peripherals  to  large  computer
resellers.

The following table presents sales information by division:

                                           THREE MONTHS ENDED
       NET SALES                                 MAY 31
       ---------
                               ------------------------------------------
                                       2000                   1999
                                       ----                   ----

CyberStar(R)division           $          479,602      $          759,970
VAR division                              264,694                 391,500
ITC division                            2,513,125                    --
                               ------------------     -------------------
                               $        3,257,421      $        1,151,470
                               ==================      ==================

Note 5. NET LOSS PER COMMON SHARE

Basic net income/loss per share is computed based on the weighted average number
of common  shares  outstanding  during each  period.  Diluted net loss per share
includes the incremental shares assumed issued on the exercise of stock options.
Basic  and  diluted  net loss per  share are  equal  because  the  effect of the
outstanding stock options and warrants is antidilutive.

Note 6. SUBSEQUENT EVENTS

On  April  1,  2000  CyberStar  entered  into a Stock  Exchange  Agreement  (the
"Agreement") with the shareholders of International  Trade Center, Inc. ("ITC"),
a global  distributor of computer and computer related  accessories,  to acquire
all of the issued and outstanding  stock of ITC. All of the conditions  required
to close the transaction were completed June 21, 2000 and on that date CyberStar
acquired all of the issued and outstanding stock of ITC.

Under  the  terms of the  Agreement,  at  closing,  CyberStar  issued  shares of
CyberStar common stock in exchange for the stock of ITC. The shareholders of ITC
received an aggregate  9,576 shares of CyberStar  common stock.  The four former
shareholders of ITC, now employees of CyberStar,  were also each granted options
to purchase  25,000  shares of CyberStar  common  stock at $1.75 per share.  The
options  become  exercisable  five years  after  their  issuance  and may become
exercisable three years after their issuance,  if certain  performance  criteria
are met.  Compensation  expense of $550,000  will be amortized  over the vesting
period as a result of granting these options.

                                       7

<PAGE>



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

RESULTS OF OPERATIONS

The  following  table  sets  forth,  for the  periods  indicated,  statement  of
operations data as a percentage of net sales:

                                                 THREE MONTHS ENDED
                                                       MAY 31
                                   ---------------------------------------------
                                         2000                        1999
                                         ----                        ----

Sales                                   100.0%                       100.0%
Cost of sales                            94.4                         83.0
                                       ------                       ------
Gross profit                              5.6                         17.0
                                       ------                       ------

Operating expenses
General and administrative               10.9                         21.3
Sales and marketing                       0.2                          1.7
                                       ------                       ------
                                         11.1                         23.0

Loss from operations                     (5.5)                        (6.0)

Other (expense)                          (0.1)                        (0.1)
                                       -------                     --------

Net loss                                 (5.6)%                       (6.1)%


COMPARISON OF THE THREE MONTHS ENDED MAY 31, 1999 AND 2000

NET SALES. Net sales increased $2,105,951, or 182.9%, to $3,257,421 in the three
months ended May 31, 2000 compared to $1,151,470  for the three months ended May
31, 1999.  CyberStar (R) division  sales  decreased  $280,368 to $479,602 in the
first  quarter of fiscal 2001 from $759,970 in the first quarter of fiscal 2000.
VAR division sales decreased $126,806 to $264,694 in the first quarter of fiscal
2001 from  $391,500 in the first  quarter of fiscal  2000.  The ITC division had
sales of $2,513,125  in the first  quarter of fiscal 2001,  the first quarter of
its operations.

GROSS PROFIT. Gross profit for the first quarter of fiscal 2001 was $183,366, or
5.6% of net sales,  compared to  $195,906,  or 17.0% of net sales,  in the prior
year.  This  decrease in gross  profit is due  primarily  to lower gross  profit
margins on sales in the ITC division. Gross profit margins were lower because of
a high number of large orders received.

OPERATING EXPENSES.  General and administrative expenses were $354,804, or 10.9%
of net sales, in the first quarter of fiscal 2001 compared to $245,490, or 21.3%
of net sales,  in the first quarter of fiscal 2000.  The increase of $109,314 is
due  primarily  to an increase in staff  resulting  in an increase in salary and
other  employee   related   expenses  of  $41,438,   amortization   of  deferred
compensation  expense of $34,179,  an increase in professional  fees of $23,444,
and an  increase  in bad debts of  $18,075,  offset by a decrease  in  occupancy
expense of  $15,125.  Sales and  marketing  expenses  decreased  by $11,545  due
primarily to a reduction in sales staff resulting in lower  commissions  paid on
sales.  Commissions  of  $38,692  were paid to an  outside  sales and  marketing
organization  on gross sales of $2,551,817 in the ITC division.  The commissions
were netted against gross sales and reduced gross sales by $38,692.
                                       8
<PAGE>

The loss from operations increased by $110,309 to $(179,249) in fiscal 2001 from
$(68,940) in fiscal 2000, reflecting the decrease in gross profit of $12,540 and
the increase in operating expenses of $97,769.

Interest  expense  increased by 198%,  or $3,046,  to $4,579 in fiscal 2001 from
$1,533 in fiscal 2000 primarily as a result of increased  average  borrowings in
fiscal 2001.

As a  result  of the  foregoing  factors,  net loss  increased  by  $113,355  to
$(183,828) in fiscal 2001 from $(70,473) in fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position at May 31, 2000 was $327,864, a decrease of $168,622
from $496,486 at February 29, 2000.  During the three months ended May 31, 2000,
net cash  used in  operating  activities  was  $1,368,588  due  primarily  to an
increase in accounts receivable of $1,028,818 as a result of increased sales and
an increase in prepaid  expenses of $232,385.  During the three months ended May
31, 1999, net cash provided by operating activities was $91,096 primarily due to
the reduction of operating  expenses  resulting  from the decrease in staff as a
result of delays in development of the e-commerce site and decreased sales.

Net cash used in investing activities in the three months ended May 31, 2000 was
$76,584 due to the  purchases of equipment,  computers and software  development
compared to net cash provided by investing  activities in the three months ended
May 31, 1999 of $8,428 due to the sale of equipment.

Net cash  provided by financing  activities  of  $1,276,550  in the three months
ended May 31, 2000  consisted  of $300,000  borrowed  under a revolving  line of
credit,  $900,000 borrowed from a private investor and borrowings on receivables
of $76,500.  Net cash of $150,000  used for financing  activities  for the three
months ended May 31, 1999 consisted of payments on outstanding  borrowings under
a revolving line of credit.

The Company has a revolving line of credit of $300,000 with a bank. This line of
credit is secured by all of the  Company's  assets and the personal  guaranty of
the majority shareholder. Borrowings under the line accrue interest at a rate of
1.0% over prime rate (9.5% at May 31,  2000) and amounted to $300,000 at May 31,
2000.

During April and May 2000,  CyberStar borrowed $900,000 from a private investor.
The notes are due April and May 2001 and bear interest on the unpaid  balance at
a fluctuating  annual rate equal to 4.0% above the rate of interest  established
by Wells Fargo Bank N.A., f/k/a Norwest Bank Minnesota NA, as its base rate.

In May  1999  the  Company  entered  into  an  agreement  whereby  it  can  sell
receivables  or  borrow  money in  amounts  up to 80% of the  eligible  accounts
receivable balance.  The Company pays a 1% commission on all receivables sold or
is charged  interest at a rate of 8% or prime plus 1.5%,  whichever  is greater,
for borrowings against receivables.  This agreement was for one year and expired
in May 2000.  Borrowings  against  receivables still outstanding at May 31, 2000
amounted to $76,550, which was paid in June 2000.
                                       9
<PAGE>

Forward-Looking Statements
--------------------------

Forward-looking   statements  herein  are  made  pursuant  to  the  safe  harbor
provisions of the Private  Securities  Litigation  Reform Act of 1995. There are
certain  important  factors that could cause results to differ  materially  from
those anticipated by some of the statements made herein. Investors are cautioned
that all  forward-looking  statements  involve risks and uncertainty.  Among the
factors that could cause actual results to differ  materially are the following:
market acceptance of new products,  changes in competitive environment,  general
conditions  in the  industries  served  by  the  Company's  products,  continued
availability  of financing and related costs,  and overall  economic  conditions
including inflation.


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

We have asserted a claim against Euler Solutions,  Inc. a Minnesota  corporation
("Euler"). Euler was developing software for the Company, which was to have been
completed by May 28, 2000. Euler has not provided us with the services for which
we contracted.  We commenced  litigation in Hennepin  County  District Court, in
Minneapolis,  Minnesota  on June 20,  2000 to  recover  the amount we have paid,
$32,151, plus our costs, and incidental and consequential damages.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

         *2.1 - Stock  Exchange  Agreement  among  the  Shareholders  of ITC and
         CyberStar Computer Corporation as of April 1, 2000.

         27 - Financial Data Schedule

         * Filed as an  exhibit  to the  Company's  Report  on Form 8-K (SEC No.
         000-27225), filed July 6, 2000, and incorporated herein by reference.

         (b)      Reports on Form 8-K

         No  Reports on Form 8-K were filed  during  the  quarter  ended May 31,
         2000.


<PAGE>


                                    SIGNATURE

         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.

                                                  CYBERSTAR COMPUTER CORPORATION


Dated:  July 14, 2000                              By    /s/ Jonathan J. Bumba
                                                --------------------------------
                                                     Jonathan J. Bumba
                                                     Its Chief Executive Officer