U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

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

For the quarter ended: May 31, 2001

Commission file no.:  0-26581

                            DERMATOLOGY SYSTEMS, INC.
          ------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

         Florida                                                   65-0844181
------------------------------------                     -----------------------
(State or other jurisdiction of                          (I.R.S.Employer
incorporation or organization)                           Identification No.)

222 Lakeview Avenue Suite 113
West Palm Beach, FL                                             33401
------------------------------------------               -----------------------
(Address of principal executive offices)                     (Zip Code)

Issuer's telephone number: (561) 832-5699


Securities to be registered under Section 12(b) of the Act:

     Title of each class                            Names of each exchange
                                                      on which registered
         None
-----------------------------------                ----------------------------

Securities to be registered under Section 12(g) of the Act:

                    Common Stock, $.0001 par value per share
                     --------------------------------------
                                (Title of class)

Copies of Communications Sent to:
                                     Donald F. Mintmire
                                     Mintmire & Associates
                                     265 Sunrise Avenue, Suite 204
                                     Palm Beach, FL 33480
                                     Tel.: (561) 832-5696 - Fax: (561) 659-5371




<PAGE>



     Indicate by 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 periods 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
                               --         ---

     As of May 31,  2001,  there are  2,000,000  shares  of voting  stock of the
registrant issued and outstanding.



<PAGE>




PART I

Item 1.           Financial Statements




                          INDEX TO FINANCIAL STATEMENTS



Balance Sheets...............................................................F-2

Statements of Operations.....................................................F-3

Statements of Stockholders' Equity...........................................F-4

Statements of Cash Flows.....................................................F-5

Notes to Financial Statements................................................F-6

















<PAGE>










<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                                 Balance Sheets



                                                                  May 31,        February 28,
                                                                    2001             2001
                                                              ----------------  ----------------
                                                                (unaudited)
<S>                                                           <C>               <C>
                                   ASSETS
CURRENT ASSETS
   Cash                                                       $          9,268  $        22,295
   Short-term loan receivable                                           10,067                0
   Deposits                                                                  0            3,000
                                                              ----------------  ----------------

      Total current assets                                              19,335           25,295
                                                              ----------------  ----------------

Total Assets                                                  $         19,335  $        25,295
                                                              ================  ================

                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accrued expenses                                           $              0  $             0
   Accrued expenses - related party                                      3,000            3,000
                                                              ----------------  ----------------

     Total current liabilities                                           3,000            3,000
                                                              ----------------  ----------------

Total Liabilities                                                        3,000            3,000
                                                              ----------------  ----------------

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized 10,000,000
   shares, none issued                                                       0                0
Common stock, $0.0001 par value, authorized 50,000,000
   shares; 2,000,000 issued and outstanding                                200              200
Additional paid-in capital                                              49,900           49,900
Deficit accumulated during the development stage                       (33,765)         (27,805)
                                                              ----------------  ----------------

Total Stockholders' Equity                                              16,335           22,295
                                                              ----------------  ----------------

Total Liabilities and Stockholders' Equity                    $         19,335  $        25,295
                                                              ================  ================
</TABLE>









                   The accompanying notes are an integral part
                          of the financial statements.


                                       F-2

<PAGE>



<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                            Statements of Operations
                           Three Months Ended May 31,
                                   (Unaudited)


                                                                                                   Period from
                                                                                                   May 21, 1998
                                                                                                    (Inception)
                                                                                                     through
                                                               2001              2000              May 31, 2001
                                                          ---------------    ----------------    -----------------
<S>                                                       <C>                <C>                 <C>
Revenues                                                  $             0    $              0    $               0
                                                          ---------------    ----------------    -----------------

Expenses
     General and administrative                                        28                   0                3,059
     Consulting fees - related party                                    0                   0                  100
     Consulting fees                                                    0                   0                4,000
     Professional fees                                              6,000               4,000               23,674
     Professional fees - related party                                  0                   0                3,000
                                                          ---------------    ----------------    -----------------

Total expenses                                                      6,028               4,000               33,833
                                                          ---------------    ----------------    -----------------

Loss from operations                                               (6,028)             (4,000)             (33,833)

Other income (expense)
     Interest income                                                   68                   0                   68
                                                          ---------------    ----------------    -----------------

Net loss                                                  $        (5,960)   $         (4,000)   $         (33,765)
                                                          ===============    ================    =================

Net loss per weighted average share, basic                $         (0.01)   $          (0.01)
                                                          ===============    ================

Weighted average number of shares                               2,000,000           2,000,000
                                                          ===============    ================
</TABLE>














                   The accompanying notes are an integral part
                          of the financial statements.


                                       F-3

<PAGE>



<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                       Statements of Stockholders' Equity
                      Period from May 21, 1998 (Inception)
                              through May 31, 2001




                                                                                           Deficit
                                                                                         Accumulated
                                                                           Additional    During the          Total
                                                   Number of     Common     Paid-in      Development     Stockholders'
                                                     Shares      Stock      Capital         Stage           Equity
                                                  ------------ ---------- ------------ ---------------  ---------------
<S>                                               <C>          <C>        <C>          <C>              <C>
BEGINNING BALANCE,
May 21, 1998 (inception)                                     0 $        0 $          0 $             0  $             0

Year Ended February 28, 1999:
----------------------------
   May 1998 - services ($0.0001/sh)                  1,000,000        100            0               0              100
   May 1998 - cash ($0.05/sh)                          565,000         57       28,193               0           28,250
   June 1998 - cash ($0.05/sh)                         371,000         37       18,513               0           18,550
   July 1998 - cash ($0.05/sh)                           4,000          0          200               0              200
   September 1998 - cash ($0.05/sh)                     60,000          6        2,994               0            3,000

Net loss                                                     0          0            0         (13,891)         (13,891)
                                                  ------------ ---------- ------------ ---------------  ---------------

BALANCE, February 28, 1999                           2,000,000        200       49,900         (13,891)          36,209

Year Ended February 29, 2000:
----------------------------

Net loss                                                     0          0            0          (4,309)          (4,309)
                                                  ------------ ---------- ------------ ---------------  ---------------

BALANCE, February 29, 2000                           2,000,000        200       49,900         (18,200)          31,900

Year Ended February 28, 2001:
----------------------------

Net loss                                                     0          0            0          (9,605)          (9,605)
                                                  ------------ ---------- ------------ ---------------  ---------------

BALANCE, February 28, 2001                           2,000,000        200       49,900         (27,805)          22,295

Three Months Ended May 31, 2001: (unaudited)
-------------------------------

Net loss                                                     0          0            0          (5,960)          (5,960)
                                                  ------------ ---------- ------------ ---------------  ---------------

ENDING BALANCE, May 31, 2001 (unaudited)             2,000,000 $      200 $     49,900 $       (33,765) $        16,335
                                                  ============ ========== ============ ===============  ===============
</TABLE>







                   The accompanying notes are an integral part
                          of the financial statements.


                                       F-4

<PAGE>


<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                            Statements of Cash Flows
                         Three Months Ended May 31, 2001
                                   (Unaudited)



                                                                                                    Period from
                                                                                                   May 21, 1998
                                                                                                    (Inception)
                                                                                                      through
                                                                  2001              2000           May 31, 2001
                                                            ---------------- ------------------ -------------------
<S>                                                         <C>              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                    $         (5,960)$           (4,000)$           (33,765)
Adjustments to reconcile net loss to net cash used by
operating activities:
       Stock issued for services - related party                           0                  0                 100
Changes in operating assets and liabilities:
    (Increase) decrease in accrued interest receivable                   (67)                 0                 (67)
    (Increase) decrease in deposits                                    3,000                  0                   0
    Increase (decrease) in accrued expenses                                0              2,000                   0
    Increase (decrease) in accrued expenses - related party                0                  0               3,000
                                                            ---------------- ------------------ -------------------

Net cash used by operating activities                                 (3,027)            (2,000)            (30,732)
                                                            ---------------- ------------------ -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Issuance of loan receivable                                   (10,000)                 0             (10,000)
                                                            ---------------- ------------------ -------------------

Net cash used by investing activities                                (10,000)                 0             (10,000)
                                                            ---------------- ------------------ -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock                                0                  0              50,000
                                                            ---------------- ------------------ -------------------

Net cash provided by financing activities                                  0                  0              50,000
                                                            ---------------- ------------------ -------------------

Net increase (decrease) in cash                                      (13,027)            (2,000)              9,268

CASH, beginning of period                                             22,295             36,900                   0
                                                            ---------------- ------------------ -------------------

CASH, end of period                                         $          9,268 $           34,900 $             9,268
                                                            ================ ================== ===================
</TABLE>















                   The accompanying notes are an integral part
                          of the financial statements.


                                       F-5

<PAGE>



                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                          Notes to Financial Statements
                  (Information with respect to the three months
                   ended May 31, 2001 and 2000 is unaudited)


(1) Summary of Significant Accounting Principles
     TheCompany Dermatology  Systems,  Inc. is a Florida  chartered  development
          stage  corporation  which conducts  business from its  headquarters in
          West Palm Beach,  Florida.  The Company  was  incorporated  on May 21,
          1998, and has elected February 28 as its fiscal year end.

          The  Company  has not yet  engaged  in its  expected  operations.  The
          Company's future operations will be to provide certain  treatments for
          skin diseases.  Current  activities  include raising additional equity
          and negotiating with potential key personnel and facilities.  There is
          no assurance  that any benefit will result from such  activities.  The
          Company will not receive any operating revenues until the commencement
          of operations,  but will nevertheless continue to incur expenses until
          then.

          The  financial  statements  have  been  prepared  in  conformity  with
          generally accepted accounting  principles.  In preparing the financial
          statements,  management is required to make estimates and  assumptions
          that affect the reported  amounts of assets and  liabilities as of the
          date  of the  statements  of  financial  condition  and  revenues  and
          expenses  for  the  period  then  ended.  Actual  results  may  differ
          significantly from those estimates.

         The  following summarize the more significant  accounting and reporting
policies and practices of the Company:

          a) Start-up costs Costs of start-up activities, including organization
          costs,  are  expensed as incurred,  in  accordance  with  Statement of
          Position (SOP) 98-5.

          b) Net loss per share  Basic net loss per  weighted  average  share is
          computed by dividing  the net loss by the weighted  average  number of
          common shares outstanding during the period.

          c) Stock  compensation for services rendered The Company issues shares
          of common stock in exchange for  services  rendered.  The costs of the
          services  are  valued  according  to  generally  accepted   accounting
          principles and have been charged to operations.

          d) Interim  financial  information  The financial  statements  for the
          three months ended May 31, 2001 and 2000 are unaudited and include all
          adjustments  which in the opinion of management are necessary for fair
          presentation,  and  such  adjustments  are of a normal  and  recurring
          nature.  The results for the three months are not indicative of a full
          year results.

(2)       Stockholders'  Equity The Company has authorized  50,000,000 shares of
          $0.0001 par value common stock,  and 10,000,000  shares of $0.0001 par
          value  preferred  stock.  Rights and privileges of the preferred stock
          are to be determined by the Board of Directors  prior to issuance.  On
          May 21,  1998,  the  Company  issued a total of  1,000,000  restricted
          shares  to its  President  and  Treasurer  for the  value of  services
          rendered in connection with the  organization  of the Company.  In May
          1998,  the Company sold 565,000  shares of common stock for $28,250 in
          cash.  In June 1998,  the Company sold 371,000  shares of common stock
          for cash of $18,550.  In July 1998,  the Company  sold 4,000 shares of
          common  stock for cash of $200.  In September  1998,  the Company sold
          60,000 shares of common stock for cash of $3,000.

(3)       Income Taxes Deferred income taxes (benefits) are provided for certain
          income and expenses which are recognized in different  periods for tax
          and financial reporting  purposes.  The Company has net operating loss
          carry-  forwards  for income tax  purposes  of $33,800,  with  $6,000,
          $9,600,  $4,300 and $13,900  expiring at February 28, 2022, 2021, 2020
          and 2019. Dermatology Systems, Inc. (A Development Stage Enterprise)

                                       F-6

<PAGE>



                          Notes to Financial Statements


(3)       Income Taxes (Continued) The amount recorded as deferred tax assets as
          of May 31, 2001 is approximately  $5,000,  which represents the amount
          of tax benefit of the loss carryforward. The Company has established a
          100%  valuation  allowance  against this  deferred  tax asset,  as the
          Company has no history of profitable operations.

(4)       Going Concern The accompanying financial statements have been prepared
          assuming  that the  Company  will  continue  as a going  concern.  The
          Company's  financial  position and operating results raise substantial
          doubt about its ability to continue as a going  concern,  as reflected
          by the net loss of $33,800  accumulated  from May 21, 1998 (inception)
          through  May 31,  2001.  The  ability of the  Company to continue as a
          going concern is dependent upon commencement of operations, developing
          sales, and obtaining  additional capital and financing.  The financial
          statements do not include any  adjustments  that might be necessary if
          the Company is unable to continue as a going  concern.  The Company is
          currently seeking  additional capital to allow it to begin its planned
          operations.

(5)       Loan  Receivable  On May 4, 2001,  the  Company  loaned  $10,000 to an
          unrelated  third party on a demand note  carrying a 9% interest  rate.
          This loan is  expected  to be repaid in July  2001.  At May 31,  2001,
          interest of $67 was accrued.

(6)       Related Parties  Counsel to the Company  indirectly owns 80,000 shares
          of the Company's common stock through the sole ownership of the common
          stock  of  another  company  which  invested  in  the  Company.  Also,
          counsel's  adult son owns 80,000 shares in the Company.  The Company's
          president owns a 42.5% interest in the Company,  consisting of 850,000
          shares, and the treasurer owns a 7.5% interest,  consisting in 150,000
          shares.

          During the period since inception,  the Company incurred certain legal
          and  consulting  fees from related  parties,  in the amount of $3,100.
          Professional  services  rendered by the  Company's  legal  counsel and
          shareholder amounted to $3,000 and is presented in Professional fees -
          related party. Consulting services rendered by the Company's secretary
          and treasurer  amounted to $100 and is presented in Consulting  fees -
          related party.  Legal counsel paid certain  miscellaneous  expenses on
          behalf of the Company,  amounting to $123.  Unpaid  amounts at May 31,
          2001 are $3,000 and are presented in Accrued expenses - related party.

                                       F-7

<PAGE>



Item 6. Management's Discussion and Analysis or Plan of Operation

     Plan of Operations

     Since its  inception,  the Company  has  conducted  no business  operations
except for organizational and capital raising activities. For the quarter ending
May 31, 2001 and 2000, the Company had no income from operations and accumulated
operating expenses of $6,028 and $4,000 respectively, and losses from operations
of  $6,028  and  $4,000   respectively.   The  Company  proposes  to  profitably
participate  in the recent  trend in the  medical/cosmetic  removal of blemishes
through the use of laser technology and, specifically through the application of
Photo Therapy Resonancy technology (otherwise referred to as "PTR").

     Dr.  Pierre  Haouzi,  61 years old,  is a graduate  of the Paris  School of
Medicine,  specializing in Biology and is Licensed to practice general medicine.
He has a specialty in Sports Medicine and Traumatology and in 1979 was certified
by the Country of France.  Dr. Haouzi has testified numerous times in court as a
medical expert. He also holds a certification in Homeopathy and Acupuncture.  In
June 1995 Dr. Haouzi resigned his position managing retirement homes and private
clinics.  In 1996 he assumed  the  position  of Medical  Director of Lasertec of
France's research and development of laser therapy for the specialized treatment
of cancer.

     Dr. Haouzi has applied  portions of his training to his recent research and
development of laser technology therapy.  While the research and development has
been focused on  specialized  treatment of cancer and many  benefits  from laser
application have been discovered,  refined and applied to the areas in which the
Company will market its services.  Dr. Haouzi has been  authorized and permitted
to  develop  this  additional  technology  while  engaged  in his  research  and
development  for the  specialized  treatment  of  cancer.  Such  forms of cancer
researched to which PTR  technology  may apply  includes  cancer of the bladder,
skin cancer and cancer of the vocal  chords.  In some respects the areas overlap
and the  cancer  research  has  developed  new  methods of  treatment  and laser
application for the areas in which the Company will engage.  Dr. Haouzi has been
a key  researcher  for  Lasertec of France,  was  authorized  and  permitted  by
Lasertec of France to develop additional  technology while doing cancer research
and  has a  verbal  commitment  from  Lasertec  of  France  which  owns  the PTR
technology  that  he is  permitted  to  utilize  such  technologies  in his  own
business.  The specific terms of the license is under discussion and the Company
expects a written  agreement  with  respect to the  technology  in the very near
future.

     Subsequent to the submission of PTR for FDA approval  management intends to
explore all available  alternatives for debt and/or equity financing,  including
but  not  limited  to  additional  private  and  public  securities   offerings.
Management  anticipates  that it will be able to satisfy  its cash  requirements
through its 2001 fiscal year end without  raising  funds via debt and/or  equity
financing or from third party funding sources.  Accordingly,  management expects
that it will be  necessary  for DSI to raise  additional  funds  within the next
twelve (9) months, commencing approximately nine(6) months from the date hereof.

     Dr. Haouzi, at least initially,  will be solely  responsible for developing
DSI's  medical  laser  sales  business.  However,  at such  time,  if  ever,  as
sufficient  operating capital becomes  available,  management  expects to employ
additional staffing and marketing personnel. In addition, the Company expects to
continuously engage in market research in order to monitor new market trends and
other critical information deemed relevant to DSI's business.




<PAGE>



     Financial Condition, Capital Resources and Liquidity

     At May 31, 2001, the Company had assets totaling $19,335 and liabilities of
$3,000. Since the Company's  inception,  it has received $50,000 in cash paid as
consideration for the issuance of shares of Common Stock.

     DSI's  working  capital  is  approximately  $16,000  and  there  can  be no
assurance that the Company's  financial  condition will improve.  The Company is
expected  to  continue  to have  minimal  working  capital or a working  capital
deficit as a result of current liabilities.

     The ability of the Company to continue as a going concern is dependent upon
its  ability to obtain a  licensing  arrangement  with the  manufacturer  of PTR
medical  lasers,  submitting PTR for FDA approval,  and then finding clients who
will purchase it.

     To implement such plan, also during this initial phase, the Company intends
to initiate a self- directed private  placement under Rule 506 in order to raise
an additional $300,000.  In the event such placement is successful,  the Company
believes  that it will have  sufficient  operating  capital to meet the  initial
expansion goals and operating costs through its 2001 fiscal year end.

     Net Operating Losses

     The Company has net operating loss carry-forwards of $33,800,  with $6,000,
$9,600  and  $4,300  and  $13,900   expiring  in  2022,   2021,  2020  and  2019
respectively.  The Company has as of May 31,  2001 a $5,000  deferred  tax asset
resulting  from the loss  carry-forwards,  for which it has  established  a 100%
valuation  allowance.  Until the Company's  current  operations begin to produce
earnings,  it  unclear  as to  the  ability  of  the  Company  to  utilize  such
carry-forwards.

     Forward-Looking Statements

     This Form 10-QSB includes  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act of  1934,  as  amended.  All  statements,  other  than
statements of historical  facts,  included or  incorporated by reference in this
Form 10-QSB which address  activities,  events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof),  business
strategy,  expansion and growth of the Company's  business and  operations,  and
other such matters are forward-looking statements. These statements are based on
certain  assumptions and analyses made by the Company in light of its experience
and its perception of historical trends,  current conditions and expected future
developments  as well as  other  factors  it  believes  are  appropriate  in the
circumstances. However, whether actual results or developments will conform with
the Company's  expectations  and predictions is subject to a number of risks and
uncertainties,  general  economic market and business  conditions;  the business
opportunities  (or lack  thereof)  that may be  presented  to and pursued by the
Company;  changes in laws or regulation;  and other  factors,  most of which are
beyond the  control of the  Company.  Consequently,  all of the  forward-looking
statements made in this Form 10-QSB are qualified by these cautionary statements
and  there  can  be  no  assurance  that  the  actual  results  or  developments
anticipated by the Company will be realized or, even if substantially  realized,
that they will have the expected consequence to or effects on the Company or its
business or  operations.  The Company  assumes no obligations to update any such
forward-looking statements. The Safe Harbor provisions referred to herein do not
apply to the Company until the Company is subject to the reporting  requirements
of Section 13(a) or Section 15(d) of the Exchange Act.


<PAGE>



PART II

Item 1. Legal Proceedings.

     The  Company  knows  of no legal  proceedings  to which it is a party or to
which any of its  property  is the  subject  which are  pending,  threatened  or
contemplated or any unsatisfied judgments against the Company.

Item 2. Changes in Securities and Use of Proceeds

         None

Item 3. Defaults in Senior Securities

         None

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

     No matter was submitted during the quarter ending May 31, 2001,  covered by
this report to a vote of the Company's shareholders, through the solicitation of
proxies or otherwise.

Item 5. Other Information

         None

Item 6. Exhibits and Reports on Form 8-K

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:

Exhibit No.     Description
-----------    -------------------------------------------------------
3(i).1            Articles of Incorporation of DSI filed May 21, 1998(1)

3(ii).1           By-laws (1)
-------------------------------
(1)  Incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB and subsequent amendments filed thereto.

     (b) No  Reports on Form 8-K were filed  during  the  quarter  ended May 31,
2001.



<PAGE>


                                   SIGNATURES
                                   ----------

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,  hereunto duly
authorized.

                            DERMATOLOGY SYSTEMS, INC.
                                  (Registrant)

     Date              Signature
     ----              ---------

 July 18, 2001         By: /s/ Dr.  Pierre Haouzi
                       -------------------------------------
                       Dr. Pierre Haouzi
                       President and Director

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

Date                  Signature                         Title
----                    ---------                       -----

July 18, 2001        By:   /s/ Dr.  Pierre Haouzi
                     -----------------------------
                     Dr. Pierre Haouzi                  President and Director