U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                FORM  10-QSB
(Mark One)

[X]   Quarterly report pursuant section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  quarterly  period  ended  September  30,  2000.

[ ]   Transition report pursuant section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  transition  period  from . . . . . . to . . . . . .

Commission  file  number  333-60487

                 CYBER MERCHANTS EXCHANGE, INC. D.B.A. C-ME.COM
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

            CALIFORNIA                                    95-4597370
            ----------                                    ----------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

    600 S. LAKE AVE., SUITE 405, PASADENA, CA               91106
   -----------------------------------------                -----
    (Address of principal executive offices)              (Zip Code)

                     Issuer's telephone number (626)793-5000
                                               -------------


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

Number  of  shares  outstanding  of the issuer's classes of common equity, as of
September  30, 2000:  7,589,669 shares of Common Stock, no par value (one class)

Transitional  Small  Business  Disclosure  Format:  Yes    No X
                                                       ---   ---


<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

                               TABLE  OF  CONTENTS


PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .   3

     Item 1.  Financial Statements . . . . . . . . . . . . . . . . . . . . .   3

         Balance Sheet (unaudited) as at September 30 and June 30, 2000. . .   3

         Statement of Operations (unaudited) for three months ended
         September 30, 2000 and September 30, 1999 . . . . . . . . . . . . .   4

         Statement of Cash Flows (unaudited) for three months ended
         September 30, 2000 and September 30, 1999 . . . . . . . . . . . . .   5

         Notes to Financial Statements (unaudited) . . . . . . . . . . . . .   6

    Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations. . . . . . . . . . . . . . . . . . . .  8

PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . .  10

     Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .  10

     Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . .  11

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                 CYBER MERCHANTS EXCHANGE, INC.
                                       D.B.A. C-ME.COM

                              PART  I  -  FINANCIAL  INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

                                         BALANCE  SHEET

                                                                    June 30,    September 30,
                                                                      2000          2000
                                                                  ------------  ---------------
                                                                                 (Unaudited)
<S>                                                               <C>           <C>

ASSETS

Current assets:
 Cash and cash equivalents                                        $ 1,274,395   $       67,995
 Certificates of deposit                                            3,900,000        4,832,284
 Stock subscription receivable                                      1,481,240                -
 Accounts receivable, net of allowance for doubtful accounts of
  $5,990 and $4,640 as of December 31, 1999 and 2000,
  respectively                                                         54,693           74,276
 Accounts receivable - related parties                                700,000           34,237
 Prepaid expenses                                                       5,367            4,895
                                                                  ------------  ---------------

Total current assets                                                7,415,695        5,013,687

Furniture, fixtures and equipment, net                                 63,937           63,920

Investments in overseas joint ventures and ABNet, net                 815,427        2,154,748
Other assets                                                            3,619            7,222
                                                                  ------------  ---------------

Total assets                                                      $ 8,298,678   $    7,239,577
                                                                  ============  ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accrued expenses                                                 $   691,114   $       96,429
                                                                  ------------  ---------------
Total current liabilities                                             691,114           96,429
                                                                  ------------  ---------------

Commitments and contingency

Shareholders' equity:
 Common stock, no par value; 40,000,000 shares authorized;
  7,589,669 shares issued and outstanding at June 30, 1999 and
  2000, respectively                                                8,550,777       10,032,017
 Additional paid-in capital                                         3,332,827        3,572,442
 Common stock subscribed                                            1,481,240                -
 Unearned stock compensation                                       (1,180,196)      (1,160,787)
 Accumulated deficit                                               (4,577,084)      (5,300,524)
                                                                  ------------  ---------------

Total shareholders' equity                                          7,607,564        7,143,148
                                                                  ------------  ---------------

Total liabilities and shareholders' equity                        $ 8,298,678   $    7,239,577
                                                                  ============  ===============
</TABLE>

                 See accompanying notes to financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

STATEMENT  OF  OPERATIONS

                                                           Three Months Ended
                                                              September 30,
                                                       --------------------------
                                                           1999         2000
                                                       ------------  ------------
                                                        (Unaudited)  (Unaudited)
<S>                                                    <C>           <C>

Revenues:
 Subscribers' fees                                     $    10,150   $    12,900
                                                       ------------  ------------

Operating costs and expenses:
 Cost of revenue                                            23,452        69,532
 General and administrative expenses                       121,622       421,619
 Stock-based compensation                                        -       259,024
                                                       ------------  ------------

 Operating gain (loss)                                    (134,924)     (737,275)
                                                       ------------  ------------

Other income (expenses):
 Interest income, net                                       18,133        76,382
 Other expenses                                                  -        (1,453)
 Loss on investment in C-ME.com Taiwan                           -       (39,300)
 Loss on investment in GP.com                                    -       (20,447)
 Loss on investment in E-SEA                                     -          (932)
                                                       ------------  ------------

Loss before income taxes                                  (116,791)     (723,026)

Income taxes                                                     -          (414)
                                                       ------------  ------------

Net loss                                               $  (116,791)  $  (723,440)
                                                       ============  ============

Basic and diluted net loss per share                   $    (0.019)  $    (0.095)
                                                       ============  ============

Weighted-average number of common shares outstanding     6,086,173     7,589,669
                                                       ============  ============
</TABLE>

                 See accompanying notes to financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                CYBER MERCHANTS EXCHANGE, INC.
                                       D.B.A. C-ME.COM

                                   STATEMENT OF CASH FLOWS
                       INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT

                                                           Three Months Ended
                                                              September 30,
                                                        --------------------------
                                                            1999          2000
                                                        ------------  ------------
                                                        (Unaudited)   (Unaudited)
<S>                                                     <C>           <C>

Cash flows from operating activities:
 Net loss                                              $  (116,792)  $   (723,440)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
   Depreciation and amortization                              7,410        10,861
   Stock compensation expense                                     -       259,024
   Loss on investments                                            -        60,679
   Changes in current assets and liabilities:
     Accounts receivable                                     (2,225)      360,417
     Accounts payable and accrued expenses                 (165,433)     (594,685)
     Prepaid expenses                                             -           472
     Other assets                                                 -        (3,603)
                                                        ------------  ------------

Net cash used in operating activities                      (277,040)     (630,275)
                                                        ------------  ------------

Cash flows from investing activities:
 Purchase of office equipment                               (26,980)      (10,844)
 Increase in deposits and others                           (865,248)     (932,284)
 Investment in certificates of deposit                      500,000             -
 Investment in GP.com                                             -    (1,000,000)
 Advance to GP.com                                                -       (34,237)
 Investment in E-SEA                                              -      (400,000)
 Return of investment due to sales of software                    -       320,000
                                                        ------------  ------------

Net cash provided by (used in) investing activities        (392,228)   (2,057,365)
                                                        ------------  ------------

Cash flows from financing activities:
 Proceeds from stock subscribed                              96,984     1,481,240
                                                        ------------  ------------

Net cash provided by financing activities                    96,984     1,481,240
                                                        ------------  ------------

Net increase in cash and cash equivalents                  (572,284)   (1,206,400)

Cash and cash equivalents, beginning of period              595,265     1,274,395
                                                        ------------  ------------

Cash and cash equivalents, end of period                $    22,981   $    67,995
                                                        ============  ============
</TABLE>

                 See accompanying notes to financial statements.


                                        5
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

                          NOTES TO FINANCIAL STATEMENTS

NOTE  1  -  ORGANIZATION  AND  BUSINESS

Cyber  Merchants Exchange, Inc. d.b.a. C-ME.com (the "Company" or "C-ME.com") is
a business-to-business e-commerce company serving the worldwide retail industry.
C-ME.com,  a  California  corporation,  was  formed  in  July,  1996.

The  Company provides its customers with an Internet-based communications system
that enables retailers and vendors to conduct negotiations and to electronically
facilitate  the  sourcing,  and the purchase and sale of merchandise on a global
basis.  Using  C-ME.com's  proprietary  software, the Company maintains a secure
yet  open  electronic  network  that  enables  retailers  to  conduct  on-line
communications  and  transactions  with  their  vendors.  The  front-end
communications  and  trading  process  is  generally  referred  to in the retail
industry  as  "sourcing."  High  volumes  of  product  and  transaction data are
exchanged between retailers and their vendors in order for buy-sell transactions
to  be  initiated,  negotiated  and consummated.  This critical sourcing process
typically  requires  a  substantial  amount  of time and attention from both the
retail merchandise buyer and the salesperson of a vendor.  The Company's related
software  products  and  services  are  designed  to make this sourcing function
substantially  more  effective  and  efficient.

C-ME.com  believes  that  by  providing  retailers with direct access to foreign
manufacturers,  it  can  better  support  its  existing  retail partnerships and
attract  new  retail  partners by aggregating vendors to create efficiencies for
both  foreign  manufacturers  and  U.S.  retailers.  To  do  this  C-ME.com  is
partnering  with companies in other countries that have the connections, capital
and  ability  to form joint ventures.  These joint ventures are opening regional
merchandise sourcing offices and marketing Internet Sourcing Networks (ISN's) to
international  manufacturers  that  would  like  to  sell directly to large U.S.
retailers.  By  establishing localized merchandise sourcing offices, C-ME.com is
fulfilling  its  mission  of  being  the  retailers' global sourcing solution by
making international commerce convenient and feasible for many manufacturers who
know  how  to  make  quality products but do not have technological knowledge or
Internet  access.  Beginning  in  the  Pacific Rim, the Company has formed joint
ventures  in Taiwan, Thailand, The Philippines, and China during 2000, and plans
to  form six more joint ventures in various Asian countries during 2001, as well
as  to  expand  its  operations to Central and South America and Europe in 2002.

NOTE  2  -  BASIS  OF  PRESENTATION

The  accompanying unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting  principles  for  interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do  not  include  all  the information and
footnotes  required  by  generally  accepted  accounting principles for complete
financial statements.  In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been  included.  Operating  results  for the three months period ended September
30,  2000 are not necessarily indicative of the results that may be expected for
the  year  ending  June  30,  2001.  For  further  information,  refer  to  the
consolidated  financial  statements  and  footnotes  thereto  included  in  the
Company's  annual  report  on  Form  10-KSB  for  the  year ended June 30, 2000.


                                        6
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

                          NOTES TO FINANCIAL STATEMENTS

NOTE  3  -  RELATED  PARTY  TRANSACTIONS

During  the  quarter  ended September 30, 2000, the Company received proceeds of
$700,000  from  GP.com  and  E-SEA  for  the  sales  of  software to these joint
ventures.  In  addition,  during  September  2000,  the  Company  advanced
approximately $34,000  to GP.com.  Subsequent to September 30, 2000, the Company
received payment in  full  for  all  advances  from  GP.com.

NOTE  4  -  TRANSACTION  IN  SHAREHOLDER'  EQUITY

In May 2000, the Company conducted a private placement to issue 1,255,900 shares
of  its common  stock at $4.878 per share.   The fund raising was closed on June
30,  2000,  with  net  proceeds  of  $5,186,959,  netting  issuance  expenses of
$939,377.  Among the net proceeds of $5,186,959, $1,475,240 was received on July
30,  2000.  During  the three-month period ended September 30, 2000, the Company
received  proceeds  of  $6,000  from  options  exercised.

During  the three-month  period  ended September 30, 2000, the Company granted a
total  of  335,596 options under the 1999 Option Plan to employees, officers and
non-employees.   The  exercise  prices  of  options  granted vary and range from
$4.878 to $6.080.   The Company applies APB Opinion No. 25 "Accounting for Stock
Issued  to  Employees"  and  related interpretations in accounting for its stock
option plans.   As a result, the Company recognized a total compensation expense
of  $239,615  which all related to employees.  Based on their respective vesting
terms,  this  amount  will  be  amortized  over  two  years  with $119,540 being
amortized  the  first  year  and  $120,076  being  amortized  the  second  year.

NOTE  5  -  SUBSEQUENT  EVENTS

In  July  2000, Mr. Yoichiro Honda, an independent party, formed C-ME Japan Co.,
Ltd.  On  August  26,  2000,  the  Company executed a sale agreement to sell its
software  to  C-ME  Japan for approximately $366,000.   On October 10, 2000, the
Company  signed an investment agreement with C-ME Japan Co., Ltd. to invest 19.5
million  of  Japanese  Yen  (approximately  $190,000) in C-ME Japan Co., Ltd. On
October  15,  2000,  the  Company  invested 19.5 million of Japanese Yen to C-ME
Japan.  In  accordance with the investment agreement, the Company will inject an
additional  20  million  of Japanese Yen in December 2000.   The equity interest
the  Company  will  own  in  C-ME  Japan  will  approximate  49.375%.

On  October  19,  2000,  the  Company  executed  a  Factoring Agreement with CIT
Financial Services. Under this agreement, CIT will establish pre-approved credit
lines  for  buyers  so  they can easily and efficiently purchase products on the
C-ME.com  web-site  and, at the same time, provide credit protection to sellers.
CIT  will  assume the buyer's financial ability to pay its debts on all approved
orders  on  the  C-ME.com  site.


                                        7
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

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

The following discussion of the financial condition and results of operations of
the  Company should be read in conjunction with the financial statements and the
related  notes thereto included elsewhere in this quarterly report for the three
months  ended  September  30,  2000.  This  quarterly  report  contains  certain
forward-looking  statements  and  the  Company's  future operating results could
differ  materially from those discussed herein.  Certain statements contained in
this  Report,  including,  without  limitation,  statements containing the words
"believes,"  "anticipates,"  "expects"  and  the  like,  constitute  "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.  Such  forward-looking  statements  involve  known  and  unknown risks,
uncertainties  and  other factors that may cause the actual results, performance
or  achievements  of  the  Company  to  be  materially different from any future
results,  performance  or  achievements  expressed  or  implied  by  such
forward-looking statements.  These factors are discussed in more detail below in
the  section  entitled  "Risk  Factors."  Given these uncertainties, readers are
cautioned  not  to place undue reliance on such forward-looking statements.  The
Company  disclaims  any  obligation  to  update  any such factors or to announce
publicly  the  results  of  any  revisions  of  the  forward-looking  statements
contained  or  incorporated  by  reference  herein  to  reflect future events or
developments.

STATUS  OF  OPERATIONS

The  Company's  current  business  model  focuses  on  the  retailer and forming
strategic  retail  relationships.  In  addition,  the  Company  is  aggressively
pursuing  the  establishment  of  international  sourcing  offices.  This
international  expansion  will  help  complement  the  strategic  retailer
relationships  that  the Company anticipates attracting through the execution of
its  business  model.  The  Company  plans to utilize the marketing power of its
retail  partners  to  attract  vendors  worldwide.

The  Company  believes that by providing retailers with direct access to foreign
manufacturers,  it  can support its existing retail partnerships and attract new
retail  partners.  The  Company's  goal  is to aggregate manufacturers to create
efficiencies  for  both foreign manufacturers and U.S. retailers.  The Company's
strategy  is  to  partner  with  companies  in  other  countries  that  have the
connections,  capital  and  ability to form joint ventures.  These joint venture
corporations  will open multiple merchandise sourcing offices in many countries,
beginning  in  the  Pacific  Rim's  major  manufacturing  centers.  The  local
merchandise  sourcing  offices  will  be  used  to  market the Company's ISNs to
manufacturers  that  want  to  sell  directly  to  U.S.  retailers.

FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS

Three  Months  Ended  September  30,  2000  Compared  to  September  30,  1999

OPERATING  REVENUE

Total  operating  revenues  for  the  three months ended September 30, 2000 were
$12,900 as compared to $10,150 for the same period last year, or a 27% increase.
Revenues consisted of subscribers' fees.  The increase in operating revenues was
due  to  the  increased  number  of  subscribers  to  the  Company's  software.


                                        8
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

The  Company  anticipates  generating  revenues  from  fees paid by domestic and
global vendors who subscribe to the ISN, one-time sales of operating software to
joint  ventures,  and  a  commission  to  be  paid  by the retailers on overseas
purchases  through  the  Company's  operating  system.

OPERATING  COSTS  AND  EXPENSES

The cost of revenue was $69,532 for the three months ended September 30, 2000 as
compared  to  $23,452  for  the  same period last year, or a 197% increase.  The
increase  in  the  cost of revenue is attributable to an increase in the cost of
additional  technical  personnel  to service customers, as well as the increased
costs  of  developing  and  servicing  the  Company's  proprietary  software.

General  and  administrative  expenses  were $421,620 for the three months ended
September  30, 2000, as compared to $121,622 for the same period last year, or a
247%  increase. The increase in general and administrative expenses is primarily
due  to  increases  in  professional  consulting expenses, payroll expenses, and
marketing  expenses.

The  Company  recognized  stock  compensation  expenses  of  $259,024  for  the
three-months  ended  September  30,  2000.  Of  the  $259,024, $29,885 came from
options  granted  in  the  first  quarter  of  fiscal  year 2001.  The remaining
$229,139  was  due  to amortization of unearned stock compensation recognized in
the  fiscal  year  ended  June  30,  2000.

NET  LOSS

The Company recorded a net loss of $723,440 for the three months ended September
30,  2000.  This  represents a $606,649 increase in net losses, as compared to a
net loss of $116,791 for the same period last year.  The increase in net loss is
attributable to a $2,750 increase in revenue, compared to a $609,399 increase in
operating  costs  and other expenses.   Loss per share as of September 30, 2000,
was $0.095 as compared to $0.019 as of September 30, 1999, due to an increase in
net  losses and an increase in the number of outstanding shares of common stock.

LIQUIDITY  AND  CAPITAL  RESOURCES

The  Company's  cash  balances and certificates of deposit decreased by $274,116
from  $5,174,395  as  of  the 12 months ended June 30, 2000, to $4,900,279 as of
September  30, 2000.  This decrease in cash balances and certificates of deposit
is  primarily  due  to  the  Company's  expansion  and  losses  from operations.

Management  estimates  the monthly cash "burn rate" to be approximately $150,000
per month.  The Company believes it has sufficient cash resources to operate its
business  over  the  next  twelve months.  Depending on market acceptance of the
Company's current business model, the Company may raise additional funds, either
debt  or  equity,  to  augment  future  growth  of  the  business.

On  January  12,  2000,  the  Company  entered  into an agreement with a bank to
establish a $600,000 revolving line of credit agreement.  Borrowings are secured
by  a $700,000 time certificate of deposit at the bank.  The line of credit will
expire  on January 2, 2001.  The Company has this revolving credit line facility
available  for  general working capital purposes.  As of September 30, 2000, the
Company  had  no  borrowing  under  this  facility.


                                        9
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

Management believes that current cash balances, certificates of deposit and cash
flows  from  operations,  if  any,  will  be  sufficient  to meet present growth
strategies  and  related  working  capital and capital expenditure requirements.
The  current  business  plan  proposes  significant  increases  in spending when
compared  to historical expenditures.  Management may decide to raise additional
capital  through  the issuance of additional debt or equity securities, prior to
achieving  positive  cash  flows  from  operations.

In  July  2000,  the  Company injected $1,000,000 into Global Purchasing Dotcom,
Inc. (GP.com) for a 50% equity interest and $400,000 into E-SouthEast Asia, Inc.
(E-SEA)  for  a  40%  equity  interest.  The  Company  has  a  future investment
commitment  of  approximately  $190,000  to  C-ME  Japan  in  December  2000.

The  Company  plans  to utilize a combination of internally generated funds from
operations,  potential  debt  and / or equity financings to fund its longer-term
growth  over  a  period  of  two  to  five  years.  The  availability  of future
financings  will  depend  on  market  conditions.

The  forecast  of  the  period  of  time  through  which the Company's financial
resources  will be adequate to support operations is a forward-looking statement
that  involves  risks  and  uncertainties.  The  actual funding requirements may
differ  materially  from this as a result of a number of factors including plans
to fully support the ISN and the Company's investments in systems infrastructure
and  staffing.

EFFECT  OF  FLUCTUATIONS  IN  FOREIGN  EXCHANGE  RATES

The Company's current joint ventures are located in countries outside the United
States.  The  functional  currency  for  this  foreign  operation  is  the local
currency.  The  carrying value of the Company's investments in Taiwan is subject
to  the  risk of foreign currency fluctuations.  Any dividends received from the
Company's  international joint ventures will also be subject to foreign exchange
risk.

RISK  FACTORS

     THE COMPANY HAS NOT PRODUCED A PROFIT AND CANNOT BE CERTAIN THAT IT WILL
     PRODUCE A  PROFIT.

The  Company  is  not  profitable  and  continues to produce a net loss.  If the
Company  does  achieve  profitability,  it cannot be certain that it will remain
profitable  nor  that  profits  will  increase  in  the  future. The Company has
incurred  significant  losses  since  its  inception  and  may never generate or
sustain  a  profit.  For  the three months ended September 30, 2000, the Company
reported  a  net loss of $706,319.  The Company devotes significant resources to
developing,  enhancing,  selling  and  marketing its products and services. As a
result,  the  Company  will  need  to  generate significant revenues to maintain
profitability.  The  Company  may not continue its historical growth or generate
sufficient  revenues  to  sustain  or  increase  profitability on a quarterly or
annual  basis  in  the  future.

     THE  INTERNET  SOURCING  NETWORK  HAS  NOT  GENERATED  ANY  REVENUE.

The  Company  expects  to  depend  primarily  on  revenue  from  the  complete
implementation  of  its  domestic  and international Internet Sourcing Networks.
The  Internet  Sourcing  Network  has  not generated any revenue and there is no
guarantee  that  it  will  generate  revenue  in  the  future.


                                       10
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

     THE  COMPANY MAY REQUIRE ADDITIONAL EQUITY FINANCING, WHICH MAY NOT BE
     AVAILABLE AND  MAY  DILUTE  THE  OWNERSHIP  INTERESTS  OF  INVESTORS.

The  Company's  ultimate  success will depend on its ability to raise additional
capital.  No  commitments  to  provide  additional  funds  have  been  made  by
management  or  other  shareholders.  The  Company  has  not  investigated  the
availability,  source  or  terms that might govern the acquisition of additional
financing.  When  additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained on
terms  acceptable  to  the  Company.  If not available, the Company's operations
would  be  severely  limited,  and  it would be unable to implement its business
plan.  If  equity  financing  is  used  to raise additional working capital, the
ownership  interests  of  existing  shareholders  may  be  diluted.

     THE COMPANY'S OPERATING RESULTS  ARE  LIKELY  TO  FLUCTUATE  SIGNIFICANTLY.

As  a result of the Company's limited operating history and the rapidly changing
nature  of  the markets in which it competes, the Company's quarterly and annual
revenues  and  operating  results are likely to fluctuate from period to period.
For  this  reason,  you  should  not rely on period-to-period comparisons of the
Company's  financial  results  as  indications of future results.  The Company's
future  operating  results  could  fall  below the expectations of public market
analysts  or  investors  and significantly reduce the market price of its common
stock.  Fluctuations in the Company's operating results will likely increase the
volatility  of  its  stock  price.

     THE COMPANY'S DEPENDENCE ON ALLIANCES WITH BUSINESSES AND GOVERNMENTS
     OUTSIDE OF THE  UNITED  STATES  INVOLVES  RISKS.

The  Company  depends  on  its  ability  to  establish  and  maintain successful
alliances  with businesses and governments located outside of the United States.
If  the  Company is unable to establish and maintain such alliances, it will not
be  able to implement the business plan in its current configuration, which will
affect  both  its revenue stream and profit potential.  In addition, the Company
faces  political sovereign risks of conducting international business, including
risks  of  changing  economic  conditions  in  the Pacific Rim, which may have a
material adverse effect on its ability to provide global merchandise sourcing to
its  retail  partners.

     THE  COMPANY  DOES NOT ANTICIPATE PAYING DIVIDENDS TO COMMON SHAREHOLDERS
     IN  THE  FORESEEABLE  FUTURE,  WHICH  MAKES  INVESTMENT  IN  THE  COMPANY
     SPECULATIVE OR RISKY

The  Company  has not paid dividends on its common stock and does not anticipate
paying  dividends  on  its  common stock in the foreseeable future. The Board of
Directors  has  sole  authority  to  declare  dividends payable to the Company's
shareholders.  The  fact  that  the  Company  has  not  and does not plan to pay
dividends  indicates  that  the  Company  must use all of its funds generated by
operations for reinvestment in its operating activities and also emphasizes that
the  Company  may not continue as a going concern.  Investors also must evaluate
an  investment  in the Company solely on the basis of anticipated capital gains.


                                       11
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                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

                           PART II - OTHER INFORMATION

ITEM  1.   LEGAL  PROCEEDINGS

As  disclosed  in  the  Company's Form 10-KSB, dated June 30, 2000, and filed on
September  29, 2000, the Company was named as a co-defendant, along with BCF, in
a  lawsuit  brought by Stanley Rosner, an individual in an action in the Supreme
Court  of  the  State  of New York, Nassau County.  To date, the Company has not
received  notice  of  the  proposed  transfer  of  venue  and  has not filed its
responsive  papers  or  otherwise  moved  against  the  complaint.

ITEM  6.   EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  EXHIBITS

EXHIBIT
NUMBER   DESCRIPTION

10.1     Factoring  Agreement  Between  CIT, Commercial Services, Inc. and Cyber
         Merchants  Exchange  dated  October  19,  2000.

27.1     Financial  Data  Schedule


(b)  REPORT  ON  FORM  8-K

On  July  18,  2000, the Company filed a Form 8-K to report under Item 5 that on
June  30,  2000,  the  Company  closed a private placement offering that secured
equity funding of approximately $6.1 million.  In addition, on May 25, 2000, the
Company granted Factory 2-U Stores a warrant on the Company's outstanding common
shares.  Based  on  a  joint  marketing  and  cooperation agreement, Factory 2-U
received  a  warrant  entitling it to purchase 838,119 shares of common stock of
the  Company.


                                       12
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

SIGNATURES

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

                                 CYBER MERCHANTS EXCHANGE, INC., d.b.a. C-ME.com
                                 -----------------------------------------------
                                                 (Registrant)


   11/10/00                       /s/  Frank  S.  Yuan
-------------                   ------------------------------------------------
                                Frank S. Yuan, Chairman, Chief Executive Officer

   11/10/00                       /s/  John  F.  Busey
-------------                    -----------------------------------------------
                                 John F. Busey, President and Acting
                                 Chief Financial Officer


                                       13
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                 D.B.A. C-ME.COM

EXHIBIT  INDEX

EXHIBIT
NUMBER   DESCRIPTION

10.1     Factoring  Agreement  Between  CIT, Commercial Services, Inc. and Cyber
         Merchants  Exchange  dated  October  19,  2000.

27.1     Financial  Data  Schedule


                                       14
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