US SECURITIES & EXCHANGE COMMISSION
                               WASHINGTON DC 20549
                                   Form 10-QSB


                                   (Mark One)


(X)  QUARTERLY REPORT UNDER SECTION 13 or (15)D OF THE SECURITIES  EXCHANGE  ACT
     OF 1934

For the quarterly period ended    April 30, 2001
                               -----------------


                                       OR


( )  TRANSITION REPORT UNDER SECTION 13 or 15(D) OF THE  SECURITIES EXCHANGE ACT
     OF 1934

For the transition period ___________ To ___________

Commission file number    000-25875
                       ------------


                           EXHAUST TECHNOLOGIES, INC.
                           --------------------------
       (Exact name of small business issuer as specified in its charter)


          Washington                                          91-1970433
          ----------                                          ----------
(State or other jurisdiction of                     (IRS Employer Identification
 Incorporation or Organization)                      No.)


            230 North Division St P.O. Box 2822 Spokane WA 99220-2822
            ---------------------------------------------------------
                    (Address of principal executive office)


                                 (509) 838-4447
                                 --------------
                           (Issuer's telephone number)


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 ( ) NO (X)

As of May 15, 2001 there were 6,491,000 shares of the Registrant's  common stock
outstanding.

Transitional Small Business Disclosure Format (check one)
                                                YES ( )  NO (X)


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                                   Form 10-QSB

                      For the Quarter Ended April 30, 2001






                                      INDEX


                                                                       Page
                                                                       ----


PART I - Financial Information


      Item 1 - Financial Statements (all financial
                statements are unaudited except the
                January 31, 2001 balance sheet):

             - Balance Sheets - April 30, 2001 and
               January 31, 2001                                         3-4

             - Statements of Loss - Three months
               ended April 30, 2001 and 2000                            5-6

             - Statements of Cash Flows - Three months
               ended April 30, 2001 and 2000                            7-9

             - Notes To Financial Statements                          10-11


      Item 2 - Management's Discussion and Analysis
                and Plan of Operation                                 12-14


PART II - Other Information                                              15




                                       -2-

<PAGE>

Part I - Financial Information
Item 1 - Financial Statements




                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
                          =============================



                                                    April 30,
                                                      2001          January 31,
                                                  (Unaudited)           2001
                                                  -----------       -----------


     ASSETS (Note 2)
     ------

CURRENT:
  Cash                                            $     3,846       $     3,822
  Accounts receivable                                  49,319            16,224
  Accounts receivable-related party                     8,549             7,184
  Inventory                                           379,886           227,834
  Inventory credit note                               300,000              --
  Prepaid expenses                                      4,858            12,145
                                                  -----------       -----------
         TOTAL CURRENT ASSETS                         746,458           267,209


EQUIPMENT, net of accumulated
  depreciation of $21,446 and $17,826                 134,316           133,713


LICENSES, net of accumulated
  amortization of $15,742 and $14,168                  15,692            17,265
                                                  -----------       -----------

                                                  $   896,466       $   418,187
                                                  ===========       ===========












                  (See notes to interim financial statements.)
                                       -3-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
                         ===============================








     LIABILITIES AND STOCKHOLDERS' DEFICIT
     -------------------------------------


CURRENT:
  Note payable                                       $ 125,000        $ 125,000
  Accounts payable                                     153,473          132,388
  Accounts payable-related party                        96,845           97,139
  Accrued interest-related party                        75,687           61,312
  Line of credit-related party                         500,000          500,000
                                                     ---------        ---------

         TOTAL CURRENT LIABILITIES                     951,005          915,839
                                                     ---------        ---------

Committments and Contingencies                            --               --
                                                     ---------        ---------

STOCKHOLDERS' DEFICIT:
  Common stock, $.00001 par value,
    100,000,000 shares authorized,
    6,491,000 and 4,692,750 shares
    outstanding                                             65               47
  Additional paid-in capital                           627,070          122,088
  Deficit accumulated during the
    development stage                                 (681,674)        (619,787)
                                                     ---------        ---------

         TOTAL STOCKHOLDERS' DEFICIT                   (54,539)        (497,652)
                                                     ---------        ---------

                                                     $ 896,466        $ 418,187
                                                     =========        =========







                   (See notes to interim financial statements)
                                      -4-


<PAGE>
<TABLE>
<CAPTION>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                               STATEMENTS OF LOSS
                                   (Unaudited)
                          =============================

                                                                                   Date of
                                                                                  Inception
                                            Three Months      Three Months      July 21,1998
                                                Ended             Ended            Through
                                              April 30,         April 30,         April 30,
                                                 2001              2000              2001
                                            ------------      ------------      ------------
<S>                                         <C>               <C>               <C>
SALES                                       $    117,844      $     37,853      $    267,445

COST OF SALES                                     74,032            33,540           207,384
                                            ------------      ------------      ------------

   Gross profit                                   43,812             4,313            60,061
                                            ------------      ------------      ------------

OPERATING EXPENSES:
 Professional services                            26,700            25,104           245,314
 Research and
  development                                      4,982            25,322           126,778
 Advertising                                       4,012            13,600            71,163
 Office expense                                    3,136               194            11,658
 Compensation                                     16,730              --              66,730
 Amortization                                      1,574             1,500            15,742
 Travel                                            4,649               666            29,877
 Director's fees                                    --                --              30,000
 Dues and subscriptions                             --               2,880             4,126
 Supplies                                         10,114                65            16,941
 Repairs                                             282               800             1,306
 Insurance                                         7,287              --              24,291
 Bad debts                                          --                --               2,882
 Commissions                                      11,858              --              18,824
                                            ------------      ------------      ------------
Total operating expenses                          91,324            70,131           665,632
                                            ------------      ------------      ------------

</TABLE>

                   (See notes to interim financial statements)
                                       -5-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                               STATEMENTS OF LOSS
                                   (Unaudited)
                          ============================


                                                                      Date of
                                                                     Inception
                                Three Months      Three Months     July 21, 1998
                                   Ended             Ended            Through
                                 April 30,         April 30,         April 30,
                                    2001              2000              2001
                                -----------       -----------       -----------


Loss from operation                 (47,512)          (65,818)         (605,571)

Interest expense                    (14,375)          (10,850)          (76,103)
                                -----------       -----------       -----------

Net loss                        $   (61,887)      $   (76,668)      $  (681,674)
                                ===========       ===========       ===========



Net loss per share-
 basic and diluted              $     (0.01)      $     (0.02)      $     (0.15)
                                ===========       ===========       ===========


Weighted average
 number of shares
 outstanding-
 basic and diluted                4,692,750         4,692,750         4,682,170
                                ===========       ===========       ===========




                   (See notes to interim financial statements)
                                      -6-

<PAGE>
<TABLE>
<CAPTION>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
                           Increase (Decrease) in Cash
                                    Unaudited
                          =============================

                                                                                 Date of
                                                                                Inception
                                             Three Months     Three Months   (July 21, 1998)
                                                 Ended            Ended           Through
                                               April 30,        April 30,        April 30,
                                                  2001             2000             2001
                                            -------------    -------------    -------------
<S>                                         <C>              <C>              <C>
Cash flows from operating activities:
 Net loss                                   $     (61,887)   $     (76,668)   $    (681,674)
 Adjustments to
  reconcile net loss
  to net cash used in
  operating activities:
   Amortization and
    depreciation                                    5,193            4,094           30,472
   Contributed services                             5,000             --             55,000
   Issuance of common
    stock for services                               --               --             30,000
   Issuance of common
    stock for note
    receivable                                    300,000             --            300,000
 Changes in assets and
  liabilities:
   Accounts receivable                            (34,460)         (31,697)         (57,868)
   Accounts payable                                20,791           65,904          250,318
   Inventory                                     (152,052)          (7,413)        (372,675)
   Note receivable                               (300,000)            --           (300,000)
   Prepaid expenses                                 7,287             --             (4,858)
   Accrued interest                                14,375           10,850           75,687
                                            -------------    -------------    -------------

Net cash used in
 operating activities                            (195,753)         (34,930)        (675,598)
                                            -------------    -------------    -------------

Cash flows from investing activities:
 Cash paid for licenses                              --               --            (15,592)
 Cash paid for property
  and equipment                                    (4,223)          (8,600)        (149,047)
                                            -------------    -------------    -------------

Net cash used in
 investing activities                              (4,223)          (8,600)        (164,639)
                                            -------------    -------------    -------------

</TABLE>


                   (See notes to interim financial statements)
                                       -7-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
                                    Continued
                       ==================================


                                                                  Date of
                                                                 Inception
                              Three Months     Three Months   (July 21, 1998)
                                  Ended            Ended           Through
                                April 30,        April 30,        April 30,
                                   2001             2000             2001
                             -------------    -------------    -------------


Cash flows from
 financing activities:
 Borrowings under line
  of credit-related
  party                               --             79,398          492,789
 Proceeds from note                   --               --            125,000
 Net proceeds from
  sale of common stock             200,000             --            226,294
 Deferred stock
  offering costs                     (--)           (34,593)            --
                             -------------    -------------    -------------

Net cash provided by
 financing activities              200,000           44,805          844,083
                             -------------    -------------    -------------


Net increase in cash                    24            1,275            3,846

Cash, beginning of
 period                              3,822              352             --
                             -------------    -------------    -------------

Cash, end of period          $       3,846    $       1,627    $       3,846
                             =============    =============    =============


Supplemental Disclosures
 of Cash Flow Information:

 Cash Paid During Period
  for:
  Interest                   $        --      $        --      $        --
                             =============    =============    =============

  Taxes                      $        --      $        --      $        --
                             =============    =============    =============

Non-Cash Financing
 Activities:
 Common stock for
  licenses                   $        --      $        --      $      15,841
                             =============    =============    =============



                   (See notes to interim financial statements)
                                       -8-

<PAGE>


                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
                                   Concluded)
                          =============================



                                                                  Date of
                                                                 Inception
                              Three Months     Three Months   (July 21, 1998)
                                  Ended            Ended           Through
                                April 30,        April 30,        April 30,
                                   2001             2000             2001
                             -------------    -------------    -------------




Inventory Advanced Under
 Line of credit-related
 party                       $        --      $        --      $       7,211
                             =============    =============    =============







                   (See notes to interim financial statements)
                                       -9-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                      =====================================

1.   BASIS OF PRESENTATION

The  foregoing  unaudited  interim  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  Regulation  S-B as
promulgated  by the  Securities  and  Exchange  Commission.  Accordingly,  these
financial statements do not include all of the disclosures required by generally
accepted  accounting  principles  for  complete  financial   statements.   These
unaudited  interim  financial  statements should be read in conjunction with the
audited  financial  statements  for the period ended  January 31,  2001.  In the
opinion of management,  the unaudited  interim  financial  statements  furnished
herein include all adjustments,  all of which are of a normal recurring  nature,
necessary for a fair statement of the results for the interim period presented.

The preparation of financial  statements in accordance  with generally  accepted
accounting  principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities,  disclosure of contingent assets
and  liabilities  known to exist as of the  date the  financial  statements  are
published,  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period.  Uncertainties  with respect to such estimates and assumptions
are  inherent  in  the  preparation  of  the  Company's  financial   statements;
accordingly,  it is possible  that the actual  results  could  differ from these
estimates  and  assumptions  that could have a material  effect on the  reported
amounts of the Company's financial position and results of operations.

Operating  results  for the  three-month  period  ended  April 30,  2001 are not
necessarily  indicative  of the results that may be expected for the year ending
January 31, 2002.

2.   DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN

The Company has been in the development  stage since its inception.  The Company
has incurred losses since inception totaling $681,674. In addition,  the Company
has a working  capital  deficiency,  limited  revenues to date and a product for
which  market  acceptance  remains  generally  untested.  While the  Company has
commenced  selling its product,  sales have not been sufficient to pay expenses.
Primarily as a result of these  factors,  the  Company's  independent  certified
public  accountants  included an  explanatory  paragraph  in their report on the
Company's 2001 financial statements which expressed  substantial doubt about the
Company's  ability to continue as a going concern.  The financial  statements do
not include any  adjustments  that may be  necessary if the Company is unable to
continue as a going concern.

                                      -10-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                         (A DEVELOPMENT STAGE COMPANY)

                     NOTES TO INTERIM FINANCIAL STATEMENTS
                     =====================================

Management  of the  Company  has  undertaken  certain  actions to address  these
conditions.  Management has commenced limited operations and has found a limited
number of companies to  manufacture  its products.  Funds  required to carry out
management's  plans  are  expected  to  be  derived  from  future  stock  sales,
borrowings from the Company's  shareholders or sales of its products.  There can
be no assurances that the Company will be sucessful in executing its plans.

3.   STOCK OFFERING

The  Company  entered  into a letter of intent with an  underwriter  pursuant to
which the  underwriter  agreed to sell, on a best efforts  basis,  up to 550,000
units at a per unit  price of  $5.10.  The  underwriting  was  unsuccessful  and
terminated in April, 2001.


4.   REVENUE RECOGNITION

In December 1999, the United States  Securities and Exchange  Commission  issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB  101").  SAB 101 refined the  criteria  for  determining  when  revenue is
considered  recognizable and is effective no later than the first fiscal quarter
of the fiscal year beginning  after  December 31, 1999. The Company  adopted the
principles specified in SAB 101, and accordingly,  sales of product are recorded
and  customers  are billed when  products are shipped to  customers  under firm,
enforceable  commitments and  collectibility  is reasonably  assured.  Estimated
amounts for  reserves for sales  returns,  provision  for  customer  rebates and
discounts  and a provision  for an  allowance  for bad debts are recorded at the
time of sale and based on management's estimates using reasonable assumptions.






                                      -11-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

Item 2.  Management's Discussion and Analysis or Plan of Operation

General
-------

This Quarterly Report on Form 10-QSB,  including the information incorporated by
reference herein,  includes "forward looking  statements"  within the meaning of
section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange
Act"). All of the statements  contained in this Quarterly Report on Form 10-QSB,
other that statements of historical fact,  should be considered  forward looking
statements,  including,  but not  limited to,  those  concerning  the  Company's
strategies,  objectives and plans for expansion of its operations,  products and
services  and  growth  in demand  for the  Company's  services.  There can be no
assurance  that  these  expectations  will prove to have been  correct.  Certain
important  factors that could cause actual results to differ materially from the
Company's expectations (the "Cautionary Statements") are disclosed in the annual
report filed on Form 10-KSB.  All  subsequent  written and oral forward  looking
statements by or attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by such Cautionary  Statements.  Investors
are cautioned not to place undue reliance on these forward  looking  statements,
which  speak  only  as of the  date  hereof  and are not  intended  to give  any
assurance as to future results. The Company undertakes no obligation to publicly
release any revisions to these forward  looking  statements to reflect events or
reflect the occurence of unanticipated events.

Plan of Operation
-----------------

The  Company  is  attempting  to sell  stock to provide  funds to  increase  our
distribution  points,   increase  our  customer  base  through  advertising  and
marketing and aggressively promote all our products.

We have inadequate cash to maintain operations during the next twelve months. In
order to meet our cash requirements we have to raise additional  capital through
the sale of  stock,  sales  of our  products  or  additional  borrowings  from a
corporate officer. If these alternatives are unsuccessful,  we may have to cease
operations.  At April 30, 2001,  we owed Mr.  Sterling  $500,000 on an unsecured
note and $96,845 in accounts  payable for monies  advanced.  We believe  that we
will need to raise at least  $3,000,000  from stock sales and/or  borrowings  in
order to maintain operations during the next twelve months.




                                      -12-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.



The Company anticipates  spending monies for capital expenditures only for molds
necessary to manufacture Company product lines to meet requests by customers for
all sizes in product lines currently being sold in a limited capacity.


The research and development previously expended is expected to be substantially
reduced as the majority of our product lines are ready for production.



Three Months Ended April 30, 2001 (Unaudited) compared to the Three Months Ended
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
--------------------------

During  the three  months  ended  April  30,  2001,  the  Company  sold  limited
quantities of its products.  The Company  recognized  total revenue in the first
quarter of fiscal 2001 of approximately  $118,000 as compared to $38,000 for the
same period of the prior  fiscal  year.  The increase in sales are the result of
our products reaching a larger market due to marketing efforts.

Operating  expenses include those costs incurred to bring the Company's  product
to market relative to research and development,  sales,  marketing,  and general
administration.  Operating  expenses  increased for the three months ended April
30,  2001 to  approximately  $92,000  from  approximately  $70,000  for the same
three-month  period in 2000.  The increase of $22,000 was  primarily  due to the
Company  ramping up  operations  to  increase  sales  efforts  related to market
penetration.   Specifically,   for  the  three  months  ended  April  30,  2001,
commissions increased $12,000 as a result of increased sales, supplies increased
$10,000  because of the need for  shipping  our  products,  insurance  increased
$7,000 because of product liability requirements, compensation increased $17,000
because  of  assembly   costs  and  assistance   from  our  corporate   officer,
professional  fees increased $9,000 due to patent  research,  while research and
development  expenses  decreased  $23,000  because  our  products  are now being
marketed  and not  developed.  Additionally,  interest  increased  approximately
$3,000 as a result of borrowings from the Company president.




                                      -13-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.


Net Loss
--------

Primarily  as a result of the  foregoing  factors,  the  Company's  net loss was
approximately  $62,000 and $76,000,  respectively,  for the three month  periods
ended April 30, 2001 and 2000.


Financial Conditions and Liquidity
----------------------------------

At April 30,  2001,  the Company had $3,846 of cash.  For the three months ended
April 30, 2001, the Company received  approximately  $118,000 from product sales
and approximately  $200,000 from stock sales. The Company expended approximately
$337,000 to market the Company's products,  operate the Company and increase its
level of inventory.  The Company also received  $300,000 from stock sales in the
form of a credit line to be used for future purchases of inventory. Future funds
required to carry out management's  plans are expected to be derived from future
stock sales,  product  sales and  borrowings.  If none of the  alternatives  are
successful, we may have to cease operations.








                                      -14-

<PAGE>

                           PART II - OTHER INFORMATION
                           ---------------------------


ITEM 1.   LEGAL PROCEEDINGS

The Company  knows of no  litigation  present,  threatened  or  contemplated  or
unsatisfied  judgment  against the  Company,  its  officers or  directors or any
proceedings in which the Company, its officers or directors are a party.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

The following shares of the Company's common shares were issued during the three
months ended April 30, 2001:

         a.       In April,  2001, 469,275 shares of common stock were issued to
Wang Wen Yuan, a non-related  party pursuant to "Regulation S" of the Securities
and Exchange  Commission for $500,000,  paid $200,000 in cash and the balance in
the form of a Credit Note to be used against  future  inventory  purchases.  The
purchasing  party is related to a company  that is currently  manufacturing  the
Company's specialty line of air tools.

         b.       In April,  2001 the  Company  issued  1,063,180  shares of its
common stock and 265,795  shares of its common  stock to Robert E.  Sterling and
Matthew R. Sterling,  respectively, in exchange for the world wide rights to the
Turbolator  and PHTEM.  The  license  agreements  were  changed  to reflect  the
addition  of the  world  wide  rights.  No  changes  were  made to the  licenses
regarding the required annual sales.

In neither of the stock transactions, for the three months ended April 30, 2001,
were underwriters used.

The rights of the holders of the Company's securities have not been modified nor
have the rights  evidenced  by the  securities  been limited or qualified by the
issuance or modification of any other class of securities.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

There are no senior secutities issued by the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters  presented to the  shareholders  for vote during the three
months ended April 30, 2001.



                                      -15-

<PAGE>


ITEM 5.   OTHER INFORMATION

None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

No reports on Form 8-K were filed for the quarter ended April 30, 2001.











                                      -16-

<PAGE>

                                   SIGNATURES



Pursuant to the  requirements  of the Exchange Act of 1934,  the  registrant has
duly caused this report to be signed on its behalf by the undersigned  thereunto
duly authorized.



                                             EXHAUST TECHNOLOGIES, INC.







                                             /s/  Robert E. Sterling
                                             -----------------------
                                                  Robert E. Sterling
                                                  President







                                      -17-