U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                               AMENDMENT NO. 1 TO
                                  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  September 30, 2000.
                                                     ------------------

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

Commission  file  number    001-15643
                         --------------



                 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 or Plan of Operation . . . 9

PART  II  -  OTHER  INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 13

     Item  1.  Legal  Proceedings . . . . . . . . . . . . . . . . . . . . . . 13

     Item  2.  Changes  in  Securities  and  Use  of Proceeds . . . . . . . . 13
     Item  6.  Exhibits  and  Reports  on  Form  8-K . . . . . . . . . . . . .13

SIGNATURES . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . 14


                                        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)
                                                                                  (Restated)
<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                                                  54,693           74,276
  Accounts receivable - related parties                                     -           34,237
  Prepaid expenses                                                      5,367            4,895
                                                                  ------------  ---------------

Total current assets                                                6,715,695        5,013,687

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

Investments in overseas joint ventures                                (49,573)         673,081
Investments in ABNet                                                1,000,000        1,000,000
Other assets                                                            3,619            7,222
                                                                  ------------  ---------------

Total assets                                                      $ 7,733,678   $    6,757,910
                                                                  ============  ===============

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 and 7,589,669 shares issued and outstanding           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                                              (5,142,084)      (5,782,191)
                                                                  ------------  ---------------

Total shareholders' equity                                          7,042,564        6,661,481
                                                                  ------------  ---------------

Total liabilities and shareholders' equity                        $ 7,733,678   $    6,757,910
                                                                  ============  ===============
</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)

                                                                       (Restated)
<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
 Amortization of negative goodwill                                -      83,333
 Other expenses                                                   -      (1,454)
 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)   (639,692)

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

Net loss                                                $  (116,791)  $(640,107)
                                                        ============  ==========

Basic and diluted net loss per share                    $     (0.02)  $   (0.08)
                                                        ============  ==========

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)
                                                                        (Restated)
<S>                                                      <C>           <C>
Cash flows from operating activities:
 Net loss                                                $  (116,792)  $  (640,107)
 Adjustments to reconcile net loss to net cash used in
   operating activities:
   Depreciation and amortization                               7,410        10,861
   Gain on amortization of negative goodwill                       -       (83,333)
   Stock compensation expense                                      -       259,024
   Loss on investments                                             -        60,679
   Changes in current assets and liabilities:
     Accounts receivable                                      (2,225)      (19,583)
     Accounts payable and accrued expenses                  (165,433)     (594,685)
     Prepaid expenses                                              -           472
     Other assets                                                  -        (3,603)
                                                         ------------  ------------

Net cash used in operating activities                       (277,040)   (1,010,275)
                                                         ------------  ------------

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                                              -      (600,000)
 Advance to GP.com                                                 -       (34,237)
 Investment in E-SEA                                               -      (100,000)
                                                         ------------  ------------

Net cash provided by (used in) investing activities         (392,228)   (1,677,365)

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-month 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  -  INVESTMENTS  IN  OVERSEAS  JOINT  VENTURES


During  the  quarter  ended  September  30,  2000,  the Company injected cash of
$100,000 and $600,000 into E-SEA and GP.com, respectively. The Company amortized
the  negative  goodwill of $25,000, $25,000, and $33,333 for C-ME/Taiwan, E-SEA,
and  GP.com,  respectively, based on the straight-line method over the estimated
useful life of three years. Usingtheequity accounting method, the Company picked
up equity in the loss of joint venturesof $39,300 in C-ME/Taiwan, $932 in E-SEA,
and  $20,447  in  GP.com,  respectively.

As  of  September  30,  2000,  the investment in the respective joint venture is
summarized  as  follows:

<TABLE>
<CAPTION>
                                     C-ME/Taiwan     E-SEA       GP.com        Total
---------------------------------------------------------------------------------------
<S>                                <C>            <C>         <C>          <C>

Investment                         $    300,000   $ 400,000   $1,000,000   $ 1,700,000
Negative goodwill                      (300,000)   (300,000)    (400,000)   (1,000,000)
Amortization of negative                 50,000      25,000       33,333       108,333
  goodwill
Equity in loss of joint                (113,873)       (932)     (20,447)     (135,252)
  venture
---------------------------------------------------------------------------------------
Net investment                     $    (63,873)  $ 124,068   $   612,886  $   673,081
=======================================================================================
</TABLE>

Previously  issued financial statements for the quarter ended September 30, 2000
reported a  net loss  of $723,439.  During fiscal year 2000, the Company entered
into  transactions  with  its  joint  ventures  for  the  sale  of the Company's
proprietary  software.  Previously  issued  financial  statements  reflect these
transactions  as a sale occurring in fiscal year 2000 rather than as a reduction
in  the  Company's  investment  in the joint ventures to be recognized as income
ratably  over  the  life  of  the software. The Company subsequently changed its
judgment  regarding  the  recognition of revenue and determined that it was more
appropriate  to  recognize  this  amount over the life of the software sold. The
effect of this restatement is to reduce net loss for the quarter ended September
30,  2000  by $83,333, which was from the amortization of negative goodwill, and
reduce  the  loss  per  share  by  $0.01.


NOTE  4  -  TRANSACTION  IN  SHAREHOLDERS'  EQUITY

In May 2000, the Company commenced a private placement to issue 1,255,900 shares
of  its  common stock at $4.878 per share.   The offering 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.  During
the  quarter  ended  September  30,  2000, the Company recognized $259,024 stock
compensation  expense.



                                        7
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                          NOTES TO FINANCIAL STATEMENTS

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  $180,000) in C-ME Japan Co., Ltd. On
October  15,  2000,   the  Company  invested   19.5   million  of  Japanese  Yen
(approximately  $180,000)  to  C-ME  Japan.  In  accordance  with the investment
agreement,  the  Company  will  inject  an  additional  20  million Japanese Yen
(approximately  $190,000)  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  website  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.


                                        8
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                d.b.a. C-ME.com

ITEM  2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION


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  which  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",  and are discussed in more detail in the Risk Factors
section  of the Company's Annual Report on Form 10-KSB for the fiscal year ended
June  30,  2000.  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  OPERATION

THREE  MONTHS  ENDED  SEPTEMBER  30,  2000  COMPARED  TO  YEAR-END JUNE 30, 2000

REVENUE

Total  operating revenues for three months ended September 30, 2000 increased to
$12,900,  increasing by $2,750 from $10,150, a 27% increase, for the same period
last  year  with  revenue  consisting  of  subscribers'  fees.  The  increase in
operating  revenue  was due to the increased number of subscribers to C-ME.com's
software.


                                        9
<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, and a commission to be paid by the
retailers  on  overseas  purchases  through  the  Company's  operating  system.

The  financial statements have been revised to restate the revenue recognized by
the  Company during the period covered by this report, as discussed in Note 3 to
the  financial  statements,  which  is  incorporated  herein  by  reference.

OPERATING  COSTS  AND  EXPENSES

The  cost  of  revenue  increased  $46,080 to $69,532 for the three months ended
September  30,  2000,  compared to $23,452 for the same period last year, 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 increased by $299,997 to $421,619 for the
three  month  ended  September  30,  2000,  as compared to $121,622 for the same
period  last  year,  a 247% increase. The increase in general and administrative
expenses  is  primarily  due to the increase in professional consulting expense,
payroll  expense,  and  marketing  expense.

The  Company  recognized  stock   compensation   expense  of  $259,024  for  the
three-month  period  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 $640,107 for the three months ended September
30, 2000, a $523,316 increase in net loss, 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 $526,066 increase in operating costs
and  other  expenses.   Loss  per  share  as  of September 30, 2000 was $0.08 as
compared  to  $0.02  as of September 30, 1999 due to an increase in net loss and
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  with  the  bank.
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  available  for general working capital purposes.  As of
September  30,  2000,  the  Company  had  no  borrowing  under  this  facility.


                                       10
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                d.b.a. C-ME.com

Management  believes  that current cash balances 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 the 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  future  investment
commitments  to  C-ME  Japan  of  about  $395,000  in October and 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  FLUCTUATION  IN  FOREIGN  EXCHANGE  RATE


The Company's current joint ventures are located in countries outside the United
States.  The  functional  currency  for  each  foreign  operation  is  the local
currency.  The  carrying  values of the Company's investments in the Pacific Rim
are 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 $640,107.  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 become
profitable.  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 during the period of
this quarterly report and there is no guarantee that it will generate revenue in
the  future.


                                       11
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                d.b.a. C-ME.com

     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  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  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.


                                       12
<PAGE>
                         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
Burlington  Coat  Factory, 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  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

RECENT  SALES  OF  UNREGISTERED  SECURITIES

During  the period ended September 30, 2000, the Company issued 15,000 shares of
common stock pursuant to options exercised at $0.40 per share for total proceeds
to  the  Company  of  $6,000.00.  The  sales  of  the  shares  were  exempt from
registration  under  Rule  506  of  Regulation  D  and/or Section 4(2) under the
Securities  Act  of 1933, as amended.  The sales were made on exercise of grants
by  employees  under  the  Company's  written  1996 and 1999 stock option plans,
copies  of  which  the  Company  has  provided  to  its  participants.


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

*  Previously  filed  with  the  Commission  on  November  13,  2000.


(B)  REPORTS  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.


                                       13
<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)


05/11/01                               /s/  Frank  S.  Yuan
--------                        ------------------------------------------------
                                Frank S. Yuan, Chairman, Chief Executive Officer


05/11/01                               /s/  John  F.  Busey
--------                        ------------------------------------------------
                                John F. Busey, President and Acting
                                Chief Financial Officer


                                       14
<PAGE>
                                  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

*  Previously  filed  with  the  Commission  on  November  13,  2000.



<PAGE>