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    July 31, 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 No.)
 Incorporation or Organization)


            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 September 5, 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 July 31, 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 - July 31, 2001 and
               January 31, 2001                                             3-4

             - Statements of Loss - Three months
               and six months ended July 31, 2001
               and 2000                                                     5-6

             - Statements of Cash Flows - Six months
               ended July 31, 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
                          =============================



                                                July 31,
                                                  2001      January 31,
                                              (Unaudited)       2001
                                              -----------   -----------


     ASSETS (Note 2)
     ------

CURRENT:
  Cash                                        $     3,629   $     3,822
  Accounts receivable                             100,957        16,224
  Accounts receivable-related party                 9,075         7,184
  Accounts receivable-other                        16,565          --
  Inventory                                       345,800       227,834
  Inventory credit note                           236,360          --
  Prepaid expenses                                  6,979        12,145
                                              -----------   -----------
         TOTAL CURRENT ASSETS                     719,365       267,209


EQUIPMENT, net of accumulated
  depreciation of $25,066 and $17,826             130,696       133,713


LICENSES, net of accumulated
  amortization of $17,316 and $14,168              14,118        17,265
                                              -----------   -----------





                                              $   864,179   $   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                             145,584      132,388
  Accounts payable-related party                99,725       97,139
  Accrued interest-related party                90,062       61,312
  Line of credit-related party                 500,000      500,000
                                             ---------    ---------

         TOTAL CURRENT LIABILITIES             960,371      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                   632,070      122,088
  Deficit accumulated during the
    development stage                         (728,327)    (619,787)
                                             ---------    ---------

         TOTAL STOCKHOLDERS' DEFICIT           (96,192)    (497,652)
                                             ---------    ---------

                                             $ 864,179    $ 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
                             Three        Three        Six          Six        Inception
                             Months       Months      Months       Months    July 21, 1998
                             Ended        Ended       Ended        Ended        Through
                            July 31,     July 31,    July 31,     July 31       July 31,
                             2001         2000        2001         2000          2001
                           ---------    ---------   ---------    ---------   -------------
<S>                        <C>          <C>         <C>          <C>         <C>
SALES                      $ 189,817    $  22,188   $ 307,661    $  60,041   $     457,262

COST OF SALES                166,815       17,747     240,847       51,287         374,199
                           ---------    ---------   ---------    ---------   -------------

   Gross profit               23,002        4,441      66,814        8,754          83,063
                           ---------    ---------   ---------    ---------   -------------

OPERATING EXPENSES:
 Professional services        29,666       20,404      56,366       45,508         274,980
 Research and
  development                   (118)      15,286       4,864       40,608         126,660
 Advertising                   5,604        7,907       9,616       21,507          76,767
 Office expense                3,350          745       6,487          939          15,009
 Compensation                 16,730       10,000      33,460       10,000          83,460
 Amortization                  1,574        1,500       3,147        3,000          17,315
 Travel                        1,177         --         5,826          666          31,054
 Director's fees                --           --          --           --            30,000
 Dues and subscriptions          275          971         275        3,851           4,401
 Supplies                      1,547          557      11,661          622          18,488
 Repairs                         888         --         1,170          800           2,194
 Bad debts                      --           --          --           --             2,882
 Insurance                   (15,865)         810      (8,578)         810           8,426
 Commissions                   3,905        3,619      15,763        3,619          22,729
                           ---------    ---------   ---------    ---------   -------------
Total operating expenses      48,733       61,799     140,057      131,930         714,365
                           ---------    ---------   ---------    ---------   -------------

</TABLE>

                   (See notes to interim financial statements)
                                       -5-
<PAGE>
<TABLE>
<CAPTION>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                               STATEMENTS OF LOSS
                                   (Unaudited)
                          ============================


                                                                                     Date of
                         Three          Three           Six            Six          Inception
                         Months         Months         Months         Months      July 21, 1998
                         Ended          Ended          Ended          Ended          Through
                        July 31,       July 31,       July 31,       July 31,        July 31,
                          2001           2000           2001           2000           2001
                      -----------    -----------    -----------    -----------    -------------
<S>                   <C>            <C>            <C>            <C>            <C>

Loss from operation       (25,731)       (57,358)       (73,243)      (123,176)        (631,302)

Interest expense          (20,922)       (12,370)       (35,297)       (23,220)         (97,025)
                      -----------    -----------    -----------    -----------    -------------

Net loss              $   (46,653)   $   (69,728)   $  (108,540)   $  (146,396)   $    (728,327)
                      ===========    ===========    ===========    ===========    =============



Net loss per share-
 basic and diluted    $     (0.01)   $     (0.01)   $     (0.02)   $     (0.03)
                      ===========    ===========    ===========    ===========


Weighted average
 number of shares
 outstanding-
 basic and diluted      6,491,000      4,692,750      5,591,875      4,692,750
                      ===========    ===========    ===========    ===========

</TABLE>





                   (See notes to interim financial statements)
                                      -6-
<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

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


                                          Six          Six           Date of
                                          Months       Months       Inception
                                          Ended        Ended     (July 21, 1998)
                                         July 31,     July 31,       Through
                                          2001         2000       July 31, 2001
                                        ---------    ---------    -------------

Cash flows from operating activities:
 Net loss                               $(108,540)   $(146,396)   $    (728,327)
 Adjustments to
  reconcile net loss
  to net cash used in
  operating activities:
   Amortization and
    depreciation                           10,387        8,723           35,666
   Contributed services                    10,000       10,000           60,000
   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                   (103,189)     (14,823)        (126,597)
   Accounts payable                       (15,782)      63,853          245,309
   Inventory                             (117,966)       5,307         (338,589)
   Note receivable                       (236,360)        --           (236,360)
   Prepaid expenses                         5,166      (10,177)          (6,979)
   Accrued interest                        28,750       23,059           90,062
                                        ---------    ---------    -------------

Net cash used in
 operating activities                    (195,970)     (60,454)        (675,815)
                                        ---------    ---------    -------------

Cash flows from investing activities:
 Cash paid for licenses                      --           --            (15,592)
 Cash paid for property
  and equipment                            (4,223)     (23,244)        (149,047)
                                        ---------    ---------    -------------

Net cash used in
 investing activities                      (4,223)     (23,244)        (164,639)
                                        ---------    ---------    -------------




                   (See notes to interim financial statements)
                                       -7-
<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

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


                                     Six          Six           Date of
                                     Months       Months       Inception
                                     Ended        Ended     (July 21, 1998)
                                    July 31,     July 31,       Through
                                     2001         2000       July 31, 2001
                                   ---------    ---------    -------------

Cash flows from
 financing activities:
 Borrowings under line
  of credit-related
  party                                 --        120,576          492,789
 Proceeds from note                     --           --            125,000
 Net proceeds from
  sale of common stock               200,000         --            226,294
 Deferred stock
  offering costs                       (--)       (34,592)            --
                                   ---------    ---------    -------------

Net cash provided by
 financing activities                200,000       85,984          844,083
                                   ---------    ---------    -------------

Net increase
(decrease) in cash                      (193)       2,286            3,629

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

Cash, end of period                $   3,629    $   2,638    $       3,629
                                   =========    =========    =============

Supplemental Disclosures
 of Cash Flow Information:

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

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

Non-Cash Financing
 Activities:
 Common stock for
  licenses                         $    --      $    --      $      15,841
                                   =========    =========    =============
 Common stock for
  note receivable                  $ 300,000    $ 300,000    $     300,000
                                   =========    =========    =============



                   (See notes to interim financial statements)
                                       -8-
<PAGE>

                           EXHAUST TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

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



                              Six         Six         Date of
                             Months      Months      Inception
                             Ended       Ended    (July 21, 1998)
                            July 31,    July 31,      Through
                             2001        2000      July 31, 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 and six-month periods ended July 31, 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 $728,327. 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 July 31, 2001, we owed Mr. Sterling $500,000 on an unsecured note
and $99,725 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 and Six Months  Ended July 31,  2001  (Unaudited)  compared to the
--------------------------------------------------------------------------------
Three Months and Six Months Ended July 31, 2000 (Unaudited)
-----------------------------------------------------------


During the three  months and six months  ended July 31,  2001 the  Company  sold
limited quantities of its products.  The Company recognized total revenue in the
second quarter of fiscal 2001 of  approximately  $190,000 as compared to $22,000
for the same period of the prior fiscal year and approximately  $308,000 for the
six months ended July 31, 2001 as compared to $60,000 for the same period of the
prior  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 decreased for the three months ended July 31,
2001  to  approximately   $49,000  from  approximately   $62,000  for  the  same
three-month  period in 2000.  The  decrease of $13,000 was  primarily  due to an
insurance rebate and no research and development expenses. Specifically, for the
three months ended July 31, 2001,  insurance  decreased  $17,000  because of the
insurance  rebate and research and  development  decreased  $15,000  because our
products are now being marketed and not developed.  Professional  fees increased
$9,000 as a result  of legal  fees for  patents,  while  compensation  increased
$7,000 because of assembly costs and assistance  from our corporate  officer and
administrative  expenses  increased  $4,000  as  a  result  of  increased  sales
activities. Additionally, interest increased approximately $8,000 as a result of
borrowings from the Company president.

For  the  six  months  ended  July  31,  2001,   operating   expenses  increased
approximately  $10,000 for the same six month period of last year as a result of
additional costs incurred to bring the


                                      -13-
<PAGE>

                           EXHAUST TECHNOLOGIES, INC.


Company's  products to market.  Specifically,  professional  services  increased
approximately  $11,000  because of patent  research,  research  and  development
decreased $36,000 because our products are now being marketed and not developed,
compensation  increased  $23,000 because of assembly costs,  supplies  increased
$11,000  because of the need for shipping our  products,  commissions  increased
$12,000  due to  increased  sales,  insurance  decreased  $9,000  because of the
insurance  rebate,  promotion of the  Company's  products  decreased  $7,000 and
administrative  expenses  increased  $5,000.  Additionally,  interest  increased
approximately $12,000 as a result of borrowings from the Company president.


Net Loss
--------

Primarily  as a result of the  foregoing  factors,  the  Company's  net loss was
approximately  $47,000 and $70,000,  respectively,  for the three month  periods
ended  July  31,  2001  and  2000  and  approximately   $108,000  and  $146,000,
respectively, for the six month periods ended July 31, 2001 and 2000.


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

At July 31, 2001,  the Company had $3,629 of cash. For the six months ended July
31, 2001, the Company  received  approximately  $223,000 from product sales. The
Company expended approximately $139,000 for the three months ended July 31, 2001
and $223,000 for the six months  ended July 31,  2001,  to market the  Company's
products  and  operate  the  Company.   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 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 July 31, 2001.

ITEM 5.   OTHER INFORMATION

None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

During the quarter  ended July 31,  2001,  the  Company  filed Form 8-K with the
Commission on May 7, 2001,  changing  Certified Public  Accountants,  (Item 4 of
Form 8-K)








                                      -15-
<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, on this 12th day of September, 2001.



                                 EXHAUST TECHNOLOGIES, INC.



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


                                 /s/  William A. Sutherland
                                 --------------------------
                                      William A. Sutherland
                                      Chief Financial Officer







                                      -16-