UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

/X/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002.

                                       OR

/ /      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________.

                        COMMISSION FILE NUMBER 000-31153

                             MAGNOLIA VENTURES, INC.
                           ___________________________
                 (Name of Small Business Issuer in its charter)


                Nevada                                 88-0355504
   _______________________________                 ___________________
   (State or other jurisdiction of                 (I.R.S. Employer
    incorporation or organization)                 Identification No.)


     6767 Tropicana Avenue, Suite 207
         Las Vegas, Nevada                                89103
________________________________________                __________
(Address of principal executive offices)                (Zip Code)

                                       N/A
                                       ___
                 (Former name, former address and former fiscal
                      year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 / /

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

         At June 30, 2002, there were outstanding 21,000,000 shares of the
Registrant's Common Stock, $.001 par value.

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

                                       1

<PAGE>


                                     PART I

                              FINANCIAL INFORMATION

Item I.   Financial Statements

                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                FINANCIAL REPORTS

                                  JUNE 30, 2002
                                DECEMBER 31, 2001





<PAGE>





                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                    CONTENTS







INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS                     F-1
________________________________________________________________________________

FINANCIAL STATEMENTS

   Balance Sheets                                                            F-2

   Statements of Income                                                F-3 - F-4

   Statements of Stockholders' Equity                                        F-5

   Statements of Cash Flows                                            F-6 - F-7

   Notes to Financial Statements                                      F-8 - F-10
________________________________________________________________________________



<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Magnolia Ventures, Inc.
Las Vegas, Nevada


I have audited the accompanying balance sheets of Magnolia Ventures, Inc. (A
Development Stage Company) as of June 30, 2002 and December 31, 2001, and the
related statements of income, stockholders' equity, and cash flows for the three
months ended June 30, 2002, the six months ended June 30, 2002, the year ended
December 31, 2001 and the period June 13, 1994 (inception) through June 30,
2002. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Magnolia Ventures, Inc. (A
Development Stage Company) as of June 30, 2002 and December 31, 2001 and the
results of its operations and cash flows for the three months ended June 30,
2002, the six months ended June 30, 2002, the year ended December 31, 2001, and
the period June 13, 1994 (inception) through June 30, 2002, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters is also
described in Note 4. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




Kyle L. Tingle, CPA. LLC

August 10, 2002
Henderson, Nevada

                                       F-1

<PAGE>
<TABLE>
<CAPTION>

                   MAGNOLIA VENTURES, INC.
                (A DEVELOPMENT STAGE COMPANY)
                       BALANCE SHEETS


                                                                June 30,     December 31,
                                                                    2002             2001
                                                           _____________     ____________

                           ASSETS

<S>                                                        <C>               <C>
CURRENT ASSETS
     Cash                                                  $          31     $         31
                                                           _____________     ____________

            Total current assets                           $          31     $         31
                                                           _____________     ____________

                   Total assets                            $          31     $         31
                                                           =============     ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                      $       5,045     $          0
     Officers advances (Note 7)                                   36,591           36,506
                                                           _____________     ____________

            Total current liabilities                      $      41,636     $     36,506
                                                           _____________     ____________


STOCKHOLDERS' EQUITY
     Common stock: $.001 par value;
        authorized 25,000,000 shares;
        issued and outstanding:
        21,000,000 shares at December 31, 2001:            $                 $     21,000
        21,000,000 shares at June 30, 2002;                       21,000
     Additional Paid In Capital                                  (18,900)         (18,900)
     Accumulated deficit during development stage                (43,705)         (38,575)
                                                           _____________     ____________

            Total stockholders' equity                     $     (41,605)    $    (36,475)
                                                           _____________     ____________

                   Total liabilities and
                   stockholders' equity                    $          31     $         31
                                                           =============     ============
</TABLE>

See Accompanying Notes to Financial Statements.

                                      F-2

<PAGE>
<TABLE>
<CAPTION>

                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              STATEMENTS OF INCOME


                                                              Three months ended                   Six months ended
                                                            June 30,         June 30,          June 30,         June 30,
                                                                2002             2001              2002             2001
                                                       _____________     ____________     _____________     ____________

<S>                                                    <C>               <C>              <C>               <C>
Revenues                                               $           0     $          0     $           0     $          0

Cost of revenue                                                    0                0                 0                0
                                                       _____________     ____________     _____________     ____________

           Gross profit                                $           0     $          0     $           0     $          0
General, selling and
   administrative expenses                                     1,751            1,460             5,130            3,735
                                                       _____________     ____________     _____________     ____________
           Operating (loss)                            $      (1,751)    $     (1,460)    $      (5,130)    $     (3,735)

Nonoperating income (expense)
   Interest income                                                 0                0                 0                0
                                                       _____________     ____________     _____________     ____________

   Net (loss)                                          $      (1,751)    $     (1,460)    $      (5,130)    $     (3,735)
                                                       =============     ============     =============     ============


   Net (loss) per share, basic
   and diluted (Note 2)                                $      (0.00)     $     (0.00)     $      (0.00)      $    (0.00)
                                                       =============     ============     =============     ============

   Average number of shares
   of common stock outstanding                            21,000,000       21,000,000        21,000,000       21,000,000
                                                       =============     ============     =============     ============

</TABLE>


See Accompanying Notes to Financial Statements.

                                      F-3

<PAGE>
<TABLE>
<CAPTION>

                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              STATEMENTS OF INCOME


                                                                                                           June 13, 1994
                                                                                 Year ended               (inception) to
                                                                         December 31,      December 31,         June 30,
                                                                                 2001              2000             2002
                                                                         ____________     _____________     ____________

<S>                                                                      <C>              <C>               <C>
Revenues                                                                 $          0     $           0     $          0

Cost of revenue                                                                     0                 0                0
                                                                         ____________     _____________     ____________

           Gross profit                                                  $          0     $           0     $          0

General, selling and
   administrative expenses                                                      5,056            31,295           44,361
                                                                         ____________     _____________     ____________
           Operating (loss)                                              $     (5,056)    $     (31,295)    $    (44,361)

Nonoperating income (expense)
   Interest income                                                                  0                 0              656
                                                                         ____________     _____________     ____________

   Net (loss)                                                            $     (5,056)    $     (31,295)    $    (43,705)
                                                                         ============     =============     ============


   Net (loss) per share, basic
   and diluted (Note 2)                                                  $     (0.00)      $     (0.00)     $     (0.00)
                                                                         ============     =============     ============

   Average number of shares
   of common stock outstanding                                             21,000,000        21,000,000       21,000,000
                                                                         ============     =============     ============
</TABLE>


See Accompanying Notes to Financial Statements.


                                      F-4

<PAGE>
<TABLE>
<CAPTION>


                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                       STATEMENTS OF STOCKHOLDERS' EQUITY


                                                                                                           Accumulated
                                                                                                            (Deficit)
                                                                       Common Stock and Capital              During
                                                                       In Excess of Par Value              Development
                                                                      ______________________________          Stage
                                                                           Shares        Amount
                                                                      ______________________________     _____________


<S>                                                                   <C>              <C>               <C>
Balance, December 31, 1998                                               21,000,000    $       2,100     $      (2,224)

Net (loss), December 31, 1999                                                                                        0
                                                                      _____________    _____________     _____________

Balance, December 31, 1999                                               21,000,000    $       2,100     $      (2,224)

Net (loss), December 31, 2000                                                                                  (31,295)
                                                                      _____________    _____________     _____________

Balance, December 31, 2000                                               21,000,000    $       2,100     $    (33,519)

Net (loss), December 31, 2001                                                                                  (5,056)
                                                                      _____________    _____________     _____________

Balance, December 31, 2001                                              21,000,000     $       2,100     $    (38,575)

Net (loss) January 1, 2002 to
June 30, 2002                                                                                                  (5,130)
                                                                      _____________    _____________     _____________

Balance, June 30, 2002                                                  21,000,000     $       2,100     $    (43,705)
                                                                      =============    =============     =============

</TABLE>



See Accompanying Notes to Financial Statements.

                                      F-5

<PAGE>
<TABLE>
<CAPTION>


                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS


                                                            Three months ended                  Six months ended
                                                          June 30,         June 30,          June 30,         June 30,
                                                              2002             2001              2002             2001
                                                     _____________     ____________     _____________     ____________

<S>                                                  <C>               <C>              <C>               <C>
Cash Flows From
Operating Activities
    Net (loss)                                       $      (1,751)    $     (1,460)    $      (5,130)    $     (3,735)
    Adjustments to reconcile net (loss)
    to cash (used in) operating activities:
    Changes in assets and liabilities
    Increase in accounts payable                             1,666              385             5,045            2,585
    Increase in officer advances                                85            1,075                85            1,150
                                                     _____________     ____________     _____________     ____________

         Net cash (used in)
            operating activities                     $           0     $          0     $           0     $          0
                                                     _____________     ____________     _____________     ____________

Cash Flows From
Investing Activities                                 $           0     $          0     $           0     $          0
                                                     _____________     ____________     _____________     ____________

Cash Flows From
Financing Activities
    Issuance of common stock                                     0                0                 0                0
                                                     _____________     ____________     _____________     ____________

         Net cash (used in)
            financing activities                     $                 $          0     $           0     $          0
                                                     _____________     ____________     _____________     ____________

         Net increase (decrease)
            in cash                                  $           0     $          0     $           0     $          0

Cash, beginning of period                                       31               31                31               31
                                                     _____________     ____________     _____________     ____________
Cash, end of period                                  $          31     $         31     $          31     $         31
                                                     =============     ============     =============     ============


</TABLE>

See Accompanying Notes to Financial Statements.

                                      F-6

<PAGE>
<TABLE>
<CAPTION>

                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS

                                                                                                         June 13, 1994
                                                                                Year ended              (inception) to
                                                                       December 31,      December 31,         June 30,
                                                                               2001              2000             2002
                                                                       ____________     _____________     ____________

<S>                                                                    <C>              <C>               <C>
Cash Flows From
Operating Activities
    Net (loss)                                                         $     (5,056)    $     (31,295)    $    (43,705)
    Adjustments to reconcile net (loss)
    to cash (used in) operating activities:
    Changes in assets and liabilities
    Increase in accounts payable                                                  0                 0            5,045
    Increase in officer advances                                              5,056            31,295           36,591
                                                                       ____________     _____________     ____________

         Net cash (used in)
            operating activities                                       $          0     $           0     $     (2,069)
                                                                       ____________     _____________     ____________

Cash Flows From
Investing Activities                                                   $          0     $           0     $          0
                                                                       ____________     _____________     ____________

Cash Flows From
Financing Activities
    Issuance of common stock                                                      0                 0            2,100
                                                                       ____________     _____________     ____________

         Net cash (used in)
            financing activities                                       $          0     $           0     $      2,100
                                                                       ____________     _____________     ____________

         Net increase (decrease)
            in cash                                                    $          0     $           0     $         31

Cash, beginning of period                                                        31                31     $          0
                                                                       ____________     _____________     ____________
Cash, end of period                                                    $         31     $          31     $         31
                                                                       ============     =============     ============

</TABLE>

See Accompanying Notes to Financial Statements.

                                      F-7

<PAGE>


                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      JUNE 30, 2002, AND DECEMBER 31, 2001


NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF BUSINESS:

         Magnolia Ventures, Inc. ("Company") was organized June 13, 1994 under
         the laws of the State of Nevada. The Company currently has no
         operations and, in accordance with Statement of Financial Accounting
         Standard (SFAS) No. 7, "ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE
         ENTERPRISES," is considered a development stage company.

         A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS
         FOLLOWS:

         ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         CASH

         For the Statements of Cash Flows, all highly liquid investments with
         maturity of three months or less are considered to be cash equivalents.
         There were no cash equivalents as of June 30, 2002 and 2001, and
         December 31, 2001 and 2000.

         INCOME TAXES

         Income taxes are provided for using the liability method of accounting
         in accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES." A
         deferred tax asset or liability is recorded for all temporary
         differences between financial and tax reporting. Temporary differences
         are the differences between the reported amounts of assets and
         liabilities and their tax basis. Deferred tax assets are reduced by a
         valuation allowance when, in the opinion of management, it is more
         likely than not that some portion or all of the deferred tax assets
         will not be realized. Deferred tax assets and liabilities are adjusted
         for the effect of changes in tax laws and rates on the date of
         enactment.

         REPORTING ON COSTS FOR START-UP ACTIVITIES

         Statement of Position 98-5 ("SOP 98-5), "REPORTING ON THE COSTS OF
         START-UP ACTIVITIES" which provides guidance on the financial reporting
         of start-up and organization costs, requires most costs of start-up
         activities and organization costs to be expensed as incurred. With the
         adoption of SPO 98-5, there has been little to no effect on the
         Company's financial statements.

                                      F-8

<PAGE>


                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      JUNE 30, 2002, AND DECEMBER 31, 2001


NOTE 2.  STOCKHOLDERS' EQUITY

         COMMON STOCK

         The authorized common stock of the Company consists of 25,000,000
         shares with par value of $0.001. On June 13, 1994, the Company
         authorized and issued 2,100 shares of its no par value common stock in
         consideration of $2,100 in cash.

         On December 3, 1999, the State of Nevada approved the Company's
         restated Articles of Incorporation, which increased its capitalization
         from 25,000 common shares to 25,000,000 common shares. The no par value
         was changed to $0.001 per share.

         On December 3, 1999, the Company's shareholders approved a forward
         split of its common stock at one hundred shares for one share of the
         existing shares. The number of common stock shares outstanding
         increased from 2,100 to 210,000. Prior period information has been
         restated to reflect the stock split.

         On February 8, 2000, the Company's shareholders approved a forward
         split of its common stock at one hundred shares for one share of the
         existing shares. The number of common stock shares outstanding
         increased from 210,000 to 21,000,000. Prior period information has been
         restated to reflect the stock split.

         PREFERRED STOCK

         On February 8, 2000, the State of Nevada approved the Company's
         restated Articles of Incorporation which created a new class of serial
         preferred stock, with a par value of $0.01. The Company has authorized
         10,000,000 shares of Serial Preferred Stock. No shares of Serial
         Preferred Stock has been issued.

         NET LOSS PER COMMON SHARE

         Net loss per share is calculated in accordance with SFAS No. 128,
         "EARNINGS PER SHARE." The weighted-average number of common shares
         outstanding during each period is used to compute basic loss per share.
         Diluted loss per share is computed using the weighted averaged number
         of shares and dilutive potential common shares outstanding. Dilutive
         potential common shares are additional common shares assumed to be
         exercised.

         Basic net loss per common share is based on the weighted average number
         of shares of common stock outstanding of 21,000,000 during 2002, 2001,
         2000, and since inception. As of June 30, 2002 and 2001, December 31,
         2001 and 2000, and since inception, the Company had no dilutive
         potential common shares.

                                      F-9

<PAGE>


                             MAGNOLIA VENTURES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      JUNE 30, 2002, AND DECEMBER 31, 2001

NOTE 3.  INCOME TAXES

         There is no provision for income taxes for the period ended June 30,
         2002, due to the net loss and no state income tax in Nevada, the state
         of the Company's domicile and operations. The Company's total deferred
         tax asset as of June 30, 2002 is as follows:

                  Net operating loss carry forward       $           43,705
                  Valuation allowance                    $          (43,705)
                                                         __________________

                  Net deferred tax asset                 $                0

         The net federal operating loss carry forward will expire between 2016
         and 2021. This carry forward may be limited upon the consummation of a
         business combination under IRC Section 381.

NOTE 4.  GOING CONCERN

         The Company's financial statements are prepared in accordance with
         generally accepted accounting principles applicable to a going concern.
         This contemplates the realization of assets and the liquidation of
         liabilities in the normal course of business. Currently, the Company
         does not have significant cash of other material assets, nor does it
         have operations or a source of revenue sufficient to cover its
         operation costs and allow it to continue as a going concern. It is the
         intent of the Company to seek a merger with an existing, operating
         company. Until that time, the stockholders, officers, and directors
         have committed to advancing the operating costs of the company.

NOTE 5.  RELATED PARTY TRANSACTIONS

         The Company neither owns nor leases any real or personal property. An
         officer of the corporation provides office services without charge.
         Such costs are immaterial to the financial statements and accordingly,
         have not been reflected therein. The officers and directors for the
         Company are involved in other business activities and may, in the
         future, become involved in other business opportunities. If a specific
         business opportunity becomes available, such persons may face a
         conflict in selecting between the Company and their other business
         interest. The Company has not formulated a policy for the resolution of
         such conflicts.

NOTE 6.  WARRANTS AND OPTIONS

         There are no warrants or options outstanding to acquire any additional
         shares of common stock of the Company.

NOTE 7.  OFFICERS ADVANCES

         The Company has incurred costs while seeking additional capital through
         a merger with an existing company. An officer of the Company has
         advanced funds on behalf of the Company to pay for these costs. These
         funds have been advanced interest free.

                                      F-10


<PAGE>

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

          The Company currently has no business activities and has no assets or
operations. The Company has had no preliminary negotiations to effectuate a
business combination.

          The Company is dependent upon its officers to meet any de minimis
costs which may occur. Peggy Melilli, an officer and director of the Company,
has agreed to provide the necessary funds, without interest, for the Company to
comply with the Securities Exchange Act of 1934, as amended; provided that she
is an officer and director of the Company when the obligation is incurred. All
advances are interest-free.

          In addition, since the Company has had no operating history nor any
revenues or earnings from operations, with no significant assets or financial
resources, the Company will in all likelihood sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity and consummate such a
business combination.

          This discussion may contain certain forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those forward-looking statements. The
factors that may cause actual results to differ materially is that the Company
has no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public company
and that there can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or including a
business combination.


Item III. Qualitative and Quantitative Disclosures About Market Risk.

          The Company has neither considered nor conducted any research
concerning qualitative and quantitative market risk.


                                       2

<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 1 -  Legal Proceedings ................................................None

Item 2 -  Changes in the Rights of the Company's
          Security Holders .................................................None

Item 3 -  Defaults by the Company on its
          Senior Securities ................................................None

Item 4 -  Submission of Matter to Vote of Security
          Holders ..........................................................None

Item 5 -  Other Information

          (a)      Board Meeting

          The board held one meeting during the current quarter, which was a
special meeting.

          The board of directors has not established an audit committee. In
addition, the Company does not have any other compensation or executive or
similar committees. The Company will not, in all likelihood, establish an audit
committee until such time as the Company completes a business combination, of
which there can be no assurance. The Company recognizes that an audit committee,
when established, will play a critical role in the financial reporting system of
the Company by overseeing and monitoring management's and the independent
auditors' participation in the financial reporting process. At such time as the
Company establishes an audit committee, its additional disclosures with the
Company's auditors and management may promote investor confidence in the
integrity of the financial reporting process.

          Until such time as an audit committee has been established, the full
board of directors will undertake those tasks normally associated with an audit
committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, and (ii)
discussions with the independent auditors the matters required to be discussed
by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or
supplemented.

                                       3

<PAGE>

          The board of directors of the Company, consistent with its intent to
enhance the reliability and credibility of its financial statements, has
submitted the financial statements included in this Form 10-QSB to its
independent auditor prior to the filing of this report. An audit was completed
for the period then ended.

Item 6 -  Exhibits and Reports on Form 8-K

          The following exhibits are filed with this report:

          There were no reports on Form 8-K filed during the quarter for which
this report is filed. The following exhibits are filed with this report:

          23.1  Consent of Auditor

          99.1  Certification of Chief Executive Officer and Chief Financial
                Officer


                                    SIGNATURE

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

Dated: August 13, 2002                   MAGNOLIA VENTURES, INC.



                                         By: /s/ PEGGY MELILLI
                                             _________________
                                             Peggy Melilli
                                             President

                                       4