UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              AMENDMENT TO NO. 1 TO
                                  FORM 10-QSB/A

(Mark One)
[x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 2001

[  ]  TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

       For the Transition Period from _______________ TO _______________.

                                     0-28163
                            (Commission File Numbers)

                               Cirus Telecom, Inc.
             (Exact name of registrant as specified in its charter)

         Delaware                                             7379
(State or other jurisdiction of                    (Primary Standard Industrial
incorporation or organization)                      Classification Code Number)


                   43-06 Main Street, Flushing, New York 11355
                    (Address of principal executive offices)

                                 (718) 762-3115
              (Registrants' telephone number, including area code)

              (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO[ ]

     As of March 31, 2001, there were 64,076,212 shares of Common Stock, par
value $.0001 per share, issued and outstanding.

<PAGE>



                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                    CONTENTS



                                                                          Page
                                                                          number


Consolidated balance sheet at March 31, 2001  (unaudited) (restated)
and December 31, 2000 (audited)                                              3

Consolidated statements of operations and comprehensive
income (loss) for the three months ended March 31, 2001
(unaudited) (restated) and cumulative for the period December 11, 2000
(date of inception) to March 31, 2001(unaudited) (restated)                  4

Consolidated statement of stockholders' equity for
the period from December 11, 2000 (date of inception)
to March 31, 2001 (unaudited) (restated)                                     5

Consolidated statements of cash flows for the three months ended
March 31, 2001 (unaudited) (restated) and cumulative for the period
December 11, 2000 (date of inception) to March 31, 2001
(unaudited) (restated)                                                       6

Notes to consolidated financial statements                               7 - 18


                                       2
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                     ASSETS
                                     ------

                                                                                    March 31, 2001
                                                                                     (unaudited)       December 31, 2000
                                                                                      (restated)            (audited)
                                                                                      -----------          -----------
<S>                                                                                   <C>                  <C>
Current assets:
    Cash                                                                              $   539,542          $        --
    Prepaid expenses                                                                    1,260,395                   --
                                                                                      -----------          -----------
         Total current assets                                                           1,799,937                   --
                                                                                      -----------          -----------

Property and equipment                                                                    217,870                   --
                                                                                      -----------          -----------

Total assets                                                                          $ 2,017,807          $        --
                                                                                      ===========          ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current liabilities:
    Accounts payable and accrued expenses                                             $    27,724          $        --
    Due to stockholder                                                                         --               15,712
    Capital lease payable                                                                 153,522                   --
                                                                                      -----------          -----------
         Total current liabilities                                                        181,246               15,712
                                                                                      -----------          -----------

Commitments and contingencies

Stockholders' equity (deficiency):
    Common stock - $0.0001 and $ .001 par value respectively,
     100,000,000 shares
     authorized, 64,076,212 and 4,000
     shares issued and outstanding, respectively                                            6,407                    4
Preferred stock  - $0.0001 par value 5,000,000 authorized,
     Preferred stock - $0.0001 par value, 5,000,000 authorized,
     850 shares issued and outstanding;
     at March 31, 2001 liquidation preference $850,000                                         --                   --
     Additional paid-in capital                                                         2,614,133                   96
     Stock subscription receivable                                                             --                 (100)
     Accumulated other comprehensive loss                                                    (190)                  --
     Deficit accumulated during the development stage                                    (783,789)             (15,712)
                                                                                      -----------          -----------
         Total stockholders' equity (deficiency)                                        1,836,561              (15,712)
                                                                                      -----------          -----------
Total liabilities and stockholders' equity                                            $ 2,017,807          $        --
                                                                                      ===========          ===========
</TABLE>


                 See notes to consolidated financial statements


                                       3
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                              Cumulative
                                                                                             for the period
                                                                    For the three           December 11, 2000
                                                                     months ended          (date of inception)
                                                                    March 31, 2001           to March 31, 2001
                                                                      (restated)                (restated)
                                                                     ------------            ------------------

<S>                                                                  <C>                        <C>
Sales                                                                $         --               $         --
                                                                     ------------               ------------

Expenses:
    Consulting                                                            401,299                    401,299
    Professional fees                                                      25,000                     36,000
    Officers salaries                                                      24,750                     24,750
    Travel and entertainment                                               16,777                     21,038
    Office and miscellaneous                                               10,465                     10,916
    Printing                                                                7,741                      7,741
    Rent                                                                    2,484                      2,484
                                                                     ------------               ------------
         Total expenses                                                   488,516                    504,228
                                                                     ------------               ------------

Loss before other income
    and provision for income taxes                                       (488,516)                  (504,228)
                                                                     ------------               ------------
Other income:
   Interest income                                                          3,773                      3,773
                                                                     ------------               ------------

         Total other income                                                 3,773                      3,773
                                                                     ------------               ------------

Loss before provision for income taxes                                   (484,743)                  (500,455)
                                                                     ------------               ------------

Provision for income taxes                                                     --                         --
                                                                     ------------               ------------

Net loss                                                                 (484,743)                  (500,455)

Unrealized loss on foreign currency translation                              (190)                      (190)
                                                                     ------------               ------------

Comprehensive net loss                                               $   (484,933)              $   (500,645)
                                                                     ============               ============

Net loss                                                             $   (484,743)              $   (500,455)

Dividends accreted on convertible preferred stock                        (283,334)                  (283,334)
                                                                     ------------               ------------

Net loss attributable to common stockholders                         $   (768,077)              $   (783,789)
                                                                     ============               ============

Loss per share:
    Basic                                                            $       (.01)              $       (.02)
                                                                     ============               ============
Weighted average number of
 common shares outstanding                                             56,311,656                 49,837,144
                                                                     ============               ============
</TABLE>

                 See notes to consolidated financial statements


                                       4
<PAGE>

                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
            FOR THE PERIOD FROM DECEMBER 11, 2000 (DATE OF INCEPTION)
                         TO MARCH 31, 2001 (UNAUDITED)

<TABLE>
<CAPTION>



                                                                                                      Additional
                                                   Common Stock                 Preferred Stock       Paid - in
                                                Shares         Amount         Shares         Amount     Capital
                                              -----------    -----------    -----------   ---------   -----------
<S>                                                 <C>      <C>               <C>        <C>         <C>
Balance at December 11, 2000                        4,000    $         4             --   $      --   $        96

Contribution of common shares by founders
  in connection with recapitalization              (4,000)            (4)            --          --           (96)

Recapitalization in connection with
  reverse acquisition - Cirus Telecom, Inc.
  equity                                       20,701,824          2,070             --          --       (68,752)

Issuance of common stock
  in connection with the merger
  of DMS Acquisition Corp, net
  of related costs                             40,000,000          4,000             --          --       (62,306)

Sale of preferred shares                               --             --            850          --       850,000

Issuance of common stock in
  connection with service contract              2,974,388            297             --          --     1,486,897

Issuance of common stock in
  connection with service contract                400,000             40             --          --       124,960

Unrealized foreign currency translation
  adjustment                                           --             --             --          --            --

Imputed preferred stock dividend
  attributable to a beneficial
  conversion feature                                   --             --             --          --       283,334

Net loss for the three months
  ended March 31, 2001                                 --             --             --          --            --
                                              -----------    -----------    -----------   ---------   -----------

Balance at March 31, 2001 (restated)           64,076,212    $     6,407            850   $      --   $ 2,614,133
                                              ===========    ===========    ===========   =========   ===========

<CAPTION>

                                                               Deficit            Accumulated       Total
                                                  Stock       Accumulated            Other       Stockholders'
                                               Subscription    During the         Comprehensive     Equity
                                                 Receivable  Development Stage    Income (loss)  (Deficiency)
                                               -----------    -----------       -----------      -----------
<S>                                            <C>            <C>               <C>              <C>
Balance at December 11, 2000                   $      (100)   $        --       $        --      $        --

Contribution of common shares by founders
  in connection with recapitalization                  100             --                --               --

Recapitalization in connection with
  reverse acquisition - Cirus Telecom, Inc.
  equity                                                --             --                --          (66,682)

Issuance of common stock
  in connection with the merger
  of DMS Acquisition Corp, net
  of related costs                                      --             --                --          (58,306)

Sale of preferred shares                                --             --                --          850,000

Issuance of common stock in
  connection with service contract                      --             --                --        1,487,194

Issuance of common stock in
  connection with service contract                      --             --                --          125,000

Unrealized foreign currency translation
  adjustment                                            --             --              (190)            (190)

Imputed preferred stock dividend
  attributable to a beneficial
  conversion feature                                    --       (283,334)               --               --

Net loss for the three months
  ended March 31, 2001                                  --       (500,455)               --         (500,455)
                                               -----------    -----------       -----------      -----------

Balance at March 31, 2001 (restated)           $        --    $  (783,789)      $      (190)     $ 1,836,561
                                               ===========    ===========       ===========      ===========
</TABLE>



           See accompanying notes to consolidated financial statements


                                       5
<PAGE>

                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                                Cumulative
                                                                                              for the period
                                                                       For the three         December 11, 2000
                                                                        months ended        (date of inception)
                                                                       March 31, 2001        to March 31, 2001
                                                                         (restated)               (restated)
                                                                       --------------         ------------------
<S>                                                                      <C>                     <C>
Cash flows from operating activities:
   Net loss                                                              $  (484,743)            $  (500,455)
Adjustments to reconcile net loss to net cash used in
    operating activities:
     Common stock issued for services                                        371,799                 371,799
Decrease in:
    Prepaid expenses                                                         (20,000)                (20,000)
Increase in:
    Accounts payable and accrued expenses                                     27,724                  27,724
                                                                         -----------             -----------
Net cash used in operating activities
                                                                            (105,220)               (120,932)
                                                                         -----------             -----------

Cash flows from investing activities:
    Purchase of property and equipment                                        (2,848)                 (2,848)
    Costs in connection with merger                                          (53,564)                (53,564)
                                                                         -----------             -----------

Net cash used in investing activities                                        (56,412)                (56,412)
                                                                         -----------             -----------

Cash flows from financing activities:
    Advances from stockholders                                                    --                  15,712
    Repayment to stockholder                                                 (15,712)                (15,712)
    Sale of preferred stock                                                  850,000                 850,000
    Repayment of capital lease obligations                                   (61,500)                (61,500)
    Repayment of related party debt
        in connection with recapitalization                                  (71,857)                (71,857)
                                                                         -----------             -----------

Net cash provided by financing                                               700,931                 716,643
                                                                         -----------             -----------
Effect of exchange rate changes on cash                                         (190)                   (190)

Increase in cash                                                             539,109                 539,109

Cash at beginning of period                                                      433                     433

Cash at end of period                                                    $   539,542             $   539,542
                                                                         ===========             ===========

Supplemental disclosure of non-cash flow information:
    Cash paid during the year for:
         Interest                                                        $        --             $        --
                                                                         ===========             ===========
         Income taxes                                                    $        --             $        --
                                                                         ===========             ===========

Schedule of non-cash investing and financing activities:
    Assets recorded under capital leases                                 $   215,022             $   215,022
                                                                         ===========             ===========
    Issuance of 40,000,000 shares of common stock in
         connection with the DMS Acquisitions Corp. merger               $   (58,306)            $   (58,306)
                                                                         ===========             ===========
    Issuance of 3,374,388 shares of common stock in
         connection with service contracts                               $ 1,612,194             $ 1,537,194
                                                                         ===========             ===========
    Issuance of 20,701,824 shares of common stock in
      connection with Cirus Telecom recapitalization                     $   (66,682)            $   (66,682)
                                                                         ===========             ===========
    Imputed preferred stock dividend attributable to a
    beneficial conversion feature                                        $   283,334             $   283,334
                                                                         ===========             ===========
</TABLE>


           See accompanying notes to consolidated financial statements


                                       6
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 1 - ORGANIZATION

         History
         -------

         Cirus Telecom, Inc. ("Cirus") was incorporated in the state of Delaware
         on August 25, 1997 under the name Sierra Madre Gold Corporation. On
         October 4, 1999, the name was changed to Capital One Ventures Corp. On
         February 9, 2001, the name was changed to Cirus Telecom, Inc. ("Cirus")
         in connection with the merger discussed below. Since March 31, 1998,
         Cirus has been a development stage company seeking a merger or
         acquisition of a private entity. Cirus' year end is September 30, and
         has had no operations for the year ended September 30, 2000 and 1999.

         DMS Acquisitions Corp. ("DMS") was incorporated in the state of
         Delaware on December 11, 2000 to operate as a wholesale provider of
         long distance and telecommunication services and has a year end of
         September 30.

         Capital One Acquisition Corp. ("Capital One") was incorporated in the
         state of Delaware on February 1, 2001 in order to facilitate the merger
         between Cirus and DMS. Capital One is wholly owned by Cirus. (See note
         8 for common stock split).

         Merger
         ------

         Pursuant to an agreement and plan of merger dated February 8, 2001,
         Capital One acquired all of the issued and outstanding common stock of
         DMS in exchange for 40,000,000 shares of Cirus common stock which
         represented 65.9% of the outstanding shares of Cirus's common stock
         after the issuance. Concurrent with the above acquisition, DMS merged
         with and into Capital One. Capital One then changed its name to DMS and
         continues to be wholly owned by Cirus. Cirus and DMS are collectively
         referred to as the "Company".

         The merger of Cirus and DMS has been treated as a recapitalization and
         purchase by DMS as the acquirer (reverse acquisition) of Cirus as
         control rests with the former DMS shareholders, although prior to the
         acquisition, Cirus had been the registrant. Therefore, the historical
         financial statements prior to February 8, 2001 are those of DMS. The
         transaction is considered a capital transaction whereby DMS contributed
         its stock for the net assets of the Company. Simultaneously with the
         merger, DMS's former President was elected as the Company's President.
         As of March 31, 2001, the Company is a development stage company.
         However, as a result of the merger discussed above, the Company intends
         to begin planned principal operations as a wholesale provider of long
         distance and telecommunications services in the quarter ending June 30,
         2001 and therefore anticipates no longer being considered a development
         stage company at such time.



                                       7
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 2 - INTERIM RESULTS AND 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 Items 303 and 310(B) Regulation S-B.

         In the opinion of management, the unaudited consolidated financial
         statements have been prepared on the same basis as the annual
         consolidated financial statements and reflect all adjustments, which
         include only normal recurring adjustments, necessary to present fairly
         the financial position as of March 31, 2001 and the results of
         operations and cash flows for the three month period ended March 31,
         2001 and for the period December 11, 2000 (date of inception to March
         31, 2001). The results for the periods are not necessarily indicative
         of the results to be expected for any subsequent quarter or the entire
         fiscal year ending September 30, 2001. The balance sheet at December
         31, 2000 has been derived from the audited consolidated financial
         statements at that date.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted pursuant to the
         Securities and Exchange Commission's rules and regulations. These
         unaudited consolidated financial statements should be read in
         conjunction with the Company's audited consolidated financial
         statements for the period ended December 11, 2000 (date of inception)
         to December 31, 2000 included in Form 8-K/A filed on March 16, 2001.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a)  Principles of Consolidation
         ---------------------------

         The accompanying consolidated financial statements include the accounts
         of the Company and its wholly owned subsidiary, after elimination of
         all significant intercompany transactions and accounts.

     b)  Cash and Cash Equivalents
         -------------------------

         The Company considers highly liquid investments with maturities of
         three months or less at the time of purchase to be cash and cash
         equivalents. Included in these amounts are deposits in a foreign bank
         of approximately $479,500 which are not insured. The Company plans to
         transfer the money during the second quarter of 2001 to a domestic
         financial institution. The Company believes that such risk is minimal
         based on the reputation of the financial institution.


                                       8
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)


     c)  Property and Equipment
         ----------------------

         Property and equipment are recorded at cost less accumulated
         depreciation which is provided on the straight line basis over the
         estimated useful lives of the assets. Expenditures for maintenance and
         repairs are expensed as incurred.

     d)  Income Taxes
         ------------

         The Company accounts for income taxes in accordance with the "liability
         method" of accounting for income taxes. Accordingly, deferred tax
         assets and liabilities are determined based on the difference between
         the financial statement and tax bases of assets and liabilities, using
         enacted tax rates in effect for the year in which the differences are
         expected to reverse. Current income taxes are based on the respective
         periods' taxable income for federal, state and city income tax
         reporting purposes.

     e)  Loss per Common Share
         ---------------------

         Loss per common share is computed pursuant to Financial Accounting
         Standards Board, Statement of Financial Accounting Standards ("SFAS")
         No. 128, "Earnings Per Share" ("EPS"). Basic income (loss) per share is
         computed as net income (loss) available to common shareholders divided
         by the weighted average number of common shares outstanding for the
         period. Diluted EPS reflects the potential dilution that could occur
         from common stock issuable through stock based compensation including
         stock options, restrictive stock awards, warrants and other convertible
         securities. Diluted EPS is not presented since the effect would be
         anti-dilutive.

     f)  Comprehensive Loss
         ------------------

         Comprehensive loss includes net losses and foreign currency translation
         adjustments. Accumulated other comprehensive loss consists of foreign
         currency translation adjustments.

     g)  Use of estimates
         ----------------

         In preparing the consolidated financial statements in conformity with
         accounting principles generally accepted in the United States of
         America, management is required to make estimates and assumptions which
         affect the reported amounts of assets and liabilities and the
         disclosure of contingent assets and liabilities at the date of the
         financial statements and revenues and expenses during the reporting
         period. Actual results could differ from those estimates. F-7


                                       9
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

     h)  Fair value disclosure at March 31, 2001
         ---------------------------------------

         The carrying value of cash, accounts payable and accrued expenses are a
         reasonable estimate of their fair value because of the short-term
         maturity of these instruments. The carrying value of short-term debt
         closely approximates its fair value based on the instruments' interest
         rate terms, maturity date, and collateral, if any in comparison to the
         Company's incremental borrowing rates of similar financial instruments.

NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at cost consists of the following at March 31,
         2001:

               Computer software and equipment                  $      217,870


               Less: accumulated depreciation and amortization              --
                                                                --------------
                                                                $      217,870
                                                                ==============

         At March 31, 2001 the computer software and equipment has not yet been
         put into operation. Therefore, the Company has not started depreciating
         such equipment. The Company is also responsible for the preparation and
         installation of the equipment related to the capital lease obligation
         described below. The Company has taken title to the equipment as of
         March 31, 2001, however, it has not been installed or placed into
         operation.



                                       10
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 5 - CAPITAL LEASE OBLIGATION

         On March 23, 2001 the Company entered into an agreement to acquire
         $215,022 of computer equipment and software. The terms of the agreement
         call for the following payment terms and conditions: an initial down
         payment of $61,500 and twelve monthly payments of $13,336 commencing
         April 2001. The Company has imputed interest related to this agreement
         at 8% per annum since no interest is stated in the agreement. The lease
         is secured by the related computer equipment and software.

         At March 31, 2001 the aggregate future value of the payments due
         pursuant to the above terms and conditions are as follows: Year ended
         September 30:

                  2001                                            $   0,016
                  2002                                                0,016
                                                                  ---------
                  Total minimal lease payments                        0,032
                                                                  ---------

                  Less: Amount representing interest                  6,510
                                                                  ---------

                  Present value of net
                    minimum lease payments                        $   3,522
                                                                  =========

         At March 31, 2001 the computer equipment and software is carried at a
         book value of $215,022.

NOTE 6 - PROVISION FOR INCOME TAX

         Income taxes are provided for the tax effects of transactions reported
         in the financial statements and consist of taxes currently due plus
         deferred taxes related to differences between the financial statement
         and tax bases of assets and liabilities for financial statement and
         income tax reporting purposes. Deferred tax assets and liabilities
         represent the future tax return consequences of these temporary
         differences, which will either be taxable or deductible in the year
         when the assets or liabilities are recovered or settled. Accordingly,
         measurement of the deferred tax assets and liabilities attributable to
         the book-tax basis differentials are computed at a rate of 34% federal,
         9% state, and 9% city. Cirus and its subsidiaries file consolidated tax
         returns for federal, state and city tax purposes.




                                       11
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 6 - PROVISION FOR INCOME TAX (cont'd)

         The only material tax effect of significant items comprising the
         Company's current deferred tax assets as of March 31, 2001, is the
         Company's net operating losses "NOL"s" which amounted to approximately
         $110,000 as of March 31, 2001. The deferred tax asset associated with
         the Company's NOL's amounted to approximately $50,000 as of March 31,
         2001.

         In accordance with SFAS 109, the Company has recorded a 100% valuation
         allowance for such deferred tax asset since management could not
         determine that it was "more likely than not" that the deferred tax
         asset would be realized in the future. The Company's NOL's will expire
         in 2016 if not utilized prior.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

         Lease Commitments
         -----------------

         The Company leases its administrative offices on a month to month basis
         with annual payments approximating $14,500. The Company leases space to
         store equipment on a month to month basis with annual payments
         approximating $14,300. Rent expense for the three months ended March
         31, 2001 amounted to approximately $2,484.

         Consulting Contract
         -------------------

         On March 29, 2001, the Company entered into a consulting agreement for
         a financial research report on the Company. In exchange for services
         rendered the consultant is to receive 40,000 restricted shares of the
         Company's common stock which has not been issued. The Company has
         agreed to allow the consultant "Piggy-back Registration Rights" for the
         shares issued to the consultant. This allows the consultant the right
         to "Piggy-back" on any registration offering by the Company without
         cost to the consultant. In addition, the Company has agreed to pay
         $6,500 of which none has been paid.




                                       12
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 8 - STOCKHOLDERS' EQUITY

         Acquisition of Subsidiary
         -------------------------

         Pursuant to the agreement and plan of merger, dated February 8, 2001,
         Cirus issued 40,000,000 shares of its common stock to enable its
         subsidiary, Capital One, to acquire and merge with DMS.

         In addition, to the merger agreement, Cirus and the four stockholders
         of DMS signed a lock-up agreement in which the stockholders agreed not
         to sell, assign, transfer, pledge hypothecate or otherwise dispose of
         the Cirus shares they received in the merger until one year after the
         date of merger.

         Preferred Stock
         ---------------

         On February 6, 2001 the Board of Directors of the Company adopted and
         created a series of preferred stock consisting of 1,000 shares
         designated as the Series A Convertible Preferred Stock ("Preferred
         Stock"). Each share of Preferred Stock has a liquidation preference of
         $1,000. The Preferred Stock is convertible into common stock at any
         time after the 30th calendar day the Company receives payment in full.
         The conversion rate is equal to $1,000 per share of preferred stock
         divided by 75% of the average market price of the common stock for ten
         days prior to the date of conversion.

         The conversion rate is subject to adjustment under certain
         circumstances. Outstanding Preferred Stock may be repurchased by the
         Company from holders of shares of Preferred Stock by: (i) delivering
         notice in writing thereof to such holders prior to the date which is
         one year following the date on which the Company received payment in
         full for the Preferred Stock from and issued the Preferred Stock to a
         particular holder of Preferred Stock (the Issuance Date"); and (ii) by
         the payment to such holders of the sum of $1,250 per share of Preferred
         Stock so repurchased within three (3) business days of such notice by
         way of wire transfer, certified check or bank draft. The Company may
         not repurchase any shares of Preferred Stock for which it has received
         a Conversion Notice. As a condition to the closing of the above
         agreement and plan of merger with DMS, Cirus sold 850 shares of the
         Preferred Stock for total proceeds of $850,000 to four entities. Each
         entity holding such shares shall only be allowed to convert preferred
         shares into common stock up to a maximum of 9.9% of the outstanding
         shares of common stock following the conversion. The calculation
         includes common stock beneficially owned by the entity and its
         affiliates.




                                       13
<PAGE>

                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)



NOTE 8 - STOCKHOLDERS' EQUITY (cont'd)

         Preferred Stock (cont'd)
         ------------------------

         The holders of such shares are not entitled to receive any dividends.
         In accordance with, Financial Accounting Standards Board Emerging
         Issues Task Force ("EITF") Issue No. 98-5, "Accounting for Convertible
         Securities with Beneficial Conversion Features or Contingently
         Adjustable Conversion Ratios" and Issue No. 00-27 "Application of Issue
         No. 98-5 to Certain Convertible Investments", the Company has
         calculated the discount resulting from the beneficial conversion option
         available to the preferred holders (75% of market value) to be
         $283,334, based on the market value of common stock at the date of
         preferred stock issuance. The discount is being amortized from the date
         of issuance to the earliest conversion date (30 days from receipt of
         payment) and has been treated as a preferred dividend over the
         amortization period. For the three months ended March 31, 2001 and for
         the period December 11, 2000 to March 31, 2001 the Company has recorded
         a preferred dividend of $283,334, respectively.

         Issuance of Common Stock for Consulting Services
         ------------------------------------------------

         In February 2001, the Company entered into a consulting agreement for
         investor relations services for a six month period. In exchange for
         services rendered, the consultant is to receive 4.9% of the total
         issued and outstanding common stock of the Company. As a result of this
         agreement, the Company issued 2,974,388 shares of common stock in March
         2001, which has been valued at $1,487,194. For the cumulative period
         from inception to March 31, 2001 the Company has expensed $371,799 of
         consulting services related to this agreement and at March 31, 2001
         recorded $1,115,395 of prepaid expenses. The Company has agreed to
         allow the consultant "Piggy-back Registration Rights" for the shares
         issued to the consultant. This allows the consultant the right to
         "Piggy-back" on any registration offering by the Company without cost
         to the consultant. The consulting agreement shall be in effect until
         August 2001.




                                       14
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 8 - STOCKHOLDERS' EQUITY (cont'd)

         Issuance of Common Stock for Consulting Services (cont'd)
         ---------------------------------------------------------

         On March 30, 2001, the Company entered into a consulting agreement for
         promotion and investor relations. In exchange for services rendered the
         consultant received a non-refundable commitment fee equal to 400,000
         shares of the Company's common stock which has been valued at $125,000
         of which $-0- has been expensed and the full amount is included in
         prepaid expense at March 31, 2001. The Company has agreed to allow the
         consultant "Piggy-back Registration Rights" for the shares issued to
         the consultant. This allows the consultant the right to "Piggy-back" on
         any registration offering by the Company without cost to the
         consultant. The commitment fee will be expensed over the term of the
         contract which is one year. In addition to the commitment fee, the
         Company has agreed to pay $5,000 per month under this agreement which
         $-0- has been expensed and the full commitment fee of $125,000 is
         included in prepaid expense at March 31, 2001. The Company has agreed
         to allow the consultant "Piggy-back Registration Rights" for the shares
         issued to the consultant. This allows the consultant the right to
         "Piggy-back" on any registration offering by the Company without cost
         to the consultant.

         Common Stock Split
         ------------------

         On March 30, 2001, the stockholders voted to increase the authorized
         number of shares of common stock from 30,000,000 to 100,000,000 and to
         effect a four for one forward split of the outstanding common stock to
         all shareholders of record as of April 6, 2001. As a result of this,
         total outstanding shares increased from 16,019,053 to 64,076,212 as of
         March 31, 2001. A total of $4,805 was reclassified from the Company's
         additional paid in capital account to the Company's common stock
         account. All share and per share amounts have been restated to
         retroactively reflect the stock split.

NOTE 9 - RELATED PARTY TRANSACTIONS

         Employment Agreements
         ---------------------

         On February 8, 2001, DMS entered into employment agreements with two
         key officers/shareholders, the chief executive officer and president
         and the chief technology officer. The employment agreements are for a
         term of two years with annual salaries of $90,000 and $108,000,
         respectively, for the first year and $120,000 each for the second year.
         The chief executive officer owned 25% of DMS prior to its merger with
         Capital One. In addition, the chief technology officer owned 100% of a
         company that was a 23% shareholder of DMS. As a result of the agreement
         and plan of merger, the chief executive officer now owns 16.5% of Cirus
         and the Company owned by the chief technology officer now owns 15.2% of
         Cirus.


                                       15
<PAGE>

                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)


NOTE 9 - RELATED PARTY TRANSACTIONS

         Employment Agreements (cont'd)
         ------------------------------

         For the cumulative period from December 11, 2000 (date of inception) to
         March 31, 2001 the Company has expensed $24,750 of officers salaries of
         which $4,334 is owed to the officers/shareholders and is included in
         accrued expenses at March 31, 2001.

         Distribution Agreement
         ----------------------

         On February 6, 2001, DMS entered onto a distribution agreement with a
         company (the "distributor") that owned 27% of DMS prior to the merger.
         The agreement is for two years with an option to renew for an
         additional year at the end of the initial term. As a result of the
         merger, the distributor now owns 17.8% of the Company. The distribution
         agreement provides the distributor the right to purchase long distance
         and telecommunications services from DMS for the purpose of
         distributing prepaid calling cards and is subject to the following
         conditions:

                      1)     If DMS, after three months from the date of the
                             agreement, averages $2,000,000 per month in
                             revenues, for the following nine month period, the
                             distributor shall be entitled to dispose of 100% of
                             its common stock.

                      2)     If DMS, after three months from the date of the
                             agreement, fails to maintain an average of
                             $2,000,000 in revenue for said nine month period,
                             the distributor shall be entitled to dispose of up
                             to 75% of its common stock after the first year of
                             the Agreement and 100% after the second year of the
                             agreement.

                      3)     DMS warrants that if they are unable to maintain
                             sufficient network capacity, or if they do not have
                             their network operating within the specified
                             timeframe, that will not enable the distributor to
                             reach the target set in (1), the distributor will
                             be subject to the following rule. As long as the
                             distributor averages $2,000,000 per month in
                             revenues for the remainder of the first year
                             anniversary date of signing of the contract, after
                             a 90-day ramp-up period, the distributor shall be
                             entitled to dispose of 100% of its common stock.



                                       16
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)



NOTE 10 -SUBSEQUENT EVENTS

         Consulting Contract
         -------------------

         On May 4, 2001, the Company entered into a consulting agreement for
         marketing to new investors. In exchange for services rendered the
         consultant is to receive 50,000 shares of restricted common stock. The
         term of the agreement is for one month.

NOTE 11 -RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

         The consolidated financial statements for the three-month period ended
         March 31, 2001 and for the period December 11, 2000 (date of inception)
         to March 31, 2001 have been restated to reflect a change to Form 10-QSB
         filed on May 21, 2001. The restatement is a change in the amortization
         period of dividends accreted on convertible preferred stock to be in
         accordance with EITF issue No. 98-5 and No. 00-27 which requires such
         amortization through the date of earliest conversion. The preferred
         stock permits conversion any time after the 30th calendar day the
         Company receives payment in full. The amortization period was changed
         from one year to thirty calendar days from the date the Company
         received payment in full. The effect of this change is an increase in
         dividends accreted on redeemable convertible preferred stock to
         $283,334 from the previously stated amount of $43,150 for the quarter
         ended March 31, 2001 and for the period December 11, 2000 to March 31,
         2001. The effect of this change upon net loss attributable to common
         stockholders is an increase of $240,184 for the quarter ended March 31,
         2001 and for the period December 11, 2000 to March 31, 2001.




                                       17
<PAGE>


                       CIRUS TELECOM, INC. AND SUBSIDIARY
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
            FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND CUMULATIVE
     FOR THE PERIOD DECEMBER 11, 2000 (DATE OF INCEPTION) TO MARCH 31, 2001
                                   (UNAUDITED)



NOTE 11 -RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (cont'd)

         The effect of the corrections were as follows:

<TABLE>
<CAPTION>
         For the period December 11, 2000 (date of inception) to March 31, 2001:

                                                             Net Loss
                                                            Attributable
                                                              to Common           Net Loss
                                                            Stockholders          Per Share
                                                           ---------------      -------------
<S>                                                     <C>                     <C>
                    As previously stated on
                    Form 10-QSB                         $     (543,605)         $        (.01)

                    Change in amortization
                    period of dividends accreted
                    to common stockholders                    (240,184)
                                                        ---------------         -------------
                  (.01)

                    As reflected on the
                    restated consolidated
                    statement of operations             $     (783,789)         $        (.02)
                                                        ===============         =============

                    For the three month period ended March 31, 2001
</TABLE>
<TABLE>
<CAPTION>

                                                             Net Loss
                                                            Attributable
                                                              to Common           Net Loss
                                                            Stockholders          Per Share
                                                           ---------------      -------------
<S>                                                     <C>                     <C>
                    As previously stated on
                    Form 10-QSB                         $     (527,893)         $        (.01)

                    Change in amortization
                    period of dividends accreted
                    to common stockholders                    (240,184)                    --
                                                        ---------------         -------------

                    As reflected on the
                    restated consolidated
                    statement of operations             $     (768,077)         $        (.01)
                                                        ==============          =============
</TABLE>

                                       18
<PAGE>

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


         The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the financial
statements, related notes, and other detailed information included elsewhere in
this Quarterly Report on Form 10-QSB. This report contains certain
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. Forward-looking statements are statements other than historical
information or statements of current condition. Some forward-looking statements
may be identified by the use of such terms as "believes," "anticipates,"
"intends," or "expects." These forward-looking statements relate to our plans,
objectives and expectations for future operations and growth. Other
forward-looking statements in this Quarterly Report on Form 10-QSB include
statements regarding synergies and growth expected as a result of our
in-progress and future acquisitions, expected growth in earnings, revenue and
gross margin, our expectation regarding our ability to consummate future
acquisitions and the necessity for and expected availability of additional
financing. In light of the risks and uncertainties inherent in all such
projected operational matters, the inclusion of forward-looking statements in
this report should not be regarded as a representation by us or any other person
that our objectives or plans will be achieved or that any of our operating
expectations will be realized. Our revenues and results of operations are
difficult to forecast and could differ materially from those projected in the
forward-looking statements contained in this report as a result of certain risks
and uncertainties including, but not limited to, our ability to integrate and
manage acquired companies, assets and personnel, changes in market conditions,
the volatile and competitive environment for Internet telephony, the
availability of transmission facilities, management of our rapid growth, entry
into new and developing markets, competition, the international
telecommunications industry, dependence on operating agreements with foreign
partners, reliance on third parties to provide us with technology,
infrastructure and content, significant foreign and U.S.-based customers and
suppliers, availability of transmission facilities, U.S. and foreign
regulations, international economic and political instability, dependence on
effective billing and information systems, customer concentration and attrition,
rapid technological change, and the expansion of the global network. These
factors should not be considered exhaustive; we undertake no obligation to
release publicly the results of any future revisions we may make to
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

OVERVIEW

         Cirus Telecom, Inc. ("Cirus") is a full-service telecommunications
company that focuses on developing integrated telephone service in the emerging
competitive carrier industry. We offer an integrated set of telecommunications
products and services, including local exchange, local access, domestic and
international long distance telephone, calling cards, dedicated access, and
other enhanced and value-added telecommunications services tailored to meet the
needs of our customers and the growing marketplace demand from small and
medium-sized businesses for reliability and speed.



                                       19
<PAGE>


History
-------

         Cirus Telecom, Inc. was incorporated in the state of Delaware on August
25, 1997 under the name Sierra Madre Gold Corporation. On October 4, 1999, the
name was changed to Capital One Ventures Corp. On February 9, 2001, the name was
changed to Cirus Telecom, Inc. in connection with the merger discussed below.
Since March 31, 1998, Cirus had been a development stage company seeking a
merger or acquisition of a private entity. DMS Acquisitions Corp. ("DMS") was
incorporated in the state of Delaware on December 11, 2000 to operate as a
wholesale provider of long distance and telecommunication services.

Merger
------

         Pursuant to an agreement and plan of merger dated February 8, 2001,
Cirus, through a wholly-owned subsidiary, acquired all of the issued and
outstanding common stock of DMS in exchange for 10,000,000 shares of Cirus
common stock which represented 65.9% of the outstanding shares of Cirus's common
stock after the issuance. Concurrent with the above acquisition, DMS merged with
and into the wholly-owned subsidiary, which then changed its name to DMS and
continues to be wholly owned by Cirus. Cirus and DMS are collectively referred
to as the "Company".

         We offer long distance services to customers through agreements we have
with several international long distance carriers. The long distance services
include domestic service, such as interLATA, which are calls that pass from one
"Local Access and Transport Area" or "LATA" to another LATA, and intraLATA,
which are calls that stay within the LATA in which they originated, but are
beyond the distance limits of the local calling plan. Our services also include
international calling, toll-free services (800, 888, 877, 866), calling card,
and other enhanced services. We offer individual customers consultation services
with regard to the design and implementation of complete telecommunications
systems to meet their specific needs, including the selection of equipment,
interconnection of local area networks and wide area networks, and
implementation of virtual private networks.

         The nature of our telecommunications business is rapidly evolving but
has a limited operating history. We believe period-to-period comparisons of our
revenues and operating results, including our network operations and other
operating expenses as a percentage of total revenue, are not meaningful and
should not be relied upon as indicators of future performance. We also believe
our historical growth rates are not indicative of future growth rates.

         We continue to deploy our telecom switching network, expand our
customer base and we are beginning to penetrate the business segment. We
anticipate future growth from providing a comprehensive product suite of
communications services. These services are expected to include wholesale
telecom sales, international long-distance services, domestic call termination,
phone-card PIN activation and debit-card billing software deployment.




                                       20
<PAGE>

         There is a great demand in the United States for telecom carriers to
provide a host of services at competitive prices. Due to the deregulation of the
telecom industry, any corporation with the appropriate state and federal
licenses may provide any number of those services. As the incumbent Baby Bell's
navigate the telecom waters, we believe they may be hampered by their size and
legislative limitations as to what they can and are able to do. This creates
opportunities for smaller and more nimble organizations to react to changing
technologies and market demands.

         Cirus' service offering allows us to lease from the incumbent local
exchange carriers ("ILECs"), on an as-needed basis, multiple unbundled network
elements and combine them into our own full service platform. We lease a
combination of network elements, including the local loop, a network interface
device, where the local loop terminates at the customer's premises, a switch
port that connects the local loop to the ILEC's switch, the switching
functionality of the ILEC's switch, and the transport of telephone calls between
ILEC switches for local calls, or to a long distance telephone company's
point-of-presence for a long distance call. We have chosen this platform to grow
our customer base because it allows us to rapidly enter new markets with minimal
capital expenditures. For example, we can build a customer base without
deploying either a local switch or last-mile infrastructure. Instead of buying
and maintaining our own equipment in the field, we utilize the reliable
equipment owned by the ILECs and focus our resources on building a customer
base.

         In March of 2001 Cirus leased a switch from NACT, a leading telecom
hardware producer. This switch is expected to be operational by mid June 2001.
This will increase the telecom capacity of Cirus by 20,000,000 minutes per
month. Cirus will utilize this switch to run prepaid card programs for companies
such as 9278 Communications, Inc., the wholesaling of long-distance minutes and
providing call-termination into the United States. With the implementation of
this switch, Cirus will be able to fulfill the terms of its carrier services
contract with 9278 Communications, Inc.

         The margins on switched telecom products vary on several factors, but
most importantly the relationships with direct providers both domestically and
internationally. Cirus deals with both the incumbent PTTs and Secondary Network
Operators (SNOs) in international locations. The logic behind choosing a
provider is based upon costs and service reliability. Once the NACT switch is
operational, Cirus will endeavor to place direct lines into as many
international locations as possible, thereby creating the most direct route to
the country in question.

         Building and expanding our business has required and will continue to
require us to make significant expenditures in excess of the amounts of cash
that our business is generating. We believe our strategy of leasing the
circuit-switched networks and building our own packet-switched network will help
our operations to generate positive cash flow much sooner than the strategy used
by CLECs of building a circuit-switched network before a customer base has been
established. We have experienced operating losses and generated negative cash
flow since we began operating and we expect to continue to generate negative
cash flow for a period of time while we continue to expand our network and
develop product offerings and our customer base. We cannot assure you that our
revenue or customer base will increase or that we will be able to achieve or
sustain positive cash flow.


                                       21
<PAGE>

           Management believes that the working capital and cash flow from
  operations will be sufficient to meet the cash and capital requirements of our
  retail division for the next 12 months. Our plan for the growth of our
  telecommunications division includes an aggressive strategy to obtain as many
  new local and international access lines as our cash resources allow. We will
  need to expend cash and incur additional losses before we are able to grow our
  telecommunications business to a profitable level. We believe our cash will
  provide us with sufficient liquidity to grow our business and carry out many
  of our expansion plans. We may seek additional financing, however, there can
  be no assurance that we will be able to obtain such funding when needed, or
  that such funding, if available, will be obtainable on terms acceptable to us.

Competition in the Telecommunications Industry

         Local Telecommunications Market

         The local telecommunications market is a highly competitive environment
and is dominated by ILECs. Based upon the geographical locations in which we
currently sell services, Verizon and BellSouth are our largest competitors. Most
of our actual and potential competitors, including most of the facilities-first
CLECs, have substantially greater financial, technical, marketing and other
resources (including brand name recognition) than we do. Furthermore, the
continuing trend toward business alliances in the telecommunications industry
and the lack of substantial barriers to entry in the data and Internet services
markets could help to generate substantial new competition. We anticipate that
we will be able to compete based upon our pricing, reliability, customer service
and rapid ability to provision accounts and respond to customer requests. Our
established competitors, such as the ILECs, are able to compete effectively
because they have long-term existing relationships with their customers, strong
name recognition, abundant financial resources, and the ability to cut prices of
certain services by subsidizing such services with revenues generated from other
products. Although the Telecommunications Act reduced barriers to entry into the
local market, future regulatory decisions could provide Lies with more pricing
flexibility, which would result in increased price competition.

         In addition to competition from ILECs, other CLECs and wireless
entities, several other entities currently offer or are capable of offering
local service, such as long distance carriers, cable television companies,
electric utilities and microwave carriers. These entities, upon entering into
appropriate interconnection agreements or resale agreements with ILECs, can
offer single source local and long distance services like those we offer. For
example, long distance carriers, such as AT&T Corp., MCI WorldCom and Sprint
Corporation, among other carriers, have each begun to offer local
telecommunications services in major U.S. markets using the unbundled network
elements platform or by reselling the ILECs' services.



                                       22
<PAGE>


         Long Distance Telecommunications Market

         The long distance market, in comparison to the local market, has
relatively insignificant barriers to entry and has been populated by numerous
entities that compete for the same customers by frequently offering promotional
incentives and lower rates. We compete with many such companies that do not
offer any service other than long distance, and we compete with established
major carriers such as AT&T and MCI WorldCom. We will also have to maintain high
quality and low cost services to compete effectively. In many instances, we must
be in a position to reduce our rates to remain competitive.

         Government Regulation

         Local and long distance telecommunications services are subject to
regulation by the Federal Communications Commission ("FCC") and by state
regulatory authorities. Among other things, these regulatory authorities impose
regulations governing the rates, terms and conditions for interstate and
intrastate telecommunications services and require us to file tariffs for
interstate and international service with the FCC and obtain approval for
intrastate service provided in the states in which we currently market our
services. We must obtain and maintain certificates of public convenience and
necessity from regulatory authorities in the states in which we operate. We are
also required to file and obtain prior regulatory approval for tariffs and
intrastate services. In addition, we must update or amend the tariffs and, in
some cases, the certificates of public convenience and necessity, when rates are
adjusted or new products are added to the local and long distance services we
offer. Changes in existing laws and regulations, particularly regulations
resulting in increased price competition, may have a significant impact on our
business activities and on our future operating results. We are also subject to
Federal Trade Commission regulation and other federal and state laws relating to
the promotion, advertising and direct marketing of our products and services.
Certain marketing practices, including the means to convert a customer's local
or long distance telephone service from one carrier to another, have recently
been subject to increased regulatory review of both federal and state
authorities. Even though we have implemented procedures to comply with
applicable regulations, increased regulatory scrutiny could adversely affect the
transitioning of customers and the acquisition of new customer bases. Amendments
to existing statutes and regulations, adoption of new statutes and regulations
and expansion of our operations into new geographic areas and new services could
require us to alter our methods of operation or obtain additional approvals, at
costs which could be substantial. There can be no assurance that we will be able
to comply with applicable laws, regulations and licensing requirements. Failure
to comply with applicable laws, regulations and licensing requirements could
result in civil penalties, including substantial fines, as well as possible
criminal sanctions.




                                       23
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Gross Margin

         We have yet to generate revenues pursuant to our business activities
and as laid out in our plan of business. Management estimates that in Q2 of 2001
Cirus will generate revenues from its business activities. These business
activities include the selling of long-distance and other telecom services, as
well as the fulfillment of a $24 million contract for telecom services with 9278
Communications, Inc. 9278 is the largest single customer of Cirus, and any
material change or loss to this customer would result in substantial changes to
Cirus' plan of business and financial projections.

General and Administrative

         General and administrative expenses for the three months ended March
31, 2001 were $488,516. This sum was primarily due to business integration costs
generated by our acquisition in the first quarter of 2001.

         We anticipate the amount of general and administrative expenses to rise
over the next two quarters as Cirus anticipates the addition of further
technical, support and managerial staff. Cirus estimates that it will have to
double its staffing requirements to meet the upcoming demands. As the number of
staff increases, Cirus will have to relocate to larger office premises. Causing
the monthly rental expense to increase by an estimated 100%.

Depreciation and Amortization

         At March 31, 2001 the computer software and equipment had not yet been
put into operation, therefore, the Company has not started depreciation on such
equipment.

Interest Income

         Interest income of $3,773 was derived from cash deposits at Cirus'
banking institutions.

Net Loss

         We reported a net loss attributable to common shareholders of $768,077,
or $0.01 per common share attributable to common shareholders, for the three
months ended March 31, 2001. Within this net loss figure, there is a non-cash
dividend attributed to the convertible preferred stock issued of $283,334.



                                       24
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2001, we had cash and cash equivalents of $539,542. The
Company has total prepaid expenses of $1,260,395, which were paid through the
issuance of common stock. The Company has current liabilities comprised of
$27,724 of accounts payable and accrued expenses and $153,522 in a capital lease
payable. The working capital was generated as a direct result of the sale of 850
shares of Series A convertible preferred stock, completed on the closing of the
merger with DMS Acquisitions Corp.

         The Company increased cash by $539,109 for the three months ended March
31, 2001. The activity for the period was broken down as follows. The Company
consumed $105,220 for operating activities and $56,412 for investing activities,
which includes $2,848 for equipment and software and $53,564 in connection with
the merger. For the same period the company received cash from financing
activities of $700,931 which was comprised of $850,000 from the sale for
preferred stock, net of $71,857 of costs related to the recapitalization and
$15,712 repaid to a shareholder and $61,500 paid attributable to capital lease
obligations.

         The existing capital resources are adequate to maintain the current
level of spending without having to account for any extraordinary expenditures,
such as the addition of staff or purchase of equipment. The Company will be
seeking additional capital investment through either the sale of equity or the
structuring of debt instruments to assist the growth that Cirus is undertaking.

         It is estimated that until the fourth quarter, the Company will not be
able to substantially expand its switching facility to increase the capacity
without additional capital being raised for the company, or preferential leasing
terms are negotiated with hardware and software suppliers. At that point, it is
projected that the Company be able to grow its network through its internal cash
flow. Cirus estimates that it will have to triple the size of its switching
facilities to meet the customer demand for its telecom services. These new
switches will be designed to work in tandem with Cirus' existing NACT platform.

         The Company did not generate any revenues in the quarter ending March
31, 2001. Cirus will generate revenues derived from phone-card sales from April
2001 and it anticipates that its switch will be fully functional in June 2001.
The principal uses of cash for operating activities in fiscal were to purchase
computer hardware, software and to lease telecom switching equipment.



                                       25
<PAGE>


EQUITY AND DEBT FINANCING

Prefered Stock

         On February 6, 2001 the Board of Directors of the Company adopted and
created a series of preferred stock consisting of 1,000 shares designed as the
Series A Convertible Preferred Stock ("Preferred Stock"). As a condition to the
closing of the above agreement and plan of merger with DMS, Cirus sold 850
shares of the Preferred Stock for total proceeds of $850,000 to four entities.
Each share of Preferred Stock has a liquidation preference of $1,000. The
Preferred Stock is convertible into common stock at any time, provided that each
entity holding such shares shall only be allowed to convert preferred shares in
to common stock up to a maximum of 9.9% of the outstanding shares of common
stock following the conversion. The conversion rate is equal to $1,000 per share
of Preferred Stock divided by 75% of the average market price of the common
stock for ten days prior to the date of conversion. The conversion rate is
subject to adjustment under certain circumstances. Outstanding Preferred Stock
may be repurchased by the Company at a price of $1,250 per share for one year.

CASH FLOWS

         The Company's cash balances vary significantly from day-to-day due to
the volume of purchases, sales and deposits required in the telecom industry.
Due to the nature of the telecom industry and the financial risk and exposure of
the Company, all customers are required to prepay for services based upon their
carrier requirements. If the Company establishes credit terms with customers, it
is done on an individual basis, based upon payment history and the duration of
the customer relationship.

         The Company experienced a net loss relating to operating activities of
$484,743 including a non-cash adjustment amount of $371,799 related to the
issuance of common stock for corporate consulting service contracts. The Company
also made a prepayment for carrier services in the amount of $20,000 to secure
access to international carrier lines.

         The Company received a total of $850,000 from the sale of preferred
stock. When one factors in a $15,712, $71,857 repayment of related party debt
and $61,500 paid in connection with a capital lease, the net cash amount into
the Company was $700,931. There was also $53,564 in costs associated with the
merger of DMS Acquisition Corp. and Capital One Ventures Corp.

         The Company spent $2,848 for computer equipment. The Company has a
monthly lease obligation of twelve monthly payments of $13,336 commencing April
2001. The lease is secured by the related computer equipment and software.


                                       26
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         Neither the Company nor any of its property is a party to any pending
or threatened legal proceedings.


Item 2.  Changes in Securities and Use of Proceeds

     None.

Item 3.  Defaults Upon Senior Securities

     None.


Item 4.  Submission of Matters to a Vote of Security Holders

     None.


Item 5.  Other Events

     None.


Item 6.  Exhibits and Reports on Form 8-K

  (a)  Exhibits

         None

  (b)  Reports on Form 8-K.

         Form 8-K filed on February 23, 2001

         Form 8-K/A filed on March 16, 2001


                                       27
<PAGE>


                                   SIGNATURES

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



                                              CIRUS TELECOM, INC.


December 27, 2001                             By:/s/AMAR BAHADOORSINGH
                                                 ---------------------
                                                     Amar Bahadoorsingh,
                                                     Chief Executive Officer