SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                ----------------

                                   FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO _________.

                      Commission File Number: _____________

                            TOTAL ENTERTAINMENT INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

              INDIANA                                           35-1504940
  -------------------------------                          -------------------
  (State or Other Jurisdiction of                           (I.R.S. Employer
  Incorporation or Organization                            Identification No.)

          1411 Peel Street, Suite 500, Montreal, Quebec, Canada H3A 1S5
          -------------------------------------------------------------
               (Address of Principal Executive Offices)     (Zip Code)

                                 (514) 842-6999
                           ---------------------------
                           (Issuer's telephone number)

         Check whether the issuer (1) filed all reports to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

         As of November 9, 2001, there were 58,388,443 shares of the issuer's
common stock outstanding.

         Transitional Small Business Disclosure Format (check one): Yes [ ]
No [X]
<PAGE>

                            Total Entertainment, Inc.

                                      Index

PART I.  Financial Information (Unaudited)

Condensed Consolidated Balance Sheets
  December 31, 2000 and September 30, 2001 (Unaudited) ......................  1

Condensed Consolidated Statements of Operations
  Nine Months Ended September 30, 2001 and 2000 (Unaudited) .................  2

Condensed Consolidated Statements of Operations
  Three Months Ended September 30, 2001 and 2000 (Unaudited) ................  3

Condensed Consolidated Statements of Cash Flows
  Nine Months Ended September 30, 2001 and 2000 (Unaudited) .................  4

Notes to Condensed Consolidated Financial Statements (Unaudited) ............  5

Management's Discussion and Analysis of Financial
  Condition and Results of Operations .......................................  9

PART II. Other Information .................................................. 12

Signatures

<PAGE>

                    PART I. Financial Information (Unaudited)

                   Total Entertainment, Inc. and Subsidiaries

                           Consolidated Balance Sheet

                 as at September 30, 2001 and December 31, 2000


                                                     December 31,    Sept. 30,
                                                         2000           2001
                                                                    (unaudited)
                                                     -----------    -----------
ASSETS

Current assets
   Cash                                              $       369    $     1,536
   Accounts receivable                                   317,455        211,228
   Prepaid expenses and other receivables                275,750           --
                                                     -----------    -----------
        Total current assets                             593,574        212,764

Property and equipment
   Computer equipment                                    351,048        354,893
   Other furniture and fixtures                           48,845         48,845
                                                     -----------    -----------
                                                         399,893        403,738
   Less accumulated depreciation                         176,248        272,295
                                                     -----------    -----------
                                                         223,645        131,443
Other assets
   Deferred software costs, net                          112,235         78,573
   Note receivable from NetForFun                        114,698        114,698
   Other assets                                           41,282         41,282
                                                     -----------    -----------

                                                     $ 1,085,434    $   578,760
                                                     ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
   Accounts payable and accrued liabilities          $   224,506    $   141,155
   Customer account deposits                             211,118        441,626
   Current maturities of capital lease
      obligations                                         21,560         13,252
   Deferred compensation                                 880,000        976,050
   Due to directors and stockholders                     272,197        393,669
                                                     -----------    -----------
         Total current liabilities                     1,609,381      1,965,752

Capital lease obligations, less current
   maturities                                              4,999           --

Stockholders' equity (deficiency) Common stock,
   $.001 par value; authorized,
   200,000,000 shares; issued and outstanding;
   58,388,443 shares at December 31,2000 and
   September 30,2001                                      58,388         58,388
   Additional paid-in capital                          2,684,695      2,684,695
   Accumulated deficit                                (3,272,029)    (4,130,075)
                                                     -----------    -----------
                                                        (528,946)    (1,386,992)
                                                     -----------    -----------

                                                     $ 1,085,434    $   578,760
                                                     ===========    ===========
                                       1
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Operations

                  Nine months ended September 30, 2001 and 2000
                                   (unaudited)

                                                     Sept. 30,       Sept. 30,
                                                        2000           2001
                                                    ------------   ------------
Income
   Gaming revenues, net                             $    473,505   $  2,023,678
   Hosting fees and commissions                           47,250           --
   Maintenance and support                                45,000           --
                                                    ------------   ------------
                                                         565,755      2,023,678

Costs and expenses
   Cost of operations                                    296,360      1,223,239
   Research and development                               74,026         59,993
   Selling, general and administrative                 1,093,261      1,502,445
   Depreciation and amortization                          77,327         96,047
                                                    ------------   ------------
                                                       1,540,974      2,881,724
OTHER INCOME
   Gain on sale of website                               964,682           --
                                                    ------------   ------------
NET LOSS FOR THE PERIOD                             $    (10,537)  $   (858,046)
                                                    ============   ============
Loss per common share
   Basic                                            $       (.00)  $       (.01)
   Diluted                                          $       (.00)  $       (.01)

Weighted-average shares outstanding used
   in computing loss per common share

   Basic                                              57,861,472     58,388,443
                                                    ============   ============
   Diluted                                            57,861,472     58,388,443
                                                    ============   ============

                                       2
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Operations

                 Three months ended September 30, 2001 and 2000
                                   (unaudited)

                                                      Sept. 30,       Sept. 30,
                                                        2000            2001
                                                    ------------   ------------
Income
   Gaming revenues, net                             $    200,210   $    446,369
                                                    ------------   ------------

Costs and expenses
   Cost of operations                                     84,579        416,158
   Research and development                               34,168            980
   Selling, general and administrative                   445,230        481,340
   Depreciation and amortization                          27,873         32,015
                                                    ------------   ------------
                                                         591,850        930,493
                                                    ------------   ------------
NET LOSS FOR THE PERIOD                             $   (391,640)  $   (484,124)
                                                    ============   ============
Loss per common share
   Basic                                            $       (.01)  $       (.01)
   Diluted                                          $       (.01)  $       (.01)

Weighted-average shares outstanding used
   in computing loss per common share

   Basic                                              58,551,921     58,388,443
                                                    ============   ============
   Diluted                                            58,551,921     58,388,443
                                                    ============   ============

                                       3
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Cash Flows

                  Nine months ended September 30, 2001 and 2000
                                   (unaudited)

                                                           Sept. 30,   Sept. 30,
                                                             2000        2001
                                                           --------    --------
Cash flows from operating activities
   Net loss                                                 (10,537)   (858,046)
   Adjustments to reconcile net loss to
     net cash used in operating
     activities
       Amortization of deferred licensing fees               93,301      33,662
       Depreciation and amortization                         77,327      96,047
       Expenditures paid by directors and stockholders       21,000        --
       Gain on sale of website                             (964,682)       --
           Non-cash charges for stock issued                   --       200,000
       Deferred compensation                                255,000      96,050
Increase (decrease) in cash from changes in
       operating assets and liabilities
           Accounts receivable                              (23,787)    106,227
           Prepaid expense and other                         44,081      75,750
           Accounts payable and accrued liabilities          21,072     (83,351)
           Customer account deposits                        (22,970)    230,508
                                                           --------    --------
               Net cash used in
                 operating activities                      (510,195)   (103,153)

Cash flows from investing activities
   Purchase of computers and equipment                      (41,695)     (3,845)
   Purchase of furniture and equipment                       (9,914)
   Proceeds from sale of website                            100,000        --
   Payments received on note receivable                      45,302        --
                                                           --------    --------
               Net cash provided by (used in)
                 operating activities                        93,693      (3,845)

Cash flows from financing activities
   Principal payments on capital leases                     (32,056)    (13,307)
   Advances from directors and
     stockholders, net                                      447,488     121,472
                                                           --------    --------
               Net cash provided by financing
                 activities                                 415,432     108,165
                                                           --------    --------

        NET INCREASE (DECREASE) IN CASH                      (1,070)      1,167

Cash at beginning of period                                  23,865         369
                                                           --------    --------

Cash at end of period                                        22,795       1,536
                                                           ========    ========

                                       4
<PAGE>

                            TOTAL ENTERTAINMENT, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE A - Summary of Accounting Policies

         The unaudited interim financial statements of Total Entertainment, Inc.
and Subsidiaries (the "Company") have been prepared in accordance with
accounting principles generally accepted in the United States of America and
rules and regulations of the Securities and Exchange Commission for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles of complete
financial statements.

         In the opinion of the Company's management, the accompanying unaudited
financial statements contain all adjustments (consisting of normal recurring
entries) necessary to present fairly the financial position as of September 30,
2001 and the results of operations for the three and nine month periods ended
September 30, 2001 and 2000 and cash flows for the nine months ended September
30, 2001 and 2000, respectively.

         The accounting policies followed by the Company are set forth in Note A
of the Company's financial statements as contained in the Form 10-KSB for the
year ended December 31, 2000 filed with the Securities and Exchange Commission.
The Form 10-KSB contains additional data and information with respect to
intangible assets, stock option plans, reserved shares, income taxes,
commitments, and other items and is incorporated by reference.

         The results reported for the three and nine month periods ended
September 30, 2001 are not necessarily indicative of the results of operations
which may be expected for a full year.

NOTE B - RECENT DEVELOPMENTS

Agreement with North Star Advertising, Inc.

         During 2000, the Company entered into a transaction whereby 1,000,000
common shares were issued to Northstar Advertising, Inc. ("Northstar") in
exchange for consulting services for internet-based advertising through July 31,
2001. The Company recorded the value of the advertising to be received based
upon the quoted market value of the common shares at the date of issuance, which
amounted to $225,000. Northstar fulfilled its obligations pursuant to the
agreement in the first quarter of 2001. Accordingly, the balance of prepaid
advertising of approximately $200,000 was expensed in the first quarter of 2001.

NOTE C - NET INCOME (LOSS) PER COMMON STOCK

         The Company computes earnings (loss) per share in accordance with
Statement of Financial Accounting Standards No. 128; "Earnings per Share,"
("SFAS 128"), which specifies the compilation, presentation and disclosure
requirements for earnings per share for entities with publicly held common stock
or instruments which are potentially common stock.

                                       5
<PAGE>

         Basic earnings (loss) per common share is determined by dividing the
net income (loss) by the weighted average number of shares of common stock
outstanding. Diluted earnings per common share is determined by dividing the net
income (loss) by the weighted number of shares outstanding and dilutive common
equivalent shares from stock options and warrants. For the three and nine months
ended September 30, 2001 and 2000, 69,250,000 options were not included in the
loss per share calculation because their effect was antidilutive.

NOTE D - RELATED PARTY TRANSACTIONS

1.   Deferred Compensation

         A total of $976,050 in deferred compensation was accrued for the
officers of the Company from the start of operations in 1998 to September 30,
2001. The deferred salaries will be paid to such persons in cash or stock of the
Company at such future time as each officer may elect by written notice to the
Board of Directors of the Company. For the period from January 1, 2001 through
September 30, 2001, $158,950 of officers salaries were paid in cash and $96,050
was deferred.

2.   Due to Directors and stockholders

         Intercapital Asset Management Inc., an entity which is controlled by
the Company's President and Chief Executive Officer, was owed a total of $77,089
by the Company as at September 30, 2001. This amount is included in due to
Directors and Stockholders. The amount advanced bears no interest and has no
scheduled repayment terms.

         From time to time, directors and stockholders of the Company have
directly paid certain Company expenses. Such transactions have been recorded as
due to directors and stockholders, and do not bear interest. These individuals
have also advanced funds to the Company from time to time, including $157,126 in
the nine months ended September 30, 2001. At September 30, 2001, the total owed
to such individuals was $316,580. There are no scheduled terms of repayment of
such amounts.


NOTE E - COMMITMENTS AND CONTINGENCIES

1.   Legislative Risks and Uncertainties

     The Company and its subsidiaries are subject to applicable laws in the
     jurisdictions in which they operate or offer services. While some
     jurisdictions have attempted to restrict or prohibit Internet gaming, other
     jurisdictions, such as several Caribbean countries, Australia and certain
     native Indian territories, have taken the position that Internet gaming is
     legal and/or have adopted, or are in the process of reviewing, legislation
     to regulate Internet gaming in such jurisdictions. As companies and
     consumers involved in Internet gaming are located around the globe, there
     is uncertainty regarding exactly which government has jurisdiction or
     authority to regulate or legislate with respect to various aspects of the
     industry. Furthermore, it may be difficult to identify or differentiate
     gaming-related transactions from other Internet activities and link those
     transmissions to specific users, in turn making enforcement of legislation
     aimed at restricting Internet gaming activities difficult. The uncertainty

                                       6
<PAGE>

     surrounding the regulation of Internet gaming could have a material adverse
     effect on the Company's business, revenues, operating results and financial
     condition.

     Pending United States Legislation and Other Existing Laws

     Governments in the United States or other jurisdictions may in the future
     adopt legislation that restricts or prohibits Internet gambling. After
     previous similar bills failed to pass in 1998, in November 1999, the United
     States Senate passed a bill intended to prohibit and criminalize Internet
     gambling (other than certain state regulated industries). A similar bill
     failed to pass the United States House of Representatives. There can be no
     assurance as to whether the Senate bill or any similar bill will become
     law.

     In addition, existing in U.S. Federal statutes and state laws could be
     construed to prohibit or restrict gaming through the use of the Internet,
     and there is a risk that government authorities may view the Company as
     having violated such statutes or laws, notwithstanding the Company's gaming
     licenses issued to Intercapital Global by the governments of Honduras,
     Costa Rica and the Dominican Republic. Several State Attorneys General and
     court decisions have upheld the applicability of state anti-gambling laws
     to Internet casino companies.

     Accordingly, there is a risk that criminal or civil proceedings could be
     initiated in the United States or other jurisdictions against the Company
     and/or its employees, and such proceedings could involve substantial
     litigation expense, penalties, fines, diversion of the attention of key
     executives, injunctions or other prohibitions being invoked against the
     Company and/or its employees. Such proceedings could have a material
     adverse effect on the Company's business, revenues, operating results and
     financial condition.

     In addition, as electronic commerce further develops, it may generally be
     subject to government regulation. Current laws which pre-date or are
     incompatible with Internet electronic commerce may be enforced in a manner
     that restricts the electronics commerce market. Any such developments could
     have a material adverse effect on the Company's business, revenues,
     operating results and financial condition.

     The Company intends to minimize the potential legal risks by continuing to
     conduct its Internet business from offshore locations that permit online
     gaming and by increasing its marketing efforts in Asia and other foreign
     jurisdictions. There is no assurance, however, that these efforts will be
     successful in mitigating the substantial legal risks and uncertainties
     associated with the Company's internet gaming business.


2.   Litigation

     On October 11, 1999, the Company filed a demand for arbitration (the
     "Statement of Claim") with the American Arbitration Association in Chicago,
     Illinois (the "AAA Action") against Robert W. Knoblock, Carole Knoblock and
     Jille Knoblock (collectively, the "Respondents"), the officers, directors
     and/or principal shareholders of Kit Farms, Inc. ("Kit"), predecessor to
     the Company. Specifically, the Company and another claimant (the
     "Claimants") allege that in connection with the January 1998 reverse merger

                                       7
<PAGE>

     between Kit and Mint Energy, Inc., a former subsidiary of the Company, the
     Respondents breached certain representations and warranties they made in
     connection with the outstanding number of shares and/or fraudulently
     misrepresented the outstanding number of shares of Kit. The Claimants are
     seeking damages of $2,700,000 plus interest, costs and attorney fees.

     On November 15, 1999, the Respondents filed an answer and motion to dismiss
     the Statement of Claim and have asserted various defenses in connection
     therewith. In connection with their defense of the AAA Action, on December
     8, 1999, the Respondents filed a separate action against the Claimants in
     the Porter Superior Court in Indiana (the "State Court Action"). In the
     State Court Action, the Respondents are seeking damages in excess of $5.5
     million arising from the Company's refusal to remove restrictive legends on
     certain Company common stock certificates held by the Respondents. The
     Company moved to compel arbitration of the claims brought in the State
     Court Action and such motion was denied. The Company chose not to appeal
     the decision and has asserted its claim set forth in the AAA action as
     counterclaims in the State Court Action. In the State Court Action, the
     Respondents have also brought a claim against the Company's transfer agent,
     Equity Transfer Services, Inc. ("Equity Transfer") In turn, Equity Transfer
     has cross-claimed against the Company for defense costs and
     indemnification. All parties in the State Court Action are currently
     engaged in discovery. Counsel for the Respondents have withdrawn from the
     State Court Action. As of November 9, 2001, the Respondents have not
     retained new counsel.

     The Company and its subsidiaries are a party to various claims and
     litigation arising in the normal course of conducting its business. The
     Company believes that these matters, taken individually, or in the
     aggregate, would not have a material adverse impact on the Company's
     financial position or results of operations.

3.   Liquidity

     The accompanying financial statements have been prepared in conformity with
     accounting principles generally accepted in the United States of America,
     which contemplate continuation of the Company as a going concern. We have a
     deficiency in working capital of approximately $1,753,000 as at September
     30, 2001 and approximately $1,016,000 as at December 31, 2000. We have also
     incurred a loss from operations in all periods since inception. There are
     also legislative risks and uncertainties regarding online casinos, and
     certain litigation against the Company; the cost of defending such actions
     could be significant. We have financed our operations to date primarily
     through the deferral of officers' salaries, advances made by affiliates,
     advances made by Summerhill Gaming Limited (SGL) during 1999 pursuant to a
     working capital loan agreement, and the proceeds of the sale of our
     Slotsvegas site.

     We may seek additional funding through public or private financing or other
     arrangements. Adequate funds may not be available when needed or may not be
     available on terms acceptable to us. If additional funds are raised by
     issuing equity securities, dilution to existing stockholders could result.
     If funding is insufficient at any time in the future, we may be unable to
     develop or enhance our products and services, take advantage of business
     opportunities or respond to competitive pressures, any of which could have
     a material adverse effect on our business, financial condition and results
     of operations.

                                       8
<PAGE>

NOTE F - RECENT ACCOUNTING PRONOUNCEMENTS

         On July 20, 2001, the Financial Accounting Standards Board (FASB)
issued SFAS 141, Business Combinations, and SFAS 142, Goodwill and Intangible
Assets (the "Statements"). SFAS 141 is effective for all business combinations
completed after June 30, 2001. SFAS 142 is effective for fiscal years beginning
after December 15, 2001; however, certain provisions of this Statement apply to
goodwill and other intangible assets acquired between July 1, 2001 and the
effective date of SFAS 142. Major provisions of these Statements and their
effective dates for the Company are as follows:

o        all business combinations initiated after June 30, 2001 must use the
         purchase method of accounting. The pooling of interest method of
         accounting is prohibited except for transactions initiated before July
         1, 2001.
o        intangible assets acquired in a business combination must be recorded
         separately from goodwill if they arise from contractual or other legal
         rights or are separable from the acquired entity and can be sold,
         transferred, licensed, rented or exchanged, either individually or as
         part of a related contract, asset or liability.
o        goodwill, as well as intangible assets with indefinite lives, acquired
         after June 30, 2001, will not be amortized. Effective January 1, 2002,
         all previously recognized goodwill and intangible assets with
         indefinite lives will no longer be subject to amortization.
o        effective January 1, 2002 goodwill and intangible assets with
         indefinite lives will be tested for impairment annually and whenever
         there is an impairment indicator.
o        all acquired goodwill must be assigned to reporting units for purposes
         of impairment testing and segment reporting.

         Although it is still reviewing the provisions of these Statements,
management's preliminary assessment is that these Statements will not have a
material impact on the Company's financial position or results of operations.


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

         The following discussion of the financial condition and results of our
operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this Form 10-QSB and the Company's Form
10-KSB for the year ended December 31, 2000. Except for the historical
information contained herein, the discussion in this Form 10-QSB contains
forward-looking statements that involve risks, uncertainties and assumptions
such as statements of our plans, objectives, expectations and intentions. The
cautionary statements made in this Form 10-QSB should be read as being
applicable to all related forward-looking statements wherever they appear in
this document. The actual results, levels of activity, performance, achievements
and prospects could differ materially from those discussed below. Factors that
could cause or contribute to such differences include those discussed elsewhere
in this Form 10-QSB.

Overview

         From 1996 through August 1998, we were considered a development stage

                                       9
<PAGE>

company. On September 12, 1998, we launched the www.theonlinecasino.com Web site
and began generating revenues.

         During 2000, we spent considerable effort developing a turnkey casino
management and support business. This activity has ceased currently as we focus
on our websites and technology improvements.

         We intend to continue to increase our marketing and administrative
activities, and to increase other operating expense as required to build our
business. In the second and third quarters of 2001, we focused our activities on
the following:

         o    Engaging qualified personnel to refine our web sites;

         o    Testing and refining various aspects of new software for the
              Casino and Sportsbook operations;

         o    Marketing to existing and potential customers

         o    Increasing our staff and remunerating the officers of the Company
              in cash.

         We have incurred significant losses and negative cash flows from
operations since inception due to the initial research, technology
infrastructure development and starting of our business. Our revenues have not
been sufficient to cover our expenses to date. In order to significantly
increase revenues we will be required to incur significant advertising and
promotional expenses. We anticipate additional revenues to occur in the fall and
winter months, when wagering on professional and college football and, to a
lesser extent basketball, and internet gaming activities as a whole, are
expected to be at their highest levels. In anticipation of an expansion of our
operations, we have recently employed additional management personnel. We intend
to employ additional personnel in such areas as sales, technical support and
finance. These actual and proposed increases in personnel will significantly
increase our selling, general and administrative expenses.

         Our limited operating history and the uncertain nature of the markets
we address or intend to address make prediction of our future results of
operations difficult. Our operations may never generate significant revenues,
and we may never achieve profitable operations. Our quarterly and annual
operating results are likely to fluctuate significantly in the future due to a
variety of factors, including the seasonal effects of the Sportsbook operation,
many of which are outside our control.

Results of Operations

         Revenues. Net revenues in the third quarter of 2001 were approximately
$446,000 compared to approximately $200,000 for the same 2000 period. Net
revenues for the nine months ended September 30, 2001 were approximately
$2,024,000, compared to $566,000 for the nine months ended September 30, 2000.
Our revenues are recognized upon completion of the sporting event or game of
chance. Sporting event revenues have a strong seasonality towards U.S.
professional and college football and basketball seasons in the fall and winter
months. The net revenue from the Casino for the quarter ended September 30, 2001
was approximately 169% more than the comparable 2000 quarter due to a higher
volume, winning percentage and additional games of chance being offered. The

                                       10

<PAGE>

higher volume is attributable, in part to an advertising campaign designed to
increase traffic to our website. Net revenues from the Sportsbook operations
were approximately $231,000 and $72,500 for the quarter ended September 30, 2001
and 2000 respectively, due to the higher volume. Substantially all of the
Sportsbook revenues occur, historically, in the first and fourth quarters of the
year when both gross volume and the hold (net winnings percentage by the
Company) were higher than in subsequent quarters. The hold on baseball games in
the summer months is typically less than the hold for football games. The tragic
events of September 11th had a severe impact on the volume of wagering in the
month of September, due to cancellation of sporting events and uncertainty of
future events.

         Cost of Operations. Cost of operations consists primarily of software
licensing and maintenance costs, royalty payments, credit card processing fees,
complimentary and bonus dollars and internet service provider costs. For the
three and nine months ended September 30, 2001 such cost amounted to
approximately $416,000 and $1,223,000, respectively as compared to $85,000 and
$296,000, respectively for the same periods in 2000. The increases are a result
of the increased volume of business, incentives granted to attract a higher
volume of customers, and higher software licensing costs for both our owned and
managed websites. In the aftermath of the September 11th attacks, the Company
decided to offer additional incentives to attract customers. Therefore there was
a significant increase in complimentary and bonus dollars in the month of
September.

         Research and Development Expenses. Research and development expenses
consist principally of costs associated with the development and implementation
of the Web sites, developing a methodology for online gaming and investigating
the development of certain software products. Total expenses for the three and
nine months ended September 30, 2001 were approximately $1,000 and $60,000,
respectively compared to $34,000 and $74,000, respectively for the same period
of 2000.

         General and Administrative Expenses. General and administrative
expenses consist primarily of salary costs, telecommunication, travel and other
administrative costs including professional service fees. Total general and
administrative expenses for the three months ended September 30, 2001 and 2000
were approximately $481,000 and $445,000, respectively. For the nine months
ended September 30, 2001 and 2000 general and administrative expenses were
approximately $1,502,000 and $1,093,000, respectively. The increase in costs
were due to the efforts to increase the size of the business, to administer the
expanded volume, and included higher advertising, including advertising relating
to the Northstar agreement (see Note B), and salary expenses.

         Depreciation and Amortization. Depreciation and amortization expenses
consist primarily of the depreciation of furniture and in-house computers,
servers and telecommunications equipment. Total depreciation and amortization
expense was approximately $32,000 and $96,000 for the three and nine months
ended September 30, 2001 and $28,000 and $77,000 for the same periods for 2000.
The increase reflects the purchasing of equipment primarily during 2000.

         Income Taxes. We have incurred net losses for each period from
inception through 1999 and recorded a modest profit for the year ended December
31, 2000. Since we have not yet filed our 1996 through 2000 tax returns for
certain predecessor companies and Total Entertainment, Inc., losses generated in
prior years may not be available. We are expecting to file such tax returns in
the near future, which could yield approximately $2,000,000 of net operating

                                       11
<PAGE>

loss carry forwards as of December 31, 2000 for United States federal income tax
purposes, which will expire in the year 2018. Due to the uncertainty of
obtaining such benefits and of future profitability, a valuation allowance equal
to the deferred tax assets has been recorded for such carry forwards. Changes in
ownership resulting from transactions among our stockholders and sales of common
stock by us, may limit the future annual realization of the tax net operating
loss carry forwards under Section 382 of the Internal Revenue Code of 1986.

Liquidity and Capital Resources.

         The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate continuation of the Company as a going concern. We have a
deficiency in working capital of approximately $1,753,000 as at September 30,
2001. We have also incurred a loss from operations in all periods since
inception. There are also legislative risks and uncertainties regarding online
casinos, and certain litigation against the Company; the cost of defending such
actions could be significant. We have financed our operations to date primarily
through the deferral of officers' salaries, advances made by affiliates,
advances made by SGL in 1999 pursuant to a working capital loan agreement, and
the proceeds of the sale of our Slotsvegas site.

         Net cash used in operating activities was approximately $103,000 and
$510,000 for the nine months ended September 30, 2001 and 2000, respectively.
The improvement was made possible by the collection of receivables and higher
customer deposits, offset by the fact that a portion of officers' salaries are
no longer being deferred.

         Our material capital commitments consist of obligations under
facilities and operating leases. We anticipate that we will experience an
increase in our capital expenditures and lease commitments consistent with our
anticipated growth in operations, infrastructure and personnel. We anticipate
devoting additional resources to building the strength of our brand name,
through increased marketing and sales efforts. We have used our common stock
where possible to obtain required products and services without using cash.
During the year 2001, we may use the barter method of doing business with
several companies to increase our advertising efforts without putting further
strain on our cash flows.

         We may seek additional funding through public or private financing or
other arrangements. Adequate funds may not be available when needed or may not
be available on terms acceptable to us. If additional funds are raised by
issuing equity securities, dilution to existing stockholders could result. If
funding is insufficient at any time in the future, we may be unable to develop
or enhance our products and services, take advantage of business opportunities
or respond to competitive pressures, any of which could have a material adverse
effect on our business, financial condition and results of operations.


                            PART II-OTHER INFORMATION

Item 1.  Legal Proceedings

         Please refer to Note E, item 2, of the Condensed Notes to Consolidated
Financial Statements and the Company's report on Form 10-KSB for the year ended
December 31,2000 for a description of the material legal proceedings in which
the Company is involved.

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<PAGE>

Item 2.  Changes in Securities and Use of Proceeds

         NOT APPLICABLE

Item 3.  Defaults upon Senior Securities

         NOT APPLICABLE

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

         NOT APPLICABLE

Item 5.  Other Information

         NOT APPLICABLE

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

         3.1      Certificate of Incorporation and amendments*
         3.2      Bylaws*
         10.1     Merger Agreement dated November 17, 1997 entered into between
                  Mint Energy Corporation and Kit Farms Inc., as amended by the
                  First Amendment thereto dated January 15, 1998, and Plan of
                  Merger/Exchange dated January 23, 1998*
         10.2     License Agreements dated April 9, 1999 and June 23, 1999
                  between Intercapital Global Fund, Ltd. and Online Gaming
                  Systems, Ltd (f/k/a. Atlantic International Entertainment,
                  Ltd.), and related Software Support Maintenance Agreements*
         10.3     Amended and Restated Purchase Agreement dated May 5, 1999
                  between Intercapital Global Fund, Ltd. and Summerhill Gaming
                  Limited*
         10.4     Agreement dated August 18, 1998 between Intercapital Global
                  Fund, Ltd. and MPACT Immedia Transaction Services Ltd.*
         10.5     Equipment Lease Agreement dated August 18, 1999 between Total
                  Entertainment Canada, Ltd. (formerly Intercapital Canada Ltd.)
                  and Dell Financial Services Canada Limited*
         10.6     Lease Agreement dated June 22, 1999 between Marine Properties
                  Ltd., as Landlord, and Total Entertainment Canada, Ltd.
                  (formerly Intercapital Canada Ltd.), as Tenant*
         10.7     Lease Agreement dated July 30, 1999 between Devonshire House,
                  Ltd., as Landlord, and Intercapital Global Fund, Ltd., as
                  Tenant*
         10.8     Revolving Credit Note dated May 5, 1999 payable to Summerhill
                  Gaming Limited*
         10.9     Marketing and License Agreement dated January 14, 2000 between
                  Intercapital Global and Online Gaming Systems, Ltd.**
         10.10    Information Services Provider Agreement dated February 1, 2000
                  between Intercapital Global and Caribbean Entertainment
                  International, S.A.**
         10.11    Purchase Agreement dated March 1, 2000 between Intercapital
                  Global and Netforfun.com Inc., and related Software Support
                  Maintenance Agreement**
         10.12    Agreement with Summerhill Gaming Limited dated March 24, 2000
                  regarding debt to equity conversion**

                                       13
<PAGE>

         10.13    Agreement with Discount Charge Card, Ltd. dated June 13, 2000
                  regarding provision of advertising media and related
                  cross-guaranty of parent companies***
         10.14    Agreement with Northstar Advertising, Inc. regarding provision
                  of public relations services***


* Incorporated by reference from the Company's Form 10-SB Registration Statement
dated December 14, 1999.
** Incorporated by reference from the Company's Form 10-KSB Annual Report for
the year ended December 31, 1999.
*** Incorporated by reference from the Company's Form 10-KSB Annual Report for
the year ended December 31, 2000.

         (c) No reports on Form 8-K were filed during the quarter for which this
report is filed.


                                   SIGNATURES

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

                                       TOTAL ENTERTAINMENT INC.


Date: November 14, 2001                By /s/ SANDY J. MASSELLI, JR.
                                       -----------------------------------------
                                       Sandy J. Masselli, Jr.,
                                       Chairman of the Board and Chief Executive
                                       Officer


Date: November 14, 2001                By /s/ RICHARD B. DAVIS, CPA
                                       -----------------------------------------
                                       Richard B. Davis, CPA
                                       Principal Financial and Accounting
                                       Officer


                                       14