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

                                   FORM 10-QSB

(Mark One)
[x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 for the quarterly period ended 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 63,778,212 shares of Common Stock, par
value $.0001 per share, issued and outstanding.


<PAGE>

                                     PART I
                                     ------

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                    CONTENTS



Consolidated balance sheet at March 31, 2001 (unaudited)
and December 11, 2000                                                    3

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

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

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

Notes to consolidated financial statements                             7 - 14




<PAGE>

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


                                                                     March 31, 2001      December 31, 2000
                                                                     -------------       -----------------
                                                                      (unaudited)
                                     ASSETS
                                     ------
<S>                                                                   <C>                  <C>
Current assets:
    Cash                                                              $   539,542          $        --
    Prepaid expenses                                                    1,260,395                   --
                                                                      -----------          -----------
         Total current assets                                           1,799,937                   --
                                                                      -----------          -----------
Property and equipment - net                                              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 (Note 6)                                         --                   --
                                                                      -----------          -----------
Stockholders' equity:
    Common stock - $0.0001 and $ .001 par value respectively,
     30,000,000 shares authorized, 16,019,053 and 1,000
     shares issued and outstanding, respectively                            1,602                    1
Preferred stock  - $0.0001 par value 5,000,000 authorized,
         850 shares issued and outstanding                                     --                   --
    Additional paid-in capital                                          2,378,754                   99
    Stock subscription receivable                                              --                 (100)
    Accumulated other comprehensive loss                                     (190)                  --
                           -------
    Deficit accumulated during the development stage                     (543,605)             (15,712)
                                                                      -----------          -----------
         Total stockholders' equity                                     1,836,561              (15,712)
                                                                      -----------          -----------

Total liabilities and stockholders' equity                            $ 2,017,807          $         -
                                                                      ===========          ===========
</TABLE>


     See accompanying notes to consolidated financial statements (unaudited)

                                        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
                                                                                -------------      ------------------
<S>                                                                              <C>                 <C>
Income                                                                           $         -         $         -
                                                                                 -----------         -----------

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)

Dividends accreted on redeemable convertible
  preferred stock                                                                    (43,150)            (43,150)
                                                                                 ------------        -----------
Net loss attributable to common stockholders                                     $  (528,083)        $  (543,795)
                                                                                 ===========         ===========
Loss per share:
    Basic                                                                        $      (.04)        $      (.04)
                                                                                 -----------         -----------
    Diluted - preferred conversion                                               $        --         $        --
                                                                                 -----------         -----------

Weighted average number of
 common shares outstanding                                                        14,077,914          12,459,286
                                                                                 ===========         ===========
</TABLE>
     See accompanying notes to consolidated financial statements (unaudited)

                                       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>


                                                      Common Stock                Preferred Stock        Additional
                                                     --------------               ---------------          Paid-In
                                                  Shares         Amount         Shares       Amount        Capital
                                               -----------    -----------    -----------   -----------   -----------
<S>                                                <C>        <C>                  <C>   <C>             <C>
Balances at December 11, 2000                       1,000    $         1             --   $         --   $        99

Net (loss) for the period December
  11, 2000 (date of inception) to
  December 31, 2000                                    --             --             --             --            --
                                              -----------    -----------    -----------   ------------   -----------

Balances at December 31, 2000                       1,000              1             --             --            99

Issuance of common stock
  in connection with the merger
  of DMS Acquisition Corp, net
  of related costs                             10,000,000          1,000             --             --       (59,306)

Contribution of common shares by founders
  in connection with recapitalization              (1,000)            (1)            --             --           (99)

Recapitalization in connection with
  reverse acquisition - Cirus Telecom, Inc.
  equity                                        5,175,456            518             --             --       (67,200)

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

Issuance of common stock in
   connection with service contract               743,597             74             --             --     1,487,120

Issuance of common stock in
  connection with service contract                100,000             10             --             --       124,990

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

Imputed preferred stock dividend
  attributable to the beneficial
  conversion feature                                   --             --             --             --        43,150

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

Balances at March 31, 2001                     16,019,053    $     1,602            850   $         --   $ 2,378,754
                                              ===========    ===========    ===========   ============   ===========
[RESTUBBED]
<CAPTION>
                                                              Accumulated
                                                                Deficit        Accumulated      Total
                                                   Stock       During the         Other      Stockholders'
                                                Subscription   Development    Comprehensive     Equity
                                                 Receivable       Stage       Income (loss)  (Deficiency)
                                                -----------    -----------    -----------     -----------
<S>                                           <C>            <C>            <C>            <C>
Balances at December 11, 2000                 $      (100)   $        --    $        --    $        --

Net (loss) for the period December
  11, 2000 (date of inception) to
  December 31, 2000                                    --        (15,712)            --        (15,712)
                                              -----------    -----------    -----------    -----------

Balances at December 31, 2000                        (100)       (15,712)            --        (15,712)

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

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

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

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 the beneficial
  conversion feature                                   --        (43,150)            --             --

Net (loss) for the three months
  ended March 31, 2001                                 --       (484,743)            --       (484,743)
                                              -----------    -----------    -----------    -----------

Balances at March 31, 2001                    $        --    $  (543,605)   $      (190)   $ 1,836,561
                                              ===========    ===========    ===========    ===========
</TABLE>

     See accompanying notes to consolidated financial statements (unaudited)

                                       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
                                                                    --------------        -----------------
<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                                    (64,348)                (64,348)
    Costs in connection with merger                                       (53,564)                (53,564)
                                                                      -----------             -----------

Net cash used in investing activities                                    (117,912)               (117,912)
                                                                      -----------             -----------

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 related party debt
        in connection with recapitalization                               (71,857)                (71,857)
                                                                      -----------             -----------

Net cash provided by financing                                            762,431                 778,143
                                                                      -----------             -----------
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                              $   153,522             $   153,522
                                                                      ===========             ===========
    Issuance of 10,000,000 shares of common stock in
         connection with the DMS Acquisitions Corp. merger            $     1,000             $     1,000
                                                                      ===========             ===========
    Issuance of 843,597 shares of common stock in
         connection with service contracts                            $ 1,537,194             $ 1,537,194
                                                                      ===========             ===========
</TABLE>


     See accompanying notes to consolidated financial statements (unaudited)


                                       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.

              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 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 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
              principle 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 301(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 our operations and cash flows for the three month
              period ended March 31, 2001. The results for the period 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 financial statements should be read
              in conjunction with the Company's audited financial statements and
              notes thereto for the period ended December 11, 2000 (date of
              inception) to December 31, 2000 as included in Form 8-K/A filed on
              March 16, 2001 and the audited financial statements and notes of
              Cirus for the years ended September 30, 2000 and 1999 included in
              Form 10-KSB.

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.

       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.


                                       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)

       d)     Loss per Common Share
              ---------------------

              Loss per common share is computed pursuant to Financial Accounting
              Standards Board, SFAS No. 128," Earnings Per Share". Basic 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 loss per share reflects
              the potential dilution that could occur from common shares
              issuable through stock options, warrants and convertible preferred
              stock. As the Company's convertible preferred stock are
              antidilutive as of March 31, 2001 and for all periods, diluted
              loss per share is the same as basic loss per share. At March 31,
              2001, the outstanding preferred stock totaling 850 shares were not
              included in the computation of diluted loss per share as their
              effect would be antidilutive.

       e)     Comprehensive Loss
              ------------------

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

NOTE 4 -      PROPERTY AND EQUIPMENT

              Property and equipment consists of the following at:

                                                                   March 31,
                                                                      2001
                                                                  -------------
                           Computer software and equipment        $    217,870

                           Less: accumulated depreciation                   --
                                                                  ------------
                                                                  $    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.

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.


                                       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 5 -      CAPITAL LEASE OBLIGATION (cont'd)

              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                                             $   80,016
                  2002                                                 80,016
                                                                   ----------
                  Total minimal lease payments                        160,032
                                                                   ----------

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

                  Present value of net
                    minimum lease payments                         $  153,522
                                                                   ==========

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

NOTE 6 -      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 10,000 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.

NOTE 7 -      STOCKHOLDERS' EQUITY

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

              Pursuant to the agreement and plan of merger, dated February 8,
              2001, Cirus issued 10,000,000 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.


                                       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 7 -      STOCKHOLDERS' EQUITY (cont'd)

              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.

              The holders of such shares are not entitled to receive any
              dividends. In accordance with Financial Accounting Standards
              Boards, 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 $291,666, based on 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 and will be treated as a preferred
              dividend over the amortization period which is one year. For the
              three months ended March 31, 2001 the Company has recorded a
              preferred dividend of $43,150 and the unamortized discount
              remaining at March 31, 2001 is $248,516.


                                       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 7 -      STOCKHOLDERS' EQUITY (cont'd)

              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 743,597 shares
              of common stock in March 2001, which has been valued at
              $1,487,194. The Company for the cumulative period from inception
              to March 31, 2001 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.

              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 100,000 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
              to the Company has agreed to pay $5,000 per month under this
              agreement.

NOTE 8 -      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. For the cumulative period from 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.


                                       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 -      RELATED PARTY TRANSACTIONS (cont'd)

              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
              distributor is 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.


NOTE 9 -      PRO FORMA FINANCIAL STATEMENTS

              The following pro forma information in a condensed format the
              Company's statement of operations for the period December 11, 2000
              (date of inception) to March 31, 2001 as if the acquisition was
              consummated and considered in effect as of December 11, 2000:

                                                                Pro forma
                                                         Statement of operations
                                                               for the period
                                                            December 11, 2000
                                                         (date of inception) to
                                                                March 31, 2001
                                                          ----------------------

                           Total income                     $            --
                                                            ===============
                           Total expenses                   $       482,481
                                                            ===============
                           Net loss                         $      (482,481)
                                                            ================

              This pro forma information regarding the Company's statement of
              operations has been presented for disclosure purposes and does not
              purport to be indicative of the Company's financial position and
              results of operations which have actually resulted had the
              acquisition occurred as of December 11, 2000.

                                       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 10 -     SUBSEQUENT EVENTS

              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
              Company outstanding common stock to all shareholders of record as
              of April 6, 2001. As a result of this, total outstanding shares
              increased to 63,776,212 as of April 12, 2001.

              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.



                                       14
<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.

                                       15
<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 had no revenues for the period ended March
31, 2001. 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.

         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.


                                       16
<PAGE>

         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. Generally, 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.

         Management believes that the present working capital and future 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.


                                       17
<PAGE>

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 ILECs 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.

         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.


                                       18
<PAGE>

         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.

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.


                                       19
<PAGE>

         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 of $528,083, or $0.04 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 $43,150.

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 $117,912 for investing
activities, which includes $64,348 for equipment and software and $53,564 in
connection with the merger. For the same period the company received cash from
financing activities of $762,431 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.

         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 will 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.


                                       20
<PAGE>

         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 the fiscal period were to
purchase computer hardware, software and to lease telecom switching equipment.

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
into 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 and $71,857 repayment of related party
debt, the net cash amount into the company was $762,431. There was also $53,564
in costs associated with the merger of DMS Acquisition Corp. and Capital One
Ventures Corp.


                                       21
<PAGE>

         The Company spent $61,500 on the purchase of its Network Telemanagement
System in March 2001 and $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.

                           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




                                       22
<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.


May 18, 2001                                    By:/s/AMAR BAHADOORSINGH
                                                   ---------------------
                                                       Amar Bahadoorsingh,
                                                         Chief Executive Officer


                                       23