|U.S. SECURITIES AND EXCHANGE COMMISSION               
|------------------------------------------------------
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|WASHINGTON, D.C. 20549                                
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|                                                      
|FORM 10 - QSB                                         
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|QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)     
|OF THE SECURITIES EXCHANGE ACT OF 1934                
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|For the quarter ended June 30, 2003                   
|                                                      
|Capacitive Deionization Technology Systems, Inc.      
|(Formerly Far West Group, Inc.)                       
|(Exact name of registrant as specified in its charter)
|                                                      

|Nevada                  | 86-0867960         
|----------------------- | -------------------
|(State of Jurisdiction) | (I.R.S. Employer   
|                        | identification No.)
|                        |                    



|13636 Neutron Road, Dallas, Texas 75244-4410                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(Address of Principal executive offices)                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                       
|972-934-1586                                                                                                                                                                                                                                                                                                                                           
|(Registrant's telephone number)                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                       
|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
|                                                                                                                                                                                                                                                                                                                                                       
|(1)  Yes    No X                                                                                                                                                                                                                                                                                                                                       
|(2)  Yes X   No                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                       
|The number of shares outstanding of the registrant's $.0001 par value common stock as of July 31, 2003 was 14,813,402.                                                                                                                                                                                                                                 
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|Capacitive Deionization Technology Systems, Inc.
|------------------------------------------------
|                                                

|Index                            |  | Page
|-------------------------------- |  | ----
|Part I     Financial Information | 
|                                 | 

| | Item 1 | Financial Statements                           |    
| | ------ | ---------------------------------------------- | ---
| |        |                                                |    
| |        | Balance Sheets as of June 30, 2003 and         |    
| |        | December 31, 2002                              | 3  
| |        |                                                |    
| |        | Statements of Operations for the three and six |    
| |        | months ended June 30, 2003 and 2002            | 4  
| |        |                                                |    
| |        | Statements of Cash Flows for the six           |    
| |        | months ended June 30, 2003 and 2002            | 5  
| |        |                                                |    
| |        | Notes to Financial Statements                  | 6-8
| |        |                                                |    
| | Item 2 | Management's Discussion and Analysis           |    
| |        | of Financial Condition and Results             |    
| |        | of Operations                                  | 8  
| |        |                                                |    
| | Item 3 | Controls and Procedures                        | 9  
| |        |                                                |    

|Part II   Other Information | 
|--------------------------- | 
|                            | 

|               | Item 1 | Legal                                               | 9 
|-------------- | ------ | --------------------------------------------------- | --
|               |        |                                                     |   
|               | Item 2 | Changes in Securities                               | 10
|               |        |                                                     |   
|               | Item 3 | Defaults upon Senior Securities                     | 10
|               |        |                                                     |   
|               | Item 4 | Submission of Matters to a Vote of Security Holders | 10
|               |        |                                                     |   
|               | Item 5 | Other Information                                   | 10
|               |        |                                                     |   
|               | Item 6 | Exhibits and Reports on Form 8-K                    | 11
|               |        |                                                     |   
|Signature Page |        | 11                                                 
|               |        |                                                    
|               |        |                                                    



|Part I     Financial Information                
|------------------------------------------------
|Item 1     Financial Statements                 
|                                                
|CAPACITIVE DEIONIZATION TECHNOLOGY SYSTEMS, INC.
|BALANCE SHEETS                                  
|                                                
|Assets                                          
|                                                
|                                                
|                                                
|Current assets:                                 
|Cash                                            
|Note receivable                                 
|Inventory                                       
|Total current assets                            
|                                                
|Furniture and equipment                         
|Less accumulated depreciation                   
|Total furniture and equipment                   
|                                                
|                                                

|Liabilities and Stockholders' Equity (Deficit)                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                 
|Current liabilities:                                                                                                             
|Accounts payable and accrued liabilities                                                                                         
|Severance payable to shareholder                                                                                                 
|Current portion of long-term debt                                                                                                
|Notes payable to outside stockholders                                                                                            
|Payable to former subsidiary                                                                                                     
|Total current liabilities                                                                                                        
|                                                                                                                                 
|Long-term and convertible debt                                                                                                   
|                                                                                                                                 
|Commitments and contingencies                                                                                                    
|                                                                                                                                 
|Stockholders' equity (deficit):                                                                                                  
|Preferred stock, $.0001 par value, 20,000,000 shares
      authorized; none issued and outstanding                               
|Common stock, $.0001 par value, 80,000,000 shares
      authorized; 14,647,304 and 12,979,304
      shares issued and outstanding
|Additional paid-in capital                                                                                                       
|Accumulated deficit                                                                                                              
|Total stockholders' equity (deficit)                                                                                             
|                                                                                                                                 
|                                                                                                                                 
|See accompanying notes to financial statements.                                                                                  
|                                                                                                                                 
|3                                                                                                                                
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|                                                                                                                                 

|CAPACITIVE DEIONIZATION TECHNOLOGY SYSTEMS, INC.
|------------------------------------------------
|STATEMENTS OF OPERATIONS                        
|                                                

|                                                                                                                          | Three Months Ended June 30, |               | Six Months Ended June 30,
|------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------- | -------------------------
|                                                                                                                          | 2003                        | 2002          |                          
|                                                                                                                          |                             |               |                          
|Revenues                                                                                                                  | $           -               | $           - |                          
|                                                                                                                          |                             |               |                          
|Operating expenses:                                                                                                       |                             |               |                          
|Common stock and options issued for services --                                                                           |                             |               |                          
|General and administrative                                                                                                | 60,688                      | 117,500       |                          
|Common stock and options issued for services --                                                                           |                             |               |                          
|Research and development                                                                                                  | 23,547                      | 18,500        |                          
|Other research and development                                                                                            | 100,313                     | 136,180       |                          
|General and administrative (excluding
      amounts applicable to stock and options
      issued for services each period | 29,985                      | (9,500)       |                          
|                                                                                                                          | 214,533                     | 262,680       |                          
|                                                                                                                          |                             |               |                          
|Loss from operations                                                                                                      | (214,533)                   | (262,680)     |                          
|                                                                                                                          |                             |               |                          
|Other income (expense):                                                                                                   |                             |               |                          
|Interest expense                                                                                                          | (14,878)                    | (563)         |                          
|Total other expense                                                                                                       | (14,878)                    | (563)         |                          
|                                                                                                                          |                             |               |                          
|Net loss                                                                                                                  | $(229,411)                  | $(263,243)    |                          
|                                                                                                                          |                             |               |                          
|Basic net loss per common share:                                                                                          | $(0.02)                     | $(0.02)       |                          
|                                                                                                                          |                             |               |                          
|Weighted average common shares outstanding                                                                                | 14,172,037                  | 11,329,520    |                          
|                                                                                                                          |                             |               |                          



|See accompanying notes to financial statements.
|-----------------------------------------------
|                                               
|4                                              
|                                               



|CAPACITIVE DEIONIZATION TECHNOLOGY SYSTEMS, INC.
|------------------------------------------------
|STATEMENTS OF CASH FLOWS                        
|Three Months Ended June 30, 2003 and 2002       
|                                                

|                                                                                 | 2003           |  | 2002          
|-------------------------------------------------------------------------------- | -------------- |  | --------------
|                                                                                 |                |  |               
|Cash flows from operating activities:                                            |                |  |               
|Net loss                                                                         | $    (475,435) |  | $    (613,085)
|Adjustments to reconcile net loss to net cash
     used in operating activities: |                |  |               
|Depreciation                                                                     | 2,500          |  | 2,397         
|Writedown of note receivable                                                     | 15,750         |  | -             
|Shares issued for services                                                       | 123,135        |  | 234,310       
|Changes in operating assets and liabilities:                                     |                |  |               
|Accounts payable and accrued liabilities                                         | 265,033        |  | 264,709       
|Net cash used in operating activities                                            | (69,017)       |  | (111,669)     
|                                                                                 |                |  |               
|Cash flows from financing activities:                                            |                |  |               
|Sale of common shares                                                            | 56,339         |  | 111,501       
|Proceeds (payments) - notes payable to stockholders                              | 13,000         |  | (1,200)       
|Net cash provided by financing activities                                        | 69,339         |  | 110,301       
|                                                                                 |                |  |               
|Net increase (decrease) in cash and cash equivalents                             | 322            |  | (1,368)       
|                                                                                 |                |  |               
|Cash at beginning of period                                                      | 729            |  | 1,668         
|                                                                                 |                |  |               
|Cash at end of period                                                            | $1,051         |  | $300          
|                                                                                 |                |  |               
|Supplemental disclosure:                                                         |                |  |               
|Total interest paid                                                              | $-             |  | $-            
|                                                                                 |                |  |               
|Non-cash transactions:                                                           |                |  |               
|                                                                                 |                |  |               

|During 2003, the Company issued 710,000 common shares for $177,500 in accrued salaries. 
|----------------------------------------------------------------------------------------
|During 2002, the Company issued 350,000 common shares for a note receivable of $175,000.
|During 2002, the Company issued 120,000 common shares for accounts payable of $60,000.  
|                                                                                        
|See accompanying notes to financial statements.                                         
|                                                                                        
|5                                                                                       
|                                                                                        



|.CAPACITIVE DEIONIZATION TECHNOLOGY SYSTEMS, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|June 30, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 1 - Future Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company is reporting cumulative net losses from continuing operations since January 1, 1997 of approximately $9,500,000 as of June 30, 2003 and has utilized approximately $3,000,000 in cash from operations during the same period.                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The following is a summary of management's plan to raise capital and generate additional operating funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company was funded initially through investment by the principal shareholder. Since 1998 funding has been through private investments including strategic alliances.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Business opportunities for the next twelve months include establishment of an international (Joint Venture) subsidiary, international CDT systems sales to governments, major multi-national industrial corporations and U.S. pilot sales. Several opportunities are being discussed including: humanitarian trust funds, Iraq rehabilitation, industrial joint ventures and geographic distribution agreements.                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company recognizes the extent of the financial investment necessary to support current and planned business activities. There is no guarantee that the Company can complete the above-referenced financing; however, the Company is currently negotiating the following opportunities:                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|1.     A significant equity investment including establishment of a majority-owned international subsidiary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2.     A matching CDT R&D Grant from an international government                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.     Bridge financing to implement the State of Texas and Red River Agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.     Additional strategic investment alliances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5.     Expansion of current strategic and investment alliances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|6.     Incentive financing from the State of Texas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company is dependent upon the proceeds of private placements and strategic alliances of the Company's securities to implement its business plan and to finance its working capital requirements. Should the Company's plans or its assumptions change or prove to be inaccurate or offering proceeds are insufficient to fund the Company's operations, the Company would be required to seek additional financing sooner than anticipated. Management is confident it will be able to continue raising funds in the balance of 2003 through private placements, investment/distribution agreements and product sales.
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|6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|There can be no assurances given that the Company will be successful in generating sufficient revenues from its planned activities or in raising sufficient capital to allow it to continue as a going concern which contemplates increased operating expenses, acquisition of assets and the disposition of liabilities in the normal course of business. These factors can affect the ability of the Company to implement its general business plan including the completion of the required manufacturing facilities and continued proprietary CDT product improvements.                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 2 - Summary of Significant Accounting Policies and Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(a) Description of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Capacitive Deionization Technology Systems, Inc. (Formerly FarWest Group, Inc.) (the "Company" or "CDT Systems, Inc.") was organized under the laws of the state of Nevada in July 1996 to serve as a water technology company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|In January 1997, the Company entered into a manufacturing and marketing license agreement with Lawrence Livermore National Laboratories ("Lawrence Livermore") whereby the Company obtained the rights to Lawrence Livermore's patented Capacitive Deionization Technology ("CDT"). The company has the rights to develop and manufacture a carbon aerogel CDT product for commercial use in the desalination, filtration and purification of water. The manufacturing and marketing license is effective for the life of the patents (up to 17 years). To maintain the license the Company must make contracted annual royalty payments to Lawrence Livermore beginning at $25,000 per year, then becoming a percentage of revenue.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|During the first quarter of 2003 the Company completed an Incentive Agreement with the State of Texas Economic Development Commission. The Incentive Program includes approximately five million dollars of incentives based on the Company employing a specified number of employees at its North Texas manufacturing facility, and making budgeted capital equipment investments and engineering development expenditures.                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The Company received a Letter of Intent from the Red River Redevelopment Authority (Texarkana area) whereby Red River will provide approximately two million dollars in incentive financing plus assistance in financing the construction of the Company's 200,000 square foot manufacturing facility at Red River.                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(b) Net Loss per Weighted Average Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net loss per weighted average share is calculated using the weighted average number of shares of common stock outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|(c) Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB of Regulations S-B. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements for the year ended December 31, 2002 which will be included in the Company's Annual Report on Form 10-KSB to be filed with the Securities and Exchange Commission. The interim unaudited financial statements should be read in conjunction with those financial statements to be included in the Form 10-KSB. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended June 30, 2003 are not indicative of the results that may be expected for the year ending December 31, 2003.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Results of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|To date the Company did not recognize any revenue. Initial revenues from pilot systems will be recognized during the third quarter of 2003. Operating expenses for the six months ended June 30, 2003 were $448,994 compared to $591,690 for the first six months of 2002, a reduction of approximately 25%. Operating expenses for the second quarter of 2003 were reduced by 19% to $214,533 compared to $262,680 for the second quarter 2002. Research and development for the six month period was $262,181 compared to $304,461 for the same period in 2002. Second quarter research and development was reduced by $30,820 compared to the second quarter 2002. The 14% reduction for the six months was a direct result of the reduction in available cash which was also reflected in the reduced operating costs.                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|During the second quarter of 2003, a private placement of 554,100 shares was completed. This transaction provided $31,340 cash (191,000 shares) to the company. In addition, 15,000 shares were issued for accounts payable penalties, 136,000 shares were issued for engineering, research and development, 212,400 shares were issued for legal and professional services and 16,000 shares were issued for interest expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|During the first quarter 2003, a private placement of 262,600 shares of the Company's rule 144 common stock was completed. The private placement provided the Company $25,000 in cash; 20,000 shares were issued for engineering services, 120,600 shares were issued for professional services; and 15,000 shares were issued for services provided by an Advisory Board member.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Liquidity and Capital Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Management recognizes the requirement for additional investment to execute the Company's business plan and complete the necessary manufacturing and research facilities. Financing transactions are currently being negotiated. These include an equity participation manufacturing joint venture, an equity investment in conjunction with a publicly financed trust fund and a long-term debt financing. There is no certainty that these fundings will be completed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Information regarding and factors affecting forward-looking statements. Forward-looking statements include statements concerning plans, goals, strategies, future events or performances and underlying assumptions and other statements, which are other than statements of historical fact. Certain statements contained herein are forward-looking statements and, accordingly, involve risk and uncertainties, which could cause the actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management's examination of historical trends, data contained in the Company's records and other data available from third parties, but there can be no assurance that management's expectations, beliefs or projections will result, or be achieved, or accomplished.                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 3.     Controls And Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Within 90 days prior to the filing of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's Chairman and Chief Executive Officer and the Company's Chief Financial Officer. Based on that evaluation, the Company's Chairman and Chief Executive Officer, and Chief Financial Officer concluded that the Company's disclosure control and procedures are effective. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Disclosure controls and procedures are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company's reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chairman, Chief Executive Officer and President, and the Company's Chief Financial Officer as appropriate, to allow timely decision regarding required disclosure.                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Part II - Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|Item 1    Legal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|There have been no legal proceedings instituted by or against the Company since 1999. The following proceedings were instituted in the year 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|Three former employees of the Company's former subsidiary, FarWest Pump Co., filed a lawsuit in Maricopa County Superior Court alleging the Company failed to pay them certain wages and provide them with stock options. The former subsidiary of the Company, FarWest Pump, Inc., also entered the lawsuit and asserted various claims against the three former employees and their employer, Duncan Pump, Inc., including conversion, civil conspiracy, wrongful interference with contractual relationships, and violation of trade secrets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|The ex-employees attempted to recover approximately $250,000 in future wages and, in the aggregate, asked to be awarded stock options permitting the purchase of up to 630,000 shares of stock of the Company at $.25 per share. The employees also had requested that any damages awarded be trebled under Arizona law applicable to the failure of an employer to pay wages.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|In late 2000, the Superior Court of Arizona Maricopa County ruled that the Company had no monetary liability to any of the three former employees of FarWest Pump Inc. The court ruled that the stock option claims for one of the three ex-employees be dismissed; however, the claims of the other two ex-employees for 205,000 stock options at $.25 per share would require further investigation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|The three ex-employees appealed the Superior Court's decision on all counts: During 2001, the Company vigorously contested the action. In January 2002, the Superior Court of Arizona Maricopa County granted the Company's request for a Summary Judgment on all monetary claims of the three ex-employees and granted summary judgment on the stock option claims for two ex-employees with stock option claims of 550,000 shares. The Plaintiffs' filed a motion to amend the Judgment on behalf of the ex-employees. The Court on April 29, 2002 declined to set oral arguments and therefore, ruled, "it is ordered denying Plaintiffs' Motion to Amend Judgment."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|In the fourth quarter of 2002, the Plaintiffs again filed an appeal based on misinterpretation of the Arizona Statue of Limitations. A ruling is expected in the 2nd quarter of 2003 on the third appeal. The Company negotiated a settlement with the third plaintiff which was executed early in Quarter two 2003. The shares specified in the settlement (125,000) were also issued in the second quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|Item 2 - Changes in Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|During the second quarter 2003, the Company issued 710,000 shares to officers in consideration of $177,500 of accrued salaries. Also during the second quarter, as ordered by a legal settlement, the Company issued 125,000 shares of common stock. These transactions, combined with the private placement mentioned above, resulted in a total of 1,405,400 shares being issued in the second quarter of 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|During the first quarter 2003, a private placement of 262,600 shares of the Company's rule 144 common stock was completed. The private placement included issuing 107,000 shares for cash; 20,000 shares were issued for engineering services, 120,600 shares were issued for professional services; and 15,000 shares were issued for services provided by an Advisory Board member. The shares issued were in reliance upon Section 4(2) of the Securities Act of 1933.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|Item 3 - Default upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|The Registrant does not have any outstanding debt or securities of this nature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|Item 4 - Submission of Matters to a Vote of Securities Holders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|NONE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|Item 5 - Other Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|NONE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|Item 6 - Exhibits and Reports of Form 8-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|(a)  Exhibit List                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|---- | -----------------------------------------------------------------------
|     |                                                                        
|32.1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|     |                                                                        
|(b)  | Reports on Form 8-K -                                                  
|     |                                                                        
|     | None                                                                   
|     |                                                                        



|                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Signatures                                                                                                                                                                                  
|                                                                                                                                                                                            
|Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|                                                                                                                                                                                            
|Capacitive Deionization Technology Systems, Inc.                                                                                                                                            
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|                                                                                                                                                                                            
|/s/ Dallas Talley                                                                                                                                                                           
|Dallas Talley                                                                                                                                                                               
|Chairman of the Board,                                                                                                                                                                      
|Chief Executive Officer                                                                                                                                                                     
|                                                                                                                                                                                            
|                                                                                                                                                                                            
|/s/ Phil Marshall                                                                                                                                                                           
|Phil Marshall                                                                                                                                                                               
|Chief Financial Officer                                                                                                                                                                     
|                                                                                                                                                                                            
|Dated: August 14, 2003                                                                                                                                                                      
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|11                                                                                                                                                                                          
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|             
|-------------
|EXHIBIT INDEX
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|Exhibit No. | Description                                                            
|----------- | -----------------------------------------------------------------------
|31.1        | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            |                                                                        
|32.1        | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|            |                                                                        









|12
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