SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
                      FOR THE QUARTER ENDED MARCH 31, 2001

                         Commission file number: 0-28465

                               CIK No. 0001098331

                          INTERSPACE ENTERPRISES, INC.
             (Exact name of registrant as specified in this charter)

                 Colorado                             84-1283938
              -------------------------------     --------------------
              (State of other jurisdiction        (I.R.S. Employer
              of incorporation or organization)    Identification No.)



               7825 Fay Avenue, #200, La Jolla, California 92037
           ----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858)456-3539

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 the  filing
requirements for at least the past 90 days.

                         YES  X          NO
                            -----         -----

As of March 31, 2001, there were 70,169,230  shares of $0.00001 par value common
stock outstanding


<PAGE>
<TABLE>
<CAPTION>
                                      PART 1. FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                                      INTERSPACE ENTERPRISES, INC.
                                      (A Development Stage Company)
                                              Balance Sheet
                                               (Unaudited)

                                                ASSETS

<S>                                                                   <C>                <C>
                                                                          MARCH 31,       DECEMBER 31,
                                                                            2001              2000
                                                                        --------------------------------
CURRENT ASSETS
     Cash                                                             $        10,740            17,343
     Prepaid Expenses                                                               -            14,750
     ---------------------------------------------------------------------------------------------------
        Total current assets                                                   10,740            32,093

FIXED ASSETS
     Computer and office equipment                                             11,281            11,281
     Accumulated depreciation                                                  (4,998)           (4,315)
     ---------------------------------------------------------------------------------------------------
       Total fixed assets                                                       6,283             6,966
     ---------------------------------------------------------------------------------------------------
          TOTAL ASSETS                                                $        17,023            39,059
     ===================================================================================================

                            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
     Accounts payable                                                 $       258,411           260,053
     Notes payable                                                            165,000           136,000
     Accrued payroll liabilities                                              389,965           279,332
     Accrued liabilities                                                        1,600             1,600
     Convertible notes payable                                                      -           136,000
     Accrued interest                                                               -             9,105
     Current portion long term liabilities                                        836               930
     ---------------------------------------------------------------------------------------------------
       Total current liabilities                                              815,812           823,020

LONG TERM LIABILITIES                                                             805             1,111

STOCKHOLDERS' EQUITY
     Common stock                                                                 701               658
     Accounts receivable subscribed                                        (1,399,987)       (1,187,097)
     Additional paid in capital                                             3,092,164         2,313,532
     Accumulated deficit - during development stage                        (2,492,472)       (1,912,165)
     ---------------------------------------------------------------------------------------------------
       Total stockholders' equity                                            (799,594)         (785,072)
     ---------------------------------------------------------------------------------------------------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $        17,023            39,059
     ===================================================================================================

                             See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                       INTERSPACE ENTERPRISES, INC.
                                      (A Development Stage Company)
                                         Statement of Operations
                                               (Unaudited)


<S>                                            <C>                    <C>             <C>
                                                                                       CUMULATIVE FROM
                                                                                         JUNE 30, 1998
                                                                                      (INCEPTION OF THE
                                                                                         DEVELOPMENT
                                                  THREE MONTHS        THREE MONTHS         STAGE) TO
                                                      ENDED              ENDED             MARCH 31,
                                                   MARCH 31, 2001     MARCH 31, 2000         2001
                                                 -------------------------------------------------------

REVENUES
                                                               -                   -
Sales                                          $               -                   -  $               -
--------------------------------------------------------------------------------------------------------
   Total Revenue                                               -                   -                  -

RESEARCH AND DEVELOPMENT                                       -                   -              5,059

ADMINISTRATIVE AND SELLING EXPENSES

Consulting                                               323,250             126,000            654,075
Depreciation and amortization                                683                 492              4,998
Legal and professional                                    72,550              35,357            274,067
License fees                                                   -             333,000            373,000
Marketing and promotion                                    2,092              11,306            101,723
Office expense                                             9,132               6,368             68,497
Other administrative expenses                             22,640              16,275            190,849
Rent                                                       2,078                 834             12,901
Salaries                                                 170,989              84,799            873,376
--------------------------------------------------------------------------------------------------------
   Total Administrative Expense                          603,414             614,431          2,553,486
--------------------------------------------------------------------------------------------------------
Net Loss from Operations                                (603,414)           (614,431)        (2,558,545)

OTHER INCOME

Interest income                                          (14,002)                  -            (68,473)
Interest expense                                          (9,105)                  -                  -
--------------------------------------------------------------------------------------------------------
Total Other (Income) Expense                             (23,107)                  0            (68,473)

INCOME TAXES                                                   -                   -              2,400
--------------------------------------------------------------------------------------------------------
     Net loss                                  $        (580,307)           (614,431)        (2,492,472)
========================================================================================================

                             See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                       INTERSPACE ENTERPRISES, INC.
                                      (A Development Stage Company)
                                         Statement of Cash Flows
                                               (Unaudited)

<S>                                                    <C>                <C>              <C>
                                                                                             JUNE 30, 1998
                                                                                           (INCEPTION OF THE
                                                                                               DEVELOPMENT
                                                       THREE MONTHS       THREE MONTHS         STAGE) TO
                                                          ENDED               ENDED            MARCH 31,
                                                        MARCH 31, 2001     MARCH 31, 2000        2001
                                                      ------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES

     Net loss                                       $       (580,307)           (614,431) $      (2,492,472)

     Adjustments to reconcile net income to net
      cash provided by operating activities:

          Depreciation and amortization                          683                 492              4,998
          Stock issued for services                          339,525             469,000            970,475
          Changes in:
          Prepaid expense                                     14,750                                      0
          Accounts payable                                    (1,642)             23,255            258,411
          Accrued interest                                    (9,105)                                     0
          Accrued payroll liabilities                        110,633              19,978            389,965
          State tax payable                                        -                   -              1,600
------------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                       (125,463)           (101,706)          (867,023)

CASH FLOWS FROM INVESTING ACTIVITIES

          Accrued interest related parties                   (14,002)                  -            (68,473)
          Computer and equipment purchases                         -                   -             (8,335)
          Note receivable (payments)                          41,112                   -             41,112
------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                         27,110                   0            (35,696)

CASH FLOWS FROM FINANCING ACTIVITIES
          Notes payable                                       29,000              16,000            174,200
          Sale of common stock                               199,150             201,500            749,764
          Repayment of notes                                    (400)               (160)           (10,505)
          Convertible notes                                 (136,000)                  -                  0
------------------------------------------------------------------------------------------------------------
Net Cash Used in Financing Activities                         91,750             217,340            913,459

          NET DECREASE IN CASH                                (6,603)            115,634             10,740

     Cash, beginning of the year                              17,343              10,223             17,343
------------------------------------------------------------------------------------------------------------
     Cash, March 31, 2001                           $         10,740             125,857  $          28,083
============================================================================================================


                             See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                    INTERSPACE ENTERPRISES, INC.
                                                    (A Development Stage Company)
                                            Statement of Changes in Stockholders' Equity
                                                             (Unaudited)
<S>                            <C>        <C>       <C>           <C>      <C>                <C>             <C>            <C>
                                Preferred Stock         Common Stock       Additional Paid    Accounts Rec    Accumulated
          Description          Shares     Dollars   Shares        Dollars     in Capital       Subscribed       Deficit      Total
------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 2000        -           -      65,836,800     $ 658    $2,313,532     $ (1,187,097)   $(1,912,165)  $(785,072)

Conversion of notes payable                            423,900       $ 4     $ 199,146              $ -                   $199,150

Shares issued for services                           3,908,530      $ 39     $ 579,486       $ (240,000)                  $339,525

Interest on notes                                     -              $ -           $ -        $ (14,002)                  $(14,002)

Due from shareholder                                  -              $ -           $ -         $ 41,112                    $41,112

Net loss                                                                                                    $ (580,307)  $(580,307)

------------------------------------------------------------------------------------------------------------------------------------
Balance March 31, 2001           -           -      70,169,230       701     3,092,164       (1,399,987)    (2,492,472)   (799,594)
====================================================================================================================================

                                           See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
                          INTERSPACE ENTERPRISES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The  accompanying   unaudited  financial  statements  include  the  accounts  of
InterSpace Enterprises, Inc. (the "Company"). The financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting principles.

In the opinion of management, the unaudited interim financial statements for the
period ended March 31, 2001 are presented on a basis consistent with the audited
financial  statements  and reflect all  adjustments,  consisting  only of normal
recurring  accruals,  necessary  for fair  presentation  of the  results of such
period.

The  results  for the three  months  ended  March 31,  2001 are not  necessarily
indicative  of the  results of  operations  for the full year.  These  financial
statements  and  related  footnotes  should  be read  in  conjunction  with  the
financial  statements and footnotes thereto included in the Company's  financial
statements of the period ended December 31, 2000.

NOTE 2 - NOTES PAYABLE

During the three month period ended March 31, 2001, the Company  secured interim
funding partially through notes payable to interested  parties totaling $45,000.
Neither  party has asked the Company to  collateralize  the loan,  sign notes or
state an interest  rate.  A similar  existing  note in the amount of $16,000 was
converted to 57,600 shares of the Company's common stock. The Company intends to
repay these parties when significant funding has been obtained.  These notes are
demand notes and therefore classified as a current liability.

NOTE 3 - CONVERTIBLE NOTES PAYABLE

Effective  February 22, 2001, the Company's Board of Directors voted to exercise
the Company's option to convert all convertible notes into common stock. A total
of $183,150 of debt was converted  resulting in the issuance of 366,300  shares.
As per the terms of the notes,  all accrued  interest  was  extinguished  on the
conversion.


<PAGE>
                          INTERSPACE ENTERPRISES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4 - NON-MONETARY TRANSACTIONS

The Company issued 3,861,000 shares during the period for certain consulting and
advisory services provided to the Company. The Company valued these transactions
at what they believed to be the fair market value of the services. The value for
these services also approximates what management believes to be the value of the
stock. A portion of the shares issued represent  compensation for services to be
issued in subsequent periods, thus the amount related to services which have yet
to be performed have been recorded as due from shareholder.

NOTE 5 - INTEREST INCOME/EXPENSE

Interest income  represents  accrued interest on promissory notes to the Company
from certain officers incurred as a result of options previously exercised.

Interest expense represents accrued interest recovered as a result of conversion
of notes payable to common stock - see NOTE 3.

<PAGE>

ITEM 2.

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

RESULTS OF  OPERATIONS  FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001 COMPARED
TO THE SAME PERIOD IN 2000.

     The Company continued  development of its business model during the quarter
ended March 31,  2001,  thus no revenues  were  achieved.  The Company  incurred
operating  expenses for the three month  period of $603,414 in 2001  compared to
$614,431 in the same period in 2000.  The Company  recorded a net operating loss
of ($580,307)  for the 2001 period as compared to ($614,431) for the same period
in fiscal  year 2000.  The Company  losses  will  continue  until  business  and
profitable operations are achieved. While the Company is seeking capital sources
for  investment,  there is no assurance that capital  sources can be found.  The
loss per share for the 2001 fiscal  quarter  was ($0.01)  compared to ($0.08) in
the fiscal quarter of 2000.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company  had cash  capital of $10,740  and $6,283 in fixed  assets for
total tangible  assets of $17,023 at the end of the period.  The Company will be
forced  to make  private  placements  of  stock  in  order  to  fund  operations
continuance. No assurance exists as to the ability to make private placements of
stock. At March 31, 2001, it had no accounts receivable. The Company has current
liabilities of $815,812 which exceed current assets by approximately $798,789.

<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 1.           Legal Proceedings - None.

Item 2.           Changes in securities - None.

Item 3.           Defaults upon senior securities - None.

Item 4.           Submission of matters to a vote of security holders - None.

Item 5.           Other information - None.

Item 6.           Exhibits and reports on Form 8-K

                         (a)  The  following  are  filed  as  Exhibits  to  this
                    Quarterly Report.  The numbers refer to the Exhibit Table of
                    Item 601 of Regulation S-K:

                                    None.

                         (b) Reports on Form 8-K filed  during the three  months
                    ended March 31, 2001. (incorporated by reference)

                                    None.




<PAGE>


                                   Signatures

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

Dated: May 11, 2001

                                          INTERSPACE ENTERPRISES, INC.



                                          by:/s/Daniel P. Murphy
                                          Daniel P. Murphy, President