SECURITIES AND EXCHANGE COMMISSION
             Washington, D.C. 20549

                   FORM 10-QSB

[X]  QUARTERLY REPORT UNDER SECTION 13 OR
     15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended
             March 31, 2001
or

[  ] TRANSITION REPORT PURSUANT TO SECTION
   13 OR 15(d) OF THE SECURITIES EXCHANGE
             ACT OF 1934
    For the transition period from   to

     Commission file number: 333-39254

            EXPORT EREZ USA, INC.
    (Exact name of small business issuer
               in its charter)

       Delaware            52-2237043
(State or other            (I.R.S. Employer
jurisdiction of             Identification No.
incorporation or
organization)

               Industrial Zone Erez
                  P.O. Box 779
             Ashkelon, Israel 78101
    _________________________________________
   (Address of principal executive offices)
                 (zip code)

 Issuer's Telephone Number:  011 972 7 689
1611

Indicate by check mark whether the registrant
(1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the last 12
months (or for such shorter period that the
registrant was required to file such
reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X                  No

Indicate the number of shares outstanding of
each of the issuer's classes of common
equity, as of the latest practicable date.

Class             Outstanding at
                     March 31, 2001

Common Stock,
par value $0.0001        12,500,000


             PART I

PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


EXPORT EREZ USA, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2001


EXPORT EREZ USA, INC. AND SUBSIDIARIES



                     CONTENTS



PAGES
1 - 2 CONSOLIDATED BALANCE SHEETS AS OF MARCH
      31, 2001 (UNAUDITED) AND DECEMBER 31,
      2000

PAGE 3 CONSOLIDATED STATEMENTS OF INCOME AND
        COMPREHENSIVE INCOME (UNAUDITED) FOR THE
       THREE MONTHS ENDED MARCH 31, 2001 AND
       2000

PAGE 4 CONSOLIDATED STATEMENTS OF CASH FLOWS
       (UNAUDITED) FOR THE THREE MONTHS ENDED
       MARCH 31, 2001 AND 2000

PAGES 5 - 6  NOTES TO CONSOLIDATED FINANCIAL
       STATEMENTS AS OF MARCH 31, 2001


<PAGE>



      EXPORT EREZ USA, INC. AND SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                    ASSETS
                               March 31,
                               2001           December
                              (Unaudited)     31, 2000
<S>                           <C>             <C>
CURRENT ASSETS
Cash and cash equivalents      $  685,347      $  663,295
Trade accounts receivable,
   net                            897,495         901,382
Trade accounts receivable -
   related parties, net             5,820           6,049
Other receivables and debit
   balances                        30,848          37,228
Inventory                         825,030         892,466
Deferred taxes                     31,821          33,077
                                ---------       ---------
  Total Current Assets          2,476,361       2,533,497
                                ---------       ---------

INVESTMENTS AND DEPOSITS
Investment in marketable
   securities                     647,743         795,074
Deposits for the severance of
  employer-employee relations     245,862         261,095
Deferred taxes                     45,595          52,952
Intangible assets                  72,323          77,963
                                ---------       ---------
   Total Investments And
      Deposits                  1,011,523       1,187,084
                                ---------       ---------

PROPERTY, PLANT AND
  EQUIPMENT, NET                  404,974         404,751

TOTAL ASSETS                   $3,892,858      $4,125,332
============                   ==========      ==========
</TABLE>

      EXPORT EREZ USA, INC. AND SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
         LIABILITIES AND SHAREHOLDERS' EQUITY

                                 March 31,
                                 2001           December
                                (Unaudited)     31, 2000
<S>                             <C>             <C>

CURRENT LIABILITIES
  Short-term bank credit        $   715,461     $   716,482
  Trade accounts payable            852,833       1,085,755
  Other accounts payable and
     credit balances                338,904         277,966
                                  ---------       ---------
Total Current Liabilities         1,907,198       2,080,203
                                  ---------       ---------

LONG - TERM LIABILITIES
  Long-term loan                       -             10,885
  Provision for the severance of
    employer-employee relations     189,155         180,121
                                  ---------       ---------
    Total Long-Term Liabilities     189,155         191,006
                                  ---------       ---------

TOTAL LIABILITIES                 2,096,353       2,271,209
                                  ---------       ---------
SHAREHOLDERS' EQUITY
Preferred stock, $0.0001 par value,
20,000,000 shares authorized, none
issued and outstanding                -               -
Common stock, $0.0001 par value,
100,000,000 shares authorized,
12,500,000 and 12,500,000 issued
and outstanding                       1,250            1,250
Additional paid-in capital          159,385          159,385
Retained earnings                 1,965,134        1,823,902
Accumulated other comprehensive
  income (loss)                    (329,264)        (130,414)
                                   ---------        ---------
Total Shareholders' Equity        1,796,505         1,854,123
                                   ---------        ---------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY            $3,892,858      $ 4,125,332
======================            ==========      ===========
</TABLE>

      EXPORT EREZ USA, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF INCOME
             AND COMPREHENSIVE INCOME
                   (UNAUDITED)

<TABLE>
<CAPTION>
                                   For the          For the
                                   Three Months     Three Months
                                   Ended            Ended
                                   March 31, 2001   March 31, 2000
<S>                                <C>              <C>

REVENUES                          $  1,097,070      $ 1,257,091
Cost of sales and processing           757,863          727,968
                                  ------------      -----------
Gross profit                           339,207          529,123
                                  ------------      -----------
OPERATING EXPENSES
Selling expenses                        61,605           35,834
General and administrative expenses     82,272           98,776
                                  ------------      -----------
TOTAL OPERATING EXPENSES               143,877          134,610
                                  ------------      -----------
INCOME FROM OPERATIONS                 195,330          394,513
                                  ------------      -----------
OTHER INCOME (LOSS)
  Interest, dividends and gain
   (loss) on sale of securities
    income, net                         10,966          (41,514)
Other income - net                      17,912            2,302
                                  ------------      -----------
TOTAL OTHER INCOME (LOSS)               28,878          (39,212)
                                  ------------      -----------
INCOME BEFORE INCOME TAXES             224,208          355,301
  Income tax expense                    82,977          124,350
                                  ------------      -----------
NET INCOME                        $    141,231       $  230,951
                                  ------------      -----------
OTHER COMPREHENSIVE INCOME
  Foreign currency translation
    gain (loss)                        (73,844)          39,602
Unrealized gain (loss) on
    available-for-sale securities     (125,005)          72,305
                                  ------------      -----------
Other comprehensive income (loss)
   before tax                         (198,849)         111,907
Income tax (expense) benefit related
   to items of other comprehensive
   income                                  -               -
                                  ------------      -----------
TOTAL OTHER COMPREHENSIVE INCOME
  (LOSS), NET OF TAX                $  (198,849)    $   111,907
==============================      ===========     ===========
COMPREHENSIVE INCOME                $    13,967     $   342,858
==============================      ===========     ===========
Net income per ordinary share -
  basic and diluted                 $   .01         $    .02
==============================      ===========     ===========
Weighted average number of shares
  outstanding during the period -
  basic and diluted                  12,500,000      12,000,000
==============================      ===========     ===========

</TABLE>

      EXPORT EREZ USA, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (UNAUDITED)

<TABLE>
<CAPTION>
                                       For the          For the
                                       Three Months     Three Months
                                       Ended            Ended
                                       March 31, 2001   March 31, 2000
<S>                                    <C>              <C>


CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                           $   141,231       $   230,951
  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities:
  Stock based compensation                   -                 -
  Depreciation and amortization             20,350            18,346
Decrease (increase) in provision for the
severance of employer-employee relations    21,552             1,552
Decrease (increase) in deferred taxes        5,437              (335)
Decrease (increase) in trade accounts
  receivable                               (30,864)          213,070
Decrease (increase) in other receivables
  and debit balances                         5,051            93,473
Decrease (increase) in inventory            34,110           (49,559)
Loss (gain) from investment in marketable
  securities                                  -               (3,289)
Loss (gain) from sale of fixed assets       (15,424)          (2,303)
Increase (decrease) in trade accounts
  payable                                  (194,946)        (132,633)
Increase (decrease) in other accounts
  payable nd credit balances                 72,427          120,294
                                        -----------      ------------
   Net Cash Provided By (Used In)
     Operating Activities                    58,924          489,567

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of fixed assets                  (35,508)         (37,806)
  Proceeds from sale of fixed assets         17,445            2,461
  Investment in marketable securities        (8,801)        (308,703)
  Proceeds from sale of marketable securities   -          1,428,850
                                        -----------      ------------
     Net Cash Provided By (Used In)
      Investing Activities                  (26,864)       1,084,802
                                        -----------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term bank credit, net                26,637       (1,392,415)
  Long-term bank credit, net                (10,650)          -
                                        -----------      ------------
  Net Cash Provided By (Used In)
    Financing Activities                     15,987        (1,392,415)
                                        -----------      ------------
  Effect of exchange rate changes on cash   (25,995)           21,222
                                        -----------      ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                             22,052           203,176

CASH AND CASH EQUIVALENTS
 - BEGINNING OF PERIOD                      663,295           681,291
                                        -----------      ------------
CASH AND CASH EQUIVALENTS -
  END OF PERIOD                         $   685,347       $   884,467
                                         ==========       ===========

</TABLE>

NOTE 1    BASIS OF PRESENTATION

The accompanying unaudited consolidated
financial statements have been prepared in
accordance with generally accepted accounting
principles and the rules and regulations of
the Securities and Exchange Commission for
interim financial information.  Accordingly,
they do not include all the information and
footnotes necessary for a comprehensive
presentation of financial position and
results of operations.

It is management's opinion that all material
adjustments (consisting of normal recurring
adjustments) have been made which are
necessary for a fair financial statement
presentation.  The results for the interim
period are not necessarily indicative of the
results to be expected for the year.

For further information, refer to the
consolidated financial statements and
footnotes included in the Company's Form
10-KSB for the year ended December 31, 2000.

NOTE 2    INVENTORY

Inventory at March 31, 2001 consisted of the
following:

Raw materials             $   625,068
Work in process                53,727
Finished goods                146,235
                          -----------
                          $   825,030
                          ===========

NOTE 3    LONG-TERM LOAN

On February 1, 2000, Export Erez Ltd.
borrowed $123,750 at an interest rate of
10.8%.  The terms are 24 monthly payments
commencing March 1, 2000 with each payment
consisting of a fixed amount of principal
along with accrued interest.  As of March 31,
2001, the balance of the loan was $54,967,
all of which is included in short-term bank
credit.

NOTE 4    SEGMENTS

The Company has two strategic business units:
the civilian market and the military market.
The military market is further broken down
between local and export sales in order to
better analyze trends in sales and profit
margins.  The Company does not allocate
assets between segments because several
assets are used in more than one segment and
any allocation would be impractical.

<TABLE>
                        Civilian   Military  Military  Consolidated
                        Local      Local     Export
<S>                     <C>        <C>       <C>       <C>

March 31, 2001
Net Sales               486,146    516,621    94,303    1,097,070
Income from operations  118,782     60,988    15,560      195,330

March 31, 2000
Net Sales               483,540    724,705    48,846    1,257,091
Income from operations  179,952    210,165     4,396      394,513

</TABLE>

NOTE 5    SUBSEQUENT EVENT

Export Erez USA is in final negotiations to
purchase Orlite Ltd. in a stock for stock
transaction.  Prior to the acquisition,
Export Erez Ltd. had entered into a joint
venture with Orlite.  The intent of the
acquisition is to dissolve the joint venture
between Export Erez Ltd. and Orlite and for
Export Erez Ltd. to acquire all of Orlite's
equipment used in the production of ballistic
helmets including any intangible knowledge.
Thereafter, Export Erez Ltd. will produce and
market these products on its own.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND  RESULTS OF
        OPERATIONS

OPERATIONS


     Export Erez USA, Inc.  is a holding company
whose subsidiaries, Export Erez, Ltd. and
Mayotex. Ltd., have been operating in excess of
ten years   Export Erez Ltd. was formed and
registered on January 23, 1983 under the name
R.T.V. Ltd. as a limited shares company under the
Companies Ordinance of the State of Israel and
changed its name to Export Erez Ltd. on April 25,
1987.  Export Erez Ltd. primarily produces and
markets textile products designed to provide
personal protection, such as bulletproof vests,
and associated heavy fabric products, such as
tents and other camping equipment.  It has been a
supplier to the Israeli military for over 12
years.

     Mayotex Ltd. was formed and registered on
March 7, 1990 as a limited liability company
under the Companies Ordinance of the State of
Israel.  Mayotex is engaged in weaving,
improving, processing, dyeing, cutting and sewing
of fabric to make the heavy-duty and sometimes
bulletproof fabrics used by Export Erez Ltd. to
manufacture its finished products and goods.

     In October, 2000, Export Erez Ltd. created a
wholly-owned subsidiary, Dragonwear Trading Ltd.
incorporated in Cyprus which is involved with
trading textile products.

     Export Erez USA's facilities are staffed
partly (approximately 60%) by a Palestinian
workforce, hired with the cooperation of the
Palestinian Authority.  Should the Middle East
peace process continue to lead to a decrease in
hostilities and normalization of relations with
the Arab and Islamic world, Export Erez USA
believes that its history of cooperation and
employment with the Gazan Palestinians and the
Palestinian Authority will lead to opportunities
to penetrate markets in the Arab and Islamic
world.

     Export Erez USA anticipates that it may
expand its operations through development of its
own marketing and sales and through acquisitions
of similar or related companies.  Export Erez is
currently in discussions with a company with a
similar product line for a possible acquisition
of that company.  Export Erez
has not yet entered into any agreements to
proceed.  If Export Erez enters into a business
combination, it will file a Form 8-K noticing
such transaction.

Overview

     Export Erez USA's strategic objectives are
as follows:

     To develop high tech products, including:
     stab-proof fabric, ballistic helmets,
     ballistic ceramic boards, one-way protective
     windows, Kevlar fabric, dry storage,
     ballistic wall coverings, and oil and fuel
     pillow type storage tanks in the year 2001
     to 2002.

     To increase its share of the local defense
     market to about 35% by the year 2004.

     To increase its share of the local civilian
     market to about 25% by the year 2004.

     To penetrate the international defense
     market with business worth about $1 million
     growing by about $1.5 million per annum to
     the year 2004.

     To extend activity in the international
     civilian market starting with activity worth
     about $0.3 million growing by about
     $0.5-0.75 million per annum to the year
     2004.

Results and Plan of Operations

       During 1999, bulletproof vests developed by
Export Erez USA were sent to laboratories in the
United States for testing, and following the
tests, the products were deemed to have met the
American N.I.G. standard.  Obtaining this
standard is intended to provide Export Erez USA's
products with entree into the American market,
and to encourage development of other markets.

       During 1999, Export Erez USA enlarged its
Internet Web site in order to participate in the
worldwide trend towards more electronic trade.
The web site is located at www.exporterez.co.il.

       In the end of 2000 and beginning of 2001,
Export Erez USA purchased heavy machines and
knowledge in manufacturing ballistic ceramic
boards and started to produce and sell in Israel
and abroad its new products.

       Expanding its product range requires Export
Erez USA to make considerable investments in
research and development, and penetrating markets
outside Israel also involves heavy expenses.
Export Erez USA intends to develop the following
products between 2001 and 2003: anti-stab cloth,
ballistic helmets, ballistic ceramic plates,
one-way protective windows, Kevlar fabric, dry
storage, ballistic wall coverings, and oil and
fuel pillow type storage tanks.

       Export Erez USA intends to spend funds, when
and if available, if ever, on commencing
production and marketing of new products,
construction of a new manufacturing and office
complex, new equipment and upgrading its existing
equipment.

       Export Erez USA has applied for listing
of its securities on the NASD OTC Bulletin Board.
As of the date of this filing, it has not yet
received acceptance for such listing.

Export Erez USA anticipates that it will offer
additional shares of its common stock to the
public with a view toward raising additional
capital with which to effect its development
plans.  Management also believes that if Export
Erez USA is able to establish a public trading
market on the NASD OTC Bulletin Board or Nasdaq
SmallCap Market it will increase Export Erez
USA's visibility to government authorities and
additional potential civilian customers.

       In March 1999, Export Erez USA signed a
limited partnership agreement with Orlite Ltd., a
public company whose stock is traded on the Tel
Aviv stock exchange, for the production of
ballistic helmets for export from Israel.  The
partnership operated throughout 1999 on a limited
basis only, because the approval required from
the Business Restrictions Authority had not yet
been given.  Approval was expected in the course
of the year 2001.  Export Erez USA has offered to
Orlite Ltd. to terminate the partnership.  Export
Erez USA will purchase all the equipment and
know-how of Orlite Ltd. for production of
ballistic helmets and Export Erez USA will
produce and market the helmets by itself.  Export
Erez USA expects that Orlite Ltd. will accept
this offer.

Three Months Ending March 31, 2001 Compared to Three Months
Ended March 31, 2000

       Sales in the three months ending March 2001 decreased to
$1,097,070 compared to $1,257,091 in the previous year due to
process of reorganization in the local military market caused
by increasing tense situation with Palestinian Authorities.

       The cost of sales and processing remained
relatively constant in the three months ended
March 31, 2001 at $757,863 compared to $727,968
for the same three months in 2000.

       Selling expenses in the three months ended
March 31, 2001increased to $61,605 compared to
$35,834 for the same three months in 2000.  This
change is the result of increase in exports from
$48,846 in March 31, 2000 to $94,303 in March
31, 2001 and as a result of increase in
commissions paid to agents.

       General and administrative costs in the
three months ended March 31, 2001 decreased to
$82,272 compared to $98,776 for the same three
months in 2000, primarily the result of
the decrease in professional expenses.

The Year Ended December 31, 2000 Compared to the
Year Ended December 31, 1999

       In 2000, revenues of $4,490,961 remained
relatively constant with revenues in 1999 of
$4,490,898.  The cost of raw materials in 2000 of
$2,126,334 rose slightly from$2,106,825 in 1999.
Salaries and related expenses decreased from
$858,592 in 1999 to $653,152 in 2000.  The cost
of sales and processing decreased from$3,121,674
in 1999 to $2,856,626 in 2000 due predominantly
to a decrease in salaries and related expenses of
$205,440.  Export Erez USA's gross profit rose
from$1,369,224 in 1999 to $1,634,335 in 2000 due
to the decrease in cost of sales.

       General and administrative costs increased
from $457,218 in 1999 to $602,606 in 2000
primarily as a result of increased salaries and
expenses in 2000 of $311,125 from $107,025 in
1999.

       In 2000, financial expenses increased to
$(113,027) in 2000 from financial income in 1999
of $88,934 primarily as a result of a decrease in
dividend income from marketable securities of
$217,603.

       Most company sales are the result of winning
tenders in both the domestic market and the world
market.  The tenders are obtained through agents
which the company operates in the local and
overseas market.  Below is the composition of
sales for 1999 and 2000:


                       1999 ($)        2000 ($)

Sales to the local
  market  civilian   $1,508,860      1,630,860
Sales to the local
   market military    2,268,921      1,580,334
Export sales
    military            713,117      1,279,767
Consolidated         $4,490,898      4,490,961

       In 2000, Export Erez USA increased its
number of customers but decreased amount of its
sales to single customers exceeding 10% of sales
from one customer in 1999 of $2,073,623 to two
customers in 2000 aggregating $1,886,977 in
sales.  The sales to the military local market
dropped in 2000 by 30%.   Export Erez had
forecasted this drop and increased its efforts to
penetrate to new markets.  The Company believes
its efforts were successful and anticipates open
order demands  from the local military market to
be greater in 2001 than in 2000.

       Selling expenses increased from $ 244,775 in
1999 to 328,012 in 2000 (34%) because of the
Company's efforts to increase its exports.

       In 2000, net cash provided by operating
activities increased to $357,739 from $122,148 in
1999 primarily due to an increase in stock issued
for services of $153,900 in 2000 and an increase
in other accounts payable and credit balances of
$68,616.

       In 2000, net cash provided by (used in)
investing activities increased from $(1,617,965
used in) in 1999 to $937,684 provided in 2000.
This was primarily the result of the Company's
investment in marketable securities in 1999 of
$1,543,577 and the proceeds from the subsequent
sale of the marketable securities in 2000 of
$1,424,264.

       In 2000, net cash (used in) provided by
financing activities decreased from $1,505,236
provided in 1999 to $(1,333,604 used in) 2000.
This was primarily the result of the repayment in
2000 of $1,344,393 in short term debt, the
proceeds of which, in the amount of $1,505,236,
were received in 1999.

       Cash and cash equivalents at December 31,
2000 of $663,295 were comparable to cash and cash
equivalents at December 31, 1999 of $681,291.

Open Orders

       Unfulfilled open orders at March 31, 2001,
totaled $1,300,000 and are scheduled for filling
within the next four months.

Liquidity and Capital Resources

       Export Erez USA's current activities are
financed by short term bank loans balanced by
short term deposits.  The decision regarding the
amount of the loans was derived from
considerations of the yield on the deposit which
is generally in foreign currency (receipts from
overseas sales), compared to the cost of short
term loans.  Export Erez USA has positive working
capital (current assets less current
liabilities).

       In the years 2001 and 2002, Export Erez USA
anticipates increasing its research and
development of certain items, primarily ballistic
helmets, stab-resistant fabric, ceramic ballistic
plates and one-way protective windows.  Export
Erez anticipates total research and development
expenses for 2001 and 2002 at approximately
$3,950,000 and $3,250,000 respectively.  Export
Erez USA anticipates that in the year 2003
research and development expenses would drop to
approximately $350,000.

       The development of these products will be
with staff engineers.  Export Erez USA will work
in the development of the ballistic helmets.
Export Erez USA anticipates that these products
will be approximately  in 20% production in the
year 2002 increasing to full production by the
year 2005.  Export Erez USA anticipates that in
order to fund the research and development for
these products, it may effect an offering of its
equity securities.  If Export Erez USA is unable
to effect an offering of its securities, it may
fund its research and development through its
operating funds.  In such event, the timing of
its anticipated research and development and
subsequent production schedule would be slowed.

Potential Acquisition

       Export Erez is in negotiations to
acquire a company that is one of its
competitors.  The acquisition is contemplated to
be an exchange of common stock of Export Erez for
the outstanding stock of the acquired company.
As of the date of this report, no agreements or
contracts have been executed effecting this
acquisition.

           PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

    There are no legal proceedings against
the Company and the Company is unaware of such
proceedings contemplated against it.

ITEM 2.  CHANGES IN SECURITIES

    Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
         SECURITY HOLDERS

    Not applicable.

ITEM 5.  OTHER INFORMATION

    Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)     Exhibits

    (b)     Reports on Form 8-K

    There were no reports on Form 8-K filed
by the Company during the quarter.


                   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 by the undersigned
thereunto duly authorized.


            EXPORT EREZ (USA), INC.
            By /s/ Joseph Postbinder

            May 18, 2001