<PAGE>   1
                                  UNITED STATES
                       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, 2000

                                       OR

                   TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                               OF THE EXCHANGE ACT

                         COMMISSION FILE NUMBER 0-22388

                          US INDUSTRIAL SERVICES, INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                             99-0273889
-------------------------------                              -------------------
(STATE OR OTHER JURISDICTION OF                               (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)

                         40 SKOKIE BOULEVARD, SUITE 110
                           NORTHBROOK, ILLINOIS 60062
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                  (847)509-8500
                           (ISSUER'S TELEPHONE NUMBER)


         (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR IF CHANGED
                               SINCE LAST REPORT)

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

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

<TABLE>
<CAPTION>
               Class                        Outstanding at March 31, 2000
               -----                        -----------------------------
<S>                                         <C>
      Common stock, no par value                       8,763,978
</TABLE>

Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]


<PAGE>   2


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          US INDUSTRIAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEET
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                               March 31,    September 30,
                                                                                  2000          1999
                                                                               ---------    -------------
                                                                              (Unaudited)
<S>                                                                            <C>          <C>
                                    ASSETS
Current Assets:
Cash                                                                            $     --      $    280
Accounts receivable, less allowance for doubtful accounts of $748                  1,647         2,414
Notes receivable, current portion                                                  1,509         1,489
Costs and estimated earnings in excess of billings on contracts in progress          183           321
Prepaid expenses and other current assets                                            375           249
Deferred income tax, current portion                                                 392           275
                                                                                --------      --------
     Total current assets                                                          4,106         5,028
                                                                                --------      --------

Property, plant and equipment, net                                                 3,550         1,800
                                                                                --------      --------

Other noncurrent assets:
Notes receivable, less current portion                                             3,581         4,577
Deferred income tax, less current portion                                          3,145         3,145
Goodwill, net of amortization of $306                                                637           660
Prepaid expenses and other assets                                                     19            10
                                                                                --------      --------
                                                                                   7,382         8,392
                                                                                --------      --------
Total Assets                                                                    $ 15,038      $ 15,220
                                                                                ========      ========

              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities                                        $  2,145      $  2,676
Current portion of obligations under capital leases                                  396           417
Current portion of long-term debt                                                     84            58
Due to affiliates, net                                                             1,320           843
Billings in excess of costs and estimated earnings on contracts in progress          131           246
                                                                                --------      --------
     Total current liabilities                                                     4,076         4,240
                                                                                --------      --------
Non-current liabilities:
Obligations under capital leases, less current portion                             1,986           934
Long-term debt, less current portion                                                 740           134
                                                                                --------      --------
     Total non-current liabilities                                                 2,726         1,068
                                                                                --------      --------
Total liabilities                                                                  6,802         5,308
                                                                                --------      --------
COMMITMENTS AND CONTINGENCIES
                           SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 25,000 authorized, 8,764 outstanding                    88            88
Additional paid-in capital                                                        22,684        22,684
Accumulated deficit                                                              (14,536)      (12,860)
                                                                                --------      --------
Total stockholders' equity                                                         8,236         9,912
                                                                                --------      --------
Total liabilities and stockholders' equity                                      $ 15,038      $ 15,220
                                                                                ========      ========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       1
<PAGE>   3


                          US INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In Thousands, except for per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                             Three Months ended                Six Months ended
                                                                   March 31,                        March 31,
                                                         ----------------------------      ----------------------------
                                                             2000             1999            2000             1999
                                                             ----             ----            ----             ----
<S>                                                      <C>              <C>              <C>              <C>
Revenue                                                  $     3,120      $     2,502      $     5,680      $    17,574
Cost of revenue                                                2,691            2,055            4,591           14,478
                                                         -----------      -----------      -----------      -----------


Gross profit                                                     429              447            1,089            3,096
Selling, general and administrative expenses                   1,761              514            2,588            2,754
                                                         -----------      -----------      -----------      -----------
                                                              (1,332)             (67)          (1,499)             342

Other:
Gain on sale of assets                                            --               --               --            4,574
Other income -                                                   106               --              106
Interest expense                                                (103)              --             (185)              (9)
                                                         -----------      -----------      -----------      -----------

Net Income (Loss) before discontinued operations              (1,435)              39           (1,684)           5,013

Discontinued operations                                           --               --                8               --
                                                         -----------      -----------      -----------      -----------

Income (Loss) before income taxes                             (1,435)              39           (1,676)           5,013

Income taxes                                                      --               --               --            1,288
                                                         -----------      -----------      -----------      -----------

Net income (loss)                                        $    (1,435)     $        39      $    (1,676)     $     3,725
                                                         ===========      ===========      ===========      ===========

Net income per share                                     $     (0.16)     $      0.01      $     (0.19)     $      0.43
                                                         ===========      ===========      ===========      ===========

Weighted average number of common shares outstanding       8,763,978        8,763,978        8,763,978        8,763,978
                                                         ===========      ===========      ===========      ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       2
<PAGE>   4


                          US INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND 1999
                                 (In Thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 2000         1999
                                                                 ----         ----
<S>                                                            <C>          <C>
Net cash (used in) provided by operating activities, net
of effects of business acquired                                $  (824)     $  (186)

Cash flow from investing activities:
Purchase of machinery and equipment                             (2,093)      (1,064)
Increase in investment                                              --         (306)
                                                               -------      -------

Net cash (used in) provided by investing activities             (2,093)      (1,371)

Cash flow from financing activities:
Net (payments)advances on notes payable and long term debt       1,661       (6,508)
Net (advances) payments on notes receivable                        976         (742)
Net proceeds from the sale of assets                                --        7,307
                                                               -------      -------

Net cash provided by financing activities                        2,637           57
                                                               -------      -------

Net (decrease) increase in cash                                   (280)      (1,499)
Cash, beginning of period                                          280        2,350
                                                               -------      -------

Cash, end of period                                            $    --      $   850
                                                               =======      =======
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>   5


                          US INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In Thousands, except Per Share Amounts)
                                   (Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been
prepared by US Industrial Services, Inc., (the "Company"), in accordance with
generally accepted accounting principles pursuant to Regulation S-B of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in audited financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
Accordingly, these interim consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and related
notes as contained in Form 10-KSB for the year ended September 30, 1999. In the
opinion of management, the interim consolidated financial statements reflect all
adjustments, including normal recurring adjustments, necessary for fair
presentation of the interim periods presented. The results of operations for the
six months ended March 31, 2000 are not necessarily indicative of results of
operations to be expected for the full year.

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, P.W. Stephens Contractors, Inc. and
P.W. Stephens Services, Inc. (collectively referred to as "St. Louis"), and, for
the time period operated, J.L. Manta, Inc. ("Manta") and P.W. Stephens
Residential, Inc. ("Residential"). In addition, the P.W. Stephens Contractors,
Inc. and QHI Stephens Contractors, Inc. subsidiaries were discontinued in May
1997, Manta's assets and liabilities were sold in November 1998 and
Residential's assets and liabilities were sold in December 1998 and have been
accounted for as discontinued operations for all current periods reported under
this Form 10-QSB.

Net Income Per Share Information

The net income per share amounts have been computed by dividing net income by
the weighted average number of common shares outstanding during the respective
periods.

In February 1997, The Financial Accounting Standards Board Issued Statement No.
128, "Earnings Per Share", which was required to be adopted on December 31,
1997. Statement 128 replaced the previously reported primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings per share is
consistent with the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented, and where
necessary, restated to conform to the Statement 128 requirements.

Revenue Recognition

The Company recognizes revenues and profits on contracts using the
percentage-of-completion method. Under the percentage-of-completion method,
contract revenues are accrued based upon the percentage that accrued costs to
date bear to total estimated costs. As contracts can extend over more than one
accounting period, revisions in estimated total costs and profits during the
course of work are reflected during the period in which the facts requiring the
revisions become known. Losses on contracts are charged to income in the period
in which such losses are first determined.

The percentage-of-completion method of accounting can result in the recognition
of either costs and estimated profits in excess of billings or billings in
excess of costs and estimated profits on contracts in progress, which are
classified as current assets and liabilities, respectively, in the accompanying
balance sheet. The current asset account represents costs incurred and profits
earned that have not been billed to the customer on uncompleted construction
contracts. The current liability account represents deferred income on
uncompleted construction contracts. Generally accepted accounting principles for
percentage-of-completion accounting require the classifications as current
assets and liabilities. Revenues from time and material contracts are recognized
currently as the work is performed.

Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform with the current year presentation.


                                       4
<PAGE>   6


                          US INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In Thousands, except Per Share Amounts)
                                   (Unaudited)

NOTE 2. DISCONTINUED OPERATIONS

During the first quarter of fiscal year 1999, the Company sold the assets and
liabilities of Manta and Residential. The results of operations for the
respective periods presented are reported as a component of discontinued
operations in the consolidated statement of operations. There were no sales from
these operations and earnings of only $8 for the period March 31, 2000.

NOTE 3. LITIGATION, COMMITMENTS AND CONTINGENCIES

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to potential
litigation, which are defended in the normal course of business. At March 31,
2000, there were various claims and disputes incidental to the business. The
Company believes that the disposition of all such claims and disputes,
individually or in the aggregate, should not have a material adverse affect upon
the Company's financial position, results of operations or cash flows. As of
March 31, 2000, the Company had not been named as a responsible party for any
environmental issues under the Federal Superfund Law.

NOTE 4. SUBSEQUENT EVENT

On July 27, 2000, a transaction was completed with a private investment firm
that altered the ownership of the holding Company's substantial shareholder. A
Form 8-K and, subsequently, Form 13-D were filed with the Securities and
Exchange Commission indicating these changes. As a result of this process, the
Company reconstituted its Board of Directors and changed its executive
management. New management is currently focused on improving operations,
bringing current its public findings, and addressing strategic planning issues.

Former management previously reported a potential merger that, if concluded,
would require the issuance of a substantial amount of the Company's shares.
management will conduct an evaluation of these discussions. In the past, former
management indicated that it had adopted a plan to dispose of its industrial
service and environmental companies. Current management is evaluating its
options and is focused on improving the financial performance of its current
business.

Agreements entered into by previous management are being reviewed by our new
management.

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

OVERVIEW

In the past, former management indicated that it had adopted a plan to dispose
of its industrial service and environmental companies. Current management is
evaluating its options and is focused on improving the financial performance of
its current business.

RESULTS OF OPERATIONS

General

The Company currently operates primarily in the environmental remediation
services industry through St. Louis. The other services formerly provided by the
Company have been classified as discontinued operations in the accompanying
financial statements. The following discussion and analysis relate to the
Company's continuing operations. The results of operations for the six months
ended March 31, 2000 are not necessarily indicative of results of operations to
be expected for the full year.

Revenue

Revenue during the three months ended March 31, 2000 increased to $3.1 million
from $2.5 million resulting from successful efforts to expand its customer base.
Revenue for the six months ended March 31, 2000 decreased to $5.6 million from
17.6 million primarily related to the sale of the assets of Residential and
Manta completed during the first quarter of fiscal 1999.


                                       5
<PAGE>   7


Selling, General and Administrative Expenses (SG&A)

SG&A during the three months ended March 31, 2000 increased 342% to $1.8 million
from $0.5 million for the same period in 1999. For the six months ended March
31, 2000 SG&A decreased 7% to $2.6 million from $2.8 million for the same
periods in 1999.


Other Income

Other income during the three and six months ended March 31, 1999 of
approximately $106 represents interest earned on notes receivable advanced by
the Company.


Other Expenses

Interest expense during the three months and six months ended March 31, 2000 was
$103 and 185, respectively, and relates primarily to the capital leases entered
into in the first quarter 2000.

Net Earnings (Loss)

Net loss during the three and six months ended March 31, 2000, decreased to $1.4
million and $1.7 million, respectively, from $0 and $3.7 million for the same
periods in 1999. The decrease was attributed to the gain realized from the sale
of the assets of Residential and Manta during the first quarter 1999.

Liquidity and Capital Resources

The Company believes that the proceeds from the sale of assets, the cash flows
from the existing operations of St. Louis and the financing arrangements the
Company currently has in place will be sufficient throughout the next twelve
months to finance its working capital needs, planned capital expenditures, debt
service and the outstanding obligations from the Company's discontinued
operations. Implementation of the Company's strategic plan of expanding its
operation may require additional capital.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENT INCLUDED IN THIS FORM 10-QSB

This Form 10-QSB contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which are intended to be covered by the safe harbors
created thereby. These statements include the plans and objectives of management
for future operations, including plans and objectives relating to future growth
of the Company's business activities and availability of funds. The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions, regulatory framework, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could be inaccurate and, therefore, there
can be no assurance that the forward-looking statements included in this Form
10-QSB will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to potential
litigation, which are defended in the normal course of business. Management
believes that such proceedings are either adequately covered by insurance, or if
uninsured, by the estimated losses it has recorded to date. The resolution of
such claims, however, could have a material effect on the Company's results of
operations or cash flows.


                                       6
<PAGE>   8


ITEM 5. OTHER INFORMATION

The following matters have not been previously reported by the Company in a
Report on Form 8-K:

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

     27.0      Financial Data Schedule

(b)  REPORTS ON FORM 8-K

     None


                                       7
<PAGE>   9


SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.

                         US INDUSTRIAL SERVICES, INC.



August 14, 2000          By: /s/ FRANK FRADELLA



                                   Frank Fradella
                                   CEO and President


                                       8
<PAGE>   10


                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
  NO.              DESCRIPTION
-------            -----------
<S>                <C>

 27.0              Financial Data Schedule
</TABLE>