SECURITIES AND EXCHANGE COMMISSION
                    Washington, DC 20549

                         FORM 10-KSB
  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                    EXCHANGE ACT OF 1934

For the year ended December 31, 2000
Commission File No. 000-31129





                     HOLMES HERBS, INC.
   (Exact name of registrant as specified in its charter)




Nevada                                            88-0412635
(State of organization) (I.R.S. Employer Identification No.)

3651 Lindell Rd., Suite A, Las Vegas, NV 89103
(Address of principal executive offices)

Registrant's telephone number, including area code (702) 873-7404

Securities registered under Section 12(g) of the Exchange
     Act: Common stock, $0.001 par value per share

Check whether the issuer (1) filed all reports required to
be file by Section 13 or 15(d) of the Exchange Act during
the past 12 months and (2) has been subject to such filing
requirements for the past 90 days.  Yes X

Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this
form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-KSB or any amendments to this Form 10-KSB.     [ X ]

Issuer's Revenue during the year ended December 31, 2000:
$ 0

As  of  December 31, 2000, the registrant had 250,000 shares
of   its   common  stock,  $0.001  par  value,  outstanding.
Aggregate  market value of the voting and non-voting  common
equity held by non-affiliates based on the price of N/A  per
share  (the  selling or average bid and asked price)  as  of
December 31, 2000: N/A.

NOTE: The company's stock is not, and has not, been traded
or quoted, and the book value is negative. Therefore, there
is no way to ascertain a market value for the stock.

            DOCUMENTS INCORPORATED BY REFERENCE:

None

                           PART I

ITEM 1.   DESCRIPTION OF BUSINESS

                         Background

Holmes  Herbs, Inc. (the "Company") is a Nevada  corporation
formed  on December 3, 1998. Its principal place of business
is  located  at  3651 Lindell Rd., Suite A,  Las  Vegas,  NV
89103.

                     Business of Issuer

The  Company was organized to engage in any lawful corporate
business.  Since its inception, the Company's main  activity
has been organizational.

The  Company  plans to engage in both wholesale  and  retail
distribution  of  herbal products beginning  in  Las  Vegas,
Nevada.  The  Company will rely on newspaper  advertisements
and  later  will use e-commerce to implement  its  marketing
objectives.   The  Company also intends  to  utilize  direct
mailing and e-mail to solicit manufacturers and retailers of
products.

The company has not yet introduced any products, and has not
entered  into  agreements  with  any  suppliers.   Once  the
Company  begins  offering products for sale,  it  will  face
competition  from existing suppliers. Competition  in  these
products  is  primarily  centered on quality,  price,  brand
recognition and service, with an emphasis on the service. To
be  competitive  in  these marketplaces,  the  Company  must
effectively  maintain and promote the quality  of  both  the
products  and  service among consumers and establish  strong
marketing  relationships with manufacturers and distributors
of  the  products.  While the Company believes that it  will
compete   effectively,   many  of   the   competitors   have
substantially greater resources and well recognized business
names.   The Company believes it can take advantage  of  its
smaller  size to attract customers seeking more personalized
service.  The  Company  expects  to  attract  customers  via
various  internet search engines upon completion of  various
web pages.

                     Marketing Strategy

The  Company  intends to engage in both  the  wholesale  and
retail distribution of herbal products.  The Company intends
to initially rely on newspaper advertisements and later on e-
commerce  to  implement the Company's marketing  objectives.
The  Company also intends to utilize direct mailing, and  e-
mail  to  solicit  manufacturers and Retailers  of  products
which will be sold by the Company.

The  Company's marketing and licensing strategy  is  to  (i)
establish and expand a clientele; (ii) expand the number  of
advertisements; and (iii) acquire or establish relationships
with  major  manufacturers businesses, companies, properties
or technologies.

The  Company  will  purchase  most  of  its  inventory  from
manufacturers principally in North America and  the  Orient.
To  date,  no  contracts have been executed and the  Company
does  not anticipate entering into any contracts due to lack
of funding.  Upon funding, letters of credit may be sought.

The  need  for  herbal products increases as the  increasing
population has begun returning to nature (herbs) to heal any
ailments.   The Company does not anticipate being  dependent
on  one  major or a few major customers.  The business  will
supply  to  major  herbal retailers and the general  public.
Also  listing  the  web  page(s) throughout  various  search
engines  should  provide the Company with numerous  business
opportunities.

As  of  the date of this Registration Statement, the Company
has one part time employee, who to this date has not entered
into an employment arrangement with the Company.  Due to the
lack  of  funding, the Company has no collective  bargaining
agreements  covering its only employee, has not  experienced
any  material labor disruption and is unaware of any efforts
or  plans  to  organize its future employees.   The  Company
considers relations with its employee to be good.

Other  than  the  early design stages of  its  website,  the
Company has no intellectual property rights.

ITEM 2.   DESCRIPTION OF PROPERTY.

The Company's principal executive and administrative offices
are  temporarily  located  at 886 Calverhill  Street,  North
Vancouver,  BC,  Canada V7L 1X9, which is  provided  by  the
President  at  no charge to the Company.  The  Company  also
uses  shared office space with secretarial services  located
at  3651 Lindell Rd., Suite A, Las Vegas, Nevada 89103 at no
cost to the Company, and Management expects this arrangement
to  continue.  The  Company pays its own  charges  for  long
distance    telephone   calls   and   other    miscellaneous
secretarial, photocopying, and similar expenses. This  is  a
verbal agreement between Vegas Commerce Center and the Board
of Directors.

ITEM 3.   LEGAL PROCEEDINGS

The  Company  is not a party to any material  pending  legal
proceedings  and,  to  the best of its  knowledge,  no  such
action by or against the Company has been threatened.

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

No  such  matters  were  submitted during  the  most  recent
quarter.

                           PART II

ITEM 5.   MARKET  FOR  COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS.

The  Company's common stock is not yet quoted on any  market
or quotation system in the United States. Management has not
undertaken  any discussions, preliminary or otherwise,  with
any prospective market maker concerning the participation of
such  market  maker  in the after-market for  the  Company's
securities.

                        Market Price

The  Registrant's Common Stock is not quoted at the  present
time.

Effective  August  11,  1993, the  Securities  and  Exchange
Commission   adopted  Rule  15g-9,  which  established   the
definition of a "penny stock," for purposes relevant to  the
Company,  as any equity security that has a market price  of
less  than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any
transaction  involving  a penny stock,  unless  exempt,  the
rules  require:  (i)  that  a broker  or  dealer  approve  a
person's account for transactions in penny stocks; and  (ii)
the  broker  or dealer receive from the investor  a  written
agreement to the transaction, setting forth the identity and
quantity  of  the penny stock to be purchased. In  order  to
approve a person's account for transactions in penny stocks,
the  broker  or dealer must (i) obtain financial information
and  investment experience and objectives of the person; and
(ii)  make  a reasonable determination that the transactions
in penny stocks are suitable for that person and that person
has sufficient knowledge and experience in financial matters
to  be  capable  of evaluating the risks of transactions  in
penny  stocks. The broker or dealer must also deliver, prior
to  any  transaction in a penny stock, a disclosure schedule
prepared  by  the  Commission relating to  the  penny  stock
market,  which, in highlight form, (i) sets forth the  basis
on   which   the  broker  or  dealer  made  the  suitability
determination; and (ii) that the broker or dealer received a
signed,  written agreement from the investor  prior  to  the
transaction. Disclosure also has to be made about the  risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer  and  the  registered representative,  current
quotations  for the securities and the rights  and  remedies
available  to an investor in cases of fraud in  penny  stock
transactions. Finally, monthly statements have  to  be  sent
disclosing recent price information for the penny stock held
in  the  account  and information on the limited  market  in
penny stocks.

The  National Association of Securities Dealers,  Inc.  (the
"NASD"), which administers NASDAQ, has recently made changes
in  the criteria for initial listing on the NASDAQ Small Cap
market  and  for continued listing. For initial  listing,  a
company must have net tangible assets of $4 million,  market
capitalization of $50 million or net income of  $750,000  in
the  most  recently completed fiscal year or in two  of  the
last  three  fiscal years. For initial listing,  the  common
stock must also have a minimum bid price of $4 per share. In
order  to continue to be included on NASDAQ, a company  must
maintain  $2,000,000 in net tangible assets and a $1,000,000
market value of its publicly-traded securities. In addition,
continued inclusion requires two market-makers and a minimum
bid price of $1.00 per share.

Management  intends  to  strongly  consider  undertaking   a
transaction  with any merger or acquisition candidate  which
will allow the Company's securities to be traded without the
aforesaid  limitations. However, there can be no  assurances
that,  upon a successful merger or acquisition, the  Company
will  qualify its securities for listing on NASDAQ  or  some
other  national  exchange,  or  be  able  to  maintain   the
maintenance criteria necessary to insure continued  listing.
The  failure of the Company to qualify its securities or  to
meet   the   relevant   maintenance  criteria   after   such
qualification in the future may result in the discontinuance
of  the  inclusion of the Company's securities on a national
exchange.  In such events, trading, if any, in the Company's
securities  may  then  continue in the non-NASDAQ  over-the-
counter market. As a result, a shareholder may find it  more
difficult to dispose of, or to obtain accurate quotations as
to the market value of, the Company's securities.

                           Holders

There  are  47  holders of the Company's Common  Stock.  The
company  issued 100,000 shares of Common Stock  on  December
31, 1998 and an additional 30,000 shares of Common Stock  on
November 12, 1999. The Company also issued and sold  100,000
shares  on  March  23,  1999, pursuant  to  a  Rule  504  of
Regulation D Offering promulgated under the Securities  Act.
These  shares  were issued for a price of  $0.10  per  share
pursuant  to  an  exemption  from registration  provided  by
Section 4(2) of the Securities Act of 1933, as amended  (the
"Securities Act").

On  December  31,  1998, the Company  issued  the  following
shares:  5,000 to Maria Aguilar; 10,000 to Kim Chan;  10,000
to  Roger  Farmer;  5,000 to Martin  Kay;  7,500  to  Sharon
Kennedy;  5,000  to  John Lynch; 10,000 to  William  Miller;
5,000 to David Owens; 7,500 to Christine Roberts; 10,000  to
Jesus  Sanchez;  7,500  to  Mary  Sullivan;  7,500  to  Mark
Ventura; and 10,000 to Chi Yang.

On  March  23,  1999,  pursuant to an executed  Subscription
Agreement at the price of $.10 per share, the Company issued
the following shares: 2,000 to Sarah Adams; 3,000 to William
Bruce; 5,000 to David Cardenas; 4,000 to John Daniels; 3,000
to Shirley Dickenson; 5,000 to James Elliott; 5,000 to Julia
Evans; 2,000 to Jesse Graham; 2,500 to Susan Hahn; 3,000  to
Michael  Hall;  5,000  to  Dennis Harrison;  2,500  to  Gary
Lawson;  4,000  to  John Lucas; 4,500 to  Michelle  Mahoney;
5,000 to Charles Mann; 3,000 to Anna Marshall; 2,500 to Jose
Martinez; 5,000 to Joseph Murphy; 3,000 to Nancy Nash; 2,000
to  Heather  Nelson; 3,000 to Diane Oliver;  2,000  to  Juan
Ortega; 3,000 to John Parker; 3,000 to William Parks;  1,500
to  John Richardson; 4,000 to Robert Rivera; 1,500 to Robert
Shannon;  2,500 to Patricia Smith; 1,500 to Antonio  Torres;
2,000  to Charles Tucker; 1,500 to John Valentine; 3,000  to
Michael Ward and 2,000 to David Wright.

On  November 12, 1999, the Company issued 30,000  shares  to
Bill Aaron.

                        Shareholders

As  of  February  23,  2001, there  were  _____  holders  of
Company's common stock.

                          Dividends

Holmes Herbs has not paid any dividends on its common stock.
Our company currently intends to retain any earnings for use
in  its  business,  and  does  not  anticipate  paying  cash
dividends in the foreseeable future.

ITEM 6.   MANAGEMENT'S PLAN OF OPERATION

NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS

This  statement includes projections of future  results  and
"forward-looking  statements" as that  term  is  defined  in
Section  27A  of the Securities Act of 1933 as amended  (the
"Securities  Act"),  and  Section  21E  of  the   Securities
Exchange  Act of 1934 as amended (the "Exchange  Act").  All
statements  that  are included in this  filing,  other  than
statements   of   historical   fact,   are   forward-looking
statements.    Although   Management   believes   that   the
expectations  reflected in these forward-looking  statements
are   reasonable,  it  can  give  no  assurance  that   such
expectations  will  prove  to have been  correct.  Important
factors that could cause actual results to differ materially
from  the  expectations  are disclosed  in  this  Statement,
including,  without  limitation, in conjunction  with  those
forward-looking statements contained in this Statement.

The  Company  plans to engage in both wholesale  and  retail
distribution  of herbal products based on natural  remedies.
Additional  funding  through  private  placement   will   be
necessary  to enable the Company to lease a suitable  office
warehouse facility in Las Vegas and to enable the Company to
complete its web page and to secure contracts with suppliers
and buyers of the products.

                          Liquidity

The  Company  will have to raise additional capital  in  the
next  twelve  months.  As of December 31, 1999, the  Company
had  nominal  working  capital and  results.   In  order  to
satisfy the liquidity needs of the Company for the following
twelve months, the Company will be primarily dependent  upon
proceeds  from  the  sale  of the  Company's  common  and/or
preferred  stock  and  possible cash flow  from  operations.
Historically,  revenues from existing  operations  have  not
been adequate to fund the operations of the Company.  If the
Company is unable to obtain adequate funds from the sale  of
its  stock  in  public  offerings,  private  placements,  or
alternative  financing arrangements, it may be necessary  to
postpone   any  additional  acquisitions  or  the  Company's
ability  to  obtain Letters of Credit.  The  Company,  under
such  circumstances,  would resort to using  cash  flow  for
internal growth.

While  the  Company has raised capital to meet  its  working
capital   and  financing  needs,  additional  financing   is
required  in  order  to  complete the  planned  improvements
necessary  to  the Company's acquisitions.  The  Company  is
seeking  financing, in the form of equity and debt in  order
to  make  the  necessary improvements  and  provide  working
capital.   There  are  no assurances  the  Company  will  be
successful in raising the funds required.

The  Company has issued shares of its Common Stock from time
to  time  in  the  past to satisfy certain  obligations  and
expects  in  the  future to also acquire  certain  services,
satisfy  indebtedness  and/or  make  acquisitions  utilizing
authorized  shares of the capital stock of the Company.   If
operations  and  cash  flow can be  improved  through  these
efforts,  management  believes that the Company's  liquidity
problems  will be resolved and that the Company can continue
to  operate.   However,  no  assurance  can  be  given  that
management's actions will result in profitable operations.

The  plan of the Company is to raise more financing as  soon
as  the  Company's shares are approved for trading to enable
the Company to enter into purchase and supply contracts.  An
overall budget of $650,000 for the first year should achieve
the  Company's goals.  The Company does not anticipate  that
there will be a need to dramatically increase the number  of
employees over the next twelve months.

               Investment Company Act of 1940

Although the Company will be subject to regulation under the
Securities  Act of 1933 and the Securities Exchange  Act  of
1934, management believes the Company will not be subject to
regulation under the Investment Company Act of 1940  insofar
as  the  Company  will not be engaged  in  the  business  of
investing or trading in securities. In the event the Company
engages in business combinations which result in the Company
holding   passive  investment  interests  in  a  number   of
entities,  the Company could be subject to regulation  under
the  Investment  Company Act of 1940.  In  such  event,  the
Company  would  be  required to register  as  an  investment
company   and   could  be  expected  to  incur   significant
registration and compliance costs. The Company has  obtained
no  formal  determination from the Securities  and  Exchange
Commission  as  to  the  status of  the  Company  under  the
Investment  Company  Act  of  1940  and,  consequently,  any
violation of such Act would subject the Company to  material
adverse consequences.

ITEM 7.   FINANCIAL STATEMENTS.

The  Audited Financial Statements as of December. 31,  2000,
and December 31, 1999
                 TABLE OF CONTENTS


                                                     Page Number

INDEPENDENT ACCOUNTANT'S REPORT                     1

FINANCIAL STATEMENT

       Balance Sheets                                2

       Statements of Operations and
      Deficit
          Accumulated During the Development         3
      Stage

       Statement of Changes in Stockholders'         4
      Equity

       Statements of Cash Flows                      5

       Notes to the Financial Statements           6-7


David E. Coffey     3651 Lindell Road, Suite I, Las Vegas,
NV 89103
____________________________________________________________
________________
Certified Public Accountant

               INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Stockholders
of Holmes Herbs, Inc.
Las Vegas, Nevada

     I have audited the accompanying balance sheets of
Holmes Herbs, Inc.
(a development stage company) as of December 31, 2000, and
December 31,
1999, and the related statements of operations, cash flows,
and changes in
stockholders' equity for the years then ended, as well as
the cumulative period
from December 3, 1998 (date of inception) to December 31,
2000.  These
statements are the responsibility of Holmes Herbs, Inc.'s
management.
My responsibility is to express an opinion on these
financial statements
based on my audit.

     I conducted my audit in accordance with generally
accepted
auditing standards.  Those standards require that I plan and
perform
the audit to obtain reasonable assurance about whether the
financial
statements are free of material misstatement.  An audit
includes
examining, on a test basis, evidence supporting the amounts
and
disclosures in the financial statements.  An audit also
includes
assessing the accounting principles used and significant
estimates
made by management, as well as evaluating the overall
financial
statement presentation.  I believe that my audit provides a
reasonable
basis for my opinion.

     In my opinion, the accompanying financial statements
present
fairly, in all material respects, the financial position of
Holmes Herbs,
Inc. as of December 31, 2000, and December 31, 1999, and the
results
of operations, cash flows, and changes in stockholders'
equity for the
years then ended, as well as the cumulative period from
December 3,
1998, in conformity with generally accepted accounting
principles.



David E. Coffey, C. P. A.
Las Vegas, Nevada
February 16, 2001



HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
BALANCE SHEETS

<TABLE>
<S>                                             <C>              <C>
                                                December 31,     December 31,
                                                2000             1999
ASSETS                                          ----------       ----------

Cash                                             $   20,041       $      41
                                                 ----------       ---------
  Total Assets                                   $   20,041       $      41
                                                 ==========       =========

LIABILITIES & STOCKHOLDERS' EQUITY

Accounts payable                                 $    6,400       $     400
                                                 ----------       ---------
  Total Liabilities                                   6,400             400

Stockholders' Equity
  Common stock, authorized
   50,000,000 shares at .001 par value,
   250,000 and 230,000 shares, respectively,
   issued and outstanding                               250             230
   Additional paid-in capital                        23,600           3,620
   Deficit accumulated during the
   development stage                               (10,209)         (4,209)
                                                 ----------       ---------
    Total Stockholders' Equity                       13,641           (359)


    Total Liabilities and Stockholders' Equity   $   20,041      $       41
                                                 ==========      ==========
</TABLE>
The accompanying notes are an integral part of these
financial statements.

                           -  2  -



HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
( With Cumulative Figures From Inception )

<TABLE>
<S>                               <C>              <C>             <C>
                                   Year ended      Year ended      From Inception
                                                                   Dec. 3, 1998 to
                                   Dec. 31, 2000   Dec. 31, 1999   Dec. 31, 2000
                                      --------      --------       ---------
Income                               $       0       $      0      $      0

Expenses
  Office and
   administrative expenses                   0          3,809         3,809
  Professional fees                      6,000              0         6,000
  Organizational costs                       0              0           400
                                     ---------       --------      --------
Total expenses                           6,000          3,809        10,209

Net loss                               (6,000)        (3,809)      (10,209)
                                                                   ========

Retained earnings, beginning
 of period                             (4,209)          (400)
                                     ---------       --------
Deficit accumulated during the
 development stage                   $(10,209)       $(4,209)
                                     =========       ========


Earnings ( loss ) per share
 assuming dilution:
Net loss                             $  (0.03)       $ (0.02)      $ (0.05)
                                     =========       ========      ========

Weighted average
shares outstanding                     236,667        171,667       200,000
                                     =========       ========      ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.

                            - 3 -

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM DECEMBER 3, 1998  ( Date of Inception ) TO DECEMBER 31, 2000

<TABLE>
<S>                             <C>             <C>            <C>           <C>                <C>
                                        Common Stock         Additional      Deficit accumul-   Total
                                Shares          Amount         Paid-in       ated during the
                                                               Capital       development stage
                                ---------       -----------    -----------   ----------         ----------
                                                   $             $               $               $
Balance,
December 3, 1998                       -----           -----        -----            ----            -----

Issuance of common
stock for cash
December 31, 1998                    100,000             100            0               0              100

Less net loss                              0               0            0           (400)            (400)
                                   ---------      ----------    ---------       ---------        ---------
Balance,
December 31, 1998                    100,000      $      100    $       0       $   (400)        $   (300)

Issuance of common
stock for cash
March 23, 1999                       100,000             100        9,900               0           10,000

Issuance of common
stock for cash Nov. 10, 1999          30,000              30        2,970               0            3,000

Less offering costs                        0               0      (9,250)               0          (9,250)

Less net loss                              0               0            0         (3,809)          (3,809)
                                   ---------      ----------    ---------       ---------        ---------
Balance,
December 31, 1999                    230,000             230        3,620         (4,209)            (359)

Issuance of common
stock for cash, August 24, 2000       20,000              20       19,980               0           20,000

Less net loss                              0               0            0         (6,000)          (6,000)
                                   ---------      ----------    ---------       ---------        ---------
Balance,
December 31, 2000                    250,000      $      250    $  23,600       $(10,209)        $  13,641
                                   =========      ==========    =========       =========        =========
</TABLE>
The accompanying notes are an integral part of these financial statements
                                      - 4 -
HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF CASH FLOWS
( With Cumulative Figures From Inception )
<TABLE>
<S>                                   <C>             <C>            <C>
                                      Year ended      Year ended     From Inception,
                                                                     Dec. 3, 1998 to
                                      Dec. 31, 2000   Dec. 31, 1999  Dec. 31, 2000
                                      ----------      ----------     -------------
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES
Net Loss                                $(6,000)          $(3,809)      $ (10,209)
Non-cash items included in net loss
Adjustments to reconcile net loss to
 cash used by operating activity
  Accounts payable                         6,000                 0           6,400
                                        --------          --------      ----------
   NET CASH PROVIDED BY
   OPERATING ACTIVITIES                        0           (3,809)         (3,809)

CASH FLOWS FROM INVESTING                      0                 0               0
ACTIVITIES

CASH FLOWS FROM FINANCING
ACTIVITIES
  Sale of common stock                        20               130             250
  Paid-in capital                         19,980            12,870          32,850
  Less offering costs                          0           (9,250)         (9,250)
                                        --------          --------      ----------
   NET CASH PROVIDED BY
   FINANCING ACTIVITIES                   20,000             3,750          23,850

   NET INCREASE IN CASH                   20,000              (59)      $   20,041
                                                                        ==========
CASH AT BEGINNING OF PERIOD                   41               100
                                        --------          --------
   CASH AT END OF PERIOD                $ 20,041          $     41
                                        ========          ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.

                            - 5 -

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2000, AND DECEMBER 31, 1999


NOTE A    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          The Company was incorporated on December 3, 1998,
          under the laws of the State of Nevada. The
          business purpose of the Company is to procure and
          resell herbal remedies.

          The Company will adopt accounting policies and
          procedures based upon the nature of future
          transactions.

NOTE B    OFFERING COSTS

          Offering costs were deducted from the proceeds of
          the  public offering.

NOTE C    EARNINGS (LOSS) PER SHARE

          Basic EPS is determined using net income divided
          by the  weighted average shares outstanding during
          the period. Diluted EPS is computed by dividing
          net income by the weighted average shares
          outstanding, assuming all dilutive potential
          common shares were issued.  Since the Company has
          no common shares that are potentially issuable,
          such as stock options, convertible securities or
          warrants, basic and diluted EPS  are the same.

NOTE D    COMMON STOCK ISSUES

          On March 23, 1999, the Company completed the sale
          of 100,000 shares of it's common stock at $.10 per
          share for total proceeds of $10,000.  The net
          proceeds were to be used for marketing of herbal
          remedies.

          On November 10, 1999, the Company sold by private
          placement 30,000 common shares at $.10 per share
          for a total of $3,000. The proceeds were to be
          used for working capital.

          On August 24, 2000, the Company completed a
          private placement offering and sold 20,000 shares
          of its common stock at $1.00 per share for a total
          of $20,000.  The proceeds are to be used to
          purchase and resell herbal remedies.

                            - 6 -

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2000, AND DECEMBER 31, 1999
(continued)

NOTE D    COMMON STOCK ISSUES (continued)

          All of the above shares were issued pursuant to an
          exemption from registration requirements under
          Section 4 (2) of the Securities Act.




                            - 7 -

ITEM 8.   CHANGES  IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON
          ACCOUNTING AND FINANCIAL DISCLOSURE.

Since the inception of Holmes Herbs on December 3, 1998, the
principal independent accountant for the Company has neither
resigned nor been dismissed.

                          PART III

ITEM 9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS,   AND
          CONTROL PERSONS

The  members of the Board of Directors of the Company  serve
until  the next annual meeting of the stockholders, or until
their  successors have been elected. The officers  serve  at
the pleasure of the Board of Directors.

There  are  no  agreements for any officer  or  director  to
resign  at the request of any other person, and none of  the
officers  or directors named below are acting on behalf  of,
or at the direction of, any other person.

The  Company's officers and directors will devote their time
to  the  business on an "as-needed" basis, which is expected
to require 5-10 hours per month.

Information  as to the directors and executive  officers  of
the Company is as follows:

Name/Address             Age    Position
Patricia Wiate           46     President, Secretary,
                                Treasurer and Director

Patricia Wiate; President, Secretary, Treasurer and Director

Ms.  Wiate has been the President, Secretary, Treasurer  and
Director  of the Company since incorporation on December  3,
1998.   Ms.  Wiate  has been involved in  retail  sales  and
marketing including pottery from 1989 through 1996 and  wine
from 1997 through 1999.  Prior to that time she studied wine
in Europe while her husband was in the military.

ITEM 10.  EXECUTIVE COMPENSATION

The  Company's officer and/or director has not received  any
compensation  for her services rendered to the Company,  nor
has  she  received such compensation in the  past.  She  has
agreed  to act without compensation until authorized by  the
Board of Directors, which is not expected to occur until the
Registrant has generated revenues from operations. As of the
date  of  this  registration statement, the Company  has  no
funds available to pay Ms. Wiate and she is not accruing any
compensation pursuant to any agreement with the Company.

No  retirement,  pension, profit sharing,  stock  option  or
insurance  programs  or  other similar  programs  have  been
adopted by the Registrant for the benefit of its employees.

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS
          AND MANAGEMENT.

There  are  no persons known to the Company, as of  February
23,  2001, to be a beneficial owner of five percent (5%)  or
more  of  the  Company's  common  stock,  by  the  Company's
directors   individually,  and  by  all  of  the   Company's
directors and executive officers as a group.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not Applicable.

ITEM 13.  EXHIBITS.

EXHIBITS

3.1   The  exhibit consisting of the Company's  Articles  of
Incorporation is attached to the Company's Form 10-SB, filed
on  July 24, 2000. This exhibit is incorporated by reference
to that Form.

3.2   The  exhibit  consisting of the  Company's  Bylaws  is
attached  to  the Company's Form 10-SB, filed  on  July  24,
2000.  This  exhibit is incorporated by  reference  to  that
Form.
                         SIGNATURES

In  accordance  with Section 13 or 15(d) of  the  Securities
Exchange Act, the Registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
                           Holmes Herbs, Inc.


                           By: /s/ Patricia Wiate
                              Patricia Wiate, President
                           Date:                 March 1,
                              2001