U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   Form 10-QSB

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

                For the quarterly period ended September 30, 2004

[     ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                       COMMISSION FILE NUMBER: 333-112754

                         Castle & Morgan Holdings, Inc.
              (Exact name of Small Business Issuer in its Charter)


          Delaware                                     32-0104570
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                       1175 Walt Whitman Road - Suite 100
                            Melville, New York 11747
                                  631-424-9009
                    (Address of principal executive offices)


                                  631-424-9009
                           (Issuer's telephone number)

Check whether the registrant (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 of the latest practicable date: 3,809,570 shares of Common Stock, as
of November 11, 2004.


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

<PAGE>

                              Table of Contents


                                                                    Pages
PART 1.  FINANCIAL INFORMATION

Item 1   Financial Statements                                   F1 through F4

Item 2   Management's Discussion and Analysis or Plan
         of Operations                                               2

Item 3   Controls and Procedures                                     7

PART II. OTHER INFORMATION                                           7

Item 1   Legal Proceedings                                           7

Item 2   Unregistered Sale of Equity Securities and Use
         of Proceeds                                                 7

Item 3   Defaults Upon Senior Securities                             7

Item 4   Submission Of Matters To A Vote Of Security Holders         8

Item 5   Other Information                                           8

Item 6   Exhibits and Reports on Form 8-K                            8

Signature                                                            8



<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.           Financial Statements


                         CASTLE & MORGAN HOLDINGS, INC.
                                  BALANCE SHEET

                                   (Unaudited)

                               September 30, 2004

                                     ASSETS

Current assets:
 Cash and cash equivalents                                   $    1,298
                                                              ----------
    Total current assets                                          1,298

Equipment, net of accumulated depreciation of $260                  233

Intangible assets, net of accumulated amortization of $779          707
                                                              ---------
                                                             $    2,238
                                                              =========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
 Accounts payable                                            $   16,609
 Loans payable - shareholders                                    39,624
                                                              ---------
    Total current liabilities                                    56,233

Stockholders' deficit:
 Preferred stock, $.0001 par value, 1,000,000
  shares authorized; 0 shares issued and outstanding               -
 Common stock, $.0001 par value, 25,000,000 shares
  authorized; 3,709,570 shares issued and outstanding               371
 Additional paid-in-capital                                       3,011
 Accumulated deficit                                            (57,377)
                                                              ----------
    Total stockholders' deficit                                 (53,995)
                                                              ----------
                                                             $    2,238
                                                              ==========

                       See notes to financial statements.

                                      F-1
<PAGE>



                         CASTLE & MORGAN HOLDINGS, INC.

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)



                                       Nine months ended     Three months ended
                                     ---------------------   -------------------
                                         September 30,          September 30,
                                     ---------------------   -------------------
                                        2004       2003        2004      2003
                                      --------   -------      ------    ------
Net sales                            $   -      $    942     $   -     $  -
                                      -------    -------      ------    ------

Operating expenses:
 General and administrative            33,888      3,032       21,669      466
 Depreciation and amortization            995      1,867          250      399
                                      -------    -------      -------    ------
Total operating expenses               34,883      4,899       21,919      865
                                      -------    -------      ------    ------

Net loss                            $ (34,883)  $ (3,957)    $(21,919) $  (865)
                                     ========    =======      =======   =======

Net loss per share - basic
 and diluted:                       $   (0.01)  $  (0.00)    $  (0.01) $ (0.00)
                                     ========    =======      =======   =======

Weighted average common shares
 outstanding
   basic and diluted                3,709,570   3,527,801   3,709,570  3,527,801
                                    =========   =========   =========  =========


                        See notes to financial statements

                                      F-2

<PAGE>




                         CASTLE & MORGAN HOLDINGS, INC.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

                                                    Nine months ended
                                                   ---------------------
                                                      September 30,
                                                  ---------------------
                                                    2004        2003
                                                  --------     -------
Cash flows from operating activities:
 Net loss                                        $ (36,884)  $ (3,957)
                                                  --------    -------
 Adjustments to reconcile net loss to
  net cash used in operating activities:
  Depreciation and amortization                        995      1,866
 Changes in operating assets and liabilities:
  Decrease in accounts receivable                      337       -
  Increase in accounts payable                       9,162         51
                                                  --------    -------
     Total adjustments                              10,494      1,917
                                                  --------    -------
Net cash used in operating activities              (26,390)    (2,040)
                                                  --------    -------
Cash flows from financing activities:
 Capital contribution                                 -         1,000
 Loan from shareholder                              26,020      5,000
                                                  --------    -------
Net cash provided by financing activities           26,020      6,000
                                                  --------    -------
Net (decrease) increase in cash and
 cash equivalents                                     (370)     3,960
Cash at beginning of year                            1,668      1,042
                                                  --------    -------
Cash and cash equivalents at end of period       $   1,298   $  5,002
                                                  ========    =======

Supplemental cash flow information:

Cash paid during the year for:
   Interest                                      $    -      $   -
                                                  ========    =======
   Income taxes                                  $    -      $   -
                                                  ========    =======

                       See notes to financial statements.

                                      F-3
<PAGE>



                         CASTLE & MORGAN HOLDINGS, INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS



1. BASIS OF PRESENTATION

          The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures required
for annual financial statements have been condensed or omitted. The Company's
management believes that all adjustments necessary to present fairly the
Company's financial position as of September 30, 2004 and the results of
operations and cash flows for the three and nine month periods ended September
30, 2004 and 2003 have been included and that the disclosures are adequate to
make the information presented not misleading.

2. LOANS PAYABLE - SHAREHOLDERS

         During the quarter ended September 30, 2004, Internet Finance
International Corporation, a shareholder and a company wholly owned by the
Company's President, loaned the Company $14,000. The loan is payable on demand
and bears no interest.

3. SUBSEQUENT EVENT

         In November 2004, in accordance with the terms and conditions of a
Financial Advisory and Investment Banking Agreement, the Company issued 100,000
shares of common stock.

                                      F-4
<PAGE>


Item 2.           Management's Discussion and Analysis Or Plan Of Operation

Castle & Morgan Holdings, Inc. (the "Company") filed its Fourth Amendment to its
Form SB-2 Registration Statement on June 22, 2004 and received an effective date
of June 23, 2004. Such amended filing contained a relatively extensive
discussion regarding the Company's Plan of Operation. Owing to the fact that
less than five (5) months have passed since preparation of such Management's
Discussion and Analysis ("MD&A"), we are repeating certain relevant portions
thereof with only a minor change in the second paragraph to the subsection
entitled "Overview" in order to reflect net loss through September 30, 2004.
Such MD&A reads as follows:

We were incorporated under the Laws of the State of Delaware in June 2003 and
were inactive until December 18, 2003 at which time Festive World LLC
(hereinafter "Festive"), a New York Limited Liability Company, was merged into
us.

Overview

Since 1999, Festive has been engaged in operating an e-commerce website
(www.festiveworld.com) currently selling videos on a *reseller basis to the
general public with a focus toward adult oriented content. Visitors to our
website can purchase a multitude of video selections focusing on adult oriented
content in both VHS and DVD formats. When a visitor selects a movie to purchase,
they are actually purchasing the video thru our wholesale partner TLA Video,
through our privately branded website having the look and feel of
festiveworld.com. The Company currently generates revenue solely through this
source and earns commissions ranging between approximately 6% - 13% per movie
sold.

During calendar year ended December 31, 2003 we incurred a net loss of ($20,322)
as compared to a net loss of ($12,293) for calendar year ended December 31,
2002. During the nine month period ended September 30, 2004, C&M incurred a
further net loss of $34,883 as compared to a net loss of $3,957 for the nine
month period ended September 30, 2003.

* A "resale" is the ability of an entity that has not constructed a network of
its own (Castle & Morgan) to offer to end users services located on a network
built by another (TLA). In our instance, reselling by the Company on behalf of
TLA Video is simply conducted online through the Company's website
festiveworld.com which directs the purchaser to a private labeled website by TLA
Video that takes the order, processes the customers' credit card and ships out
the respective package, for which Castle & Morgan receives a commission.

Method Of Obtaining Visitor Traffic To Our Website

The method by which we obtain visitor traffic to our website is done in a
three-fold manner: (1) by listing our website festiveworld.com in major search
engines such as yahoo, google, webhound and others; (2) by subscribing to
pay-per-search services such as Overture, whereby we pay for visitor traffic
selecting specific keywords or topics and pay Overture a nominal charge on a
per-visitor or per-click charge; and (3) we obtain traffic from the general
public from public announcements and press releases.

                                       2

<PAGE>

Trends Towards Increased On-Line Internet Purchases

Current trends are showing increasing purchases being made on-line through a
host of online venues, including large and small e-commerce companies commonly
referred to as e-tailers. The rapid growth and public acceptance of the internet
as a medium for convenient and price effective shopping has been increasing
yearly as a factor of increasing broadband capacities of internet service
providers, increasing security available on the internet, increased number of
users utilizing the internet, and the wider array of choices available.

Increased Internet Competition And Uncertainties Related To Evolving Internet
Market

However, with this increased business and larger audience, the internet and the
drive to increase revenues and capture a larger audience to sell to through the
internet has created an environment of increasing competition. Many companies
such as Amazon, eBay and others sell videos and a wide assortment of other
products over the internet and have significantly more resources than our
Company. The increased level of competition may require the Company to embrace
significant marketing and advertising expenses in order to increase visitor
traffic to our website so as to increase potential revenue.

Our Company is subject to the risks and uncertainties frequently encountered by
companies in the new and rapidly evolving market for internet products and
services. These risks include the failure to develop and extend the Company's
brands, the non-acceptance or rejection of the Company's services and products
by consumers, vendors, sponsors and/or advertisers and the inability to maintain
and increase the levels of traffic on our online services.

Plan Of Operations

a.       General

The extent of our operations over the next twelve (12) months will be determined
by public acceptance of our product and our ability to market same. While we
cannot predict exactly what our level of activity will be over the next 12
months, past experience leads us to believe that available capital resources
will be adequate to fund working capital requirements for the 12 month period
commencing October 1, 2004.

We will attempt to not incur any cash obligations that we cannot satisfy with
known resources, which are currently severely limited.

The Company does not believe that period-to-period comparisons of its operating
results are necessarily meaningful nor should they be relied upon as reliable
indicators of future performance, thus making it difficult to accurately
forecast quarterly and annual revenues and results of operations. In addition,
our operating results are likely to fluctuate significantly from quarter to
quarter, and year-to-year, as a result of several factors, many of which are
outside our control, and any of which could materially harm our business. These
factors include:

        o  fluctuations in the demand for advertising or electronic commerce;

                                       3
<PAGE>

        o  the unpredictability of our success in any new revenue and cost
           reduction initiatives;

        o  volatility in the media market is general and the high number of
           companies decreasing their marketing budgets;

        o  changes in the level of traffic on our websites; and

        o  fluctuations in marketing expenses and technology infrastructure
           costs.

Our revenues for the foreseeable future will remain primarily dependent on user
traffic levels and advertising activity on our website(s). As aforesaid, future
revenues are difficult to forecast. The Company may be unable to adjust spending
quickly enough to offset any unexpected reduction in revenues in a particular
quarter or year, which may materially adversely affect our business, financial
condition and results of operations.

b.       The TLA Agreement

The Company's business model and how it generates revenue is as a reseller of
TLA Video.

Revenue generation is accomplished by referring customers through our
festiveworld.com website to purchase products from TLA Video's festiveworld
affiliate e-commerce website that has the look and feel of festiveworld.com. For
each customer that purchases a product from TLA Video via the festiveworld.com
website, we earn a commission. The manner in which festiveworld acquires
customers is through search engines and when deployed, pay-per-click advertising
and/or banner advertising programs on other websites. For instance, when a
person does a search on google.com, one of the world's leading search engines,
for "festive videos" our website URL www.festiveworld.com appears as being one
of the relevant selections for that search term. By clicking on the URL
festiveworld.com - it directs the person to our website where they can select
and purchase any one or several videos out of a large selection of adult, gay,
lesbian and mainstream videos. If for instance, somebody purchases a video for
$30.00 and our commission rate for that product is ten percent (10%), we would
receive a commission of $3.00. Since we do not hold inventory, take possession,
nor transact the actual credit card purchase, our revenues are solely based upon
commission based revenue. For additional information regarding our agreement
with TLA Video, see Business - General and the TLA Agreement filed as an Exhibit
to our Registration Statement.

c.       Expansion Plans

We may wish to expand our business activities through acquisitions of
complimentary or ancillary business(es) in order to attempt to compliment or
"niche" of adult oriented material. Currently, our websites focus is geared
towards videos and music ("Content") in order to offer and provide offering
alternative content for the gay, lesbian and bi-sexual marketplace. Our
expansion plans may include the partnering, licensing, acquiring, or merging
with other companies that have access to Content, or are actively involved in
facilitation of the sale, development, licensing, creation, or delivery of
Content. While we may not be able to readily find companies of this nature as it
relates to Content, we may seek alternatives outside the scope of this immediate
focus in an attempt to increase shareholder value and to otherwise diversify the
Company's business focus and potential for revenue or profits.

                                       4

<PAGE>

As heretofore indicated in Risk Factor 7 to our Registration Statement, these
plans, if implemented, would require additional sources of funds or sale of C&M
equity securities (the latter of which would dilute existing shareholder
interests). To date, we have not identified or targeted any firms for
acquisitions or other forms of business combinations.

Results of Operations for the Nine Months ended September 30, 2004 in Comparison
to the Nine Months Ended September 30, 2003

Net sales for nine months ended September 30, 2004 decreased by 100% from the
comparative period ended September 30, 2003 (from $942 to $0). Total operating
expenses increased by approximately 612% from $4,899 for the nine months ended
September 30, 2003 to $34,883 for the nine months ended September 30, 2004. The
primary reason for the increase in operating expenses resulted from an increase
in professional fees, incurred from the filing of our registration statement,
from $0 to $30,317. As a result of the above, net loss for the nine months ended
September 30, 2004 increased by approximately 782% from ($3,957) to ($34,883).

Net sales have decreased (as indicated above) due to our being in a transition
phase. The decrease in comparative revenues (from $942 to $0) is principally due
to the Company narrowing its focus to only being an affiliate reseller of TLA
Video. Due to the increased competition for the sale of videos, DVD's and the
like over the Internet, coupled by the increasing costs of advertising and
marketing, we were not able to promote and market our products (and website) at
the same level and budget as during the previous quarter.

Liquidity

As of November 4, 2004 we had $823 in cash.

We anticipate that our available capital resources will be adequate to fund our
working capital requirements based upon our present level of operations for the
12-month period subsequent to October 1, 2004. However, unanticipated future
events may cause us to seek additional working capital sooner. A shortage of
capital would affect our ability to fund our working capital requirements. If we
require additional capital, funds may not be available on acceptable terms, or
at all. In addition, if we raise additional capital through the sale of equity
securities, the issuance of these securities could dilute existing shareholders.
If funds are not available, this could materially adversely affect our financial
condition and results of operations.

We do not have any credit facilities or other commitments for debt or equity
financing. No assurance can be given that financing, when needed, will be
available. To date, we have not sought any funding source and have not
authorized any person or entity to seek out funding on our behalf.

To meet commitments that are greater than 12 months in the future, we will have
to operate our business in such a manner as to obtain public acceptance of and
demand for our products. There does not currently appear to be any other viable
source of long-term financing except that management may consider various

                                       5

<PAGE>

sources of debt and/or equity financing if same can be obtained on terms deemed
reasonable to management.

Absent available financing, our President will loan the Company monies as
needed. No formal written arrangement exists with our President committing to
advance funds, however he has orally agreed to do so and during the quarter
ended September 30, 2004, Internet Finance International Corporation, a
shareholder and a Company wholly owned by our President, loaned the Company
$14,000.

Further and in terms of the Company's liquidity, management (Mr. Kern) will
continue to loan capital to the Company on an as needed basis until operations
have been stabilized and positive cash flow has been achieved and/or financing
from outsides sources is obtained to further sustain the Company's operations.
Considering the Company's low cost of operation and low overhead, management is
confident that it will have the available financial resources by revenues,
financing and/or loans from Mr. Kern to continue with our operations.

In addition, the Company may, upon acceptance by any one of our vendors and/or
service providers, make payment in the form of Company's securities so long as
permissible under securities law. Lastly, increased sales activity may offset
the needed working capital and reduce the need to adequately further fund
working capital requirements.

                                       6
<PAGE>



Item 3.           Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management (consisting solely of our President) conducted an evaluation of
our "disclosure controls and procedures" (as defined in the General Rules and
Regulations under the Securities Exchange Act of 1934 at Rules 13a-15 and
15d-15). Based on management's evaluation, it was concluded that as of the
Evaluation Date, our disclosure controls and procedures are effective to ensure
that all material information required to be filed in this Quarterly Report on
Form 10-QSB has been made known to him in a timely fashion.

There have been no significant changes (including corrective actions with regard
to significant deficiencies or material weaknesses) in our internal controls or
in other factors that could significantly affect these controls subsequent to
the Evaluation Date set forth above.

PART II.          OTHER INFORMATION

Item 1.           Legal Proceedings:        None

Item 2.           Unregistered Sale of Equity Securities and Use of Proceeds

                  a. The following equity securities of the Company were issued
                     on November 10, 2004 and were not registered under the
                     Securities Act.

                        i.          Issuance of 100,000 restricted shares of
                                    common stock issued in accordance with the
                                    terms and conditions of a Financial Advisory
                                    and Investment Banking Agreement
                                    ("Agreement") between the Company and
                                    vFinance Investments, Inc. Each of these
                                    restricted shares bear a restrictive legend;

                        ii.         there were no underwriters involved in the
                                    transaction, nor were there any underwriting
                                    discounts or commissions paid. Consideration
                                    for the issuance of such restricted shares
                                    relates directly to a retainer fee for
                                    compensation for services under the
                                    aforesaid Agreement;

                        iii.        the Company claimed exemption from
                                    registration in accordance with Section 4(2)
                                    as transaction by an issuer not involving a
                                    public offering.

                  b. Not Applicable.

                  c. There were no Company repurchases of equity securities
                     during the period covered by this Form 10-QSB.

Item 3.           Defaults Upon Senior Securities:  None

                                       7

<PAGE>

Item 4.           Submission of Matters to a Vote of Shareholders

On July 11, 2004 the Board of Directors and certain principal stockholders of
the Company, representing approximately 65.1% of the total issued and
outstanding Common Stock, adopting a resolution to amend the Company's Articles
of Incorporation to increase the authorized shares of Common Stock from
25,000,000 to 100,000,000. A Preliminary Information Statement, pursuant to
Section 14(C) of the Securities Exchange Act of 1934 and Rule 14C-2 thereunder
was filed with the SEC on August 10, 2004 and the Definitive Information
Statement was filed with the SEC on November 15, 2004.

The above-referenced resolution will become effective 21 calendar days after the
mailing of the Definitive Information Statement.

Item 5.           Other Information:        None

Item 6.           Exhibits and Reports on Form 8-K

                  a.       8-K: None

                  b.       Exhibit
                                  31  Section 302 Certification of Chief
                                      Executive  Officer and Chief
                                      Financial Officer

                                  32  Certification  Pursuant  to 18 U.S.C.
                                      Section  1350, as Adopted Pursuant to
                                      Section 906 Of The Sarbanes-Oxley Act Of
                                       2002

                                    SIGNATURE


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


Dated:   November 15, 2004
         Melville, New York

                     CASTLE & MORGAN HOLDINGS, INC.
                              (Registrant)

/s/ Christopher Kern
--------------------------------------------------------------
Christopher Kern, Chief Executive Officer, Principal Executive
Financial and Accounting Officer



                                       8