UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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


For Quarter Ended:  August 31, 2000         Commission File Number:    0-22382

                           SECTOR COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

               Nevada                                  56-1051491
               ------                                  ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                7601 Lewinsville Road, Ste 250, McLean, VA 22102
                ------------------------------------------------
              (Address of principal executive offices) (Zip Code)

                                 (703) 761-1500
                                 --------------
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  proceeding  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. [ X ] Yes [ ] No

         Indicate  the  number of  shares  outstanding  of each of the  issuer/s
classes of common stock as of the last practicable date:

    Number of Shares of Common Stock outstanding at August 31, 2000: 17,368,805


<PAGE>





                           SECTOR COMMUNICATIONS, INC.

                                      INDEX

   PART I   FINANCIAL INFORMATION

            ITEM 1.  Financial Statements

                Balance Sheets............................................ 2-3

                Statements of Operations.................................. 4

                Statements of Cash Flows.................................. 5-6

                Notes to Consolidated Financial Statements (Unaudited).... 7

            ITEM 2.  Managements Discussion and Analysis of Financial
                      Condition and Results of Operations..................12

   PART II  OTHER INFORMATION

            ITEM 1 - Changes In Securities................................ 21

            ITEM 2 - Legal Proceedings.................................... 22

            ITEM 5 - Other information.................................... 23

            ITEM 6.  Exhibits and Reports on Form 8-K..................... 24

            Signature Page................................................ 24




                                       -1-

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1.  Financial Statements


<TABLE>
<CAPTION>
                           SECTOR COMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEET

                                                      August 31,    February 28,
                                                         2000           2000
                                                     ------------   -------------
                                                     (unaudited)
<S>                                                  <C>             <C>
       ASSETS
CURRENT ASSETS
    Cash and Cash Equivalents                        $    201,105    $    170,607
    Accounts Receivable, net of provision for
     doubtful accounts of $30,163 and $18,148             204,337         391,681
    Loans receivable                                      300,000               -
    Prepaid Expenses                                       11,281          30,597
                                                     ------------    ------------
       Total Current Assets                               716,723         592,885
                                                     ------------    ------------

PROPERTY AND EQUIPMENT                                  1,841,448       2,019,960
    Accumulated Depreciation                          ( 1,598,459)    ( 1,803,610)
                                                     ------------    ------------
    Net Book Value                                        242,989         216,350
                                                     ------------    ------------

OTHER ASSETS
    Deposits                                               30,887          28,289
                                                     ------------    ------------

       TOTAL       ASSETS                            $    990,599    $    837,524
                                                     ============    ============
</TABLE>

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


                                      -2-

<PAGE>
<TABLE>
<CAPTION>
                          SECTOR COMMUNICATIONS, INC.
                     CONSOLIDATED BALANCE SHEET (continued)

                                                       August 31,    February 28,
                                                        2000              2000
                                                     ------------    ------------
                                                      (unaudited)
<S>                                                  <C>             <C>
       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts Payable and Accrued Expenses               1,753,505       1,818,732
    Debentures Payable                                    263,952         263,952
    Deferred Revenue                                      179,885         203,878
    Due to Related Parties                                158,269         180,355
                                                     ------------    ------------
       Total Current Liabilities                        2,355,611       2,466,917

Rent Deposit                                               12,248          12,248
                                                     ------------    ------------
       TOTAL LIABILITIES                                2,367,859       2,479,165
                                                     ------------    ------------
Commitments and Contingencies

STOCKHOLDERS' EQUITY
    Preferred Stock, $.001 par value; 5,000,000
     shares authorized, no shares issued and
     outstanding                                               -                -
    Common Stock, $.001 par value; 500,000,000 and
     40,000,000 shares authorized, 17,368,805 and
     17,193,805 shares issued and outstanding              17,369          17,194
    Common stock subscribed                               400,000               -
    Additional Paid-in Capital                         14,409,075      14,376,351
    Accumulated Deficit                               (15,921,339)    (15,748,015)
    Cumulative Foreign Currency Translation
     Adjustment                                       (   282,365)    (   287,171)
                                                     ------------    ------------
       Total Stockholders' Equity                     ( 1,377,260)    ( 1,641,641)
                                                     ------------    ------------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $    990,599    $    837,524
                                                     ============    ============
</TABLE>

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



                                       -3-


<PAGE>
<TABLE>
<CAPTION>
                          SECTOR COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)


                                              Three Months Ended               Six Months Ended
                                         --------------------------       ----------------------------
                                          August 31,     August 31,        August 31,      August 31,
                                             2000           1999              2000             1999
                                         -----------    -----------       -----------     ------------
<S>                                      <C>            <C>               <C>             <C>
REVENUE
   Telecommunication Revenue             $    93,963    $   160,003       $   229,212     $    305,700
   Software Sales and Maintenance            115,168        107,844           208,502          160,384
                                         -----------    -----------       -----------     ------------
                                             209,131        267,847           437,714          466,084

COST OF SALES                                 51,115        116,744           115,501          233,521
                                         -----------    -----------       -----------     ------------

GROSS PROFIT                                 158,016        151,103           322,213          232,563
                                         -----------    -----------       -----------     ------------

OPERATING EXPENSES
   Software Development Costs                  3,153         46,723            11,162           88,680
   Sales, General and Administrative         246,942        148,925           487,771          400,344
                                         -----------    -----------       -----------     ------------
     Total Operating Expenses                250,095        195,648           498,933          489,024
                                         -----------    -----------       -----------     ------------

Loss From Operations                         (92,079)     (  44,545)         (176,720)        (256,461)

OTHER INCOME (EXPENSE)
   Interest (Expense)                       (  5,279)     (  26,889)        (  10,558)       (  64,740)
   Other Income (Expense)                     14,109      (   8,034)           13,954          103,354
                                         -----------    -----------       -----------     ------------

Loss Before Provision for Income Taxes       (83,249)     (  79,468)         (173,324)        (217,847)

Provision for Income Taxes                         -              -                 -                -
                                         -----------    -----------       -----------     ------------

Net Loss                                 $   (83,249)   $  ( 79,468)      $  (173,324)    $   (217,847)
                                         ===========    ============      ===========     ============

Loss Per Share                           $   (  0.01)    $ (   0.01)      $  (   0.01)    $   (   0.01)
                                         ===========    ============      ===========     ============

Weighted Average Number of Shares
   Outstanding                            17,328,859     17,193,805        17,261,332       15,557,916
</TABLE>


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

                                       -4-

<PAGE>
<TABLE>
<CAPTION>
                           SECTOR COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                       FOR THE SIX MONTHS ENDED AUGUST 31,

                                                             2000            1999
                                                         ------------     -----------
<S>                                                      <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Loss                                              $  (173,324)     $  (217,847)
   Adjustments to Reconcile Net Loss to Net Cash
    Provided By Operating Activities:
     Depreciation and Amortization                            47,704          168,448
     Allowance for doubtful accounts                          12,844                -
     Amortization of Discount and Loan Costs                       -           78,889
     Common stock issued for services                         32,900                -
     Change in Assets and Liabilities
       (Increase) Decrease in Assets
         Accounts Receivable                                 174,500          264,304
         Prepaid Expenses and Deposits                        16,728       (   25,175)
         Loans receivable                                   (300,000)               -
       (Decrease) Increase in Liabilities
         Accounts Payable                                   ( 65,227)          39,310
         Related Party Payable                              ( 22,086)      (   44,158)
         Deferred Revenue                                   ( 23,993)               -
                                                         ------------     -----------
Net Cash Provided (Used) By Operating Activities            (299,954)         263,771
                                                         ------------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of Fixed Assets                                 ( 75,922)      (   75,879)
                                                         ------------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Sale of Common Stock                                            -          100,000
   Common Stock Subscribed                                   400,000                -
                                                         ------------     -----------
                                                             400,000          100,000
                                                         ------------     -----------
Effect of Exchange Rate Changes on Cash                        6,374      (   239,222)
                                                         ------------     -----------
Net Increase in Cash                                          30,498           48,670

CASH - MARCH 1,                                              170,607          181,877
                                                         ------------     -----------
CASH - AUGUST 31,                                        $   201,105      $   230,547
                                                         ===========      ===========
SUPPLEMENTAL CASH FLOWS INFORMATION:
   Cash Paid For:
     Interest                                            $         -      $         -
                                                         ===========      ===========
     Taxes                                               $         -      $         -
                                                         ===========      ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                       -5-
<PAGE>


                      CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                   (UNAUDITED)
                       FOR THE SIX MONTHS ENDED AUGUST 31,



SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIAL ACTIVITIES:

   Period ended August 31, 2000:

     Common stock totalling 175,000 shares was issued for services. These shares
     have been valued at $32,900.

   Period Ended August 31, 1999:

     Common stock totaling 2,425,000 shares was issued in settlement of accounts
     payable aggregating $97,000.





























The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                       -6-


<PAGE>


                           SECTOR COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            AUGUST 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          a)   Basis of Presentation
               ---------------------
               The  accompanying  financial  statements  have been  prepared  in
               accordance  with  generally  accepted  accounting  principles for
               interim  financial  information and with the instructions to Form
               10-QSB.  Accordingly,  they do not include all of the information
               and   footnotes   required  by  generally   accepted   accounting
               principles for complete financial  statements.  In the opinion of
               management,  all adjustments (consisting only of normal recurring
               adjustments)  considered  necessary for a fair  presentation have
               been included.  Certain  reclassifications  have been made to the
               prior period to conform to the current period's presentation.

               For further  information  refer to the financial  statements  and
               footnotes  included  in the  Registrant's  Annual  Report on form
               10-KSB for the period ended February 29, 2000.

               The  results  of  operations  for  any  interim  period  are  not
               necessarily indicative of the results to be expected for the full
               fiscal year ending February 28, 2001.

               The  unaudited  consolidated  balance sheet as of August 31, 2000
               and the consolidated  statements of operations and cash flows for
               the six and three month  periods  ended  August 31, 2000 and 1999
               are  those of  Sector  Communications,  Inc.  ("Sector")  and its
               subsidiaries   (collectively  the  "Company").   All  significant
               inter-company accounts and transactions have been eliminated.

          b)   Loss Per Share
               --------------
               Loss per share is based on the weighted  average number of shares
               of common stock outstanding during the period.

               On July 1, 1999, the Company  effected a 5 for 1 stock split. All
               share and per share amounts presented in the financial statements
               give retroactive effect to this stock split.


                                      -7-
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            AUGUST 31, 2000 AND 1999

NOTE 2 - PROPERTY AND EQUIPMENT

          Property and equipment consists of the following:

                                                August 31,      February 29,
                                                   2000             2000
                                              ------------      ------------
            Fiber Network                     $    157,837       $   157,837
            Equipment                            1,541,099         1,724,832
            Furniture and Fixtures                  52,444            47,223
            Vehicles and Other                      90,068            90,068
                                              ------------       -----------
                                                 1,841,448         2,019,960
            Less:  Accumulated Depreciation      1,598,459        (1,803,610)
                                              ------------       -----------
                                              $    242,989       $   216,350
                                              ============       ===========

          Depreciation  expense for the six-month  periods ended August 31, 2000
          and 1999 was  $47,704  and  $168,448,  respectively  and for the three
          month  periods ended August 31, 2000 and 1999 was $24,455 and $83,067,
          respectively.

NOTE 3 - WARRANTS

          At August 31,  2000,  all of the  Company's  outstanding  common stock
          purchase warrants expired as follows:

                 Number            Exercise                           Date of
                of Shares           Price           Exercisable     Expiration
                ---------         ----------        -----------     ----------
                  10,000          $    22.50          2/28/97         6/30/00
                  10,000               30.00          7/20/97         6/30/00
                  10,000               40.00          7/20/98         6/30/00
                  ------
                  30,000
                  ======

NOTE 4 - STOCK OPTION PLANS

          A summary of stock option transactions for the period ended August 31,
          2000 are as follows:

                     Outstanding, Beginning                       5,312,458

                     Granted                                        175,000
                                                                  ---------
                     Outstanding, Ending                          5,487,458
                                                                  =========
                     Exercisable, Ending                          5,487,458
                                                                  =========

                                      -8-
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            AUGUST 31, 2000 AND 1999

NOTE 5- STOCKHOLDERS' EQUITY

          On  August 8,  2000,  the  authorized  number  of  common  shares  was
          increased to 500,000,000 shares.

          On June 22, 2000,  the Company  issued  175,000 shares of common stock
          for directors' compensation. These shares have been valued at $32,900.

          The Company has received $400,000 in common stock  subscriptions.  The
          common stock to be issued is based on 70% of the 5-day  average  price
          preceding the receipt of the funds.  The number of shares to be issued
          totals 2,134,449 shares.

          The Company issued  2,425,000  shares of common stock in settlement of
          accounts payable aggregating $97,000.

          In May 1999, the Company sold 3,846,150  shares of common stock to two
          purchasers for cash proceeds of $100,000.

          On July 1, 1999, the Company effected a 5 for 1 stock split. All share
          and per share  amounts  presented  in the  financial  statements  give
          retroactive effect to this stock split.

NOTE 6- COMMITMENTS AND CONTINGENCIES

     1)   A former  employee of Ideous  filed suit  against  Ideous for wrongful
          termination.  Judgement  was entered  against  Ideous in the amount of
          $110,850.  An appeal is pending.  The full amount has been  accrued in
          the financial statements.

     2)   An  individual  has  filed  suit  against  the  Company,  also  naming
          Worldwide  Plumbing Supply,  Inc.  ("Worldwide")  and Allan Kline. The
          suit alleges that Mr. Kline  represented  that he was the Prisident of
          Sector and would sell  35,000  shares of Company  Common  Stock to the
          plaintiff for $20,000.  The plaintiff also alleges that Mr. Kline told
          the plaintiff that  Worldwide was the parent of Sector.  The plaintiff
          issued a check to Worldwide and it was cashed.  Worldwide has filed an
          answer.  The Company  maintains  that it has no knowledge of Worldwide
          and that  Allan  Kline is not the  President  of Sector.  The  Company
          denies each allegation, believes the suit as it relates to the Company
          is  without  merit,  and  intends  to defend  itself  vigorously.  The
          plaintiff seeks the return of $20,000.

     3)   Agricola  Metals,  Inc.  filed  a suit  against  the  Company  seeking
          $31,136.  The plaintiff alleges that it had a consulting contract with
          the  Company and is owed this amount  pursuant to said  contract.  The
          Company has filed an answer and denies each and every allegation.

     4)   The Company is named a defendant in an action alleging  non-payment of
          legal  services  and  expenses in the amount of  $12,500.  The Company
          believes  some loss may be probable and has accrued this amount in the
          financial statements.

                                      -9-
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            AUGUST 31, 2000 AND 1999

NOTE 7 - GOING CONCERN

          The accompanying  consolidated financial statements have been prepared
          assuming the Company will  continue as a going  concern.  As of August
          31, 2000, the Company has a working  capital deficit of $1,638,888 and
          an accumulated  deficit of $15,921,339.  Based upon the Company's plan
          of operation, the Company estimates that existing resources,  together
          with funds  generated from  operations  will not be sufficient to fund
          the  Company's  working  capital.  The  Company  is  actively  seeking
          additional  equity   financing.   There  can  be  no  assurances  that
          sufficient  financing  will be  available on terms  acceptable  to the
          Company or at all. If the Company is unable to obtain such  financing,
          the Company will be forced to scale back  operations  which would have
          an adverse effect on the Company's financial conditions and results of
          operation.


NOTE 8 - SEGMENT INFORMATION

          The  Company's  foreign  operations  are  conducted by Global,  Sector
          Bulgaria and Ideous.

                                                   August 31,       August 31,
                                                      2000             1999
                                                  -----------     ------------
       Revenues from external customers:
         Telecommunications                       $   229,212     $    305,700
         Software                                     208,502          160,384
                                                  -----------     ------------
                                                  $   437,714     $    466,084
                                                  ===========     ============

       Interest expense:
         Corporate                                $    10,558     $     64,740
                                                  ===========     ============

       Depreciation and amortization:
         Telecommunications                       $    41,732     $    147,489
         Software                                       5,972           13,243
         Corporate                                          -            7,716
                                                  -----------     ------------
                                                  $    47,704     $    168,448
                                                  ===========     ============

                                      -10-
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            AUGUST 31, 2000 AND 1999

NOTE 8 -    SEGMENT INFORMATION (Continued)

                                                  August 31,       August 31,
                                                      2000             1999
                                                  -----------     ------------
       Segment profit (loss) before taxes:
         Telecommunications                       $(   35,467)    $     52,692
         Software                                  (   24,589)     (    73,261)
         Corporate                                 (  113,268)     (   197,278)
                                                  -----------     ------------
                                                  $ ( 173,324)    $(   217,847)
                                                  ===========     ============
       Segment assets:
         Telecommunications                       $   361,546     $    549,755
         Software                                     217,889          282,335
         Corporate                                    411,164           53,232
                                                  -----------     ------------
                                                  $   990,599     $   885,322
                                                   ==========      ===========
       Expenditure for segment assets:
         Telecommunications                       $    66,408     $     53,102
         Software                                         415           22,777
         Corporate                                      9,099                -
                                                  -----------     ------------
                                                  $    75,922     $     75,879
                                                  ===========     ============

          The  following  geographic  area data for trade  revenues  is based on
          product  or  service  delivery  location  and  property,   plant,  and
          equipment is based on physical location.

                                                   August 31,       August 31,
                                                      2000             1999
                                                  -----------     ------------
       Revenues from external customers:
         United States                            $         -     $          -
         Switzerland                                  208,502          160,384
         Bulgaria                                     229,212          305,700
                                                  -----------     ------------
                                                  $   437,714     $    466,084
                                                  ===========     ============

       Segment assets:
         Switzerland                              $   217,889     $    282,335
         Bulgaria                                     361,546          549,755
         United States                                411,164           53,232
                                                  -----------     ------------
                                                  $   990,599     $    885,322
                                                  ===========     ============

                                      -11-
<PAGE>

Item 2.        Management's  Discussion and Analysis of Financial Condition
               and Results of Operations

NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS:

Sector  includes  certain  estimates,   projections  and  other  forward-looking
statements  in its  reports,  presentations  to  analysts  and  others and other
material  disseminated  to the public.  There can be no  assurance  as to future
performance  and  actual  results  may  differ  materially  from  those  in  the
forward-looking  statements.  Factors that could cause actual  results to differ
materially from estimates or projections contained in forward-looking statements
include:  (i) the effects of vigorous competition in the markets in which Sector
operates;  (ii) the cost of entering new markets  necessary to provide  products
and  services;  (iii) the impact of any unusual  items  resulting  from  ongoing
evaluations of Sector's business strategies; (iv) requirements imposed on Sector
and its  competitors  by the Bulgarian  Telecommunications  Company  (BTC);  (v)
unexpected  results of litigation filed against Sector; and (vi) the possibility
of one or more of the  markets  in  which  Sector  competes  being  affected  by
variations  in  political,  economic or other  factors such as monetary  policy,
legal and regulatory  changes or other external factors over which Sector has no
control.

OVERVIEW

Sector  continued  operations  during the quarter which were in keeping with its
strategy to advance and develop in underdeveloped  markets. The Company directed
efforts toward expansion of its subsidiary business in Bulgaria and successfully
obtained  cable   television   license  rights  (See  Part  II,  Item  5,  Other
Information) which it may use to develop new revenue streams.  Although a formal
plan  for  exploitation  of the  licenses  has not yet  been  developed  and the
financial  impact of the licenses cannot be estimated,  the Company believes its
licensing activities are positive developments which will bolster its reputation
within the telecommunications industry and, more particularly, within Bulgaria.

During August, the Company made effective a change in its capital structure (See
Part II, Item 1, Changes In Securities) to allow it to issue an increased number
of shares of common  stock.  Management's  intent was to  establish a reserve of
common stock to be used for acquisition of other companies and for  satisfaction
of agreements which bring necessary  capital funding to the Company.  During the
same month,  the Company  secured a Letter of Intent (See Part II, Item 5, Other
Information)  to acquire  several  corporations.  Although  the  Company has not
completed its due diligence and cannot consider the transactions  probable as of
this date, management believes acquisition of other corporations may allow it to
expand its base of operations and ultimately yield favorable results.


                                      -12-
<PAGE>


RESULTS OF OPERATIONS (For the 3 months ended August 31, 2000 v. 1999)

Telecommunication   Revenue   -   Sector   continues   to   earn   all   of  its
telecommunications revenue from Sector BG (i) providing direct-dial services for
international  long distance  calls to a select group of hotels in the cities of
Sofia and Plovdiv in Bulgaria; (ii) from the sales,  integration,  installation,
and maintenance of customer-owned  digital phone systems  (primarily through its
distributor  agreement with Mitel);  and (iii) from  usage-based  percentages of
Sector  BG-owned  digital phone systems  through shared revenue  agreements with
some of its customers.

Sector's  telecommunications revenue decreased by $66,040 or 41.3% from $160,003
for the three  months  ended on August 31,  1999 to $93,963  for the same period
ended  August 31 ,2000.  Management  believes  the  decrease  in revenue was the
result of a decrease in the number of hotels who have  contracted  for  services
from  Sector  and a  decrease  in  overall  occupancy  of its  hotel  customers.
Management  does not anticipate a further decline in revenue during the upcoming
quarter and estimates that revenue  levels for the upcoming  quarter will remain
stable.

Software Sales and Maintenance Revenue - Sector's software sales and maintenance
revenue  increased by $7,324 or 6.8% from $107,844 for the three months ended on
August 31,  1999 to  $115,168  for the same  period  ended  August 31, 2000 (all
figures are net of payments to third party  distributors).  Management  believes
the  increase  in sales  for the  three  months  ending  August  31,  2000,  was
attributable  to normal  variations in sales revenue from period to period.  The
Company  continues to be affected by the lack of capital available to HIS to (1)
fund an adequate level of sales and marketing  expense and (2) fund the software
and  development  expense  necessary  to upgrade  existing  product  lines or to
develop new applications.

Costs of Sales - The Cost of Sales of Sector  decreased by $65,629 or 56.2% from
$116,744  for the three  months ended on August 31, 1999 to $51,115 for the same
period ended August 31, 2000. The majority of the decrease was  attributable  to
(1) the decrease in costs associated with payments due to the BTC resulting from
the lower revenues (2) a decrease in other variable expenses associated with the
lower revenue  levels and (3) to reduced  depreciation  charges of fixed assets.
Management does not anticipate additional reductions and estimates that Costs of
Sales for the upcoming quarter will remain stable.

Gross Profit - Gross profit is calculated as revenues less the cost of revenues.
Sector's  gross profit  increased  $6,913 or 4.6% from  $151,103  from the three
month period  ending  August 31, 1999 to $158,016 for the quarter  ending August
31,  2000.  Management  considers  the  increase  marginal and expects its gross
profit to remain stable during the upcoming quarter.

Software  Development Costs - Software  development costs consisted primarily of
salaries, related benefits,  consultants fees and other costs. Sector's software
development  costs  decreased  by $43,570 or 93.3%  from  $46,723  for the three
months  ended on August,  1999 to $3,153 for the same  period  ended  August 31,
2000.  The decrease was attributable the lack of capital available to HIS/Ideous
to fund a higher  level  of  software  development  costs.  Management  believes
software development costs will remain stable during the upcoming quarter.

                                      -13-

<PAGE>

Operating Expenses - Operating expenses consisted  primarily of personnel costs,
including  salaries,  benefits  and bonuses and  related  costs for  management,
finance and accounting,  legal and other professional services.  Total operating
expenses of Sector  increased  by $98,017 or 65.8% from  $148,925  for the three
months ended on August 31, 1999 to $246,942 for the same period ended August 31,
2000.  This increase in operating  expense was primarily the result of increased
costs of  operations  related to the  HIS/Ideous  offices in Zurich  which arose
because of moderately  increased  revenue levels,  but there were also increases
experienced  because  of  startup of an office in Los  Angeles,  California  and
issuance of shares as  directors'  compensation.  Management  expects  operating
expenses  to remain  stable  during the  upcoming  quarter,  unless the  Company
proceeds  with  acquisition  or  other  development  plans;  in  such  instance,
operating  expenses  would be  expected  to rise in  accordance  with the  costs
incurred for  implementation  of such plans, the dollar figures for which cannot
presently be estimated.

Administrative  Costs and Other  Costs - Management  expects  that  Sector  BG's
general and administrative costs, not taking into consideration any expansion of
the current network, to remain at current levels.

Management expects Sector's general and administrative  costs,  exclusive of any
addition of new employees,  to remain consistent with the levels  experienced in
the  three  months  ended on August  31,  2000.  If the  Company  proceeds  with
acquisition or other development plans, however,  domestic operating general and
administrative  expenses would be expected to rise in accordance  with the costs
incurred to administer the business  elements of such plans,  the dollar figures
for which cannot presently be estimated.

Interest Expense - Interest expense for the three month period ending August 31,
2000 decreased by $21,610 or 80.4% as compared to the same three month period in
1999.  The  decrease in interest  expense  was the result of the  conversion  of
convertible  debentures issued in early in fiscal 1999.  Management expects that
interest expense could increase in the future to the degree Sector borrows funds
in order to finance any  continuing  operating cash flow deficits and implements
any capital expenditure plans.


RESULTS OF OPERATIONS (For the 6 months ended August 31, 2000 v. 1999)

Telecommunications  Revenue   -   Sector   continues   to   earn   all   of  its
telecommunications revenue from Sector BG (i) providing direct-dial services for
international  long distance  calls to a select group of hotels in the cities of
Sofia and Plovdiv in Bulgaria; (ii) from the sales,  integration,  installation,
and maintenance of customer-owned  digital phone systems  (primarily through its
distributor  agreement with Mitel);  and (iii) from  usage-based  percentages of
Sector  BG-owned  digital phone systems  through shared revenue  agreements with
some of its customers.

                                      -14-

<PAGE>

For the six month  period  ending  August 31, 2000,  telecommunications  revenue
decreased by $76,488 or 25% from $305,700.  Management  believes the decrease in
revenue was the result of a decrease in the number of hotels who have contracted
for  services  from  Sector and a decrease  in  overall  occupancy  of its hotel
customers.  Management  does not anticipate a further  decline in revenue during
the upcoming six months and estimates  that revenue  levels for the upcoming six
months will remain stable.

Software Sales and Maintenance Revenue - Sector's software sales and maintenance
revenue  increased  from $160,384 to $208,502  respectively  or 30%.  Management
believes  the  increase in sales for the six months  ending  August 31, 2000 was
attributable  to normal  variations in sales revenue from period to period.  The
Company  continues to be affected by the lack of capital available to HIS to (1)
fund an adequate level of sales and marketing  expense and (2) fund the software
and  development  expense  necessary  to upgrade  existing  product  lines or to
develop new applications.

Cost of Sales - The Cost of Sales of Sector  decreased by $118,020 or 50.5% from
$233,521 for the six months ending August 31, 1999 to $115,501.  The majority of
the  decrease was  attributable  to (1) the  decrease in costs  associated  with
payments  due to the BTC  resulting  from the lower  revenues  (2) a decrease in
other  variable  expenses  associated  with the lower revenue  levels and (3) to
reduced  depreciation  charges of fixed assets.  Management  does not anticipate
additional  reductions  in the  Cost of  Sales  for  the  upcoming  quarter  and
estimates that Costs of Sales for the upcoming six months will remain stable.

Gross Profit - Gross profit is calculated as revenues less the cost of revenues.
Sector's gross profit increased $89,650 or 38.5% from $232,563 for the six month
period ending August 31, 1999 to $322,213 for the six month period ending August
31,  2000.  The  increase  is  considered  natural as a result of the  decreases
experienced in Costs of Sales as described herein.  Management expects its gross
profit to remain consistent with current quarter levels;  this would result in a
reduction for the upcoming six-month period.

Software Development Costs - Software development costs consisted primarily
of  salaries,  related  benefits,  consultants  fees and other  costs.  Sector's
software  development  costs  decreased  by  $77,518  or 87.4%  from  $88,680 to
$11,162.  The  decrease  was  attributable  the  lack of  capital  available  to
HIS/Ideous  to fund a higher  level of software  development  costs.  Management
believes  software  development costs will remain stable during the upcoming six
months.

Operating Expenses - Operating expenses consisted  primarily of personnel costs,
including  salaries,  benefits  and bonuses and  related  costs for  management,
finance and accounting,  legal and other professional services.  Total operating
expenses of Sector  increased  $87,427 or 21.8% from $400,344 for the six months
ended  August 31, 1999 to $487,771  for the same period  ended  August 31, 2000.
This increase in operating  expense was primarily the result of increased  costs
of operations related to the HIS/Ideous offices in Zurich which arose because of
moderately  increased revenue levels.  Management  expects operating expenses to
remain stable during the upcoming six months,  unless the Company  proceeds with
acquisition or other  development  plans; in such instance,  operating  expenses
would  be  expected  to  rise  in  accordance   with  the  costs   incurred  for
implementation  of such plans,  the dollar figures for which cannot presently be
estimated.

                                      -15-
<PAGE>


Administrative  Costs and Other  Costs - Management  expects  that  Sector  BG's
general and administrative costs, not taking into consideration any expansion of
the current network,  to remain at current levels.  Management  expects Sector's
general and administrative costs, exclusive of any addition of new employees, to
remain consistent with the levels  experienced in the six months ended on August
31, 2000. If the Company proceeds with acquisition or other  development  plans;
domestic operating general and administrative expenses would be expected to rise
in accordance  with the costs  incurred to administer  the business  elements of
such plans, the dollar figures for which cannot presently be estimated.

Interest  Expense - Interest  expense  for the three month  period ending August
31, 2000 decreased by $54,182 or 83.7% to $10,558 from $64,740.  The decrease in
interest  expense was the result of the  conversion  of  convertible  debentures
issued in early in fiscal 1999.  Management  expects that interest expense could
increase in the future to the degree  Sector  borrows  funds in order to finance
any  continuing   operating  cash  flow  deficits  and  implements  any  capital
expenditure plans.


LIQUIDITY AND CAPITAL RESOURCES

During the  quarter  ending  August 31,  2000,  the  Company  financed  Sector's
operations   primarily  through  sales  revenue  generated  from  the  Company's
subsidiaries.  The Company also received  $400,000 in funding  through a sale of
shares of its common  stock under  Regulation S (See Part II, Item 1, Changes In
Securities).  Although the Company has in the past and is  currently  experience
negative cash flow from operations, the Company believes it will be able to meet
its basic  capital  demands  during the next quarter  through the receipt of the
remainder  of the  outstanding  commitment  for  receipt  of funds  through  its
Regulation S agreement.  The funding of any expanded  and/or  future  operations
will require further infusions of capital.

If  additional  funds are raised by the Company  through the  issuance of equity
securities, securities convertible into or exercisable for equity securities, or
an equity  securities  exchange,  the  percentage  ownership of the then current
stockholders  of the Company  will be reduced.  The Company may issue  preferred
stock  with  rights,  preferences  or  privileges  senior to those of the common
stock.  There can be no  assurance  that the Company will be  successful  in its
efforts to obtain  adequate  capital or if any such  additional  capital is made
available  to the Company that it will be on terms and  conditions  that are not
extremely dilutive to the present holders of the Common Stock.

Discontinuance  of the listing of the Company's common stock on the NASDAQ Small
Cap Market occurred  previously;  the Company's  common stock  presently  trades
through the Over the Counter Bulletin Board.

                                      -16-

<PAGE>

FORWARD-LOOKING STATEMENTS

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  contains  forward-looking  statements.  There are certain  important
factors  that  could  cause  results  to  differ  materially  from  those in the
forward-looking  statements  contained  in  the  above  discussion.  Among  such
important  factors are (i) the timely creation of versions of Sector's  products
for the  Microsoft  Windows NT and Unix  operating  systems,  (ii) the impact of
Microsoft  Windows NT, Unix and other  operating  systems on the Open VMS market
upon which  Sector's  current  products  are  dependent,  (iii) the  reliance on
distributors to continue reselling Sector's products, (iv) the ability of Sector
to successfully expand the distribution of its products through new and unproven
channels, including resellers,  integrators,  distributors and direct sales, (v)
the risks associated with Sector's engineering effort needed to develop products
for Microsoft  Windows NT and Unix, (vi) the impact of competitive  products and
pricing,  (vii) the  uncertainty  of the labor market and local  regulations  in
Switzerland, Bulgaria and the United Kingdom, (vii) Sector's ability to hire and
retain research and development  personnel with  appropriate  skills in a highly
competitive  labor  market,  and  (viii)  such  risks and  uncertainties  as are
detailed  from time to time in the  Company's  public  reports,  including  this
Report.

     In addition to the factors described above,  factors that may contribute to
future fluctuations in quarterly operating results include,  but are not limited
to: (i) the development and  introduction of new operating  systems that require
additional development efforts; (ii) the introduction or enhancement of products
by Sector or its competitors; (iii) changes in the pricing policies of Sector or
its  competitors;  (iv)  increased  competition;  (v)  technological  changes in
computer and  telecommunications  systems and environments;  (vi) the ability of
Sector to timely develop,  introduce and market new products and services; (vii)
Sector's  quality  control of products and services sold;  (vii) Sector's market
readiness  to deploy  systems  management  products  for  distributed  computing
environments;  (ix) Sector's market  readiness to deploy new  telecommunications
services;   (x)  market  acceptance  of  new  services,   products  and  product
enhancements;  (xi) customer order deferrals in anticipation of new products and
product  enhancements;  (xii)  Sector's  success  in  expanding  its  sales  and
marketing  programs;  (xiii) personnel changes;  (xiv) foreign currency exchange
rates; (xv) mix of products sold; and (xvi) general economic conditions.

     Sector's  future  revenues will also be difficult to predict.  Accordingly,
any significant  shortfall of revenues in relation to management's  expectations
or any material delay of customer orders would have an immediate  adverse effect
on its business,  operating results and financial condition.  As a result of all
of the foregoing factors, management believes that period-to-period  comparisons
of Sector's results of operations are not and will not necessarily be meaningful
and should not be relied upon as any indication of future performance.

                                      -17-

<PAGE>

     Management of Growth;  Dependence on Key Personnel.  In the future,  Sector
will be required to continue to improve its financial and  management  controls,
reporting  systems and  procedures  on a timely  basis and to expand,  train and
manage its employee  work force.  There can be no assurance  that Sector will be
able to  effectively  manage  such  growth.  Its  failure  to do so would have a
material  adverse  effect  on its  business,  operating  results  and  financial
condition.  Competition  for  qualified  sales,  technical  and other  qualified
personnel is intense and there can be no  assurance  that Sector will be able to
attract,  assimilate  or retain  additional  highly  qualified  employees in the
future.  If Sector is unable to hire and  retain  such  personnel,  particularly
those in key positions, its business,  operating results and financial condition
would be materially adversely affected.  Sector's future success also depends in
significant  part upon the  continued  service of its key  technical,  sales and
senior  management  personnel.  The loss of the services of one or more of these
key employees  could have a material  adverse effect on its business,  operating
results and  financial  condition.  Additions of new and  departures of existing
personnel,  particularly  in key positions,  can be disruptive and can result in
departures of existing personnel,  which could have a material adverse effect on
Sector's business, operating results and financial condition.

     Uncertainty  in  Developing  Products for New Operating  Systems.  Sector's
software products operate  primarily on the Open VMS operating system.  Sector's
current product development activities are primarily directed towards developing
new  products  for  the  Windows  NT  and  UNIX  operating  systems,  developing
enhancements to its current  products and porting new products and  enhancements
to other  operating  systems.  Sector has made and  intends to  continue to make
substantial  investments  in porting its products to new  operating  systems and
Sector's  future success will depend on its ability to  successfully  accomplish
such ports.

     The process of porting existing  products and product  enhancements to, and
developing  new  products  for, new  operating  systems  requires a  substantial
capital  investment,  the devotion of  substantial  employee  resources  and the
cooperation  of the owners of the  operating  systems to which the  products are
being  ported  or  developed.  For  example,  the  added  focus on  porting  and
development  work for the  Windows NT market  has  required,  and will  require,
Sector to hire additional personnel with expertise in the Windows NT environment
as well as devote its engineering resources to these projects.  The diversion of
engineering  personnel  to this area may cause Sector to be delayed in its other
product  development  efforts.  Furthermore,  operating  system  owners  have no
obligation  to assist in these  porting or  development  efforts and may instead
choose to enter into  agreements  with other third party software  developers or
internally develop their own products.  In particular,  the failure to receive a
source  license to certain  portions of the  operating  system,  either from the
operating system owner or a licensee thereof,  would prevent Sector from porting
its products to, or developing products for, such operating system. There can be
no assurance that Sector's  current or future porting efforts will be successful
or, even if successful, that the operating system to which Sector elects to port
to or develop products will achieve or maintain market  acceptance.  The failure
of Sector to port its  products  to new  operating  systems  or to select  those
operating  systems  that  achieve and maintain  market  acceptance  could have a
material adverse effect on Sector's  business,  operating  results and financial
condition.

                                      -18-
<PAGE>


     Risks Associated With International Operations. International revenue (from
sales  outside  the  United  States  and  Canada)  accounted  for a  significant
percentage of Sector's total revenues for fiscal 1999.  Management believes that
Sector's  success  depends  upon  continued   expansion  of  its   international
operations.  Sector currently has sales offices in Bulgaria and Switzerland. Any
International  expansion  may require  Sector to  establish  additional  foreign
offices,   hire  additional  personnel  and  recruit  additional   international
resellers.  This may require  significant  management  attention  and  financial
resources and could adversely affect Sector's operating  margins.  To the extent
that  Sector is unable to effect  these  additions  efficiently  and in a timely
manner,  its growth,  if any, in  international  sales will be limited,  and its
business,  operating  results and financial  condition  could be materially  and
adversely  affected.  There  can be no  assurance  that  Sector  will be able to
maintain or increase  international  market demand for its products.  Sector, as
noted  earlier  cannot  and  will  not  expand  or  contribute  further  to  any
maintenance of the operations of its HIS subsidiary in Switzerland.

     As of August 31,2000, the Company's Swiss subsidiary employed engineers and
contractors  located in Zurich who perform certain product development work. The
Company's  Bulgarian   subsidiary   operates   autonomously  from  Sofia.  These
international  operations  subject  Sector  to a  number  of risks  inherent  in
developing  products and services  outside of the United  States,  including the
potential loss of developed  technology,  imposition of  governmental  controls,
export license requirements,  restrictions on the export of critical technology,
political and economic instability, trade restrictions, difficulties in managing
international operations and lower levels of intellectual property protection.

     Sector's  international  business  will also involve a number of additional
risks, including lack of acceptance of localized products,  cultural differences
in the conduct of business,  longer accounts receivable payment cycles,  greater
difficulty in accounts receivable  collection,  seasonality due to the slow-down
in European business activity during Sector's second fiscal quarter,  unexpected
changes in  regulatory  requirements  and  royalty  and  withholding  taxes that
restrict the repatriation of earnings, tariffs and other trade barriers, and the
burden of complying with a wide variety of foreign laws. Sector's  international
sales will be generated primarily through its international distributors and are
expected  to be  denominated  in  local  currency,  creating  a risk of  foreign
currency  translation  gains and losses.  To the extent  profit is  generated or
losses are incurred in foreign countries, Sector's effective income tax rate may
be materially and adversely affected. In some markets,  localization of Sector's
products  is  essential  to  achieve  market   penetration.   Sector  may  incur
substantial  costs and experience  delays in localizing its products,  and there
can be no assurance  that any localized  product will ever generate  significant
revenue. There can be no assurance that any of the factors described herein will
not have a material  adverse effect on Sector's future  international  sales and
operations  and,  consequently,  its business,  operating  results and financial
condition.

                                      -19-

<PAGE>

     Sector's  future  financial  performance  will  depend in large part on the
growth of its  telecommunications  service business in Eastern Europe as well as
its ability to expand  horizontally the scope of its business activities in that
region.  As a result of  competition,  technological  change  or other  factors,
Sector's business, operating results and financial condition could be materially
and adversely affected.

     Rapid   Technological   Change  and   Requirement   for  Frequent   Product
Transitions.  The  market  for  Sector's  products  is  characterized  by  rapid
technological  developments,  evolving  industry  standards and rapid changes in
customer requirements.  The introduction of products embodying new technologies,
the  emergence  of new industry  standards  or changes in customer  requirements
could render Sector's existing products obsolete and unmarketable.  As a result,
Sector's  future  success  will  depend  upon its ability to continue to enhance
existing  products,  respond to changing  customer  requirements and develop and
introduce,  in a timely manner,  new products that keep pace with  technological
developments  and emerging  industry  standards.  There can be no assurance that
Sector's products or services will achieve market acceptance, or will adequately
address the changing needs of the  marketplace or that Sector will be successful
in  developing  and  marketing  enhancements  to its  existing  products  or new
products  incorporating  new  telecommunication  technology  on a timely  basis.
Sector  has  in  the  past   experienced   delays  in  the  development  of  its
telecommunications  services and there can be no assurance  that Sector will not
experience  further delays in connection  with its current  service  offering or
future  service  development  activities.  If Sector is  unable to  develop  and
introduce new products, or enhancements to existing products, in a timely manner
in response to changing  market  conditions or customer  requirements,  Sector's
business,  operating  results and financial  condition  will be  materially  and
adversely affected.  Because Sector has limited resources,  Sector must restrict
its business  development  efforts to a relatively  small number of products and
services.  There can be no assurance  that these efforts will be successful  or,
even if  successful,  that any  resulting  products or  operating  systems  will
achieve market acceptance.

     Sector may also be subject to additional competition due to the development
of new  technologies  and increased  availability of domestic and  international
transmission  capacity.  For example, even though fiber-optic networks,  such as
that of  Sector,  are now  widely  used for voice and data  transmission,  it is
possible that the  desirability of such networks could be adversely  affected by
changing  technology.  The  telecommunications  industry is in a period of rapid
technological  evolution,  marked by the introduction of new product and service
offerings and  increasing  satellite and fiber optic  transmission  capacity for
services  similar to those  provided by Sector.  Sector cannot  predict which of
many possible future product and service offerings will be important to maintain
its competitive  position or what  expenditures  will be required to develop and
provide such products and services.

                                      -20-

<PAGE>


     Dependence  on  Proprietary  Technology;  Risks of  Infringement.  Sector's
success  depends  upon  its  proprietary  technology.  Sector  will  rely  on  a
combination  of  copyright,  trademark  and trade secret  laws,  confidentiality
procedures and licensing  arrangements  to establish and protect its proprietary
rights.  Sector does not have any patents  material to its  business  and has no
patent  applications filed. As part of its  confidentiality  procedures,  Sector
will  generally  enter  into  non-disclosure   agreements  with  its  employees,
distributors and corporate partners,  and license agreements with respect to its
software,   documentation  and  other  proprietary  information.  Despite  these
precautions,  it may be possible for a third party to copy or  otherwise  obtain
and use Sector's  products or technology  without  authorization,  or to develop
similar technology independently. Policing unauthorized use of Sector's products
is  difficult  and although  Sector is unable to  determine  the extent to which
piracy of its software products exists,  software piracy can be expected to be a
persistent  problem.  Sector will make source code  available for certain of its
products and the  provision of such source code may increase the  likelihood  of
misappropriation or other misuses of Sector's intellectual  property. In selling
its products,  Sector will also rely in part on "shrink wrap"  licenses that are
not signed by licensees and,  therefore,  may be unenforceable under the laws of
certain  jurisdictions.   In  addition,  effective  protection  of  intellectual
property  rights is unavailable or limited in certain foreign  countries.  There
can be no assurance that Sector's protection of its proprietary rights including
any patent that may be issued,  will be adequate  or that  Sector's  competitors
will not independently  develop similar technology,  duplicate Sector's products
or design  around any patents  issued to Sector or other  intellectual  property
rights.

     Sector is not aware  that any of its  products  infringes  the  proprietary
rights of third parties. There can be no assurance,  however, that third parties
will not claim such  infringement  by Sector  with  respect to current or future
products.  Sector expects that software product  developers will increasingly be
subject to such claims as the number of  products  and  competitors  in Sector's
industry segment grows and the functionality of products in the industry segment
overlaps.  Any such  claims,  with or  without  merit,  could  result  in costly
litigation that could absorb  significant  management  time,  which could have a
material adverse effect on Sector's  business,  operating  results and financial
condition.  Such claims  might  require  Sector to enter into royalty or license
agreements.  Such  royalty  or  license  agreements,  if  required,  may  not be
available  on terms  acceptable  to Sector  or at all.  If such  agreements  are
entered into they could have a material  adverse effect upon Sector's  business,
operating results and financial condition.


                          PART II - OTHER INFORMATION

ITEM 1 - Changes In Securities

On June 22,  2000,  certificates  representing  50,000  shares of the  Company's
common  stock,  restricted  under  Rule 144,  were  issued to two  directors  as
compensation for their agreement to serve as directors; directors of the Company
each receive 25,000 shares of the Company's common stock,  restricted under Rule
144, following their appointment.

                                      -21-

<PAGE>

On June 22, 2000,  certificates  representing  125, 000 shares of the  Company's
common stock, restricted under Rule 144, were issued to five directors as annual
compensation;  directors  for the  Company are to receive  25,000  shares of the
Company's  common  stock,  restricted  under Rule 144,  together with such other
compensation as may be approved by the Board.

During July, 2000, the Company agreed with Overseas Communications, Ltd. to sell
shares  of its  common  stock to  overseas  investors  through  a  Regulation  S
subscription  agreement.  The Company agreed to receive up to $650,000 according
to its needs and to in  exchange  to sell its  common  stock  with the number of
shares to issue to be  calculated  using an average  of the strike  price of the
Company's trading stock for the 5 trading days prior to the Company's receipt of
funds,  discounted  by thirty  percent  (30%).  During the quarter,  the Company
received  $400,000 toward the Regulation S subscription;  the Company must issue
2,134,449 shares in exchange therefor.

On August 8, 2000, the Company made effective a change in its capital  structure
which  authorizes it to issue five hundred million  (500,000,000)  shares of its
common stock through  acceptance of a filing with the Nevada  Secretary of State
on August 8, 2000; resolutions  authorizing the change in capital structure were
made on July 25, 2000.


ITEM 2 - Legal Proceedings.

The Company is party to the following Legal Proceedings:

Indira Shetty v. World Wide Plumbing et al. v. Worldwide Plumbing  Supply,  Inc,
  Allan Kline,  and Sector Communications, Inc.
Supreme Court of the State of New York, County of Queens
Filed August 30, 1999  Case 19847-99
------------------------------------
Plaintiff  alleges  Allan Kline  represented  he was the President of Sector and
would sell Plaintiff 35,000 shares of stock for $20,000.00.  Mr. Kline allegedly
told Plaintiff that World Wide Plumbing  Supply,  Inc. was the parent company of
Sector. Plaintiff issued a check to World-wide Plumbing and it was cashed. World
Wide is a an entity in the New York area and has filed an answer.  Sector has no
knowledge  of World  Wide  Plumbing  and  denies  each and every  allegation  of
wrongdoing. Sector pled that Allan Kline was not the President of Sector and has
no knowledge of any of the facts. Plaintiff seeks recovery of his $ 20,000.00. A
loss is not  believed  to be  probable  or  estimable  in this  case,  as Sector
Communications,  Inc.  never  received  any funds from  Plaintiff.  This case is
presently being litigated.

                                      -22-

<PAGE>

Kinsella Boesch Fujikawa & Towle, LLP v. Sector Communications, Inc.
Los Angeles Superior Court, Central District
Filed June 30, 2000  Case BC232756
----------------------------------

The Company is currently  defending  this action which alleges  non-payment  for
legal  services  rendered  by  Plaintiff  and unpaid in the  amount of  $12,500,
inclusive of $1,339.20 of alleged costs.  The Company takes a contrary  position
to that of Plaintiff  and answered the  complaint by filing a general  denial on
August 2, 2000.  Plaintiff  does not  properly  allege  that it  entered  into a
written fee  agreement  with the Company.  The Company  takes the position  that
claimant  cannot  prevail  on any claims for its own  attorneys  fees  allegedly
incurred in  preparing or  maintaining  its claim  against the Company,  as such
claim is believed to be contrary to  applicable  law. The Company  believes some
loss may be probable and  presently  estimates a loss of $1,000,  in belief that
said sum represents an amount in excess of the reasonable  value of the services
provided  by the  claimant.  While the Company  doubts the merits of  claimant's
action,  the outcome is uncertain and may  materially  and adversely  affect the
financial condition of the Company if such outcome proves unfavorable.


ITEM 5 - Other information

During the  quarter  the  Company  entered  into a letter of intent  (LOI) which
allows  it to  conduct  due  diligence  to  determine  whether  it will  acquire
Workseek.com  and American  Recruitment  Conferences,  Inc.  private  California
corporations,   and  Sunburst  Acquisitions  III,  Inc.,  a  public  corporation
incorporated in Colorado, under terms included in the LOI. The Company commenced
its due  diligence  proceedings  during the quarter;  it is presently  unable to
state  whether the  transactions  are probable  (whether they will be completed)
because  the due  diligence  process has not been  completed  and the Board must
approve any acquisition  agreement.  The Company stated in a press release dated
August 29,  2000,  that it will file Form 8-K with the  Securities  and Exchange
Commission and will subsequently file financials for the target  corporations as
required.

During the quarter  the Company  secured  licenses  from the  Telecommunications
State  Commission  of the  Government of Bulgaria to become a cable TV operator;
the   licenses   cover   construction,    maintenance,    and   use   of   cable
telecommunications  networks  for radio and TV signals  and the  provision  of a
range of services throughout the capital city of Sofia.

On August 10, 2000, the Company confirmed  election of Michael J. Zwebner to its
Board of Directors.  Mr.  Zwebner  currently  serves as Chairman of the Board of
Directors  of Talk Visual  Corporation  (OTC BB:  TVCP) and as a director of The
Entertainment Internet, Inc. (EQS: EINI).

                                      -23-

<PAGE>

ITEM 6 - Exhibits and reports on Form 8-K

     (a) Exhibit Index

No.  Description
--   -----------
27   Financial Data Schedule


     (b) Reports on Form 8-K

       None




                                   SIGNATURES

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


                                        SECTOR COMMUNICATIONS, INC.
                                            (Registrant)



Dated: October 16, 2000             By  /s/ Theodore Georgelas
                                        --------------------------
                                        President, and Director






                                      -24-