UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   Form 10-QSB


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 For the quarter ended March 31, 2004

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from to

Commission File Number:                              001-12885
                        -------------------------------------------------------

                        AVENUE ENTERTAINMENT GROUP, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

         Delaware                                             95-4622429
---------------------------                        --------------------------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization                       Identification No.)


11111 Santa Monica Blvd., Suite 525
Los Angeles, California                                  90025
--------------------------------------------         ---------------------
(Address of principal executive offices)                 (Zip Code)

                                 (310) 996-6815
              (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 and Exchange Act of 1934
during the preceding 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 ______
                               ---------

Number of shares outstanding of each of issuer's classes of common stock as of
May 14, 2004:



     Common Stock                                    5,371,030



<PAGE>




                        AVENUE ENTERTAINMENT GROUP, INC.

                                Table of Contents

PART I.  FINANCIAL INFORMATION                                         Page No.
                                                                       --------

  Item 1. Financial Statements

          Unaudited Consolidated Balance Sheet -
          March 31, 2004                                                      1

          Unaudited Consolidated Statements of Operations -
          Three Months Ended March 31, 2004 and 2003                          2

          Unaudited Consolidated Statements of Cash Flows -
          Three Months Ended March 31, 2004 and 2003                          3

          Unaudited Notes to Consolidated Financial Statements                5

  Item 2. Management's Discussion and Analysis or Plan of Operation           8

  Item 3. Controls and Procedures                                            12

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings                                                  13

  Item 2. Changes in Securities                                              13

  Item 3. Defaults Upon Senior Securities                                    13

  Item 4. Submissions of Matters to a Vote of Security Holders               13

  Item 5. Other Information                                                  13

  Item 6. Exhibits and Reports on Form 8-K                                   14

          Signatures                                                         14

          Statement By Principal Executive and Financial Officer Regarding
          Facts and Circumstances Relating to Exchange Act Filings           15

          Written Statement of President and Chief Executive and Financial   17
          Officer


<PAGE>






                          PART I. FINANCIAL INFORMATION

                        AVENUE ENTERTAINMENT GROUP, INC.


                      UNAUDITED Consolidated Balance Sheet


                                                                     March 31,
                                                                         2004

                                                                   (unaudited)
Assets

Cash                                                          $      258,414
Accounts receivable, net of allowance of $10,000                      17,141
Film costs, net                                                      180,498
Property and equipment, net                                            8,680
Other assets                                                          17,470
                                                                  ----------
Total assets                                                  $      482,203
                                                                  ==========


Liabilities and Stockholders' Deficit

Accounts payable and accrued expenses                         $      387,490
Deferred income                                                      409,361
Deferred compensation                                              1,110,117
Due to related party                                                 146,597
                                                                  ----------
Total liabilities                                                  2,053,565

Stockholders' deficit

Common stock, par value $.01 per share, $15,000,000 shares
        authorized, 5,371,030 shares issued and outstanding           53,710
Additional paid-in capital                                         7,172,839
Accumulated deficit                                               (8,644,224)
Treasury stock, at cost                                               (3,687)
Note receivable for common stock                                    (150,000)
                                                                  -----------
Total stockholders' deficit                                       (1,571,362)
                                                                  -----------
Total liabilities and stockholders' deficit                   $      482,203
                                                                  ==========


        See accompanying notes to the consolidated financial statements.


<PAGE>


                        AVENUE ENTERTAINMENT GROUP, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>


<CAPTION>
                                                         Three months      Three months
                                                            ended             ended
                                                          March 31,         March 31,
                                                             2004              2003
                                                             ----              ----
                                                         (unaudited)       (unaudited)

<S>                                                  <C>                       <C>
Operating revenues                                   $      566,992            157,364
                                                           --------           -------

Cost and expenses:
  Film production costs                                       4,525            14,997
  Selling, general & administrative expenses                309,966           309,197
  Other income                                              (49,654)                0
                                                      --------------------------------
                                                      -------------------------------
       Total costs and expenses                             264,837           324,194
                                                      --------------------------------
                                                      --------------------------------

Income (loss) before income tax                             302,155          (166,830)

Income tax expense                                                0            20,729
                                                      ------------------------------------

Net income (loss)                                      $    302,155       $   (187,559)
                                                      ====================================

Basic income (loss) per common stock                   $        .06       $      (.03)
                                                      =============          =========

Diluted income (loss) per common stock                $         .05       $      (.03)
                                                      ==================     ==========

Weighted average common shares outstanding-basic          5,371,003          5,371,003
                                                      =============         =========


Weighted average common shares outstanding-diluted       6,530,5 86         5,371,003
                                                      ====================================





        See accompanying notes to the consolidated financial statements.

</TABLE>


<PAGE>


                        AVENUE ENTERTAINMENT GROUP, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS




<TABLE>

<CAPTION>

                                                                        Three months        Three months
                                                                           ended               ended
                                                                         March 31,           March 31,
                                                                           2004                2003
                                                                       -----------         -----------
                                                                        (unaudited)        (unaudited)

Cash flows from operating activities:

<S>                                                                  <C>               <C>
   Net profit (loss)                                                 $   302,155       $     (187,559)
Adjustments to reconcile net loss to net cash (used for)
    provided by operating activities:
   Depreciation                                                            1,609               2,190
   Amortization - film production costs                                    3,138              13,556
   Deferred compensation                                                 (51,116)             30,300
   Changes in assets and liabilities which affect net income:
       Accounts receivable                                               115,481             (24,889)
       Film costs                                                         73,013             (23,571)
       Other assets                                                          325                  (3)
       Accounts payable and accrued expenses                              (8,817)            (25,632)
       Deferred income                                                   (25,000)            (44,401)
                                                                       ------------     ---------------
                                                                       ------------     ---------------

           Net cash provided by (used for) operating activities           410,788            (260,009)




        See accompanying notes to the consolidated financial statements.

</TABLE>

<PAGE>


                        AVENUE ENTERTAINMENT GROUP, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>

<CAPTION>

                                                                                 Three months        Three months
                                                                                    ended               ended
                                                                                  March 31,           March 31,
                                                                                       2004                2003
                                                                                  -------------   ------   ----
                                                                                 (unaudited)          (unaudited)

Cash flows from financing activities:
<S>                                                                            <C>                   <C>
     Proceeds from (repayment of) loan payable                                 $  (190,000)          $         0

                                                                                  -------------        ----------

           Net cash provided by (used for) financing activities                   (190,000)                    0


           Net increase (decrease) in cash                                          220,788             (260,009)

Cash at beginning of year                                                            37,626             358,216
                                                                                  -------------         -----------

Cash at end of period                                                          $    258,414           $  98,207
                                                                                  ============         ============
Supplemental cash flow information:
  Cash paid during the year for:
     Interest                                                                  $        510                   0
                                                                                  ===========          $============
     Income taxes                                                              $          0            $   20,729
                                                                                  ===============      ============






          See accompanying notes to consolidated financial statements.


</TABLE>


<PAGE>



                        AVENUE ENTERTAINMENT GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





1.       Summary of significant accounting policies


The Company

         Avenue Entertainment Group, Inc. (the "Company") is principally engaged
in the  development,  production and  distribution of feature films,  television
series, movies-for-television, mini-series and film star biographies.


         Generally, theatrical films are first distributed in the theatrical and
home video markets. Subsequently, theatrical films are made available for
worldwide television network exhibition or pay television, television
syndication and cable television. Generally, television films are first licensed
for network exhibition and foreign syndication or home video, and subsequently
for domestic syndication on cable television. The revenue cycle generally
extends 7 to 10 years on film and television product.


Basis of presentation

         The accompanying interim consolidated financial statements of the
Company are unaudited and have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission regarding
interim financial reporting. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements and should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Form 10-KSB for the year ended December 31, 2003. The Independent Auditor's
Report dated March 12, 2004 on the Company's consolidated financial statements
states that the Company has suffered losses from operations, has a working
capital deficiency and has an accumulated deficit that raises substantial doubt
about its ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that may result from the Company's
inability to continue as a going concern. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position of the Company at March 31, 2004, and the
results of its operations and its cash flows for the three months ended March
31, 2004 and 2003 have been included. The results of operations for the interim
period are not necessarily indicative of results which may be realized for the
full year.


<PAGE>

                        AVENUE ENTERTAINMENT GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENT (Continued)



Earnings (Loss) per Common Share

           The Company has adopted Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings per Share", which established standards for computing
and presenting earnings per share (EPS). The statement simplifies the standards
for computing EPS, replaces the presentation of primary EPS with a presentation
of basic EPS and requires a dual presentation of basic and diluted EPS on the
face of the income statement. Basic EPS are based upon the weighted average
number of common shares outstanding during the period. Diluted EPS are based
upon the weighted average number of common shares if all dilutive potential
common shares had been outstanding.

           The following potential common shares have been excluded from the
computation of diluted net income (loss) per share for the three months ended
March 31, 2003 because the effect would have been anti-dilutive:

Options outstanding under the Company's stock option plan            2,235,000

            The following potential common shares have been excluded from the
computation of diluted earnings per share for the three months ended March 31,
2004 due to the exercise price being greater than the Company's weighted average
stock price for the period:

Options outstanding under the Company's stock option plan               970,000


2.      Film costs

         Film costs consist of the following:

                                                                     March 31,
                                                                         2004

      In process or development                                   $   163,642
      Released, net of accumulated amortization of $17,173,558         16,856
                                                                     --------
                                                                  $   180,498


3.     Property and Equipment

       The major classes of property and equipment consist of the following:


<PAGE>

                                           Useful               March 31,
                                            life                    2004
       Machinery and equipment            4 to 5 years           $ 232,599
       Furniture and fixtures             10 years                  29,495
       Leasehold improvements             3 to 4 years               3,267
                                                                  -----------
                                                                   265,361
       Less accumulated depreciation                              (256,681)
                                                                 ----------
                                                              $     8,680

       Depreciation expense was $1,609 and $2,190 for the three months ended
March 31, 2004 and 2003, respectively.

4.      Earnings Per Share

         Earnings per share for the three months ended March 31, 2004 were as
follows:

            Basic
              Weighted-average of common shares outstanding           5,371,003
              Net income                                             $  302,155
              Net income per share                                   $     0.06

            Diluted
              Weighted-average of common shares outstanding           5,371,003
              Incremental shares assuming dilution                    1,159,583
                                                               ----------------

              Weighted-average diluted common shares outstanding      6,530,586
                                                                  =============

              Net income                                         $       302,155
              Net income per share                               $         0.05

5.      Loan Payable

                    On April 15, 2003 the Company entered into an unsecured loan
       for $250,000 at prime plus 1% with City National Bank and the loan amount
       was increased to $350,000 on November 4, 2003. The loan matured on April
       15, 2004. The amount outstanding at March 31, 2004 was zero as repayment
       of the loan was made in full in February 2004.

<PAGE>



ITEM 2.  MANGEMENTT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

            Except for the historical information presented in this document,
the matters discussed in this Form 10-QSB, and specifically in "Management's
Discussion and Analysis or Plan of Operation," or otherwise incorporated by
reference into this document, are "forward looking statements" (as such term is
defined in the Private Securities Litigation Reform Act of 1995). These
statements can be identified by the use of forward- looking terminology such as
"believes," "expects," "may," "will," "intends," "should," or "anticipates" or
the negative thereof or other variations thereon or comparable terminology, or
by discussions of strategy that involve risks and uncertainties. The safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended, apply to
forward-looking statements made by Avenue Entertainment Group, Inc. (the
"Company"). You should not place undue reliance on forward-looking statements.
Forward-looking statements involve risks and uncertainties. The actual results
that we achieve may differ materially from any forward-looking statements due to
such risks and uncertainties. These forward-looking statements are based on
current expectations, and we assume no obligation to update this information.
Readers are urged to carefully review and consider the various disclosures made
by us in this report on Form 10-QSB and in our other reports filed with the
Securities and Exchange Commission ("SEC") that attempt to advise interested
parties of the risks and factors that may affect our business.

            The following discussion and analysis of our financial condition and
plan of operation should be read in conjunction with the unaudited financial
statements and accompanying notes and the other financial information appearing
elsewhere in this report and with the audited financial statements contained in
our Form 10-KSB for the year ended December 31, 2003.

Overview

         Avenue Entertainment Group, Inc. (the "Company") is principally engaged
in the  development,  production and  distribution of feature films,  television
series, movies-for-television, mini-series and film star biographies.

          Generally, theatrical films are first distributed in the theatrical
and home video markets. Subsequently, theatrical films are made available for
worldwide television network exhibition or pay television, television
syndication and cable television. Generally, television films are first licensed
for network exhibition and foreign syndication or home video, and subsequently
for domestic syndication on cable television. The revenue cycle generally
extends 7 to 10 years on film and television product.


Basis of Presentation

           The accompanying interim consolidated financial statements of the
Company are unaudited and have been prepared by the Company pursuant to the

<PAGE>

rules and regulations of the Securities and Exchange Commission regarding
interim financial reporting. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements and should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Form 10-KSB for the year ended December 31, 2003. The Independent Auditor's
Report dated March 14, 2004 on the Company's consolidated financial statements
states that the Company has suffered losses from operations, has a working
capital deficiency and has an accumulated deficit that raises substantial doubt
about its ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that may result from the Company's
inability to continue as a going concern. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position of the Company at March 31, 2004, and the
results of its operations and its cash flows for the three months ended March
31, 2004 and 2003 have been included. The results of operations for the interim
period are not necessarily indicative of results which may be realized for the
full year.

Critical Accounting Policies

         Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with generally accepted accounting principles in the
United States. The preparation of financial statements require management to
make estimates and judgments that affect the reported amounts of assets and
liabilities, revenues and expense and disclosures at the date of the financial
statements. On an on-going basis, we evaluate our estimates, including, but not
limited to, those related to revenue recognition, accounts receivables,
inventories and impairment of intangibles. We use authoritative pronouncements,
historical experience and other assumptions as the basis for making estimates.
Actual results could differ from those estimates. We believe that the following
critical accounting policies affect our more significant judgments and estimates
in the preparation of our consolidated financial statements.

         Revenue Recognition.  The Company recognizes revenue in accordance with
the  provisions  of  Statement  of Financial  Accounting  Standards  No. 139 and
American  Institute of Certified Public  Accountants  Statement of Position 00-2
(collectively referred to as "SOP 00-2").

         Revenues from feature film distribution licensing agreements are
recognized on the date the completed film is delivered or becomes available for
delivery, is available for exploitation in the relevant media window purchased
by that customer or licensee and certain other conditions of sale have been met
pursuant to criteria set by SOP 00-2.

         Revenues from domestic television and video licensing contracts, which
provide for the receipt of non-refundable guaranteed amounts, are recognized
when the film is available for exhibition, provided that the other conditions of
sale required by SOP 00-2 have been met. Until all conditions of sale have been
met, amounts received on such licensing contracts are reflected in the
accompanying financial statements as deferred income. International sales and
other sales in the United States are recognized in the period in which payment
is received.


<PAGE>

         The market trend of each film is regularly examined to determine the
estimated future revenues and corresponding lives. Due to the nature of the
industry, management's estimates of future revenues may change within the next
year and the change could be material.

         Revenues from producer-for-hire contracts are recognized on a
percentage-of-completion method, measured by the percentage of costs completed
to date to estimated total cost for each contract. Provisions for estimated
losses on uncompleted contracts are made in the period in which such losses are
determined.

Valuation of long-lived and intangible assets, including film costs. Long-lived
assets, consisting primarily of property, plant and equipment and intangibles,
including film costs comprise a significant portion of the Company's total
assets. Long-lived assets, including intangibles and film costs, are reviewed
for impairment whenever events or changes in circumstances have indicated that
their carrying amounts may not be recoverable. Recoverability of assets is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by that asset. The cash flow projections are
based on historical experience, management's view of growth rates within the
industry and the anticipated future economic environment.

            Factors we consider important which could trigger an impairment
review include the following:

         o significant underperformance relative to expected historical or
           projected future operating results;
         o significant changes in the manner of our use of the acquired assets
           or the strategy for our overall business;
         o significant negative industry or economic trends;
         o significant decline in our stock price for a sustained period; and
        (a) our market capitalization relative to net book value.

         When we determine that the carrying value of intangibles and long-lived
assets may not be recoverable based upon the existence of one or more of the
above indicators of impairment, we measure any impairment based on a projected
discounted cash flow method using a discount rate determined by our management
to be commensurate with the risk inherent in our current business model.

The three months ended March 31, 2004 are compared to the three months ended
March 31, 2003.

Revenues

         Revenues for the three months ended March 31, 2004 were approximately
$567,000 compared to $157,000 for the three months ended March 31, 2003.
Revenues earned in 2004 were derived primarily from producer fees for the
feature film Closer, the HBO First Look Deal and the licensing of rights of the
"Hollywood Collection" in secondary markets through Janson Associates.

<PAGE>

Film Production Costs

         Film production costs for the three months ended March 31, 2004 were
approximately $5,000 compared to $15,000 for the three months ended March 31,
2003. The decrease in film production costs is due to a decrease in revenues
earned in secondary markets through Janson Associates.

Selling, General and Administrative

         Selling, general and administrative (S,G&A) expenses for the three
months ended March 31, 2004 were approximately $310,000 compared to $309,000 for
the three months ended March 31, 2003. The increase in S,G&A is not significant
but does remain consistent with previous quarters.

Liquidity and Capital Resources

         At March 31, 2004, the Company had approximately $258,000 of cash.
Revenues were sufficient to cover costs of operations for the quarter ended
March 31, 2004. The Company has a working capital deficiency and has an
accumulated deficit of $8,644,000 through March 31, 2004. The Company's
continuation as a going concern is dependent on its ability to ultimately attain
profitable operations and positive cash flows from operations. The Company's
management believes that it can satisfy its working capital needs based on its
estimates of revenues and expenses, together with improved operating cash flows,
as well as additional funding whether from financial markets, other sources or
other collaborative arrangements. The Company believes it will have sufficient
funds available to continue to exist through the next year, although no
assurance can be given in this regard. Insufficient funds will require the
Company to scale back its operations. The Independent Auditor's Report dated
March 12, 2004 on the Company's consolidated financial statements for the year
ended December 31, 2003 states that the Company has suffered losses from
operations, has a working capital deficiency and has an accumulated deficit that
raises substantial doubt about its ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that may result
from the Company's inability to continue as a going concern.

Forward-Looking Statements

         This report contains certain forward-looking statements reflecting
management's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements, including, but not limited to, the ability of
the Company to reverse its history of operating losses; the ability to obtain
additional financing and improved cash flow in order to meet its obligations and
continue to exist as a going concern; production risks; dependence on contracts
with certain customers; future foreign distribution arrangements; and dependence
on certain key management personnel. All of these above factors are difficult to
predict, and many are beyond the control of the Company.


<PAGE>



ITEM 3.  CONTROLS AND PROCEDURES

          Based on the evaluation conducted by the Chief Executive and Financial
Officer, as of a date within 90 days of the filing date of this quarterly
report, of the effectiveness of the Company's disclosure controls and
procedures, the CEO/CFO concluded that, as of the evaluation date (1) there were
no significant deficiencies or material weaknesses in the Company's disclosure
controls and procedures, (2) there were no significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the evaluation date, and (3) no corrective actions were required
to be taken.


<PAGE>


                        AVENUE ENTERTAINMENT GROUP, INC.

                                 MARCH 31, 2004

                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

We may become involved in litigation arising out of operations in the normal
course of business. As of March 31, 2004, we are not a party to any pending
legal proceedings the adverse outcome of which could reasonably be expected to
have a material adverse effect on our operating results or financial position.


Item 2.  Changes in Securities

(a) There were no modifications of instruments defining the rights of the
holders of any class of registered securities. (b) The rights evidenced by any
class of registered securities have not been materially limited or qualified by
the issuance or
                  modification of any other class of securities.
(c) In the first quarter ended March 31, 2004 there were no sales of
unregistered securities. (d) Rule 463 of the Securities Act is not applicable to
the Company. (e) In the first quarter ended March 31, 2004 there were no
repurchases by the Company of its Common Stock.


Item 3.  Defaults Upon Senior Securities

                  None


Item 4.  Submissions of Matters to a Vote of Security Holders

                  In the first quarter ended March 31, 2004 there were no
matters submitted to a vote of security holders.


Item 5.  Other Information

                  None.




Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

         31.  Certification of Chief Executive and Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2003.

         32.  Written  Statement  of  the  President  and  Chief  Executive  and
Financial Officer pursuant to 18 U.S.C.ss.1350.

(b)      Reports

         No reports  were filed under Form 8-K for the  quarter  ended March 31,
2004.



                                   SIGNATURES

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

                        AVENUE ENTERTAINMENT GROUP, INC.





DATE:    May 20, 2004                        BY:  Cary Brokaw
                                                  President and Chief Executive
                                                  and Financial
                                                  Officer, Director