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

                                   FORM 10-QSB



[X]  QUARTERLY  REPORT  UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF  1934

For the quarterly period ended June 30, 2004

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

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

                         Commission file number: 0-22711


             Nevada                                      76-0640970
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)


    701 North Post Oak, Road, Suite 630, Houston, Texas       77024
       (Address of Principal Executive Office)              (Zip Code)


                                 (713) 682-7400
              (Registrant's Telephone Number, Including Area Code)


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

      APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each the issuer's classes of common
equity, as of the latest practicable date: 44,117,003 common shares outstanding
as of June 28, 2004.

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


================================================================================


<PAGE>
<TABLE>
<CAPTION>
                             CRESCENT COMMUNICATIONS, INC.
                                   TABLE OF CONTENTS
                                      __________


                            PART I.   FINANCIAL INFORMATION

<S>                                                                                 <C>
ITEM 1.   FINANCIAL STATEMENTS

          Unaudited Condensed Consolidated Financial Statements . . . . . . . . . .  F-1

            Condensed Consolidated Balance Sheet as of June 30, 2004 (Unaudited)
              and December 31, 2003 . . . . . . . . . . . . . . . . . . . . . . . .  F-2

            Unaudited Condensed Consolidated Statement of Operations for three
              months and six months ended June 30, 2004 and 2003. . . . . . . . . .  F-3

            Unaudited Condensed Consolidated Statement of Stockholders' Equity for
              the six months ended June 30, 2004. . . . . . . . . . . . . . . . . .  F-4

            Unaudited Condensed Consolidated Statement of Cash Flows for the six
              months ended June 30, 2004 and 2003 . . . . . . . . . . . . . . . . .  F-5

            Notes to Unaudited Condensed Consolidated Financial Statements. . . . .  F-6

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS. . . . . . . . . . . . . . . . . . .  I-1

ITEM 3.   CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . .  I-4


                               PART II. OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . .  II-1

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . .  II-1

          SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  II-2

          CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  II-3
</TABLE>


                                        2
<PAGE>
ITEM  1.   FINANCIAL  STATEMENTS





                          CRESCENT COMMUNICATIONS, INC.
                                   __________




              UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003


                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                             CRESCENT COMMUNICATIONS, INC.
                         CONDENSED CONSOLIDATED BALANCE SHEET
                                      __________


                                                               JUNE 30,     DECEMBER 31,
                                                                 2004           2003
     ASSETS                                                  (UNAUDITED)       (NOTE)
     ------                                                  ------------  --------------
<S>                                                          <C>           <C>

Current assets:
  Cash and cash equivalents                                  $    97,534   $       9,485
  Accounts receivable, net                                        85,679         155,425
  Note receivable                                                250,000               -
  Prepaid expenses and other                                       9,834           2,100
                                                             ------------  --------------

      Total current assets                                       443,047         167,010

Property and equipment, net of accumulated depreciation
  of $200,064 and $190,686 at June 30, 2004 and December
  31, 2003, respectively                                          52,474          61,191

Net non-current assets of discontinued operations                      -         542,372
                                                             ------------  --------------

      Total assets                                           $   495,521   $     770,573
                                                             ============  ==============


LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
  Book overdraft                                             $         -   $      63,705
  Notes payable                                                   26,475         124,658
  Notes payable to related parties                               330,878         514,670
  Accounts payable                                               620,958         717,188
  Accrued liabilities                                            310,170         297,693
  Deferred revenue                                               123,088         193,038
                                                             ------------  --------------

      Total current liabilities                                1,411,569       1,910,952
                                                             ------------  --------------

Commitments and contingencies

Stockholders' deficit:
  Series A Convertible Non-Redeemable Preferred stock,
    $.001 par value, 20,000,000 shares authorized; 115.726
    issued and outstanding, $5,000 pre share liquidation
     preference($578,630 aggregate liquidation preference)             -               -
  Series B Convertible Non-Redeemable Preferred stock,
    $.001 par value, 10,000,000 shares authorized; no
    shares issued and outstanding                                      -               -
  Common stock, $.001 par value, 85,000,000 shares
    authorized, 42,436,030 and 34,540,174 shares issued
    and outstanding at June 30, 2004 and December 31,
    2003, respectively                                            42,436          34,540
  Additional paid-in capital                                   5,899,583       5,540,467
  Deferred compensation                                                -         (12,008)
  Accumulated deficit                                         (6,858,067)     (6,703,378)
                                                             ------------  --------------

      Total stockholders' deficit                               (916,048)     (1,140,379)
                                                             ------------  --------------

        Total liabilities and stockholders' equity           $   495,521   $     770,573
                                                             ============  ==============

<FN>
Note:  The balance sheet at December 31, 2003 has been derived from the audited financial
statements  at  that  date  but  does  not  include  all of the information and footnotes
required by  accounting principles generally accepted in the United States of America for
complete financial statements.
</TABLE>


                            See accompanying notes.


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                          CRESCENT COMMUNICATIONS, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   __________


                                       THREE MONTHS ENDED           SIX MONTHS ENDED
                                             JUNE 30,                   JUNE 30,
                                   --------------------------  --------------------------
                                       2004          2003          2004          2003
                                   ------------  ------------  ------------  ------------
<S>                                <C>           <C>           <C>           <C>

Service revenue                    $   161,709   $    82,751   $   372,177   $   151,774

Cost of services                       111,035       101,875       224,631       204,813
                                   ------------  ------------  ------------  ------------
  Gross margin                          50,674       (19,124)      147,546       (53,039)

Selling, general and adminis-
  trative expenses                     250,956       522,829       596,235       930,401
                                   ------------  ------------  ------------  ------------

Loss from operations                  (200,282)     (541,953)     (448,689)     (983,440)

Interest expense                        27,955        10,329        38,795        21,301
                                   ------------  ------------  ------------  ------------

    Loss from continuing
      operations                      (228,237)     (552,282)     (487,484)   (1,004,741)
                                   ------------  ------------  ------------  ------------

Discontinued operations:
  Gain from sale of discontinued       643,627             -       643,627             -
    broadband internet segment
  Loss from operation of
    discontinued broadband
    internet segment                  (133,806)     (195,020)     (310,832)     (310,213)
                                   ------------  ------------  ------------  ------------

    Income (loss) from
      discontinued operations          509,821      (195,020)      332,795      (310,213)
                                   ------------  ------------  ------------  ------------


      Net income (loss)            $   281,584   $  (747,302)  $  (154,689)  $(1,314,954)
                                   ============  ============  ============  ============


Basic and diluted net income
  (loss) per common share
  Continuing operations            $     (0.00)  $     (0.02)  $     (0.01)  $     (0.05)
  Discontinued operations                 0.01         (0.01)         0.01         (0.02)
                                   ------------  ------------  ------------  ------------

                                   $      0.01   $     (0.03)  $     (0.00)  $     (0.07)
                                   ============  ============  ============  ============

Weighted average shares out-
  standing                          40,421,968    23,614,681    38,691,661    19,211,411
                                   ============  ============  ============  ============
</TABLE>


                            See accompanying notes.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                              CRESCENT COMMUNICATIONS, INC.
                                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                         FOR THE SIX MONTHS ENDED JUNE 30, 2004
                                                       __________


                                                 SERIES A               SERIES B
                                                 --------               --------
                            COMMON STOCK     PREFERRED STOCK        PREFERRED STOCK   ADDITIONAL
                       -------------------  --------------------  -------------------   PAID-IN       DEFERRED      ACCUMULATED
                         SHARES    AMOUNT    SHARES     AMOUNT      SHARES    AMOUNT    CAPITAL     COMPENSATION      DEFICIT
                       ----------  -------  ---------  ---------  ----------  -------  ----------  --------------  -------------
<S>                    <C>         <C>      <C>        <C>        <C>         <C>      <C>         <C>             <C>

Balance at December
  31, 2003             34,540,174  $34,540        116  $       -           -  $     -  $5,540,467  $     (12,008)  $ (6,703,378)

Issuance of common
  stock for compensa-
  tion                     50,000       50          -          -           -        -      11,950              -              -

Issuance of common
  stock for cash        7,845,856    7,846          -          -           -        -     347,166              -              -

Amortization of
  deferred compen-
  sation                        -        -          -          -           -        -           -         12,008              -

Net loss                        -        -          -          -           -        -           -              -       (154,689)
                       ----------  -------  ---------  ---------  ----------  -------  ----------  --------------  -------------

Balance at June 30,
  2004                 42,436,030  $42,436        116  $       -           -  $     -  $5,899,583  $           -   $ (6,858,067)
                       ==========  =======  =========  =========  ==========  =======  ==========  ==============  =============


                          TOTAL
                       ------------
<S>                    <C>

Balance at December
  31, 2003             $(1,140,379)

Issuance of common
  stock for compensa-
  tion                      12,000

Issuance of common
  stock for cash           355,012

Amortization of
  deferred compen-
  sation                    12,008

Net loss                  (154,689)
                       ------------

Balance at June 30,
  2004                 $  (916,048)
                       ============
</TABLE>


                            See accompanying notes.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                          CRESCENT COMMUNICATIONS, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   __________


                                                            JUNE 30,     JUNE 30,
                                                              2004         2003
                                                           ----------  ------------
<S>                                                        <C>         <C>

Cash flows from operating activities:
  Net loss                                                 $(154,689)  $(1,314,954)
  Adjustments to reconcile net loss to net cash
    used in operating activities:                           (360,128)      756,858
                                                           ----------  ------------

      Net cash used in continuing operations                (514,817)     (558,096)
      Net cash used in discontinued operations              (310,832)     (310,213)
                                                           ----------  ------------

        Net cash used by operating activities               (825,649)     (868,309)
                                                           ----------  ------------

Cash flows from investing activities:
  Proceeds from sale of connectivity services business       900,000             -
  Proceeds from sale of property and equipment                 4,366             -
  Capital expenditures                                             -       (11,410)
                                                           ----------  ------------

      Net cash provided by continuing operations               4,366             -
      Net cash provided (used) by discontinued operations    900,000       (11,410)
                                                           ----------  ------------

        Net cash provided (used) by investing activities     904,366       (11,410)
                                                           ----------  ------------

Cash flows from financing activities:
  Decrease in book overdraft                                 (63,705)      (11,583)
  Proceeds from notes payable                                 40,000       144,647
  Payments on notes payable                                 (321,975)     (119,530)
  Issuance of common stock for cash                          355,012       866,185
                                                           ----------  ------------

      Net cash provided by continuing operations               9,332       879,719
      Net cash provided by discontinued operations                 -             -
                                                           ----------  ------------

        Net cash provided by financing activities              9,332       879,719
                                                           ----------  ------------

Net increase in cash and cash equivalents                     88,049             -

Cash and cash equivalents at beginning of period               9,485             -
                                                           ----------  ------------

Cash and cash equivalents at end of period                 $  97,534   $         -
                                                           ==========  ============
</TABLE>


                            See accompanying notes.

                                      F-5
<PAGE>
                          CRESCENT COMMUNICATIONS, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


1.   BASIS  OF  PRESENTATION
     -----------------------

     The  unaudited  consolidated condensed financial statements included herein
     have  been  prepared without audit pursuant to the rules and regulations of
     the  Securities  and  Exchange Commission. Certain information and footnote
     disclosures  normally  included  in  financial  statements  prepared  in
     accordance  with  accounting  principles  generally  accepted in the United
     States  of  America  have been condensed or omitted, pursuant to such rules
     and  regulations.  These  unaudited  consolidated  condensed  financial
     statements  should  be  read  in  conjunction with the audited consolidated
     financial  statements  and  notes  thereto of Crescent Communications, Inc.
     (the  "Company") included in the Company's Annual Report on Form 10-KSB for
     the  year  ended  December  31,  2003.

     In  the  opinion  of  management,  the  unaudited  consolidated  condensed
     financial  information  included herein reflect all adjustments, consisting
     only  of  normal,  recurring  adjustments,  which  are necessary for a fair
     presentation of the Company's financial position, results of operations and
     cash flows for the interim periods presented. The results of operations for
     the  interim periods presented herein are not necessarily indicative of the
     results  to  be  expected  for  a  full  year  or any other interim period.

     The  preparation  of  consolidated  financial statements in conformity with
     accounting  principles  generally  accepted in the United States of America
     requires  management  to  make  estimates  and  assumptions that affect the
     reported  amounts  of  assets  and liabilities and disclosure of contingent
     assets  and  liabilities  at  the  dates  of  the  consolidated  financial
     statements  and  the  reported  amounts of revenues and expenses during the
     periods.  Actual  results  could differ from estimates making it reasonably
     possible  that  a  change  in  the  estimates could occur in the near term.


2.   GOING  CONCERN  CONSIDERATIONS
     ------------------------------

     During  the six months ended June 30, 2004 and the years ended December 31,
     2003  and  2002,  the  Company  has  been  unable  to  generate  cash flows
     sufficient  to  support  its  operations and has been dependent on debt and
     equity  raised  from qualified individual investors. During the years ended
     December  31,  2003  and  2002,  the Company experienced negative financial
     results  as  follows:

<TABLE>
<CAPTION>
                                             2003          2002
                                         ------------  ------------
<S>                                      <C>           <C>
     Net loss                            $(2,543,629)  $(2,946,382)
     Negative cash flow from operations   (1,423,363)   (1,774,837)
     Negative working capital             (1,743,942)   (1,276,547)
     Stockholders' deficit                (1,140,379)     (442,332)
</TABLE>

     These  negative factors have continued during the six months ended June 30,
     2004 and raise substantial doubt about the Company's ability to continue as
     a  going  concern.

     The  Company  has  supported  current  operations  by:  1)  selling off its
     traditional connectivity services business, 2) raising additional operating
     cash  through  private  placements  of  its  common  stock, 3) issuing debt
     convertible  to  common  stock  to  certain key stockholders and 4) issuing
     stock  and options as compensation to certain employees and vendors in lieu
     of  cash  payments.

     These  steps  have provided the Company with the cash flows to continue its
     business  plan,  but  have  not  resulted in significant improvement in the
     Company's  financial  position.  Management  is considering alternatives to
     address  its  critical  cash  flow  situation  that  include:


                                      F-6
<PAGE>
                          CRESCENT COMMUNICATIONS, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


2.   GOING  CONCERN  CONSIDERATIONS,  CONTINUED
     ------------------------------------------


          -    Raising  capital  through  additional  sale  of  its  common  and
               preferred  stock  and/or  debt  securities.

          -    Merging  the  Company  with  another  business  that  compliments
               current  activities.

          -    Reducing  cash operating expenses to levels that are in line with
               current revenues. Reductions can be achieved through the issuance
               of  additional  common  shares  of the Company's stock in lieu of
               cash  payments  to  employees  or  vendors.


     These  alternatives  could  result  in  substantial  dilution  of  existing
     stockholders.  There  can  be  no  assurances  that  the  Company's current
     financial  position  can  be improved, that it can raise additional working
     capital  or  that  it  can achieve positive cash flows from operations. The
     Company's  long-term  viability  as  a  going concern is dependent upon the
     following:

          -    The Company's ability to locate sources of debt or equity funding
               to  meet  current  commitments and near term future requirements.

          -    The  ability  of  the  Company  to  achieve  profitability  and
               ultimately  generate  sufficient  cash  flow  from  operations to
               sustain  its  continuing  operations.


3.   SALE  OF  CONNECTIVITY  BUSINESS
     --------------------------------

     Effective  June  17, 2004, the Company entered into an Asset Sale Agreement
     (the  "Agreement")  with  DFW  Internet  Services,  Inc.  ("DFW"),  a Texas
     corporation  and a wholly-owned subsidiary of MobilePro Corporation for the
     sale of certain assets related to connectivity services including wireless,
     digital  subscriber  line  and  traditional  communication  technologies to
     business  and residential customers. Under the terms of this Agreement, the
     Company  has  received a total of $1,150,000 of which $900,000 was cash and
     $250,000  was a one-year promissory note. Additionally, DFW acquired 85% of
     accounts  receivable  associated  with  services  provided to the Company's
     customers  through  June  17,  2004.  Further,  DFW entered into a one-year
     sublease for the Company's leased space at 701 N. Post Oak Road, Suite 630,
     Houston,  Texas,  for a rental rate  of  $3,000  per  month.  The terms and
     conditions  of the transactions were the result of arms-length negotiations
     by  the parties. As a result of the Agreement our operations are now solely
     based  on  Bluegate  (TM)  ,  our branded HIPAA compliant broadband digital
     connectivity  offering  for  health care providers nationally. Following is
     analysis  of  assets  sold  under  the  agreement:

<TABLE>
<CAPTION>
Assets sold:
<S>                                               <C>
  Property and equipment                          $  306,027
  Goodwill associated with connectivity business     200,346
                                                  ----------

                                                     506,373
                                                  ----------
Consideration received
  Cash                                               900,000
  Note receivable                                    250,000
                                                  ----------
                                                   1,150,000
                                                  ----------

Gain recognized                                   $  643,627
                                                  ----------
</TABLE>


                                      F-7
<PAGE>
                          CRESCENT COMMUNICATIONS, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


3.   SALE  OF  CONNECTIVITY  BUSINESS,  CONTINUED
     --------------------------------------------

     In  addition  to  the  above  assets,  the Company sold 85% of the accounts
     receivable  associated  with  it's  traditional  connectivity  business.

     Following is an analysis of discontinued operations:

<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED        SIX MONTHS ENDED
                                        JUNE 30,                  JUNE 30,
                                ------------------------  -----------------------
                                   2004         2003         2004        2003
                                -----------  -----------  ----------  -----------
<S>                             <C>          <C>          <C>         <C>

     Service revenue            $  449,631   $  497,913   $ 860,681   $1,032,279

     Cost of services              333,105      305,627     673,891      614,442
                                -----------  -----------  ----------  -----------

       Gross margin                116,526      192,286     186,790      417,837

     Selling, general and
       administrative expenses     250,332      387,306     497,622      728,050
                                -----------  -----------  ----------  -----------

     Loss from operations         (133,806)    (195,020)   (310,832)    (310,213)
                                ===========  ===========  ==========  ===========
</TABLE>


4.   INCOME  TAX
     -----------

     The difference between the Federal statutory income tax rate of 34% and the
     Company's  effective  rate  is  primarily  attributable to increases in the
     valuation  allowance offset against deferred tax assets associated with the
     Company's  net  operating  losses.


5.   NOTES  PAYABLE  TO  RELATED  PARTIES
     ------------------------------------

     Certain  notes payable to related parties totaling $300,185 are convertible
     into  shares  of  the  Company's  common  stock  at  $.05 per share, at the
     election of the payee, any time prior to repayment of the note. At June 30,
     2004  the  notes  are  convertible  into  6,003,700  common  shares.

     During  the six months ended June 30, 2004 certain members of the executive
     management  team  advanced $80,000 under short term borrowing agreements of
     which $39, 000 have been repaid. The amounts are due on demand and call for
     interest  at  10%  of  the  face  value  of  the  loan.


6.   STOCKHOLDERS'  EQUITY
     ---------------------

     During  the  six months ended June 30, 2004, the Company engaged in various
     transactions  affecting  stockholders'  equity,  as  follows:

          -    The  Company  sold  common  stock  under  Regulation S to various
               foreign investors under investment agreements entered into during
               2003. The investment agreements generally provide for the sale of
               restricted  common  stock  at 35% of the current trading price in
               the  United  States.  During  the six month period ended June 30,
               2004,  7,845,656  shares  were  issued  for  $355,012.


                                      F-8
<PAGE>
                          CRESCENT COMMUNICATIONS, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


3.   STOCKHOLDERS'  EQUITY,  CONTINUED
     ---------------------------------

          -    The Company issued common stock for legal and consulting services
               totaling  $12,000.

          -    The  Company  issued  options  to acquire shares of the Company's
               common  stock  to  employees  and  consultants.  The  options are
               exercisable  after  a  vesting  period  at  $.20  per  share.


                                      F-9
<PAGE>
ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS

This  Management's  Discussion  and Analysis as of June 30, 2004 and for the six
months  ended  June  30,  2004, should be read in conjunction with the unaudited
condensed  financial  statements  and  notes thereto set forth in Item 1 of this
report  and  in  conjunction  with our Annual Report on Form 10-KSB for the year
ended  December  31,  2003.  The  results  of operations for the interim periods
presented  herein  are  not necessarily indicative of the results to be expected
for  a  full  year  or  any  other  interim  period.

The  information  in  this discussion contains forward-looking statements within
the  meaning  of  Section  27A  of  the  Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements
are  based  upon current expectations that involve risks and uncertainties.  Any
statements  contained  herein that are not statements of historical facts may be
deemed  to  be  forward-looking  statements.  For example, words such as, "may,"
"will,"  "should,"  "estimates," "predicts," "potential," continue," "strategy,"
"believes,"  "anticipates,"  "plans,"  "expects,"  "intends,"  and  similar
expressions  are  intended  to  identify forward-looking statements.  Our actual
results  and  the  timing  of  certain  events may differ significantly from the
results  discussed  in the forward-looking statements.  Factors that might cause
or  contribute  to  such a discrepancy include, but are not limited to the risks
discussed in our other SEC filings.  These forward-looking statements speak only
as  of  the date hereof.  We expressly disclaim any obligation or undertaking to
release  publicly  any  updates  or  revisions to any forward-looking statements
contained  herein  to reflect any change in our expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement
is  based.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The  Company's discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared  in  accordance  with  generally  accepted accounting principles in the
United  States.  The  preparation  of  these  financial  statements requires the
Company  to  make  estimates  and  judgments that affect the reported amounts of
assets,  liabilities, revenue and expenses, and related disclosure of contingent
assets  and  liabilities.  On  an  ongoing  basis,  the  Company  evaluates  its
estimates.  The  Company  bases  its  estimates  on historical experience and on
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances.  These  estimates  and  assumptions  provide  a  basis for making
judgments  about  the  carrying  values  of  assets and liabilities that are not
readily  apparent  from  other  sources.  Actual  results  may differ from these
estimates  under  different assumptions or conditions, and these differences may
be  material.

The  Company believes the following critical accounting policies affect its more
significant  judgments and estimates used in the preparation of its consolidated
financial  statements.

REVENUE RECOGNITION
-------------------

Revenue  from  Bluegate (TM) , HIPAA compliant broadband digital connectivity is
recognized  based  upon  contractually  determined  monthly  service  charges to
individual customers.  Services are billed in advance and, accordingly, revenues
are  deferred  until the period in which the services are provided.  At June 30,
2004,  deferred  service  revenue  was  $123,088.


                                      I-1
<PAGE>
STOCK-BASED  COMPENSATION
-------------------------

Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
("SFAS  No.  123")  established financial accounting and reporting standards for
stock-based  employee  compensation plans.  It defined a fair value based method
of  accounting  for  an  employee  stock option or similar equity instrument and
encouraged  all  entities  to  adopt  that method of accounting for all of their
employee  stock  compensation plans and include the cost in the income statement
as  compensation  expense.  However,  it  also  allows  an entity to continue to
measure compensation cost for those plans using the intrinsic value based method
of  accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees".  The  Company  accounts  for
compensation  cost for stock option plans in accordance with APB Opinion No. 25.

GENERAL

Crescent  Communications  is  a Nevada corporation that began operations on July
23,  2001,  providing  co-location  hosting and connectivity systems to small to
mid-size businesses in Texas.  The Company, headquartered in Houston, Texas is a
Value  Added  Network  provider that develops and deploys specific technological
internet  related  solutions  for  businesses.

The  Company was formed through a Stock Exchange Agreement ("Agreement") whereby
the shareholders of Solis Communications, Inc ("Solis") exchanged all the issued
and  outstanding  shares  of  Solis  for  600  shares  of  newly issued Series A
Convertible  Non-Redeemable  Preferred  Stock  of  Berens  Industries,  Inc.
("Berens").  Solis,  the  ultimate  acquirer  of  Berens in this reverse merger,
agreed  to  contribute  $600,000  cash  and  cash  equivalents.  Berens  was  a
development  stage  enterprise  involved in the development of an online auction
site  for  exclusive  paintings  and  other  art  works.  At  the  date  of  the
Agreement,  Berens  had  ceased  all activity due to their inability to generate
sufficient  revenue  or  obtain additional capital funding.  This transaction is
exempt  from  section  4.2  of  the  Securities  Act.

On  September  17,  2001  Berens filed a name change to Crescent Communications,
Inc.  d.b.a. Crescent Broadband and approved a 5-for-1 reverse stock split to be
effective  on  September 24, 2001.  On a fully convertible post-split basis, the
former  shareholders  of  Solis beneficially owned an aggregate of approximately
28,000,000  shares of common  stockAs a result, the former shareholders control
approximately  52%  of  the common stock.  The Series A Preferred Stock does not
receive  dividends.

Effective  June 17, 2004, the Company entered into an Asset Sale Agreement  (the
"Agreement") with DFW Internet Services, Inc. ("DFW"), a Texas corporation and a
wholly-owned  subsidiary of MobilePro Corporation for the sale of certain assets
related to connectivity services including wireless, digital subscriber line and
traditional  communication  technologies  to business and residential customers.
Under  the  terms  of  this  Agreement,  the  Company  will  receive  a total of
$1,150,000  of  which  $900,000  was cash and $250,000 was a one-year promissory
note.  Additionally,  DFW  acquired  85%  of accounts receivable associated with
services  provided  to the Company's customers through June 17, 2004.   Further,
DFW  entered  into  a one-year sublease for the Company's leased space at 701 N.
Post  Oak  Road, Suite 630, Houston, Texas, for rental rate of $3,000 per month.
The  terms  and  conditions  of  the transactions were the result of arms-length
negotiations by the parties.  We received a fairness opinion from an independent
third party that the asset sale was fair and equitable to us. As a result of the
Agreement  our  operations  are  now solely based on Bluegate (TM) , our branded
HIPAA  compliant  broadband  digital  connectivity  offering  for  health  care
providers  nationally.

The Company has incurred a significant loss from operations since inception, and
is  in a negative working capital and stockholders' deficit position at June 30,
2004.  The  Company  remains  dependent  on  outside  sources  of  funding  for
continuation  of  its operations.  Based on these factors, our auditors issued a
qualified opinion at December 31, 2003 that reflects the significant doubt about
the  company's  ability  to  continue  as  a  going  concern.


                                      I-2
<PAGE>
RESULTS  OF  OPERATIONS

THREE MONTHS ENDED JUNE 30, 2004 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2004

     During  the  three  months  ended June 30, 2004, the Company's revenue from
Bluegate (TM) , HIPAA compliant broadband digital connectivity connectivity  was
$161,709  versus  $82,751 for the three month period ended  June 30, 2003.  This
increase  of  $78,958  is a 95% improvement and is primarily attributable to our
efforts  to  market  Bluegate  (TM) as it has become the center of our business.

     Cost of sales for the three months ended June 30, 2004 were $111,035 versus
$101,875  for  the  comparable  2003  period.  The  increase  is  due  to higher
interconnect fees and costs associated with Bluegate (TM).  The gross margin for
the  three month period just ended improved  substantially  over the three month
period  ended  June 30, 2003. The improvement in gross margin is attributable to
the  fact  that  our  margins  improve  as revenues increase due to fixed costs.

     Selling,  general  and  administrative  expenses  of $250,956 for the three
months  ended  June  30,  2004, represents a decrease of $271,873 as compared to
three  months  ended June 30, 2004.  The decrease is attributable to lower costs
arising  from  stock  based  compensation.

     No  significant  capital  expenditures  were  made  during  the  period.

SIX MONTHS ENDED JUNE 30, 2004 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2003

     During  the  six  months  ended  June  30, 2004, the Company's revenue from
Bluegate (TM) , HIPAA compliant broadband digital connectivity connectivity  was
$372,177  versus  $151,774  for the six month period ended  June 30, 2003.  This
increase of $220,403 is primarily attributable to our efforts to market Bluegate
(TM)  as  it  has  become  the  center  of  our  business.

     Cost  of  sales for the six months ended June 30, 2004 were $224,631 versus
$204,813  for  the  comparable  2003  period.  The  increase  is  due  to higher
interconnect fees and costs associated with Bluegate (TM).  The gross margin for
the six month period just ended improved substantially over the six month period
ended  June  30,  2003.  The  improvement  is  attributable to the fact that our
margins  improve  as  revenues  increase  due  to  fixed  costs.

     Selling,  general  and  administrative  expenses  of $596,235 for the three
months  ended  June  30,  2004, represents a decrease of $930,401 as compared to
three  months  ended June 30, 2004.  The decrease is attributable to lower costs
arising  from  stock  based  compensation.

     Interest  expense is higher in 2004 by due almost entirely to a higher debt
level  in  most  of  2004.  Certain  of  the  debt  was  repaid upon sale of our
traditional  connectivity  services  business.

     No  significant  capital  expenditures  were  made  during  the  period.


                                      I-3
<PAGE>
PLAN  OF  OPERATIONS,  LIQUIDITY  AND  CAPITAL  RESOURCES

Operations  for  the  six  month  period ended June 30, 2004 have been funded by
the  issuance  of  common stock for cash of  $355,012, and proceeds from sale of
the  Company's  traditional  connectivity  business of $900,000. The Company has
continued to take steps to reduce its monthly operating expenses relating to its
core  business  and has expanded its efforts in creating a market for the health
care  industry.  Because  of  the  uncertainty  associated with this new market,
breakeven  cash  flow  is  not  expected  until  late  2004,  at  the  earliest.

The  Company  is seeking additional capital to fund expected operating costs and
has engaged in negotiations to merge or sell part or all of the Company. No firm
or definitive commitments for mergers or acquisitions have been obtained at this
time  and the Company continues to negotiate with certain parties to address the
operating  cash  flow shortfalls. We believe future funding may be obtained from
public  or  private  offerings  of  equity  securities, debt or convertible debt
securities  or  other  sources.  Stockholders  should assume that any additional
funding  will  likely  be  dilutive.

If  we  are  unable  to  raise  additional  funding,  we  may  have to limit our
operations  to  an extent that we cannot presently determine.  The effect on our
business may include the sale of certain assets, the reduction or curtailment of
new  customer  acquisition,  reduction in the scope of current operations or the
cessation  of  business  operations.

Our  ability  to  achieve  profitability  will  depend upon our ability to raise
additional  operating  capital,  continued  growth  in  demand  for connectivity
services  and  our  ability  to  execute  and  deliver  high  quality,  reliable
connectivity  services.

Effective  June 17, 2004, the Company entered into an Asset Sale Agreement  (the
"Agreement") with DFW Internet Services, Inc. ("DFW"), a Texas corporation and a
wholly-owned  subsidiary of MobilePro Corporation for the sale of certain assets
related to connectivity services including wireless, digital subscriber line and
traditional  communication  technologies  to business and residential customers.
Under  the  terms  of  this  Agreement,  the  Company  will  receive  a total of
$1,150,000  of  which  $900,000  was cash and $250,000 was a one-year 6% secured
promissory  note.  Additionally,  DFW  acquired  85%  of  accounts  receivable
associated  with  services  provided to the Company's customers through June 17,
2004.   Further,  DFW  entered into a one-year sublease for the Company's leased
space  at  701  N.  Post Oak Road, Suite 630, Houston, Texas, for rental rate of
$3,000  per  month.


ITEM  3.  CONTROLS  AND  PROCEDURES

Manfred  Sternberg,  our  Chief  Executive  Officer and Mike McDonald, our Chief
Financial  Officer,  have  concluded that our disclosure controls and procedures
are  appropriate  and  effective.  They  have  evaluated  these  controls  and
procedures as of a date within 90 days of the filing date of this report of Form
10-QSB.  There  were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
his  evaluation,  including  any  corrective  actions with regard to significant
deficiencies  and  material  weaknesses.


                                      I-4
<PAGE>
                                    PART   II

ITEM  2.  CHANGES  IN  SECURITIES

During  the  calendar  quarter  ending  June  30,  2004  the Company completed a
placement  of  3,463,411shares of common stock with investors located outside of
the  United  States.  The  shares  were  offered  pursuant  to an exemption from
registration  afforded by Regulation S to the Securities Act of 1933. Share sold
pursuant  to  Regulation S are deemed restricted and may not be sold to any U.S.
Person  (as that term is defined in the Regulation) for a period of one (1) year
from  the  date  of  sale.  Thereafter,  the  shares  will  be  subject  to  the
restrictions  of  Rule  144.  The  Company  received a total of $127,425 for the
shares.  The  proceeds  were  used  for  general  business  purposes.

Among  other  things,  the placement agreement provided for the Company to issue
shares  of  Regulation  S  stock at prices substantially below the quoted market
price  of  the  shares

The transactions during the quarter ended June 30, 2004 were as follows:

<TABLE>
<CAPTION>
             Date Issued    Title of Securities   Shares     Amount
            --------------  -------------------  ---------  --------
<S>         <C>             <C>                  <C>        <C>
            April 16, 2004  Common Stock           265,000  $ 11,050
            April 20, 2004  Common Stock           683,417    22,648
            April 30, 2004  Common Stock           140,500     5,535
            May 3, 2004     Common Stock           248,994    10,002
            May 6, 2004     Common Stock            27,000     1,134
            May 11, 2004    Common Stock            52,000     2,184
            May 25, 2004    Common Stock           215,000     9,450
            May 28, 2004    Common Stock           228,000     7,742
            June 4, 2004    Common Stock           235,000     8,385
            June 7, 2004    Common Stock           165,000     5,445
            June 10, 2004   Common Stock           186,500     6,155
            June 11, 2004   Common Stock            40,000     1,320
            June 14, 2004   Common Stock            65,000     2,580
            June 15, 2004   Common Stock            25,000       825
            June 21, 2004   Common Stock           410,000    14,490
            June 24, 2004   Common Stock           347,000    13,524
            June 10, 2004   Common Stock            15,000       585
            June 29, 2004   Common Stock           115,000     4,371
                                                 ---------  --------

                                                 3,463,411  $127,425
                                                 =========  ========
</TABLE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(A)  Exhibits

     Exhibit  31.1  -  Certification  of  Chief  Executive  Officer  of Crescent
     Communications, Inc required by Rule 13a - 14(1) or Rule 15d - 14(a) of the
     Securities  Exchange Act of 1934, as adopted pursuant to Section 302 of the
     Sarbanes-Oxley  Act  of  2002.

     Exhibit  31.2  -  Certification  of  Chief  Financial  Officer  of Crescent
     Communications, Inc required by Rule 13a - 14(1) or Rule 15d - 14(a) of the
     Securities  Exchange Act of 1934, as adopted pursuant to Section 302 of the
     Sarbanes-Oxley  Act  of  2002.


                                      II-1
<PAGE>
     Exhibit  32.1  --  Certification  of  Chief  Executive  Officer of Crescent
     Communications,  Inc  pursuant  to Section 906 of the Sarbanes-Oxley Act of
     2002  and  Section  1350  of  18  U.S.C.  63.

     Exhibit  32.2  --  Certification  of  Chief  Financial  Officer of Crescent
     Communications,  Inc  pursuant  to Section 906 of the Sarbanes-Oxley Act of
     2002  and  Section  1350  of  18  U.S.C.  63.

(B)  Reports on Form 8-K

     On  June  25,  2004,  the  company  issued an 8-K to announce a significant
     disposition  of  assets  pursuant  to  Item  2.

                                   SIGNATURES


In  accordance  with the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized




                                        Crescent Communications, Inc.

Date:  August 23, 2004                  /s/  Manfred Sternberg
                                        ----------------------

                                        Manfred Sternberg,
                                        Chief Executive Officer



                                        Crescent Communications, Inc.

Date:  August 23, 2004                  /s/  Mike McDonald
                                        ------------------
                                        Mike McDonald,
                                        Chief Financial Officer


                                      II-2
<PAGE>