FORM 10-QSB
                     SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC  20549
(Mark One)
[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [FEE REQUIRED]
         For the quarter ended January 31, 2001  ________________

                                     OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
         For the transition period from  ______________ to _________________
                                          Commission file number  2-98314-W
                                _____________

                         MEDICAL ADVISORY SYSTEMS, INC.
                              ________________
                (Name of small business issuer in its charter)


        Delaware                                         52-1233960
 --------------------------------------      ---------------------------------
 (State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)

  8050 Southern Maryland Blvd., Owings, MD                       20736
  -----------------------------------------                  ------------
  (Address of principal executive offices)                    (Zip Code)


                                (301) 855-8070
                                --------------

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 filing requirements for the past 90 days.
Yes_X__ 		No____


Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
QSB or any amendment of this Form 10-QSB [x]
  Issuer's revenues for its most recent fiscal quarter: $1,624,543.


Common Stock, $.005 par value                   5,161,230 Shares of Common
Stock Outstanding as of January 31, 2001



Item 1  FINANCIAL STATEMENTS

Medical Advisory Systems, Inc.
Consolidated Balance Sheets

                                                     October 31,    January 31,
                                                            2000           2001
Assets

Current
 Cash and cash equivalents                           $ 2,615,842    $ 2,268,410
 Accounts receivable, less allowance for doubtful
  accounts of $115,542 and $90,000                       482,202        459,725
 Inventories                                              46,526         48,718
 Prepaid expenses and other                               41,021         18,391
                                                     -----------    -----------

Total current assets                                   3,185,591      2,795,244

Property and equipment, at cost, less
 accumulated depreciation and amortization (Note 1)    1,620,847      1,730,378

Purchased software, at cost, less accumulated
 amortization of $317,123 and $454,246                 2,408,353      2,411,230

Investment in affiliates (Note 2)                      1,152,921      1,461,921

Deferred investment advisory costs (Note 4)              209,926        175,884

Intangible assets, net                                    36,390         33,003
                                                     -----------    -----------

                                                     $ 8,614,028    $ 8,607,660

See accompanying summary of accounting policies and notes to consolidated
financial statements.
                                                                         -2-

Medical Advisory Systems, Inc.
Consolidated Balance Sheets
                                                     October 31,    January 31,
                                                            2000           2001

Liabilities and Stockholders' equity

Current
 Current maturities of long-term debt                $     3,719    $     3,826
 Current maturities of capital lease obligations          29,428         30,170
 Accounts payable and accrued expenses                   264,934        424,259
 Deferred income                                          21,699         19,283
                                                     -----------    -----------

Total current liabilities                                319,780        477,538
                                                     -----------    -----------

Long-term debt                                           126,661        125,654
Capital lease obligations                                 68,424         60,598
                                                     -----------    -----------

Total liabilities                                        514,865        663,790
                                                     -----------    -----------

Commitments and contingencies

Stockholders' equity (Notes 3, 4 and 5)
 Common stock; $.005 par value; 10,000,000
  shares authorized; 5,161,230 and 4,889,129
  shares issued and outstanding                           25,605         25,805
 Additional paid-in capital                           14,437,732     14,587,532
 Accumulated deficit                                  (6,320,591)    (6,625,884)
 Treasury stock, at cost (50,000 shares)                 (43,583)       (43,583)
                                                     -----------    -----------

Total stockholders' equity                             8,099,163      7,943,870
                                                     -----------    -----------

                                                     $ 8,614,028    $ 8,607,660
                                                     ===========    ===========

See accompanying summary of accounting policies and notes to consolidated
financial statements.
                                                                         -3-


Medical Advisory Systems, Inc.
Consolidated Statements of Operations


Three months ended January 31,                              2000           2001

Revenue:

24/7 medical response and assistance services        $   318,891    $   990,303
ASP and WEB hosting services                                   -        252,235
Interactive medical information services               2,235,429        204,908
Pharmaceutical kits and equipment                        153,382        162,723
Other services                                            11,243         14,374
                                                     -----------    -----------

Total Revenue                                          2,718,945      1,624,543
                                                     -----------    -----------

Operating Expenses:

24/7 medical response and assistance services            152,228        797,023
ASP and WEB hosting services                                   -          7,425
Interactive medical information services               2,023,825        185,741
Pharmaceutical kits and equipment                        110,039        102,449
Other services                                            17,228         13,461
Salaries and wages                                       209,645        273,290
Other selling, general and administrative (Note 4)       605,006        362,998
Depreciation & amortization                               44,914        204,098
                                                     -----------    -----------

Total Operating Expenses                               3,162,885      1,946,485
                                                     -----------    -----------

Operating loss                                          (443,940)      (321,942)


Other Income/(Expense):
Interest income                                            7,139         31,774
Other income                                               8,586             26
Interest expense                                          (3,935)       (15,151)
                                                     -----------    -----------

Total Other Income/(Expense)                              11,790         16,649
                                                     -----------    -----------

Net loss                                             $  (432,150)   $  (305,293)
                                                     ===========    ===========

Basic and diluted loss per share                     $     (0.10)   $     (0.06)

Weighted average shares outstanding                    4,430,717      4,889,129
                                                     ===========     ==========

See accompanying summary of accounting policies and notes to consolidated
financial statements.
                                                                         -4-

Medical Advisory Systems, Inc.
Consolidated Statements of Cash Flows

Three months ended January 31,                              2000           2001

Cash flows from operating activities:
  Net loss                                           $  (432,150)   $  (305,293)
  Adjustment to reconcile net loss to net cash
   provided by (used in) operating activities:
   Depreciation and amortization                          44,914        204,098
   Provision for doubtful accounts                         7,500        (33,014)
   Compensation expense for options and warrants         319,189         34,042
Changes in assets and liabilities:
   Accounts receivable                                  (388,368)        55,491
   Inventory                                             (10,454)        (2,192)
   Prepaid expenses and other                              9,151         22,630
   Accounts payable and accrued expenses                   3,344        159,325
   Deferred income                                        (3,864)        (2,416)
                                                     -----------    -----------

Net cash (used in) provided by operating activities     (450,738)       132,671
                                                     -----------    -----------

Cash flows from investing activities:
 Investment in equity affiliate                               -        (159,000)
 Purchase of property and equipment                      (39,946)      (313,119)
                                                     -----------    -----------

Net cash used in investing activities                    (39,946)      (472,119)
                                                     -----------    -----------

Cash flows from financing activities
 Repayment of loans to banks and related parties          (8,138)        (7,984)
                                                     -----------    -----------
Net cash used in financing activities                     (8,138)        (7,984)
                                                     -----------    -----------

 Net decrease in cash                                   (498,822)      (347,432)

 Cash at beginning of period                             931,949      2,615,842
                                                     -----------    -----------
 Cash at end of the period                              $433,127    $ 2,268,410
                                                     ===========    ===========

See accompanying summary of accounting policies and notes to consolidated
financial statements
                                                                         -5-

Medical Advisory Systems, Inc.
Summary of Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Medical Advisory
Systems, Inc. (MAS or the Company) and its wholly-owned subsidiaries, MAS
Laboratories,Inc., Doc-Talk, Inc., and TLC., Inc. Significant intercompany
transactions have been eliminated in consolidation.

Effective November 1, 1998, the Company began using the equity method of
accounting for its investment in AmericasDoctor.com. The Company determined
that the equity method was appropriate based on a combination of its strict
ownership percentage, which increased from 8% in October 1998 to 13.5% in
April 1999, coupled with the ability to have a representative on the board of
directors. Under the equity method, original investments are recorded at cost,
increased for subsequent investments in and advances to the investee, and
adjusted for the Company's share of undistributed earnings and losses of the
investee.

The Company's ownership interest was reduced to 5.3% on October 31, 1999 and
further reduced to 2.3% on January 6, 2000.  Effective November 1, 1999, the
Company discontinued using the equity method to account for its investment in
AmericasDoctor.com and began to use the cost method.

In May 2000, the Company purchased a 12% ownership interest in CICP, the
holding company for CORIS Group International ("CORIS").  The Company accounts
for this investment using the cost method (see Note 2).

In December 2000, the Company purchased a 15% ownership interest in Jaspin
Interactive, Inc. ("Jaspin"). The Company accounts for this investment using
the cost method (see Note 2).

Business Operations

The Company provides interactive medical information services via "chats" over
the internet and telephone, provides telemedicine services, training, and
pharmaceuticals to the worldwide maritime industry and other individuals or
entities located in remote locations worldwide, operates as an Application
Service Provider (ASP) primarily to the clinical research industry, provides
WEB hosting services, and operates an out-patient medical clinic.  MAS
Laboratories is currently inactive. The Company provides these various services
through four operating segments as described more fully in Note 8.
                                                                         -6-
Risks and Uncertainties

The Company provides medical information and assistance services and related
products and services through various methods of distribution.  A portion of
the Company's revenues result from providing medical information to the public
via the internet under a contract with AmericasDoctor.com.  AmericasDoctor.com
has an exclusive contract with America Online (AOL) to be an anchor tenant on
the AOL Health Page.  Certain AOL subscribers can "chat" with the Company's
doctors located in its call center, which is staffed 24-hours-a-day. The
Company has amended its contract with AmericasDoctor.com to allow it to market
its internet chat service to other foreign and domestic customers.  The
Company believes that the ability to market to new customers worldwide could
ultimately lead to significantly greater internet chat revenue.

During fiscal 2000, the Company negotiated new strategic alliances in the 24/7
medical response and assistance and the application service provider services
segments.  The Company plans to develop new products and services in fiscal
2001 that should, if successful, replace the revenue lost after amendment of
the AmericasDoctor.com agreement.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
particularly regarding valuation of accounts receivable, recognition of
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Actual results could differ from those estimates.

Concentrations of Credit Risk

Financial instruments and related items that potentially subject the Company
to concentrations of credit risk consist primarily of cash and cash equivalents
and trade receivables. The Company places its cash and temporary cash
investments with high credit quality institutions. At times, such investments
may be in excess of the FDIC insurance limit. The Company's customers are not
concentrated geographically and it periodically reviews its trade receivables
in determining its allowance for doubtful accounts. Revenues from
AmericasDoctor.com, Inc. were $199,119 and $2,233,972 or 12% and 82% of
consolidated revenues for the three months ended January 31, 2001 and 2000,
respectively.
                                                                         -7-
Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.  The Company had temporary investments of $2,210,000
on January 31, 2001.

Inventories

Inventories are stated at the lower of cost or market determined by the
first-in, first-out (FIFO) method. Inventories consist of pharmaceuticals
available for sale.

Property and Equipment

Property and equipment are stated at cost.  Depreciation is computed over their
estimated useful lives by the straight-line method (see Note 1).

Deferred Investment Advisory Costs

Deferred investment advisory and public relations costs consist of the
estimated fair value of warrants issued to certain third parties for public
and investor relations services to be rendered over one and two year periods.
These amounts are being amortized on a straight line basis over the lives of
the service agreements.

Purchased Software

The Company capitalizes the cost of purchased software that is ready for
service.  These direct costs are amortized using the straight-line method over
five years which does not exceed the expected life of the software.  The
Company regularly reviews the carrying value of the software and a loss is
recognized when the value of the estimated undiscounted cash flow benefit
related to the asset falls below the unamortized cost.

Impairment of Long-Lived Assets

Long-lived assets and certain identifiable intangibles held and used by the
Company are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. In
addition, assets to be disposed of are reported at the lower of the carrying
amount or the fair value less costs to sell.

Revenue Recognition

Revenues from contracts that provide unlimited services are recognized ratably
over the term of the contract. Revenues from contracts based on usage are
recognized when the services are rendered. Other revenues are recognized at
the time services or goods are provided.
                                                                         -8-
Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109. Accounting for Income Taxes ("SFAS 109"). Under
SFAS 109, deferred taxes are determined using the liability method which
requires the recognition of deferred tax assets and liabilities based on
differences between financial statement and income tax bases using presently
enacted tax rates.

Stock Based Compensation

The Company accounts for stock based compensation using the intrinsic value
method prescribed in Accounting Principle Board Opinion No. 25, "Accounting
for Stock Issued to Employees." The Company has adopted the disclosure-only
provisions of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation" with respect to options and warrants granted to
employees.

Earnings Per Share

The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share," specifying the computation, presentation and disclosure
requirements of earnings per share information. Basic earnings per share have
been calculated based upon the weighted, average number of common shares
outstanding. Stock options and warrants have been excluded as common stock
equivalents in the diluted earnings per share because they are antidilutive.

Comprehensive Income

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS 130"), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS 130 requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence
as other financial statements. The Company adopted SFAS 130 during the first
quarter of fiscal 1999 and has no items of comprehensive income to report.
                                                                         -9-

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. SFAS 133
requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair market value. Under certain
circumstances, a portion of the derivative's gain or loss is initially
reported as a component of other comprehensive income and subsequently
reclassified into income when the transaction affects earnings. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. SFAS 133 is effective for all
fiscal quarters beginning after June 15, 2000 and requires application
prospectively. Presently, the Company does not use derivative instruments
either in hedging activities or as investments. Accordingly, the Company
believes that adoption of SFAS 133 will have no impact on its financial
position or results of operations.

In March 2000, the FASB issued interpretation No. 44 ("FIN 44"), "Accounting
for Certain Transactions Involving Stock Compensation, an Interpretation of
APB Opinion No. 25" FIN 44 clarifies the application of APB No. 25.  FIN 44
clarifies the application of APB No. 25 for (a) the definition of employee for
purposes of applying APB No. 25, (b) the criteria for determining whether a
plan qualifies as a noncompensatory plan, (c) the accounting consequences of
various modifications to previously fixed stock option or award, and (d) the
accounting for an exchange of stock compensation awards in a business
combination.  FIN 44 did not have an affect on the Company's financial
statements but may impact the accounting for grants or awards in future
periods.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 that summarizes certain of the SEC staff's views
in applying generally accepted accounting principles to revenue recognition in
financial statements.  The staff Accounting Bulletin is effective for the
fiscal year beginning November 1, 2000.  The initial adoption of this guidance
is not anticipated to have a material impact on the Company's results of
operations or financial position, however, the guidance may impact the way in
which the Company will account for future transactions.

Reclassifications

Certain prior year balances have been reclassified to conform to the current
year presentation.
                                                                         -10-

Notes to Consilidated Financial Statements

1. Property and Equipment

    Property and equipment consists of the following:

                                       October 31,   January 31,   Estimated
                                              2000          2001   Useful lives

    Land                               $    65,078   $    65,078
    Buildings and improvement              955,802     1,472,428   10-20 years
    Furniture, fixtures and equipment    1,212,782     1,244,259     3-5 years
    Construction in progress               374,984             -      20 years
                                       -----------   -----------

                                         2,608,646     2,781,765

    Less: Accumulated depreciation
          and amortization                 987,799     1,051,387
                                       -----------   -----------

                                       $ 1,620,847   $ 1,730,378
                                       ===========   ===========

2. Investment in Affiliates

    Investment in affiliates consists of the following:

                                           October 31,       January 31,
                                                  2000              2001

    AmericasDoctor.com                     $   639,171       $   639,171

    CORIS                                      513,750           513,750
    Jaspin Interactive                               -           309,000
                                           -----------       -----------

                                           $ 1,152,921       $ 1,461,921
                                           ===========       ===========

The Company's remaining investment in AmericasDoctor.com represents goodwill
that has been assigned a five-year life. On October 31, 1999, the Company's
ownership interest was reduced to 5.3% and further reduced to 2.3% on January
6, 2000.  Effective November 1, 1999, the Company began to account for its
investment using the cost method.
                                                                         -11-

In May 2000, the Company purchased 12% of the outstanding common stock of CORIS
of Paris, France for $400,000 in cash and 10,000 shares of its common stock
with a fair value of $113,750 for a total investment of $513,750.  CORIS
provides medical and non-medical travel assistance and insurance claims
services to the travel industry and insurance clients through an independent
network of 24-hour call centers in 37 countries.  The investment agreement with
CORIS calls for the development of international internet medical "chat"
services and foreign language chat services in the U.S, using CORIS 24-hour
call centers to provide infrastructure and personnel.  It also calls for CORIS
to serve as the international arm of MAS' application service provider ("ASP")
operations.  This investment has been accounted for using the cost method.

In December 2000, the Company purchased a 15% ownership interest in Jaspin
Interactive, Inc., ("Jaspin") a privately held company in Dulles, Virginia.
The Company paid $159,000 and issued 40,000 shares of the Company's common
stock, with a fair value of $150,000, for a total investment of $309,000 in
exchange for shares.   Jaspin is an Internet and Online business solutions
provider and software development company.  Under the investment agreement,
the Company will have the right to use Jaspin's proprietary software and will
provide ASP and WEB hosting services to Jaspin.

3. Related Party Transactions

Hall & Associates, P.A., Hall & AmDoc, Associates, P.A., and Hall & DocTalk,
Associates, P.A., which are owned by the Company's Chief Executive Officer,
Thomas M. Hall, M.D., provide medical professional services to MAS. Amounts
paid to these companies represent fees for professional services rendered and
premiums on professional liability insurance. During the three months ended
January 31, 2000 and 2001, the Company paid Hall & Associates, P.A., Hall &
AmDoc, Associates, P.A. and Hall & DocTalk, Associates, P.A., a combined total
of $185,582 and $655,567, respectively, in fees and professional liability
insurance premiums. There were no amounts payable to these affiliates at either
January 31, 2000 or 2001.
                                                                         -12-

During 2000 the Company began construction of a new technology facility (See
Note 1).  The Company entered into an agreement with a contractor, whose owners
are related to the Company's President and Chairman of the Board, to develop
and construct the building.  The amount of the contract, together with approved
change orders was approximately $670,000 which management believes
approximates the market value for the services rendered.

4. Stockholder's Equity

In January 2000, the Company issued 95,180 shares of common stock in connection
with the exercise of previously recorded warrants issued to third parties.
In December 2000, the Company issued 40,000 shares of common stock as part of
the purchase price for a 15% interest in a privately-held company (see Note 2).


5.  Stock Warrants

In May 2000, the Company issued 75,000 warrants to purchase its common stock
to an investment-banking firm as consideration for providing investment
advisory services for two years. The holder of the warrants may purchase
75,000 common shares at $10.50 per share, subject to adjustment as specified
in the warrant agreement, for up to one year. There are no vesting requirements
associated with these warrants. The Company determined the estimated aggregate
fair value of these warrants on the date of grant to be $272,336 based on the
Black-Scholes valuation model.  The Company recorded the $272,336 as deferred
investment advisory fees and is amortizing this cost to expenses over 24
months, the term of the agreement.

6.  Stock Options

The Company has a nonqualified stock option plan to provide key employees and
non-employees the opportunity to participate in equity ownership. Options may
be granted at or below the fair market value of the stock and have a five-year
life (increased to ten years in December 1999). Options granted to certain
individuals vest ratably over three years. The Company has reserved 1,000,000
common shares for exercise of these stock options.

7.  Income Taxes

The Company has estimated its annual effective tax rate at 0% due to the
uncertainty over the level of earnings in 2001. Also, the Company has net
operating loss carryforwards of approximately $1.0 million for income tax
reporting purposes for which no income tax benefit has been recorded due to
the uncertainty over the generation of taxable income in 2001.
                                                                         -13-

8.  Operating Segments

The Company has four operating segments: Interactive medical information
services, 24/7 medical response and assistance services, Pharmaceutical kits
and equipment and ASP and WEB hosting services.  The Interactive medical
information services segment provides 24 hour a day medical information to the
public via the internet as well as via the telephone to individuals, groups and
associations.  The 24/7 medical response and assistance services segment
provides medical advice to ocean-going vessels and medical travel assistance
services to multi-national corporations, the international travel industry and
health maintenance organizations.  The Pharmaceutical kits and equipment
segment provides customized pharmaceutical and medical supply kits to the
maritime and aviation industries.  The ASP and WEB hosting services segment
allows the Company to function as an application service provider for a
clinical software research provider and to provide other WEB hosting services.
In 2000, the Company changed its business to offer both Interactive Internet
chats and telephone chats to the same customer base using the same physicians.
Accordingly, the Company views this as one segment and has reclassified prior
year amounts to be comparable with the current quarter.  The Company evaluates
performance based on the operating results of the respective segments.  The
accounting policies of the segments are the same as those described in the
summary of accounting policies.
                                                                         -14-


Three months ended                                   Segment         Total
January 31, 2001                     Revenues     Profit(loss)       Assets

24/7 medical response &
  assistance services             $   990,303     $   193,280     $ 1,190,992
ASP & WEB                             252,235         244,810       2,888,230
Interactive medical
  information services                204,908          19,167       1,460,961
Pharmaceutical kits and
  equipment                           162,723          60,274          92,691
Other services                         14,374             913          11,600
Unallocated corporate expenses              -        (840,386)              -
Unallocated assets                          -               -       2,963,186


                                  $ 1,624,543     $  (321,942)    $ 8,607,660



Three months ended                                   Segment         Total
January 31, 2000                     Revenues     Profit(loss)       Assets

24/7 medical response &
  assistance services             $   318,891     $   166,663     $   498,633
Interactive medical information
  services                          2,235,429         211,604       1,631,717
Pharmaceutical kits and
  equipment                           153,382          43,343         154,149
Other services                         11,243          (5,985)              -
Unallocated corporate expenses              -        (849,565)              -
Unallocated assets                          -               -       1,175,478
                                  -----------     -----------     -----------

                                  $ 2,718,945     $  (443,940)    $ 3,459,977
                                  ===========     ===========     ===========

                                                                         -15-

9.   Subsequent Event

In February 2001, the Company announced completion of Digital Angel
Corporation's purchase of a 16.5% interest in Medical Advisory Systems from
certain members of senior management.  In addition, the Company expanded the
Board of Directors from five to seven members.  Applied Digital Solutions,
Inc., parent company of Digital Angel Corporation, has the authority to name
four of the seven directors that give it effective control of the Company's
Board.  The Company expects to generate revenue for its ASP and 24/7 medical
response segments through a proposed service agreement with Digital Angel
Corporation.  As part of this agreement the Company would provide a computer
hosting facility for management of sensitive data and a full-time physician-
staffed medical call center for use by Digital Angel Corporation's customers
and end-users.  Applied Digital Solutions is a publicly held information and
solutions company headquartered in Palm Beach, Florida.

                                                                         -16-

Medical Advisory Systems, Inc.

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

Forward-Looking Information

The Private Securities Litigation Reform Act of 1995 provides "safe harbor"
for certain forward-looking statements made by the Company in its disclosures
to the public. There is certain information contained herein, in the
Company's press releases and in oral statements made by authorized officers
of the Company that are forward-looking statements as defined by such Act.
When used herein in the Company's press releases and in such oral statements,
the words "estimate", "project", "anticipate", "expect", "intend", "believe",
"plan", and similar expressions are intended to identify forward-looking
statements.

The following selected financial data and Management's Discussion and
Analysis of Financial Conditions and Results of Operations should be read in
conjunction with the Company's interim financial statements and notes
thereto, included elsewhere in this Form 10QSB.

In fiscal 2000, the Company took steps to diversify the sources of revenue to
reduce its dependence on the interactive medical information segment as its
primary generator of revenue.  The Company continues to explore strategic
alliances and investments in entities that can maximize the profitability of
its 24/7 physician-staffed medical call center and the recently completed ASP
facility.  The current status of this diversification effort is set forth
below.

In October 2000, the Company announced plans for a new strategic relationship
with Drkoop.com, Inc., a leading Internet health network that provides e-
health solutions for business and individual customers worldwide. As part of
this relationship the Company and Drkoop.com, Inc. will jointly develop and
promote products and services.  The goal of this relationship is to leverage
the primary assets of both companies, adding new lines of services to the
drkoop.com network and increasing potential revenue streams for both
companies.  The Company and Drkoop.com are working to finalize an agreement
to provide these new products and services.

In December 2000, the Company purchased 15% of the issued and outstanding
common shares of Jaspin Interactive, Inc. (Jaspin).  Jaspin is a software and
web development company headquartered in Dulles, Virginia.  The purchase
price of the shares was $159,000 and 40,000 restricted shares of the
Company's common stock.  The alliance will provide the Company with the right
to use Jaspin's proprietary ChatCentre and RoomCentre software, including
upgrades and support.  Further, as part of a separate agreement, the Company
will provide ASP and hosting services to Jaspin for a fee in the near future.

In January 2001, the Company completed construction of the new building that
was started in March of 2000.  Construction was completed one month ahead of
schedule.  The building houses the Company's new Technology Center and
expanded pharmacy. Included in the Technology center is a new FDA and
industry compliant ASP and web hosting center.

In February 2001, Digital Angel Corporation, a wholly owned subsidiary of
Applied Digital Solutions, Inc. purchased a 16.5% interest in the Company
from certain members of senior management.  In conjunction with this
transaction, the Company has expanded the number of members to its Board from
five to seven.  Two members of the previous board resigned, and new members
Mercedes Walton, David A. Loppert, Dr. Richard Seeling and Dr. Paul Sanberg
were named. Through this transaction Digital Angel Corporation will have
access to the Company's secure, FDA-compliant ASP computer facility for
management of sensitive data and a 24/7 physician-staffed medical call center
for use by its customers and product end-users.  At this time the Company and
Digital Angel Corporation are developing various business and revenue models
for the on-going development and launch of a joint product offering.

                                                                         -17-

NET LOSS

The Company's net loss for the first three months of FY 2001 was $305,293
compared to a net loss of $432,150 for the comparable period in FY 2000. The
decrease in the net loss is attributed primarily to operating income
generated by the ASP segment, which was introduced in the second quarter of
fiscal 2000, and an increase in operating income for the 24/7 medical
response & assistance services segment.   The increased income was offset by
higher amortization expense associated with the deferred investment advisory
fees, increased depreciation associated with the purchase of eResearch
Technology (eRT) software and increased payroll related to new technology
personnel and salary increases.

24/7 MEDICAL RESPONSE AND ASSISTANCE SERVICES

Revenues increased 211% from $318,891 in the first quarter of 2000 to
$990,303 for the same period in fiscal 2001. Operating expenses increased
424% from $152,228 in the first quarter of 2000 to $797,023 in the first
quarter of 2001. Operating income increased from  $166,663 in the first
quarter of 2000 to $193,280 in the first quarter of 2001. This 16% increase
in operating income is primarily attributed to an increase in assistance
services.  The Company charges a fixed fee per case to process an assistance
claim and passes the external expenses through to its clients.

ASP and WEB HOSTING SERVICES

ASP and WEB Hosting Services had revenues of $252,235, costs of $7,425 and
operating income of $244,810 in fiscal 2001.  This program began in April
2000 and therefore did not have revenues or expenses in the first quarter of
2000.   The revenue in this segment is attributed primarily to a service
agreement with eResearch Technology (eRT). Under this agreement the Company
is currently paid a flat fee for providing ASP and hosting services.  The
Company began providing these services to eRT in April 2000.

In February 2001, the Company began to offer its ASP and web hosting services
to markets outside of the United States.  In late February 2001, the Company
signed an agreement with its first international ASP client.  This agreement,
signed with a leading provider of clinical psychology and employee assistance
services to the French Market, is to provide web development and Internet
Chat ASP services.  Under this agreement, the Company will provide the client
with 24-hour access to the chat application software housed on servers in the
Company's ASP hosting center in Owings, Maryland.


INTERACTIVE MEDICAL INFORMATION SERVICES

Revenues decreased 91% from $2,235,429 in the first quarter of 2000 to
$204,908 in the first quarter of 2001.  Operating expenses decreased 91% from
$2,023,825 in the first quarter of 2000 to $185,741 in the first quarter of
2001. Operating income decreased 91% from $211,604 in the first quarter of
2000 to $19,167 in the first quarter of 2001.  The decline in Interactive
Medical Information Services is primarily attributed to the reduction in the
volume of real time internet chats owing to the elimination, by
AmericasDoctor.com, of unlimited, free to the consumer access to the chat
feature of the AmericasDoctor.com website.  Further, in September 2000, the
Company and Americasdoctor.com amended their Call Center Service Agreement.
Under the amended agreement, MAS calculates revenue based on a fixed fee per

                                                                         -18-

Internet chat plus a monthly access fee compared to a cost plus 20% fee for
Internet chats under the previous agreement.  Additionally, as part of the
amended Call Center Agreement, the Company has negotiated better placement of
the Doc-Talk service link on the AmericasDoctor.com website and a release
from the exclusivity restrictions of the original agreement.  With this
release the Company is now afforded the opportunity to pursue offering real-
time, physician-based, Internet chat domestically to any customer.

Effective late March 2001, MAS began "live" testing of the Doc-talk service
on the DrKoop.com website.  This on-going test is undertaken as part of a
strategic relationship formed between the Company and DrKoop.com in late
October of 2000.  DrKoop.com is a leading Internet health network providing
information to consumers worldwide.

In an effort to offset the decrease in operating income from this segment,
MAS has significantly reduced operating expenses and consolidated personnel
resources, including physicians, from the real time interactive chat and Doc-
Talk programs.  These two programs, now merged as one, are known as
Interactive Medical Information Services.

At this time Medical Advisory Systems, Inc. expects the current Interactive
Medical Information Services revenue stream and associated costs to remain
constant at the present level.

PHARMACEUTICAL KITS AND SERVICES

Revenues increased $9,341 or 6% from $153,382 in the first quarter of 2000 to
$162,723 in the first quarter of 2001.  Operating expenses were reduced by
$7,590 or 7% from $110,039 in the first quarter of 2000 to $102,449 in the
first quarter of 2001.  Operating income increased by 39% or $16,931 from
$43,343 in fiscal 2000 to $60,274 in fiscal 2001.  The growth of this segment
is attributed to an expanded customer base and increased efficiency of
operations.  The pharmacy began operating out of the new facility in early
January 2001.  The new space is expected to increase the efficiency of on-
going pharmacy operations.

OTHER

Revenues from other health-related services, which consists of the medical
responder training programs and the medical clinic, increased 28% from
$11,243 in the first quarter of 2000 to $14,374 in the first quarter of 2001.
Expenses decreased by 22% from $17,228 in the first quarter of 2000 to
$13,461 in the first quarter of 2001. The net income increased to $913 in the
first quarter of 2001, as compared to a loss of $5,985 in the first quarter
of 2000. Net income is expected to increase throughout the year as a result
of the Company's recent approval, by the United States Coast Guard, of its
expanded "Response to Illness and Injury at Sea" training course.

SALARIES AND WAGES

Salaries and wages increased $63,645 or 30% from $209,645 in the first
quarter of 2000 to $273,290 in the first quarter of 2001. This increase is
attributed to the hiring of additional key personnel and regular and ordinary
increases in compensation levels of existing personnel.
                                                                         -19-

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses decreased 40% from $605,006 in
the first quarter of 2000 to $362,998 in the first quarter of 2001. The
decrease is due primarily to a decrease in non-cash compensation expense
related to options and warrants issued to third parties in exchange for
services.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization increased from $44,914 in the first quarter of
2000 to $204,098 in the first quarter of 2001, an increase of 354%.  This
increase is due primarily to the amortization of new software and hardware
purchases related to the Company's ASP and WEB Hosting Services.

INCOME TAX BENEFIT/EXPENSE

The Company did not record an income tax provision or benefit for the three
months ended January 31, 2000 and 2001 due to the net loss for the periods.
The Company has provided a valuation allowance related to the deferred tax
asset represented by the net operating losses due to the uncertainty
surrounding the amount of taxable income to be generated in fiscal 2001.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities increased to $132,671 in fiscal 2001
compared to cash used in operations of $450,738 in fiscal 2000.  This
increase is due to a reduction in the net loss and more efficient collection
of accounts receivable.

Cash used by investing activities relates to capital expenditures for
construction of the new building, as well as, the investment in Jaspin
completed in December 2000.

The Company currently has a $500,000 credit agreement with a local financial
institution.  As of January 31, 2001 there is no outstanding balance.  The
agreement currently extends through October 31, 2001.

The Company has a strong cash position as of January 31, 2001 and relatively
little debt.  Management believes the Company's cash flow from operations
will continue to improve throughout fiscal 2001 as it works to diversify its
sources of operating revenue.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. SFAS 133
requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair market value. Under certain
circumstances, a portion of the derivative's gain or loss is initially
reported as a component of other comprehensive income and subsequently
reclassified into income when the transaction affects earnings. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. SFAS 133 is effective for all
fiscal quarters beginning after June 15, 2000 and requires application
prospectively. Presently, the Company does not use derivative instruments
either in hedging activities or as investments. Accordingly, the Company
believes that adoption of SFAS 133 will have no impact on its financial
position or results of operations.
                                                                         -20-

In March 2000, the FASB issued interpretation No. 44 ("FIN 44"),
"Accounting for Certain Transactions Involving Stock Compensation, an
Interpretation of APB Opinion No. 25" FIN 44 clarifies the application of
APB No. 25.  FIN 44 clarifies the application of APB No. 25 for (a) the
definition of employee for purposes of applying APB No. 25, (b) the criteria
for determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequences of various modifications to previously fixed stock
option or award, and (d) the accounting for an exchange of stock compensation
awards in a business combination.  FIN 44 did not have an affect on the
Company's financial statements but may impact the accounting for grants or
awards in future periods.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 that summarizes certain of the SEC staff's
views in applying generally accepted accounting principles to revenue
recognition in financial statements.  The staff Accounting Bulletin is
effective for the fiscal year beginning November 1, 2000.  The initial
adoption of this guidance is not anticipated to have a material impact on the
Company's results of operations or financial position, however, the guidance
may impact the way in which the Company will account for future transactions.


Part II - OTHER INFORMATION

Item 1. Legal Proceedings
	NONE
Item 2. Changes in Securities
In December 2000 the Company purchased 15% of the issued and outstanding
common shares of Jaspin Interactive, Inc.  The purchase price of the
shares included 40,000 restricted shares of the Company's common stock.
Item 3.  Defaults from Senior Securities
	NONE
Item 4. Submission of Matters to a Vote of Security Holders.
	NONE
Item 5.  Other Information
	NONE
Item 6 Exhibits
	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.

MEDICAL ADVISORY SYSTEMS, INC.
					  Registrant

Date: 03/23/2001            By: /s/ Dale L. Hutchins, Ph.D.
      ----------                ---------------------------------
                                Dale L. Hutchins, Ph.D.
                                Executive Vice President/
                                Chief Operating Officer
                                                                         -21-