SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

             [X] Quarterly report pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 2000

       [ ] Transition report under Section 13 or 15(d) of the Exchange Act

                         Commission file number 0-21934

                              DIGITAL PRIVACY, INC.
        (Exact name of small business issuer as specified in its charter)

                                    Delaware
                         (State or other jurisdiction of
                         incorporation or organization)

                                   52-1680936
                        (IRS Employer Identification No.)

            1433 Utica Avenue South, Suite 290, Minneapolis, MN 55416
                    (Address of Principal Executive Offices)

                                 (763) 544-2200
                           (Issuer's Telephone Number)

           4820 Minnetonka Blvd., Suite 410, St. Louis Park, MN 55416
                                (Former Address)

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 planned confirmed by a court.
Yes [X]  No [  ]

As of August 8, 2000, the  Registrant  had 3,938,113  shares of its Common Stock
outstanding.

Transitional Small Business Disclosure Format:    Yes  [  ]   No [X]

<PAGE>


PART I
FINANCIAL INFORMATION

Item 1.  Financial Statements.


                              Digital Privacy, Inc.
                            Condensed Balance Sheets

<TABLE>
<S>                                                              <C>              <C>


                                                                   June 30,        December 31,
                          ASSETS                                     2000             1999
                                                                  (unaudited)         ----
                                                                  -----------

CURRENT ASSETS
       Cash                                                       $ 148,708           $ 84,493
       Accounts Receivable                                           43,299                  -
       Inventory                                                     22,840             14,765
       Other                                                          5,004              4,753
                                                                      -----              -----
          TOTAL CURRENT ASSETS                                      219,851            104,011
                                                                    -------            -------

PROPERTY AND EQUIPMENT                                               62,919             48,584
                                                                     ------             ------

OTHER ASSETS
       Patents and trademarks                                       396,112            387,821
       License fee escrow                                            49,996             49,996
                                                                     ------             ------
                                                                    446,108            437,817
                                                                    -------            -------

                                                                  $ 728,878          $ 590,412
                                                                  =========          =========

   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
       Notes payable to vendor                                     $ 10,000           $ 10,000
       Accounts payable                                              74,710             56,326
       Accrued expenses                                              17,684             29,688
                                                                     ------             ------
          TOTAL CURRENT LIABILITIES                                 102,394             96,014
                                                                    -------             ------

NOTES PAYABLE TO DIRECTOR                                           600,000            600,000
                                                                    -------            -------

STOCKHOLDERS' EQUITY (DEFICIT)
       Preferred stock:
          Series A, 8% cumulative convertible - $.01
             par value, $10 stated and liquidation value
             (authorized - 40,000 shares; issued and
             outstanding - 30,000 and 15,000 shares)                300,000            150,000
          Undesignated - $.01 par value (authorized -
             4,960,000 shares; no shares issued and
             outstanding)                                                 -                  -
       Common stock - $.01 par value (authorized -
          95,000,000 shares; issued and outstanding -
          3,928,113 and 3,620,113 shares)                            39,281             36,201
       Additional paid-in capital                                   654,369             80,449
       Warrants                                                       4,877              4,877
       Accumulated deficit                                         (972,043)          (377,129)
                                                                   --------           --------
                                                                     26,484           (105,602)
                                                                     ------           --------
                                                                  $ 728,878          $ 590,412
                                                                    =======          =========

</TABLE>

      See notes to condensed financial statements.

<PAGE>

                              Digital Privacy, Inc.
                       Condensed Statements of Operations
                                   (unaudited)


<TABLE>
<S>                                <C>                   <C>               <C>                 <C>

                                 Three months ended June 30,               Six months ended June 30,
                                 ---------------------------               -------------------------
                                        2000              1999                  2000              1999
                                        ----              ----                  ----              ----

REVENUES                            $ 60,473             $ 211               $75,088             $ 211

COST OF GOODS SOLD                       947                86                 1,358                86
                                         ---                --                 -----                --

GROSS PROFIT                          59,526               125                73,730               125

OPERATING EXPENSES                   350,803           265,246               638,065           662,916
                                     -------           -------               -------           -------

OPERATING LOSS                      (291,277)         (265,121)             (564,335)         (662,791)

INTEREST EXPENSE                      15,537             5,893                30,579             8,352
                                      ------             -----                ------             -----

NET LOSS                            (306,814)         (271,014)             (594,914)         (671,143)

PREFERRED STOCK DIVIDEND ACCRUED       6,000                 -                10,691                 -
                                       -----             -----                ------             -----

NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS                    $ (312,814)       $ (271,014)           $ (605,605)       $ (671,143)
                                ================  ================        ============      ============

NET LOSS PER SHARE OF COMMON STOCK-
  BASIC AND DILUTED                  $ (0.08)                                $ (0.16)
                                ================                          ============

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING               3,918,992                               3,816,783
                                ================                          ============

</TABLE>

See notes to condensed financial statements.

<PAGE>

                              Digital Privacy, Inc.
                       Condensed Statements of Cash Flows
                                   (unaudited)

<TABLE>
<S>                                                              <C>            <C>



                                                               Six months ended June 30,
                                                               ----------------------------
                                                                       2000            1999
                                                                       ----            ----

OPERATING ACTIVITIES
      Net loss                                                    $(594,914)     $ (671,143)
      Adjustments to reconcile net loss
      to net cash provided (used) by operating
      activities:
             Depreciation                                            14,174          14,570
             Loss on disposal of property and equipment                   -           9,292
             Amortization and impairment of deferred
               finance costs                                              -         262,058
             Changes in operating assets and liabilities:
               Accounts receivable                                  (43,299)              -
               Inventory                                             (8,075)             83
               Other current assets                                    (251)         17,146
               Accounts payable and accrued liabilities               6,380         393,502
                                                                      -----         -------
                  Net cash provided (used) by operating activities (625,985)         25,508
                                                                   --------          ------


INVESTING ACTIVITIES
      Purchases of property and equipment                           (28,509)              -
      Patent and trademark costs                                     (8,291)        (10,475)
                                                                     ------         -------
                  Net cash used by investing activities             (36,800)        (10,475)
                                                                    -------         -------

FINANCING ACTIVITIES
      Issuance of stock                                             727,000               -
                                                                    -------         -------

NET INCREASE IN CASH                                                 64,215          15,033

CASH
      Beginning of period                                            84,493           4,233
                                                                     ------           -----

      End of period                                               $ 148,708        $ 19,266
                                                                  ==========        =======

</TABLE>

See notes to condensed financial statements.

<PAGE>

                              DIGITAL PRIVACY, INC

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2000

                                   (unaudited)

1.       Basis Of Presentation:
     The  interim  financial  statements  are  unaudited,  but in the opinion of
     management  reflect all  adjustments  necessary for a fair  presentation of
     results of such periods.  All such  adjustments  are of a normal  recurring
     nature.   The  results  of  operations  for  any  interim  period  are  not
     necessarily indicative of results for a full fiscal year.

     The  condensed  balance  sheet as of December 31, 1999, is derived from the
     audited financial  statements but does not include all disclosures required
     by generally  accepted  accounting  principals.  The notes accompanying the
     financial  statements in the Company's Annual Report on form 10-KSB for the
     year ended December 31, 1999,  include  accounting  policies and additional
     information  pertinent to an  understanding  of both the December 31, 1999,
     condensed  balance  sheet  and  the  interim  financial   statements.   The
     information  has not  changed  substantially  except  as a result of normal
     transactions in the six months ended June 30, 2000, and as discussed in the
     following notes.

2.       Earnings (Loss) Per Share:
     Earnings  (loss) per share was not  calculated  for the three and six month
     period ended June 30, 1999,  as it is not  meaningful  due to the Company's
     adoption  of fresh  start  reporting  upon its  emergence  from  Chapter 11
     bankruptcy on September 9, 1999

3.       Stock Transactions:
     During the six months ended June 30, 2000, the Company issued 15,000 shares
     of Series A preferred stock for $150,000 and issued in a private  placement
     308,000 shares of common stock for $577,000.

<PAGE>

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

                  The following  discussion  should be read in conjunction  with
the  financial  statements  and related  notes which are included  under Item 1.
Statements  made  below  which  are not  historical  facts  are  forward-looking
statements.   Forward-looking   statements   involve   a  number  of  risks  and
uncertainties  including,  but not limited to, general economic conditions,  our
ability  to  complete  development  and then  market our  products,  competitive
factors and other risk factors as stated in other of our public filings with the
Securities and Exchange Commission.

Overview

                  We were  initially  formed  in  December  1990 and  filed  for
bankruptcy under Chapter 11 of the U.S.  Bankruptcy Code on January 6, 1999. Our
Reorganization  Plan was confirmed by the U.S. Bankruptcy Court for the District
of Minnesota on September 8, 1999.

                  We began commercial  activity in the first quarter of 2000 and
are now in a position to offer a diverse range of products  designed  around the
concept of providing  useful products and services in an attractive,  convenient
format to people in their everyday environments.

                  From  December  7,  1990  through  December  1998,  we  raised
approximately  $5,000,000  through  equity  and  debt  financings  from  private
investors. As a development stage enterprise, we incurred losses in excess of $8
million.

                  Our  ability to  continue  in  business  is  dependent  on our
ability to raise additional capital and, ultimately, to generate sufficient cash
flow from  operations to support our cost  structure.  The following are primary
obstacles  which we feel  contributed  to our  inability  to generate  cash flow
sufficient to meet scheduled  payments and sustain further operations and forced
us into bankruptcy:

         1.  We  experienced   significant   delays,   some   unforseeable   and
uncontrollable, in the design and development of our products;

         2. We experienced  delays in bringing our products to market because of
the slow  adaptation and development of the smart card and security market place
in the United States, and the lack of established distribution channels;

         3. Our inability to deliver to the government market our hardware based
product and the significant time delay in developing new software products; and

         4. We expended a considerable amount of time and resources in preparing
for further  financing  and growth.  It was  necessary to engage an  independent
auditor to review and audit historical financials and operational procedures and
to retain  consultants to provide marketing research and prepare a comprehensive
business  plan.  We also  retained the services of corporate  counsel to prepare
private placement memorandum, review our past sales of securities for compliance
with  applicable   securities  laws  and  applicable   contractual   shareholder
obligations,   assist  in  reducing  potential  liability  resulting  from  past
transactions,  and advise on the  revaluation  and  related  issues  involved in
recapitalization efforts.

                  We  recognized  only very nominal  revenues in 1998.  Revenues
were generated primarily on integration services and the sale of our developer's
tool kit product. 1998 was the first year we realized sales.

                  Inadequate cash flow and lack of capital  resources  continued
to be the most  serious  concerns  facing our  management  coming into 1999.  At
December 31, 1998, we had a significant  negative net worth.  Having taken steps
to cut expenses and extend the payment schedule on long-term  payables,  we then
developed a proposal  for a  restructuring  of our debts that would  involve the
conversion of secured and certain unsecured debt into common stock.  Ultimately,
we concluded that a non-bankruptcy restructuring was unlikely to be completed in
a timely  manner.  We therefore  decided to file a Chapter 11  bankruptcy as the
best method for restructuring our obligations.

                  Following  the   bankruptcy   proceedings   we  added  to  our
management structure and board of directors. Current management is familiar with
our history and recognizes the problems that plagued us prior to the bankruptcy.
Accordingly, we are now focused on two aspects: (i) raising sufficient financing
to  support  us until  positive  cash flow from  sales  are  generated  and (ii)
generating sales.

Liquidity

                  During the  quarter we raised  $10,000  from the sale of 5,000
shares  common  stock at a price of $2.00 per share in a private  placement  and
$1,000 from the exercise of employee stock  options.  Subsequent to the close of
the quarter,  in July, we raised an additional $50,000. As of August 7, 2000, we
had  approximately  $100,000 in cash which we believe will be  sufficient  until
October  2000.  We  currently  project  requiring  approximately  an  additional
$1,500,000 to allow us to grow the business. In the event we are unsuccessful in
raising such funds, we will have to seek alternative  sources of funding.  While
we are  currently  looking  to raise a lesser  amount of funds  for  short  term
working capital, we currently have no plans how to raise such additional funds.

                  There  can be no  assurance  that we will be able to raise any
additional proceeds from private offerings of our securities or otherwise obtain
the substantial  additional capital necessary to permit us to attract and retain
a  sufficient  number of  subscribers  or that any  assumptions  relating to our
business  plan  will  prove to be  accurate.  While we hope to raise  additional
financing,  we have no current  arrangements  with  respect  to, or sources  of,
additional  financing  and there can be no  assurance  that any such  financing,
particularly the significant  amounts of financing that would be required,  will
be available to us on commercially reasonable terms, or at all. Any inability to
obtain  additional  financing could have a material  adverse  effect,  including
possibly requiring us to significantly curtail or cease operations.

Second Quarter Activities

<PAGE>

                  We  continued  to  actively   market  our  computer   security
products.  Our family of PrivacyWeb(TM)  products providing secure websites have
been developed and are currently  undergoing final stage Beta testing. We expect
to begin actively  marketing  them  commercially  during the third quarter.  The
development  efforts relating to our e-commerce  security products are currently
on hold as we are meeting with  potential  joint  venture  partners to produce a
multi-purpose SmartCard(TM).

                  We  incurred  a loss  during  the  quarter  of  $306,814  from
operations  and had  revenues  of  $60,473.  We expect  to have some  meaningful
revenues  during the fourth  quarter and  possibly  towards the end of the third
quarter.

                  The  Company is  concentrating  its  efforts  on the  security
aspects of its products.  As a result,  shortly after the quarter ended its Vice
President  of Sales  resigned.  The  Company has filled the opening by hiring as
consultants two salesmen that are specialists in security  technology  products.
We are hopeful that these efforts will be successful in increasing sales. In the
event we can increase sales, this will relieve the burden of financing and allow
other  members of  management  to devote  their  efforts to growing the business
through internal growth.

                  Once we attain a level of liquidity, we will also look to grow
our business through acquisitions. We currently have no acquisition plans and do
not believe that any such type of transaction is likely in the near future.

Year 2000 Disclosure

                  We are  Year  2000  compliant  and we do  not  anticipate  any
internal problems. In the event any internal problems should arise, we have many
expert  computer  technicians on our payroll and we believe that we will be able
to satisfactorily  address any such problems.  However,  we are dependent on the
integrity of the Internet  being  maintained to increase its use as a commercial
marketplace,  thereby  increasing  demand for our products.  Given the currently
available  information  it does not appear to be likely that the  Internet  will
suffer major failure and, accordingly,  we do not believe that our potential for
profitability  or  operations  will be  materially  affected  by the  Year  2000
problem.

<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings.

                  None.

Item 2.  Changes in Securities.

                  We sold an  aggregate  of 10,000  restricted  shares of common
stock at a price of $2.00  per  share to one  investor.  The  shares  were  sold
pursuant to the exemption from registration contained in Regulation D, Rule 506.

                  We also issued  20,000  shares to a former employee upon
the exercise of stock options.

Item 3.  Defaults Upon Senior Securities.

                  None.

Item 4.  Submission of Matters to Vote of Security Holders.

                  None.

Item 5.  Other Information.

                  None.

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

         (a)      A financial data schedule is filed herewith as an exhibit.

         (b)      None.



<PAGE>

                                   SIGNATURES



         In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the  undersigned  thereto  duly
authorized.


Date: August 14, 2000

                                        DIGITAL PRIVACY, INC.



                                        By:   /s/Howard Miller
                                              Howard Miller
                                              Chief Executive Officer