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 March 31, 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.)

           4820 Minnetonka Blvd., Suite 410, St. Louis Park, MN 55416
               (Address of principal executive offices)(Zip Code)


                                 (612) 285-1163
                           (Issuer's telephone number)


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,  and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X]  No [  ]

As of May 12, 2000,  the  Registrant  had  3,908,113  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>


                                                              March 31,         December 31,
                          ASSETS                                2000                1999
                                                             (unaudited)
<S>                                                          <C>               <C>
CURRENT ASSETS
       Cash                                                      $ 485,823           $ 84,493
       Accounts Receivable                                          14,429                  -
       Inventory                                                    14,879             14,765
       Other                                                         2,782              4,753
                                                           ----------------     --------------
          TOTAL CURRENT ASSETS                                     517,913            104,011
                                                           ----------------     --------------
PROPERTY AND EQUIPMENT                                              57,347             48,584
                                                           ----------------     --------------
OTHER ASSETS
       Patents and trademarks                                      392,146            387,821
       License fee escrow                                           49,996             49,996
                                                           ----------------     --------------
                                                                   442,142            437,817
                                                           ----------------     --------------
                                                               $ 1,017,402          $ 590,412
                                                           ================     ==============

              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
       Notes payable to vendor                                    $ 10,000           $ 10,000
       Accounts payable                                             35,613             56,326
       Accrued expenses                                             49,491             29,688
                                                          -----------------     ---------------
          TOTAL CURRENT LIABILITIES                                 95,104             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 -
          3,903,113 and 3,620,113 shares)                           39,031             36,201
       Additional paid-in capital                                  643,619             80,449
       Warrants                                                      4,877              4,877
       Accumulated deficit                                        (665,229)          (377,129)
                                                           ----------------     --------------
                                                                   322,298           (105,602)
                                                           ----------------     --------------
                                                               $ 1,017,402          $ 590,412
                                                           ================     ==============

       See notes to condensed financial statements.

</TABLE>

<PAGE>

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

                                             Three Months
                                            Ended March 31,
                                       2000                   1999

REVENUES                             $ 14,615                 $ -

COST OF GOODS SOLD                        411                   -
                                   ------------         --------------
GROSS PROFIT                           14,204                   -

OPERATING EXPENSES                    287,262              397,670
                                   ------------         --------------
OPERATING LOSS                       (273,058)            (397,670)

INTEREST EXPENSE                       15,042                2,459
                                   ------------         --------------
NET LOSS                             (288,100)            (400,129)

PREFERRED STOCK DIVIDEND ACCRUED        4,691                    -
                                   ------------         --------------
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS                     $ (292,791)          $ (400,129)
                               ==================     ==================
NET LOSS PER SHARE OF COMMON STOCK-
  BASIC AND DILUTED                   $ (0.08)
                               ==================

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING                3,714,575
                               ==================

See notes to condensed financial statements.

<PAGE>

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



<TABLE>
<S>                                                              <C>                    <C>
                                                                            Three Months
                                                                           Ended March 31,
                                                                        2000                   1999

OPERATING ACTIVITIES

      Net loss                                                    $ (288,100)            $ (400,129)
      Adjustments to reconcile net loss
      to net cash provided (used) by operating
      activities:
             Depreciation                                              7,087                  7,536
             Loss on sale or disposal of property and
               equipment                                                   -                  9,292
             Amortization and impairment of deferred
               finance costs                                               -                207,169
             Changes in operating assets and liabilities:
               Accounts receivable                                   (14,429)                     -
               Inventory                                                (114)                     -
               Other current assets                                    1,974                 (4,889)
               Accounts payable and accrued liabilities                 (910)               212,474
                                                                  ------------             ----------
                  Net cash provided (used) by operating activities  (294,492)                31,453
                                                                  ------------             ----------
INVESTING ACTIVITIES
      Purchases of property and equipment                            (15,850)                     -
      Patent and trademark costs                                      (4,328)                     -
                                                                  ------------              ---------
            Net cash used by investing activities                    (20,178)                     -
                                                                  ------------              ---------

FINANCING ACTIVITIES
      Issuance of stock                                              716,000                      -
                                                                  ------------               --------

NET INCREASE IN CASH                                                 401,330                 31,453

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

      End of period                                                $ 485,823               $ 35,686
                                                            ==================      ==================

See notes to condensed financial statements.

</TABLE>

<PAGE>

                              DIGITAL PRIVACY, INC

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 March 31, 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 three months ended March 31, 2000, and as discussed in
     the following notes.

2.       Earnings (Loss) Per Share:
     Earnings  (loss) per share was not  calculated  for the three month  period
     ended March 31, 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 three  months ended March 31, 2000,  the Company  issued  15,000
     shares of Series A  preferred  stock for  $150,000  and issued in a private
     placement 283,000 shares of common stock for $566,000.

<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.

<PAGE>

                  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  $150,000  from  the  sale of
convertible  preferred  stock and  $566,000  from a private  placement of common
stock.  As of May 10,  2000,  we had  approximately  $275,000  in cash  which we
believe will be sufficient until September 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 in this offering,  we will have
to seek alternative  sources of funding. 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 our current  private  offering 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.

First Quarter Activities

                  Effective  March 1, 2000 we hired a Vice President of Sales to
develop a marketing plan and sales  department to increase sales. We are hopeful
that these efforts will be successful.  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.

<PAGE>

                  We completed development of our computer security products and
they  are  being  actively  marketed.  Our  family  of  PrivacyWeb(TM)  products
providing secure websites have been developed and are currently  undergoing Beta
testing.  We  expect  to begin  marketing  them  commercially  during  the first
quarter.  We are  working to complete  development  of our  e-commerce  security
products.

                  We  incurred  a loss  during  the  quarter  of  $288,100  from
operations in the first  quarter and had revenues of $14,615.  We expect to have
some meaningful  revenues during the third quarter and possibly  towards the end
of the second quarter.

                  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.

         During the quarter we sold an aggregate of 15,000  restricted shares of
Preferred Stock to six current shareholders for $150,000,  completing the second
half of the  December  30,  1999 sale.  The  shares  were sold  pursuant  to the
exemptions  from  registration  contained in Regulation S and Regulation D, Rule
506.

         We also sold an aggregate of 283,000  restricted shares of common stock
at a price of $2.00 per share to 21 investors.  The shares were sold pursuant to
the exemption from registration contained in Regulation D, Rule 506.

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)      During this quarter a Current  Report on Form 8-K was filed to
                  report the merger  with  Digital  Privacy,  Inc.,  a Minnesota
                  corporation,  and the simultaneous name change, as well as the
                  Company's new  management  team and business  activities.  The
                  Report also  disclosed a change in  accountants  following the
                  merger  and the  financial  statements  (including  pro forma)
                  required to report the merger.

<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: May 12, 2000

                                                DIGITAL PRIVACY, INC.



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