<PAGE>   1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001 OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO
         __________

                        COMMISSION FILE NUMBER: 000-23889

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

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

            DELAWARE                                    76-0553110
(STATE OF OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                       IDENTIFICATION NO.)


    4900 HOPYARD ROAD, SUITE 200 PLEASANTON, CALIFORNIA     94566
       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)           (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (925) 251-0000

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

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].

         The number of shares of Common Stock of the Registrant, par value $.001
per share, outstanding at May 15, 2001 was 13,519,288.



<PAGE>   2

                          ITEM 1. FINANCIAL STATEMENTS

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                         ($000'S, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                 MARCH 31,      DECEMBER 31,
                                                                    2001             2000
                                                               -------------    -------------
<S>                                                            <C>              <C>
 ASSETS
 CURRENT ASSETS:
   Cash                                                        $         210    $          --
     Trade accounts receivable, net
   of allowance for doubtful accounts
     of $227 and $320                                                  4,225            6,249
   Unbilled revenue                                                      286               --
   Prepaid expenses and other                                            339              365
   Net assets of discontinued operations                                 116              336
                                                               -------------    -------------
      Total current assets                                             5,176             6950

PROPERTY AND EQUIPMENT                                                 5,285            5,281
   Less - accumulated depreciation                                    (3,462)          (3,123)
                                                               -------------    -------------
   Property and equipment, net                                         1,823            2,158

GOODWILL                                                              14,224           14,224
   Less - accumulated amortization                                    (2,312)          (2,224)
                                                               -------------    -------------
   Goodwill, net                                                      11,912           12,000

OTHER                                                                     45               46
                                                               -------------    -------------

TOTAL ASSETS                                                   $      18,956    $      21,154
                                                               =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Line of credit                                              $       2,337    $       3,597
   Accounts payable                                                    1,529            2,195
   Acquisition payable                                                   589            1,693
   Restructuring reserve                                                 642              853
   Accrued salaries and other expenses                                 2,083            2,520
   Payable to stockholders                                               900              900
   Deferred revenue                                                      373              324
                                                               -------------    -------------
      Total current liabilities                                        8,453           12,082

OTHER LIABILITIES                                                         19               19
COMMITMENTS AND CONTINGENCIES                                             --               --
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value; 35,000,000
  shares authorized; 13,261,888 and 11,545,057
  shares issued and outstanding                                           13               12
   Additional paid-in capital                                         99,430           98,244
   Common stock warrants                                                 100              100
   Accumulated other comprehensive income (loss)                        (118)            (118)
   Retained earnings (deficit)                                       (88,941)         (89,185)
                                                               -------------    -------------
      Total stockholders' equity                                      10,484            9,053
                                                               -------------    -------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $      18,956    $      21,154
                                                               =============    =============
</TABLE>

See notes to condensed consolidated financial statements.
<PAGE>   3


                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                         ($000'S, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                          ------------------------------
                                                             MARCH 31,        MARCH 31,
                                                               2001            2000
                                                          -------------    -------------
<S>                                                       <C>              <C>
REVENUE                                                   $       6,693    $      19,605

COST OF REVENUE                                                   4,584           13,252
                                                          -------------    -------------
GROSS PROFIT                                                      2,109            6,353

OPERATING EXPENSES:
  Selling, general and administrative expenses                    1,367            6,433
  Goodwill amortization                                              88              368
  Depreciation and amortization                                     339              473
                                                          -------------    -------------
      Total operating expenses                                    1,794            7,274

INCOME (LOSS) FROM OPERATIONS                                       315             (921)

OTHER INCOME (EXPENSE)                                               --               (2)

INTEREST EXPENSE, net                                               (71)            (130)
                                                          -------------    -------------
INCOME (LOSS) BEFORE INCOME TAXES                                   244           (1,053)

INCOME TAX PROVISION (CREDIT)                                        --             (380)
                                                          -------------    -------------

NET INCOME (LOSS)                                         $         244    $        (673)
                                                          =============    =============

NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED            $        0.02    $       (0.08)
                                                          =============    =============

AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED                12,724,397        8,807,597
                                                          =============    =============
</TABLE>

See notes to condensed consolidated financial statements.



                                       2


<PAGE>   4


         BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($000'S)


<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED
                                                                    ------------------------------
                                                                      MARCH 31,        MARCH 31,
                                                                        2001             2000
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
                  OPERATING ACTIVITIES:
   Net income (loss)                                                $         244    $        (673)
   Adjustments to reconcile net income (loss) to net
       Cash provided by (used in) operating activities:
   Depreciation and amortization                                              427              841
   Change in allowance for doubtful accounts                                  (93)            (220)
   Compensation expense on issuance of common stock                            44               --
   Deferred taxes                                                              --              354
   Cash provided by (used in) operating activities:
       Trade accounts receivable                                            2,117            3,058
       Unbilled revenue                                                      (286)            (545)
       Prepaid expenses and other                                              27             (256)
       Accounts payable                                                      (666)            (799)
       Restructuring reserve                                                 (139)            (516)
       Accrued salaries and other expenses                                   (385)          (3,198)
       Income taxes receivable/payable                                         --             (672)
       Deferred revenue                                                        49              216
       Discontinued operations                                                220               --
                                                                    -------------    -------------
       Net cash provided by (used in) operating activities                  1,559           (2,410)


INVESTING ACTIVITIES:
   Payments for acquisitions                                                  (56)              --
   Additions of property and equipment, net of
       disposals                                                               (4)            (434)
                                                                    -------------    -------------
       Net cash used in investing activities                                  (60)            (434)

FINANCING ACTIVITIES:
   Net proceeds (expense) from issuance of common stock                       (29)           7,175
   Repayments on line of credit                                            (1,260)          (4,377)
                                                                    -------------    -------------
       Net cash provided by (used in) financing activities                 (1,289)           2,798

   Effect of exchange rate on cash                                             --              (20)
                                                                    -------------    -------------

NET INCREASE (DECREASE) IN CASH                                               210              (66)

CASH:
   Beginning of period                                                         --              973
                                                                    -------------    -------------
   End of period                                                    $         210    $         907
                                                                    =============    =============

SUPPLEMENTAL DISCLOSURE:
   Noncash issuance of common stock in satisfaction
   of severance obligations                                         $         394    $          --
                                                                    =============    =============
   Noncash settlement in connection with
   prior acquisition                                                $         893    $          --
                                                                    =============    =============
   Noncash settlement in connection with
   litigation between the Company and affiliates
   of Unaxis                                                        $         125    $          --
                                                                    =============    =============
</TABLE>


See notes to condensed consolidated financial statements.


                                       3
<PAGE>   5


                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with accounting principles generally
         accepted in the United States of America for interim financial
         information and the instructions to Form 10-Q and Article 10 of
         Regulation S-X. Accordingly, they do not include all of the information
         and footnotes required by accounting principles generally accepted in
         the United States of America ("U.S. GAAP") for complete financial
         statements. In the opinion of management, all adjustments considered
         necessary for a fair presentation have been included in the financial
         statements. Operating results for the three-month period ended March
         31, 2001, are not necessarily indicative of the results that may be
         expected for the year ending December 31, 2001. The balance sheet at
         December 31, 2000, has been derived from the audited financial
         statements at that date but does not include all of the information and
         footnotes required by U.S. GAAP for complete financial statements. For
         additional information, refer to financial statements and footnotes
         thereto included in the Company's annual report on Form 10-K for the
         year ended December 31, 2000.

         The preparation of the condensed financial statements in conformity
         with U.S. GAAP requires management to make estimates and assumptions
         that affect the reported amounts of assets and liabilities and
         disclosures of contingent assets and liabilities at the date of the
         condensed financial statements and the reported amounts of revenues and
         expenses during the reporting period. Actual results could differ from
         these estimates.

         Basic income (loss) per share is based upon weighted average number of
         common shares outstanding during the period. Diluted income (loss) per
         share is computed using the weighted average number of common shares
         and potentially dilutive securities outstanding during the period.
         Potentially dilutive securities include incremental common shares
         issuable upon the exercise of stock options and warrants. Potentially
         dilutive securities are excluded from the computation if their effect
         is anti-dilutive. At March 31, 2001, the Company excluded potentially
         dilutive securities from the diluted earnings per share calculation,
         because their effect was anti-dilutive. Potentially dilutive securities
         excluded because of their anti-dilutive effect are 2.6 million shares
         and 1.9 million shares at March 31, 2001 and March 31, 2000,
         respectively.

2.       LIQUIDITY

         The Company is required to make payments in 2001 amounting to $0.5
         million related to the PROSAP acquisition. In addition, the Company
         expects to make payments of up to $89,000 and has issued 1,270,000
         shares of the Company's common stock to the prior owners of Cogent. The
         Company may be required to make payments to certain stockholders,
         subject to a registration rights agreement, of approximately $0.9
         million. Due to our current and foreseeable liquidity issues, we may be
         unable to make any of these payments in cash.

         The Company relies primarily on the timeliness and amount of accounts
         receivable collections to fund cash disbursements. As a result of prior
         losses and negative cash flows, the Company has experienced a
         significant decline in available liquidity, which has had an adverse
         impact on the ability of the Company to meet its immediate obligations
         and in the future and to continue as a going concern. The Company
         intends to improve its liquidity by securing equity financing and
         replacing its credit facility with Comerica Bank, which matured on
         March 31, 2001. Comerica Bank has provided the Company with short-term
         interim financing in the form of a $3.0 million Demand Note. The Demand
         Note carries interest of Comerica's prime rate plus 4%. Available
         borrowings will be reduced by 2% of eligible accounts receivable each
         month until the Demand Note is called.

         The Company believes that it is taking the actions necessary to restore
         cash flows from operations, which the Company believes,  will be
         adequate to fund its operations over the next year, combined with
         proceeds from a new equity financing and the replacement of its
         Comerica credit facility. There can be no assurance that the Company's
         efforts to increase revenue and reduce operating costs will result in
         operating profits or positive cash flows from operations, that the
         Company's collection efforts with respect to its accounts receivable
         will be sufficient to fund cash disbursements, or that the Company will
         be able to secure new equity or debt financing. If such equity or debt
         financing is obtained there can be no assurance as to the cost or other
         terms, or dilutive effect of any additional financing which may be
         available.

3.       RESTRUCTURING

         Remaining amounts recorded as accrued restructuring costs at March 31,
         2001, relate to ongoing severance and lease obligations, which have
         extended payment terms.


                                       4
<PAGE>   6

4.       CREDIT FACILITIES

         Our operating line of credit facility with Comerica Bank matured on
         March 31, 2001. Comerica Bank has informed us that they will continue
         to extend credit on a demand note basis for a limited period of time.
         Comerica Bank has provided the Company with short-term interim
         financing in the form of a $3.0 million Demand Note, secured by liens
         on substantially all of the Company's operating subsidiaries. The
         Demand Note carries interest of Comerica's prime rate plus 4%.
         Available borrowings will be reduced monthly by 2% of eligible accounts
         receivable. The Demand Note does not have a maturity date; however, it
         is callable at any time.

5.       INCOME TAXES

         As a result of continued losses, the Company has recorded a valuation
         allowance to offset all of its net deferred tax assets recorded at
         March 31, 2001. The valuation allowance relates to deferred tax assets
         established for net operating loss carryforwards generated through
         March 31, 2001 and other temporary differences. The Company does not
         expect to recognize tax benefits on prior or future losses or other
         temporary differences until such time that it is more likely than not
         that tax benefits may be realized by the Company.


6.       RECENT SALES OF UNREGISTERED SECURITIES

         On January 16, 2001, the prior owners of Cogent Technologies LLC
         ("Cogent") were issued 1,020,000 shares of our common stock in partial
         settlement of a claim by them related to the unpaid balance of our
         purchase price of the business of Cogent and amounts due under
         employment agreements with us. The Company accrued $1.2 million at
         December 31, 2000 for the settlement.

         On February 15, 2001, Kevin J. Murphy, BrightStar's President and Chief
         Operating Officer was issued 100,000 shares of our common stock in
         connection with the commencement of his employment with the Company.

         On February 15, 2001, certain former employees were issued 346,831
         shares of our common stock in satisfaction of $346,831 of remaining
         severance payment obligations under prior employment agreements with
         the Company.

         On February 15, 2001, Unaxis Trading Limited ("Unaxis") was issued
         250,000 shares of our common stock in settlement of litigation between
         the Company and certain affiliates of Unaxis. If, prior to a sale of
         these shares by Unaxis, the Company has not exercised its right to call
         the shares for $1.60 per share, Unaxis may exercise its right to put
         the shares to the Company for a price of $2.00 per share during the 15
         day period commencing on February 1, 2002.

         On May 4, 2001, 257,400 shares of our common stock were issued in
         satisfaction of our obligations under various registration rights
         agreements.

7.       LITIGATION

         The Company has accrued $0.6 million relating to its litigation
         exposure. This amount includes estimated costs to settle legal claims
         related primarily to two separate lawsuits brought against the Company
         for damages related to software development and implementation services
         provided by the Company. The amounts accrued primarily represent
         defense costs to be paid by the Company up to its deductible under its
         errors and omissions insurance policy. The aggregate amount of the
         claims filed against the Company is $5.4 million. Additionally, the
         Company has received a lawsuit from the prior owners of Integrated
         Systems Consulting LLC ("ISC"), alleging violations of federal and
         state securities laws, fraud, negligent misrepresentation, breach of
         contract, breach of good faith and fair dealing and unjust enrichment
         related to purchase consideration surrounding the Company's acquisition
         of ISC in 1999. The plaintiffs are seeking compensatory damages in
         excess of $2 million, court costs, attorney's fees and punitive
         damages. The Company denies any wrongdoing and intends to vigorously
         defend the case. The Company has


                                       5
<PAGE>   7


         accrued an amount, which represents estimated defense costs to be paid
         by the Company, subject to the deductible under its directors and
         officers insurance policy. While any litigation contains an element of
         uncertainty, the Company believes, based upon its assessment of the
         claims and negotiation to settle with the plaintiffs, that the
         liability recorded as of March 31, 2001, combined with coverage under
         the Company's errors and omissions and directors and officer's
         insurance policies, is adequate to cover the estimated exposure.

         In addition to the litigation noted above, the Company is from time to
         time involved in litigation incidental to its business. The Company
         believes that the results of such litigation, in addition to amounts
         discussed above, will not have a materially adverse effect on the
         Company's financial condition.

         ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         BrightStar is an information technology company that emphasizes
         Application Team Outsourcing services for Global 2000, mid-market and
         public sector clients, including packaged and custom application
         management, custom application development, integration of
         comprehensive enterprise and e-business solutions and staff
         augmentation. Application Team Outsourcing services generally generate
         recurring revenues based on long-term contracts for application support
         or development projects or from sustainable client relationships.
         Originally centered on Enterprise Resource Planning (ERP) solutions,
         the Company also implements and manages Customer Relationship
         Management (CRM), E-commerce, Supply Chain Management (SCM) and
         corporate portal solutions.

         We call our business strategy "Application Team Outsourcing," because
         we team with our clients' organizations to deliver the required
         application outsourcing solution. Application Team Outsourcing enables
         BrightStar to leverage its excellent reputation for rapid-hiring and
         client satisfaction to provide agile units of highly skilled
         applications engineers in an outsourcing environment. We focus on
         redirecting a client's current IT budget from a fixed expense, to a
         flexible budget, by utilizing BrightStar's ability to expand and
         contract resources both in numbers and skill sets. In doing so, we
         strive to become part of the "fabric" of our clients' organizations,
         thereby generating ongoing business from satisfied clients.

         We have approximately 140 employees and full-time contractors in client
         locations around the United States and in the Company's offices located
         in Pleasanton, California, Dallas, Texas and Lafayette, Louisiana.

         The Company provides services to its customers for fees that are based
         on time and material or fixed fee contracts. Accordingly, revenue is
         recognized as consulting services are performed. Unbilled revenue is
         recorded for contract services provided for which a billing has not
         been rendered. Deferred revenue represents the excess of amounts billed
         over contract costs and expenses incurred.

         The timing of revenue is difficult to forecast because the Company's
         sales cycle for certain of its services can be relatively long and is
         subject to a number of uncertainties, including clients' budgetary
         constraints, the timing of clients' budget cycles, clients' internal
         approval processes and general economic conditions. In addition, as is
         customary in the industry, the Company's engagements, generally, are
         terminable without a client penalty. The Company's revenue and results
         of operations may fluctuate significantly from quarter to quarter or
         year to year because of a number of factors, including, but not limited
         to, the effect of changes in estimates to complete fixed fee contracts;
         the rate of hiring and the productivity of revenue generating
         personnel; the availability of qualified IT professionals; the
         significance of client engagements commenced and completed during a
         quarter; the number of business days in the quarter; changes in the
         relative mix of the Company's services; changes in the pricing of the
         Company's services; the timing and the rate of entrance into new
         geographic or IT specialty markets; departures or temporary absences of
         key revenue-generating personnel; the structure and timing of
         acquisitions; changes in the demand for IT services; and general
         economic factors.

         Cost of revenue consists primarily of salaries (including non-billable
         and training time) and benefits for consultants. The Company generally
         strives to maintain its gross profit margins by offsetting increases in
         salaries and benefits with increases in billing rates.


                                       6

<PAGE>   8

         Selling, general and administrative expenses primarily consist of costs
         associated with (i) corporate overhead, (ii) sales and account
         management, (iii) telecommunications, (iv) human resources, and (v)
         recruiting.

         RESULTS OF OPERATIONS

         Revenue for the first quarter of 2001 decreased $12.9 million or 65.9%
         from the first quarter of 2000 as a result of a continued reduction in
         the demand for ERP and e-commerce consulting services and the sale of
         our Australian subsidiary.

         Gross profit as a percentage of revenue for the three months ended
         March 31, 2001 and 2000, was 32% for both years.

         The Company's reductions in selling, general and administrative
         expenses are the result of the execution of the turnaround plan, which
         included reductions in office space, sales personnel and related costs,
         management overhead and discretionary expenses.

         Goodwill is the cost in excess of amounts assigned to identifiable
         assets acquired less liabilities assumed. Goodwill recorded in
         conjunction with the Founding Companies and all other acquisitions in
         1998 is being amortized over 40 years on a straight-line basis. The
         realizability and period of benefit of goodwill is evaluated
         periodically to assess recoverability, and, if warranted, impairment or
         adjustments to the period benefited would be recognized. As a result of
         its evaluation of market conditions, the Company reduced the carrying
         value of its remaining goodwill to $12 million at December 31, 2000.

         As a result of continued losses, the Company has recorded a valuation
         allowance to offset all of its net deferred tax assets recorded at
         March 31, 2001. The valuation allowance relates to deferred tax assets
         established for net operating loss carryforwards generated through
         March 31, 2001 and other temporary differences. The Company does not
         expect to recognize tax benefits on prior or future losses or other
         temporary differences until such time that it is more likely than not
         that tax benefits may be realized by the Company.

         LIQUIDITY AND CAPITAL RESOURCES

         The Company is required to make payments in 2001 amounting to $0.5
         million related to the PROSAP acquisition. In addition, the Company
         expects to make payments of up to $89,000 and has issued 1,270,000
         shares of the Company's common stock to the prior owners of Cogent. The
         Company may be required to make payments to certain stockholders,
         subject to a registration rights agreement, of approximately $0.9
         million. Due to our current and foreseeable liquidity issues, we may be
         unable to make any of these payments in cash.

         The Company relies primarily on the timeliness and amount of accounts
         receivable collections to fund cash disbursements. As a result of prior
         losses and negative cash flows, the Company has experienced a
         significant decline in available liquidity, which has had an adverse
         impact on the ability of the Company to meet its immediate obligations
         and in the future and to continue as a going concern. The Company
         intends to improve its liquidity by securing equity financing and
         replacing its credit facility with Comerica Bank, which matured on
         March 31, 2001. Comerica Bank has provided the Company with short-term,
         interim financing in the form of a $3.0 million Demand Note. The Demand
         Note carries interest of Comerica's prime rate plus 4%. Available
         borrowings will be reduced by 2% of eligible accounts receivable each
         month until the Demand Note is called.

         The Company believes that it is taking the actions necessary to restore
         cash flows from operations, which the Company believes, will be
         adequate to fund its operations over the next year, combined with
         proceeds from a new equity financing and the replacement of its
         Comerica credit facility. There can be no assurance that the Company's
         efforts to increase revenue and reduce operating costs will result in
         operating profits or positive cash flows from operations, that the
         Company's collection efforts with respect to its accounts receivable
         will be sufficient to fund cash disbursements, or that the Company will
         be able to secure new equity or debt financing. If such equity or debt
         financing is obtained there can be no assurance as to the cost or other
         terms, or dilutive effect of any additional financing which may be
         available.


         FORWARD-LOOKING INFORMATION - Management's Discussion and Analysis of
         Financial Condition and Results of Operations ("MD&A") includes
         "forward-looking statements" within the meaning of Section 27A of the
         Securities Act of 1933 and Section 21E of the Securities Exchange Act
         of 1934. All statements, other than statements of historical facts,
         included in this MD&A regarding the Company's financial position,
         business strategy and plans and objectives of management of the Company
         for future operations are forward-looking statements. These
         forward-looking statements rely on a number of assumptions concerning


                                       7
<PAGE>   9


         future events and are subject to a number of uncertainties and other
         factors, many of which are outside of the Company's control, that could
         cause actual results to materially differ from such statements. While
         the Company believes that the assumptions concerning future events are
         reasonable, it cautions that there are inherent difficulties in
         predicting certain important factors, especially the timing and
         magnitude of technological advances; the performance of recently
         acquired businesses; the prospects for future acquisitions; the
         possibility that a current customer could be acquired or otherwise be
         affected by a future event that would diminish their information
         technology requirements; the competition in the information technology
         industry and the impact of such competition on pricing, revenues and
         margins; the degree to which business entities continue to outsource
         information technology and business processes; uncertainties
         surrounding budget reductions or changes in funding priorities of
         existing government programs and the cost of attracting and retaining
         highly skilled personnel.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's demand note from Comerica Bank bears interest at variable
         rates; therefore, the Company's results of operations would be affected
         by interest rate changes. An immediate 10 percent change in interest
         rates would not have a material effect on the Company's results of
         operations over the next fiscal year.

                           PART II - OTHER INFORMATION

ITEM 1. Legal proceedings

         Information related to Item 1 is disclosed in Part I Item I (Note 8 to
         the Consolidated Financial Statement) and is by the reference
         incorporated herein.

ITEM 3. Defaults upon Senior Securities

         The Credit Facility was secured by liens on substantially all of the
         Company's assets (including accounts receivable) and a pledge of all
         outstanding capital stock of the Company's domestic operating
         subsidiaries. The Credit Facility also required that the Company Comply
         with various loan covenants, including (i) maintenance of certain
         financial ratios, (ii) restrictions on additional indebtedness and
         (iii) restrictions on liens, guarantees and payments of dividends. As
         of, and during the three months ended March 31, 2001 and the year ended
         December 31, 2000, the Company was not in compliance with certain
         financial covenants. Comerica Bank has agreed to waive the defaults for
         both periods.

ITEM 4. Submission of matters to a vote of Stockholders

         None

ITEM 6. Exhibits and reports on Form 8-K

(a) Exhibits

         None

(b) Reports on Form 8-K

         None


                                       8


<PAGE>   10

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.

         BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

Date:  May  15,  2001.             BY: /s/ Joseph A. Wagda
                                      ------------------------------------
                                      Joseph  A.  Wagda
                                      Chairman and Chief Executive Officer

                                   BY: /s/ Ken Czaja
                                      ------------------------------------
                                      Kenneth A. Czaja
                                      Vice President - Finance and
                                      Chief Financial Officer




                                       9