EXHIBIT INDEX APPEARS ON PAGE



                     U.S. SECURITIES AND EXCHANGE COMMISSION

                               Washington, DC  20549

                                    FORM 10-QSB

                 Quarterly Report Under Section 13 or 15(d) of the
                          Securities Exchange Act of 1934

                 For the quarterly period ended June 30, 2001

                          Commission File Number: 0-17170


                                TELVUE CORPORATION
         (Exact name of small business issuer as specified in its charter)




           DELAWARE                                     51-0299879
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)



16000 Horizon Way, Suite 500
Mt. Laurel, New Jersey                                      08054
(Address of principal executive offices)                  (Zip Code)

Issuer's telephone number, including area code:(856) 273-8888

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

Number of shares of registrant's common stock outstanding as of July 23,
2001: 24,796,583 shares.

Transitional Small Business Disclosure Form:  Yes       No   X
                                                  ------   ------
This report includes a total of 15 pages.



                         TELVUE CORPORATION

                                       INDEX

                                                                      PAGE
                                                                       NO.
                                                                      -----

PART I.   FINANCIAL INFORMATION


          Item 1.  Financial Statements

          Balance Sheets as of June 30, 2001
          (unaudited) and as of December 31, 2000

          Statements of Operations for the three
          months ended June 30, 2001 (unaudited)
          and June 30, 2000 (unaudited)

          Statements of Operations for the six
          months ended June 30, 2001 (unaudited)
          and June 30, 2000 (unaudited)

          Statements of Cash Flows for the six
          months ended June 30, 2001 (unaudited)
          and June 30, 2000 (unaudited)

          Notes to Financial Statements (unaudited)

          Item 2.  Management's Discussion and Analysis or Plan of
                   Operation


PART II.  OTHER INFORMATION

          Item 4.  Submission of Matters to Vote of Security Holders

          Item 6.  Exhibits and Reports on Form 8-K


<Page>

<Table>

PART I.  Financial Information
ITEM I.  Financial Statements

                                 TELVUE CORPORATION
                                   BALANCE SHEETS

                                                 June 30,      December 31,
                                                   2001            2000
                                               -------------   -----------
<S>                                              <C>             <C>

ASSETS                                         (Unaudited)              *

CURRENT ASSETS
  Cash and cash equivalents                     $   708,041     $  709,740
  Accounts receivable - trade                     1,079,474        781,597
  Inventory                                          20,467           -
  Deferred tax asset                                410,000        300,000
  Other current assets                               32,124         16,974
                                                -----------     ----------
     TOTAL CURRENT ASSETS                         2,250,106      1,808,311

PROPERTY AND EQUIPMENT
  Machinery and equipment                         5,235,821      5,074,442
  Less accumulated depreciation                   4,667,477      4,509,063
                                                -----------     ----------
                                                    568,344        565,379

OTHER ASSETS
  Deferred tax asset                                793,371      1,136,320
  Goodwill - net of accumulated amortization
   of $25,507 in 2001                             1,212,075           -
  Covenant not to compete - net of
   accumulated amortization of $208 in 2001           9,168           -
  Other assets                                        9,300        109,300
                                                 ----------     ----------
                                                  2,023,914      1,245,620
                                                 ----------     ----------
                                                 $4,842,364     $3,619,310
                                                 ==========     ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accrued interest-majority stockholder-current    $120,000        $84,000
  Notes payable-Dacon Corporation-current            35,864          -
  Notes payable - Ford Motor Credit Corp-current      4,170          -
  Accounts payable                                  362,976        254,680
  Accrued expenses                                  433,071        304,357
  Accrued dividends                               1,477,854      1,266,732
                                                -----------     ----------
     TOTAL CURRENT LIABILITIES                    2,433,935      1,909,769

NOTES PAYABLE - MAJORITY STOCKHOLDER                867,315        541,000

ACCRUED INTEREST - MAJORITY STOCKHOLDER - net
   of current portion                             1,899,000      2,023,088

NOTES PAYABLE - DACON CORPORATION-net of
  current portion                                   264,136          -

NOTES PAYABLE - FORD MOTOR CREDIT CORP - net
  of current portion                                  7,480          -

REDEEMABLE CONVERTIBLE PREFERRED STOCK, $1 par
  value, 6,900,000 shares authorized,
  3,518,694 shares issued and outstanding
  (liquidation value of $4,996,548)               3,518,694      3,518,694

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
  Common stock, $.01 par value, 100,000,000
  shares authorized, 24,721,583 shares
  issued and outstanding                            247,216        247,216
  Additional paid-in capital                      1,582,310      1,582,310
  Accumulated deficit                            (5,977,722)    (6,202,767)
                                                 -----------    -----------
                                                 (4,148,196)    (4,373,241)
                                                 -----------    -----------
                                                 $4,842,364     $3,619,310
                                                 ===========    ===========

*  Derived from audited financial statements.

The accompanying unaudited notes are an integral part of these statements.
<Page>

                                   TELVUE CORPORATION
                                STATEMENTS OF OPERATIONS
                                       (UNAUDITED)


                                                    Three Months Ended
                                                          June 30,
                                               ----------------------------
                                                     2001            2000
                                                     ----            ----
REVENUES
  ANI services                                 $ 1,316,057     $ 1,278,032
  Hardware sales and service                       396,058             -
                                               -----------     -----------
TOTAL REVENUES                                   1,712,115       1,278,032

COST OF REVENUES
  ANI services                                     440,088         493,540
  Hardware sales and service                       310,969             -
                                              ------------     -----------
TOTAL COST OF REVENUES                             751,057         493,540
                                              ------------     -----------
GROSS MARGIN                                       961,058         784,492

OPERATING EXPENSES
  Selling and marketing                            178,868         138,978
  General and administrative                       247,804         162,563
  Depreciation & amortization                      101,456         102,997
                                               -----------     -----------
TOTAL OPERATING EXPENSES                           528,128         404,538
                                               -----------     -----------
OPERATING INCOME                                   432,930         379,954

OTHER INCOME (EXPENSE)
  Interest income                                    6,825           3,630
  Interest expense                                 (64,381)        (71,830)
                                                -----------     -----------
TOTAL OTHER INCOME (EXPENSE)                       (57,556)        (68,200)
                                                -----------     -----------

INCOME BEFORE INCOME TAXES                         375,374         311,754

INCOME TAX                                        (130,354)       (102,091)
                                                ------------     ----------

NET INCOME                                         245,020         209,663

DIVIDENDS ON REDEEMABLE
  CONVERTIBLE PREFERRED STOCK                     (105,561)       (105,561)
                                                -----------    ------------
NET INCOME AVAILABLE TO
  COMMON STOCKHOLDERS                           $  139,459     $   104,102
                                                ===========    ============

NET INCOME PER COMMON SHARE
  BASIC                                               $.01            $.00
                                                ============    ===========
  DILUTED                                             $.00            $.00
                                                ============   ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
   BASIC                                         24,721,583      24,539,500
                                                 ==========      ==========
   DILUTED                                       88,467,737      86,353,912
                                                 ==========      ==========




The accompanying unaudited notes are an integral part of these statements.

<Page>

                                   TELVUE CORPORATION
                                STATEMENTS OF OPERATIONS
                                       (UNAUDITED)


                                                    	Six Months Ended
                                                          June 30,
                                               ----------------------------
                                                     2001            2000
                                                     ----            ----
REVENUES
  ANI services                                 $ 2,642,681     $ 2,511,221
  Hardware sales and service                       438,154             -
                                               -----------     -----------
TOTAL REVENUES                                   3,080,835       2,511,221

COST OF REVENUES
  ANI services                                     961,018       1,027,861
  Hardware sales and service                       348,809             -
                                              ------------     -----------
TOTAL COST OF REVENUES                           1,309,827       1,027,861
                                              ------------     -----------
GROSS MARGIN                                     1,771,008       1,483,360

OPERATING EXPENSES
  Selling and marketing                            356,104         282,079
  General and administrative                       456,925         319,403
  Depreciation & amortization                      184,753         215,496
                                               -----------     -----------
TOTAL OPERATING EXPENSES                           997,782         816,978
                                               -----------     -----------
OPERATING INCOME                                   773,226         666,382

OTHER INCOME (EXPENSE)
  Interest income                                   17,325           7,742
  Interest expense                                (121,437)       (147,566)
                                                -----------     -----------
TOTAL OTHER INCOME (EXPENSE)                      (104,112)       (139,824)
                                                -----------     -----------

INCOME BEFORE INCOME TAXES                         669,114         526,558

INCOME TAX                                        (232,949)       (179,030)
                                                ------------     ----------

NET INCOME                                         436,165         347,528

DIVIDENDS ON REDEEMABLE
  CONVERTIBLE PREFERRED STOCK                     (211,122)       (211,122)
                                                -----------    ------------
NET INCOME AVAILABLE TO
  COMMON STOCKHOLDERS                           $  225,043     $   136,406
                                                ===========    ============

NET INCOME PER COMMON SHARE
  BASIC                                               $.01            $.01
                                                ============    ===========
  DILUTED                                             $.00            $.00
                                                ============   ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
   BASIC                                         24,721,583      24,421,972
                                                 ==========      ==========
   DILUTED                                       89,583,179      86,236,384
                                                 ==========      ==========

The accompanying unaudited notes are an integral part of these statements.


<Page>

                                   TELVUE CORPORATION
                                STATEMENTS OF CASH FLOWS
                                    (UNAUDITED)


                                                      Six Months Ended
                                                          June 30,
                                                    ---------------------
                                                     2001            2000
                                                     ----            ----

CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income                                    $   436,165       $347,528
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Depreciation & amortization                     184,753        215,496
    Deferred taxes                                  232,949        179,030
  Changes in assets and liabilities:
   Decrease (increase) in -
    Accounts receivable - trade                    (297,875)       (34,494)
    Inventory                                       (18,049)          -
    Other current assets                            (15,150)       (23,095)
   Increase (decrease) in -
    Accounts payable                                108,296       (234,498)
    Accrued expenses                                128,714         34,789
    Accrued interest - majority stockholder         (88,088)         -
                                                 -----------    -----------
    NET CASH PROVIDED BY OPERATING ACTIVITIES       671,715        484,756
                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment               (99,729)       (28,353)
  Other assets (deposit on Source purchase)         100,000            -
  Acquisition of assets of Source                (1,000,000)           -
                                                 -----------    -----------
   NET CASH (USED) BY INVESTING ACTIVITIES         (999,729)       (28,353)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from notes payable-majority stockholder  650,000           -
  Debt reduction:
    Notes payable - majority stockholder           (323,685)      (602,434)
  Issuance of common stock                            -             23,800
                                                 -----------     ----------
   NET CASH PROVIDED (USED) BY
    FINANCING ACTIVITIES                            326,315       (578,634)
                                                 -----------     ----------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                   (1,699)      (122,231)

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                               709,740        325,698
                                                 ----------     ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD         $  708,041     $  203,467
                                                 ==========     ==========






The accompanying unaudited notes are an integral part of these statements.

</TABLE>
<Page>

                                     TELVUE CORPORATION
                               NOTES TO FINANCIAL STATEMENTS
                                     (UNAUDITED)

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

Summary Financial Information and Results of Operations
--------------------------------------------------------

In the opinion of management, the accompanying unaudited financial
statements have been  prepared in conformance with generally accepted
accounting principles and with the regulations of the Securities and
Exchange Commission and contain all adjustments (consisting of only normal
recurring adjustments) necessary to make the financial statements not
misleading and to present fairly the financial condition as of June 30,
2001, the results of operations for the three and six months ended June 30,
2001 and 2000 and cash flows for the six months ended June 30, 2001 and
2000.

Interim Financial Information
-----------------------------

While management believes that the disclosures presented are adequate to
prevent misleading information, these unaudited financial statements must be
read in conjunction with the audited financial statements and notes included
in the Company's Form 10-KSB report for the year ended December 31, 2000, as
filed with the Securities and Exchange Commission.

Prior period financial statements have been reclassified to conform with
current quarter presentation.

2.  NEW BUSINESS AND ACQUISITIONS:
    -----------------------------

On March 9, 2001, TelVue Corporation (the "Company") acquired the assets of
J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source
Communications Group ("Source"), a Delaware corporation located in Mullica
Hill, New Jersey, for $1.3 million under the terms of an Asset Purchase
Agreement which was signed on February 14, 2001.  The assets, which
consisted primarily of material contracts with equipment, software and
Communication service providers, were purchased for $1,000,000 in cash and
$300,000 pursuant to a promissory note.  The Company funded a portion of
the acquisition by borrowing $650,000 from its majority shareholder, on
March 5, 2001, at an interest rate of prime plus one percent (1%)
compounded monthly and due on January 1, 2004.  Jeffrey Kraengel, former
president of Source, joined the Company as Executive Vice President with
the responsibility of integrating Source's operations into the Company,
expanding existing business with current customers and suppliers,
identifying and creating new business opportunities, supervising research
and development and training employees.

The accompanying financial statements include the operations of Source
since the date of acquisition.

The following unaudited pro forma information for the six months ended June
30, 2001, is presented as if the acquisition of Source occurred on January
1, 2000.  This information is based on historical results of operations,
adjusted for acquisition costs, and, in the opinion of management, is not
necessarily indicative of what the results would have been had the Company
operated Source since January 1, 2000.

                                        Six Months Ended June 30,
                                           2001            2000
                                        ----------       --------
Revenues                                $3,388,812      $2,994,762
Net income                                 440,014         352,228
Diluted EPS                                   $.00            $.00


3.  SUPPLEMENTAL CASH FLOW INFORMATION:
    -----------------------------------

Supplemental disclosures of cash paid during the period-

                                           2001            2000
                                           ----            ----
             Income taxes               $   -           $  -
             Interest                   $209,525        $147,566

Non-cash Investing and Financing Transactions
---------------------------------------------
The Company accrued dividends on its redeemable convertible preferred stock
of 211,122 for each of the six months ended June 30, 2001 and 2000.

The Company issued a promissory note, in the amount of $300,000, payable to
the seller in connection with the purchase of Source.

The Company purchased a van in the amount of $21,402. The Company paid cash
of $8,402 and financed the balance of $13,000.

4.  EARNINGS PER COMMON SHARE:
    --------------------------------

Basic earnings per common share is computed by dividing net income, after
deduction of preferred stock dividends, by the weighted average number of
shares of outstanding.  Diluted earnings per common share is computed by
dividing net income, after the deduction of preferred stock dividends, when
applicable, by the weighted average number of shares outstanding adjusted
to include incremental common shares that would have been outstanding if
potentially dilutive common shares had been issued.  Incremental shares of
64,861,596 and 61,814,412 for the six months ended June 30, 2001 and 2000,
respectively, were used in the calculation of diluted earnings per common
share.

The following is reconciliation from basic earnings per share to diluted
earnings per share for the six months ended June 30, 2001 and 2000.


                                       Net Income
                                       Available    Average
                                     to Common      Shares        Earnings
                                      Stockholders   Outstanding  Per Share
                                      ------------   -----------  --------

2001                                  $  225,043     24,721,583    $ .01
Effect of dilution
  Warrants                                           29,915,160
  Convertible preferred stock            211,122     33,311,986
  Convertible accrued interest              -           955,701
  Vested unexercised stock options          -           678,749
                                      -----------    ----------    --------
Diluted                               $  436,165     89,583,179    $ .00
                                      ===========    ==========    ========

2000                                  $  136,406     24,421,972    $ .01
Effect of dilution
  Warrants                                           29,915,160
  Convertible preferred stock            211,122     30,496,885
  Convertible accrued interest              -           955,701
  Vested unexercised stock options          -           446,666
                                      -----------    ----------    --------
Diluted                               $  347,528     86,236,384    $ .00
                                      ===========    ==========    ========



5.  DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK:
    ----------------------------------------------------

As of June 30, 2001 accrued dividends on outstanding preferred stock
amounted to $1,477,854.


6.  CORPORATE INCOME TAXES:
    -----------------------

The Company uses the asset and liability method of accounting for income
taxes in accordance with Financial Accounting Standards Board Statement
(SFAS) No. 109, "Accounting for Income Taxes".  SFAS 109 requires
recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been recognized in the financial
statements or tax returns.  Under this method, deferred tax liabilities and
assets are determined based on the differences between the financial
statement carrying amounts and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse.  Differences between financial reporting and tax bases
arise most frequently from differences in timing of income and expense
recognition.  Deferred income tax expense is measured by the change in the
net deferred income tax asset or liability during the year.

The provisions for income tax benefit (expense) consist of the following
components:

                                                  2001             2000
                                              -----------        ----------
Current
 Federal                                       $    -             $   -
 State                                              -                 -
                                              -----------        ----------
                                                    -                 -
Deferred
 Federal                                        (232,949)         (179,030)
 State                                               -                -
                                               ----------        ----------
                                               $(232,949)        $(179,030)
                                               ==========        ==========

The Company has a net operating loss carryforward of approximately
$1,560,000 on a tax reporting basis.  The carryforward will begin to expire
in 2007, if not utilized.

Differences between the effective income tax rate and the statutory federal
income tax rate were primarily the result of the change in the valuation
allowance.

7.  NOTES PAYABLE AND ACCRUED INTEREST:
    ----------------------------------

Notes Payable and Accrued Interest - Majority Stockholder
---------------------------------------------------------
On March 5, 2001, the Company borrowed $650,000 from the majority
stockholder for the purchase of Source Communications Group (the "Source
Loan"). Interest on the loan is set at the rate of prime plus one percent
(1%) compounded monthly.  The principal on the loan is due on or about
January 1, 2004.

Effective as of March 31, 2001, the Company obtained from the majority
stockholder an extension to January 1, 2003, of his prior agreement not to
demand repayment of his loans or the accrued interest on the loans.  The
Company has decided to voluntarily make, and the majority stockholder has
agreed to accept, monthly payments of at least $25,000 through December 31,
2001.  The Company makes current interest payments from the monthly payment
and the balance of the payment is applied to either accrued interest or
principal. The Company may make monthly payments in excess of $25,000 when,
in the opinion of management, the Company has excess cash that is not needed
to fund operations.  The Company made payments of $25,000 each month for
each month from January 2001 to May 2001. In June 2001, the Company made a
payment of $400,000 to Mr. Lenfest and applied $323,685 of the payment to
the Source loan.  The reminder of the payment was applied to current and
accrued interest, bringing total payments during the six months ended June
30, 2001 to $525,000.  The Company has classified $120,000 of accrued
interest as a current liability. As of June 30, 2001, the total outstanding
notes due to the majority stockholder is in an aggregate principal amount of
$867,315 and accrued interest due on these notes in the aggregate amount of
$2,019,000.

Notes Payable - Dacon Corporation d/b/a Source Communications Group
-------------------------------------------------------------------
On March 9, 2001, the Company acquired substantially all of the assets of
Source Communications Group for $1.3 million. The assets, which consisted
primarily of material contracts with equipment, software and communication
service providers, were purchased for $1,000,000 in cash and $300,000
pursuant to a promissory note. The promissory note has a term of three
years.  Interest only is payable monthly during year one at the rate of 8%
per annum. Beginning in year two, both principal and interest are payable
monthly at the rate of 5.06% per annum. As of June 30, 2001, the principal
amount of the note was $300,000.

Notes Payable - Ford Motor Credit Corp
--------------------------------------
The Company purchased a van for $21,402, to be used for installations
related to the Source business.  The Company paid cash of $8,402 and
financed the balance of $13,000.  The loan is payable monthly in the amount
of $390, including principal and interest, has a term of three years and
bears interest at 5.0% per annum.  As of June 30, 2001, the principal amount
due on the loan was $11,650.

8.  COMMITMENTS AND CONTINGENCIES
    -----------------------------

The Company has received notice from a cable operating company customer
asserting its right to be indemnified against claims of patent infringement
made against the cable operator by a third party.  The third party has
alleged to the cable operator that portions of the cable operator's pay-
per-view operations infringe one or more patents held by such party.  The
Company has not received any notice of alleged infringement from the third
party.  The Company has retained independent patent counsel to review the
third party patents and the alleged infringement.  The Company is unable at
this time to determine if it has liability under the indemnity provisions
of the contracts with the cable operator or the amount of such liability if
it exists.

9. FINANCIAL DATA BUSINESS SEGMENT
   -------------------------------

The Company had conducted all of its operations as a marketing and service
company primarily selling automatic number identification ("ANI")
telecommunications services to the cable industry for the automated ordering
of pay-per-view features and events.  As discussed in note 2, on March 9,
2001, the Company acquired substantially all of the assets of Source, a
communications solutions provider and network integrator.  The following
represents information for the Company's ANI and Source business segments.

Six months Ended June 30, 2001             ANI        Source        Total
---------------------------------      ----------   ---------    ----------
Revenues                               $2,642,681    $438,154    $3,080,835
Operating income                          858,956     (85,730)      773,226
Interest expense                          121,227         210       121,437
Income before income taxes                755,054     (85,940)      669,114
Capital expenditures                       85,030   1,326,349     1,411,379

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     TelVue Corporation ("TelVue") is a marketing and service company which
sells automatic number identification ("ANI")telecommunications services to
the cable television industry for the automated ordering of pay-per-view
features and events (the "Service").  TelVue provides the Service through
equipment it purchases. TelVue's equipment for providing the Service
nationwide is located at TelVue's home office in Mt. Laurel, New
Jersey.  The equipment provides enhanced service features, such as, "Custom
Greeting" which identifies the cable operator by name, "Title Speak" which
speaks the movie or event title, start-time and channel appearance on
accepted orders, and "Call Redirect" which automatically redirects
unaccepted order calls to the cable operator's customer service
representative for assistance.  TelVue believes these enhanced service
features are necessary for it to remain competitive within the pay-per-view
ANI industry.  The equipment also speaks promotional messages for products
and services at the time a cable subscriber is placing an order for a pay-
per-view movie or event (the "PPV+ service").  TelVue serves cable
television systems across the United States via trunk lines and data
circuits that it currently leases from MCIWorldcom. TelVue believes it
receives a favorable trunk usage rate from MCIWorldcom.

     On March 9, 2001, TelVue acquired substantially all of the assets of
Source Communications Group a Delaware corporation located in Mullica Hill,
NJ ("Source") for $1.3 million. Source was a privately held regional
communications solution provider and network integrator serving clients
mainly in the Mid-Atlantic states. Source represents a number of well-known
equipment, software and communications service suppliers. Source molds
these resources into a custom business solution for its clients and
satisfies its customers' individual voice and data communications needs.
The acquisition is part of a strategy to allow TelVue to grow and diversify
both its product lines and customer base beyond the cable TV industry.
TelVue plans to expand Source's current sales and marketing activities
along with enhancing its existing installation and maintenance services.
Under the terms of the asset purchase agreement, TelVue retained the
employees and management of Source and Source relocated its principal
offices to TelVue's offices in Mt. Laurel, NJ. Jeffery Kraengel, the former
President of Source, has joined TelVue as an Executive Vice President with
the responsibility of integrating the Source operations into TelVue,
expanding existing business with current customers and suppliers,
identifying and creating new business opportunities, supervising research
and development, and training employees.

     TelVue had net income of $245,020 and $209,663 for the three months
ended June 30, 2001 and 2000, respectively, and net income of $436,165 and
$347,528 for the six months ended June 30, 2001 and 2000, respectively.
Total revenue increased $434,083 and $569,614 for the three and six months
ended June 30, 2001, respectively. This is partially a result of hardware
sales and service revenue from Source of $396,058 and $438,154 for the
three and six months ended June 30, 2001, respectively.  Service revenue
also increased as a result of an increase in feature revenue of $108,430
and $232,346 for the three and six months ended June 30, 2001,
respectively.  Pay-per-view buy revenue decreased $82,202 and $127,967 for
the three and six months ended June 30, 2001, respectively, due to a
reduction in the average monthly buy rate from 9.6% to 8.0% for the three
months ended June 30, 2000 and 2001, respectively, and from 9.6% to 7.8%
for the six months ended June 30, 2000 and 2001, respectively. TelVue
believes the decrease in the buy rates is attributable to a somewhat weak
movie product, a lack of major special events and the movement of cable
operators to impulse ordering on digital cable systems (see below).

     Cost of revenues increased $257,517 and $281,966 for the three and six
months ended June 30, 2001, respectively.  This is primarily due to
hardware sales and service direct costs of $310,969 and $343,459 for the
three and six months ended June 30 2001, respectively, related to the
Source business.  No such costs were incurred during 2000.  ANI service
costs decreased $53,452 and $66,843 for the three and six months ended June
30, 2001, respectively as a result of a decrease in trunk expense of
$39,468 and $57,128 for the three and six months ended June 30, 2001,
respectively.  The trunk decrease was due to retroactive credits received
from MCIWorldcom under the terms of the contract agreement and as a result
in the reduction in buy rates.

     Selling and marketing expenses increased $39,890 and $74,025 for the
three and six months ended June 30, 2001, respectively. This increase is
primarily a result of selling and marketing expenses related to the Source
business, such as $55,427 for payroll, taxes and benefits and $10,717 in
commission expense for the six months ended June 30, 2001.  General and
administrative expenses increased $85,241 and $137,522 for the three and
six months ended June 30, 2001, respectively. The Source business accounts
for $60,589 and $70,547 of the increase for the three and six months ended
June 30, 2001, respectively, due predominately to payroll, taxes and
benefits.  Also contributing to the increase on the ANI side of the
business was an increase in legal expense of $21,562 related to the Source
acquisition, and an increase in accounting expense of $16,314 also related
to the Source acquisition.

     During the six months ended June 30, 2001, TelVue purchased $162,729
of equipment compared to $28,353 purchased during the same period of 2000.
Included in the 2001 equipment purchases is $50,000 of equipment which was
acquired with the purchase of Source.  Also included is the purchase of a
van in the amount of $21,402, of which $13,000 is being financed through
Ford Motor Credit Corp. Depreciation and amortization expense decreased
$30,743 for the six months ended June 30, 2001, as a result of equipment
being fully depreciated.  Depreciation and amortization accounted for 8% of
total operating expenses for the six months ended June 30, 2001, compared
to 12% for the six months ended June 30, 2000.

     TelVue recorded income tax expense of $232,949 and $179,030 for the
six months ended June 30, 2001 and 2000, respectively. TelVue's net
operating loss carryforward was approximately $1,560,000 on a tax-reporting
basis as of June 30, 2001 (see Note 6 to TelVue's financial statements).

     As of June 30, 2001, TelVue was serving approximately 19,100,000 full-
time cable subscribers and 1,700,000 part-time cable subscribers, compared
to approximately 16,600,000 full-time cable subscribers and 1,400,000 part-
time cable subscribers served as of June 30, 2000.  The part-time
subscribers did not significantly contribute to the revenue or service
expenses for the six months ended June 30, 2001 and 2000.

     Total liabilities increased $998,009 and total assets increased
$1,223,054 for the six months ended June 30, 2001.  The increase in total
liabilities was partially a result of an increase in notes payable to the
majority stockholder of $326,315 and notes payable - Dacon Corporation of
$300,000, both which are related to the purchase of Source (see note 7 of
the financial statements), and an increase in accrued dividends of
$211,122.  The increase in assets is primarily attributable to an increase
in goodwill of $1,212,075 as a result of the Source purchase.  TelVue's
days for sales in average accounts receivable was 55 days at June 30, 2001,
compared to 56 days at June 30, 2000.  TelVue does not offer incentives or
discounts to its customers, nor has it changed its credit terms with its
customers.

      TelVue had positive cash flow from operating activities of $671,715
for the six months ended June 30, 2001, compared to $484,756 for the six
months ended June 30, 2000. Ignoring changes in operating assets and
liabilities that result from timing issues, and considering only
adjustments to reconcile net income to net cash provided by operating
activities, TelVue would have positive cash flow from operating activities
of $853,867 for the six months ended June 30, 2001, compared to positive
cash flow from operating activities of $742,054 for the six months ended
June 30, 2000. The increase in cash flow is a result of the increase in
service revenue (see above).

      Since November 2, 1989, TelVue has funded its expansion and
operating deficit from the proceeds from the sale of shares of TelVue's
Common Stock and Preferred Stock to Mr. H.F. Lenfest, TelVue's majority
stockholder ("Mr. Lenfest") and from borrowings from Mr. Lenfest. From
November 1989 to February 1996, TelVue borrowed an aggregate of $6,128,712
from Mr. Lenfest.  The interest rates on the loans range from a floating
rate based on the prime rate of PNC Bank to a fixed rate of 12%. Interest
on one of the loans is payable quarterly and, at the option of TelVue may
be paid by the delivery of shares of TelVue's Preferred Stock at the rate
of one share of Preferred Stock for each one dollar of accrued interest.
Accrued interest on this loan was $143,348 as of June 30, 2001, and there
was no outstanding principal.  Interest due on this loan prior to 1998, in
the amount of $473,682 has been paid with 473,682 shares of Preferred
Stock. In addition, during January 1995, Mr. Lenfest purchased from Science
Dynamics Corporation TelVue's non-interest bearing note in the amount of
$541,000.

     On March 9, 2001, TelVue acquired substantially all of the assets of
Source for $1.3 million (see Notes 2 and 7 to the financial statements).
The assets, which consisted primarily of material contracts with equipment,
software and communication service providers, were purchased for $1,000,000
in cash and $300,000 pursuant to a promissory note. The promissory note has
a term of three years.  Interest only is payable monthly during year one at
the rate of 8% per annum. Beginning in year two, both principal and
interest are payable monthly at the rate of 5.06% per annum. TelVue funded
a portion of the acquisition by borrowing $650,000 from Mr. Lenfest on
March 5, 2001, at an interest rate of prime plus one percent (1%)
compounded and due on or about January 1, 2004.  The acquisition of Source
is part of TelVue's long term business strategy to expand and diversify its
operations.  TelVue is cross-training its technical personnel to work
within the Source business and is also hiring new sales representatives to
promote the Source products.

      TelVue remains dependent upon the deferral of a lump sum repayment of
principal and interest due to Mr. Lenfest to fund operations and capital
expenditures from operating cash flow. Effective as of March 31, 2001,
TelVue obtained from Mr. Lenfest a written agreement stating he will not
demand repayment of his loans or the cash payment of accrued interest on
the loans through January 1, 2003.  On January 1, 1999, TelVue began to pay
current monthly interest payments to Mr. Lenfest from its monthly loan
payment and applying the balance from the monthly payment to either
principal or accrued interest.  TelVue has made payments of $25,000 per
month for the period January 2001 through May 2001, and made a $400,000
payment in June 2001, of which $323,685 was applied to the principal
portion of the Source loan.   The total payments made to Mr. Lenfest during
the six months ended June 30, 2001 were $525,000.  TelVue intends to
continue to make voluntary monthly repayments to Mr. Lenfest throughout
2001. The monthly payment amount may vary depending on the availability of
cash.  TelVue intends to invest cash in the Source business during the
remainder of 2001 in an effort to grow the business. The aggregate
outstanding loan balance due to Mr. Lenfest as of June 30, 2001, is
$867,315 in loan principal and $2,019,000 in accrued interest (see Note 7
to TelVue's financial statements).

     TelVue's ability to fund its operating expenses primarily depends on
three factors: (i) the continued expansion of TelVue's subscriber base,
(ii) the cable industry's buy rates, and (iii) the continued deferral by
Mr. Lenfest of a lump sum cash repayment of his loans to TelVue. Management
believes that its present marketing strategies will further increase the
customer base, although there can be no assurances that TelVue will be able
to attract any further customers or that it will retain its current
customers.  In addition, revenues are affected by the buy rates of
subscribers connected to the Service.  TelVue has no control over the buy
rates and therefore cannot assure that buys rates will increase or will
remain at their current level. As noted above, TelVue experienced a
decrease in the average monthly buy rate from 9.6% to 7.8% for the six
months ended June 30, 2000 and 2001, respectively.

     The decrease in buy rates noted above is partially a result of the
movement of cable operators to impulse ordering on digital cable systems.
Some cable operators have begun deploying digital services to their
customers.  These digital services will allow cable operators to offer
additional channels and to offer additional pay-per-view channels.  Where
the cable operators have activated two-way cable plant (i.e. the operator
is able to send a signal to and receive a signal from its customer), the
digital service can also allow the cable operator to process ordering of
pay-per-view movies and events directly from its customers, without using
TelVue's service.  The long-term effect of the deployment of digital two-
way service on TelVue is not clear.  The deployment of digital cable and
the activation of two-way service require a significant capital commitment
from the cable operator.  In addition, TelVue has found that some cable
operators with digital service have chosen to use TelVue's single number
ordering technology for pay-per-view ordering.  TelVue believes that
TelVue's patent pending Internet pay-per-view technology for pay-per-view
order processing may be used by cable operators as an additional method for
the operator's customers to order pay-per-view movies and events.  TelVue
intends to monitor developments in the rollout of digital services by its
cable operator customers and to attempt to position TelVue to continue to
be the cable operator's provider of choice for processing pay-per-view
orders.  However, there can be no assurances that TelVue will be successful
in this effort.

PART II.  OTHER INFORMATION

ITEM 4.   Submission of Matters to a Vote of Security Holders

TelVue's annual meeting of stockholders was held on June 14, 2001.  The
following five directors were elected:

                                      Vote For        Votes Withheld
                                     -----------      --------------
1.  H.F. Lenfest                     144,887,508            8,500
2.  Frank Carcione                   144,860,508           35,500
3.  Joseph Murphy                    144,887,508            8,500
4.  H. Chase Lenfest                 144,887,508            8,500
5.  Joy Tartar                       144,887,508            8,500


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

(a)    Exhibits

3.1    Certificate of Incorporation of TelVue (incorporated by
       reference to TelVue's Registration Statement on Form S-8, dated
       March 30, 1989 (the "Registration Statement")).

3.2    Bylaws of TelVue (incorporated by reference to TelVue's
       Registration Statement).

3.3    Certificate of Amendment of Certificate of Incorporation of the
       Company, dated April 11, 1990 (incorporated by reference to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1991, (the "1991 Form 10-K")).

3.4    Certificate of Amendment of Certificate of Incorporation of the
       Company, dated March 15, 1991 (incorporated by reference to the 1991
       Form 10-K).

3.5    Form of copy of Amendment of Certificate of Incorporation of the
       Company, filed September 25, 1995 (incorporated by reference to the
       Company's Form 10-QSB for the period ended September 30, 1995, (the
       September 30, 1995 Form 10-QSB)).

4.1    The TelVue Corporation 1999 Stock Option Plan (incorporated by
       reference to Exhibit 99 of TelVue's Registration Statement on
       Form S-8, dated September 23, 1999), (the "1999 Stock Option
       Plan")).

4.2    Form of ISO Option Agreement issued pursuant to the 1999 Stock
       Option Plan (incorporated by reference to TelVue's Annual
       Report on Form 10-KSB for the year ended December 31, 1999, (the
       "1999 Form 10-KSB"))

4.3    Warrant Agreement, dated March 15, 1991, between TelVue and
       H.F. Lenfest (incorporated by reference to TelVue's Annual
       Report on Form 10-K for the year ended December 31, 1990, (the
       "1990 Form 10-K")).

4.4    Certificate of Designation of Class A Preferred Stock (incorporated
       by reference to the September 30, 1990 Form 10-Q).

4.5    Form of NQSO Option Agreement issued pursuant to the 1999 Stock
       Option Plan (incorporated by reference to the 1999 Form 10-KSB).

10.1   Distributorship Agreement, dated November 2, 1989, between the
       Company and Science (incorporated by reference to the 1989 Form
       10-K).

10.2   Stock Purchase Agreement, dated November 2, 1989, between the
       Company and H.F. Lenfest (incorporated by reference to the
       Company's Report on Form 8-K, dated November 15, 1989, (the "1989
       Form 8-K")).

10.3   Shareholders' Agreement, dated November 2, 1989, among TelVue
       and certain of its stockholders (incorporated by reference to the
       Company's 1989 Form 8-K).

10.4   Option Agreement, dated November 2, 1989, among TelVue and
       certain of its stockholders (incorporated by reference to the 1989
       Form 8-K).

10.5   Form of Credit Agreement between TelVue and H.F. Lenfest
       (incorporated by reference to the 1990 Form 10-K).

10.6   Form of Line of Credit Agreement between TelVue and H.F.
       Lenfest (incorporated by reference to the 1990 Form 10-K).

10.7   Subordinated Promissory Note, dated November 15, 1994 the principal
       amount of $541,000 payable to Science Dynamics Corporation
       (incorporated by reference to the 1994 Form 10-KSB).

10.8   Letter Agreement dated November 8, 1990 between Science Dynamics
       Corporation and H.F. Lenfest (incorporated by reference to the
       Company's Report on Form 8-K for November 16, 1990).

10.9   Loan Agreement dated December 24, 1991, between TelVue and H.F.
       Lenfest (incorporated by reference to the 1991 Form 10-K).

10.10  Lease Agreement for office space and the First Amendment to Lease
       dated March 30, 1994 ("Office Lease Agreement"), between TelVue
       and Bloom Associates (incorporated by reference to the 1994 Form 10-
       KSB).

10.11  Letter dated March 31, 2001, from H.F. Lenfest, waiving
       the repayment of loans and accrued interest until January 1,
       2003(incorporated by reference to the March 31, 2001 Form 10-QSB).

10.12  Second Amendment to Office Lease Agreement Dated May 5, 1999,
       between TelVue and Bloom Associates(incorporated by reference
       to the 1999 Form 10-KSB).

10.13  Asset Purchase Agreement by and among TelVue Corporation, J.D.
       Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source
       Communications Group and Jeffrey Kraengel, dated February 14, 2001
       (incorporated by reference to the March 26, 2001 Form 8-K).

11.    Statement re:  Computation of Per Share Earnings (see TelVue's
       June 30, 2001 Financial Statements included herein).

(b)    On May 25, 2001, TelVue filed an amended report on Form 8-K/A
       providing information responsive to the requirements of Item 7 of
       the form regarding the acquisition of Source Communications Group by
       TelVue on March 9, 2001.  TelVue filed a report on Form 8-K on March
       26, 2001 responsive to the requirements of Item 2 of the form.




                             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.


                                            TELVUE CORPORATION



Dated: 8/10/01                      By: /s/Frank J. Carcione
                                       -----------------------------------
                                       Frank J. Carcione
                                       President(Chief Executive Officer)



Dated: 8/10/01                      By: /s/Irene A. DeZwaan
                                        ---------------------------------
                                        Irene A. DeZwaan
                                        Treasurer (Controller)
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