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                   U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                      For the Quarter Ended March 31, 2002
                                       or
         [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                         Commission file number 0-18995

                       INTERLINE RESOURCES CORPORATION
                       -------------------------------
      (Exact name of small business issuer as specified in its charter)

           Utah                                                87-0461653
(State or other jurisdiction of                             (I.R.S. employer
incorporation or organization)                               identification No.)

                 160 West Canyon Crest Road, Alpine, UT 84004
                   (Address of principal executive offices)

      Registrant's telephone number, including area code: (801) 756-3031

     Securities registered pursuant to Section 12(b) of the Exchange Act:

     Securities registered pursuant to Section 12(g) of the Exchange Act:

                          Common Stock $.005 Par Value
                                 Title of Class

  Securities registered pursuant to Section 12(g) of the Exchange Act: None

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the 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____.

APPLICABLE TO REGISTRANTS  INVOLVED IN BANKRUPTCY  PROCEEDINGS  DURING PRECEDING
FIVE YEARS  Indicate by check whether the Registrant has filed all documents and
reports required to be file by Section 12,13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to the  distribution of securities under a plan confirmed
by a court. Yes X No____.

Common stock  outstanding at May 10, 2002 - 14,066,052 shares of $.005 par value
Common stock.


                    DOCUMENTS INCORPORATED BY REFERENCE: NONE


<PAGE>




                                   FORM 10-QSB
                         INTERLINE RESOURCES CORPORATION

                                TABLE OF CONTENTS


PART I. - FINANCIAL INFORMATION

Item 1      Financial Statements                                            Page

            Condensed Consolidated Balance Sheet at March 31, 2002             5
            Condensed Consolidated Statement of Operations for the
            three months ended March 31, 2002 and 2001                         7

            Condensed Consolidated Statements of Cash Flows for the
            three months ended March 31, 2002 and 2001                         8

Item 2      Management's Discussion and Analysis of
            Financial Condition and Results of Operations                      9



PART II. - OTHER INFORMATION

Item 1      Legal Proceedings                                                 16

Item 2      Changes in the Securities                                         16

Item 3      Defaults Upon Senior Securities                                   16

Item 4      Submission of Matters to a Vote of Security Holders               17

Item 5      Other Information                                                 17

Item 6(a)   Exhibits                                                          17

Item 6(b)   Reports on Form 8-K                                               17

            Signatures                                                        18

                                       2
<PAGE>


                 FORWARD LOOKING INFORMATION AND RISK FACTORS


     Interline Resources  Corporation (the "Company") or its representatives may
make forward looking statements,  oral or written,  including statements in this
report's Management's Discussion and Analysis of Financial Condition and Results
of  Operation,  press  release  and filings  with the  Securities  and  Exchange
Commission,  regarding  estimated future net revenues from  operations,  planned
capital expenditures  (including the amount and nature thereof),  the effects of
the Company's prior Bankruptcy  proceeding,  the Company's  projected  financial
position,  results  of  operations,   business  strategy  and  other  plans  and
objectives  for  future   operations.   These  statements  are   forward-looking
statements,  within the meaning of Section 27A of the Securities Act of 1993 and
Section 21E of the Securities Exchange Act, which reflect  Management's  current
views with respect to future events and financial performance.

     Although  the Company  believes  that the  expectations  reflected in these
forward looking  statements are  reasonable,  there can be no assurance that the
actual results or  developments  anticipated by the Company will be realized or,
even if substantially  realized, that they will have the expected effects on its
business or results of operations. Such forward-looking statements involve known
and unknown  risks,  uncertainties  and other factors which may cause the actual
results,  performance or achievements of the Company to be materially  different
from any future  results,  performance or  achievements  expressed or implied by
such forward-looking statements. Such factors include but are not limited to the
outcome of the Company's current Bankruptcy Proceeding, the timing and extent of
changes  in  commodity   prices,   unforeseen   engineering  and  mechanical  or
technological  difficulties in connection with the Company's business operations
and other risks.

     These   forward-looking   statements  are  subject  to  certain  risks  and
uncertainties  including,  but not limited to, future financial  performance and
future events,  competitive pricing for services,  costs of obtaining capital as
well as national,  regional and local economic conditions.  Actual results could
differ materially from those addressed in the forward-looking statements. Due to
such uncertainties and risks,  readers are cautioned not to place undue reliance
on such forward-looking statements, which speak only as of the date whereof.

     All subsequent oral and written forward-looking  statements attributable to
the Company or persons  acting on its behalf are  expressly  qualified  in their
entirety by these  factors.  The Company  assumes no obligation to update any of
these statements.

                                       3
<PAGE>



                               INTERLINE RESOURCES
                                   CORPORATION
                                AND SUBSIDIARIES

                                 PART I - ITEM 1
                              FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 March 31, 2002






The condensed  financial  statements included have been prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements  prepared in  accordance  with U.S.  generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and  regulations,  although the Company  believes that the disclosures are
adequate to make the information  presented not misleading.  The Company assumes
that the user of this interim  financial  information  has read or has access to
the audited  financial  statements for the preceding fiscal  year----and in that
context,  this  disclosure is adequate for a fair  presentation of the Company's
financial position.

In the opinion of the Company,  all  required  adjustments,  consisting  of only
normal  recurring  adjustments as of March 31, 2002, have been made. The results
of  operations  for the interim  period are not  necessarily  indicative  of the
results to be expected for the entire year.


                                       4
<PAGE>


                         INTERLINE RESOURCES CORPORATION
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet
                                   (Unaudited)


                                                                     March 31,
                                                                       2002
                                                                  --------------
Assets

Current assets:
     Cash and cash equivalents                                    $      98,925
     Accounts receivable - trade                                        375,342
     Insurance proceeds receivable                                      441,000
     Inventories                                                         66,203
     Other current assets                                                63,308
                                                                  --------------
          Total current assets                                        1,044,778

Property, plant and equipment, net                                    4,041,490
Technology and marketing rights, net                                    247,857
Investment in affiliate                                                  47,154
                                                                  --------------

               Total assets                                           5,381,279
                                                                  ==============






  The accompanying notes are an integral part of these consolidated condensed
                             financial statements.


                                       5
<PAGE>

                         INTERLINE RESOURCES CORPORATION
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet
                                   (Unaudited)

                                                                     March 31,
                                                                       2002
                                                                  --------------
Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable                                             $   1,023,708
     Accrued liabilities                                                 98,475
     Related party accrued interest                                     596,775
     Note payable, related party                                      3,595,920
     Current portion of long-term debt                                  162,052
                                                                  --------------
          Total current liabilities                                   5,476,930

Long-term debt less current maturities                                  434,502
                                                                  --------------
          Total liabilities                                           5,911,432

Stockholders' deficit:
     Preferred stock - $.01 par value.  25,000,000
       shares authorized; no shares issued and                                -
       outstanding.
     Common stock - $.005 par value.  100,000,000
       shares authorized; 14,066,052 shares issued and
       outstanding.                                                      70,330
     Additional paid-in capital                                       9,209,058
     Accumulated deficit                                             (9,809,541)
                                                                  --------------

               Total stockholders' deficit                             (530,153)
                                                                  --------------

               Total liabilities & stockholders' deficit          $   5,381,279
                                                                  ==============









  The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                       6
<PAGE>


                         INTERLINE RESOURCES CORPORATION
                                AND SUBSIDIARIES
                Condensed Consolidated Statement of Operations
                                   (Unaudited)

                                                         Three months ended
                                                              March 31,
                                                      -------------------------
                                                          2002         2001
                                                      ------------ ------------

Revenue                                               $   904,447  $ 1,271,530

Direct costs                                              532,948      820,836
                                                      ------------ ------------
Gross margin                                              371,499      450,694

Selling, general and administrative expenses              332,398      256,262
Research and development                                    1,226        1,730
Depreciation, depletion and amortization                  130,637      212,059
                                                      ------------ ------------
Loss from operations                                      (92,762)     (19,357)

Other income (expense) net
      Interest expense, principally to related party     (148,192)    (108,630)
      Gain on disposal of assets                          441,000            -
                                                      ------------ ------------
Net income (loss) before income taxes                     200,046     (127,987)

Income taxes                                                    -            -
                                                      ------------ ------------
Net income (loss)                                     $   200,046  $  (127,987)
                                                      ============ ============
Income (loss) per common share - basic                $      0.01  $     (0.01)
                                                      ============ ============
Income (loss) per common share - diluted              $      0.01  $     (0.01)
                                                      ============ ============

Weighted average shares - basic                        14,066,052   14,066,052
                                                      ============ ============
Weighted average shares - diluted                      14,611,052   14,066,052
                                                      ============ ============



  The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                       7
<PAGE>


                         INTERLINE RESOURCES CORPORATION
                                AND SUBSIDIARIES
                Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                         Three months ended
                                                              March 31,
                                                      -------------------------
                                                          2002         2001
                                                      ------------ ------------
Cash flows from operating activities:
     Net income (loss)                                $   200,046  $  (127,987)
     Adjustment to reconcile net income (loss) to net
       cash (used in) provided by operating activities:
         Depreciation, depletion and amortization         130,637      212,059
         Gain on disposal of asset                       (441,000)           -
         (Increase) decrease in:
              Accounts receivable                         (79,952)      (1,682)
              Inventories                                       -       27,113
              Other current assets                        (12,404)      (5,576)
          Increase (decrease) in:
              Accounts payable                           (411,860)     (14,505)
              Accrued liabilities                           6,514      122,433
              Related party accrued interest              125,857            -
                                                      ------------ ------------
                Net cash (used in) provided by
                operating activities                     (482,162)     211,855

Cash flows from investing activities:
     Proceeds from insurance policy                       715,425            -
     Purchase of property, plant & equipment             (149,893)           -
                                                      ------------ ------------

               Net cash provided by investing
               activities                                 565,532

Cash flow used in financing activities-
     Payment on long-term debt                            (21,621)     (36,119)
                                                      ------------ ------------

Net increase in cash                                       61,749      175,736

Cash, beginning of period                                  37,176      263,029
                                                      ------------ ------------
Cash, end of period                                   $    98,925  $   438,765
                                                      ============ ============
Supplemental Cash Disclosure
      Interest Paid                                   $    20,685  $    24,753

      Taxes Paid                                      $         -  $         -

  The accompanying notes are an integral part of these consolidated condensed
                             financial statements.

                                       8
<PAGE>

PART 1 - ITEM 2.

                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

     Interline Resources  Corporation (the Company),  is a Utah corporation with
its  principal  and  executive  offices  located at 160 West Canyon  Crest Road,
Alpine,  Utah 84004,  telephone (801) 756-3031.  The Company's current operating
subsidiaries  are (1) Interline  Energy Services,  Inc.  ("Interline  Energy") a
Wyoming  corporation which manages the Company's oil and gas operations  located
in Wyoming which consist of natural gas gathering,  natural gas processing, over
the road NGL truck  transportation  and oil well  production,  and (2) Interline
Hydrocarbons,  Inc. ("Interline  Hydrocarbons") a Wyoming corporation which owns
and operates the Company's used oil refining technology.

Interline Energy Services - Oil and Gas Operations.

     The Company has been  engaged in the oil and gas industry  since 1990,  and
currently operates in east-central  Wyoming near Douglas.  The Company's oil and
gas operations include the Well Draw Gas Plant, a crude-oil  gathering pipeline,
a 20.4% interest in the Hat Creek  Partnership,  NGL trucking and four producing
oil and gas wells.

Well Draw Gas Plant
     The Well Draw Gas Plant (the  "Plant"),  is a natural gas  liquids  (NGL's)
processing plant with a 3,500 barrel per day fractionator. On August 11, 2001, a
major fire  erupted at the Plant  resulting in  destruction  of much of the Well
Draw processing and fractionating equipment. Because of the fire the Company was
unable to process gas or liquids from August 11, 2001 through the end of January
2002.  During that time the Company  continued  to provide  liquid  treating and
other  services  at the  plant for a  significantly  reduced  volume.  The plant
returned to normal operations in early February 2002. The Company owns a natural
gas gathering  pipeline  system that supplies a small  percentage of liquids for
the Plant.  However,  most of the NGLs are trucked  into the Plant from  outside
sources.  Under normal  operations  the Plant  processes  and extracts NGLs from
gathered gas. The fractionation process separates the constituent  components of
these  liquids  and the NGLs  delivered  to the Plant by truck  into  commercial
grades of propane, butane and natural gasoline.

     The Company buys mixed liquids from a variety of sources,  transports  them
to Well Draw, fractionates the liquids and re-markets these products for its own
account.  The Company also  fractionates  liquids for others on a fee basis. The
plant processed and  fractionated a total of 56,292 gallons a day of natural gas
liquids for the three months ended March 31, 2002,  compared to 78,584 gallons a
day for the three months ended March 31, 2001. Of the total gallons fractionated
and processed,  3,231 gallons per day was for the Company and 53,061 gallons per
day for others  during  2002,  as compared  to 3,717 and 74,867  gallons per day
respectively for the three months ended March 31, 2001.

                                       9
<PAGE>

Merit Energy Company Agreement
     Since  1994 the  Company  has  processed  NGL's  produced  at Merit  Energy
Company's (Merit) Baroil Plant located in Wyoming. Merit supplies more NGL's for
processing than any of the Company's other customers.  The Company's most recent
service agreement with Merit expired on March 31, 2002, but has been extended on
a  month-to-month  basis while the parties  negotiate the terms of a replacement
contract. During the three months ended March 31, 2002, the Company processed an
average of 43,609  gallons per day of Merit liquids  compared to 40,976  gallons
per day for the three months ended March 31, 2001. The Merit contract  accounted
for 77.47% of the total NGL's processed for the 2002 period compared with 52.14%
for 2001.

Kinder Morgan (formerly KN Gas Gathering) Agreement
     During 1998,  the Company  entered into an agreement with KN Gas Gathering,
Inc.  ("KNGG") to process  NGL's on a month to month basis.  On October 7, 1999,
all  assets of KNGG were  purchase  by Kinder  Morgan  ("KM").  During the three
months ended March 31, 2002,  the Company  processed an average of 6,485 gallons
per day of NGLs under the KM contract compared to 19,405 gallons per day for the
same  period in 2001.  The KM  contract  accounted  for 11.52% of the total NGLs
processed by the plant for the three  months  ended March 31, 2002,  compared to
24.69% of the total NGLs process for the three months ended March 31, 2001.

Conoco Pipeline
     In 1995 the Company purchased a 180-mile crude oil pipeline with associated
pumping  stations and storage tanks from Conoco Pipeline Company  (Conoco).  The
pipeline transports oil from oil producing fields in Converse County, Wyoming to
Conoco's  Lance Creek Station  where it connects  with an  interstate  crude oil
pipeline  system.  The Company  receives  revenues from  operation of the Conoco
Pipeline by charging a transportation fee. The pipeline gathered and transported
approximately 44,121 barrels of oil during the three months ended March 31,2002,
compared to 52,840 for the three  months  ended March  31,2001.  The  throughput
reduction is attributable to normal production declines.

Hat Creek Partnership
     The Hat Creek Partnership, of which Interline Energy owns a 20.4% interest,
owns  working  interests  in the CH Federal  well and a 13-mile  gathering  line
connected to the Company's gas gathering system.

Oil Well Production
     The  Company  owns  working  interests  in four wells  located in  Converse
County,  Wyoming.  The Company is also the operator of these  wells.  During the
three  months  ended March 31,  2002,  the wells  produced  approximately  1,335
barrels of oil and 1,436 Mcf of natural  gas  compared  to  approximately  1,000
barrels of oil and 1,629 Mcf of natural gas for the three months ended March 31,
2001.

NGL Trucking Operations
     The   Company's   NGLs   transportation   operation   consists   of   seven
tractor-trailer-pup  combination units that are used to move unprocessed natural
gas liquids to the Plant for fractionation,  and to deliver propane,  butane and
natural  gasoline  from the Plant to  various  refiners,  chemical  plants,  and

                                       10
<PAGE>

end-users. When circumstances permit, these trucks also move liquids on a common
carrier basis for third  parties.

     During the three months ended March 31, 2002, the Company's trucks traveled
a combined total of 274,126 miles and carried  approximately  12 million gallons
of raw and finished  product  compared to 210,604 miles and 9 million gallons of
raw and finish product for the quarter ended March 31, 2001.

Interline Hydrocarbon - Used Oil Refining.
     In January 1993, the Company  acquired  certain patent rights to a used oil
reprocessing  technology from Petroleum  Systems Inc.,  ("PSI").  However,  as a
result  of  substantial   independent  research  and  development  of  used  oil
technologies and processes since 1993, the Company  developed a new process that
does not utilize the PSI  technology.  As a result,  on  September  10, 1998 the
Company  reassigned  to PSI all the  intellectual  rights  obtained from PSI. In
making that  re-assignment,  the Company  assigned  all rights it had to receive
royalties from any plants that used PSI technology. On May 28, 1998, the Company
filed a patent  application  in the United  States  Patent  Office for a new and
alternative  method from the PSI technology  for  processing  used oil. This new
technology was used in the Korean, Australian and Spanish Plants.

     To date, the Company has  constructed  or licensed six used oil plants,  of
which 2 have since been  de-commissioned.  The Company has  continuing  contract
relationships with three of the remaining properties.  For a discussion of those
relationships refer to the Company's December 31, 2001, 10-KSB filing.

     Revenues to the  Company,  from its used oil refining  technology  can come
from five  sources:  1)  profits  made from  constructing  used oil  plants,  2)
granting exclusive  franchise  territories to licensees,  3) receiving royalties
based on either production or a flat yearly licensing fee, 4) taking partnership
interests in  operating  plants by either  contributing  the  technology  and/or
making cash contributions for partnership interests and, 5) supplying technology
and  construction  plans along with process  consultation  services and start-up
assistance to customers  wishing to construct their own plant (as opposed to the
Company supplying a "turn-key" facility).

     Based on the experiences  with the six plants that have been constructed or
licensed by the Company, management prefers not to perform contract construction
services.  While the Company  desires to own interest(s) in one or more domestic
refineries,  financing such participation may be difficult for the Company until
its cash position improves.  Meanwhile, the Company expects to capitalize on the
technology by licensing the technology,  selling  construction  plans for plants
and providing technical consultation to the purchaser.

     It has become  evident that  demanding  royalties  based on  production  is
impractical in many  situations  and countries.  Unless and until the re-refined
oil  produced in a plant can be sold at prices  comparable  to base  lubricating
oils,  collecting royalties based on production will be difficult.  This reality
was experienced in Korea,  where the royalty was terminated for the first plant,
and in England  where the  royalties  were reduced and deferred  until the plant
becomes  profitable.  The best prospects for employing the Company's  technology

                                       11
<PAGE>

are in countries where governmental  concessions provide economic incentives for
collecting and processing used oils.

     Management  still  believes  that there  exists  economic  support  for and
interest in the used oil refining  technology.  The Company continues to receive
inquiries  about its  patented  process  but has  become  more  selective  as to
potential  purchasers.  Because of the  substantial  knowledge  obtained  by the
Company about the complicated used oil supply and demand picture the Company has
become much more active in helping potential  customers  evaluate the markets in
which they would compete.

Results of Operations

     The following analysis of the financial condition and results of operations
should be read in conjunction  with the Financial  Statements and Notes thereto,
included elsewhere in this report.

Total Revenues For Three Months Ended March 31, 2002 and 2001

     Operating revenues decreased $367,083,  or 28.9%, to $904,447 for the three
months ended March 31 2002, as compared to $1,271,530 for the three months ended
March 31, 2001. The Company's  total  operating  revenues were obtained from oil
and gas transportation and processing .

     The Well Draw fractionation  facility, was under construction from the date
of its  destruction by fire on August 11, 2001,  until it was returned to normal
operations in mid-February  2002. The shortened  production period to only seven
out of a  possible  thirteen  weeks  is a  significant  reason  for the  reduced
revenues and production costs. A resulting major reduction in fractionation fees
and product sales was only  partially  offset by the increase in  transportation
revenues.

     The Company's Oil & Gas Operations revenue for the three months ended March
31, 2002 and 2001 were as follows:

   Oil & Gas Operations Revenue For Three Months Ended March 31, 2002 and 2001
   ---------------------------------------------------------------------------
                                   2002     %                2001      %

Liquids (NGL) Sold               $97,205 10.75%            $276,882 21.78%
Fractionation Fees               295,761 32.70%             575,625 45.27%
Transportation Fees              452,531 50.04%             317,872 25.00%
Crude Tariff Fees                 33,080 3.66%               39,365 3.10%
Crude Oil Sold                     8,366 0.92%               32,085 2.52%
Residue Gas Sold                  17,137 1.89%               24,957 1.96%
Other                                367 0.04%                4,744 0.37%

Total Revenue                   $904,447 100%            $1,271,530 100%

                                       12
<PAGE>



     The reduced  proportion of revenue  generated by "Liquids  (NGL) Sold" is a
direct result of the  shortened  production  period caused by the fire.  Without
fractionation  capability  at the Well Draw plant the  Company  did not have the
ability to produce NGL component products for sale.

     Revenue from  "Fractionation  Fees" was also significantly  impacted by the
shortened  production  period.  First quarter 2002  fractionation  revenues were
51.4%  of  fractionation  revenues  for the  comparable  period  in  2001.  This
corresponds  closely  with the  proportion  of the  three  months  in which  the
fractionation process was functional at the Well Draw plant.

     During the seven  months that the Well Draw plant was being  re-constructed
the Company's  trucking  operation  continued to function and generate revenues.
This was accomplished by management's ability to secure transportation contracts
not  originating  nor  terminating  at the  Well  Draw  plant.  Results  of this
marketing effort are listed above.  Revenues from  "Transportation  Fees" during
the first  three  months of 2002  increased  $134,659,  or 42.4%,  over the same
period  the prior  year.  The  proportion  of total  revenue  generated  by this
business  increased  from 25% in Q1 2001 to 50% in Q1 2002  and is a result  not
only of the revenue  increase but also of the revenue  decreases in liquids sold
and fractionation fees.

Used Oil Refining Revenues
     Since  it  commenced  operations  in the used oil  refining  business,  the
Company has primarily derived revenues attributed to fees for engineering, plant
design,  license,  exclusivity or other services  associated  with the Company's
used oil refining  technology.  The revenue  attributed to the used oil refining
business varies  significantly  from quarter to quarter reflecting the status of
the Company's fees and plant design services.

     Used oil  refining  revenues  contributed  $0 total  revenues for the three
month period ended March 31, 2002.

Direct Costs
     Direct costs decreased $287,888, or 35.1%, to $532,948 for the three months
ended March 31, 2002,  compared to $820,836 for the three months ended March 31,
2001.  As a percent of revenues,  direct costs  decreased to 58.9% for the three
months  ended March 31, 2002  compared to 64.6% for the three months ended March
31, 2001.

     The  $287,888  decrease in direct  costs was  largely due to the  shortened
production period compounded by lower market cost for natural gas products.  The
average  market  price for natural gas  products  was 46% lower during the first
three months of 2002 than during the same period in 2001.  Producer payments and
plant fuel purchases decreased $208,565 or 65.9% to 108,033 for the three months
ended March 31, 2002  compared to $316,598  for the three months ended March 31,
2001.  The  shortened  length of plant  operation  during the three months ended
March 31, 2002 also  contributed  to the  proportional  decrease in direct costs
such as repairs, chemicals and supplies.

     Miles  logged by  drivers in the  Company's  trucking  operation  increased
63,522 or 30.2%  during the first  quarter of 2002 over the same period in 2001.
As a result  fuel costs  increased  $27,851  or 43.8% to  $91,459  for the three
months ended March 31, 2002 compared to $63,608 for the three months ended March
31, 2001.

                                       13
<PAGE>

      There were no direct costs during the current period attributable to used
oil refining operations.

Selling, General and Administrative
     Selling,   general  and  administrative  expenses  consist  principally  of
salaries and benefits, travel expenses, insurance, legal and accounting, outside
contract services,  information technical services and administrative  personnel
of the Company.

     Selling, general and administrative expenses increased $76,136, or 29.7% to
$332,398  for the quarter  ended March 31,  2002,  compared to $256,262  for the
three months ended March 31, 2001.  As a percent of revenues,  selling,  general
and administrative  expenses increased to 36.8% for the three months ended March
31, 2001, compared to 20.2% for the three months ended one year earlier.

     The  increase in selling,  general and  administrative  expenses was mainly
attributed to increases in administrative  wages and travel expenses.  Increased
administrative  attention was given to the final stages of reconstruction at the
Well Draw facility.  Many of these salary and travel costs were not capitalized.
Also,  in  response to  heightened  interest in the  Company's  oil  re-refining
technology,  management  hired an  additional  engineer  resource  to  assist in
anticipated re-refining projects.

Depreciation and Amortization
     Depreciation  and  amortization  expenses  decreased  $81,422  or  38.4% to
$130,637 for the three months ended March 31, 2002, compared to $212,059 for the
three months ended March 31, 2001.  As a percent of revenues,  depreciation  and
amortization  expenses  decreased to 14.4% for the 2002 period compared to 16.7%
for the three months ended March 31, 2001.

Research and Development
     Research  and  development   expenses  were  mainly   attributable  to  the
development and enhancement of the Company's used oil refining  technology.  The
Company will continue to incur research and development expenses as it continues
to develop its used oil refining technology.

     Research and development  expenses  decreased $504, or 29.1%, to $1,226 for
the three months  ended March 31, 2002,  compared to $1,730 for the three months
ended  March 31,  2001.  As a percent  of  revenues,  research  and  development
expenses remained at 0.1% for the quarter ended March 31, 2002.

Loss from operations
     Loss from operations increased $73,405, or 379.2%, to a loss of $92,762 for
the three  months  ended  March 31,  2002,  compared  to a loss of $19,357  from
operations  for the three months ended March 31, 2001.  The $73,405  decrease in
income from operations was attributed to the shortened  production period, which
resulted in a 28.9%  decrease in revenues and an  associated  35.1%  decrease in
total costs.

Other income (expenses)
     Interest expense to a related party increased $39,562 or 36.4%, to $148,192
for the three months  ended March 31,  2002,  compared to $108,630 for the three
months  ended March 31,  2001.  This  increase in interest  expense to a related

                                       14
<PAGE>

party was primarily  attributable  to the Company note  agreement with its major
creditor.  The Company  recognized a gain of $441,000  related to its  insurance
policy  on the Well Draw  facility  as a result of the fire  which  occurred  in
August  2001.  On September  22, of 1999,  2000 and 2001 the Company did not pay
this major creditor the installments due under the note agreement.  As a result,
the note  ($3,595,920)  is currently in default.  Under the note  agreement,  if
default  occurs any  installments  not paid when due shall bear an  increase  in
interest to fourteen percent (14%).

Liquidity and Capital Resources
     Sources  of  liquidity  for  the  Company  are  revenues  from  oil and gas
operations and revenues from the sale of its  hydrocarbon  refining  technology.
Currently,  the only consistent  ongoing revenue sources to the Company are from
its oil and gas operations in Wyoming.  The Company  receives  revenues from its
used oil  refining  technology  when a sale or  license  is  executed.  On-going
royalty fees will be received from the  Australia  Plant (see Part II - Item 1 -
Legal  Proceeding),  and the Spanish Plant as  commissioning  and acceptance are
completed.  While the Company continues to work with potential purchasers of its
technology, such sales and expected revenues are uncertain and unpredictable.

     In an effort  to cure the  default  status  with its  major  creditor,  the
Company is seeking to sell its Alpine Office Building  located in Utah. Also the
Company is trying to raise cash from the marketing of it refining  technology or
raise additional  financing through the sale of equity,  sale of debt or assets.
If the  Company  is  unable to raise  additional  cash it may be forced to cease
operations and liquidate the assets of the Company.

     Management has put strict  restraints on all capital  expenditures with the
exception of the  replacement of  fire-damaged  equipment or any other necessary
expenditure to maintain current operations.

     The Company's net cash provided during the quarter ended March 31, 2002 was
$61,749  compared to $175,736 for the same period ended March 31, 2001.  The net
decrease of $113,987 in cash  provided for the quarter  ended March 31, 2002 was
primarily a result lower sales during that period  compared with the same period
in the prior year.

                                       15
<PAGE>


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Transpacific Industries - Australia
     In September 1996, the Company signed an exclusive  purchase agreement with
Transpacific Group of Companies granting them exclusive rights to the Technology
for all of Australia.  Under the terms of the agreement,  Transpacific purchased
from the Company a 24,000-gallon-per-day plant for $3.4 million.

     The plant was completed and has been  operating  since August of 1998.  Per
the purchase agreement,  upon completion of the plant the Company is entitled to
retention monies in the amount of $186,509 and ongoing  royalties of 6 cents per
gallon.  Since the inception of the startup of the Australian plant, the Company
has tried on many occasions to receive these outstanding sums and to resolve the
royalty issues with  Transpacific.  These negotiations have not been successful.
In February of 2000,  the Company  hired legal  counsel in  Australia  to pursue
money due under the purchase  agreement.  On July 19, 2000,  the Company filed a
claim in the Queensland Supreme Court seeking payment of the royalties due under
the License Agreement. The action is currently in the discovery stage.

Item 2. Changes in Securities:

      None

Item 3. Defaults Upon Senior Securities:

     On September 9, 1998, the United States  Bankruptcy  Court for the District
of Utah  confirmed  the plan of  reorganization  under  Chapter  11. The Company
reached  agreement  with its major  creditor  during the Chapter 11 case and the
terms of the agreement were incorporated in the plan. The terms of the agreement
included a new trust deed note dated September 22, 1998 for $3,600,000, together
with interest at the rate of 7% per annum on the unpaid  principal.  The Company
is obligated to make  quarterly  payments of all accrued  interest  beginning on
December 22, 1998 and continuing  until  September 22, 2002. The Company is also
obligated  to make  principal  payments  of  $750,000  on  September  22,  1999,
$1,000,000 on September 22, 2000, $1,000,000 on September 22, 2001, and $850,000
on September 22, 2002.  To date none of the  principal  payments have been made.
The note is secured by Trust Deeds securing a security interest in the Company's
Alpine Office located in Alpine,  Utah and a security  interest in all assets of
Interline Energy Service,  Inc. The Company executed a new Pledge Agreement with
this major creditor pledging stock of all subsidiaries of the Company.

     In August of 1999, the Company  received $4,080 for its interest in the Hat
Creek #2 well. Under the pledge agreement with this major creditor, all proceeds
from the sell of Company assets will go to pay down the principal portion of the
note.  After  applying  the  proceeds  from  this sell the note was  reduced  to
$3,595,920.

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<PAGE>

     As of May 13,  2002,  the Company  has not paid the first  three  principal
payments due under the trust note. As a result,  the note for  $3,595,920 due to
this  major  creditor  is  currently  in  default.  Under the trust deed note if
default  occurs in the payment of  installments  of principal  or interest,  the
holder  thereof,  at its option and  without  notice or demand,  may declare the
entire principle  balance and accrued interest due and payable.  Also if default
occurs any installments not paid when due shall bear interest  thereafter at the
rate of fourteen  percent  (14%) per annum  until  paid.  The note is secured by
Trust Deeds securing a security  interest in the Company's Alpine Office located
in  Alpine,  Utah and a security  interest  in all  assets of  Interline  Energy
Service,  Inc. The Company  executed a pledge agreement with this major creditor
pledging stock of all  subsidiaries of the Company.  Per the trust deed note and
pledge agreement,  upon default,  the major creditor can exercise his rights and
sell or demand the Company to sell the  collateral or any part of the collateral
to cure the  installments  in default or the total due under the note. As of May
13, 2002, the Company also has not made the required interest payments.

     In an effort  to cure the  default  status  with its  major  creditor,  the
Company is seeking to sell its Alpine Office Building  located in Utah. Also the
Company is trying to raise cash from the marketing of it refining  technology or
raise additional  financing through the sale of equity,  sale of debt or assets.
If the  Company  is  unable to raise  additional  cash it may be forced to cease
operations and liquidate the assets.

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

      None

Item 5. Other Information:

      None

Item 6(a). Exhibits:

      None

Item 6(b) Form 8-K:

      None

                                       17
<PAGE>



                                     SIGNATURES


     In  accordance  with Section 13 or 15(d) of the  Exchange  Act, the Company
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: May 13, 2002                 INTERLINE RESOURCES CORPORATION


                                    By/s/ Michael R.  Williams
                                      ----------------------------
                                       Michael R. Williams
                                       Chairman of the Board and
                                       Chief Executive Officer


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the Company and in the capacities and on the
dates indicated.

Date              Title             Signature

May 13, 2002      Chairman          /s/ Michael R.  Williams
                  and CEO           ------------------------
                                    Michael R. Williams

May 13, 2002      President/        /s/ Brice Bergquist
                  And COO           -------------------------------
                                    Brice Bergquist


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