---------------------------------------------------------------------
                   U.S. SECURITIES AND EXCHANGE COMMISSION
                 Washington, D.C. 20549Washington, 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, 2001
                                      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 March 26, 2001 -  14,066,052  shares of $.005 par
value Common stock.


                  DOCUMENTS INCORPORATED BY REFERENCE: NONE







                                      1

<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, 2001      5

            Condensed Consolidated Statement of Operations for the
            three months ended March 31, 2001 and 2000                  7

            Condensed Consolidated Statements of Cash Flows for
            three months ended March 31, 2001 and 2000                  8

Item 2      Management's Discussion and Analysis of
            Financial Condition and Results of Operations               10



PART II. - OTHER INFORMATION

Item 1      Legal Proceedings                                           20

Item 2      Changes in the Securities                                   21

Item 3      Defaults Upon Senior Securities                             21

Item 4      Submission of Matters to a Vote of Security Holders         22

Item 5      Other Information                                           22

Item 6(a)   Exhibits                                                    22

Item 6(b)   Reports on Form 8-K                                         22

            Signatures                                                  23










                                      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, 2001






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 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  presumes 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  adjustments  consisting  of only  normal
recurring  adjustments  as of March 31,  2001,  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,
                                                                2001

Assets

Currrent assets:
     Cash and cash equivalents                              $   438,765
     Accounts receivable - trade                                544,479
     Inventories                                                 46,497
     Other current assets                                        23,099
                                                            -------------

          Total current assets                                1,052,840

Property, plant and equipment                                 6,722,317
Accumulated depreciation and depletion                       (3,538,958)
                                                            ------------

          Net property, plant & equipment                     3,183,359

Technology and marketing rights                                 390,714
                                                            ------------

               Total assets                                 $ 4,626,913
                                                            ============













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,
                                                           2001

Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable                                 $    518,286
     Accrued liabilities                                   350,999
     Note payable, related party                         3,595,920
     Current portion of long-term debt                     276,328
                                                      ------------

          Total current liabilities                      4,741,533
                                                      ------------

Long-term debt less current maturities                     439,507
                                                      ------------

          Total liabilities                              5,181,040

Stockholders' equity:
     Preferred stock - $.01 par value.  25,000,000
       shares authorized; 1,000,000 series A shares
       authorized; 0 series A shares issued and o/s             -
     Common stock - $.005 par value.  100,000,000
       shares authorized; 14,066,052 shares
       outstanding at March 31, 2001                       70,330
     Additional paid-in capital                         9,209,058
     Retained earnings                                 (9,833,515
                                                      -----------

            Total stockholders' equity                   (554,127)
                                                      -----------

            Total liabilities & stockholders' equity  $ 4,626,913
                                                      ===========







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,
                                                   -----------------------------
                                                        2001           2000
                                                   --------------  -------------

Revenue                                            $   1,271,530   $  1,316,803

Direct costs                                             820,836        825,144
                                                   --------------  -------------

Gross margin                                             450,694        491,659

Selling, general and administrative expenses             256,262        258,509
Research and development                                   1,730          7,128
Depreciation, depletion and amortization                 212,059        184,617
                                                   --------------  -------------

Income (loss) from operations                            (19,357)        41,405

Other income (expnese) net
     Interest income (expense)                           (13,976)       (17,082)
     Interest expense, related party                     (94,654)       (76,619)
     Gain from sale of assets                                  -              -
                                                   --------------  -------------

Net income (loss) before income taxes              $    (127,987)  $    (52,296)

Income tax benefit
     Current                                                   -              -
     Deferred                                                  -              -
                                                   --------------  -------------

Net income (loss)                                  $    (127,987)  $    (52,296)
                                                   ==============  =============

Income (loss) per common share -
  basic and diluted                                $       (0.01)  $      (0.00)
                                                   ==============  =============

Weighted average shares - basic and diluted           14,066,052     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,
                                                      --------------------------
                                                           2001         2000
                                                       ------------  -----------

Cash flows from operating activities:
  Net income (loss)                                    $  (127,997)  $  (52,296)
  Adjustment to reconcile net income (loss) to net
    cash (used in) provided by operating activities:
      Depreciation, depletion and amortizatio              212,059      184,617
      Gain on disposal of asset                                  -            -
      (Increase) decrease in:
        Accounts receivable                                 (1,682)      28,043
        Inventories                                         27,113        5,433
        Other current assets                                (5,576)       4,916
        Note receivable                                          0       77,500
      Increase (decrease) in:
        Accounts payable                                   (14,505)     100,560
        Accrued liabilities                                122,433       21,128
        Deferred income
                                                       ------------  -----------

          Net cash provided (used) by operating            211,855      369,901

Cash flows from investing activities:
  Purchase of property, plant & equipment                        0     (102,710)
                                                       ------------  -----------

  Net cash used in investing activities                          0     (102,710)










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







                                      8

<PAGE>



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

                                                          Three months ended
                                                               March 31,
                                                      --------------------------
                                                           2001          2000
                                                      -------------  -----------

Cash flows from financing activities:
     Proceeds from debt obligations                                      72,600
     Payment on long-term debt                             (36,119)     (35,389)
                                                      -------------  -----------

     Net cash provided (used) by financing activities      (36,119)      37,211
                                                      -------------  -----------

Net increase (decrease) in cash                            175,736      304,402

Cash, beginning of period                                  263,029      255,735
                                                      -------------  -----------

Cash, end of period                                     $  438,765   $  560,137
                                                      =============  ===========






















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







                                      9

<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.

     On September  26,  1997,  the Company  filed a Petition for  Reorganization
under  Chapter 11 (the  Petition)  of the United  States  Bankruptcy  Code.  The
Company continued its operations as a debtor-in-possession  under the Bankruptcy
Code.  The Company's  subsidiaries  did not join the Company in the Petition and
were not directly involved in the Bankruptcy Reorganization Proceedings.

     On June 18, 1998, the Company filed a Plan of Reorganization and Disclosure
Statement to the Plan of Reorganization  with the United States Bankruptcy Court
for the District of Utah, Central Division. On July 14, 1998, the Company's Plan
of Reorganization  and Disclosure  Statement to the Plan of  Reorganization  was
approved and circulation  thereof was authorized by the United States Bankruptcy
Court for the District of Utah, Central Division.

     On September  10, 1998,  the Plan of  Reorganization  was  confirmed by the
United States Bankruptcy Court for the District of Utah. As a result, restraints
on the  activities  of Interline  imposed by the  Bankruptcy  code were removed.
Interline  reached  agreement with its major creditor during the Chapter 11 case
and the terms of the  agreement  (See Part 1 - Item 2 -  Liquidity  and  Capital
Resources) were  incorporated in the plan. All other creditors were paid in full
under the plan.

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 gathering  pipeline,  a
20.4% interest in the Hat Creek Partnership, NGL trucking and four producing oil
and gas wells.









                                      10

<PAGE>



Well Draw Gas Plant
     The Well Draw Gas Plant (the "Plant"),  is a natural  gas  liquids  (NGLs)
processing  plant with a 150,000  gallons per day capacity.  The Plant processes
NGL's into propane,  butane and natural  gasoline.  As part of the Plant system,
the Company owns a natural gas gathering  pipeline system.  The gathering system
is  connected  to the Well Draw Gas Plant and  supplies  a small  percentage  of
liquids for the Plant. Most of the NGL's originate from liquids that are trucked
into the Plant from outside sources.

     At the Well Draw Gas Plant  ("Well  Draw") the Company  buys mixed  liquids
from several  different plants,  transports them to Well Draw,  fractionates the
liquids into commercial  propane,  butane, and natural gasoline,  and re-markets
these products for its own account.  The Company also enters into agreements for
fractionation  of liquids  for others on a fee basis.  The plant  processed  and
fractionated  a total of 78,584  gallons a day of natural  gas  liquids  for the
three  months ended March 31,  2001,  compared to 107,989  gallons a day for the
three  months  ended  March 31,  2000.  Of the total  gallons  fractionated  and
processed,  3,717 gallons per day was for the Company and 74,867 gallons per day
for  others  during  2001,  as  compared  to 8,930 and  99,059  gallons  per day
respectively for the three months ended March 31, 2000.

Merit (formerly Amoco) Agreement
     During  1994,  the  Company  entered  into a six year  contract  with Amoco
Production Company ("Amoco") to process NGLs located at its Baroil Plant located
in Wyoming.  On December 1, 1999, Amoco Production Company sold its Baroil Plant
assets to Merit Energy Company  ("Merit").  The initial six (6) year term of the
agreement was to expire on June 1, 2000.  By agreement of the Parties,  however,
the  contract  was  extended  through May 31,  2001.  The  Company is  currently
negotiating  with  Merit to  replace  the  Agreement.  The  terms  which  may be
reflected in any replacement  contract have not yet been  determined.  The Merit
agreement is the largest  liquids  contract  the Company  has. To serve  Merit's
processing  requirements,  the Company made  modifications  to the Well Draw Gas
Plant to increase its processing  capacity from 90,000 to approximately  150,000
gallons per day. The Company also  constructed  an amine treating unit to reduce
sulfur  concentrations of the NGLs at the Bairoil,  Wyoming plant where the NGLs
are  collected.  During the three  months  ended  March 31,  2001,  the  Company
processed  an average of 40,976  gallons  per day of Merit  liquids  compared to
47,265  gallons per day for the three  months  ended March 31,  2000.  The Merit
contract  accounted  for 52.14% of the total NGLs  processed for the 2001 period
compared with 43.77% for 1999.

Kinder Morgan (formerly KN Gas Gathering) Agreement
     During 1998,  the Company  entered into an agreement with KN Gas Gathering,
Inc. ("KNGG") to process NGLs on a month to month basis. On October 7, 1999, all
assets of KNGG was  purchase by Kinder  Morgan  ("KM").  During the three months
ended March 31, 2001, the Company processed an average of 19,405 gallons per day
of NGLs under the KM contract  compared  to 45,613  gallons per day for the same
period in 2000. The KM contract accounted for 24.69% of the total NGLs processed
by the plant for the three months  ended March 31,  2001,  compared to 42.24% of
the total NGLs process for the three months ended March 31, 2000.







                                      11

<PAGE>



Conoco Pipeline
     The Conoco Pipeline,  purchased by the Company from Conoco Pipeline Company
in  January  of 1995 is a 180 mile  crude  gathering  and  trunk  pipeline  with
associated pumping stations and storage tanks. 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  52,840
barrels of oil during the three months ended March  31,2001,  compared to 60,970
for the three months ended March 31,2000.

Hat Creek Partnership
     The Hat Creek Partnership, of which Interline Energy owns a 20.4% interest,
owned  working  interests  in two oil and gas wells "the Hat  Creek #2,  and CH
Federal wells" and a 13 mile gathering line interconnected to the Well Draw Gas
Plant.  Effective  July 1, 1999, the Company sold its interests in the Hat Creek
#2 well for the sum of  $4,080 to Dakota  Oil LLC.  Dakota  Oil LLC is a company
formed and owned in part by Company  insiders,  to attempt a recompletion of the
Dakota producing zone in the Hat Creek #2 well, which if successful,  would have
provided  additional  natural gas reserves to the Company's Well Draw Gas Plant.
Unfortunately, the recompletion was unsuccessful.

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,  2001,  the wells  produced  approximately  1,000
barrels of oil and 1,629 Mcf of natural  gas  compared  to  approximately  1,979
barrels of oil and 3,741 Mcf of natural  gas for the three  months  ended  March
31,2000.

NGL Trucking Operations
     The   Company's   NGLs   transportation   operation   consists   of   seven
tractor-trailer-pup  combination units. These units move unprocessed natural gas
liquids to Well Draw for  fractionation,  and takes propane,  butane and natural
gasoline from Well Draw to various refiner, chemical plants, and end-users. When
time permits, these trucks also move liquids on a common carrier basis for third
parties.  The Company intends to continue to emphasize this profitable  business
segment,  and believes that our reputation for flexibility and customer  service
will allow us to maximize opportunities.

     During the three months ended March 31, 2001, the Company's trucks traveled
a combined total of 210,604 miles and carried approximately 9 million gallons of
raw and finished product compared to 269,173 miles and 12 million gallons of raw
and finish product for the quarter ended March 31, 2000.








                                      12

<PAGE>



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 has been able to develop a
new process  which does not utilize the 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 has been implemented in the Korean, Australian and Spanish Plants. As
a  result,  on  September  10,  1998 the  Company  reassigned  to PSI all of the
intellectual  rights it  obtained  from it under the  assignment  agreement.  In
making that  re-assignment,  the Company  assigned  all rights it had to receive
royalties  from  any  plants  constructed  by the  Company  which  utilized  PSI
technology.

     To date, the Company has  constructed or licensed six used oil plants.  For
full disclosure on each plant,  refer to the Company's December 31, 2000, 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 star-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's current preference is not to perform plant
construction  services.  Further,  until  the  Company  improves  its  financial
condition  , it is not in a position  to take  interests  in  operating  plants.
Management  believes the best way for it to capitalize  on the  technology is to
sell the construction plans for a plant and provide consultation services to the
purchaser.

     It has also become evident to management that demanding  royalties based on
production is, in many situations and countries, difficult. 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 to
achieve.  This  reality  has been  seen in both  Korea,  where the  royalty  was
terminated  for the first  plant,  and England  where,  as described in previous
filings,  the  royalties  were  reduced  and  deferred  until the plant  becomes
profitable.  The most viable  opportunities the Company has identified to employ
its technology 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 Management obtained
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.






                                      13

<PAGE>



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.  On July 16,
1997,  Transpacific  announced that it had formed a new Australian national used
oil collection,  recycling and refining company called  Nationwide Oil Pty. Ltd.
with Shell  Australia  Ltd., and Mobil Oil Australia Ltd. to own and operate the
plant.

     The Company  completed  construction  of the Nationwide  plant in Sydney in
August  of 1998 and the  plant  has been  operating  since  that  time.  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 with the  Queensland  Supreme Court  seeking  payment of the royalties due
under the License Agreement. The action is currently in the discovery stage.

Ecolube, S.A.  -  Madrid, Spain
     On June 10, 1998 the Company signed an engineering and marketing  agreement
with Ecolube,  S.A., a subsidiary of Sener Engineering of Madrid,  Spain.  Under
the agreement, the Company provided Ecolube with engineering  specifications and
construction  drawings  for the  building  of a 24,000  gallon per day waste oil
re-refinery  in  Madrid.  Under the  agreement,  Interline  receives  a $534,000
engineering  and  licensing  payment  and running  royalties  of $0.0175 on each
gallon produced and sold for 10 years. Ecolube has the right to build additional
plants in the  Iberian  Peninsula  (Spain and  Portugal)  for a four year period
commencing  from the date of plant  start  up.  The  Ecolube  Plant has now been
constructed and has been operating at approximately 75% of design capacity. Full
commissioning  and  acceptance  is  expected to be  completed  during the second
quarter of 2001.


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, 2001 and 2000

     Revenues  decreased  $45,273,  or 3.4%, to $1,271,530  for the three months
ended March 31,2001,  as compared to $1,316,803 for the three months ended March
31, 2000. The revenue decrease  included a $24,075 or 1.9%,  increase in oil and
gas revenues  and a decrease of $69,348 or 100% in used oil  refining  revenues.
The Company's  total  revenues,  on a segment basis,  for the three months ended
March 31, 2001, and 2000 were as follows:







                                      14

<PAGE>



           Revenues For Three Months Ended March 31, 2001, and 2000


                        2001           %          2000             %

Oil and Gas             $1,271,530     100%       $1,247,455       94.7%
Used Oil                         0     0%         $69,348          5.3%
Refining


Total Revenue           $1,271,530     100%       $1,316,803       100%


Oil and Gas Revenues
     Oil and gas  revenues  contributed  100% of total  revenues  for the  three
months ended March 31,  2001,  as compared to a 94.7% for the three months ended
March 31, 2000.  Revenues  increased $24,075 or 1.9% to $1,271,530 for the three
months ended March 31, 2001 as compared to $1,247,455 for the three months ended
March 31, 2000.

     The increase in oil and gas revenues resulted from an increase of $322,903,
or 200.2%,  in  processing  for Merit.  This  increase was  partially  offset by
decreases of $46,886, or 33.9%, in processing fees for other customers; $19,586,
or 25.6%, in oil and gas production;  $154,067,  or 35.8%, in natural gas liquid
(NGL) product sales; $66,991, or 17.4%, in trucking revenues;  $5,751, or 12.7%,
in crude oil tariff fees; and, $5,547, or 53.9%, in ?other? revenues.

      The $322,903 or 200.2% increase in processing fees for Merit is attributed
to a price increase made effective January 1, 2001. The Company will continue to
collect the higher price through the remaining term of the current Merit
contract.

     The decrease in processing fees for other  customers was mainly  attributed
to a decrease in the value of NGL's relative to natural gas.  During much of the
first  quarter  of 2001 the Btu value of NGL's  was lower  than the Btu value of
natural gas. Where it was possible,  many producers elected to leave their NGL's
entrained  in the natural gas stream  rather  than  extracting  them for sale as
NGL's. Consequently,  the Well Draw Gas Plant plant throughput was substantially
lower than during the year earlier  period.  During the three months ended March
31,2001, the Company processed an average of 74,867 gallons of NGL's per day for
third parties  compared to 99,059 gallons a day for the three months ended March
31,2000.  The same factor also is responsible  for the $158,810  decrease in NGL
product sales  revenue and the $66,991  decrease in trucking  revenues.  Reduced
revenues from the  Company's  oil and gas  production is primarily the result of
normal production declines.

     The Company's Oil & Gas Operations revenue for the three months ended March
31, 2001 and 2000 were as follows:








                                      15

<PAGE>



  Oil & Gas Operations Revenue For Three Months Ended March 31, 2001 and 2000
  ---------------------------------------------------------------------------


                                2001       %           2000           %

Liquids (NGL) Sold              $276,882   21.78%      $430,949       34.55%
Fractionation Fees               575,625   45.27%      267,350        21.43%
Transportation Fees              317,872   25.00%      417,121        33.44%
Crude Tariff Fees                 39,365   3.10%       45,116         3.62%
Crude Oil Sold                    32,085   2.52%       54,041         4.33%
Residue Gas Sold                  24,957   1.96%       22,587         1.81%
Other                              4,744   .37%        10,291         .82%


Total Revenue                 $1,271,530   100%        $1,247,455     100%


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,  exclusively 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 31,2001,  compared to $69,348 for the comparable period
in 2000.

Direct Costs
     Direct costs  decreased  $4,308,  or .52%, to $820,836 for the three months
ended March 31, 2001,  compared to $825,144 for the three months ended March 31,
2000.  As a percent of revenues,  direct costs  increased to 64.6% for the three
months  ended March 31, 2001  compared to 62.7% for the three months ended March
31, 2000.

     The $4,308  increase in direct costs was related to the increased costs for
natural  gas  purchased  for use as fuel at the  Company's  Well Draw  Plant and
higher  transportation  expenses.  These  increases  were largely offset because
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 decreased $2,247, or 0.9% to
$256,262  for the quarter  ended March 31,  2001,  compared to $258,509  for the
three months ended March 31, 2000.






                                      16

<PAGE>



As a percent of revenues, selling, general and administrative expenses increased
to 20.2% for the three months ended March 31, 2001, compared to 19.6% for the
three months ended one year earlier.

     The  increase in selling,  general and  administrative  expenses was mainly
attributed to increases in  insurance,  utilities and wages which were offset by
decreases in legal and outside services, lease costs and travel expenses.

Depreciation and Amortization
     Depreciation  and  amortization  expenses  increased  $27,442  or  14.9% to
$212,059 for the three months ended March 31, 2001, compared to $184,617 for the
three months ended March 31, 2000.  As a percent of revenues,  depreciation  and
amortization  expenses  increased to 16.7% for the 2001 period compared to 14.0%
for the three months ended March 31, 2000.

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 $5,398, or 75.7%, to $1,730 for
the three months  ended March 31, 2001,  compared to $7,128 for the three months
ended  March 31,  2000.  As a percent  of  revenues,  research  and  development
expenses decreased to .1% for the quarter ended March 31, 2001, compared to 0.5%
for the year earlier period.

Income (Loss) from operations
     Income from operations decreased $60,762, or 146.8%, to a loss of ($19,357)
for the three  months ended March 31,  2001,  compared to a $41,405  income from
operations  for the three months ended March 31, 2000.  The $60,762  decrease in
income from operations was attributed to a 3.4% decrease in revenues  compounded
by a 1.2% increase in total costs.

Other income (expenses)
     Net interest (expense) decreased $3,106, or 18.2%, to $13,976 for the three
months  ended March 31,  2001,  compared to $17,082 for the three  months  ended
March 31,  2000.  The net  decrease  was  mainly  attributed  to lower  interest
payments during the 2000 period.

     Interest expense to a related party increased  $18,035 or 23.5%, to $94,654
for the three  months  ended March 31,  2001,  compared to $76,619 for the three
months  ended March 31,  2000.  This  increase in interest  expense to a related
party was attributed to the Company note agreement with its major  creditor.  On
September 22, of 1999 and 2000,  the Company did not pay this major creditor the
first and  second  installments  ($750,000  and  $1,000,000)  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 from seven percent (7%) to fourteen percent (14%).







                                      17

<PAGE>



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 when  commissioning and acceptance is
completed.  While the Company continues to work with potential purchasers of its
technology, such sales and expected revenues are uncertain and unpredictable.

     On  September  9, 1998,  the plan of  reorganization  under  Chapter 11 was
confirmed by the United States  Bankruptcy  Court for the District of Utah.  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 (the Company did not make
the first two  installments  - see below);  $1,000,000 on September 22, 2001 and
$850,000 on September 22, 2002.  The note is secured by Trust Deeds  securing an
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 sale of Company assets will go to pay down the principal portion of the
note.  After  applying  the  proceeds  from  this sale the note was  reduced  to
$3,595,920.

     At the time the plan was confirmed,  management believed the Company's cash
from the oil and gas  operating  activities,  cash received from the sale of its
hydrocarbon  refining technology and cash retained under the reorganization plan
would be adequate to meet its operating needs in the near term and would provide
a plan to meet debt obligations.  Certain  assumptions where made in the plan of
reorganization  that the Company  would  receive cash from the  marketing of its
hydrocarbon  refining  technology.  Since September 10, 1998 when the Bankruptcy
Plan was confirmed, the Company has received $179,006 cash from the marketing of
its refining technology.

     Under the new trust  deed  note,  (see new terms of trust  deed  above) the
Company is obligated to pay this major  creditor  $750,000 by September 22, 1999
and  $1,000,000 by September 22, 2000. As of March 24, 2001, the Company has not
paid the first two principal payments due under the trust note. The Company also
did not pay the  December  22, 2000  interest  ($93,554)  and the March 22, 2001
interest  ($93,554).  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






                                      18

<PAGE>



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 ($750,000 and $1,000,000) or the total  ($3,595,920) due
under the note.

     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 any necessary expenditures to maintain current operations.  For the
quarter ended March 31, 2001,  the Company made no purchases of property,  plant
or  equipment.   Management  is  unaware  of  any  significant   future  capital
expenditures.  However the very nature of equipment operation, wear and tear and
replacement  in this type of  operation  can be  significant.  The Company  will
continue to incur research and development  costs as it continues to develop its
refining technology.  At present these activities are being performed by current
Company employees and part time contract consultants.

     The Company?' net cash provided by operations  was $211,287 for the quarter
ended March 31, 2001 compared to net cash provided by operations of $369,901 for
the period ended March 31, 2000.  The net decrease of $158,614 in cash  provided
by  operations  for the year ended  March 31,  2001 was mainly  attributed  to a
$75,691  increase  in the  Company's  net loss offset by timing  differences  in
collection of accounts  receivable and  disbursement of accounts payable between
quarter ended March 31, 2001 and that ended a year earlier.









                                      19

<PAGE>



                         PART II - OTHER INFORMATION
Item 1.  Legal Proceedings
         LEGAL PROCEEDINGS

Interline U.K.
     In February  1995,  the Company  formed  Interline  (UK)  Limited,  a joint
venture with Whelan  Environmental  Services,  Ltd. of Birmingham,  England,  to
construct a refinery in Stoke, England. As part of the transaction,  the Company
executed a licensing  agreement  with the joint  venture  giving it the right to
own,  operate and practice the Interline used oil  technology.  The terms of the
joint  venture  provided  the Company a 40%  ownership  interest,  and under the
license agreement, the right to receive a 6 cent gross royalty per gallon of oil
processed.  The refinery was  completed in early 1996 and  officially  opened in
July 1996.  The refinery,  with a capacity to process 24,000 gallons of used oil
per day, is in current  production.  In April of 1997 the  Company  sold its 40%
interest  in the joint  venture to John Whelan for  $500,000.  Whelan is now the
sole owner of the used oil refinery in Stoke-on-Trent,  and is authorized to use
the Interline technology under the original licensing agreement.  As a result of
the realities of the pricing structure in England for used oil products, and the
higher than expected  operating  costs to operate the England plant,  the 6 cent
royalty  called for in the license  agreement  was reduced to 3 cents and is not
payable until the refinery is profitable.  To date, the Company has not received
any royalty revenue from the English plant.  Further,  John Whelan had only paid
$200,000 of the purchase price.  After attempted  settlement  negotiations broke
down, on November 19, 1998 the Company instituted a legal proceeding against him
in the High Court of Justice, Queens Bench Division,  Bristol District Registry,
Bristol Mercantile Court.

     In January of 2000,  the  Company  was  required  to deposit  approximately
$80,000 security bond with Bristol  Mercantile Court. The Company was also faced
with spending $50,000 to litigate the case. Due to the Company's cash restraints
and in the best interest of the Shareholders, the Company elected not to proceed
with the case and the action against John Whelan was dismissed.  The Company has
the option to re-file this claim against John Whelan for five years.

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







                                      20

<PAGE>



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 plan of  reorganization  under  Chapter 11 was
confirmed by the United States  Bankruptcy  Court for the District of Utah.  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,  199,8  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 (the  Company did not make this  installment  - see below);
$1,000,000  on September  22, 2000 (the Company did not make this  installment -
see below); $1,000,000 on September 22, 2001 and $850,000 on September 22, 2002.
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.

     Under the new trust  deed  note,  (see new terms of trust  deed  above) the
Company is obligated to pay this major  creditor  $750,000 by September 22, 1999
and  $1,000,000 by September  22, 2000. As of May 15, 2001,  the Company has not
paid the first two 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  ($750,000 and $1,000,000) or
the total  ($3,595,920) due under the note. As of May 15, 2001, 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.






                                      21

<PAGE>



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




































                                      22

<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 16, 2001                 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 16, 2001      Chairman          /s/ Michael R.  Williams
                  and CEO           ------------------------
                                    Michael R. Williams

May 16, 2001      Director/         /s/ Laurie Evans
                  Secretary         -------------------------
                                    Laurie Evans























                                      23