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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 June 30, 2000
                                      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 August 14, 2000 -  14,066,052  shares of $.005 par
value Common stock.

                  DOCUMENTS INCORPORATED BY REFERENCE: NONE

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                                      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 June 30, 2000       5

            Condensed Consolidated Statement of Operations for the
            three and six months ended June 30, 2000 and 1999           7

            Condensed Consolidated Statements of Cash Flows for
            six months ended June 30, 2000 and 1999                     8

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



PART II. - OTHER INFORMATION

Item 1      Legal Proceedings

Item 2      Changes in the Securities

Item 3      Defaults Upon Senior Securities

Item 4      Submission of Matters to a Vote of Security Holders

Item 5      Other Information

Item 6(a)   Exhibits

Item 6(b)   Reports on Form 8-K

            Signatures





                                      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.

      Theses  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)

                                 June 30, 2000




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 June 30,  2000,  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)



                                                          June 30,
                                                            2000
                                                      ---------------

Assets

Current assets:
      Cash and cash equivalents                           $214,715
      Accounts receivable - trade                        1,098,535
      Inventories                                           31,245
      Other current assets                                  23,646
                                                      ---------------
         Total current assets                            1,368,141

Property, plant and equipment                            6,705,384
Accumulated depreciation and depletion                  (3,068,085)
                                                      ---------------

         Net property, plant & equipment                 3,637,299

Technology and marketing rights                            497,857
                                                      ---------------

              Total assets                              $5,503,297
                                                      ===============




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)

                                                          June 30,
                                                            2000
                                                      ---------------
Liabilities and Stockholders' Equity

Current liabilities:
      Accounts payable                                     $830,783
      Accrued liabilities                                    39,078
      Note payable, related party                         3,595,920
      Current portion of long-term debt                     175,566
                                                      ---------------

         Total current liabilities                        4,641,347
                                                      ---------------
Long-term debt less current maturities                      654,620
                                                      ---------------

         Total liabilities                                5,295,967
                                                      ---------------

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 June 30, 2000                        70,330
      Additional paid-in capital                          9,209,058
      Cumulative deficit                                 (9,072,058)
                                                      ---------------

             Total stockholders' equity                     207,330
                                                      ---------------

             Total liabilities & stockholders' equity    $5,503,297
                                                      ===============

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)

<TABLE>
<CAPTION>
                            Three months ended              Six months ended
                                 June 30,                       June 30,
                      ------------------------------------------------------------
                              2000             1999          2000           1999
                      ------------------------------- -------------- -------------
<S>                       <C>               <C>          <C>           <C>
Revenue                   $1,433,693        $923,750     $2,750,496    $1,740,684
Direct Costs               1,214,318         588,547      2,039,462     1,122,759
                      --------------- --------------- -------------- -------------
Gross margin                 219,375         335,203        711,034       617,925
Selling, general and
 administrative expenses     225,231         235,016        483,740       475,432
Research and
 Development                   6,391          20,841         13,519        40,519
Depreciation, depletion
 and amortization            177,258         192,478        361,875       361,190
                      --------------- --------------- -------------- -------------
(Loss) from operations      (189,505)       (113,132)      (148,100)     (259,216)

Other income (expense)
   net interest income
   (expense)                 (13,860)        (14,954)       (30,942)      (29,180)
 Interest expense, related
  party                      (75,488)        (63,000)      (152,107)     (126,000)
 Gain from sale of assets      1,500               -          1,500        18,908
                      --------------- --------------- -------------- -------------
Net loss before income
 taxes                      (277,353)       (191,086)      (329,649)     (395,488)

Income tax benefit
 Current                           -               -              -             -
 Deferred                          -               -              -             -
                      --------------- --------------- -------------- -------------
Net loss                   ($277,353)      ($191,086)     ($329,649)    ($395,488)
                      =============== =============== ============== =============
Loss per common share -
 basic and diluted            ($0.02)         ($0.01)        ($0.02)       ($0.03)
                      =============== =============== ============== =============
Weighted average shares
  - basic and diluted     14,066,052      14,066,052     14,066,052    14,066,052
                      =============== =============== ============== =============

</TABLE>

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)

<TABLE>
<CAPTION>
                                                             Six Months Ended
                                                                  June 30
                                                          2000               1999
                                                       -----------------------------
<S>                                                    <C>                <C>
Cash flows from operating activities:
  Net (loss)                                           ($329,649)         ($395,488)
  Adjustment to reconcile net (loss) to net
    cash (used in) provided by operating activities:

      Depreciation, depletion and amortization           361,875            361,190
      Gain on disposal of asset                           (1,500)           (18,908)
      (Increase) decrease in:
         Accounts receivable                            (577,455)          (142,952)
         Inventories                                       9,527             29,136
         Other current assets                             (7,018)              (998)
         Note receivable                                  77,500              9,021
      Increase (decrease) in:
         Accounts payable                                639,771           (204,556)
         Accrued liabilities                                (390)           (26,550)
         Deferred income                                      -              (4,281)
                                                       -----------------------------
     Net cash provided (used) by operating activities    172,661           (394,386)


Cash flows from investing activities:
      Proceeds from sale of equipment                      1,500             54,763
      Purchase of property, plant & equipment           (141,261)          (185,554)
                                                       -----------------------------
      Net cash used in investing activities             (139,761)          (130,791)

</TABLE>

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




                                      8

<PAGE>



                        INTERLINE RESOURCES CORPORATION
                               AND SUBSIDIARIES
                                         atement of Cash Flows
                        (Unaudited)

                                                    Six Months Ended
                                                         June 30
                                              2000                  1999
                                          ----------------------------------

Cash flows from financing activities:
      Proceeds from debt obligations         110,100               76,280
      Payment on long-term debt              (73,920)             (90,234)
                                          ----------------------------------

 Net cash (used in) financing activities     (73,920)             (13,954)

Net (decrease) in cash                       (41,020)            (539,131)

Cash, beginning of period                    255,735              762,459
                                          ----------------------------------

Cash,  end of period                        $214,715             $223,328
                                          ==================================




     Non-cash  investing and financing  activities:  During the six month period
ended June 30, 2000, the Company acquired property and equipment in exchange for
notes payable totaling $110,100.


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, Utah
84004 (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

                                      10

<PAGE>



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.

Well Draw Gas Plant
      The Well Draw Gas Plant (the  "Plant"),  is a natural gas  liquids  (NGLs)
processing  plant with a 150,000  gallon 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  enters into  agreements  for
fractionation  of liquids from others on a fee basis.  The plant  processed  and
fractionated  a total of 101,067  gallons a day of natural  gas  liquids for the
three months ended June 30, 2000 compared to 72,826  gallons a day for the three
months ended June 30, 1999. Of the total  gallons  fractionated  and  processed,
11,531  gallons  per day was for the  Company  and  89,536  gallons  per day for
others,  as compared to 11,451 and 61,375 gallons per day  respectively  for the
three month ended June 30, 2000 and 1999.

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  term of the six year
agreement was to expire on June 1, 2000. Thereafter,  the contract automatically
renews for one year  terms,  unless  Merit  serves the  Company  with  notice to
terminate  90 days prior to the end of a term.  The  Company  did not  receive a
termination notice from Merit, so the next expirations date is June 1, 2001. The
Merit agreement is the largest liquids  contract the Company has. To fulfill the
contract,  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 June 30, 2000 the Company processed an
average of 47,534  gallons per day of Merit liquids  compared to 53,065  gallons
per day for the three months ended June 30, 1999. The Merit  contract  accounted
for 47.03% of the total NGLs  processed for the three months ended June 30, 2000
and 72.86% 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 June 30, 2000, the Company  processed an average of 37,574 gallons per day
of NGLs under the KM contract

                                      11

<PAGE>



compared to 8,310 gallons per day for the three months ended June 30, 1999.  The
KM contract  accounted  for 37.18% of the total NGLs  processed by the plant for
the three  months  ended  June 30,  2000  compared  to 11.41% of the total  NGLs
process for the three months ended June 30, 1999.

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  58,239
barrels of oil for the three months  ended June 30, 2000  compared to 68,380 for
the three months ended June 30, 1999.

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 $2,040 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 June 30, 2000, the wells produced approximately 1,333 barrels
of oil and 3,101 Mcf of natural gas compared to  approximately  1,245 barrels of
oil and 3,168 Mcf of natural gas for the three months ended June 30, 1999.

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  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  June 30,  2000,  the  Company's  trucks
collectively traveled 229,849 miles and carried a total of 14 million gallons of
raw and finished product for the three

                                      12

<PAGE>



months  ended June 30,  2000  compared  to 195,934  miles and 10.4  million
gallons of raw and finish product for the three months ended June 30, 1999.

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, 1999 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  territories to licensee,  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) rather than build
plants,  sell the construction  plans and provide  consultation and expertise so
the customer can then build the Plant.

      Based on the experiences with the six Plants that have been constructed or
licensed  by the  Company,  management's  current  belief  is to stay out of the
construction  business.  Further,  until the Company  becomes  more  financially
stable,  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 in many  situations and countries is difficult.  Unless and until the
re-refined oil produced in a Plant can be sold at higher values based on pricing
similar to base  lubricating  oils,  on-going  royalties  based on production is
difficult to obtain. 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 not payable until profitable.

      Management  still believes that there exists  economic  justification  and
interest in the used oil  refining  technology.  The most  viable  opportunities
management has discovered  are in countries that have  governmental  concessions
resulting in economic incentives for collecting and

                                      13

<PAGE>



processing used oil. In March of 2000, the Company hired Delphos  International,
a Washington DC based  consulting firm  specializing in  international  business
development  to help  develop the  technology  in foreign  nations.  Delphos has
experience in working with world wide  government  agencies  which offer special
funding and consideration for environmental projects throughout the world.

      From experience, management is aware of the complicated nature between the
balance of supply and demand.  Management  has become much more selective in its
consideration  of selling the  technology to  prospective  purchasers and unless
favorable conditions exist the Company discourages the purchaser. Management has
become  much more  active in  helping  potential  customers  evaluate  their end
product sales markets.

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 Licensee Agreement. The defendants answer is due on August 16, 2000.

     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,
Ecolube will  construct  and operate the plant and produce  lubricant  base oil.
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  currently is in  production  trial
stage. Full  commissioning and acceptance is expected to be completed during the
third or fourth quarter of 2000.

                                      14

<PAGE>




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 June 30, 2000 and 1999

      Revenues increased $509,943,  or 55.2%, to $1,433,693 for the three months
ended June 30, 2000 as compared to $923,750  for the three months ended June 30,
1999. The revenue  increase  included a $547,457 or 63.97%,  increase in oil and
gas revenues and a $37,514,  or 55.17%  decrease in used oil refining  revenues.
The Company's  total  revenues,  on a segment basis,  for the three months ended
June 30, 2000 and 1999 were as follows:

            Revenues For Three Months Ended June 30, 2000 and 1999
          ----------------------------------------------------------

                             2000        %             1999         %
-------------------------------------------------------------------------
Oil and Gas             $1,403,207    97.87%         $855,750    92.64%
Used Oil refining           30,486     2.13%           68,000     7.36%
Other                            0        0%                0        0%
-------------------------------------------------------------------------
Total Revenue           $1,433,693      100%         $923,750      100%
=========================================================================


Oil and Gas Revenues
      Oil and gas revenues  contributed  97.87% of total  revenues for the three
months ended June 30, 2000,  as compared to  approximately  92.64% for the three
months ended June 30, 1999.  Revenues increased $547,457 or 63.97% to $1,403,207
for the three  months  ended June 30, 2000 as compared to $855,750 for the three
months ended June 30, 1999.

      During the three months ended June 30, 2000,  revenues increased $547,457,
or 63.97%. This revenue increase was mainly attributed to a $420,258, or 169.55%
increase  in liquids  (NGLs) sold to the local  market  under the account of the
Company, a $91,989, or 44.49% increase in fractionation fees, a $29,064 or 9.49%
increase  in  transportation  fees,  a $7,504,  or 14.83%  decrease in crude oil
tariff fees, a $18,636 or 77.99%  increase in crude oil sales and an increase of
$8,754, or 133.66% in residue sales.

                                      15

<PAGE>



      The  $420,258,  or 169.55%  increase  in liquids  (NGLs) sold to the local
market  under  the  account  of the  Company  was  attributed  to the  Company's
agreement to purchase  NGL's.  On June 18, 2000,  the Company agreed to purchase
approximately  50,000  gallons a day of NGLs from a local dealer of NGLs.  These
liquids are being  processed  and  fractionated  at the Well Draw Gas Plant into
propane,  butane and  natural  gasoline.  The liquids are then being sold in the
local market place to customers established by the Company. The agreement was on
a day to day basis and was terminated on August 9, 2000.

      The  increase in  fractionation  fees and  transportation  fees was mainly
attributed  to an increase in liquids  (NGLs)  processed  for others at the Well
Draw Gas  Plant.  During  the three  months  ended June 30,  2000,  the  Company
processed  for others an average of 89,536  gallons per day of NGLs  compared to
61,375  gallons a day for the three  months  ended  June 30,  1999.  The  28,161
gallons a day increase was mainly  attributed  to liquids  processed  for Kinder
Morgan.  During the three  months ended June 30,  2000,  the Company  process an
average of 37,574 gallons a day of NGLs under the KM contract  compared to 8,310
gallons per day for the three months ended June 30, 1999.


      The Company's Oil & Gas Operations revenue for the three months ended June
30, 2000 and 1999 were as follows:



  Oil & Gas Operations Revenue For Three Months Ended June 30, 2000 and 1999
-------------------------------------------------------------------------------

                                   2000          %           1999        %
------------------------------------------------------------------------------
Liquids (NGL) Sold              $668,118      47.61%       $247,860    28.96%
Fractionation Fees               298,760      21.29%        206,771    24.16%
Transportation Fees              335,399      23.91%        306,335    35.80%
Crude Tariff Fees                 43,097       3.07%         50,601     5.91%
Crude Oil Sold                    42,530       3.03%         23,894     2.79%
Residue Gas Sold                  15,303       1.09%          6,549      .77%
Other                                  0         .0%         13,740     1.61%
------------------------------------------------------------------------------
Total Revenue                    $1,403,207     100%       $855,750      100%
==============================================================================






                                      16

<PAGE>



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 $30,486, or 2.13% of total revenues
for the three months ended June 30, 2000  compared to $68,000,  or 7.36 of total
revenues for the three months ended June 30, 1999. The $30,486  received for the
three month  ending June 30, 2000 was revenue  attributed  to the startup of the
Ecolube  used oil  refinery  in  Fuenlabrada  which is located  south of Madrid,
Spain.  In June of 1998, the Company  entered into an engineering  and licensing
agreement  with  Ecolube,  S.A., a subsidiary  of Sener  Engineering  of Madrid,
Spain. Under the Ecolube agreement, the Company will receive a total engineering
and licensing payment of $534,000 and will also receive payment for assisting in
the startup and  commissioning  of the plant.  From the inception of the Ecolube
agreement,  the Company has  recorded  revenues  of $409,000  attributed  to the
engineering and licensing agreement and $99,834 attributed to the startup of the
plant.  During  the three  months  ended  June 30,  2000 and 1999,  the  Company
received no revenues for royalties for its used oil technology.

Direct Costs
      Direct costs increased  $625,771,  or 106.32%, to $1,214,318 for the three
months ended June 30, 2000  compared to $588,547 for the three months ended June
30,  1999.  As a percent of revenues,  direct costs  increased to 84.70% for the
three months  ended June 30, 2000  compared to 63.71% for the three months ended
June 30, 1999.

      The $625,771  increase in direct costs was related to the Company's 55.20%
increase in total revenues which was mainly attributed to the Company day to day
agreement to purchase  NGLs from a local  dealer.  The increase of 20.99%,  as a
percent of revenues was also directly  related to the agreement to purchase NGLs
for its own account.  Agreements  where the Company  purchases  NGLs for its own
account,  carries a lower gross margin when  compared to  agreements  to process
NGLs for others on a fee basis.  The  Company  also  experience  an  increase in
repair and  maintenance  costs at the Well Draw Gas Plant and higher diesel fuel
costs relating to its trucking operation.

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 $9,785, or 4.16% to
$225,231  for the year ended June 30, 2000  compared  to $235,016  for the three
months  ended June 30,  1999.  As a percent of  revenues,  selling,  general and
administrative expenses decrease 9.73%, to

                                      17

<PAGE>



15.71% for the three months ended June 30, 2000 compared to 25.44% for the three
months ended June 30, 1999.

      The decrease of $9,785, or 4.16%, in selling,  general and  administrative
expenses  were mainly  attributed  to a decrease  in legal and outside  contract
service.  During 2000,  the Company  reduced its outside  legal fees by $18,577,
reduced  outside  contract  services  by  $19,759,  offset  by  an  increase  in
accounting fees of $8,732.  Legal costs were mainly  attributed to the Company's
legal proceedings and patent protection.

Depreciation and Amortization
      Depreciation  and  amortization  expenses  decreased  $15,220  or 7.91% to
$177,258 for the three  months ended June 30, 2000  compared to $192,478 for the
three  months ended June 30, 1999.  As a percent of revenues,  depreciation  and
amortization  expenses  decreased  to 12.36% for the three months ended June 30,
2000 compared to 20.84% for the three months ended June 30, 1999.

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 $14,450, or 69.33%, to $6,391
for the three  months  ended June 30,  2000  compared  to $20,841  for the three
months ended June 30, 1999. As a percent of revenues,  research and  development
expenses  decreased to .45% for the three months ended June 30, 2000 compared to
2.26% for the three months ended June 30, 1999.

 (Loss) from operations
      (Loss) from operations increased $76,373, or 67.51%, to $189,505 loss from
operations  for the three months ended June 30, 2000 compared to a $113,132 loss
from  operations for the three months ended June 30, 1999. The $76,373  increase
in (loss) from operations was credited to an increase in repairs and maintenance
at the Well  Draw Gas  Plant  and  higher  diesel  fuel  costs  relating  to the
transportation  operation. Also during the three months ended June 30, 1999, the
Company  received  $68,000 from the Ecolube  agreement  relating to its used oil
technology. The Company incurred minimal costs associated with this revenue

Other income (expenses)
      Net interest income (expense)  decreased  $1,094, or 7.32%, to $13,860 for
the three  months  ended June 30, 2000  compared to $14,954 for the three months
ended June 30, 1999.  The net decrease was mainly  attributed  to an increase in
interest earned during 2000 on the Company's  money market and interest  bearing
accounts.


                                      18

<PAGE>



      Interest  expense to a related  party  increased  $12,488  or  19.82%,  to
$75,488 for the three  months  ended June 30,  2000  compared to $63,000 for the
three months ended June 30, 1999. This $12,488 increase in interest expense to a
related  party was  attributed  to the  Company  note  agreement  with its major
creditor. On September 22, 1999, the Company did not pay this major creditor the
first installment ($750,000) 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 (7%) to fourteen (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 only 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 (the  Company did not make this  installment  - see below);
$1,000,000 on September 22, 2000;  $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.

      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

                                      19

<PAGE>



Bankruptcy Plan was confirmed,  the Company has received  $167,834 cash from the
marketing of it refining technology.

      On  September  22,  1999,  the  Company  was  obligated  to pay this major
creditor  $813,000  which  consists of  principal  of $750,000  and  interest of
$63,000  under the new trust deed note (see new terms of trust deed  above).  On
September 22, 1999, the Company paid this major creditor an interest  payment of
$63,000,  but did not make the principal payment of $750,000 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 hereof,  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  installment in default
($750,000) or the total  ($3,595,920) due under the note. As of August 14, 2000,
the Company is current on all 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 of the Company.

      Management has put strict restraints on all capital  expenditures with the
exception  of  any  necessary   expenditures  to  maintain  current  operations.
Management is unaware of any significant future capital  expenditures except for
the upgrade and overhaul of its  compressor  located at the Well Draw Gas Plant.
The total cost of this addition  will be  approximately  $80,000.  The financial
statements for June 30, 2000 include $65,000 under caption  "Accounts  payable".
However the very nature of equipment operation, ware 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's  net cash  provided by  operations  was $172,661 for the six
months ended June 30, 2000  compared to net cash used by  operations of $394,386
for the six months  ended June 30,  1999.  The net  increase of $567,047 in cash
provided  by  operations  for the six  months  ended  June 30,  2000 was  mainly
attributed to a $65,839 decrease in net loss and significant  timing  difference
in collection of accounts receivable and disbursement of accounts payable

                                      20

<PAGE>



between  quarter ended June 30, 2000 and quarter  ended June 30, 1999.  Also the
Company  received  payment in full ($77,500) on a note  receivable from Wold Oil
Properties.


                        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 untitled to
retention monies in the

                                      21

<PAGE>



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 Licensee
Agreement. The Defendants answer is due on August 16, 2000.

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,  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 (the  Company did not make this  installment  - see below);
$1,000,000 on September 22, 2000;  $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.

      On  September  22,  1999,  the  Company  was  obligated  to pay this major
creditor  $813,000  which  consists of  principal  of $750,000  and  interest of
$63,000  under the new trust deed note (see new terms of trust deed  above).  On
September 22, 1999, the Company paid this major creditor an interest  payment of
$63,000,  but did not make the principal payment of $750,000 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 hereof,  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

                                      22

<PAGE>



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 installment in default  ($750,000) or the total  ($3,595,920)  due under the
note. As of August 14, 2000, the Company is current on all 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


                                      23

<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: August 14, 2000              INTERLINE RESOURCES CORPORATION


                                    By/s/ Michael R.  Williams
                                   -----------------------------------
                                       Michael R. Williams
                                       CEO/President
                                       Principal Executive Officer
                                       Director

                                    By/s/ Mark W.  Holland
                                   -----------------------------------
                                      Mark W. Holland
                                      Chief Financial Officer / Director

      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

August 14, 2000   CEO/President     /s/ Michael R.  Williams
                   and Director    ------------------------
                                        Michael R. Williams

August 14, 2000   Director/         /s/ Laurie Evans
                  Secretary       ------------------------
                                        Laurie Evans




                                      24