U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                            FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
DECEMBER 31, 2000

OR

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


              COMMISSION FILE NUMBER: 000-09358

                      3 Si HOLDINGS, INC.
    (Exact name of registrant as specified in its charter)

          Wyoming                                          83-0245581
(State or jurisdiction of incorporation                 I.R.S. Employer
              or organization)                          Identification No.)

6886 South Yosemite Street, Englewood, Colorado             80112
 (Address of Principal Executive Offices)                  (Zip Code)

             Registrant's telephone number:  (303)749-0210

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

     Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, $0.01 Par Value

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

As of December 31, 2000, the Registrant had 41,873,998 shares of common stock
issued and outstanding.

Transitional Small Business Disclosure Format (check one): Yes     No   X.

                           TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                   PAGE

ITEM 1.  FINANCIAL STATEMENTS

         CONSOLIDATED BALANCE SHEET
         AS OF DECEMBER 31, 2000                                    4

         CONSOLIDATED STATEMENTS OF EARNINGS
         FOR THE THREE AND SIX MONTHS ENDED
         DECEMBER 31, 2000 AND DECEMBER 31, 1999                    6

         CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE SIX MONTHS ENDED
         DECEMBER 31, 2000 AND DECEMBER 31, 1999                    7

         NOTES TO INTERIM CONSOLIDATED
         FINANCIAL STATEMENTS                                       8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS             10

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                         19

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                 19

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                           20

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS       20

ITEM 5.  OTHER INFORMATION                                         20

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                          20

SIGNATURE                                                          20

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                   Independent Accountants' Report

Board of Directors
3Si Holdings, Inc.

We have reviewed the accompanying consolidated balance sheet of
3Si Holdings, Inc. as of December 31, 2000, and the related
statements of earnings, and cash flows for the periods then
ended. These financial statements are the representation of the
management of 3Si Holdings, Inc.

We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants.  A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material
modifications that should be made to the accompanying
consolidated financial statements in order for them to be in
conformity with generally accepted accounting principles.


/s/ Balogh and Tjornehoj, LLP
Balogh and Tjornehoj, LLP
January 19, 2001
Denver, Colorado

                     Independent Accountants' Report

Board of Directors
3Si Holdings, Inc.

The accompanying statements of earnings and cash flows of 3Si
Holdings, Inc. for the periods ended December 31, 1999, were not
audited by us, and, accordingly, we do not express an opinion on
them.

/s/ Balogh and Tjornehoj, LLP
Balogh and Tjornehoj, LLP
February 1, 2000
Denver, Colorad

                           3Si HOLDINGS, INC.
                       CONSOLIDATED BALANCE SHEET
                            DECEMBER 31, 2000
                                (Unaudited)

                                   ASSETS

Current Assets
Cash and cash equivalents                                    $   273,163
Accounts receivable - trade                                      143,536
Other current assets                                               5,889
Total current assets                                             422,588

Equipment At Cost
Computer systems and software                                     89,562
Less accumulated depreciation and amortization                   (25,127)
Net equipment                                                     64,435

Other Assets                                                      50,290

Total assets                                                 $   537,313

            LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current Liabilities
Current portion of long-term debt                            $     5,656
Accounts payable - trade                                          78,709
Customer deposits                                                  9,396
Accrued liabilities (Note 3)                                     157,708
Unearned revenue                                                  64,800
Total current liabilities                                        316,269

Long-Term Debt                                                    15,935

Minority Interest                                                 50,872

Common Stock Subject To Redemption (Note 4)                    2,211,048

Stockholders' (Deficit) Equity
Common stock                                                     420,890
Additional paid in capital                                     3,337,725
Accumulated (deficit)                                         (3,566,194)
Treasury stock                                                   (38,184)
Common stock subject to redemption                            (2,211,048)
Total stockholders' (deficit) equity                          (2,056,811)

Total liabilities and stockholders' (deficit) equity             537,313

See independent accountants' reports and notes to interim consolidated
financial statements

                           3Si HOLDINGS, INC.
                CONSOLIDATED STATEMENTS OF EARNINGS
                              (Unaudited)

                                    Three Months          Six Months
                                       Ended                Ended
                                    December 31           December 31
                                 2000        1999      2000        1999
Consulting, service, and
license fees                       432,103    21,722     725,449     48,211

Contract labor and other costs     171,997    43,160     231,147     59,788

Gross profit                       260,106   (21,438)    494,302    (11,577)

Selling and administrative
Expenses                           242,552   139,042     386,256    352,027

Earnings (loss) from operations     17,554  (160,480)    108,046   (363,604)

Other income (expense)
Interest income                      2,255     6,717       4,265     18,045
Interest expense                    (1,051)  (64,771)     (2,335)  (127,942)
Miscellaneous income                     -    11,079      75,162     11,079

Total other income (expense)         1,204   (46,975)     77,092    (98,818)

Net earnings (loss) before
minority Interest                   18,758  (207,455)    185,138   (462,422)

Minority interest                  (23,280)   36,078     (44,850)    63,978

Earnings (loss) before income
Taxes                               (4,522) (171,377)    140,288   (398,444)

Income taxes (Note 5)                    -         -           -          -

Net earnings (loss)                 (4,522) (171,377)    140,288   (398,444)

Basic and diluted earnings (loss)
per common share (Note 2)                -         -           -       (.01)

Weighted average shares
outstanding
Basic                           41,825,399 35,133,530 41,683,433 34,643,313
Diluted                         41,825,399 35,133,530 41,800,348 34,643,313

See independent accountants' reports and notes to interim
consolidated financial statements

                          3Si HOLDINGS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited)

                                                   Six Months
                                                     Ended
                                           December 31     December 31
                                               2000           1999

Operating activities
Net earnings (loss)                        $ 140,288       $  (398,444)
Reconciling adjustments
Depreciation and amortization                  9,910            18,858
Gain on disposition of assets                (75,000)                -
Stock for services                            58,087                 -
Income (loss) attributable to minority
Interest                                      44,850           (63,978)
Change in operating assets and
liabilities
Accounts receivable                          (88,931)          386,517
Other assets                                  (4,673)           90,074
Accounts payable                             (77,932)         (640,134)
Unearned revenue                              64,800                 -
Other liabilities                                  -          (160,711)
Total adjustments                            (68,889)         (369,374)
Net cash provided by (used for)
operating activities                          71,399          (767,818)

Investing activities
Proceeds from sale of assets                  75,000                 -
Interest accrued on savings                     (290)                -
Purchases of equipment                        (6,915)           (5,873)
Software development costs                         -           (20,025)
Net cash provided by (used for)
investing activities                          67,795           (25,898)

Financing activities
Payments on capital lease                     (3,729)                -
Proceeds from exercise of stock
Options                                            -            11,500
Purchase of treasury shares                        -           (21,528)
Net cash (used for) provided by
financing activities                          (3,729)          (10,028)

Net change in cash and cash
Equivalents                                  135,465          (803,744)

Cash and cash equivalents, beginning         137,698         1,372,293

Cash and cash equivalents, ending            273,163           568,549

Supplemental disclosures of cash
flow information
Interest paid                                  1,051           127,942
Income tax paid                                    -                 -

See independent accountants' reports and notes to interim
consolidated financial statements

                          3Si HOLDINGS, INC.
        NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)

NOTE 1.  MANAGEMENT'S STATEMENT

In the opinion of management, the accompanying unaudited
financial statements contain all adjustments (all of which are
normal and recurring in nature) necessary to present fairly the
financial position of 3Si Holdings, Inc. ("TSIH") at December 31,
2000, and the results of operations and cash flows for the three
months and six months ended December 31, 2000, and December 31,
1999.  The Notes to the Consolidated Financial Statements which
are contained in the June 30, 2000, Form 10-KSB should be read in
conjunction with these Interim Consolidated Financial Statements.

NOTE 2.  (LOSS) EARNINGS PER SHARE

Basic earnings per share for the six months ended December 31,
2000, was calculated by dividing net earnings by the average
number of common shares outstanding during the year.  Diluted
earnings per common share for the six months ended December 31,
2000, was calculated by adjusting outstanding shares, assuming
conversion of all potentially dilutive stock options.

Net (loss) earnings per share for the three months and six months
ended December 31, 1999, and the three months ended December 31,
2000 was computed on the basis of the weighted average number of
common shares only, as shares subject to stock options would have
an anti-dilutive effect.

NOTE 3.  CONTINGENCIES

TSIH sold the assets of its systems integration business
effective as of May 1, 1999.  The asset purchase agreement
provided for additional contingent payments to TSIH when key
contracts were renewed.  The final contract renewal payment of
$75,000 was received in September 2000.

The asset purchase agreement also provided for contingent
payments to TSIH of 75% of the profits in excess of contract
renewal payments from the sold business for the first year (April
2000), and 50% of the profits in excess of contract renewal
payments for the second and third years (April 2001 and 2002).
Profits from the sold business did not exceed contract renewal
payments through April 2000.  No additional contingent payments
are estimated to be due to TSIH at December 31, 2000.  There is
currently no assurance as to when or if any contingent payments
will be earned.

The first $157,708 of additional contingent payments earned by
TSIH will be retained by the buyer to pay for compensated
absences for former TSIH employees.  This amount is included
under accrued liabilities in the December 31, 2000 balance sheet.

NOTE 4.  COMMON STOCK SUBJECT TO REDEMPTION

TSIH has issued 6,460,137 shares of common stock ("the SAN
shares") that are subject to redemption under the following
terms.  All contingent payments received after August 2000 from
the May 1999 sale of the systems integration business will be
used to redeem the SAN shares.  In addition, TSIH will use 50% of
any capital investment or loans, and 50% of subsequent net
income, to redeem SAN shares.  For redemption payments after
September 2000, the SAN shares shall be transferred back to TSIH
at $.52 per share, or the then current market price, whichever is
higher.  At the point SAN has received redemption payment
totaling $2,211,048, TSIH will have the right, but not the
obligation, to continue purchasing the SAN shares.

TSIH has received a contingent payment of $75,000 in September
2000 (see Note 3) which must be used to redeem SAN shares under
the terms of the redemption agreement.  The SAN agreement is
being contested, and no redemption has been made as of December
31, 2000.

NOTE 5.  INCOME TAXES

TSIH has sufficient net operating loss carryforward to offset the
current taxable income.  There is no income tax liability as of
December 31, 2000.

NOTE 6.  STOCK FOR SERVICES

TSIH entered into an agreement with a law firm to prepare
registration statements with the Securities and Exchange
Commission and perform other services in exchange for 332,531
shares of TSIH common stock, valued at $58,087.

NOTE 7.  RECLASSIFICATIONS

Certain items from the December 31, 1999, statements of earnings
have been reclassified in order to make them more comparable to
the current financial statements.  There is no effect on net
earnings (loss).

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

Management's Discussion.

The registrant's strategy is to continue to expand the offering
of the KEWi family of products to a broader customer base.  By
partnering with Application Service Providers (ASPs) and other
distribution partners, the registrant intends to increase its
penetration into the Internet-based software market.  The
agreements with Qwest Cyber.Solutions ("QCS") and SMI
International are examples of this strategy.

The addition of document management and portal management to the
family of KEWi products, along with the expansion of capabilities
in the knowledge management and request tracking products, has
increased the size of the potential market for KEWi products and
services.

As of October 2000, the registrant expanded its agreement with
QCS to develop and maintain the QCS web site.  Projected revenues
for FY 2001 under this expanded agreement are as follows:

                                            Gross     Subcontracts
                                     Revenues        Costs        Net

Earned to December 31, 2000         $ 647,000        $ 127,000   $520,000
Balance of current agreement          294,000          126,000    168,000

Total                               $ 941,000        $ 253,000   $688,000

The registrant has also entered into an agreement with SMI
International to maintain and operate an Internet-based customer
support system for FY 2001, for the U.S. Air Force Operational
Space and Support Program.  The $129,600 fee for the annual
agreement was received in July 2000.  Revenue of $64,800 has been
recognized through December 31, 2000.

Financial Condition.

(a)  Working Capital.

As of December 31, 2000, the registrant had working capital of
approximately $106,000.  Working capital provided by operations
was $82,000 for the three months ended December 31, 2000.

(b)  Commitments.

The registrant has an obligation as of December 31, 2000, to
redeem $75,000 of its common stock subject to redemption.  This
obligation is being contested.

(c)  Other Sources of Working Capital

Management is anticipating that the $50,000 escrow account
(held to register the common stock subject to redemption) will be
released in the following quarter when the registrant has
fulfilled its obligation to prepare the registration statements.

The May 1999 sale of the systems integration business
provides for contingent payments based on subsequent profits of
the business sold.  The registrant will share in 50% of the
profits in excess of $75,000 for the year ended April 2001.  The
first $158,000 of these contingent payments earned will be
retained by the buyer to pay for compensated absences for former
the registrant employees.  Profits from the sold business
(unaudited) through October 31, 2000, have not exceeded $75,000.

(d)  Credit Facilities

The registrant currently has no line of credit facility in
place.  The provision in the SAN common stock redemption
agreement, requiring that 50% of loan proceeds will be used to
redeem the SAN shares, may impact the registrant's ability to
obtain additional short-term financing.

(e)  Cash Requirements

Management believes that, with the agreements already in
place to provide services for FY 2001, it has the ability to
generate sufficient cash to support its operations for the next
twelve months.

Results of Operations

(a)  Three Months Ended December 31, 2000

Revenues increased by approximately $410,000 for the three months
ended December 31, 2000 compared to December 31, 1999.  This
primarily reflects the new agreements with QCS and SMI
International.

Selling and administrative expenses increased by approximately
$103,000 for the three months ended December 31, 2000 compared to
December 31, 1999.  This is primarily attributable to the
following items:

Legal fees associated with a registration statement

Website and brand recognition costs

Compensation costs

Interest expense decreased by approximately $63,000 for the three
months ended December 31, 2000 compared to December 31, 1999.
The December 31, 1999 interest expense was related to debt to
SAN.  This debt was settled in March 2000 in exchange for common
stock subject to redemption.

(b)  Six Months Ended December 31, 2000

Revenues increased by approximately $677,000 for the six
months ended December 31, 2000 compared to December 31, 1999.
This primarily reflects the new agreements with QCS and SMI
International.

The December 31, 2000 revenues include a non-recurring
$100,000 licensing fee for the use of KEWi software.

Selling and administrative expenses increased by
approximately $34,000 for the six months ended December 31, 2000
compared to December 31, 1999.  This is primarily attributable to
website and brand recognition costs.

Interest expense decreased by approximately $126,000 for the
six months ended December 31, 2000 compared to December 31, 1999.
The December 31, 1999 interest expense was related to debt to
SAN.  This debt was settled in March 2000 in exchange for common
stock subject to redemption.

Miscellaneous income increased by $64,000 for the six months
ended December 31, 2000 compared to December 31, 1999.  This
primarily represents the $75,000 contingent contract renewal
payment from the May 1999 sale of the systems integration
business.

Risk Factors.

The Registrant recognizes that with the trend toward Internet-
based software products, there is a short window of opportunity
where KEWi, a developed and available product, can capture a
market demanding Internet designed solutions.  The risk of losing
this advantage exists.  There is no assurance that the Registrant
will be able to capture and maintain enough market share to
compete successfully in the future.  The Registrant sees the
following risk factors associated with the business of the
Registrant:

(a)  Product Development.

There can be no assurance that the Registrant will generate
significant revenues in the future from it developed products;
and there can be no assurance that the Registrant will operate at
a profitable level.  If the Registrant is unable to obtain
customers and generate sufficient revenues so that it can
profitably operate, the Registrant's business will not succeed.
In such event, investors in the shares of common stock of the
Registrant may lose their entire investment.

As a result of the fixed nature of many of the
Registrant's expenses, the Registrant may be unable to adjust
spending in a timely manner to compensate for any unexpected
delays in the marketing of the Registrant's products or any
capital raising or revenue shortfall.  Any such delays or
shortfalls will have an immediate adverse impact on the
Registrant's business, operations and financial condition.

(b)  Significant Working Capital Requirements.

The working capital requirements associated with the
plan of business of the Registrant will continue to be
significant.  The Registrant anticipates, based on currently
proposed assumptions relating to its operations (including with
respect to costs and expenditures and projected cash flow from
operations), that it can generate sufficient cash flow to
continue its operations for an indefinite period at the current
level without requiring additional financing.  However, the
Registrant will need to raise additional capital in the next six
months, through debt or equity, to fully implement its sales and
marketing strategy and grow.  In the event that the Registrant's
plans change or its assumptions change or prove to be inaccurate
or if cash flow from operations proves to be insufficient to fund
operations (due to unanticipated expenses, technical
difficulties, problem or otherwise), the Registrant would be
required to seek additional financing sooner than currently
anticipated or may be required to significantly curtail or cease
its operations.

(c)  Registrant Only Has Limited Assets.

The Registrant has only limited assets.  As a result, there can
be no assurance that the Registrant will generate significant
revenues in the future; and there can be no assurance that the
Registrant will operate at a profitable level.  If the Registrant
is unable to obtain customers and generate sufficient revenues so
that it can profitably operate, the Registrant's business will
not succeed.

(d)  Success of Registrant Dependent on Management.

The Registrant's success is dependent upon the hiring of key
administrative personnel.  None of the Registrant's officers,
directors, and key employees have an employment agreement with
the Registrant; therefore, there can be no assurance that these
personnel will remain employed by the Registrant.  Should any of
these individuals cease to be affiliated with the Registrant for
any reason before qualified replacements could be found, there
could be material adverse effects on the Registrant's business
and prospects.  In addition, management has no experience in
managing companies in the same business as the Registrant.

In addition, all decisions with respect to the management of
the Registrant will be made exclusively by the officers and
directors of the Registrant.  Investors will only have rights
associated with ownership interests to make decisions which
effect the Registrant.  The success of the Registrant, to a large
extent, will depend on the quality of the directors and officers
of the Registrant.  Accordingly, no person should invest in the
shares unless he is willing to entrust all aspects of the
management of the Registrant to the officers and directors.

(e)  Control of the Registrant by Officers and Directors.

The Registrant's officers and directors beneficially
own approximately 64% of the outstanding shares of the
Registrant's common stock.  As a result, such persons, acting
together, have the ability to exercise significant influence over
all matters requiring stockholder approval.  Accordingly, it
could be difficult for the investors hereunder to effectuate
control over the affairs of the Registrant.  Therefore, it should
be assumed that the officers, directors, and principal common
shareholders who control the majority of voting rights will be
able, by virtue of their stock holdings, to control the affairs
and policies of the Registrant.

(f)  Limitations on Liability, and Indemnification, of
Directors and Officers.

The articles of incorporation of the Registrant provide
for indemnification of officers and directors of the Registrant.
In addition, the Wyoming Business Corporation Act provides for
permissive indemnification of officers and directors and the
Registrant may provide indemnification under such provisions.
Any limitation on the liability of any director, or
indemnification of directors, officer, or employees, could result
in substantial expenditures being made by the Registrant in
covering any liability of such persons or in indemnifying them.

(g)  Potential Conflicts of Interest Involving Management.

Currently, only two of the officers and directors of the
Registrant devote 100% of their time to the business of the
Registrant.  However, conflicts of interest may arise in the area
of corporate opportunities which cannot be resolved through arm's
length negotiations.  All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to the
Registrant.  It is the intention of management, so as to minimize
any potential conflicts of interest, to present first to the
board of directors to the Registrant, any proposed investments
for its evaluation.

(h)  Product distribution and market acceptance.

The Registrant has developed a subscription-based distribution
model for its proprietary products.  Although subscription-based
services are commonplace within the information technology
industry, this model represents a significant deviation for the
traditional knowledge management and support center industry.
Existing support center call management products are Windows-
based applications licensed on a per-user basis with an
associated annual maintenance fee. A subscription-based service
offers many advantages over traditional software distribution
models.  This model has not yet been proven within the target
market.

(i)  Changing Technologies.

The Registrant's business is subject to changes in technology and
new service introductions.  Accordingly, the Registrant's ability
to compete will be dependent upon its ability to adapt to
technological changes in the industry and to develop services
based on those changes to satisfy evolving client requirements.
Technological changes may create new products or services that
are competitive with, superior to, or render obsolete the
services currently offered.

(j)  Acceptance And Effectiveness Of Internet Electronic Commerce.

The Registrant's success in establishing an e-commerce
business web site will be dependent on consumer acceptance of e-
retailing and an increase in the use of the Internet for e-
commerce.  If the markets for e-commerce do not develop or
develop more slowly than the Registrant expects, its e-commerce
business may be harmed.  If Internet usage does not grow, the
Registrant may not be able to increase revenues from Internet
advertising and sponsorships which also may harm both the
Registrant's e-commerce business.  Internet use by consumers is
in an early stage of development, and market acceptance of the
Internet as a medium for content, advertising and e-commerce is
uncertain.  A number of factors may inhibit the growth of
Internet usage, including inadequate network infrastructure,
security concerns, inconsistent quality of service, and limited
availability of cost-effective, high-speed access.  If these or
any other factors cause use of the Internet to slow or decline,
the Registrant's results of operations could be adversely
affected.

(k)  Competition In Internet Commerce.

Increased competition from e-commerce could result in
reduced margins or loss of market share, any of which could harm
both the Registrant's e-commerce businesses.  Competition is
likely to increase significantly as new companies enter the
market and current competitors expand their services.  Many of
the Registrant's present and potential competitors are likely to
enjoy substantial competitive advantages, including larger
numbers of users, more fully-developed e-commerce opportunities,
larger technical, production and editorial staffs, and
substantially greater financial, marketing, technical and other
resources.  If the Registrant does not compete effectively or if
it experiences any pricing pressures, reduced margins or loss of
market share resulting from increased competition, the
Registrant's business could be adversely affected.

(l)  Unreliability Of Internet Infrastructure.

If the Internet continues to experience increased numbers of
users, frequency of use or increased bandwidth requirements, the
Internet infrastructure may not be able to support these
increased demands or perform reliably. The Internet has
experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and could face
additional outages and delays in the future.  These outages and
delays could reduce the level of Internet usage and traffic on
the Registrant's website.  In addition, the Internet could lose
its viability due to delays in the development or adoption of new
standards and protocols to handle increased levels of activity.
If the Internet infrastructure is not adequately developed or
maintained, use of the Registrant's website may be reduced.  Even
if the Internet infrastructure is adequately developed, and
maintained, the Registrant may incur substantial expenditures in
order to adapt its services and products to changing Internet
technologies.  Such additional expenses could severely harm the
Registrant's financial results.

(m)  Transactional Security Concerns.

A significant barrier to Internet e-commerce is the secure
transmission of confidential information over public networks.
Any breach in the Registrant's security could cause interruptions
in the operation of the Registrant's website and have an adverse
effect on the Registrant's business.

(n)  Governmental Regulation Of The Internet.

The Registrant is subject to the same federal, state and local
laws as other companies conducting business on the Internet.
Today, there are relatively few laws specifically directed
towards online services.  However, due to the increasing
popularity and use of the Internet and online services, it is
possible that laws and regulations will be adopted with respect
to the Internet or online services.  These laws and regulations
could cover issues such as online contracts, user privacy,
freedom of expression, pricing, fraud, content and quality of
products and services, taxation, advertising, intellectual
property rights and information security.  Applicability to the
Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues,
taxation, libel, obscenity and personal privacy is uncertain.

Several states have proposed legislation that would limit
the uses of personal user information gathered online or require
online services to establish privacy policies.  The Federal Trade
Commission also has recently started a proceeding with one online
service regarding the manner in which personal information is
collected from users and provided to third parties.  Changes to
existing laws or the passage of new laws intended to address
these issues could directly affect the way the Registrant does
business or could create uncertainty in the marketplace.  This
could reduce demand for the Registrant's services or increase the
delivery costs, or could otherwise harm its business.  In some
jurisdictions, the Registrant will be required to collect value-
added taxes on the Registrant's fees.  The Registrant's failure
to comply with foreign laws could subject it to penalties ranging
from fines to bans on the Registrant's ability to offer its
services.

(o)  Influence of Other External Factors on Prospects for Registrant.

The industry of the Registrant in general is a speculative
venture necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by the Registrant will
result in a commercially profitable business.  The marketability
of its products will be affected by numerous factors beyond the
control of the Registrant.  These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect companies' spending.  Factors which leave less money in
the hands of potential customers of the Registrant will likely
have an adverse effect on the Registrant.  The exact effect of
these factors cannot be accurately predicted, but the combination
of these factors may result in the Registrant not receiving an
adequate return on invested capital.

(p)  No Cumulative Voting

Holders of the shares are not entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the
holders of a majority of the shares present at a meeting of
shareholders will be able to elect all of the directors of the
Registrant, and the minority shareholders will not be able to
elect a representative to the Registrant's board of directors.

(q)  Absence of Cash Dividends

The board of directors does not anticipate paying cash dividends
on the shares for the foreseeable future and intends to retain
any future earnings to finance the growth of the Registrant's
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements, and the general
operating and financial condition of the Registrant, and will be
subject to legal limitations on the payment of dividends out of
paid-in capital.

(r)  Limited Public Market for Registrant's Securities.

There has been only a limited public market for the shares of
common stock of the Registrant.  There can be no assurance that
an active trading market will develop or that purchasers of the
shares will be able to resell their securities at prices equal to
or greater than the respective initial public offering prices.
The market price of the shares may be affected significantly by
factors such as announcements by the Registrant or its
competitors, variations in the Registrant's results of
operations, and market conditions in the retail, electronic
commerce, and Internet industries in general.  The market price
may also be affected by movements in prices of stock in general.
As a result of these factors, investors in the Registrant may not
be able to liquidate an investment in the shares readily, or at
all.

(s)  No Assurance of Continued Public Trading Market; Risk
of Low Priced Securities.

There has been only a limited public market for the
common stock of the Registrant.  The common stock of the
Registrant is currently quoted on the Over the Counter Bulletin
Board.  As a result, an investor may find it difficult to dispose
of, or to obtain accurate quotations as to the market value of
the Registrant's securities. In addition, the common stock is
subject to the low-priced security or so called "penny stock"
rules that impose additional sales practice requirements on
broker-dealers who sell such securities.  The Securities
Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure in connection with any trades involving a
stock defined as a penny stock (generally, according to recent
regulations adopted by the U.S. Securities and Exchange
Commission, any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions), including
the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the
risks associated therewith.   The regulations governing low-
priced or penny stocks sometimes limit the ability of broker-
dealers to sell the Registrant's common stock and thus,
ultimately, the ability of the investors to sell their securities
in the secondary market.

(t)  Effects of Failure to Maintain Market Makers.

If the Registrant is unable to maintain a National
Association of Securities Dealers, Inc. member broker/dealers as
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail.  Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market.  There can be no
assurance the Registrant will be able to maintain such market
makers.

(u)  Shares Eligible For Future Sale.

All of the 26,623,057 shares of common stock which are currently
held, directly or indirectly, by management have been issued in
reliance on the private placement exemption under the Securities
Act of 1933.  Such shares will not be available for sale in the
open market without separate registration except in reliance upon
Rule 144 under the Securities Act of 1933.  In general, under
Rule 144 a person (or persons whose shares are aggregated) who
has beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be
deemed affiliates of the Registrant (as that term is defined
under that rule) would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of 1%
of the then outstanding shares of common stock, or the average
weekly reported trading volume during the four calendar weeks
preceding such sale, provided that certain current public
information is then available.  If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.

Forward Looking Statements.

The foregoing Management's Discussion and Analysis of Financial
Condition and Results of Operation contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act
of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934,
as amended, including statements regarding, among other items,
the Registrant's business strategies, continued growth in the
Registrant's markets, projections, and anticipated trends in the
Registrant's business and the industry in which it operates.  The
words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements.  These forward-looking statements are based largely
on the Registrant's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the
Registrant's control.  The Registrant cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including, among others, the
following: reduced or lack of increase in demand for the
Registrant's products, competitive pricing pressures, changes in
the market price of ingredients used in the Registrant's products
and the level of expenses incurred in the Registrant's
operations.  In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained
herein will in fact transpire or prove to be accurate.  The
Registrant disclaims any intent or obligation to update "forward
looking statements."

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Other than as set forth below, the Registrant is not a party
to any material pending legal proceedings and, to the best of its
knowledge, no such action by or against the Registrant has been
threatened.

In a Form 8-K filed on March 24, 2000, the Registrant disclosed
an action and its settlement:

(a)  A vendor of the Registrant, Storage Area Network, who was
allegedly owed $2,211,048 at June 30, 1999, filed suit to attempt
to attach the Registrant's assets for the collection of that
liability.  A settlement agreement was reached in March 2000.
Storage Area Network received 6,460,137 shares of restricted
common stock, and the liability to SAN was discharged.  No gain
or loss was recorded upon this settlement.

After the Registrant paid off another vendor in August 2000,
these shares are subject to redemption under the following terms:
All subsequent contingent receipts from the May 1999 sale of the
systems integration business will be used to redeem these shares.
In addition, the Registrant will use 50% of any capital
investment or loans, and 50% of subsequent net income, to redeem
these shares.  For redemption payments through September 2000,
these shares will be transferred back to the Registrant at $0.35
per share.  For subsequent redemption payments, these shares
shall be transferred back to the Registrant at $0.52 per share,
or the then current market price, whichever is higher.  At the
point Storage Area Network has received redemption payments
totaling $2,211,048, the Registrant will have the right, but not
the obligation, to continue purchasing these shares.

A $50,000 escrow account was established by the Registrant under
the settlement agreement for the Registrant to use to cover the
expenses of registering these shares during the year ended June
30, 2001.  Interest expense of $182,749 and $19,603 for the years
ended June 30, 2000 and 1999, respectively, was incurred and paid
to Storage Area Network prior to the settlement.

(b)  Certain information has recently come to the attention
of the Registrant's management that necessitates that the
Registrant now dispute the liability to Storage Area Network, as
set forth above.  The Registrant has consulted with counsel and
is considering all legal alternatives with regard to this matter.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

Reports on Form 8-K.

No reports on Form 8-K were filed during the second quarter
of the fiscal year covered by this Form 10-QSB.

Exhibits.

Exhibits included or incorporated by reference herein: See
Exhibit Index.


                             SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                      3Si Holdings, Inc.



Dated: February 12, 2001              By: /s/ Frank W. Backes
                                      Frank W. Backes,
                                      President and Chief Executive Officer

                            EXHIBIT INDEX

Exhibit                    Description
Number

2.1     Agreement and Plan of Reorganization between the Registrant,
        Kimbrough Computer Sales, Inc. d.b.a. 3Si, Inc., Fred Slack,
        Frank Backes and Larry Valdez, dated May 28, 1997 (incorporated
        by reference to Exhibit 10.1 of the Form 8-K filed on June 9, 1997).

2.2     Transition Agreement between the Registrant, Kimbrough
        Computer Sales, Inc. d.b.a. 3Si, Inc., Fred Slack, Frank Backes
        and Larry Valdez, dated May 28, 1997 (incorporated by reference
        to Exhibit 10.2 of the Form 8-K filed on June 9, 1997).

3.1     Articles of Incorporation, and amendments thereto
       (incorporated by reference to Exhibit 3.1 of the filed
        Registration Statement on Form S-2).

3.2     Certificate of Amendment to Articles of Incorporation
       (incorporated by reference to Exhibit 3.2 of the Form 10-KSB/A
        filed on December 19, 2000).

3.3     Bylaws, as amended (incorporated by reference to Exhibit 3.2
        of the filed Registration Statement on Form S-2).

4.1     Warrant Agreement between the Registrant and One Capital
        Corporation, dated October 22, 1997 (incorporated by reference to
        Exhibit 1 of the Form S-8 filed on July 27, 1998).

4.2     1998 Omnibus Stock Option Plan, dated June 18, 1998
       (incorporated by reference to Exhibit 1 of the Form S-8 filed on
        February 3, 2000).

4.3     2000 Non-Qualified Stock Plan, dated June 18, 2000
       (incorporated by reference to Exhibit 4 of the Form S-8 filed on
        June 18, 2000).

4.4     Form of Common Stock Purchase Agreement between the
        Registrant and institutional investors (incorporated by reference
        to Exhibit 4.4 of the Form SB-2 filed on December 22, 2000).

10.1    Asset Purchase Agreement between the Registrant, 3Si, Inc.,
        and PC Specialists, Inc., dated May 7, 1999 (incorporated by
        reference to Exhibit 10.1 of the Form SB-2 filed on December 22, 2000).

10.2    Settlement Agreement between the Registrant and Storage Area
        Network, Inc., dated March 16, 2000 (incorporated by reference to
        Exhibit 99.1 of the Form 8-K filed on March 24, 2000).

10.3    License Agreement between KEWI.net, Inc. and Qwest
        Cyber.Solutions LLC, dated May 22, 2000 (incorporated by
        reference to Exhibit 10.2 of the Form 10-QSB filed on November
        13, 2000).

10.4    Joint Marketing and Warrant Agreement between KEWi.net, Inc.
        and Qwest Cyber.Solutions LLC, dated May 22, 2000 (incorporated
        by reference to Exhibit 10.3 of the Form 10-QSB filed on November
        13, 2000).

10.5    Production Agreement between KEWi.net, Inc., Qwest
        Cyber.Solutions LLC, and BVP Media, Inc., dated May 22, 2000
       (incorporated by reference to Exhibit 10.4 of the Form 10-QSB
        filed on November 13, 2000).

21      Subsidiaries of the Registrant (incorporated by reference to
        Exhibit 21 of the Form 10-K filed on October 13, 1999).