UNITED STATES
                       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 period ended September 30, 2001

                                       OR

[ ] TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15 (d) OF THE
    EXCHANGE ACT OF 1934

                     For the transition period from __ to __

                           Commission File No. 0-22744


                           VIKING CAPITAL GROUP, INC.
                           --------------------------
        (Exact name of small business issuer as specified in its charter)


                Utah                                   87-0442090
                ----                                   ----------
    (State or other jurisdiction of         (IRS Employer Identification No.)
     incorporation or organization)

        Two Lincoln Centre, Suite 300, 5420 LBJ FWY, Dallas, Texas 75240
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 386-9996
                                 --------------
                           (Issuer's telephone number)


        ----------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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

As of September 30, 2001, approximately 40,191,246 shares of Common Stock of the
issuer were issued and 39,665,621 shares were  outstanding.  As of September 30,
2001,  100,000  shares of Class B Common  Stock of the  issuer  were  issued and
outstanding.



                                     - 1 -
<PAGE>

                           VIKING CAPITAL GROUP, INC.



                                      INDEX


                                                                          Page
                                                                          Number
                                                                          ------
PART I - FINANCIAL INFORMATION

   Item 1. Financial Statements

      Consolidated Balance Sheets - September 30, 2001 (unaudited)
      and December 31, 2000                                                  3

      Consolidated Statements of Operations (unaudited) - For the
      three months ended September 30, 2001 and 2000                         5

      Consolidated Statements of Operations (unaudited) - For the
      nine months ended September 30, 2001 and 2000, and for the
      period from inception (November 12, 1986) to September 30, 2001        6

      Consolidated  Statements of Cash Flows (unaudited) - For the
      nine months ended September 30, 2001 and 2000, and for the
      period from inception (November 12, 1986) to September 30, 2001        7

      Notes to Consolidated Condensed Financial Statements                   9


   Item 2. Management's Discussion and Analysis or Plan of Operations.      12


PART II - OTHER INFORMATION

   Item 2.  Changes in Securities                                           15

   Item 5. Other Information                                                15
   Item 6.  Exhibits                                                        15


SIGNATURES                                                                  16
EXHIBITS                                                                    17




                                     - 2 -
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS



                                     ASSETS
                                     ------
                                                                     (Unaudited)
                                                                    September 30,  December 31,
                                                                         2001           2000
                                                                    -------------  ------------
<S>                                                                 <C>            <C>
CURRENT ASSETS

  Cash                                                              $    150,243   $     13,193
  Marketable securities                                                    8,977           --
  Accounts receivable                                                       --             --
  Notes and other accounts receivable and accrued interest,
     including $106,444 and $19,384  due from related parties
     as of September 30, 2001 and December 31, 2000, respectively        140,623         81,164
                                                                    ------------   ------------
     Total current assets                                                299,843         94,357
                                                                    ------------   ------------

OFFICE FURNITURE, EQUIPMENT, SOFTWARE AND
  CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET                            428,841        649,808

OTHER ASSETS                                                              60,027         85,027
                                                                    ------------   ------------

TOTAL ASSETS                                                        $    788,711   $    829,192
                                                                    ============   ============

</TABLE>










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

                                     - 3 -
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS



                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------

                                                                                  (Unaudited)
                                                                                 September 30,   December 31,
                                                                                      2001            2000
                                                                                 -------------   ------------
<S>                                                                              <C>             <C>
CURRENT LIABILITIES
  Accounts payable and accrued expenses                                          $    223,130    $    248,473
  Accrued officers' payroll and payroll taxes                                       1,738,780       1,430,042
  Lease obligation, current portion                                                     3,412          13,448
  Notes payable and accrued interest, including
     $70,135 and $42,574 due to related parties as of
     September 30, 2001 and December 31, 2000, respectively                           415,931         287,015
                                                                                 ------------    ------------
     Total current liabilities                                                      2,381,253       1,978,978
                                                                                 ------------    ------------

     Total liabilities                                                              2,381,253       1,978,978
                                                                                 ------------    ------------

STOCKHOLDERS' DEFICIT
  Preferred  stock  $1.00 par  value; 50,000,000 shares authorized;
     Series A Preferred Stock $1.00 par value; 2,500,000 shares
        authorized, no shares issued and outstanding                                     --              --
     Series AA Preferred Stock $1.00 par value; 6,000,000 shares
        authorized, no shares issued and outstanding                                     --              --
  Common stock $0.001 par value; 150,000,000 shares authorized;
     40,191,246 and 36,581,463 issued and 39,665,621 and 36,055,838
     outstanding, as of September 30, 2001 and December 31, 2000, respectively         40,191          36,581
  Common stock Class B $0.001 par value; 100,000 shares
     authorized, issued  and outstanding                                                  100             100
  Paid-in capital                                                                  10,236,099       9,514,125
  Deficits accumulated in the development stage                                   (11,827,726)    (10,659,386)
                                                                                 ------------    ------------
                                                                                   (1,551,336)     (1,108,580)
                                                                                 ------------    ------------

  Less treasury stock of 525,625 shares, at cost                                      (41,206)        (41,206)
                                                                                 ------------    ------------

     Total stockholders' (deficit)                                                 (1,592,542)     (1,149,786)
                                                                                 ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                      $    788,711    $    829,192
                                                                                 ============    ============

</TABLE>




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

                                     - 4 -
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
               Three months ended September 30, 2001 and 2000



                                                         Three months ended
                                                            September 30,
                                                        2001            2000
                                                   ------------    ------------

Revenue                                            $       --      $       --
Cost of revenue                                            --              --
                                                   ------------    ------------
Gross profit                                               --              --
                                                   ------------    ------------

Costs and expenses
   Depreciation and amortization                         66,751          72,219
   General and administrative expenses                  329,341         415,988
                                                   ------------    ------------
       Total costs and expenses                         396,092         488,207
                                                   ------------    ------------

   Loss from operations                                (396,092)       (488,207)

Other income(expense)
   Interest income                                        2,491             767
   Interest and penalty expense                         (12,037)         (7,846)
   Other                                                    (26)           (751)
                                                   ------------    ------------
         Total other income(expense)                     (9,572)         (7,830)

Loss before income taxes                               (405,664)       (496,037)

Income tax provision                                       --              --
                                                   ------------    ------------

Net Loss                                           $   (405,664)   $   (496,037)
                                                   ============    ============

Loss per common share attributable to
   common stockholders
     Basic and fully diluted                       $      (.010)   $      (.014)
                                                   ============    ============


Weighted average common shares outstanding           39,007,412      34,356,323
                                                   ============    ============





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

                                     - 5 -
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                Nine months ended September 30, 2001 and 2000 and
         Period from November 12, 1986 (inception) to September 30, 2001



                                                       Nine months ended             Period from
                                                         September 30,            November 12, 1986
                                                     2001            2000       to September 30, 2001
                                                ------------    ------------    ---------------------
<S>                                             <C>             <C>             <C>
Revenue                                         $       --      $     15,666         $    474,376
Cost of revenue                                         --            13,366               91,324
                                                ------------    ------------         ------------
Gross profit                                            --             2,300              383,052
                                                ------------    ------------         ------------

Costs and expenses
   Depreciation and amortization                     220,968         101,201              525,336
   General and administrative expenses               917,864       1,101,356           11,473,913
                                                ------------    ------------         ------------
       Total costs and expenses                    1,138,832       1,202,557           11,999,249
                                                ------------    ------------         ------------

   Loss from operations                           (1,138,832)     (1,200,257)         (11,616,197)

Other income(expense)
   Interest income                                     6,472          19,582              112,487
   Interest and penalty expense                      (35,539)        (21,707)            (319,688)
   Other                                                (441)         (4,415)              26,895
                                                ------------    ------------         ------------
         Total other income(expense)                 (29,508)         (6,540)            (180,306)

Loss before income taxes                          (1,168,340)     (1,206,797)         (11,796,503)

Income tax provision                                    --              --                    (32)
                                                ------------    ------------         ------------

Net loss                                        $ (1,168,340)   $ (1,206,797)        $(11,796,535)
                                                ============    ============         ============

Loss per common share attributable to
   common stockholders
     Basic and fully diluted                    $      (.031)   $      (.036)
                                                ============    ============


Weighted average common shares outstanding        37,419,554      33,520,759
                                                ============    ============

</TABLE>









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

                                     - 6 -
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                Nine months ended September 30, 2001 and 2000 and
         Period from November 12, 1986 (inception) to September 30, 2001


                                                                    Nine months ended              Period from
                                                                       September 30,            November 12, 1986
                                                                   2001            2000       to September 30, 2001
                                                              ------------    ------------    ---------------------
<S>                                                           <C>             <C>             <C>
Cash flows from operating activities
   Net loss                                                   $ (1,168,340)   $ (1,206,797)       $(11,796,535)
   Non-cash charges included in operations
     Provision for doubtful accounts                                  --              --                72,561
     Depreciation and amortization                                 220,968         101,201             525,336
     Common stock issued for services and interest                 127,062         319,799           2,899,087
     Stock options issued for services                              47,623            --               114,162
     Note payable issued for services                                 --              --                 3,200
     Note payable issued for interest expense                          642            --                 4,302
     Common stock issued for accrued expenses,
       expense reimbursement, fees, other                             --              --               187,988
     Provision for doubtful notes receivable                          --              --                52,754
     Loss on assets                                                   --              --                15,000
     Advances to stockholder expensed to consulting                   --              --                57,706
   Changes in assets and liabilities
     Decrease in accounts receivable                                  --            14,024                 205
     (Increase) in interest receivable                              (6,472)         15,288              (8,617)
     (Increase) in deposits                                           --              --               (31,767)
     Decrease in other assets, receivables                          55,000           5,332               2,325
     (Decrease) in accounts payable and accrued expenses           (25,343)        (71,265)            365,670
     Increase in interest payable                                   15,666            --                15,666
     Increase in accrued payroll and payroll taxes                 308,738         281,877           1,630,247
                                                              ------------    ------------        ------------
       Net cash used for operating activities                     (424,456)       (540,541)         (5,890,710)

Cash flows from investing activities
   Capital expenditures                                               --              --              (837,940)
   Loans made                                                      (82,988)        (60,000)           (477,815)
   Loan repayments                                                    --              --               114,500
   Other                                                              --              --               (15,050)
                                                              ------------    ------------        ------------
       Net cash used for investing activities                      (82,988)        (60,000)         (1,216,305)

Cash flows from financing activities
   Stock sale expenses                                                --              --               (11,716)
   Proceeds from sale of common stock                              499,800         535,249           5,312,889
   Proceeds from notes payable                                     184,330         178,000           2,832,383
   Principal repayments of notes payable                           (29,600)        (95,300)           (774,919)
   Principal payments on capital lease obligations                 (10,036)        (19,519)           (104,226)
   Proceeds from preferred stock sale                                 --              --                20,000
   Repurchase of preferred stock                                      --              --               (11,319)
   Preferred dividends paid                                           --              --                (5,834)
                                                              ------------    ------------        ------------
       Net cash provided by financing activities                   644,494         598,430           7,257,258

Increase (decrease) in cash                                        137,050          (2,111)            150,243

</TABLE>

                                  - continued -

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

                                     - 7 -
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                                   (Unaudited)
                  Nine months ended September 30, 2001 and 2000
       and Period from November 12, 1986 (inception) to September 30, 2001


                                                             Nine months ended           Period from
                                                               September 30,          November 12, 1986
                                                             2001         2000      to September 30, 2001
                                                          ----------   ----------   ---------------------
<S>                                                       <C>          <C>          <C>

Cash at beginning of period                                   13,193        8,434              --
                                                          ----------   ----------        ----------
Cash at end of period                                     $  150,243   $    6,323        $  150,243
                                                          ==========   ==========        ==========

Cash flow information:
   Interest paid                                          $    9,920   $   13,459        $  131,239
   Income taxes paid                                      $     --     $     --          $       32

Non-cash investing activities:
   Repayment of note receivable - non cash method         $     --     $     --          $   21,000
   Common stock issued for:
     Acquisition of NIAI                                  $     --     $     --          $   10,000
     Acquisition of VISI                                  $     --     $     --          $      434
     Oil lease                                            $     --     $     --          $   40,000
   Marketable securities acquired for note payable        $    8,977   $     --          $    8,977

Non-cash financing activities:
   Preferred stock issued for:
     Note payable-related party                           $     --     $     --          $   60,000
     Accrued interest-related party                       $     --     $     --          $    4,500
     Accrued expenses-related party                       $     --     $     --          $   25,500

Common stock issued for:
   Repayment of notes payable                             $   51,100   $   20,198        $1,490,334
   Payment of interest                                    $      734   $    1,825        $  148,745
   Payment of accounts payable and exp reimbursement      $     --     $     --          $   15,000
   Conversion of preferred stock                          $     --     $     --          $  100,000
   Payment of preferred stock dividend                    $     --     $     --          $   25,556
   Notes receivable                                       $     --     $   79,000        $  832,032

Note payable issued for services                          $     --     $     --          $    6,860
Assignment of oil lease in payment of note payable        $     --     $     --          $   40,000

Common stock acquired for conversion of
   note receivable                                        $     --     $     --          $    6,406

Common stock canceled for conversion of
   note receivable                                        $   60,000   $     --          $   65,600

Additions to equipment under capital leases               $     --     $     --          $  107,631

</TABLE>

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

                                     - 8 -
<PAGE>

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The consolidated  interim  financial  statements  include the accounts of Viking
Capital  Group,  Inc.  and  its  wholly  owned  subsidiaries  (collectively  the
"Company").

The consolidated interim financial statements included herein have been prepared
by the Company,  without  audit,  pursuant to the rules and  regulations  of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally accepted  accounting  principals  ("GAAP") 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.  It  is  suggested  that  these  financial  statements  be  read  in
conjunction  with  the  consolidated  financial  statements  and  related  notes
included in the Company's  Form 10-KSB as of and for the year ended December 31,
2000.

In the opinion of  management,  the  unaudited  interim  consolidated  financial
statements of the Company contain all adjustments, consisting only of those of a
normal  recurring  nature,  necessary to present fairly the Company's  financial
position  and the  results  of its  operations  and cash  flows for the  periods
presented.  The  preparation  of financial  statements in  accordance  with GAAP
requires  management  to make  estimates  and  assumptions.  Such  estimates and
assumptions  affect the reported amounts of assets and  liabilities,  as well as
the  disclosures  of  contingent  assets  and  liabilities  at the  date  of the
financial  statements,  and the reported  amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

2.   MARKETABLE SECURITIES

Marketable  securities  consist of an investment  in an equity  security and are
classified as available for sale.  Unrealized  gains and losses will be adjusted
directly  to  stockholder  deficits.  There were no  unrealized  gains or losses
through September 30, 2001.

3.   SOFTWARE DEVELOPMENT COSTS

Software development costs have been capitalized in accordance with Statement of
Financial  Accounting  Standards No. 86,  "Accounting  for the Costs of Computer
Software to be Sold,  Leased or Otherwise  Marketed" ("SFAS 86"). Under SFAS 86,
capitalization  of software  development  costs begins upon the establishment of
technological  feasibility  and ends when a product  is  available  for  general
release to customers.  For the nine month period  ending  September 30, 2001 and
for the year ended December 31, 2000 the Company amortized $200,932 and $143,448
of software costs, respectively, using an estimated useful life of three years.

Management periodically evaluates the recoverability, valuation and amortization
of capitalized software costs. As part of this review,  management considers the
undiscounted  projected  future net  earnings.  If the  undiscounted  future net
earnings are less than the stated value,  software costs will be written down to
fair value.

4.   RELATED PARTY TRANSACTIONS

During the current  quarter,  the Company  did not enter into  promissory  notes
payables  with  related  parties.  At  September  30, 2001 there were $70,135 in
promissory notes payable (including accrued interest) to related parties.

                                     - 9 -
<PAGE>

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

During the current quarter, the Company entered into $30,438 of promissory notes
receivable  with related  parties.  At September  30, 2001,  there were $106,444
promissory notes receivable from related parties including accrued interest.

5.   OPTIONS ISSUED

During the current quarter, the Company granted 366,137 share options for common
restricted stock exercisable at $0.50 per share for six months and 547,122 share
options for common  restricted  stock  exercisable  between  $0.22 and $0.30 per
share  exercisable  for one year in  connection  with  the  purchase  of  common
restricted  shares for cash.  The  Company  also  issued one million two hundred
thousand share options immediately  exercisable at $0.25 per share for services.
The options issued for services were valued at $250,369 using the  Black-Scholes
option  pricing  model.  The  following  assumptions  were used for these option
grants; dividend yield at 0.00%, expected volatility at 136%, risk free interest
rate of 6%, and a term of 10 years.

6.   OTHER

The financial  statements  have been prepared on the assumption that the Company
will  continue as a going  concern.  Its  continued  existence  depends upon the
success of management's  efforts to raise additional  capital  necessary to meet
the Company's  obligations as they come due and to obtain sufficient  capital to
execute its business plan.

There can be no degree of assurance given that the Company will be successful in
completing additional financing transactions. Should the Company be unsuccessful
in its efforts to obtain adequate  financing,  it's current financial  condition
may be affected adversely, and such affects may be material.

7.   ACCOUNTING CHANGES

In July 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 141 "Business  Combinations" which requires
the  purchase  method  of  accounting  for  business  combination   transactions
initiated after June 30, 2001.

In July 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 142 "Goodwill and Other Intangible Assets".
The statement requires that goodwill recorded on acquisitions completed prior to
July 1, 2001 be amortized  through December 31, 2001.  Goodwill  amortization is
precluded on acquisitions  completed after June 30, 2001.  Effective  January 1,
2002,  goodwill will no longer be amortized but will be tested for impairment as
set forth in the  statement.  We are  currently  reviewing  the new standard and
evaluating  the  effects of this  standard  on our future  financial  condition,
results of operations, and accounting policies and practices.

8.   EVENTS SUBSEQUENT TO SEPTEMBER 30, 2001

Subsequent to September 30, 2001,  approximately 50,242 share options for common
restricted  stock were granted with an exercise price of $0.30 per share.  These
options  were  issued in  connection  with  conversion  of debt to stock and are
exercisable  and expire  within one year.  The  Company  issued  100,000  common
restricted share options  exercisable at $0.50 per share in payment of services.
All of these options are exercisable  and expire within one year.  Additionally,
the Company  issued  approximately  210,001 common  restricted  share options in
connection  with  stock  purchases  exercisable  at  $0.50  per  share  and  are
exercisable and expire within six months. The Company also issued 555,000 common
restricted  shares for  $166,500  cash and 50,242  common  restricted  shares in
connection  with the  conversion  of $7,100  promissory  notes plus  interest to
stock.


                                     - 10 -
<PAGE>

The Company  signed an agreement  dated  October 1, 2001 to purchase 25% of Wuxi
Viking, located in Wuxi, China. The agreement will be effective after receipt of
a business license pertaining to this transaction by Chinese  authorities.  Wuxi
Viking is the parent and a producing member of a total of five companies engaged
in the garment manufacturing business.  Viking has worked with the prior owners,
the  Liutan  Group of  Companies  for  some  time  and  changed  the name of the
purchased  Company  in  anticipation  of  closing  the deal.  Viking  will issue
1,800,000  common  restricted  shares in exchange for its 25%  ownership of Wuxi
Viking.  The value of this acquisition is determined by the current market price
of the shares given up in the  transaction.  This  acquisition will be accounted
for under the equity  method,  using the market price of the 1.8 million  shares
given up.

Viking  signed an  agreement  dated  August 1,  2001 to  acquire  25% of Fei Yun
Property Development Company, Ltd. ("Fei Yun"). The Chinese authorities approved
the new company  structure for a foreign  investor  (Viking Capital) on November
15,  2001.  This  transaction  will be effective  upon  issuance of the business
license for this new company structure and related transfer of business from Fei
Yun. The primary business of Fei Yun is development and management of commercial
and  residential  real  estate.  It  also  owns  a  chemical  exchange  company,
construction  and  operating  rights  for a  tollway  and two  notes  receivable
representing  one third  ownership of an office building and 40% ownership of an
organic waste management  company.  Viking issued  14,000,000  common restricted
shares  pending  the final  effective  date,  to  selling  owners of Fei Yun and
7,500,000  shares to be held by Fei Yun for future  growth in  exchange  for 25%
ownership of Fei Yun. The value of this acquisition is determined by the current
market price of the shares given up in the transaction. This acquisition will be
accounted  for under the equity  method,  using the  market  price of the shares
given up.


                                     - 11 -
<PAGE>

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

This  Quarterly  Report  on  Form  10-QSB  contains  certain   "forward-looking"
statements as such term is defined in the Private  Securities  Litigation Reform
Act of 1995 and information  relating to the Company and its  subsidiaries  that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this  report,  the  words  "anticipate,"  "believe,"  "estimate,"  "expect"  and
"intend" and words or phrases of similar  import,  as they relate to the Company
or  its   subsidiaries   or  Company   management,   are  intended  to  identify
forward-looking   statements.   Such  statements   reflect  the  current  risks,
uncertainties  and  assumptions  related to certain factors  including,  without
limitations,   changes  or  anticipated  changes  in  regulatory   environments,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation and supervision,  international  relations between the US and foreign
countries,   seasonality,   distribution  networks,  product  introductions  and
acceptance, technological change, changes in industry practices, one-time events
and other factors described herein and in other filings made by the Company with
the Securities and Exchange Commission.  Based upon changing conditions,  should
any one or more of these  risks or  uncertainties  materialize,  or  should  any
underlying assumptions prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended.   The  Company  does  not  intend  to  update  these   forward-looking
statements.


Material Changes in Results of Operations

This has been a very successful  quarter for the Company and is expected to mark
the successful turning point in the history of our development stage company.

Management  has recently  focused its efforts on  opportunities  in China as the
most expedient way to grow the Company.  Efforts in China first yielded  results
in  February  of 2001,  when the  Company  signed  an  agreement  with a Chinese
privatization authority. The agreement gives Viking the legal right to act as an
intermediate  for  individuals  or  companies  in the  Americas  who wish to buy
privatized  Chinese  assets.  This agreement has generated  several  acquisition
targets  for the Company  from both the  privatization  effort and from  already
private companies in China.

Management  believes it has  completed  a milestone  event in the history of the
Company  with the  acquisition  of 25% and voting  control  of  Beijing  Fei Yun
Property Development Co., Ltd. (Fei Yun) of Beijing,  China and 25% ownership of
Wuxi  Viking  Garment  Co.,  Ltd. of Wuxi,  China.  The  transactions  have been
determined to be pending due to administrative  approvals still not processed in
the People's  Republic of China.  The Company is waiting for the imminent return
of the new  ownership  documents  that will make the  agreements  effective  and
therein allow the Company to record the purchase.

Viking's  25% purchase of Fei Yun is in exchange  for  fourteen  million  common
restricted  shares to selling  owners of Fei Yun and seven  million five hundred
thousand shares issued to Fei Yun for future growth. The primary business of Fei
Yun is development and management of commercial and residential real estate.  It
also owns a chemical exchange  company,  construction and operating rights for a
tollway and two notes  receivable  representing one third ownership of an office
building  and 40%  ownership of an organic  waste  management  company.  The two
companies  related to the notes were originally part of the corporate  structure
of Fei  Yun but  were  sold to the Fei Yun  founders  with  the  expectation  of
re-purchase when the books and records of the company are more complete in terms
of its historical data. After approval by the Chinese authorities, the Company's
name will be Beijing  Fei Yun Viking  Enterprises  Co.,  Ltd.  The two  founding
executives have joined Viking as vice presidents.


                                     - 12 -
<PAGE>

The Company  retained  Beijing Jin Zhong Wei  Appraisal  Co., Ltd. to perform an
appraisal of the  business and assets of Fei Yun. The results of such  appraisal
show that the total value of gross  assets and  business  are  $217,803,000.  It
should  be noted  that  the two  companies  sold to the  founders,  account  for
$45,692,400  of the  assets  leaving  $172,110,600.  The  value of the two notes
receivables is $11,630,604.  Consequently,  the total is  $183,741,204  which is
$172,110,600 plus the $11,630,604 value of the two notes receivable. The Company
expects to repurchase  these two companies when its historical  records are more
complete.

Also  during the  quarter,  Viking  negotiated  for the  purchase of 25% of Wuxi
Viking Garment  Company,  Ltd.  (Wuxi Viking) for 1.8 million common  restricted
shares.  The  acquisition  agreement is to become  effective  after receipt of a
business license  pertaining to this transaction by PRC authorities.  Receipt of
such  license  is  expected  to be  imminent.  Wuxi Viking is the  parent  and a
producing  member  of  a  total  of  five  companies   engaged  in  the  garment
manufacturing business. Viking has worked with the prior owner, the Liutan Group
of Companies for some time and changed the name of the purchased company to Wuxi
Viking in  anticipation  of closing the deal.  Wuxi Viking is expected to exceed
$130 million in consolidated sales this year.

It was determined that both acquisitions,  when effective, will be accounted for
as an equity  investment.  While the  Company  controls  the voting  power of in
excess of 51% of Fei Yun, after discussions with the SEC, it was determined that
the Company  cannot  consolidate  the  operations  of Fei Yun at current  direct
equity ownership levels. The Fei Yun purchase agreement grants control to Viking
via the founders and now Viking vice presidents who are the two largest and only
other significant share holders of Fei Yun. The agreement also grants Viking the
right to  purchase  in excess of 51% of Fei Yun at any time at its then  current
market value.

The  Company  is  currently  in  discussions  with the other  Fei Yun  owners to
purchase up to 100% of Fei Yun and not less than 51%.

Future  growth of Viking will be focused in two areas.  China based  diversified
acquisitions and US based  application  service provider (ASP) business.  Viking
will develop its ASP business with the receipt of additional funding.

Material Changes in Financial Condition, Liquidity and Capital Resources for the
quarter ended September 30, 2001.

The Company believes that its purchases in China will significantly  enhance its
ability to raise capital in the US market.  Viking also believes that the recent
announcement of China's entry to the WTO will further enhance  Viking's  ability
to raise capital. Viking is now negotiating with investment bankers to raise the
Company $50M in  convertible  debentures or direct sale of the Company's  common
stock. In both cases,  the sale price or conversion price will be at much higher
than current market prices of Viking's stock. The raised capital will be used to
purchase a larger percentage ownership in its current China acquisitions, invest
in new China projects, and capitalize the ASP business in the US.

In  connection  with its efforts to attract  capital and  implement  its plan of
business,  the Company incurred losses for the quarters ended September 30, 2001
and 2000, of $405,664 and $496,037, respectively. The decrease in loss is due to
decreases in rent,  consulting,  and bad debt expense of approximately  $23,000,
$45,000 and $37,000 respectively.  Year to date losses for the nine months ended
September 30, 2001 and 2000 are $1,168,340 and $1,206,797 respectively.

At September 30, 2001 vs. December 31, 2000, respectively,  the Company had cash
on hand of $150,243 vs. $13,193, current assets of $299,843 vs. 94,357 including
cash, and $140,623 vs. $81,164 in notes and interest receivable, total assets of
$788,711 vs. $829,192 and liabilities  totaling $642,473 vs. $548,936  excluding
accrued  officers'  salary of $1,738,780  vs.  $1,430,042.  Total  stockholders'
deficit at September 30, 2001 is $1,592,542 vs. $1,149,786 at December 31, 2000.

Viking expects to continue its current growth by acquisition plans over the next
twelve  months and  therefore  must  secure  additional  funds to carry out such
growth  plans.  There can be no  degree of  assurance  that such  funds  will be
available.

                                     - 13 -
<PAGE>

Subsequent to September 30, 2001, the Company  issued 555,000 common  restricted
shares for $166,500 cash and 50,242 common  restricted shares in connection with
the conversion of $7,100 promissory notes plus interest to stock.

The Company  signed an agreement  dated  October 1, 2001 to purchase 25% of Wuxi
Viking, located in Wuxi, China. The agreement will be effective after receipt of
a business license pertaining to this transaction by Chinese  authorities.  Wuxi
Viking is the parent and a producing member of a total of five companies engaged
in the garment manufacturing business.  Viking has worked with the prior owners,
the  Liutan  Group of  Companies  for  some  time  and  changed  the name of the
purchased  Company  in  anticipation  of  closing  the deal.  Viking  will issue
1,800,000  common  restricted  shares in exchange for its 25%  ownership of Wuxi
Viking.  The value of this acquisition is determined by the current market price
of the shares given up in the  transaction.  This  acquisition will be accounted
for under the equity  method,  using the market price of the 1.8 million  shares
given up.













                                     - 14 -
<PAGE>

                           PART II - OTHER INFORMATION

Item 2. Changes in Securities

During the quarter ended September 30, 2001, the Company sold common  restricted
shares (Class A Common) in private sales under exemption from registration under
the Securities Act pursuant to Section 4(2) and/or Regulation D, Rule 506. Sales
have been made to accredited investors only. In summary; 1,711,060 common shares
were issued for cash of $324,800,  432,915 common shares were issued for payment
of services valued at $67,578. Of these shares,  32,915 were free trading shares
issued from the Employee  Benefit Plan registered under Form S-8. 226,000 common
shares were issued for conversion of promissory notes to stock in the amounts of
$33,600 in principal and $300 in interest.



Item 5. Other Information

         The Company's common stock trades on the OTC Electronic Bulletin Board.
         Its symbol is "VGCP".

         Company  information can be found on the World Wide Web. The address is
         www.vcgi.com.



Item 6.  Exhibits and Reports on Form 8-K

a)       Exhibit 2.1:   Stock for Ownership Agreement - Beijing Fei Yun Property
                        Development Co. Ltd.



b)       Form 8-K filed on August 14, 2001 reporting the  acquisition of 25% and
         control of Beijing Fei Yun Property  Development  Co.,  Ltd. The report
         contains the text of the press release and the  contract.  The purchase
         is currently pending  administrative  approvals by People's Republic of
         China authorities.











                                     - 15 -
<PAGE>

                                   SIGNATURES



         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                       VIKING CAPITAL GROUP, INC.

Dated:  November 19, 2001                 By:  /s/ William J. Fossen
                                          ----------------------------
                                          William J. Fossen, CEO


Dated:  November 19, 2001                 By:  /s/ Matthew W. Fossen
                                          ----------------------------
                                          Matthew W. Fossen,
                                          Chief Financial Officer
                                          President






                                     - 16 -
<PAGE>



                                  EXHIBIT INDEX
                                  -------------


EXHIBIT
NUMBER            DESCRIPTION
-------           -----------


 2.1              Stock  for  Ownership  Agreement  - Beijing  Fei Yun  Property
                  Development  Co.,  Ltd.   (exhibits  and  schedules   omitted)
                  (incorporated  by reference to Exhibit 2.2 to the Registrant's
                  Current Report on Form 8-K dated 8/14/01)











                                     - 17 -