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

                                  FORM 10-QSB
              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2001

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
              For the transition period from ________ to ________


                    Consortium Service Management Group, Inc.
             (Exact name of registrant as specified in its charter)

    Texas                            0-27359                       74-2653437
  (state of                 (Commission File Number)             (IRS Employer
incorporation)                                                    I.D. Number)


                   500 North Shoreline Drive, Suite 701 North
                            Corpus Christi, TX 78471
                                  512-887-7546
            -------------------------------------------------------
            (Address and telephone number of registrant's principal
               executive offices and principal place of business)

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 twelve 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  [ ]     No  [X]

As  of  August  29, 2001, there were 5,624,218 shares of the Registrant's Common
Stock,  par  value  $0.001,  outstanding.

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


<PAGE>



                         PART I - FINANCIAL INFORMATION



Item  1.          Financial  Statements





















                                        2
<PAGE>



To  the  Board  of  Directors  and  Stockholders  of
Consortium  Service  Management  Group,  Inc.  and  Subsidiary



I have reviewed the accompanying balance sheets of Consortium Service Management
Group,  Inc.  and  Subsidiary as of June 30, 2001 and December 31, 2000, and the
related  Statements  of Operations, Accumulated Deficits, and Cash Flows for the
quarter  and  year  then  ended,  in accordance with Statements on Standards for
Accounting  and  Review  Services  issued by the American Institute of Certified
Public  Accountants.  All  information included in these financial statements is
the  representation  of  the  management of Consortium Service Management Group,
Inc.  and  Subsidiary.

A  review  consists principally of inquiries of company personnel and analytical
procedures applied to financial data.  It is substantially less in scope than an
audit 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,  I  do  not  express  such  an  opinion.

Based  upon  my review, I am not aware of any material modifications that should
be  made  to  the  accompanying  financial statements in order for them to be in
conformity  with  generally  accepted  accounting  principles.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 2 to the
financial  statements, the Company has suffered recurring losses from operations
that  raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2.  The
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.


                                              /s/Gary  Skibicki
                                              ----------------------------------
Date:  November  14,  2001                    Gary  Skibicki
Oklahoma  City,  OK.                          Certified  Public  Accountant


                                        3
<PAGE>
            CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET



                                     ASSETS
                                     ------

<TABLE>
<CAPTION>

                                                     6/30/01          12/31/00
                                                     -------          --------
Current  Assets
---------------
<S>                                                <C>              <C>
Cash                                               $    29,864      $     1,492
Dividends  Receivable                                                     8,155
                                                   -----------      -----------

     Total  Current  Assets                        $    29,864      $     9,647


Fixed  Assets
-------------

Furniture,  Fixtures,  Equipment                        60,909           74,909
Less:  Accumulated  Depreciation                       (39,606)         (35,751)
                                                   -----------      -----------

     Total  Fixed  Assets                          $    21,303      $    39,158


Other  Assets

Investment  -  United                                  283,708          307,217
  Engineering  Co.

Investment  -  Anaerobic
  Farm  Waste,  Inc.                                     1,200              880

Carbon  Dioxide  Equipment                             654,300           27,889

Employee  Advances                                      48,186            1,752

Tissue  Bonding  Patent                                  8,667            8,667
Less:  Accumulated  Amortization                          (724)            (482)
                                                   -----------      -----------

     Total  Other  Assets                          $   995,337      $   345,923
                                                   -----------      -----------

     Total  Assets                                 $ 1,046,504      $   394,728
                                                   ===========      ===========
</TABLE>


                  The accompanying notes are an integral part
                      of these interim financial statements

                                        4
<PAGE>
            CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (Continued)

                                  LIABILITIES
                                  -----------

<TABLE>
<CAPTION>

                                                     6/30/01          12/31/00
                                                     -------          --------
Current  Liabilities
--------------------
<S>                                                <C>              <C>
Accounts  Payable                                  $    404,387     $    43,661

Interest  Payable                                       137,522          83,332

Federal  Payroll  Taxes  Payable                         29,750          23,896

Notes  Payable  To  Stockholders                      1,095,264         990,264
                                                   ------------     -----------

     Total  Current  Liabilities                   $  1,666,923     $ 1,141,153


                        STOCKHOLDERS' AND MEMBERS' EQUITY
                        ---------------------------------

Preferred  Stock  $.001  par  value,
10,000,000  shares  authorized;
75,669  shares  issued  and  outstanding
at  December  31,  2000,  0  shares  issued
and  outstanding  at  June  30,  2001                               $        76

Common  Stock  $.001  par  value,
40,000,000  shares  authorized;
3,927,374  shares  issued  and
outstanding  at  December  31,  2000
and  5,138,078  issued  and
outstanding  at  June  30,  2001                   $      5,138    $      3,927

Additional  Paid  In  Capital                         3,606,763       2,452,680

Membership  Capital  Gastech  LLC                       226,000

Beginning  Accumulated  Deficit,                     (3,203,108)     (2,257,537)
1/1/01,  1/1/00

Current  Year  Loss                                  (1,257,482)       (935,770)

Foreign  Exchange  Gain  (Loss)                           2,270          (9,801)
                                                   ------------     -----------

Ending  Accumulated  Deficit,
6/30/01,  12/31/00                                 $ (4,458,320)    $(3,203,108)
                                                   ------------     -----------

     Total  Stockholders'  Equity                      (620,419)       (746,425)
                                                   ------------     -----------

     Total  Liabilities  and
     Stockholders'  Equity                         $  1,046,504     $   394,728
                                                   ============     ===========
</TABLE>


                  The accompanying notes are an integral part
                      of these interim financial statements

                                        5
<PAGE>
            CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                              April 1, 2001 -   April 1, 2000 -   Jan. 1, 2001 -   Jan. 1, 2000 -
                               June 30, 2001     June 30, 2000    June 30, 2001    June 30, 2000
                              ---------------   ---------------   --------------   --------------
<S>                            <C>               <C>               <C>              <C>
Revenues                                         $       9,000     $        100     $     19,000

Cost  of  Goods Sold                                                      5,000

Gross  Profit  (Loss)                                    9,000           (4,900)          19,000
                                                 -------------     ------------     ------------

General  and
Administrative Expenses        $     173,867           150,324        1,210,755          252,541

  Funded  R&D                              0                 0                0                0
  Cost  of  Funded  R&D               19,304            55,923           20,054           59,517
  Net  R&D  Cost                      19,304            55,923           20,054           59,517
                               -------------     -------------     ------------     ------------
Operating  Loss                     (193,171)         (197,247)      (1,235,709)        (293,058)

(Loss)  on  Investments                                (14,310)                          (21,510)

Interest  Income                          28             1,434               91            1,445

Interest  in  Income  (Loss)
Of  Unconsolidated  Companies        (13,229)          (12,747)         (21,864)         110,659

Foreign  Exchange
Gain  (Loss)                           1,637            (2,949)           2,270          (13,144)
                               -------------     -------------     ------------     ------------

Other  Gains  (Losses)

Net  Loss                      $    (204,735)    $    (225,819)    $ (1,255,212)    $   (215,608)

Basic  and  Diluted
Loss  Per  Share                        (.04)             (.07)            (.24)            (.07)

Average  Shares Outstanding          5138370 SHS       3117050 SHS      5138370 SHS      3117050 SHS
</TABLE>


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

                                        6
<PAGE>
            CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                      April 1, 2001 -   April 1, 2000 -   Jan. 1, 2001 -   Jan. 1, 2000 -
                                       June 30, 2001     June 30, 2000    June 30, 2001    June 30, 2000
                                      ---------------   ---------------   --------------   --------------

Cash Flows From Operating Activities
------------------------------------
<S>                                    <C>               <C>               <C>              <C>
Net  Loss                              $    (204,735)    $   (225,819)     $ (1,255,212)    $   (215,608)
Dividends  from  Investees                     8,155                              8,155            3,685
Depreciation  and  Amortization                4,005            1,928             8,012            3,855
(Increase)  Decrease  Prepaid  Expenses                                                           (5,000)
Increase  (Decrease)  Accounts  Payable                        (5,000)                            (4,188)
Increase  (Decrease)  Accrued  Interest       27,095                             54,190           15,481
Increase  (Decrease)  Taxes  Payable           2,927           (8,609)            5,854          (20,627)
Equity (Income) Loss from Investees           13,229           12,745            21,864         (110,659)
Foreign  Exchange  Loss  (Gain)               (1,637)           2,949            (2,270)          13,142
Compensation  for  Common  Stock                                                756,690           46,129
                                       -------------     ------------     -------------     ------------
Cash Flows From Operating Activities   $    (150,961)     $  (221,806)    $    (402,717)    $   (273,790)

Cash Flows From Investing Activities
------------------------------------
Purchase  Equipment                                            (6,058)         (612,411)          (6,058)
Purchase  Securities                                           (6,690)                            (8,490)
Employee  Advance                            (23,986)         (29,551)          (46,434)         (56,555)
Investment  in  Subsidiary                                                         (320)
                                       -------------     ------------     -------------     ------------

Cash  Flows From Investing Activities  $     (23,986)    $    (42,299)    $    (659,165)    $    (71,103)

Cash Flows From Financing Activities
------------------------------------
Increase  (Decrease)  Notes  Payable         115,000          386,500           105,000          472,267
Sell Stock                                                                      220,000
Increase (Decrease) Accounts Payable*       (151,881)                           360,726
Increase  Paid  In  Capital                  178,528                            178,528
Increase  Membership  Capital                 63,000                            226,000
                                       -------------     ------------     -------------     ------------

Cash Flows From Financing Activities   $     204,647     $    386,500     $   1,090,254     $    472,267

Net  Increase  (Decrease)  Cash               29,700          122,395            28,372          127,374
Cash  Beginning  of  Period                      164            4,973             1,492               (6)
Cash  End  of  Period                  $      29,864     $    127,368     $      29,864     $    127,368
</TABLE>

* Accounts payable are shown as part of financing in 2001 because they relate to
purchasing  carbon  dioxide  equipment.

                 The accompanying notes are an integral part of
                       these interim financial statements

                                        7
<PAGE>
            CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS



                                     NOTE 1
                              BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly,  they  do not include all of the information and footnotes required
by  generally  accepted accounting principles for complete financial statements.
In  the  opinion  of management, all adjustments considered necessary for a fair
presentation  have  been  included.  Operating  results for the six month period
ending  June  30, 2001 are not necessarily indicative of the results that may be
expected  for  the year ended December 31, 2001.  For further information, refer
to  the  annual  financial  statements  and footnotes thereto for the year ended
December  31,  2000.

On  February  15,  2001 CSMG Gastech LLC was formed as a Texas Limited Liability
Company  of  which  Consortium  Service  Management  Group  owns  55%  interest.
Operations  in  2001  for  CSMG Gastech have principally been limited to raising
funds  through  selling membership interest to purchase carbon dioxide separator
equipment, and those activities have been included in the consolidated financial
statements.



                                     NOTE 2
                                  GOING CONCERN

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in  the  normal course of business.  The Company incurred a net
loss of $1,255,212 for the six months ended June 30, 2001 and when combined with
prior  year  net  losses raises substantial doubt as to the Company's ability to
obtain  debt  and/or  equity  financing  and  achieve  profitable  operations.

The  Company's  management  intends  to raise additional operating funds through
equity  and/or  debt offerings and the sale of technologies.  However, there can
be  no  assurance  management will be successful in its endeavors.  The possible
consequences  of not obtaining additional funds either through equity offerings,
debt  offerings,  or  sale  of technologies is that there will not be sufficient
money  to  fund the capital projects required to earn long term planned revenues
of  the  company.


                                        8
<PAGE>

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

     The  following  discussion  and analysis should be read in conjunction with
the  financial statements and the accompanying notes thereto and is qualified in
its  entirety  by  the  foregoing  and  by  more  detailed financial information
appearing  elsewhere.  See  "Item  1.  Financial  Statements."

     Results  of  Operations - Second Quarter of 2001 Compared to Second Quarter
     ---------------------------------------------------------------------------
of  2000
--------

     We  had  no  revenues  for  Q2  2001 but revenues of $9,000  Q2  2000.

     Operating expenses increased by $23,543 to $173,867 during Q2 2001 compared
to  $150,324 in Q2 2000. This increase is attributed to expenses incurred in the
organization  of CSMG Gastech LLC, our new 55 percent-owned subsidiary that will
operate  some  of  our  CO2  separator  projects.

     We  had  a  loss  from operations of $193,171 for Q2 2001 compared to a net
loss  of  $197,247  for Q2 2000. We had accrued losses in Q2 2000 of $12,747 and
$2,949  attributable respectively to the operations of our Ukraine joint venture
in  United  Engineering  Company and to foreign exchange loss, as compared to an
accrued loss in Q2 2001 of $13,229 from the joint venture and a foreign exchange
loss  of  $1,637.

     Our net loss for Q2 2001 was $204,735, or $0.04 a share, as compared with a
net  loss  in  Q2  2000  of  $225,819,  or  $0.07  a  share.

     Results  of  Operations - First Half of 2001 Compared to First Half of 2000
     ---------------------------------------------------------------------------

     We  had  revenues of only $100 for the first half of FY 2001 and $19,000 in
the  first  half  of  FY  2000.  The  2001  revenues  came from interest income.

     Operating  expenses  of $252,541 in the first half of 2000 increased in the
first  half  of  2001  to  $1,210,755  - a 479 percent increase. The increase is
attributable  to  the exchange of preferred stock by two officers of the company
for  common  stock  with  the  increase  in  value  of the common stock over the
preferred  stock  being  regarded  as  compensation  expense.

     We  had  an  operating  loss  of  $293,058 in the first half of 2000 and an
increase in these losses in the first half of 2001 to $1,235,709 - a 322 percent
increase.

     We  recorded  accrued  income of $110,659 in the last half of 2000 from our
Ukraine  joint  venture operations in United Engineering Company, but an accrued
loss  of  $21,864 in the first half of 2001.  The 2001 loss is attributable to a
decline  in  defense  conversion  but was partially offset by a foreign exchange
gain of $2,270 in the first half of 2001.  In the first half of 2000 our foreign
exchange  loss  was  $13,144.

     Taking  into  account our joint venture operations in Ukraine, we had a net
loss  of  $1,255,212, or $0.24 a share in the first half of 2001 compared with a
net loss of $215,608, or $0.07 a share, in the first half of 2000. Nevertheless,

                                        9
<PAGE>

we feel that we are  on the right course for the company, that our CO2 separator
project, our anaerobic animal waste project and our human tissue bonding project
all  hold  considerable  promise  for  our  company  in  2001.

     Outlook
     -------

     The  statements  made  in  this  Outlook  are  based  on  current plans and
expectations.  These statements are forward-looking, and actual results may vary
considerably  from  those  that  are  planned.

     We  are  optimistic  about  the  future.  As  stated above under Results of
Operations,  we  believe  that our three projects are all on the right track and
hold  considerable  promise  for  the  company.

     The  company's  future  results of operations and the other forward-looking
statements  contained  in  this  Outlook  involve  a  number  of  risks  and
uncertainties.  Among  the  factors  that  could  cause actual results to differ
materially  are  the  following:  inability  of  the  company  to  obtain needed
additional  capital,  loss  of  personnel - particularly Chief Executive Officer
Donald S. Robbins or Executive Vice President and Chief Financial Officer Gordon
W. Allison - as a result of accident or for health reasons, interruptions in the
supply  of  equipment  from  manufacturers  of the equipment, the development of
competing  products  by  well-capitalized competitors, and an accident involving
life  or  serious  bodily harm that fairly or unfairly would bring into question
the  safety  of  using  the  company's  products.


Item  6.          Exhibits  and  Reports  on  Form  8-K

(a)     Exhibits

     The following exhibits are filed, by incorporation by reference, as part of
this  Form  10-QSB:

     Exhibit  No.                    Description
     ------------                    -----------

         3          -     Amended  and  Restated  Articles of  Incorporation  of
                          Consortium  Service  Management  Group,  Inc.*

         3.1        -     Bylaws  of  Consortium  Service  Management Group,
                          Inc.*

        10          -     Founders'  Agreement  of United Engineering Company*

        10.1        -     Statutes  (Bylaws)  of United Engineering Company*

        10.2        -     Agreement   of   April  24,  1996  between  Consortium
                          Service  Management  Group, Inc. and The L Group, Inc.
                          concerning tissue bonding  technology*  (rescinded  in
                          January  2000)

        10.3        -     Agreement   of   July  9,  1996   between   Consortium
                          Service  Management  Group,  Inc.   and  International
                          Welding concerning tissue bonding  technology*

                                       10
<PAGE>

        10.4        -     Agreement among Consortium  Service  Management Group,
                          Inc.,   United   Engineering   Company   and   Ivan V.
                          Semenenko, the inventor  of the anaerobic  farm  waste
                          technology*

        10.5        -     Agreement  of  June 9, 1998  among  Consortium Service
                          Management  Group,  Inc.,   The  Sumy  Frunze  Machine
                          Building  Science  and  Production  Association,   and
                          United  Engineering Company  concerning  the anaerobic
                          farm waste technology*

        10.6        -     Agreement between Consortium Service Management Group,
                          Inc.  and  Western  Waste  Management, Inc. concerning
                          the anaerobic farm waste  technology*

        10.7        -     Agreement between Consortium Service Management Group,
                          Inc.  and  Aardema Dairy concerning the anaerobic farm
                          waste technology*

        10.8        -     Agreement between Consortium Service Management Group,
                          Inc.  and  John  and  Ruth  Beukers   concerning   the
                          anaerobic farm waste technology*

        10.9        -     Agreement  of  December  1998  between   International
                          Welding  Association  of  Kiev, Ukraine and Consortium
                          Service Management Group, Inc. concerning  the  carbon
                          dioxide  separator  technology*

        10.10       -     Operating   Agreement   of  June  14,  2001    between
                          Consortium Service Management Group, Inc. and Resource
                          Technology Corporation***

        10.11       -     Contract  Agreement  Effective August 14, 2000 between
                          Consortium  Service  Management  Group/Anaerobic  Farm
                          Waste Co. and Rondeau Anaerobic***

        10.12       -     Contract     IAW-USA    002-PR-19.04.2000     between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

        10.13       -     Contract    IAW-USA    003-PR-19.04.2000      between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

                                       11
<PAGE>

        10.14       -     Contract    IAW-USA    004-PR-19.04.2000      between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

        10.15       -     Contract     IAW-USA    005-PR-19.04.2000     between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

        10.16       -     Contract     IAW-USA    006-PR-19.04.2000     between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

        10.17       -     Contract     IAW-USA    007-PR-19.04.2000     between
                          International  Association  Welding,  Kiev  and  E.O.
                          Paton  Electric  Welding Institute  National  Academy
                          Science  Ukraine  and  Consortium  Service Management
                          Group,  Inc.***

        10.18       -     Contract    IAW-USA   008-PR   between  International
                          Association Welding,  Kiev,  Ukraine  and  Consortium
                          Service Management Group, Inc.***

        16          -     Letter  dated January 29, 2000 from Jaak (Jack) Olesk
                          to  Consortium Service  Management  Group,  Inc.  Re:
                          Termination as Auditor**

        99          -     Ukraine  Ministry  of   Health,   State   Department,
                          Certificate of  State  Registration  No.  1105-193***


     *Previously filed with Form 10-SB; Commission File No. 0-27359 incorporated
herein.

     **Previously  filed with Amendment No. 1 to Form 10-SB; Commission File No.
0-27359  incorporated  herein.

     ***Previously filed with Amendment No. 2 to Form 10-SB; Commission File No.
0-27359  incorporated  herein.


(b)     Forms  8-K

     None

                                       12
<PAGE>

                                   SIGNATURES

     Pursuant  to  the  requirements of the Exchange Act of 1934, the Registrant
has  duly  caused  this  report  to  be  signed on its behalf by the undersigned
hereunto  duly  authorized.

Date:  October  31, 2001                Consortium Service Management Group,
Inc.


                                        By/s/Gordon  W.  Allison
                                          --------------------------------------
                                          Gordon W. Allison,  Vice President and
                                            Chief  Financial  Officer










                                       13