<PAGE>

                                                             Document is copied.


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB



                                QUARTERLY REPORT
            Under Section 13 or 15 (d) of the Securities Act of 1934
                    For the Three-Months Ended March 31, 2001

                    DIGITAL CREATIVE DEVELOPMENT CORPORATION
   --------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

             UTAH                                      34-1413104
-------------------------------             ------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


67 Irving Place North New York, New York                            10003
----------------------------------------                      ------------------
(Address of Principal Executive Offices)                          (Zip Code)


         (212) 387-7700
----------------------------------------
     (Issuer's Telephone Number)


Formerly Arthur Treacher's Inc.
------------------------------------------------------


         Check whether the issuer (l) filed all reports required to be filed by
Sections 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
     ---      ---


At May 15, 2001, the latest practicable date, there were 31,485,924 shares of
Common Stock outstanding, $.01 par value.


<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION

                                      INDEX

PART I.           FINANCIAL INFORMATION
PAGE
------

                  Item 1.  Financial Statements:

                           Consolidated Balance Sheets as of March 31,2001
                           (Unaudited) and June 30, 2000

                           Consolidated (Unaudited) Statements of Operations for
                           the Three-Month Periods:
                           January 1, 2001 through March 31, 2001; and
                           December 27, 1999 through March 26, 2000.

                           Consolidated (Unaudited) Statements of Operations for
                           the Nine-Month Periods:
                           July 1, 2000 through March 31, 2001; and July 1, 1999
                           through March 26, 2000

                           Consolidated (Unaudited) Statements of Cash Flows for
                           the Nine-Month Periods:
                           July 1, 2000 through March 31, 2001; and July 1, 1999
                           through March 26, 2000


                           Notes to Interim Consolidated Financial Statements

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



<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                         MARCH 31,2001 AND JUNE 30,2000

<TABLE>
<CAPTION>


                                                                           March 31,         June 30,
                                                                             2001              2000
ASSETS                                                                    (unaudited)
                                                                          -----------
<S>                                                                    <C>                 <C>
CURRENT ASSETS
              Cash and cash equivalents                                      $ 3,231,575      $ 8,239,351
              Accounts receivable, net                                           108,908           92,750
              Inventories                                                        799,878          127,635
              Prepaid expenses and other                                          55,600           84,358
                                                                       -----------------------------------
                          TOTAL CURRENT ASSETS                                 4,195,961        8,544,094
                                                                       -----------------------------------
                          .
PROPERTY AND EQUIPMENT , AT COST
              Leasehold Improvements                                           2,446,864        2,382,525
              Furniture, fixtures and equipment                                2,187,020        1,824,037
                                                                       -----------------------------------
                                                                               4,633,884        4,206,562
              Less accumulated depreciation                                    3,885,909        3,403,910
                                                                       -----------------------------------
                          PROPERTY AND EQUIPMENT , NET                           747,975          802,652
                                                                       -----------------------------------

OTHER ASSETS

              Goodwill and other intangibles                                   3,176,762          268,035
              Notes receivable, net                                              500,000          266,134
              Investments and advances in Entertainment Concept
                Companies                                                      1,021,800                -
              Marketable Securities Available For Sale                         1,906,700          300,000
              Non-marketable securities, net of allowance of
                $ 450,000 in each period                                       1,600,000        2,200,000
              Other                                                            1,160,547           26,925
                                                                       -----------------------------------
                          TOTAL OTHER ASSETS                                   9,365,809        3,061,094
                                                                       -----------------------------------

TOTAL ASSETS                                                                $ 14,309,745     $ 12,407,840
                                                                       ===================================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
              Accounts payable                                               $ 4,025,893      $ 2,155,326
              Accrued expenses and other liabilities                           1,249,015          455,261
              Current maturities of long term debt                               248,000        1,377,993
              Deferred revenue                                                   281,000          317,262
                                                                       -----------------------------------
                          TOTAL CURRENT LIABILITIES                            5,803,908        4,305,842

LONG TERM DEBT, NET OF CURRENT MATURITIES                                      2,252,300          470,994
                                                                       -----------------------------------
                          TOTAL  LIABILITIES                                   8,056,208        4,776,836
                                                                       -----------------------------------

MINORITY INTEREST IN SUBSIDIARY                                                        -        4,805,282
                                                                       -----------------------------------
STOCKHOLDERS' EQUITY
              Preferred stock                                                  1,255,000        1,744,885
              Common stock                                                       314,852          164,707
              Additional paid in capital                                      26,338,505       19,941,820
              Accumulated deficit                                            (22,194,220)     (19,025,690)
              Accumulated unrealized gain on securities                          539,400                -
                                                                       -----------------------------------
                          TOTAL STOCKHOLDERS' EQUITY                           6,253,537        2,825,722
                                                                       -----------------------------------

TOTAL LIABILITIES AND  STOCKHOLDERS' EQUITY                                 $ 14,309,745     $ 12,407,840
                                                                       ===================================
</TABLE>


<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           FOR THE THREE MONTH PERIODS

<TABLE>
<CAPTION>
                                                                                 January 1,2001         December 27,1999
                                                                                     through                 through
                                                                                  March 31,2001           March 26,2000
                                                                                  -------------           -------------
<S>                                                                               <C>                   <C>
TOTAL REVENUE                                                                       $ 2,736,400             $ 2,878,998
                                                                                 ---------------------------------------

OPERATING EXPENSES
              Cost of sales, including occupancy except depreciation                    770,587               1,641,143
              Operating expenses                                                      1,381,827               1,079,530
              Depreciation and amortization                                             153,173                 176,109
              General and administrative expenses                                     1,268,399                 293,161
                                                                                 ---------------------------------------
                          TOTAL OPERATING EXPENSES                                    3,573,986               3,189,943
                                                                                 ---------------------------------------

LOSS FROM OPERATIONS                                                                   (837,586)               (310,945)

OTHER INCOME (EXPENSE)                                                               (1,430,000)                (73,743)
LOSS ASSIGNED TO MINORITY INTERESTS
                                                                                 ---------------------------------------
NET LOSS BEFORE COMPREHENSIVE INCOME                                                 (2,267,586)               (384,688)

OTHER COMPREHENSIVE INCOME
              UNREALIZED GAINS ON SECURITIES                                            618,865                       -
                                                                                 ---------------------------------------
NET LOSS                                                                             (1,648,721)               (384,688)

              UNDECLARED PREFERRED STOCK DIVIDENDS                                      (39,804)                (30,570)
                                                                                 ---------------------------------------
NET LOSS FOR COMMON SHAREHOLDERS                                                   $ (1,688,525)             $ (415,258)
                                                                                 =======================================

BASIC LOSS PER COMMON SHARE                                                            $  (0.05)                $ (0.03)
                                                                                 =======================================

DILUTED LOSS PER COMMON SHARE                                                          $  (0.05)                $ (0.03)
                                                                                 =======================================

WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES FOR
              BASIC AND DILUTED                                                      31,485,924              15,424,004
                                                                                 =======================================
</TABLE>


<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           FOR THE NINE MONTH PERIODS

<TABLE>
<CAPTION>

                                                                                            July 1,2000             July 1,1999
                                                                                              through                 through
                                                                                           March 31,2001           March 26,2000
                                                                                           -------------           -------------
<S>                                                                                      <C>                       <C>
TOTAL REVENUE                                                                                $ 9,619,843            $ 10,366,002
                                                                                         ----------------------------------------

OPERATING EXPENSES
              Cost of sales, including occupancy except depreciation                           4,423,701               5,476,350
              Operating expenses                                                               3,727,442               3,912,433
              Depreciation and amortization                                                      481,999                 567,268
              General and administrative expenses                                              3,182,822                 911,347
                                                                                         ----------------------------------------
                          TOTAL OPERATING EXPENSES                                            11,815,964              10,867,398
                                                                                         ----------------------------------------

LOSS FROM OPERATIONS                                                                          (2,196,121)               (501,396)
OTHER INCOME (EXPENSE)                                                                        (1,218,410)               (156,514)
LOSS ASSIGNED TO MINORITY INTERESTS                                                              246,000                       -
                                                                                         ----------------------------------------
NET LOSS BEFORE COMPREHENSIVE INCOME                                                          (3,168,531)               (657,910)

OTHER COMPREHENSIVE INCOME
              UNREALIZED GAINS ON SECURITIES                                                     539,400                       -
                                                                                         ----------------------------------------
NET LOSS                                                                                      (2,629,131)               (657,910)

              UNDECLARED PREFERRED STOCK DIVIDENDS                                              (119,413)                (91,710)
                                                                                         ----------------------------------------
NET LOSS FOR COMMON SHAREHOLDERS                                                            $ (2,748,544)             $ (749,620)
                                                                                         ========================================

BASIC LOSS PER COMMON SHARE                                                                     $  (0.12)                $ (0.05)
                                                                                         ========================================

DILUTED LOSS PER COMMON SHARE                                                                   $  (0.13)                $ (0.05)
                                                                                         ========================================

WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES FOR
              BASIC AND DILUTED                                                               21,555,908              15,278,452
                                                                                         ========================================
</TABLE>


<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE NINE MONTH PERIODS

<TABLE>
<CAPTION>

                                                                                                  July 1,2000         July 1,1999
                                                                                                   through             through
                                                                                                 March 31,2001       March 26,2000
<S>                                                                                              <C>                 <C>
OPERATING ACTIVITIES
              Net loss                                                                           $ (3,168,531)        $ (657,910)
              Adjustments to reconcile net loss to net cash provided by
                   operating activities:
                          Depreciation and amortization                                               490,034            567,268
                          Loss assigned to minority interests                                        (246,000)                 -
                          Unrealized losses on investments                                          1,050,000                  -
                          Amortization of deferred revenue                                            (36,262)          (241,634)
                          Deferred revenue proceeds                                                         -            120,720

                          Changes in assets and liabilities:
                                       (Increase) Decrease in accounts receivable                     344,795             39,958
                                       (Increase) Decrease in deposits and other assets              (275,796)            35,266
                                       (Increase) in prepaid expenses and other
                                              current assets                                          109,481            (48,797)
                                       Decrease in inventories                                         67,700             39,564
                                       Increase (Decrease) in accounts payable                      1,076,823           (671,794)
                                       Increase (Decrease) in accrued expenses and other
                                              liabilities                                            (158,139)           (71,600)
                                                                                               ----------------------------------
              Net cash (used in) provided by operating activities                                    (745,895)          (888,959)
                                                                                               ----------------------------------

INVESTING ACTIVITIES
              Investments made by subsidiary                                                       (2,772,966)        (2,100,000)
              Purchases of businesses                                                                (297,647)                 -
              Proceeds from disposition of restaurants, net of capital expenditures                    52,197             29,267
                                                                                               ----------------------------------
              Net cash used in investing activities                                                (3,018,416)        (2,070,733)
                                                                                               ----------------------------------

FINANCING ACTIVITIES
              Issuance of common stock                                                                123,250          5,674,978
              Proceeds from long term debt                                                                  -          1,010,133
              Principal payments of long term debt                                                 (1,366,715)          (275,661)
                                                                                               ----------------------------------
              Net cash (used in) provided by financing activities                                  (1,243,465)         6,409,450
                                                                                               ----------------------------------

              Net (decrease) in cash and cash equivalents                                        $ (5,007,776)       $ 3,449,758

CASH AND EQUIVALENTS,beginning of period                                                            8,239,351            165,459
                                                                                               ----------------------------------
CASH AND EQUIVALENTS,end of period                                                               $  3,231,575        $ 3,615,217
                                                                                               ==================================

Supplemental disclosure of cash flow information:
              Cash paid for interest                                                             $          -        $    62,508
                                                                                               ==================================

Supplemental disclosure of noncash transactions:
              Common stock issued to settle accounts payable                                     $          -        $       -
                                                                                               ==================================

Supplemental disclosure of noncash transactions:
              Common stock issued to settle debt and interest                                    $          -        $   146,396
                                                                                               ==================================

</TABLE>


<PAGE>


                    DIGITAL CREATIVE DEVELOPMENT CORPORATION

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2001

NOTE 1- BASIS OF PRESENTATION

         The accompanying interim unaudited financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments which, in the opinion of management, are
necessary to properly state the results of operations and financial position.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations although
management believes that the disclosures are adequate to make the information
presented not misleading. The results of operations are not necessarily
indicative of the results for the full year. These financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's audited financial statements included in the Form 10-KSB for
the fiscal year ended June 30, 2000, filed with the Securities and Exchange
Commission on October 16, 2000.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The interim consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries:

Arthur Treacher's Inc. ("ATI Delaware") an 80% owned subsidiary: either directly
or through it's own subsidiaries operates 21 Arthur Treacher's Fish and Chips
and Pudgies restaurants in Pennsylvania, New York, New Jersey and Delaware.

Digital Creative Development Corporation (" DCDC (Delaware)"): a subsidiary,
which primarily acquires and makes investments in traditional entertainment
content entities. In addition the Company invests and forms joint ventures with
web design, web consulting and companies that create and transmit digital
broadband content.

CineBLAST! : a subsidiary, which is a developer and producer of independent
short and feature films.

Tuneinmovies.com, Inc. ("TM"): a subsidiary, which primarily aggregates content
and delivers it to homes and businesses through the integration of various
traditional and digital distribution methods, including streaming and
store-and-forward technologies.


<PAGE>


Keynomics, Inc. ("KI"): a subsidiary, which provides software technology to
industry, with emphasis on performance improvement and ergonomic education and
training in the computer workstation environment.

Earnings per Share

Effective December 28, 1997, the Company implemented the provisions of Statement
of Financial Accounting Standards # 128 "Earnings Per Share". All earnings per
share information presented has been restated to reflect the provisions of this
statement.

NOTE 3- COMMITMENTS AND CONTINGENCIES

------ATAC Corporation and Patrick Cullen v. Arthur Treacher's Inc. and James
Cataland, Case No. 1:95CV 1032, in the U.S. District Court, Northern District,
Ohio Eastern Division; filed May 9, 1995. On November 16, 1994, the Company (the
former Arthur Treacher's, Inc.) terminated the agency agreement of a Regional
Development Representative, ATAC Corporation, on the grounds that ATAC breached
the agreement by assigning the agency agreement to a third party without the
consent of the Company. ATAC claims that the Company was aware of and consented
to the third-party assignment. The Company is unaware of any document signed by
a properly-authorized representative of the Company formally authorizing or
consenting to the assignment. On May 9, 1995, ATAC filed the action and alleged
that the Company terminated the contract without cause, tortuously interfered
with other business relationships, committed wrongful conversion of the
territory and committed restraint of trade and price-fixing, breach of contract,
fraud, and violations of RICO. ATAC originally demanded a minimum of $2,750,000
in compensatory damages and $6,000,000 in punitive damages. In response to the
original complaint, the Company filed a motion to dismiss all of the claims. In
addition, the Company filed a counterclaim against ATAC seeking a Declaratory
Judgment that ATAC does not have a service contract with the Company in certain
areas which the Company does business, that ATAC has committed breach of
contract and that the Company is entitled to indemnification for previous
lawsuits which have occurred because of the actions of ATAC on behalf of the
Company. ATAC has twice amended the claims and allegation of the original
complaint. In the Third Amended Complaint ATAC asserts claims against the
Company and the Company's former President, James Cataland, for fraud, breach of
contract, tortuous interference with contract, violations of the Ohio Business
Opportunity Act, violations of the Ohio Consumer Sales Practices Act and breach
of fiduciary duty. ATAC seeks in excess of $10,000,000 in compensatory,
punitive, and statutory damages from the Company. In response to the Third
Amended Complaint, the Company in 1997 filed a Motion to Dismiss ATAC's claims
for breach of fiduciary duty and under the Consumer Sales Practices and Business
Opportunity Acts, the Company also requested that the district court dismiss the
claim against the Company's former President. The Company in 1998 filed Motions
for Summary Judgment on behalf of itself and the Company's former President with
respect to all of ATAC's claims (except breach of contract) and requested that
the court refer the remaining contract claim to binding arbitration. The Court

<PAGE>


recently granted the Company's Motion to Stay the lawsuit pending arbitration
and the ruling is presently the subject of an appeal to the Sixth Circuit Court
of Appeals.

The Company originally believed that the lawsuit was an attempt by plaintiffs to
regain the territory by forcing the Company to defend expensive litigation at
significant expense and that the plaintiffs' claims are without merit. The
Company now understands that ATAC solely seeks damages from the Company. The
Company still believes that ATAC's claims are meritless. The Company's attorneys
have indicated that they intend to vigorously defend the Company from the claims
made by ATAC and pursue any counterclaims.

In opinion of management, the ultimate disposition of these matters will not
have a material adverse effect on the Company's consolidated results of
operations or financial position.

------------M.I.E. Hospitality, Inc. v. Fred Woods, et al.; Crystal Run Company,
L.P. v. M.I.E Hospitality, Inc., Poughkeepsie Galleria v. M.I.E Hospitality,
Inc.; Pyramid Company of Buffalo v. M.I.E Hospitality, Inc.; Pyramid Crossgates
Company v. M.I.E Hospitality, Inc.; Carrousel Center Company L.P. v. M.I.E.
Hospitality, Inc. M.I.E. Hospitality Inc., a wholly owned subsidiary - of ATI
Delaware, is a party to six actions in New York State that have been
consolidated for discovery purposes in New York Supreme Court in Albany County,
New York. Each of these actions arises out of M.I.E.'s lease of certain food
court premises at five Pyramid Malls across New York State, and Pyramid's
eviction of M.I.E. in December 2000.

M.I.E. commenced the action entitled M.I.E. v. Fred Woods, et al. in December
2000. M.I.E. asserts four substantively identical causes of action with respect
to each of the five mall locations. These causes of action are for breach of
lease, conversion, wrongful eviction, and trespass. M.I.E. is in the process of
calculating its claim for damages, which claim is anticipated to be in excess of
$2,200,000.00, and may be awarded treble damages if it succeeds under its
wrongful eviction claim under RPAPLss. 853.

In each of its five actions, which were commenced on January 3, 2001, Pyramid
seeks pre-eviction rent and additional rent arrears, post eviction accelerated
rent and additional rent, and attorney's fees. Pyramid's damage claims exceed
$2,400,000.00

The actions are in the discovery phase. Documents have been produced, but
depositions have not occurred. The Company's attorneys intend to vigorously
defend the Company against the claims made by the plaintiffs but cannot estimate
the outcome at this time. The award of substantial damages to Pyramid would have
an adverse impact on the operations of M.I.E. and the Company. M.I.E. does not
own or operate any of the Company's Pudgies restaurants.


<PAGE>

Management's Discussion and Analysis or Plan of Operation

This Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Company should be read in conjunction with the Financial
Statements and Notes thereto appearing elsewhere in this Registration Statement.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Information set forth herein contains "forward-looking statements" which can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy. No
assurance can be given that the future results covered by the forward-looking
statements will be achieved. The Company cautions readers that important factors
may affect the Company's actual results and could cause such results to differ
materially from forward-looking statements made by or on behalf of the Company.
Such factors include, but are not limited to, changing market conditions, the
impact of competitive products, pricing and acceptance of the Company's
products.

Overview

The Company's principal sources of revenues are from the operation of it's
Company owned restaurants and the receipt of royalties from franchisees. The
Company presently owns 21 restaurants; franchises 75 restaurants; and
co-brands 96 restaurants. The Company's cost of sales include food, supplies
and occupancy costs (rent and utilities at Company owned stores). Operating
expenses include labor costs at the Company owned stores and advertising,
marketing and maintenance costs. Franchise services and selling expenses include
fees payable to regional representatives and their expenses. General and
administrative expenses include costs incurred for corporate support and
administration, including the salaries and related expenses of personnel at the
Company's headquarters, the costs of operating the headquarters offices (rent
and utilities) and certain related costs (travel and entertainment).

On October 19, 2000, ATI (Delaware) purchased all of the outstanding capital
stock of the entities which own and act as franchisor of the Pudgies Famous
Chicken chain of fast food chicken restaurants. Pudgies consists of 32
restaurants in the New York tri-state metropolitan area, including 12 company
owned stores and 20 franchises. The purchase price consisted of 20% of the
issued and outstanding stock of ATI (Delaware). The Company owns the remaining
80% of the issued and outstanding stock of ATI (Delaware).


<PAGE>


At acquisition, net liabilities of Pudgies exceeded net assets by approximately
$ 1.4 million, and a corresponding amount was allocated to Goodwill. Mr. Jeff
Bernstein, the Chief Executive Officer of Pudgies, became Chief Executive
Officer and President of ATI (Delaware). The Company conducts its restaurant
operations through ATI (Delaware) and intends to distribute all of its shares of
capital stock of ATI (Delaware) to its shareholders.

On October 31, 2000, ATI (Delaware) closed its Jacksonville, Florida
headquarters offices and its Bloomsburg, Pennsylvania field office,
consolidating all operations in the Lake Success, New York headquarters offices
of Pudgie's Famous Chicken, resulting in general and administrative cost
reductions.


<PAGE>


                               BUSINESS OPERATIONS

ENTERTAINMENT BUSINESS

The Company intends to acquire and make investments primarily in traditional
entertainment content entities. The investments are made either directly or
through its subsidiary, DCDC (Delaware). The Company's entertainment business is
headquartered in New York, New York. The Company's strategy is to acquire and
invest in entities which provide comprehensive services to a wide variety of
entertainment and other related businesses and for general public consumption.
The Company seeks strategic alignments with these business entities to focus on
creative services (i.e., original content production; web design; advertising;
brand marketing; etc.) resulting in revenue generation from motion pictures;
television; animation; product endorsement and sales; and licensing and
syndication. Content is intended to be delivered to both business and the
consumer through digital broadband and conventional distribution platforms.


The Company intends to acquire controlling interest in its portfolio companies
but may, from time to time, take minority equity positions in consideration for
such services and capital. The Company does not intend to engage primarily in
the business of investing, reinvesting or trading in securities so as to be an
investment company required to register as such under the Investment Company Act
of 1940. Nevertheless, the Company may be required to register as an investment
company as a consequence of investments that it has made to the extent that it
presently holds "investment securities" (as defined by the Investment Company
Act) which constitutes more than 40% of the value of the Company's assets
(exclusive of U.S. government securities and cash items) on an unconsolidated
basis, unless an exemption from the Investment Company Act is available or the
Company restructures or reduces its holdings of investment securities within a
reasonable period of time. Although it is the intention of the Company to take
the actions necessary to avoid investment company status, no assurance can be
given that the Company will be able to take such actions. The Investment Company
Act of 1940 imposes a comprehensive scheme of regulation which would require a
substantial restructuring of the operations of the Company to permit the Company
to comply with the applicable regulations.

Applicable regulations may also operate to impose significant restrictions on
the permissible activities and transactions of the Company. If the Company
cannot restructure its operations or reduce its holdings of investment
securities to avoid the need for the investment company restriction, the Board
of Directors will consider taking such actions as may be necessary or
appropriate under the circumstances.

The Company through its entertainment subsidiary has invested or advanced
approximately $1,371,800 in two entertainment concept companies during the
nine-month period ended March 31, 2001. These companies are CineBLAST !, a
wholly-owned subsidiary, and Eyecandy, an affiliate of the Company.


<PAGE>


In March 2001 the Company acquired Tuneinmovies.com, Inc. ("TM") through its
subsidiary, DCDC--Delaware ("DCDC"). TM is a creator and aggregator of new media
content. At that time, DCDC--Delaware also acquired Keynomics, Inc. ("KI"),
which provides software technology to industry.

RESTAURANT BUSINESS

The Company presently operates quick service seafood restaurants under the names
"Arthur Treacher's" and "Pudgies'". These restaurants either owned by the
Company or franchised, are located in 13 states, Puerto Rico and Canada, with
the greatest concentration in the northeast region of the United States. The
Company conducts its restaurant operations through ATI (Delaware) and intends to
distribute all of its shares of capital stock of ATI (Delaware) to its
shareholders. ( See "Overview" elsewhere herein for further information).


<PAGE>


RESULTS OF OPERATIONS

The following discussion includes the following periods: unaudited interim
financial statements for the three months and nine months ended March 31, 2001
and March 26, 2000.

2001 Three Months and 2000 Three Months.

The Company's reported total revenues of $2.7 million for the three-month period
ended March 31, 2001 reflected an decrease of $142,600 or 5 % compared to $2.9
million in the same three-month period ended March 26, 2000. This decrease was
entirely attributable to the franchising of certain Company owned restaurants
compared to the same period in the previous fiscal year, and also to the closing
of non-profitable restaurants and two office locations. This decrease offset
sales in the current quarter from the acquisition of Pudgies Famous Chicken;
this acquisition contributed a total of $ 766,000 to revenues for the three
months ended March 31, 2001. Additionally, sales were adversely affected by (i)
the severe weather conditions in the Northeast where the Company operates its
owned stores, and (ii) by construction at certain shopping malls in which two
Company owned stores are located. Sales from the Company's recent acquisitions
in March 2001 (Tune In Media and Keynomics) were insignificant.

The Company's total costs and expenses (exclusive of general and administrative
expense) decreased $591,000 or 20 % for the three-month period ended March 31,
2001 from $ 2.9 million in the 2000 period. This decrease was primarily
attributed to the franchising of certain Company owned restaurants and to the
closing of non-profitable locations.

General and administrative expense increased $975,000 or 332 %to $1.3 million
for the three-month period ended March 31, 2001from $ 293,200 in the
corresponding three month period of 2000. The increase is primarily attributed
to the expenses incurred by DCDC (Delaware), which began operations in 2000, in
the amount of $473,500 for the three month period ended March 31,
2001.Additionally, general and administrative expenses of the Pudgies operations
approximated $300,000 for the current three month period.

Included in Other Expense and integral to the acquisition of Pudgies, the
Company incurred non-recurring costs of $380,000 for headquarters relocation,
termination, and shutdown of non-profitable stores in the three months ended
March 31,2001. In addition, the Company, as a result of market conditions, wrote
down certain investments in several Internet entities held by DCDC (Delaware) to
net realizable value in the current period; that adjustment totaled $ 1.1
million. Bruce Galloway, Chairman of the Board of the Company, became chairman
of the parent company of one such entity five months after the Company had made
its initial investment. Ralph Sorrentino, the former CEO and President served as
a director of another such entity at the time the Company made its investment.


<PAGE>


The foregoing resulted in a loss (before preferred dividends) of $ 2.2 million
for the three months ended March 31, 2001 compared to a loss of $ 385,000
(before preferred dividends) in the prior period.


2001 Nine Months and 2000 Nine Months.

The Company's total revenues of $ 9.6 million for the nine-month period ended
March 31,2001 reflected a decrease of $746,200 or 7.2 % compared to $ 10.4
million in the same nine-month period ended March 26, 2000. Exclusive of the
revenues from the Pudgies acquisition, the Company recognized a decrease in net
restaurant sales (defined as gross restaurant sales less coupons, promotion cost
and discounts) due primarily to the franchising of certain Company owned
restaurants to existing franchisees, and to closing of non-profitable locations.
Additionally, weather conditions in the Northeast; construction problems; and
lower marketing allowances from the Company's suppliers adversely affected
revenues in the current period.

The Company's total costs and expenses (exclusive of general and administrative
expense) decreased $1.3 million or 13% for the nine-month period ended March 31,
2001from $ 10 million in the corresponding nine month period ended March
26,2000.This decrease was primarily attributed to the franchising of certain
Company owned restaurants compared to the same period in the previous fiscal
year and also to the closing of non-profitable restaurants and two office
locations.

General and administrative expense increased $2.3 million or 149% to $3.2
million for the nine-month period ended March 31,2001, compared to $911,300 for
the nine-month period ended March 26, 2000. The increase is primarily attributed
to the expenses incurred by DCDC (Delaware), which began operations in June 2000
and to the general and administrative expenses of the Pudgies operation acquired
in October 2000.

Other Income (Expense) for the current period includes non-recurring costs of
$500,000 for headquarters relocation, employee termination, and shutdown of
non-profitable stores integral to the acquisition of Pudgies. This is net of
Other Income reflecting the increase of other licensing income of approximately
$150,000 and a credit resulting from the discount of debt repaid in December
2000. In addition, the Company, as a result of market conditions, wrote down
certain investments in several Internet entities held by DCDC (Delaware) to net
realizable value in the current period; that adjustment totaled $ 1.1 million.
Bruce Galloway, Chairman of the Board of the Company, became chairman of the
parent company of one such entity five months after the Company had made its
initial investment. Ralph Sorrentino, the former CEO and President, served as a
director of another such entity at the time the Company made its investment.


The foregoing resulted in a loss (before preferred dividends) of $3.2 million
for the nine months ended March 31,2001 compared to a loss of $ 657,900 (before
preferred dividends) in the prior period.


<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

The Company's current liabilities exceeded its current assets by $1.6 million at
March 31,2001, compared to current assets exceeding its current liabilities by
$4.2 million at June 30, 2000. The Company had cash and short-term investments
of $3.2 million at March 31,2001 compared to $8.2 million at June 30, 2000. The
primary reason for the reduction in net current assets and the reduction in cash
and cash equivalents is the acquisition of Pudgies, which acquisition accounted
for $ 1.8 million of the decrease in net working capital. Additionally, the
Company's entertainment subsidiary (DCDC Delaware) made investments in and
advances to entertainment concept entities of approximately $1.4 million.
Further, DCDC (Delaware) acquired marketable securities of approximately $1.3
million in a publicity held provider of post-production services to the motion
picture film and television industry. Losses at the Company's restaurant
operations further adversely affected both cash and working capital. During
fiscal 2001, the Company experienced negative cash flow, which has adversely
affected its liquidity. The lack of liquidity in the Company has adversely
affected the Company's restaurant operation.

Substantially all of the cash and short term investments as of March 31,2001
represents proceeds of the private placement by DCDC (Delaware) in 2000.The
capital was raised by DCDC-Delaware and not the Company and is intended to be
used principally for operations and the acquisition and investment in companies
and technologies that focus on the creation and delivery of entertainment
content.

The Company transferred its assets and liabilities related to its restaurant
operation to ATI (Delaware). However, the Company may still be liable for
certain liabilities of ATI (Delaware). Funds may be advanced by the Company from
time to time to ATI (Delaware) to satisfy certain liabilities of the subsidiary.
The Company intends to distribute all of its shares of ATI (Delaware) to its
shareholders. In December 2000, the Company filed a registration statement with
the Securities and Exchange Commission to effectuate that distribution.

On December 15, 2000, DCDC (Delaware) purchased a promissory note between Magee
Industrial Enterprises, Inc. and MIE (a wholly-owned subsidiary of DCDC
(Delaware)) for $ 450,000, which note was guaranteed by the Company. The balance
owed to Magee was $585,000. On December 15, 2000, the Company, MIE and ATI
(Delaware) also agreed to be jointly and severally liable to DCDC (Delaware)
under a promissory note in the principal amount of $699,000, which represents
the balance owed to Magee and $84,000 previously advanced by DCDC (Delaware) to
the Company. The obligation for $699,000 bears interest at the rate of 12% per
annum and is payable at the rate of $25,000 every three months through August
31, 2002, with the balance of $494,000 due on December 1, 2002. The amount of
this note may change from time to time upon advances to MIE by DCDC (Delaware).
At March 31,2001, the balance of the note was


<PAGE>


$ 882,100.This obligation is evidenced by a promissory note senior to other
indebtedness of the debtors and secured by the assets of the Company, MIE and
ATI (Delaware). The increase in the note represents net advances to
ATI(Delaware).

The Company believes that it will need additional financing and working capital
to finance its restaurant operations and capital expenditures. Although the
Company has obtained additional financing in the past and believes it could meet
its needs through either additional borrowings or the sale of additional equity
and the re-negotiation of the Company's accounts payable, there can be no
assurance that the Company would succeed in obtaining any such financing, or
that the terms of such transactions could be effected, or that such strategy
will be successful. If the Company's strategy is unsuccessful, there is
substantial doubt about the restaurants' operations continuing as a going
concern.



<PAGE>


PART II  OTHER INFORMATION

Item 1   Legal Proceedings

RJS Consulting Corp. and Ralph J. Sorrentino v. Digital Creative Development
Corporation. On May 6, 2001, the Company terminated its Executive Consulting
Agreement (the "Consulting Agreement") with Ralph Sorrentino, its former
President and Chief Executive Officer, and RJS Consulting Corporation for cause.
On May 9, 2001, the Company received a demand for arbitration from Mr.
Sorrentino and his consulting firm, RJS Consulting Corp. (collectively
"Claimant") to arbitrate the termination of the Consulting Agreement before
JAMS. Plaintiffs allege that the Consulting Agreement was terminated without
"cause" and, separately and independently, that Mr. Sorrentino had "good reason"
to terminate the Consulting Agreement, as the terms "cause" and "good reason"
are defined in the Executive Consulting Agreement.

Claimant seeks (A) monetary damages in an amount not less than $5 million, which
includes at least the following: (1) payment of Sorrentino's full base annual
fee through October 1, 2002, in the amount of $354,167; plus (2) payment of
severance compensation in the amount of $250,000; plus (3) immediate exercise of
5 million options to acquire the Company's shares at a price of $.01 per share
and payment by the Company's repurchase of such shares at the price of $.501 per
share for a purchase price (net of the $50,000 exercise price of the options) of
$2,455,000; plus (4) payment of $2.5 million, the amount to which Sorrentino
would have been entitled pursuant to the Consulting Agreement if the Company had
not breached the Consulting Agreement, minus indebtedness previously assumed by
the Company on behalf of Sorrentino; plus (B) compensatory and punitive damages
in an amount to be proved at the hearing based on the defamation per se of the
Company's agents in publicly and falsely accusing Sorrentino of theft and
embezzlement; plus (C) such other further and different relief as the
arbitration panel may grant.

The Company believes that the Claimant's claims are without merit, that the
Company acted properly in terminating Sorrentino for cause and that the Company
will prevail in arbitration. However, an adverse determination by the
arbitration panel could have an adverse impact on the Company's operations.

------------M.I.E. Hospitality, Inc. v. Fred Woods, et al.; Crystal Run Company,
L.P. v. M.I.E Hospitality, Inc., Poughkeepsie Galleria v. M.I.E Hospitality,
Inc.; Pyramid Company of Buffalo v. M.I.E Hospitality, Inc.; Pyramid Crossgates
Company v. M.I.E Hospitality, Inc.; Carrousel Center Company L.P. v. M.I.E.
Hospitality, Inc. M.I.E. Hospitality Inc., a wholly owned subsidiary of ATI
Delaware, is a party to six actions in New York State that have been
consolidated for discovery purposes in New York Supreme Court in Albany County,
New York. Each of these actions arises out of M.I.E.'s lease of certain food
court premises at five Pyramid Malls across New York State, and Pyramid's
eviction of M.I.E. in December 2000.


<PAGE>


         M.I.E. commenced the action entitled M.I.E. v. Fred Woods, et al. in
December 2000. M.I.E. asserts four substantively identical causes of action with
respect to each of the five mall locations. These causes of action are for
breach of lease, conversion, wrongful eviction, and trespass. M.I.E. is in the
process of calculating its claim for damages, which claim is anticipated to be
in excess of $2,200,000.00, and may be awarded treble damages if it succeeds
under its wrongful eviction claim under RPAPLss.853.

         In each of its five actions, which were commenced on January 3, 2001,
Pyramid seeks pre-eviction rent and additional rent arrears, post eviction
accelerated rent and additional rent, and attorney's fees. Pyramid's damage
claims exceed $2,400,000.00

              The actions are in the discovery phase. Documents have been
produced, but depositions have not occurred. The Company's attorneys intend to
vigorously defend the Company against the claims made by the plaintiffs but
cannot estimate the outcome at this time. The award of substantial damages to
Pyramid would have an adverse impact on the operations of M.I.E. and the
Company. M.I.E. does not own or operate any of the Company's Pudgies
restaurants.



Item 2            Changes in Securities and Use of Proceeds

                                    None

Item 3            Defaults on Senior Securities

                                    None

Item 4            Submission of Matters to a Vote of Shareholders

                                    None

Item 5            Other Information

                                    None

Item 6            Exhibits and Reports on Form 8-K

-----On February 22, 2001, the Company filed a report on Form 8-K under Item 5
to report the conversion of 11,879,957 shares of common stock of the Company's
subsidiary, Digital Creative Development Corporation, a Delaware corporation,
into an equal number of shares of the Company.


<PAGE>


----- On March 27, 2001, the Company filed a report on Form 8-K under Item 5 to
report the acquisition of all of the outstanding capital stock of
Tuneinmovies.com, Inc. and Keynomics, Inc.








                                   SIGNATURES


In accordance with the Securities Exchange Act of 1934, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                     DIGITAL CREATIVE DEVELOPMENT CORPORATION
                                     (Registrant)

Date:    May 30, 2001
                                     /s/ Martin Wade III
                                     -------------------------------------
                                     Martin Wade III
                                     President/Chief Executive Officer

                                     /s/ Vincent De Lorenzo
                                     -------------------------------------
                                     Vincent De Lorenzo
                                     Vice President & Controller