SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For Quarter Ended                                         Commission file number
  June 30, 2003                                                   0-15586

                            U.S. NEUROSURGICAL, Inc.
             (Exact name of Registrant as specified in its charter)

           Delaware                                              52-1842411
(State of other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

            2400 Research Blvd, Suite 325, Rockville, Maryland 20850
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (301) 208-8998

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

            YES |X|             NO |_|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

          Class                                    Outstanding at August 3, 2003
          -----                                    -----------------------------
Common Stock, $.01 par value                             7,866,185 Shares


<PAGE>

                                     PART I
                              FINANCIAL INFORMATION
                     U.S. NEUROSURGICAL, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     June 30,     December 31,
                                                                       2003           2002
                                                                       ----           ----
<S>                                                                <C>            <C>
ASSETS
Current assets:
     Cash and cash equivalents                                     $   234,000    $    88,000
     Accounts receivable                                               577,000        623,000
     Other current assets                                               63,000        118,000
                                                                   -----------    -----------
         Total current assets                                      $   874,000    $   829,000
                                                                   -----------    -----------

Gamma Knife (net of accumulated depreciation of
     $6,374,000 in 2003 and $5,714,000 in 2002)                        935,000      1,594,000
Leasehold improvements (net of accumulated
      amortization of $1,285,000 in 2003 and $1,501,000 in 2002)       557,000        341,000
Office furniture and computers (net of accumulated
      Depreciation of $104,000 in 2003 and $99,000 in 2002)              3,000          8,000
                                                                   -----------    -----------
         Total property and equipment                                1,495,000      1,943,000
                                                                   -----------    -----------

Deferred tax asset                                                     156,000         85,000
Cash held in escrow                                                    106,000        106,000
                                                                   -----------    -----------

         TOTAL                                                     $ 2,631,000    $ 2,963,000
                                                                   ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                         $   131,000    $   119,000
     Note payable - litigation settlement                                   --        100,000
     Obligations under capital lease
      and loans payable- current portion                               376,000        790,000
     Due to stockholder                                                300,000        300,000
     Deferred tax liability                                            101,000        146,000
     Other current liabilities                                         162,000         39,000
                                                                   -----------    -----------
         Total current liabilities                                   1,070,000      1,494,000

Obligations under capital lease and loans payable-net
of current portion                                                     101,000        101,000
                                                                   -----------    -----------
                                                                     1,171,000      1,595,000
                                                                   -----------    -----------

Stockholders' equity:
     Common stock                                                       79,000         79,000
     Additional paid-in capital                                      2,808,000      2,808,000
     Accumulated deficit                                            (1,416,000)    (1,510,000)
     Treasury stock, at cost                                           (11,000)        (9,000)
                                                                   -----------    -----------
         Total stockholders' equity                                $ 1,460,000    $ 1,368,000
                                                                   -----------    -----------

         TOTAL                                                     $ 2,631,000    $ 2,963,000
                                                                   ===========    ===========
</TABLE>

   The accompanying notes to financial statements are an integral part hereof.


                                       2
<PAGE>

                     U.S. NEUROSURGICAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                         Three Months Ended
                                                              June 30,
                                                              --------
                                                         2003           2002
                                                         ----           ----

Revenue:
      Patient Revenue                                $   550,000    $   638,000
                                                     -----------    -----------

Expenses:
     Patient Expenses                                $   246,000    $   242,000
     Selling, General and Administrative                 358,000        327,000
                                                     -----------    -----------
         Total                                           604,000        569,000
                                                     -----------    -----------

Operating (Loss) income                              $   (54,000)   $    69,000

Interest expense                                         (18,000)       (49,000)

Interest income                                               --             --
                                                     -----------    -----------
(Loss) income  before income taxes                       (72,000)        20,000
Income tax (benefit) provision                           (31,000)         5,000
                                                     -----------    -----------

Net (Loss) income                                        (41,000)        15,000
                                                     ===========    ===========

Proforma basic and diluted (Loss) income per share   $      (.01)   $        --
                                                     -----------    -----------
Proforma weighted average shares outstanding           7,841,185      7,866,185


   The accompanying notes to financial statements are an integral part hereof.


                                       3
<PAGE>

                     U.S. NEUROSURGICAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                          Six Months Ended
                                                              June 30,
                                                              --------
                                                        2003            2002
                                                        ----            ----

Revenue:
      Patient Revenue                               $ 1,385,000     $ 1,384,000
                                                    -----------     -----------

Expenses:
     Patient Expenses                                   463,000         456,000
     Selling, General and Administrative                720,000         663,000
                                                    -----------     -----------
         Total                                        1,183,000       1,119,000
                                                    -----------     -----------

Operating Income                                        202,000         265,000

Interest expense                                        (47,000)        (99,000)

Interest income                                           1,000           1,000
                                                    -----------     -----------

Income before income taxes                              156,000         167,000
Income tax provision                                     62,000          68,000
                                                    -----------     -----------

Net Income                                               94,000          99,000
                                                    ===========     ===========

Proforma basic and diluted income  per share        $       .01     $       .01
                                                    -----------     -----------

Proforma weighted average shares outstanding          7,841,185       7,866,185


  The accompanying notes to financial statements are an integral part hereof.


                                       4
<PAGE>

                     U.S. NEUROSURGICAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     Six Months Ended
                                                                         June 30,
                                                                         --------
                                                                     2003         2002
                                                                     ----         ----
<S>                                                               <C>          <C>
Cash flows from operating activities:
     Income (loss) from continuing operations                     $  94,000    $  99,000
     Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:
           Depreciation and amortization:                           448,000      451,000
           Changes in operating assets and liabilities:
           Decrease (increase) in receivables                        46,000     (208,000)
           (Increase) in other current assets                       (16,000)     (40,000)
           Increase in payables and other current liabilities        90,000       56,000
                                                                  ---------    ---------
                      Net cash provided by operating activities     662,000      358,000
                                                                  ---------    ---------

Cash flows from financing activities:
     Proceeds from loan                                             137,000           --
     Repayment of note payable                                     (100,000)    (100,000)
     Purchase of treasury stock                                      (2,000)      (8,000)
     Payment of capital lease obligations                          (551,000)    (432,000)
                                                                  ---------    ---------
                      Net cash used in financing activities        (516,000)    (540,000)

Net increase (decrease) in cash and cash equivalents                146,000     (182,000)

Cash and cash equivalents - beginning of period                      88,000      311,000
                                                                  ---------    ---------

CASH AND CASH EQUIVALENTS - END OF PERIOD                         $ 234,000    $ 129,000
                                                                  =========    =========

Supplemental disclosures of cash flow information:
   Cash paid for
      Interest                                                    $  47,000    $  99,000
      Taxes                                                           3,000      102,000
</TABLE>

   The accompanying notes to financial statements are an integral part hereof.


                                       5
<PAGE>

                    U.S. NEUROSURGICAL, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

Note A - Basis of Preparation

      The accompanying financial statements at June 30, 2003, and for the three
and six months ended June 30, 2003 and 2002, are unaudited. However, in the
opinion of management, such statements include all adjustments necessary for a
fair statement of the information presented therein. The balance sheet at
December 31, 2002 has been derived from the audited financial statements at that
date appearing in the Company's Annual Report on Form 10-K.

      Pursuant to accounting requirements of the Securities and Exchange
Commission applicable to quarterly reports on Form 10-Q, the accompanying
financial statements and these notes do not include all disclosures required by
accounting principles generally accepted in the United States of America for
complete financial statements. Accordingly, these statements should be read in
conjunction with the Company's most recent annual financial statements.

      Results of operations for interim periods are not necessarily indicative
of those to be achieved for full fiscal years.

Note B - Treasury Stock

      During 2003, the Company purchased as part of its buyback program, 25,000
shares of its own common stock at a cost of $2,000.


                                       6
<PAGE>

                     U.S. NEUROSURGICAL, INC. AND SUBSIDIARY
                            MANAGEMENT DISCUSSION AND
                             ANALYSIS OF OPERATIONS
                             AND FINANCIAL CONDITION

Critical Accounting Policies

Our condensed financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. As
such, some accounting policies have a significant impact on amounts reported in
the financial statements. A summary of those significant accounting policies can
be found in our 2001 Annual Report on Form 10-K, filed, in the Notes to the
Financial Statements, Note A. In particular, judgment is used in areas such as
determining the allowance for doubtful accounts, and asset impairments.

The following discussion and analysis provides information which the Company's
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with the consolidated financial statements and notes
there to appearing elsewhere herein.

Second Quarter 2003 Compared to Second Quarter 2002 and Six Months Ended June
30, 2003 Compared to Six Months Ended June 30, 2002

Results of Operations

      Patient revenue decreased 14% to $550,000 in the quarter ended June 30,
2003 from $638,000 for the quarter ended June 30, 2002. The decrease was due to
a retroactive adjustment to revenues at the RMC. Patient expenses were $246,000
for the quarter compared to $242,000 in the year ago period. Selling, general
and administrative expense increased 9% to $358,000 from $327,000 because of due
to higher insurance costs, for the quarter ended June 30, 2003. Interest expense
decreased to $18,000 from $49,000 in the same period a year earlier. For the
quarter ended June 30, 2003, the net loss was $41,000 as compared to income of
$15,000 for the same period a year earlier. The lease payments for the NYU
equipment were completed in July 2003. In August 2003 the NYU machine will have
its cobalt reloaded. The cost is $800,000, which includes the cost of the cobalt
and related installation. This will be financed by DVI, Inc. and is expected to
have annual payments of $265,000 at 9% interest over 40 months. The financing of
the Kansas City Cobalt reload requires annual payments of $300,000. These
payments will be completed in 2004. In addition, as part of the settlement of
litigation involving GHS and USN in May 1999, USN issued promissory notes in the
aggregate amount of $450,000, bearing interest at the rate of 6% per annum, and
payable over a four-year period. The remaining liability of $100,000 was paid
during the second quarter.

      For the six months ended June 30, 2003 revenue was $1,385,000 compared to
$1,384,000 in the same period a year earlier. Patient expenses increased 2% to
$463,000 in 2002 from $456,000 in the same period in 2002. S,G & A increased 9%
to $720,000 as compared to $663,000 in the same period a year earlier. The
increase was due to an increase in insurance costs. Interest expense decreased
approximately 53% to $47,000 from $99,000 in the same period a year ago. The
reason for the decrease was due to a reduction of the lease balances on the
Gamma Knife properties. Income from operations


                                       7
<PAGE>

was $94,000 for the six months ended June 30, as compared to income of $99,000
for the six months ended June 30, 2002.

Liquidity and Capital Resources

      At June 30, 2003 the Company had a working capital deficit of $196,000 as
compared to a deficit of $665,000 at December 31, 2002. Cash and cash
equivalents at June 30, 2003 were $234,000 as compared with $88,000 at December
31, 2002.

      Net cash provided by operating activities was $662,000 as compared to net
cash provided by of $358,000 for the same period, a year earlier. Net income was
$94,000 as compared to $99,000 in the same period, a year earlier. Depreciation
and amortization was $448,000 for the six months ended June 30, 2003 as compared
to $451,000 in the same period, one year earlier. There was a decrease in
accounts receivables of $46,000 as compared to an increase of $208,000 in the
same period in 2002, as NYU reduced their outstanding receivable. Accounts
payables increase $90,000 compared to an increase of $56,000 in 2002.

      Net cash used in financing activities was $516,000 as compared to $540,000
for the same period a year earlier. This is primarily due to paying down of the
principal amounts on its capitalized leases. During the quarter the company
borrowed $137,000 from DVI to meet operating expenses. We anticipate that with
our current cash position, and collection on our accounts receivable, the
Company believes that the cash position is sufficient for the next twelve
months.

Disclosure Regarding Forward Looking Statements

      The Securities and Exchange Commission encourages companies to disclose
forward-looking information so that investors can better understand a company's
future prospects and make informed investment decisions. This document contains
such "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, particularly statements anticipating future
growth in revenues and cash flow. Words such as "anticipates," "estimates,"
"expects," "projects," "intends," "plans," "believes," "will be," "will
continue," "will likely result," and words and terms of similar substance used
in connection with any discussion of future operating or financial performance
identify such forward-looking statements. Those forward-looking statements are
based on management's present expectations about future events. As with any
projection or forecast, they are inherently susceptible to uncertainty and
changes in circumstances, and USN is under no obligation to (and expressly
disclaims any such obligation to) update or alter its forward-looking statements
whether as a result of such changes, new information, future events or
otherwise.

      USN operates in a highly competitive and rapidly changing environment and
business segments that are dependent on our ability to: achieve profitability;
increase revenues; sustain our current level of operation; introduce on a timely
basis new products; maintain satisfactory relations with our customers; attract
and retain key personnel; maintain and expand our strategic alliances; and
protect our know-how. USN's actual results could differ materially from
management's expectations because of changes in such factors. New risk factors
can arise and it is not possible for management to predict all such risk
factors, nor can it assess the impact of all such risk factors on the company's
business or the extent to which any factor, or combination of factors, may cause
actual


                                       8
<PAGE>

results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.

      Investors should also be aware that while the company might, from time to
time, communicate with securities analysts, it is against the company's policy
to disclose to them any material non-public information or other confidential
commercial information. Accordingly, investors should not assume that the
company agrees with any statement or report issued by any analyst irrespective
of the content of the statement or report. Furthermore, the company has a policy
against issuing or confirming financial forecasts or projections issued by
others. Thus, to the extent that reports issued by securities analysts or others
contain any projections, forecasts or opinions, such reports are not the
responsibility of the company.

In addition, USN's overall financial strategy, including growth in operations,
maintaining financial ratios and strengthening the balance sheet, could be
adversely affected by increased interest rates, failure to meet earnings
expectations, significant acquisitions or other transactions, economic slowdowns
and changes in USN's plans, strategies and intentions

ITEM 4. CONTROLS AND PROCEDURES

      U.S. Neurosurgical management, including the President and the Chief
Financial Officer, conducted an evaluation of the effectiveness of disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14 within 90 days of
the filing of this report. Based on that evaluation, the President and the Chief
Financial Officer concluded that the disclosure controls and procedures are
effective in ensuring that all material information required to be filed in this
quarterly report has been made known to them in a timely fashion. There have
been no significant changes in internal controls, or in factors that could
significantly affect internal controls, subsequent to the date the President and
the Chief Financial Officer completed their evaluation.

PART II                        OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) None


                                       9
<PAGE>

                                   SIGNATURES

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

                                           U.S. Neurosurgical, Inc.


Date  August 7, 2003                       By      /s/ Alan Gold
                                              ----------------------------------
                                                   Alan Gold
                                                   Director and President
                                                   Chief Executive Officer


Date  August 7, 2003                       By      /s/ Howard Grunfeld
                                              ----------------------------------
                                                   Howard Grunfeld
                                                   Vice President of Finance


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