U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 March 31, 2001

                            ------------------------

                        Commission File Number: 000-26555

                            ------------------------

                           ACCUIMAGE DIAGNOSTICS CORP.
                 (Name of Small Business Issuer in its Charter)


                Nevada                                    33-0713615
---------------------------------------         -------------------------------
    (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                 Identification Number)

400 Oyster Point Blvd., Suite 114, South San Francisco, California    94080-1917
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                    Issuer's telephone number: (650) 875-0192

Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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 filing requirements within
the past 90 days.

                                 Yes _X_ No ___

The number of shares outstanding of the issuer's common stock was 10,981,534
shares of common stock, par value $.001, as of April 23, 2001. No shares of
preferred stock are outstanding.

Transitional Small Business Disclosure Format:

                                  Yes___ No _X_


<PAGE>



                           ACCUIMAGE DIAGNOSTICS CORP.

                                   Form 10-QSB
                                 March 31, 2001


TABLE OF CONTENTS


PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements                                                 3

                Balance Sheets as of March 31, 2001 (unaudited) and           3
                September 30, 2000

                Statements of Operations (unaudited) for the Three Months s
                and Six Month Ended March 31, 2001 and 2000                   4

                Statements of Cash Flow (unaudited) for the Period
                Ended March 31, 2001 and 2000                                 5

                Notes to Financial Statements                                 6

Item 2.  Management's Discussion and Analysis of
             Financial Condition or Plan of Operations                        8

PART II.  OTHER INFORMATION


Item 2.  Changes in Securities                                                10

Item 4.  Submission of Matters to a Vote of Securities Holders                10

Item 6.  Exhibits and Reports on Form 8-K                                     10


Signature                                                                     10

<PAGE>




PART I.  FINANCIAL INFORMATION
         Item 1.  Financial Statements


                           ACCUIMAGE DIAGNOSTICS CORP.
                                 BALANCE SHEETS
           MARCH 31, 2001(UNAUDITED) AND SEPTEMBER 30, 2000 (AUDITED)



<TABLE>
<CAPTION>


ASSETS                                                                       March 31, 2001           September 30, 2000
Current Assets                                                                (UNAUDITED)                  (AUDITED)
                                                                                                           ---------
<S>                                                                             <C>                        <C>
                 Cash                                                           $167,048                   $702,903
                 Accounts Receivable, Net of Allowance                           657,368                    499,141
                  for Doubtful accounts of $26,712
                 Inventory - net of reserve for obsolete equipment                63,206                    101,893
                 Prepaid Rent                                                     11,566                      3,648
                 Prepaid insurance                                                24,850                         -
                 Note receivable - short term                                     44,778                         -
                                                                       ---------------------------------------------------------
Total Current Assets                                                             968,816                  1,307,585

Property and Equipment, net of accumulated depreciation                           46,880                     52,015

Other Assets
                 Security Deposits                                                12,051                     11,711
                 Trade receivable-non-current                                      5,688                     11,375
                 Licenses, net of accumulated amortization                        37,287                     44,603
                 Goodwill                                                        618,140                    618,140
                 Acc. Amort-Goodwill                                            (216,357)                  (185,449)
                                                                       ---------------------------------------------------------
Total Other Assets                                                              $456,809                   $500,380

                 TOTAL ASSETS                                                 $1,472,505                 $1,859,980
                                                                       =========================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

                 Accounts Payable                                             $    8,746                  $ 137,995
                 Product Warranty Reserve                                        216,157                    246,785
                 Sales Tax Payable                                                 4,308                      3,282
                 Wages & Payroll taxes Payable                                      -                        17,150
                 Other Accrued Expenses                                           76,303                      2,400
                 Accrued Vacation                                                 35,606                     23,351
                                                                       --------------------------------------------------------

Total Current Liabilities                                                        341,120                    430,963

Stockholders' Equity
Preferred Shares - $0.001 Par Value: 10,000,000                                    -                             -
shares Authorized; None issued or outstanding

Common Shares - $0.001 Par Value; 50,000,000 Authorized:                          10,982                     10,982
10,981,534  shares issued and outstanding on
March 31, 2000 and September 30, 2000


Paid-In-Capital                                                                2,443,470                  2,443,470
Accumulated Earnings (Deficit)                                                (1,323,067)                (1,025,435)
                                                                              -------------------------------------------------

Total Stockholder's Equity                                                     1,148,004                  1,429,017

                 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $1,472,505                 $1,859,980
                                                                              =================================================
</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>


                           ACCUIMAGE DIAGNOSTICS CORP
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                       FOR THE THREE AND SIX MONTHS ENDED
                        MARCH 31, 2001 AND MARCH 31, 2000


<TABLE>
<CAPTION>

                                               For the three months     For the six months
                                                  Ended March 31,          Ended March 31,
                                                 2001        2000       2001        2000
                                                 ----        ----       ----        ----


<S>                                            <C>         <C>       <C>       <C>
TOTAL REVENUES                                 $811,810    $802,341  $1,265,048 $1,677,802

COST OF GOODS SOLD                              163,816     140,217     294,563    667,752
                                             ------------------------------------------------

GROSS PROFIT                                    647,994     662,124     970,485   1,010,050

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Sales and Marketing                             193,712      70,267     315,748    139,953
General and
Administrative                                  344,135      191,710    626,192    367,863
Research and
Development                                     203,228      104,588    336,373    163,530
                                             ------------------------------------------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                        741,075      366,565  1,278,313    671,346


OPERATING INCOME (LOSS)                         (93,081)     295,559   (307,828)   338,704
                                             ------------------------------------------------

OTHER (INCOME) AND EXPENSES
          Interest Income                      (7,912)     (2,893)    (15,083)    (3,847)
          Other Income                          (750)         -         (750)      (200)
          Franchise and Other Taxes             3,446        400        5,637       400
                                             ------------------------------------------------


TOTAL OTHER (INCOME) AND EXPENSES              (5,216)     (2,493)    (10,196)    (3,647)
                                             ------------------------------------------------

NET INCOME (LOSS)                             $(87,865)  $298,052   $(297,632)  $342,351
                                             ================================================


INCOME (LOSS) PER SHARE-BASIC                  ($0.001)     $0.003    ($0.003)     $0.004


INCOME (LOSS) PER SHARE-DILUTED                ($0.001)     $0.003    ($0.003)     $0.003

Weighted Average Shares Outstanding
                                     Basic    10,981,534  9,825,436  10,981,534  9,786,818
                                     Diluted  11,435,218  10,633,648 11,435,218  10,595,030


</TABLE>

<PAGE>




                           ACCUIMAGE DIAGNOSTICS CORP
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                FOR THE PERIOD OCTOBER 1, 2000 TO MARCH 31, 2001
             and THE PERIOD FROM OCTOBER 01, 1999 TO MARCH 31, 2000

<TABLE>
<CAPTION>

                                                                                     March 31,       March 31,
                                                                                       2001            2000
                                                                                       ----            ----

Cash Flows from Operating Activities
<S>                                                                                <C>               <C>
            Net Cash provided (used) by Operating Activities:                      $ (485,653)       $ 105,769
                                                                                 ----------------------------------

            Loan to other entity
Cash Flow from Investing Activities:
            Investment in Property and Equipment                                       (5,424)             -
            Loan to other entity                                                      (44,778)             -
                                                                                 ----------------------------------

            Net Cash Provided (Used) by Investing Activities                          (50,202)             -
                                                                                 ----------------------------------

Cash Flow From Financing Activities:
            Repayment of Short-Term Debt                                                -              (4,500)
            Proceeds from sales of Stock                                                -             566,000
                                                                                        -
                                                                                 ----------------------------------

            Net Cash Provided (Used) by Financing Activities                            -             561,500
                                                                                 ----------------------------------

Increase (Decrease) in Cash                                                          (535,855)        667,269

Cash Balance at beginning of period                                                   702,903          34,201
                                                                                 ----------------------------------

Cash balance at end of period                                                      $  167,048        $701,470
                                                                                 ==================================


Supplemental Disclosure:
            Income Taxes-Franchise tax                                              $3,151            $0



</TABLE>
   The accompanying notes are an integral part of these financial statements



<PAGE>


NOTES TO THE FINANCIAL STATEMENTS

(1)      Basis of Presentation

     In the opinion of the management,  the accompanying  consolidated financial
statements  contain  all  adjustments   necessary  (consisting  of  only  normal
recurring  accruals) to present fairly the financial position at March 31, 2001,
the results of its  operations for the three months ended March 31, 2001 and the
cash flow for the period  ended  March 31,  2001;  and March 31,  2000.  Certain
information and footnote  disclosures  normally included in financial statements
that would have been prepared in accordance with generally  accepted  accounting
principles have been condensed or omitted  pursuant to the rules and regulations
of the Securities and Exchange  Commission,  although  management of the Company
believes that the disclosures in these financial statements are adequate to make
the information  presented  therein not  misleading.  It is suggested that these
condensed financial statements and notes thereto be read in conjunction with the
financial  statements and the notes thereto included in the Company's  September
30, 2000 Form 10-KSB. The results of operations for the three months ended March
31,  2001 are not  necessarily  indicative  of the results of  operations  to be
expected for the full fiscal year ending September 30, 2001.

(2)      Interim Period Cost of Goods Sold

     Interim  period  cost of  goods  sold is  calculated  using  the  perpetual
inventory  record.  The Company reports any significant  adjustments that result
from reconciling the perpetual  inventory record to periodic and annual physical
inventory observations.

(3)      Income Taxes

     Significant  components  of the provision for taxes based on income for the
six months ended March 31, 2001 and 2000 are as follows:

                                             2001              2000
                                            -------         --------
         Current tax expense
                  Federal                  $   0              $  0
                  State                      400               400
                                           --------        ---------
                                             400               400

                  Deferred tax expense
                  Federal                      0                 0
                  State                        0                 0
                                          ---------        ---------

         Provision for income taxes        $  400           $  400
                                          =========        =========


     At September 30, 2000, the Company has approximately $839,514 net operating
loss  carryforwards  available to offset future  federal and state income taxes,
which expire through 2010 and 2019.

     The Company has elected to fully  reserve all tax benefits  until such time
as it is able to reasonably expect to realize those benefits.



<PAGE>



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

     The following  discussion and analysis  should be read in conjunction  with
the  Company's  Consolidated  Financial  Statements  and related  Notes  thereto
contained  elsewhere with this document.  Operating  results for the three-month
period ended March 31, 2001 are not  necessarily  indicative of the results that
may be  expected  for any  future  periods,  including  the  full  fiscal  year.
Reference should also be made to the Annual Financial Statements, Notes thereto,
and Management's  Discussion and Analysis of Financial  Condition and Results of
Operations contained in the Company's Form 10-KSB, filed on December 29, 2000.


     AccuImage is engaged in the development,  marketing and support of software
for visualization, analysis and management of medical imaging data, particularly
in support of the imaging screening market, a market that is growing even faster
than the traditional  imaging market.  The software brings value by reducing the
time the  physician  needs for  reviewing  and  reporting  cases,  enhancing the
interpretation  of studies,  and providing  readily  visualizable 3-D images for
marketing, promotion and patient information.  Efficiency gains and cost savings
are realized through automated reporting tools  incorporating  expert knowledge,
and by  providing  hardware  and  software  for  distribution  of the images and
reports  via  internal  networks  as well as  internet  transmission  to  remote
locations,  to referring physicians and to patients. The Company is now ready to
expand its markets through a three-pronged approach: The generation of automated
report generators for new applications, including whole body screening; the sale
of upgrades and new products to existing customers; and the provision of quality
assurance  accreditation  support services needed for  demonstrating  compliance
with upcoming  recommendations  from the American College of Radiology and other
accrediting  bodies.  The Company is also  actively  establishing  a proprietary
position in these new areas. Market expansion is dependent on reaching agreement
with OEMS and large service providers.  The Company has established an
infrastructure capable of supporting the needs of these organizations.  This has
required an up-front investment in personnel resources, in advance of these
programs yielding revenue.  Coupled with an unexpected strong decrease in orders
from the Company's largest customer, Imatron, this has resulted in a period of
negative cash flow.  Our programs have attracted attention from the intended
markets, and we expect these programs to start to produce results in the next
few months.  There is no certainty that such results will be achieved.


Revenue
-------

     For the three  months  ended  March 31,  2001,  revenue  increased  1.2% to
$811,810 compared with $802,341 in 2000.


Gross Profit
------------

     For the three months  ended March 31, 2001 gross profit on sales  decreased
2.1% to  $647,994  compared  with  $662,124  in  2000.  This  quarter  marked  a
transition for the Company with the hiring of a new Chief Executive Officer, Dr.
Leon Kaufman.


Gross Margin
------------

     The gross margin percentage for the quarter was 80% compared to 83% for the
same period in 2000. This decrease in gross margin is largely due to a increased
cost of goods sold driven by a reserve  for  obsolete  equipment,  offset by our
ability to negotiate  better  discounts  with vendors now that the Company has a
record of greater purchasing volumes.


Sales and Marketing
-------------------

     The Company's  sales and marketing  expenses for the quarter were $193,712;
compared with expenses of $70,267 for the same quarter in fiscal year 2000.  The
increase  reflects the cost of increased sales and marketing  activity and added
staff.  The Company expects sales and marketing costs to continue to increase as
additional  sales  personnel  are  recruited  and  sales  commissions  increase,
although this forward  looking  statement will be influenced by the actual sales
levels attained by the Company's sales force.


Research and Development
------------------------

     The Company spent $203,228 on research and  development  activities  during
the  quarter,  which  compares  with  $104,588 for the same quarter in the prior
fiscal  year.  The Company  anticipates  that  software  development  costs will
increase  as the  Company  continues  its  recruitment  of  additional  software
development  expertise.  The Company  does not intend to reduce its research and
development   effort  since  maintenance  of  a  competitive   position  in  the
marketplace  where  the  Company  operates  requires  constant  improvement  and
high-level development of the Company's software products.


Operational and Administrative
------------------------------

     Operational  and  administrative  expenses  were  $314,135 for the quarter,
which  compares  with  $191,710 for the same quarter in the previous  year.  The
increase  is partly  driven by an increase in staff;  with the  majority  due to
increased sales activity, bonus payments, and the operational, manufacturing and
support the increase in activity requires. The Company believes that operational
and  administrative  costs  will  increase  in  the  future  if the  Company  is
successful  in its efforts to recruit  additional  staff and continue to develop
its  capabilities  in this area.  As a result of  becoming a  reporting  Company
pursuant  to the  Securities  Exchange  Act of 1934,  the  Company  will  likely
increase  its  expenditures  on  investor  relations  and  legal  and  financial
expertise.


Results of Operations
---------------------

     Increased  expenses for sales,  marketing,  operations and  administration;
along with lower than expected revenues from sales to Imatron,  Inc. resulted in
an  operating  loss of  ($93,081)  for the three  months  ending  March 31, 2001
compared to an  operating  profit of  $295,559  for the same period in the prior
fiscal year.


Liquidity and Capital Resources
-------------------------------

     In the quarter  ending March 31, 2001,  the Company  generated an operating
loss of  ($93,081).  On March 31,  2001,  the Company  had  $167,048 in cash and
accounts receivable of $673,987.  Working Capital for the period ended March 31,
2001 equaled $644,315  compared with $876,622 for the period ended September 30,
2000. The current ratio for the period ended March 31, 2001 was 2.81,  with 3.01
as the current ratio for the period ended September 30, 2000.

     The Company  anticipates  that cash  requirements  for the remainder of the
year  will be met by a  combination  of  existing  cash on hand and  operational
income,  and  financing.  There is no assurane  that the Company will be able to
obtain the necessary financing.  In the event that such financing cannot be
obtained, the Company's business could be adversely affected.


Foreign Currency Transactions
-----------------------------

     All the Company's  transactions  are negotiated,  invoiced and paid in U.S.
dollars.


Inflation
---------

     Management  believes the Company's  operations and financial condition have
suffered no adverse material effect due to inflation.


Share Price Volatility
----------------------

     During the second  quarter of fiscal year 2001,  the Company's  share price
experienced some price decline and volatility compared to the same period in the
prior  fiscal year.  The trading  price of the  Company's  common stock could be
subject to wide  fluctuations  in response to  quarter-to-quarter  variations in
operating results,  changes in earnings estimates by analysts,  announcements of
technological  innovations  or new  products by the Company or its  competitors,
general  conditions in the software and computer  industries and other events or
factors.  In  addition,  in recent  years the stock  market in general,  and the
shares of technology  companies in particular,  have  experienced  extreme price
fluctuations.  This volatility has had a substantial  effect on the market price
of securities  issued by many  companies for reasons  unrelated to the operating
performance  of the  specific  companies.  These broad market  fluctuations  may
adversely affect the market price of the common stock.


Year 2000 Impact.
-----------------

     To date, the Company has not  experienced  any year 2000 issues with any of
its internal  systems or products,  and it does not expect to experience  any in
the future. Additionally, it has not experienced any year 2000 issues related to
any of its key third party  suppliers,  distributors  and  customers nor does it
expect to experience any in the future.


Forward-looking Statements
--------------------------

     The  discussion  contained  in this  Management  Discussion  & Analysis  is
"forward  looking" as that term is contemplated by Section 27A of the Securities
Act of 1933 and Section 12E of the Securities  exchange Act of 1934,  including,
without limitation,  statements regarding the Company's  expectations,  beliefs,
intentions or strategies  regarding  future  business  operations  and projected
earnings from its products and services, which are subject to many risks.

     All  forward-looking  statements  included  in this  document  are based on
information available to the Company on the date hereof, and the Company assumes
no  obligation  to update any such  forward-looking  statements.  The  Company's
actual results may differ  materially as a result of certain factors,  including
those set forth hereafter and elsewhere in this Form 10-QSB. Potential investors
should consider  carefully the previously  stated  factors,  as well as the more
detailed  information  contained elsewhere in this Form 10-QSB,  before making a
decision to invest in the common stock of the Company.



<PAGE>



PART II - OTHER INFORMATION

Item 2.  Changes In Securities

          None.

Item 4.  Submission of Matters to a Vote of Securities Holders

     At the Company's Annual Meeting of Stockholders  held on February 12, 2001,
the  following  matters  were  submitted  to a vote of the  stockholders  of the
Company.

     (i) The election of Douglas P. Boyd, John Klock, Alexander R. Margulis, and
Chris Shepherd as directors to serve a one-year term.

    Nominees                     Shares Voted in Favor           Shares Withheld
    --------                     ---------------------           ---------------
    Douglas P. Boyd                 7,813,430                          8,000
    John C. Klock                   7,813,430                          8,000
    Alexander R. Margulis           7,814,930                          6,500
    Chris Shepherd                  7,814,930                          6,500

     (ii) The Amended and Restated Articles of Incorporation  were approved by a
total of  7,812,630  votes in favor,  2,500  votes  against,  and  6,300  shares
abstaining.

     (iii) The  Amendment to Article IX of the Bylaws was approved by a total of
7,812,630 votes in favor, 2,500 votes against, and 6,300 shares abstaining.


Item 6.  Exhibits And Reports On Form 8-K

         (a)      Exhibits:

                  None.

         (b)      Form 8-K Reports:  None.


                                   SIGNATURES

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


                                        ACCUIMAGE DIAGNOSTICS CORP.


May 15, 2001                           By:  /s/  Leon Kaufman
                                          ----------------------------------
                                          Leon Kaufman
                                          Chief Executive Officer


<PAGE>