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
September 30, 2000                                    0-26575

                            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 November 3, 2000
     -----                                       -------------------------------
Common Stock, $.01 par value                            7,316,685 Shares
<PAGE>

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

<TABLE>
<CAPTION>
                                                               September 30,   December 31,
                                                                    2000           1999
                                                                -----------    -----------
<S>                                                             <C>            <C>
ASSETS
Current assets:
    Cash and cash equivalents                                   $   115,000    $   464,000
    Accounts receivable (net of reserve for doubtful accounts       445,000        300,000
        of $150,000 at September 30, 2000)
    Deferred tax asset                                               83,000         83,000
    Other current assets                                             54,000         26,000
                                                                -----------    -----------
        Total current assets                                        697,000        873,000
                                                                -----------    -----------

Gamma Knife (net of accumulated depreciation of
    $4,176,000 in 2000 and $3,483,000 in 1999)                    2,290,000      2,983,000
Leasehold improvements (net of accumulated
     amortization of $740,000 in 2000 and $592,000 in 1999)       1,101,000      1,249,000
Office furniture and computers (net of accumulated
    depreciation of 44,000 in 2000 and $24,000 in 1999)              62,000         82,000
                                                                -----------    -----------
        Total property and equipment                              3,453,000      4,314,000
                                                                -----------    -----------

Cash held in escrow                                                 100,000         96,000
                                                                -----------    -----------

        TOTAL                                                   $ 4,250,000    $ 5,283,000
                                                                ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable and accrued expenses                       $    72,000    $   148,000
    Accrued litigation settlement                                   150,000        100,000
    Obligations under capital lease
     and loans payable- current portion                             793,000      1,043,000
    Due to Allen and Company                                        300,000        300,000
    Other current liabilities                                        44,000         24,000
                                                                -----------    -----------
        Total current liabilities                                 1,359,000      1,651,000

Accrued litigation settlement                                       200,000        350,000
Deferred tax liability                                              416,000        416,000
Obligations under capital lease and loans payable
    Net of current portion                                        1,099,000      1,751,000
                                                                -----------    -----------
                                                                  3,074,000      4,132,000

Stockholders' equity:
    Common stock                                                     73,000         73,000
    Additional paid-in capital                                    2,789,000      2,789,000
    Accumulated deficit                                          (1,686,000)    (1,711,000)
                                                                -----------    -----------
        Total stockholders' equity (deficiency)                   1,176,000      1,151,000
                                                                -----------    -----------

        TOTAL                                                   $ 4,250,000    $ 5,283,000
                                                                ===========    ===========
</TABLE>

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


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                           ------------------
                                                            2000         1999
                                                         ---------    ---------
<S>                                                      <C>          <C>
Revenue:
    Patient Revenue                                      $ 653,000    $ 808,000
                                                         ---------    ---------

Expenses:
    Patient Expenses                                       304,000      298,000
    Selling, General and Administrative                    404,000      339,000
                                                         ---------    ---------
        Total                                              708,000      637,000
                                                         ---------    ---------

(Loss) income from operations                              (55,000)     171,000

Interest expense                                           (62,000)     (95,000)

Interest income                                              2,000        6,000
                                                         ---------    ---------

(Loss) income from continuing operations                  (115,000)      82,000
before income tax
Income tax (benefit) provision                             (40,000)      29,000
                                                         ---------    ---------

(Loss) income  from Continuing operations                  (75,000)      53,000

Income from Discontinued Operations (less applicable        22,000           --
Income tax of $ 10,000)
                                                         ---------    ---------
Net (Loss) income                                        $ (53,000)   $  53,000
                                                         =========    =========

Earnings per share from continuing operations            $    (.01)   $     .01
                                                         =========    =========

Earnings per share from discontinued operations                 --           --

Earnings per share                                       $    (.01)   $     .01
                                                         =========    =========
</TABLE>

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


                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                             September 30,
                                                           -----------------
                                                           2000           1999
                                                       -----------    -----------
<S>                                                    <C>            <C>
Revenue:
    Patient Revenue                                    $ 1,924,000    $ 2,503,000
                                                       -----------    -----------

Expenses:
    Patient Expenses                                       860,000        957,000
    Selling, General and Administrative                    967,000        950,000
                                                       -----------    -----------
        Total                                            1,827,000      1,907,000
                                                       -----------    -----------

Income from operations                                      97,000        596,000

Interest expense                                          (235,000)      (318,000)

Interest income                                             10,000         12,000
                                                       -----------    -----------

(Loss) income from continuing operations                  (128,000)       290,000
before income tax
Income tax (benefit) provision                             (44,000)       110,000
                                                       -----------    -----------

(Loss) income  from continuing operations                  (84,000)       180,000

Income from Discontinued Operations (less applicable       109,000             --
Income tax of $ 61,000)
                                                       -----------    -----------
Net Income                                             $    25,000    $   180,000
                                                       ===========    ===========

Earnings per share from continuing operations          $      (.01)   $       .02
                                                       ===========    ===========

Earnings per share from discontinued operations        $       .01    $        --
                                                       ===========    ===========

Earnings per share                                     $        --    $       .02
                                                       ===========    ===========
</TABLE>

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


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  Nine Months Ended
                                                                                    September  30
                                                                                  -----------------
                                                                                  2000           1999
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
Cash flows from operating activities:
        Net (loss) income                                                     $    25,000    $   180,000
        Adjustments to reconcile net income to net cash provided by
        operating activities:
               Provision for doubtful accounts                                    150,000             --
               Depreciation and amortization:                                     861,000        845,000
               Changes in operating assets and liabilities:
               Increase in receivables                                           (295,000)      (187,000)
               Increase in other assets                                           (28,000)       (18,000)
               (Decrease) increase in payable and other current liabilities       (56,000)       316,000
               Deferred tax benefit                                                    --         70,000
                                                                              -----------    -----------
        Net cash provided by operating activities                                 657,000      1,203,000
                                                                              -----------    -----------

Cash flows from investing activities :
               Increase in cash held in escrow                                     (4,000)        (3,000)
                                                                              -----------    -----------
Net cash(used in investing activities                                              (4,000)        (3,000)
                                                                              -----------    -----------

Cash flows from financing activities:
        Cash received from GHS, Inc.                                                   --        525,000
        Repayment of note payable                                                (100,000)            --
        Payment of capital lease obligations                                     (902,000)    (1,047,000)
                                                                              -----------    -----------
Net cash used in financing activities                                          (1,002,000)      (522,000)
                                                                              -----------    -----------

Net (decrease) increase in cash and cash equivalents                             (349,000)       681,000
Cash and cash equivalents - beginning of period                                   464,000         21,000
                                                                              -----------    -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                         115,000    $   702,000
                                                                              ===========    ===========


Supplemental disclosures of cash flow information:
    Cash paid for
        Interest                                                                  235,000        318,000
        Income Taxes                                                                5,000          7,000

    Contribution of amount formerly due to GHS, Inc. to capital                        --      2,078,000
    Contribution of fixed assets of GHS, Inc.                                          --         51,000
</TABLE>

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


                                       5
<PAGE>

                           GHS, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

Note A - Basis of Preparation

      The accompanying financial statements at September 30, 2000, and for the
three and nine months ended September 30, 2000 and 1999, 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, 1999 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
generally accepted accounting principles 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.


                                       6
<PAGE>

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

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
thereto appearing elsewhere herein.

Third Quarter 2000 Compared to Third Quarter 1999 and Nine Months Ended
September 30, 2000 Compared to Nine Months Ended September 30, 1999

Results of Operations

      Patient revenue decreased 19% to $653,000 in the quarter ended September
30, 2000 from $808,000 for the quarter ended September 30, 1999. The decrease
was due to a decrease in patient treatments as well as decreased reimbursements.
The decreases in patient treatments occurred primarily at the RMC site in Kansas
City. In addition, at the end of the quarter, the Company began to reload the
cobalt in the Gamma Knife at the RMC site, resulting in a closure to the center
for three weeks. This is a normal occurrence that needs to be done every seven
years. Patient expenses increased 2% to $304,000 from $298,000 in the same
period from a year earlier. Selling, general and administrative expense for the
quarter ended September 30 increased 19% to $404,000 from $339,000 a year ago.
The Company established a reserve of approximately $150,000 during the quarter
to cover a potential deduction to its accounts receivable caused by a
retroactive reduction in fees paid by NYU. Some of the increase was offset by a
decrease in professional fees incurred in the previous year for the spin-off of
USN from GHS, Inc. Interest expense decreased 35% to $62,000 from $95,000 in the
same period a year earlier. The decrease was due to increased principal payments
on USN's Gamma Knife capital leases. For the quarter ended September 30, 2000,
the net loss from continuing operations was $75,000 as compared to income of
$53,000 for the same period a year earlier. The Company received $32,000 from
collection on a sale from discontinued operations during this quarter.

      For the nine months ended September 30, revenue decreased 23% to
$1,924,000 from $2,503,000 in the same period a year earlier. The decrease is
due the decrease in patient treatments, as described above. Patient expenses
decreased 10% to $860,000 in 2000 from $957,000 in the same period in 1999.
Selling, general and administrative expenses increased to $967,000 as compared
to $950,000 in the same period, a year earlier. Interest expense decreased 26%
to $235,000 from $318,000 in the same period a year ago due to paydown of
principal on the Gamma Knife capital leases. Loss from continuing operations was
$84,000 for the nine months ended September 30, 2000 as compared to income of
$180,000 for the nine months ended September 30, 1999. The Company received
$170,000 from collection on a sale from discontinued operations during nine
months ended September 30 2000.


                                       7
<PAGE>

Liquidity and Capital Resources

      At September 30, 2000 the Company had a working capital deficit of
$662,000 as compared to a deficit of $778,000 at December 31, 1999. Cash and
cash equivalents at September 30, 2000 were $115,000 as compared with $464,000
at December 31, 1999. The decrease was due to paydown of capital leases as well
as a delay in payment from the NYU site.

      Net cash provided by operating activities was $657,000 for the nine months
ended September 30, 2000 as compared with $1,203,000 for the same period, a year
earlier. Depreciation and amortization was $861,000 for the nine month period
ended September 30, 2000 and was 845,000 in the 1999 period. There was an
increase in gross accounts receivable of $295,000 in 2000 and $187,000 during
the nine months ended September 30, 1999.

      Payables and accrued expenses decreased $56,000 for the nine months ended
September 30, 2000 as compared to an increase of $316,000 for the same period in
1999.

      Net cash used in financing activities was $1,002,000 for the nine months
ended September 30, 2000 as compared to $522,000 for the same period a year ago.
The Company paid $902,000 towards its capital lease obligations for the nine
months ended September 30, 2000 as compared to $1,047,000 in the same period in
1999. During the current quarter the company completed payment on its RMC Gamma
Knife lease. The company will be financing approximately $1,000,000 in the
fourth quarter to pay for the reload of the cobalt in Kansas City. Notes payable
decreased by $100,000 in 2000. USN received a $525,000 contribution from GHS in
1999.

Disclosure Regarding Forward Looking Statements

Statements contained in this Information Statement that are not historical facts
may be deemed to be forward-looking statements. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from that projected or suggested herein due to
certain risks and uncertainties including, without limitation, the payment,
timing and ultimate collectability of accounts receivable for Gamma Knife
procedures from different payor groups such as Medicare and private payors;
competition; technological obsolescence; government regulation; and malpractice
liability. Additional information concerning certain risks and uncertainties
that could cause actual results to differ materially from that projected or
suggested may be identified from time to time in USN's filings with the
Securities and Exchange Commission (SEC) and USN's public announcements, copies
of which are available from the SEC or from the Company upon request.


                                       8
<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 November 10, 2000                  By /s/ Alan Gold
                                          --------------------------------------
                                          Alan Gold
                                          Director and President
                                          Chief Executive Officer


Date November 10, 2000                  By  /s/ Howard Grunfeld
                                           -------------------------------------
                                           Howard Grunfeld
                                           Chief Financial Officer


                                       9