UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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



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

Commission file number:                                       0-16749

                                  CERBCO, Inc.
        (Exact name of small business issuer as specified in its charter)

             Delaware                                     54-1448835
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                     Identification No.)

3421 Pennsy Drive, Landover, Maryland                      20785-1608
(Address of principal executive offices)                   (Zip Code)


            Issuer's telephone and fax numbers, including area code:
                               301-773-1784 (tel)
                               301-322-3041 (fax)
           301-773-4560 (24-hour public information FaxVault System)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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
                                                                        ---  ---


As of November 8, 2001,  the following  number of shares of each of the issuer's
classes of common stock were outstanding:

                         Common Stock          1,189,538
                         Class B Common Stock    293,418
                                            ------------
                         Total                 1,482,956




<PAGE>




                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                             Page
------------------------------                                             ----

Item 1. Financial Statements................................................  3

        Condensed Consolidated Statements of Operations for the Three
        Months Ended September 30, 2001 and September 30, 2000 (unaudited)..  3

        Condensed Consolidated Balance Sheets as of September 30, 2001
        and June 30, 2001 (unaudited).......................................  4

        Condensed Consolidated Statements of Cash Flows for the Three
        Months Ended September 30, 2001 and September 30, 2000 (unaudited)..  5

        Notes to Condensed Consolidated Financial Statements (unaudited)....  6

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations...............................................  9

PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings..................................................  11

Item 2. Changes in Securities and Use of Proceeds..........................  11

Item 3. Defaults upon Senior Securities....................................  11

Item 4. Submission of Matters to a Vote of Security Holders................  11

Item 5. Other Information..................................................  11

Item 6. Exhibits and Reports on Form 8-K...................................  12




<PAGE>




                         PART I - FINANCIAL INFORMATION
                         ------------------------------

Item 1.  Financial Statements
------------------------------
<TABLE>
                                  CERBCO, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<CAPTION>
                                                                              For the three months ended Sept. 30
                                                                              -----------------------------------
                                                                                     2001                 2000
                                                                                     ----                 ----

<S>                                                                               <C>                  <C>
Sales                                                                             $4,864,856           $6,332,089
                                                                                ---------------      ---------------
Costs and Expenses:
  Cost of sales                                                                    5,000,475            5,162,982
  Selling, general and administrative expenses                                     1,145,000            1,136,296
                                                                                ---------------      ---------------
    Total Costs and Expenses                                                       6,145,475            6,299,278
                                                                                ---------------      ---------------
Operating (Loss) Profit                                                           (1,280,619)              32,811
Investment Income                                                                    169,635              246,663
Interest Expense                                                                      (2,061)              (4,077)
Other Expense - net                                                                 (330,387)              (8,574)
                                                                                ---------------      ---------------
(Loss) Earnings Before Non-Owned Interests and Incomes Taxes                      (1,443,432)             266,823
Provision for Income Taxes                                                            20,000               46,000
                                                                                ---------------      ---------------
(Loss) Earnings Before Non-Owned Interests in Insituform East, Inc.               (1,463,432)             220,823
Non-Owned Interests in Loss (Earnings) of Insituform East, Inc.                      689,271             (125,183)
                                                                                ---------------      ---------------
                    NET (LOSS) EARNINGS                                          $  (774,161)        $     95,640
                                                                                ===============      ===============

Net (Loss) Earnings per Share of Common Stock:
  Basic (Loss) Earnings per Share                                                $     (0.52)        $        0.06
                                                                                ===============      ===============
  Diluted (Loss) Earnings per Share                                              $     (0.52)        $        0.06
                                                                                ===============      ===============
See notes to condensed consolidated financial statements.
</TABLE>




<PAGE>


<TABLE>
                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<CAPTION>
                                                                                                             As of
                                                                                           ----------------- --- ----------------
                                                                                            Sept. 30, 2001         June 30, 2001
                                                                                           -----------------     ----------------
ASSETS
Current Assets:
<S>                                                                                         <C>                   <C>
   Cash and cash equivalents                                                                $  2,409,288          $  1,735,972
   Marketable securities                                                                       8,027,497             7,995,843
   Accounts receivable                                                                         5,649,720             6,983,481
   Inventories                                                                                 1,202,229             1,102,521
   Prepaid and refundable taxes                                                                  130,418                80,418
   Prepaid expenses and other                                                                    270,513               289,217
                                                                                           -----------------     ----------------
     Total Current Assets                                                                     17,689,665            18,187,452
                                                                                           -----------------     ----------------

Property, Plant and Equipment - at cost less accumulated depreciation of
$17,187,724 at September 30, 2001 and $16,922,043 at June 30, 2001                             8,163,198             8,516,639
                                                                                           -----------------     ----------------

Other Assets:
   Excess of acquisition cost over value of net assets acquired less accumulated
     amortization of $1,405,151 at September 30, 2001 and $1,388,825 at June 30,
     2001                                                                                      1,534,638             1,550,964
   Cash surrender value of SERP life insurance                                                 1,701,628             2,000,107
   Marketable securities                                                                       3,015,709             3,582,029
   Deferred income taxes - net of valuation allowance of $2,301,000 at September
     30, 2001 and $1,858,000 at June 30, 2001                                                          0                     0
   Deposits and other                                                                             51,453                53,156
                                                                                           -----------------     ----------------

     Total Other Assets                                                                        6,303,428             7,186,256
                                                                                           -----------------     ----------------
         Total Assets                                                                        $32,156,291           $33,890,347
                                                                                           =================     ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued liabilities                                                  $  2,659,145          $  2,991,939
  Income taxes payable                                                                            80,000                10,000
  Current portion of capital lease obligations                                                    29,183                32,448
                                                                                           -----------------     ----------------
     Total Current Liabilities                                                                 2,768,328             3,034,387
                                                                                           -----------------     ----------------

Long-Term Liabilities:
  Accrued SERP liability                                                                       1,532,851             1,532,851
  Capital lease obligations (less current portion shown above)                                     5,582                10,147
                                                                                           -----------------     ----------------
     Total Long-term Liabilities                                                               1,538,433             1,542,998
                                                                                           -----------------     ----------------
         Total Liabilities                                                                     4,306,761             4,577,385
                                                                                           -----------------     ----------------
Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiaries                                               4,885,629             5,574,900
                                                                                           -----------------     ----------------

Stockholders' Equity:
  Common stock, $.10 par value
     Authorized:  3,500,000 shares
     Issued and outstanding: 1,189,538 shares (at September 30, 2001)                            118,953
     Issued and outstanding:  1,189,476 shares (at June 30, 2001)                                                      118,947
  Class B Common stock (convertible), $.10 par value
     Authorized:  700,000 shares
     Issued and outstanding: 293,418 shares (at September 30, 2001)                               29,342
     Issued and outstanding: 293,480 shares (at June 30, 2001)                                                          29,348
  Additional paid-in capital                                                                   7,527,278             7,527,278
  Retained earnings                                                                           15,288,328            16,062,489
                                                                                           -----------------     ----------------
     Total Stockholders' Equity                                                               22,963,901            23,738,062
                                                                                           -----------------     ----------------
         Total Liabilities and Stockholders' Equity                                          $32,156,291           $33,890,347
                                                                                           =================     ================
See notes to condensed consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>
                                  CERBCO, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<CAPTION>
                                                                          For the three months ended Sept. 30
                                                                         ----------------- --- ----------------
                                                                               2001                 2000
                                                                         -----------------     ----------------

Cash Flows from Operating Activities:
<S>                                                                        <C>                   <C>
  Net (loss) earnings                                                      $  (774,161)          $    95,640
  Adjustments to reconcile net (loss) earnings
    to net cash provided by (used in) operations:
    Depreciation and amortization                                              406,776               531,644
    Amounts attributable to non-owned interests                               (689,271)              125,183
    Gain on sale of equipment                                                   (5,420)              (32,947)
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable                             1,333,761              (622,762)
      (Increase) decrease in inventories                                       (99,708)              164,370
      Decrease (increase) in prepaid expenses                                   18,704              (109,086)
      Decrease in accounts payable and accrued expenses                       (184,498)             (196,751)
      Increase (decrease) in income taxes payable                               20,000              (164,000)
                                                                         -----------------     ----------------
  Net Cash Provided by (Used in) Operating Activities                           26,183              (208,709)
                                                                         -----------------     ----------------

Cash Flows from Investing Activities:
  Capital expenditures                                                         (35,306)             (131,543)
  Sale of equipment                                                              5,420                32,947
  Redemption of marketable securities - net                                    534,666             1,156,336
  Increase in investment in Insituform East                                          0                (2,930)
  Decrease (increase) in cash surrender value of SERP life insurance           298,479               (22,275)
  Increase in accrued SERP liability                                                 0                66,748
                                                                         -----------------     ----------------
  Net Cash Provided by Investing Activities                                    803,259             1,099,283
                                                                         -----------------     ----------------

Cash Flows from Financing Activities:
  Principal payments under capital lease obligations                            (7,830)               (7,031)
  Dividends paid                                                              (148,296)             (148,296)
                                                                         -----------------     ----------------
  Net Cash Used in Financing Activities                                       (156,126)             (155,327)
                                                                         -----------------     ----------------

Net Increase in Cash and Cash Equivalents                                      673,316               735,247
Cash and Cash Equivalents at Beginning of Period                             1,735,972             2,344,077
                                                                         -----------------     ----------------
Cash and Cash Equivalents at End of Period                                $  2,409,288           $ 3,079,324
                                                                         =================     ================

Supplemental disclosure of cash flow information:
  Interest paid                                                           $      2,061           $     3,437
                                                                         =================     ================
  Income taxes paid                                                       $          0           $   210,000
                                                                         =================     ================
See notes to condensed consolidated financial statements.

</TABLE>



<PAGE>




                                  CERBCO, Inc.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.   Financial Information

     The condensed consolidated financial statements include the accounts of the
parent holding company,  CERBCO, Inc.  ("CERBCO");  and its  majority-controlled
subsidiary,  Insituform  East,  Incorporated  ("Insituform  East," together with
CERBCO, the "Company").  All significant  intercompany accounts and transactions
have been eliminated.

     The Condensed  Consolidated  Balance  Sheet as of September  30, 2001,  the
Condensed  Consolidated  Statements  of  Operations  for the three  months ended
September 30, 2001 and 2000, and the Condensed  Consolidated  Statements of Cash
Flows for the three months ended  September 30, 2001 and 2000 have been prepared
by the Company  without audit.  The Condensed  Consolidated  Balance Sheet as of
June 30, 2001  (unaudited)  has been  derived from the  Company's  June 30, 2001
audited  financial  statements.  In the opinion of management,  all  adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the financial  position,  results of operations  and cash flows at September 30,
2001 and for all periods presented have been made.

     These  statements have been prepared in accordance with the instructions to
Form  10-QSB and  therefore  do not  necessarily  include  all  information  and
footnotes necessary to a presentation of the financial position,  the results of
operations and the cash flows, in conformity with generally accepted  accounting
principles.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these condensed
financial   statements  be  read  in  conjunction  with  the  audited  financial
statements and notes thereto included in the CERBCO annual report on Form 10-KSB
for the fiscal year ended June 30, 2001.  Operating  results for interim periods
are not necessarily indicative of operating results for an entire fiscal year.

2.   Earnings Per Share

     Basic earnings per share data are computed based upon the weighted  average
number of common shares  outstanding  during each period.  Diluted  earnings per
share data are computed based upon the weighted  average number of common shares
outstanding  during the period including common stock  equivalents from dilutive
stock options,  if any. The weighted average number of common shares outstanding
used in  computing  diluted  earnings  per  share  for the  three  months  ended
September 30, 2001 and 2000 include no net shares  associated  with  unexercised
dilutive  stock options.  The following  numbers of shares have been used in the
earnings per share computations:

<TABLE>
                                                           For the three months ended Sept. 30
                                                   ------------------------------------------------ --
<CAPTION>
                                                             2001                        2000
                                                   -------------------------      --------------------
<S>                                                       <C>                          <C>
                  Basic                                   1,482,956                    1,482,956
                                                   =========================      ====================
                  Diluted                                 1,482,956                    1,482,956
                                                   =========================      ====================
</TABLE>

3.   Marketable Securities

<TABLE>
     Marketable securities consist of:
<CAPTION>
                                                          Sept. 30, 2001                        June 30, 2001
                                             ------------------------------------     ---------------------------------
                                                Amortized              Fair             Amortized            Fair
                                                  Cost                Value               Cost               Value
                                             ----------------    ----------------     --------------     --------------
     Current:
<S>                                            <C>                 <C>                 <C>                <C>
            U.S. Government and agencies       $ 4,717,960         $ 4,772,223         $ 6,495,213        $ 6,546,031
            Corporate                            3,309,537           3,339,203           1,500,630          1,504,102
                                             ----------------    ----------------     --------------     --------------
                                                 8,027,497           8,111,426           7,995,843          8,050,133
                                             ----------------    ----------------     --------------     --------------
     Non-current:
            U.S. Government and agencies         3,015,709           3,056,327           2,270,179          2,277,260
            Corporate                                    0                   0           1,311,850          1,323,338
                                             ----------------    ----------------     --------------     --------------
                                                 3,015,709           3,056,327           3,582,029          3,600,598
                                             ----------------    ----------------     --------------     --------------

                Total marketable securities    $11,043,206         $11,167,753         $11,577,872        $11,650,731
                                             ================    ================     ==============     ==============
</TABLE>




4.   Accounts Receivable

<TABLE>
     Accounts receivable consist of:

<CAPTION>
                                                       Sept. 30, 2001          June 30, 2001
                                                      -----------------      -----------------
<S>                                                      <C>                    <C>
     Due from customers                                  $5,450,699             $6,689,864
     Miscellaneous                                          199,021                293,617
                                                      -----------------      -----------------
                                                          5,649,720              6,983,481
     Less: Allowance for doubtful accounts                        0                      0
                                                      -----------------      -----------------
                                                         $5,649,720             $6,983,481
                                                      =================      =================
</TABLE>

5.   Equity in Insituform East

     At  September  30,  2001,  CERBCO  beneficially  held  1,414,850  shares of
Insituform  East Common Stock,  par value $0.04 per share (the "Common  Stock"),
and 296,141  shares of  convertible  Insituform  East Class B Common Stock,  par
value $0.04 per share (the "Class B Common Stock"),  representing  approximately
34.9% of the Common Stock, 99.5% of the Class B Common Stock, 39.3% of the total
equity  and  62.2% of the  total  voting  power of all  outstanding  classes  of
Insituform East common stock. Holders of Class B Common Stock, voting separately
as a class,  have the  right to elect  the  remaining  members  of the  Board of
Directors  after  election  of not less than 25% of such  members  by holders of
shares of Common Stock, voting separately as a class.

     From time to time,  Insituform East issues  additional shares of stock as a
result of stock  dividends  and  exercised  stock  options.  Changes  in capital
structure  resulting from such additional stock issues decrease  CERBCO's equity
ownership.  No additional shares were issued in the three months ended September
30, 2001. If all the options  outstanding at September 30, 2001 were  exercised,
the resulting  percentages of CERBCO's  equity  ownership and total voting power
would be 34.9% and 57.8%, respectively.

     From time to time, Insituform East purchases shares of its common stock for
treasury.  Changes  in capital  structure  resulting  from such stock  purchases
increase CERBCO's equity ownership.  Insituform East did not purchase any shares
during the three months ended September 30, 2001.

6.   Accounts Payable and Accrued Liabilities

<TABLE>
     Accounts payable and accrued liabilities consist of:

<CAPTION>
                                                       Sept. 30, 2001          June 30, 2001
                                                      ------------------     -----------------

<S>                                                      <C>                   <C>
     Accounts payable                                    $1,492,140            $1,685,392
     Accrued compensation and other expenses              1,167,005             1,158,251
     Dividends payable                                            0               148,296
                                                      ------------------     -----------------
                                                         $2,659,145            $2,991,939
                                                      ==================     =================
</TABLE>

7.   Contingencies

Dispute  with ITI - United  States  District  Court for the Middle  District  of
Tennessee

     As previously reported, on December 3, 1999, Insituform Technologies,  Inc.
and its  Netherlands  affiliate  (collectively,  "ITI") filed suit in the United
States  District Court for the Middle District of Tennessee  against  Insituform
East and its subsidiary Midsouth Partners.  In its amended Complaint,  which was
filed on June 13,  2000,  ITI  contends  that  Midsouth  Partners has violated a
Settlement Agreement entered into in July 1999 (the "Settlement Agreement") with
respect to certain  litigation  initiated  earlier in 1999 by allegedly using or
failing to timely remove from certain  materials and equipment the Insituform(R)
trademark.  ITI contends that these alleged breaches of the Settlement Agreement
also  constitute  violations of the Lanham Act and the Tennessee Model Trademark
Act. In August 2001, ITI filed a Supplemental  Amended  Complaint  alleging that
Midsouth Partners is insolvent and that this is further breach of the Settlement
Agreement.  ITI seeks to terminate the Settlement Agreement and with it Midsouth
Partners'  rights to continue to exploit within its former  exclusive  territory
the  technology  available  to it under its former  Insituform  license,  to use
certain  tube labeled with the name  "Insituform,"  and to continue  buying tube
from ITI as  provided  in the  Settlement  Agreement,  and  (iv) the  Settlement
Agreement is or can be  terminated.  ITI seeks a  declaration  that the right of
Insituform East and its  subsidiaries to perform  certain  subcontract  work for
Midsouth Partners  pursuant to the Settlement  Agreement is or can be terminated
and that the other  provisions of the Settlement  Agreement remain in full force
and  effect.  In  addition,  ITI seeks  unspecified  damages  under a  "holdover
license" theory.

     ITI also contends that the various license  agreements  between  Insituform
East and ITI bar Insituform East from exploiting the Insituform  process,  using
the  Insituform  trademark,   or  practicing  any  CIPP  techniques  outside  of
Insituform  East's  territories  without payment of the  appropriate  cross-over
royalty and regular  royalty  totaling 20% (except as otherwise  provided by the
Settlement Agreement) and that these restrictions extend to Midsouth Partners as
well,  because Midsouth Partners and Insituform East are allegedly alter egos of
one another.  ITI contends that  Insituform  East is using Midsouth  Partners to
practice CIPP rehabilitation  processes outside of the territory provided for in
the  Settlement  Agreement and that the failure to pay a royalty and  cross-over
royalty  constitutes a breach of Insituform East's obligations under its license
agreements  with ITI. ITI seeks a declaration  that  Insituform  East's licenses
require the payment of a cross-over royalty for Midsouth Partners'  installation
of alternative  CIPP processes  outside of the territory in which ITI, under the
terms of the  Settlement  Agreement,  granted  Midsouth  Partners  the  right to
utilize  the  Insituform  Process  in the  condition  and state as  commercially
practiced  on the  date  of  settlement.  ITI  also  seeks  a  declaration  that
Insituform  East's  licenses  require the payment of  cross-over  royalties  for
Insituform   East's   installation  of  the  Insituform   Process  in  so-called
"Insituform  Owner-Reserved  Territories."  In  addition,  ITI seeks to  recover
royalties and cross-over  royalties from Insituform East for Midsouth  Partners'
installation of alternative CIPP processes.

     In addition, ITI seeks a declaration that it is no longer obligated to make
payments to Insituform  East under its August 4, 1980 agreement with  Insituform
East's  predecessor-in-interest (the "SAW Agreement"), under which ITI agreed to
pay Insituform East's predecessor-in-interest for recruiting potential licensees
of the  Insituform  process.  ITI  contends  that its  acquisition  or merger of
several such licensees has extinguished its obligations  under the SAW Agreement
to pay  Insituform  East,  which was assigned the right to receive  payments for
such licensees in April 1981.

     Trial is  currently  scheduled  for February  19,  2002,  and  discovery is
completed.  Insituform  East denies that ITI is entitled to the relief it seeks.
In addition,  Insituform East has counterclaimed,  seeking declarations that (I)
Midsouth  Partners  is not in  breach  of the  Settlement  Agreement,  (ii)  its
licenses  require  only the  payment of a royalty  for its  installation  of the
Insituform  Process  outside  of  its  exclusive  territories  and  not,  as ITI
contends, the payment of an additional cross-over royalty; and (iii) ITI remains
obligated to  Insituform  East under the SAW  Agreement.  The Court,  over ITI's
objection,  has also permitted  Insituform East and Midsouth  Partners to assert
the defense of patent  misuse.  The  position of  Insituform  East and  Midsouth
Partners  is that ITI  cannot  enforce  the  Company's  licenses,  which fail to
provide for the  diminution  of  royalties  upon the  expiration  of the primary
patents for the  Insituform  Process or to  distinguish  between  the  royalties
attributable to such patents and those  attributable to trademark rights,  trade
secrets  or  other  patents,   to  recover  royalties  for  Midsouth   Partners'
utilization of CIPP technologies available in the public domain. Insituform East
seeks unspecified damages from ITI in its counterclaims.

     The parties have filed cross-motions for summary judgment. IT seeks summary
judgment on  Insituform  East's patent  misuse  defense.  ITI also seeks summary
judgment  on its  claim  that  Midsouth  Partners  is  insolvent  and that  this
constitutes a breach of the  Settlement  Agreement.  Insituform  East,  Midsouth
Partners,  Insitu,  Inc., and Midsouth LLC seek summary  judgment on ITI's claim
for damages under the  Settlement  Agreement,  the Lanham Act, and the Tennessee
Model  Trademark Act, as well as declaratory  judgments that  Insituform East is
entitled to install the Insituform process outside of its exclusive  territories
and to do so without paying ITI a cross-over  royalty and that Midsouth partners
is free to offer competing  brands of CIPP  rehabilitation  and to do so without
paying  ITI  any  royalties.  The  ultimate  outcome  of  this  suit  cannot  be
ascertained at this time.

     While it is not possible at this time to establish  the ultimate  amount of
liability,  if  any,  associated  with  this  suit,  it is  the  opinion  of the
management of Insituform  East that the aggregate  amount of any such  liability
will not have a material adverse effect on the financial  position of Insituform
East.  Conversely,  in  the  opinion  of  management,  in  the  event  that  the
plaintiffs/counter-defendants  substantially  prevailed on their claims  against
Insituform East and its subsidiary Midsouth Partners,  including the restriction
or elimination of Midsouth  Partners existing rights to expand nationally and to
practice CIPP  rehabilitation  process  methods  without  payment of royalty and
cross-over  royalty to ITI, such event could have a material  adverse  effect on
the future financial position of Insituform East.

Summary and Other

     Management believes ultimate resolution of the matters discussed above will
not have a material effect on the financial  statements of CERBCO.  Accordingly,
no provision for these contingencies has been reflected therein.  The Company is
also  involved  in other  contingencies  arising out of the  ordinary  course of
business,  the  aggregate  of which  will not,  in the  opinion  of  management,
materially affect the Company's financial position or results of operations.

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

Overview and Outlook

     The  Company  reported a  consolidated  net loss of  -$774,161  (-$0.52 per
share) on sales of $4.9 million for the first  quarter of fiscal year 2002.  For
the  first  quarter  of  the  previous  fiscal  year,  the  Company   recognized
consolidated net earnings of $95,640 ($0.06 per share) on sales of $6.3 million.

     The Company attributed its unfavorable results for the fiscal quarter ended
September  30,  2001  to  the  unfavorable  results  of  Insituform  East,  Inc.
("Insituform  East"),  the  Company's  majority-controlled  and  only  operating
segment, and to significant  decreases in the cash surrender values of insurance
policies funding the parent company's supplemental retirement plan following the
events of September 11, 2001. Insituform East recognized a consolidated net loss
of -$1,134,998 on sales of $4.9 million,  which  contributed a loss of -$445,727
to CERBCO in the first  quarter of the current year. In the first quarter of the
previous fiscal year,  Insituform East recognized  consolidated  net earnings of
$206,134 on sales of $6.3 million,  contributing  earnings of $80,951 to CERBCO.
Insituform  East  attributed  its  unfavorable  first  quarter  fiscal year 2002
results  primarily to continuing  losses  experienced in the southeast region of
the United States, a region generally served by its Midsouth Partners subsidiary
and, to a lesser extent, to a reduced volume of immediately  workable backlog in
its licensed Insituform(R) process territory.

     With  respect to  forward-looking  information,  and while  there can be no
assurances  regarding the Company's  future operating  performance,  the Company
anticipates  improved  operating  results for the second  quarter of fiscal year
2002, based on an improved volume of immediately  workable backlog in Insituform
East's  licensed  Insituform(R)  process  territory and cost  reduction  efforts
undertaken  primarily  in  connection  with  operations  conducted  by  Midsouth
Partners in the southeast region of the United States. Income from the Company's
non-operating activities presently is anticipated to continue to approximate the
normal  levels of its holding  company  expenses  into the future;  accordingly,
absent  unusual items or  circumstance,  the Company's  forward-looking  results
typically are anticipated to  substantially  parallel  CERBCO's  approximate 39%
participation in the forward results of Insituform East.

     Insituform  East's total backlog value of all  uncompleted  and  multi-year
contract  awards was  approximately  $13.7  million  at  September  30,  2001 as
compared to $31.5 million at September  30, 2000.  The  twelve-month  backlog at
September 30, 2001 was approximately  $11.2 million as compared to $19.8 million
at September 30, 2000. The total backlog value of all uncompleted and multi-year
contracts  at  September  30, 2001 and 2000  includes  work not  estimated to be
released and installed within twelve months,  as well as potential work included
in term  contract  awards  which  may or may not be fully  ordered  by  contract
expiration. While potentially helpful as a possible trend indicator, "total" and
"twelve-month"  backlog figures at specific dates are not necessarily indicative
of sales and earnings for future periods due to the irregular timing and receipt
of major project awards, including large, multi-year, menu-priced contracts with
estimated but uncertain  order  quantities  further  subject to the specifics of
individual  work  releases.  On a week-to-week  and  month-to-month  basis,  the
availability  of often  volatile  "immediately  workable"  backlog most directly
affects  productivity,  with such availability subject to unpredictable  changes
such  as  weather,   customer-initiated  delays  and  found  variances  in  site
conditions.

     In addition to Insituform  East's  immediately  workable  backlog,  another
significant  factor  affecting  the  Company's  future  performance  remains the
volatility of Insituform East's earnings as a function of sales volume at normal
margins.  Accordingly,  because a substantial portion of Insituform East's costs
are  semi-fixed in nature,  its earnings can, at times,  be severely  reduced or
eliminated  during  periods of  depressed  sales at normal  margins or  material
increases in  discounted  sales,  even where total  revenues may  experience  an
apparent  buoyancy or growth from the addition of  discounted  sales  undertaken
from  time to  time  for  strategic  reasons.  Conversely,  at  normal  margins,
increases in Insituform East's period sales typically leverage positive earnings
significantly.

     As previously  reported,  Insituform East's Insituform process licensor and
former partner in the Midsouth Partners  partnership,  Insituform  Technologies,
Inc.  ("ITI")  initiated a second calendar year 1999 lawsuit against  Insituform
East and  Midsouth  Partners on December  3, 1999,  following  the July 20, 1999
settlement (the Midsouth Settlement Agreement) of earlier litigation filed March
11,  1999.  The newest  litigation  appears  again  targeted by ITI to usurp for
itself  certain  rights  belonging to Insituform  East or to Midsouth  Partners,
including  Insituform  East's  legitimate  competitive  rights as a licensee and
certain  competitive  rights  of  Midsouth  Partners  acquired  pursuant  to the
Midsouth  Settlement  Agreement.  While the ultimate  outcome of any litigation,
including ITI's most recent December 1999 litigation,  cannot be  predetermined,
pending  resolution  Insituform East and Midsouth Partners intend to continue to
exercise  their  respective  rights under  license  agreements  and the Midsouth
Settlement  Agreement as exercised prior to the instigation of such  litigation.
Trial of the December 1999  litigation  is currently  scheduled for February 19,
2002.

Results of Operations

     Three Months Ended 9/30/01 Compared with Three Months Ended 9/30/00

     Consolidated  sales  decreased $1.5 million (23%) from $6.3 million for the
quarter ended September 30, 2000 to $4.9 million for the quarter ended September
30, 2001,  due  primarily to reduced  comparable  period sales in the  southeast
region of the United States and a reduced volume of immediately workable backlog
in Insituform East's licensed Insituform(R) process territory.

     Consolidated  operating  results  decreased  from an  operating  profit  of
$32,811  for the  quarter  ended  September  30,  2000 to an  operating  loss of
-$1,280,619 for the quarter ended September 30, 2001. Consolidated cost of sales
decreased  3% in the first  quarter of fiscal year 2002 as compared to the first
quarter of fiscal year 2001. As a result, gross profit (loss) as a percentage of
sales  decreased from a gross profit of 18% for the first quarter of fiscal year
2001 to a gross profit (loss) of (3%) for the first quarter of fiscal year 2002.
This decrease is due primarily to reduced  margins  experienced in the southeast
region of the United States and the absorption of semi-fixed  costs over reduced
sales levels  during the first quarter of the current  year.  Insituform  East's
selling, general and administrative expenses remained approximately the same for
the two comparable quarters.  The parent company's unallocated general corporate
expenses increased 5% in the first quarter of fiscal year 2002, primarily due to
an increase in consulting fees.

     Investment  income  decreased 31% in the first quarter of fiscal year 2002,
primarily  as a result of a decline  in  interest  rates.  Other  expense  (net)
increased $321,813,  primarily as a result of significant  decreases in the cash
surrender values of insurance policies funding the parent company's supplemental
retirement plan following the events of September 11, 2001.

Financial Condition

     During the quarter  ended  September  30,  2001,  the  Company's  operating
activities  provided  approximately  $26,000 in cash.  This result is due to the
Company's net loss being more than offset by the net effect of (i) several items
that did not affect the Company's  cash,  including $0.4 million in depreciation
and  amortization  expenses  and $0.7  million in the  consolidated  net loss in
Insituform East attributable to non-owned  interests,  and (ii) changes in items
that did affect  the  Company's  cash,  including  a $1.3  million  decrease  in
accounts  receivable,  due primarily to improved customer collections during the
period.

     The Company's investing activities provided $0.8 million in cash during the
quarter ended September 30, 2001,  primarily due to the timing between purchases
and redemptions of its investments in marketable  debt  securities.  The Company
used cash of $0.2  million in its  financing  activities,  primarily  due to the
payment of dividends by the parent company, CERBCO.

     The  Company's   liquidity   remained   strong  with  working   capital  of
approximately  $14.9  million and a current  ratio of 6.4 to 1 at September  30,
2001. The parent company,  CERBCO, has cash and temporary  investments in excess
of $13.4 million  which,  pending longer term  investment,  it believes are more
than  adequate  to meet  its  own  cash  flow  requirements  and  the  temporary
requirements of Insituform East in the foreseeable future.



<PAGE>


     Forward-Looking Information

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements that are
based  on  certain  assumptions  and  describe  future  plans,  strategies,  and
expectations  of the  Company  are  generally  identifiable  by use of the words
"believe," "expect," "intend,"  "anticipate,"  "estimate,"  "project" or similar
expressions.  The Company's  ability to predict  results or the actual effect of
future plans or strategies is  inherently  uncertain.  Factors that could have a
material  adverse affect on the  operations and future  prospects of the Company
include,  but are not  limited  to, the  availability  of  immediately  workable
backlog,  mix of work,  weather,  changes in interest rates and general economic
conditions,  and  legislative/regulatory  changes. These risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements.

                           PART II - OTHER INFORMATION
                           ---------------------------

Item 1.  Legal Proceedings
--------------------------
     See Part I, Item 1, "Notes to Condensed  Consolidated  Financial Statements
(unaudited)  - Note  7.  Contingencies"  for  details  concerning  a  previously
disclosed  lawsuit filed in the U.S.  District Court for the Middle  District of
Tennessee against Insituform East and Midsouth Partners.

Item 2.  Changes in Securities and Use of Proceeds
--------------------------------------------------
         Not applicable.

Item 3.  Defaults upon Senior Securities
----------------------------------------
         Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         Not applicable.

Item 5.  Other Information
--------------------------
     Following the national  tragedy of September 11, 2001, and during the month
of October, 2001, three of seven directors independently resigned from the board
of  directors  of  the  Company's  subsidiary,   Insituform  East,  Incorporated
("Insituform  East")  variously  citing  reevaluated  focus of personal  time as
needed to be dedicated to their families or primary  business.  Insituform  East
directors  Trent H.  Ralston,  William C. Willis,  Jr.,  and Thomas J.  Schaefer
independently resigned effective October 9, 10 and 24, respectively. None of the
three departing  directors advised Insituform East of their resignation  because
of a  disagreement  with  Insituform  East on any matter  relating to Insituform
East's  operations,  policies or  practices  as would  require  Insituform  East
disclosure of such  resignation  under Form 8-K of the  Securities  and Exchange
Commission.  However,  registrant  believes the disclosure of the resignation of
subsidiary  Insituform  East's  directors may be an  appropriate  item of "Other
Information"  under its Quarterly Report.  Vacancies  presently  existing on the
Insituform  East board of  directors as a result of these  resignations  will be
addressed by Insituform  East in regular course under  applicable  provisions of
the Delaware Corporate Code,  Insituform East's Certificate of Incorporation and
Insituform East's By-Laws.

     In order to  address  the  current  vacancies  on the  board of  directors,
Insituform  East has  determined  to delay its annual  meeting of  stockholders,
typically  held in the second quarter of each fiscal year, to the third quarter,
at a specific date, time and location to be further determined by the Insituform
East board and adequately  noticed to Insituform East stockholders when set. For
logistic  and economic  reasons,  the CERBCO has held and desires to continue to
hold its annual meeting of  stockholders on the same date as the Insituform East
annual meeting of stockholders,  usually  preceding the Insituform East meeting.
Accordingly,  CERBCO  also  has  determined  to  delay  its  annual  meeting  of
stockholders,  typically  held in the second quarter of each fiscal year, to the
third quarter, at a specific date, time and location to be further determined by
the CERBCO board and adequately noticed to CERBCO stockholders when set.


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

(a) Exhibits:

    99-CERBCO, Inc. Consolidating Schedules: Statement of Operations Information
    for the three months ended September 30, 2001;  Balance Sheet  Information;
    and Consolidating Elimination Entries as of September 30, 2001.

(b) Reports on Form 8-K:

    No reports on Form 8-K were filed during the quarter ended September
    30, 2001.



<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.

Date: November 14, 2001

                  CERBCO, Inc.
                  -------------------------------------------------------------
                  (Registrant)



                  /s/ ROBERT W. ERIKSON
                  -------------------------------------------------------------
                  Robert W. Erikson
                  President



                  /s/ ROBERT F. HARTMAN
                  -------------------------------------------------------------
                  Robert F. Hartman
                  Vice President, Secretary & Treasurer
                  (Principal Financial and Accounting Officer)