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:                               December 31, 2000
                                       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 registrant 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
(Address of principal executive offices)                         (Zip Code)


                 Registrant'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)

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

As of February 6, 2001,  the following  number of shares of each of the issuer's
classes of common stock were outstanding:

                 Common Stock                   1,189,476
                 Class B Common Stock             293,480
                                                ---------
                 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
        and the Six Months Ended December 31, 2000 and December 31, 1999
        (unaudited)..........................................................  3

        Condensed Consolidated Balance Sheets as of December 31, 2000
        and June 30, 2000 (unaudited)........................................  4

        Condensed Consolidated Statements of Cash Flows for the Six Months
        Ended December 31, 2000 and December 31, 1999 (unaudited)............  5

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

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

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...................................................  12

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               For the six months
                                                                 ended Dec. 31                     ended Dec. 31
                                                      -----------------------------       ----------------------------
                                                         2000               1999              2000             1999
                                                      ----------         ----------       -----------      -----------

<S>                                                   <C>                <C>              <C>              <C>
Sales                                                 $5,805,494         $4,672,268       $12,137,583      $11,986,722
                                                      ----------         ----------       -----------      -----------

Costs and Expenses:
  Cost of sales                                        5,190,917          4,875,453        10,353,899       10,994,839
  Selling, general and administrative expenses         1,184,724          1,212,307         2,321,020        2,475,033
                                                      ----------         ----------       -----------      -----------
    Total Costs and Expenses                           6,375,641          6,087,760        12,674,919       13,469,872
                                                      ----------         ----------       -----------      -----------

Operating Loss                                          (570,147)        (1,415,492)         (537,336)      (1,483,150)
Investment Income                                        254,249            161,178           500,912          326,552
Interest Expense                                          (4,471)           (49,360)           (8,548)         (43,772)
Other Income (Expense) - net                            (378,983)           428,258          (387,557)         448,452
                                                      ----------         ----------       -----------      -----------
Loss Before Non-Owned Interests and Incomes Taxes       (699,352)          (875,416)         (432,529)        (751,918)
Non-Owned Interest in Pretax Loss of Midsouth
  Partners                                                     0                  0                 0           19,889
                                                      ----------         ----------       -----------      -----------
Loss Before Non-Owned Interests in Insituform           (699,352)          (875,416)         (432,529)        (732,029)
  East, Inc. and Income Taxes
Provision (Credit) for Income Taxes                       39,000           (261,000)           85,000         (201,000)
                                                      ----------         ----------       -----------      -----------
Loss Before Non-Owned Interests in Insituform           (738,352)          (614,416)         (517,529)        (531,029)
  East, Inc.
Non-Owned Interests in Loss of Insituform East,
  Inc.                                                   241,934            641,919           116,751          605,083
                                                      ----------         ----------       -----------      -----------
                               NET EARNINGS (LOSS)    $ (496,418)        $   27,503       $  (400,778)     $    74,054
                                                      ==========         ==========       ===========      ===========

Net Earnings (Loss) per Share of Common Stock:
  Basic Earnings (Loss) per Share                     $    (0.33)        $     0.02       $     (0.27)      $     0.05
                                                      ==========         ==========       ===========       ==========
  Diluted Earnings (Loss) per Share                   $    (0.33)        $     0.02       $     (0.27)      $     0.05
                                                      ==========         ==========       ===========       ==========

See notes to condensed consolidated financial statements.
</TABLE>



<PAGE>


<TABLE>
                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<CAPTION>
                                                                           As of
                                                          --------------------------------------
                                                            Dec. 31, 2000        June 30, 2000
                                                          -----------------     ----------------
ASSETS
Current Assets:
<S>                                                          <C>                   <C>
  Cash and cash equivalents                                  $ 1,120,654           $ 2,344,077
  Marketable securities                                        8,936,416             9,844,593
  Accounts receivable                                          7,391,132             6,294,655
  Inventories                                                  1,261,973             1,421,104
  Prepaid and refundable taxes                                    22,895                22,895
  Prepaid expenses and other                                     213,575               204,381
                                                             -----------           -----------
     Total Current Assets                                     18,946,645            20,131,705
                                                             -----------           -----------

Property, Plant and Equipment - at cost less
  accumulated depreciation of $17,596,622 at
  December 31, 2000 and $17,247,839 at June 30, 2000           9,545,605            10,308,637
                                                             -----------           -----------

Other Assets:
  Excess of acquisition cost over value of net assets
    acquired less accumulated amortization of $1,356,173
    at December 31, 2000 and $1,323,521 at June 30, 2000       1,583,616             1,618,629
  Cash surrender value of SERP life insurance                  2,170,280             2,387,287
  Marketable securities                                        3,307,221             2,231,052
  Deferred income taxes - net of valuation allowance
    of $1,018,000 at December 31, 2000
    and $943,000 at June 30, 2000                                      0                     0
  Deposits and other                                              56,031                60,056
                                                             -----------           -----------
     Total Other Assets                                        7,117,148             6,297,024
                                                             -----------           -----------
         Total Assets                                        $35,609,398           $36,737,366
                                                             ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued liabilities                   $ 2,433,265           $ 2,961,927
  Income taxes payable                                         1,076,708             1,271,708
  Current portion of capital lease obligations                    31,293                30,177
                                                             -----------           -----------
     Total Current Liabilities                                 3,541,266             4,263,812
                                                             -----------           -----------

Long-Term Liabilities:
  Accrued SERP liability                                       1,233,217             1,099,720
  Capital lease obligations
    (less current portion shown above)                            26,485                42,584
                                                             -----------           -----------
     Total Long-term Liabilities                               1,259,702             1,142,304
                                                             -----------           -----------
         Total Liabilities                                     4,800,968             5,406,116
                                                             -----------           -----------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiaries               6,882,273             7,004,314
                                                             -----------           -----------

Stockholders' Equity:
  Common stock, $.10 par value
     Authorized:  3,500,000 shares
     Issued and outstanding:  1,189,476 shares                   118,947               118,947
  Class B Common stock (convertible), $.10 par value
     Authorized:  700,000 shares
     Issued and outstanding: 293,480 shares                       29,348                29,348
  Additional paid-in capital                                   7,527,278             7,527,278
  Retained earnings                                           16,250,584            16,651,363
                                                             -----------           -----------
     Total Stockholders' Equity                               23,926,157            24,326,936
                                                             -----------           -----------
         Total Liabilities and Stockholders' Equity          $35,609,398           $36,737,366
                                                             ===========           ===========

See notes to condensed consolidated financial statements.
</TABLE>



<PAGE>


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

<CAPTION>
                                                                              For the six months ended Dec. 31
                                                                              --------------------------------
                                                                                 2000                 1999
                                                                              ----------          ------------
Cash Flows from Operating Activities:
<S>                                                                           <C>                 <C>
  Net earnings (loss)                                                         $ (400,778)         $    74,054
  Adjustments to reconcile net earnings (loss) to net
    cash provided by (used in) operations:
     Depreciation and amortization                                             1,011,023            1,217,500
     Amounts attributable to non-owned interests                                (116,751)            (624,972)
     Deferred income taxes                                                             0             (219,000)
     Increase in accrued SERP liability                                          133,497              118,667
     Changes in operating assets and liabilities:
       (Increase) decrease in accounts receivable                             (1,096,477)             668,101
       Decrease in inventories                                                   159,131               62,269
       (Increase) decrease in prepaid expenses and other current assets           (9,194)             562,350
       Decrease in accounts payable and accrued expenses                        (380,366)            (639,870)
       Decrease in income taxes payable                                         (195,000)            (437,921)
                                                                              ----------          -----------
Net Cash Provided by (Used in) Operating Activities                             (894,915)             781,178
                                                                              ----------          -----------

Cash Flows from Investing Activities:
  Capital expenditures, net                                                     (211,314)            (900,649)
  Purchase of marketable securities                                           (6,027,450)                   0
  Redemption of marketable securities                                          5,859,458                    0
  Purchase of remaining interests in Midsouth Partners                                 0             (948,707)
  Increase in investment in Insituform East                                       (2,930)            (151,766)
  Increase in other assets                                                             0              (20,000)
  (Increase) decrease in cash surrender value of life insurance                  217,007             (695,962)
                                                                              ----------          -----------
Net Cash Used in Investing Activities                                           (165,229)          (2,717,084)
                                                                              ----------          -----------

Cash Flows from Financing Activities:
  Principal payments on revolving lines of credit and capital lease
     obligations                                                                 (14,983)             (20,046)
  Repayment of loans to Midsouth Partners from non-owned interests                     0             (400,000)
  Dividends paid                                                                (148,296)            (148,296)
                                                                              ----------          -----------
Net Cash Used in Financing Activities                                           (163,279)            (568,342)
                                                                              ----------          -----------

Net Decrease in Cash and Cash Equivalents                                     (1,223,423)          (2,504,248)
Cash and Cash Equivalents at Beginning of Period                               2,344,077           17,050,119
                                                                              ----------          -----------
Cash and Cash Equivalents at End of Period                                    $1,120,654          $14,545,871
                                                                              ==========          ===========
Supplemental disclosure of cash flow information:
  Interest paid                                                               $    7,947          $   131,906
  Income taxes paid (refunded), net                                           $  280,000          $    (5,920)

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"). All significant
intercompany accounts and transactions have been eliminated.

         The Condensed  Consolidated  Balance Sheet as of December 31, 2000, the
Condensed  Consolidated  Statements of  Operations  for the three months and six
months  ended  December  31,  2000  and  1999,  and the  Condensed  Consolidated
Statements  of Cash Flows for the six months  ended  December  31, 2000 and 1999
have been prepared by the Company  without  audit.  The  Condensed  Consolidated
Balance  Sheet  as of June  30,  2000  (unaudited)  has  been  derived  from the
Company's  June  30,  2000  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 December 31, 2000 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-K
for the fiscal year ended June 30, 2000.  Operating  results for interim periods
are not necessarily indicative of operating results for an entire fiscal year.

2.       Earnings (Loss) Per Share

         Basic  earnings  (loss)  per share  data are  computed  based  upon the
weighted average number of common shares outstanding during each period. Diluted
earnings (loss) per share 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 (loss) per share for the
three  months and six months  ended  December  31, 2000 and 1999  include no net
shares associated with unexercised dilutive stock options. The following numbers
of shares have been used in the earnings (loss) per share computations:

          For the three months ended Dec. 31   For the six months ended Dec. 31
          ----------------------------------   --------------------------------
            2000            1999                   2000               1999
            ----            ----                   ----               ----

Basic     1,482,956       1,482,956             1,482,956           1,482,956
          =========       =========             =========           =========
Diluted   1,482,956       1,482,956             1,482,956           1,482,956
          =========       =========             =========           =========

3.       Marketable Securities

         Marketable securities consist of:
                                             Dec. 31, 2000      June 30, 2000
                                            --------------      -------------
        Current:
            U.S. Government and agencies     $ 6,436,416         $ 5,844,593
            Corporate                          2,500,000           4,000,000
                                             -----------         -----------
                                               8,936,416           9,844,593
        Non-current:
            U.S. Government and agencies       3,307,221           2,231,052
                                             -----------         -----------
                Total marketable securities  $12,243,637         $12,075,645
                                             ===========         ===========

4.       Accounts Receivable

         Accounts receivable consist of:

                                             Dec. 31, 2000      June 30, 2000
                                             -------------      -------------
        Due from customers                    $7,054,356          $5,400,317
        Miscellaneous                            336,776             894,338
                                             -----------         -----------
                                               7,391,132           6,294,655
        Less: Allowance for doubtful accounts          0                   0
                                             -----------         -----------
                                              $7,391,132          $6,294,655
                                             ===========         ===========

5.       Equity in Insituform East

         At December 31, 2000,  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 December
31, 2000. If all the options  outstanding  at December 31, 2000 were  exercised,
the resulting  percentages of CERBCO's  equity  ownership and total voting power
would be 35.9% and 58.8%, 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 December 31, 2000.

6.       Accounts Payable and Accrued Liabilities

         Accounts payable and accrued liabilities consist of:

                                                 Dec. 31, 2000    June 30, 2000
                                                 -------------    -------------

        Accounts payable                          $1,661,216        $1,633,378
        Accrued compensation and related expenses    772,049         1,180,253
        Dividends payable                                  0           148,296
                                                  ----------        ----------
                                                  $2,433,265        $2,961,927
                                                  ==========        ==========

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, the Tennessee
Model Trademark Act, and applicable  state law for the alleged  unauthorized use
of the Insituform trademark. ITI seeks to terminate the Settlement Agreement and
with it Midsouth  Partners' rights to continue to exploit the Insituform process
as  provided  in the  Settlement  Agreement.  ITI  seeks  declarations  (i) that
Midsouth  Partners  has  committed  one  or  more  noncurable  breaches  of  the
Settlement  Agreement;  (ii) that Midsouth  Partners has violated the Lanham Act
and the Tennessee Model Trademark Act; (iii) that Midsouth Partners is no longer
entitled to exploit the Insituform process, to use certain tube labeled with the
name  "Insituform,"  and to  continue  buying  tube from ITI as  provided in the
Settlement  Agreement,  and (iv)  that  the  Settlement  Agreement  is or can be
terminated.  ITI also 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.

         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 cured-in-place pipe
("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 and  Midsouth  Partners  must pay ITI a royalty and  cross-over
royalty totaling 20% (except as otherwise provided by the Settlement  Agreement)
for any CIPP  work  performed  in these  so-called  "Insituform  Owner  Reserved
Territories." ITI also seeks damages in the form of any and all unpaid royalties
and cross-over royalties that are allegedly owed.

         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 July 31,  2001,  and  discovery  is
underway.  Insituform East has  counterclaimed  for a determination in its favor
that all of its  practices  are lawful and in accord with  existing  agreements.
Insituform East seeks  unspecified  damages from ITI in its  counterclaims.  The
ultimate  outcome and  consequences  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 unforeseen 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 or to
practice any 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 -$496,418  (-$0.33 per
share) on sales of $5.8 million for the second quarter,  and a consolidated  net
loss of -$400,778 (-$0.27 per share) on sales of $12.1 million for the first six
months of fiscal year 2001. For the comparative  period of fiscal year 2000, the
Company reported consolidated net earnings of $27,503 ($0.02 per share) on sales
of $4.7 million,  and  consolidated net earnings of $74,054 ($0.05 per share) on
sales of $12.0 million, respectively.

         The Company  attributed  its negative  fiscal year 2001 period  results
primarily to  significant  decreases in the cash  surrender  values of insurance
policies  funding the parent company's  supplemental  retirement plan and losses
contributed  by  Insituform  East,  Inc.   ("Insituform  East"),  the  Company's
majority-controlled  and  only  remaining  operating  segment.  Insituform  East
recognized  consolidated  losses  of  -$398,384  on sales of $5.8  million,  and
-$192,250  on sales of $12.1  million,  contributing  losses  of  -$156,450  and
-$75,499 for the comparative  three-month and six-month  periods,  respectively.
These losses were  attributed  to reduced  revenues and margins from  Insituform
East's  operations  in  the  southeast  region  of  the  United  States  due  to
competitive conditions experienced in that marketplace,  a marketplace generally
served by Insituform  East's Midsouth Partners  subsidiary.  These losses offset
Insituform  East's  improved  results  in its  licensed  Insituform  territories
deriving  from a  consistent  flow  of  immediately  workable  backlog  in  such
territories and the impact of an aggressive cost reduction  program initiated by
Insituform East during the fourth quarter of fiscal year 2000.

         Only  Insituform  East's  Midsouth  Partners  subsidiary  has  incurred
operating  losses for either the three-month or six-month  period ended December
31, 2000.  That is, all other  activities of Insituform  East are operating at a
combined  profit in the  current  fiscal  year.  This is a  materially  improved
situation  for the  combined  results  of these  other  activities  not only for
current  comparable  periods but also recent fiscal years.  As discussed  above,
Midsouth  Partners'  operating  performance  is being  affected  by  competitive
conditions in its market area, including, the Company believes, competition from
Insituform  Technologies,  Inc.  ("ITI")  since ITI  withdrew  from the Midsouth
partnership under the terms of a 1999 settlement agreement.

         Insituform East's total backlog value of all uncompleted and multi-year
contract awards was approximately $27.6 million at December 31, 2000 as compared
to $30.5 million at December 31, 1999. The twelve-month  backlog at December 31,
2000  increased to  approximately  $17.7 million as compared to $11.4 million at
December 31, 1999.  The total backlog value of all  uncompleted  and  multi-year
contracts  at  December  31, 2000 and 1999  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.

         In response to continuing  unfavorable  operating  margins,  Insituform
East embarked on an aggressive cost reduction  program in the closing quarter of
fiscal  year 2000 to return  Insituform  East to positive  operating  results in
fiscal  year 2001.  This  program has been  successful  except for the impact of
competitive  conditions  in the  southeast  region  of  the  United  States,  as
discussed above. Additionally,  Insituform East repositioned in late fiscal year
2000 to provide a range of  customer  service  and quality in response to market
demand,  including  being  the  low-cost  provider  where  price  alone  is  the
predominantly controlling procurement factor.

         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
July 31, 2001.

Results of Operations

      Three Months Ended 12/31/00 Compared with Three Months Ended 12/31/99

         Consolidated  sales  increased $1.1 million (23%) from $4.7 million for
the  quarter  ended  December  31, 1999 to $5.8  million  for the quarter  ended
December 31, 2000, due primarily to a consistent  flow of  immediately  workable
backlog in Insituform East's licensed Insituform territories.

         The  consolidated  operating  loss  decreased  $0.8  million from -$1.4
million in the quarter  ended  December 31, 1999 to -$0.6 million in the quarter
ended  December 31, 2000,  due  primarily  to an decrease in  Insituform  East's
operating loss for the  comparable  periods from -$1.2 million to -$0.3 million.
Consolidated  cost of sales  increased  6% in the second  quarter of fiscal year
2001 as compared to the second  quarter of fiscal year 2000. As a result,  gross
profit (loss) as a percentage of sales  increased  from a gross profit (loss) of
(4%) to a gross  profit  of 11%.  This  increase  is due  primarily  to  reduced
semi-fixed  operating  costs during the second  quarter of fiscal year 2001 as a
result of an aggressive  cost  reduction  program  initiated by Insituform  East
during  the  fourth  quarter of fiscal  year 2000 and  improved  margins on work
performed in  Insituform  East's  licensed  Insituform  territories.  Insituform
East's selling, general and administrative expenses decreased 8%, primarily as a
result of the cost reduction program.  The parent company's  unallocated general
corporate expenses increased 27%, from $189,906 to $241,351, primarily due to an
increase in legal fees.

         Other income  (expense)  decreased from a net gain of $428,258 to a net
loss of  ($378,983)  as a result of period  fluctuations  in the cash  surrender
values  of  insurance   policies  funding  the  parent  company's   supplemental
retirement plan.

        Six Months Ended 12/31/00 Compared With Six Months Ended 12/31/99

         Consolidated  sales  increased $0.1 million (1%) from $12.0 million for
the six months ended December 31, 1999 to $12.1 million for the six months ended
December 31, 2000, due primarily to a consistent  flow of  immediately  workable
backlog in Insituform East's licensed  Insituform  territories during the second
quarter of fiscal year 2001,  which more than offset reduced  comparable  period
first quarter sales. Work performed during the first quarter of fiscal year 2000
included a higher  volume of larger  diameter  work  producing  higher sales per
installation.

         The  consolidated  operating  loss  decreased  $1.0  million from -$1.5
million in the six months ended  December  31, 1999 to -$0.5  million in the six
months ended December 31, 2000, due primarily to a decrease in Insituform East's
operating loss for the  comparable  periods from -$1.1 million to -$0.1 million.
Consolidated  cost of sales  decreased 6% in the first six months of fiscal year
2001 as compared to the first six months of fiscal year 2000. As a result, gross
profit as a percentage of sales  increased  from a gross profit of 8% to a gross
profit of 15%. This increase is due  primarily to reduced  semi-fixed  operating
costs  during  the  first  six  months  of  fiscal  year  2001 as a result of an
aggressive cost reduction program initiated by Insituform East during the fourth
quarter  of  fiscal  year  2000.   Insituform   East's   selling,   general  and
administrative  expenses  decreased  12%,  primarily  as a  result  of the  cost
reduction program.  The parent company's  unallocated general corporate expenses
increased 29%, from $342,529 to $440,491,  primarily due to an increase in legal
fees.

         Other income  (expense)  decreased from a net gain of $448,452 to a net
loss of  ($387,557)  as a result of period  fluctuations  in the cash  surrender
values  of  insurance   policies  funding  the  parent  company's   supplemental
retirement plan.

Financial Condition

         During the six months ended December 31, 2000, the Company's  operating
activities  used $0.9  million  in cash.  This  result is due  primarily  to the
Company's  net loss and the net effect of (i) several  items that did not affect
the  amount  of  cash  held  by the  Company,  including  the  $1.0  million  in
depreciation and amortization  expenses included in operating results,  and (ii)
the  changes in items that did affect the amount of cash held,  including a $1.1
million  increase in accounts  receivable,  due  primarily to delays in customer
collections from Insituform  East's customers to include delays  associated with
the December 2000 holiday season.

         The Company used $0.2 million in cash in  investing  activities  during
the six months ended  December 31, 2000,  primarily for equipment  purchases and
other  capital  improvements.  The Company  also used $0.2  million in financing
activities,  primarily  for payment of  dividends.  Despite the $1.2 million net
decrease in cash during the first six months of fiscal year 2001,  the Company's
liquidity  remained  strong with working  capital of $15.4 million and a current
ratio of 5.4 to 1 at December 31, 2000.

         The Company  anticipates that Insituform  East's  increased  production
levels in the future will require  additional capital  expenditures.  The parent
company,  CERBCO, has cash and temporary  investments in excess of $12.6 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.

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 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

         Pursuant to a proxy  solicitation  dated October 30, 2000,  the Company
held its  Annual  Meeting  of  Stockholders  on Friday,  December  8, 2000.  The
stockholders  voted on a proposal  regarding  the  uncontested  election  of the
directors  of the  Company.  The results of the voting on the  proposal to elect
directors of the Company are as follows:

<TABLE>
<CAPTION>
                            Class of Common Stock for
      Name of Director           which Nominated          For          Against       Withheld
---------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>               <C>
Paul C. Kincheloe, Jr.      Common Stock                 893,683       240,958          -0-
George Wm. Erikson          Class B Common Stock         262,638         8,510          -0-
Robert W. Erikson           Class B Common Stock         262,638         8,510          -0-
Webb C. Hayes, IV           Class B Common Stock         262,638         8,510          -0-
</TABLE>

Item 5.  Other Information

         Not applicable.

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  December  31,  2000;
                Statement  of  Operations  Information  for the six months ended
                December 31, 2000;  Balance Sheet  Information and Consolidating
                Elimination Entries as of December 31, 2000.

(b)      Reports on Form 8-K:

         No  reports  on Form 8-K were  filed  during  the  three  months  ended
December 31, 2000.


                                   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: February 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)