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:                                  March 31, 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 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 Nine Months Ended
              March 31, 2001 and March 31, 2000 (unaudited).................  3

              Condensed Consolidated Balance Sheets as of
              March 31, 2001 and June 30, 2000 (unaudited)..................  4

              Condensed Consolidated Statements of Cash Flows
              for the Nine Months Ended March 31, 2001 and
              March 31, 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....................  12

Item 3.       Defaults upon Senior Securities..............................  12

Item 4.       Submission of Matters to a Vote of Security Holders..........  12

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 ended Mar. 31   For the nine months ended Mar. 31
                                                   ---------------------------------    ----------------------------------
                                                      2001               2000               2001               2000
                                                   --------------    ---------------    ---------------    ---------------

<S>                                                <C>               <C>                  <C>              <C>
Sales                                              $6,289,934        $4,762,450           $18,427,517      $16,749,172
                                                   ----------        ----------           -----------      -----------

Costs and Expenses:
  Cost of sales                                     5,860,096         5,298,881            16,213,995       16,293,720
  Selling, general and administrative expenses      1,464,707         1,186,687             3,785,727        3,661,720
                                                   ----------        ----------           -----------      -----------
     Total Costs and Expenses                       7,324,803         6,485,568            19,999,722       19,955,440
                                                   ----------        ----------           -----------      -----------

Operating Loss                                     (1,034,869)       (1,723,118)           (1,572,205)      (3,206,268)
Investment Income                                     220,211           178,904               721,123          477,642
Interest Expense                                       (3,972)             (228)              (12,520)         (16,186)
Other Income (Expense) - net                         (212,283)          253,124              (599,840)         701,576
                                                   ----------        ----------           -----------      -----------
Loss Before Non-Owned Interests and Incomes Taxes  (1,030,913)       (1,291,318)           (1,463,442)      (2,043,236)
Non-Owned Interest in Pretax Loss of Midsouth
  Partners                                                  0                 0                     0           19,889
                                                   ----------        ----------           -----------      -----------
Loss Before Non-Owned Interests in Insituform      (1,030,913)       (1,291,318)           (1,463,442)      (2,023,347)
  East, Inc. and Income Taxes
Provision (Credit) for Income Taxes                   (23,000)           37,000                62,000         (164,000)
                                                   ----------        ----------           -----------      -----------
Loss Before Non-Owned Interests in Insituform      (1,007,913)       (1,328,318)           (1,525,442)      (1,859,347)
  East, Inc.
Non-Owned Interests in Loss of Insituform East,
  Inc.                                                394,483           915,144               511,234        1,504,492
                                                   ----------        ----------           -----------      -----------
                                        NET LOSS   $ (613,430)       $ (413,174)          $(1,014,208)     $  (354,855)
                                                   ==========        ===========          ===========      ===========

Net Loss per Share of Common Stock:
  Basic Loss per Share                             $    (0.41)       $    (0.28)          $     (0.68)     $     (0.24)
  Diluted Loss per Share                           $    (0.41)       $    (0.28)          $     (0.68)     $     (0.24)

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

<PAGE>


<TABLE>
                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<CAPTION>
                                                                                                            As of
                                                                                            ------------------------------------
                                                                                            Mar. 31, 2001          June 30, 2000
                                                                                            -------------          -------------
ASSETS
Current Assets:
<S>                                                                                          <C>                  <C>
  Cash and cash equivalents                                                                  $ 1,686,692          $  2,344,077
  Marketable securities                                                                        8,740,927             9,844,593
  Accounts receivable                                                                          7,897,641             6,294,655
  Inventories                                                                                  1,142,815             1,421,104
  Prepaid and refundable taxes                                                                   130,220                22,895
  Prepaid expenses and other                                                                     234,392               204,381
                                                                                             -----------           -----------
     Total Current Assets                                                                     19,832,687            20,131,705
                                                                                             -----------           -----------

Property, Plant and Equipment - at cost less accumulated depreciation of $17,755,316 at
   March 31, 2001 and $17,247,839 at June 30, 2000                                             8,985,867            10,308,637
                                                                                             -----------           -----------

Other Assets:
  Excess of acquisition cost over value of net assets acquired less accumulated
     amortization of $1,372,499 at March 31, 2001 and $1,323,521 at June 30, 2000              1,567,290             1,618,629
  Cash surrender value of SERP life insurance                                                  1,830,056             2,387,287
  Marketable securities                                                                        2,817,061             2,231,052
  Deferred income taxes - net of valuation allowance of $1,271,000 at March 31, 2001 and
     $943,000 at June 30, 2000                                                                         0                     0
  Deposits and other                                                                              54,306                60,056
                                                                                             -----------           -----------
     Total Other Assets                                                                        6,268,713             6,297,024
                                                                                             -----------           -----------
         Total Assets                                                                        $35,087,267           $36,737,366
                                                                                             ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued liabilities                                                   $ 2,618,381           $ 2,961,927
  Income taxes payable                                                                         1,123,708             1,271,708
  Current portion of capital lease obligations                                                    35,430                30,177
                                                                                             -----------           -----------
     Total Current Liabilities                                                                 3,777,519             4,263,812
                                                                                             -----------           -----------

Long-Term Liabilities:
  Accrued SERP liability                                                                       1,493,909             1,099,720
  Capital lease obligations (less current portion shown above)                                    15,322                42,584
                                                                                             -----------           -----------
     Total Long-term Liabilities                                                               1,509,231             1,142,304
                                                                                             -----------           -----------
         Total Liabilities                                                                     5,286,750             5,406,116
                                                                                             -----------           -----------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiary                                                 6,487,790             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                                                                           15,637,154            16,651,363
                                                                                             -----------           -----------
     Total Stockholders' Equity                                                               23,312,727            24,326,936
                                                                                             -----------           -----------
         Total Liabilities and Stockholders' Equity                                          $35,087,267           $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 nine months ended Mar. 31
                                                                                 2001                  2000
                                                                             -----------           -----------

Cash Flows from Operating Activities:
<S>                                                                          <C>                   <C>
  Net loss                                                                   $(1,014,208)          $  (354,855)
  Adjustments to reconcile net loss to net cash
    (used in) provided by operations:
    Depreciation and amortization                                              1,562,586             1,813,674
    Amounts attributable to non-owned interests                                 (511,234)           (1,524,381)
    Deferred income taxes                                                              0              (219,000)
    Increase in accrued SERP liability                                           394,189               185,415
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                              (1,602,986)              619,683
      Decrease (increase) in inventories                                         278,289               (56,169)
      (Increase) decrease in prepaid expenses and other current assets          (137,336)              514,498
      Decrease in accounts payable and accrued expenses                         (195,250)             (142,357)
      Decrease in income taxes payable                                          (148,000)             (400,921)
                                                                             -----------           -----------
Net Cash (Used in) Provided by Operating Activities                           (1,373,950)              435,587
                                                                             -----------           -----------

Cash Flows from Investing Activities:
  Capital expenditures, net                                                     (185,088)             (986,997)
  Purchase of marketable securities                                          (10,649,546)                    0
  Redemption of marketable securities                                         11,167,203                     0
  Increase in investment in Insituform East                                       (2,930)             (272,315)
  Purchase of remaining interests in Midsouth Partners                                 0              (948,707)
  Decrease (increase) in cash surrender value of life insurance                  557,231              (874,192)
  Increase in other assets                                                             0               (20,000)
                                                                             -----------           -----------
Net Cash Provided by (Used in) Investing Activities                              886,870            (3,102,211)
                                                                             -----------           -----------

Cash Flows from Financing Activities:
  Principal payments on capital lease obligations                                (22,009)              (30,834)
  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                                         (170,305)             (579,130)
                                                                             -----------           -----------

Net Decrease in Cash and Cash Equivalents                                       (657,385)           (3,245,754)
Cash and Cash Equivalents at Beginning of Period                               2,344,077            17,050,119
                                                                             -----------           -----------
Cash and Cash Equivalents at End of Period                                   $ 1,686,692           $13,804,365
                                                                             ===========           ===========

Supplemental Disclosure of Cash Flow Information:
  Interest paid                                                              $    21,761           $   213,569
  Income taxes paid (refunded), net                                          $   330,000           $    (6,042)

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 March 31, 2001, the
Condensed Consolidated Statements of Operations for the three months and nine
months ended March 31, 2001 and 2000, and the Condensed Consolidated Statements
of Cash Flows for the nine months ended March 31, 2001 and 2000 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 March 31, 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-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 nine months ended March 31, 2001 and 2000 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:

<TABLE>
<CAPTION>
                            For the three months ended Mar. 31              For the nine months ended Mar. 31
                            ----------------------------------              ---------------------------------
                               2001                   2000                   2001                     2000
                               ----                   ----                   ----                     ----

<S>                          <C>                    <C>                    <C>                     <C>
        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
                             =========              =========              =========               =========
</TABLE>

3.       Marketable Securities

         Marketable securities consist of:
<TABLE>
<CAPTION>
                                                          Mar. 31, 2001        June 30, 2000
                                                         -----------------    -----------------
        Current:
<S>                                                        <C>                 <C>
          U.S. Government and agencies                     $ 6,940,927         $ 5,844,593
          Corporate                                          1,800,000           4,000,000
                                                           -----------         -----------
             Total current marketable securities             8,740,927           9,844,593
                                                           -----------         -----------

        Non-current:
          U.S. Government and agencies                         751,633           2,231,052
          Corporate                                          2,065,428                   0
                                                           -----------         -----------
             Total non-current marketable securities         2,817,061           2,231,052
                                                           -----------         -----------
                 Total marketable securities               $11,557,988         $12,075,645
                                                           ===========         ===========
</TABLE>

4.       Accounts Receivable

         Accounts receivable consist of:

<TABLE>
<CAPTION>
                                                      Mar. 31, 2001          June 30, 2000
                                                      -------------          -------------
<S>                                                      <C>                    <C>
        Due from customers                               $7,638,728             $5,400,317
        Miscellaneous                                       258,913                894,338
                                                         ----------             ----------
                                                          7,897,641              6,294,655
        Less: Allowance for doubtful accounts                     0                      0
                                                         ----------             ----------
                                                         $7,897,641             $6,294,655
                                                         ==========             ==========
</TABLE>

5.       Equity in Insituform East

         At March 31, 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 and nine months
ended March 31, 2001. If all the options outstanding at March 31, 2001 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 and nine months ended March 31, 2001.

6.       Accounts Payable and Accrued Liabilities

         Accounts payable and accrued liabilities consist of:

<TABLE>
<CAPTION>
                                                             Mar. 31, 2001         June 30, 2000
                                                            -----------------     ----------------

<S>                                                            <C>                  <C>
        Accounts payable                                       $1,636,348           $1,633,378
        Accrued compensation and related expenses                 982,033            1,180,253
        Dividends payable                                               0              148,296
                                                               ----------           ----------
                                                               $2,618,381           $2,961,927
                                                               ==========           ==========
</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, 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'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 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 October 9, 2001, and discovery is
underway. The Company 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) that 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) that 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 essence of the defense is that (1)
because the licenses 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; and (2) because ITI
effectively requires Insituform East to purchase a staple product at a
noncompetitive price - Insituform's "Insitutube" - as a condition of the
licenses, ITI is barred from enforcing the royalty provisions of the licenses
until it purges itself of this misuse by amending the licenses to prorate its
royalties to account for the former value of the now-expired patents, by
permitting Insituform East to purchase alternative market-available CIPP tube
capable of satisfying customer specifications, and by disgorging any improper
gains that it has obtained as a result of this practice. Insituform East seeks
unspecified damages from ITI in its counterclaims. 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 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 -$613,430 (-$0.41 per
share) on sales of $6.3 million for the third quarter, and a consolidated net
loss of -$1,014,208 (-$0.68 per share) on sales of $18.4 million for the first
nine months of fiscal year 2001. For the comparative periods of fiscal year
2000, the Company reported a consolidated net loss of -$413,174 (-$0.28 per
share) on sales of $4.8 million, and a consolidated net loss of -$354,855
(-$0.24 per share) on sales of $16.7 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 -$649,582 on sales of $6.3 million, and
-$841,832 on sales of $18.4 million, contributing losses of -$255,099 and
-$330,598 to the Company for the comparative three-month and nine-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 the nine-month period ended March 31, 2001. 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 $21.6 million at March 31, 2001 as compared to
$28.7 million at March 31, 2000. The twelve-month backlog at March 31, 2001
increased to approximately $14.0 million as compared to $10.4 million at March
31, 2000. The total backlog value of all uncompleted and multi-year contracts at
March 31, 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.

         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
October 9, 2001.

Results of Operations

       Three Months Ended 3/31/01 Compared with Three Months Ended 3/31/00

         Consolidated sales increased $1.5 million (32%) from $4.8 million for
the quarter ended March 31, 2000 to $6.3 million for the quarter ended March 31,
2001, due primarily to a consistent flow of immediately workable backlog in
Insituform East's licensed Insituform territories.

         The consolidated operating loss decreased $0.7 million from -$1.7
million in the quarter ended March 31, 2000 to -$1.0 million in the quarter
ended March 31, 2001, due primarily to an decrease in Insituform East's
operating loss for the comparable periods from -$1.5 million to -$0.6 million.
Consolidated cost of sales increased 11% in the third quarter of fiscal year
2001 as compared to the third quarter of fiscal year 2000. As a result, gross
profit (loss) as a percentage of sales increased from a gross profit (loss) of
(11%) to a gross profit of 7%. This increase is due primarily to reduced
semi-fixed operating costs during the third 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 increased 5%, primarily as a
result of additional legal expenses more than offsetting the impact of the cost
reduction program. The parent company's unallocated general corporate expenses
increased 106%, from $214,294 to $441,480, primarily due to the recognition on
January 1, 2001 of an additional year's increase in liability for the parent
company's supplemental retirement plan.

         Other income (expense) decreased from a net gain of $253,124 to a net
loss of ($212,283) primarily as a result of period fluctuations in the cash
surrender values of insurance policies funding the parent company's supplemental
retirement plan.

        Nine Months Ended 3/31/01 Compared With Nine Months Ended 3/31/00

         Consolidated sales increased $1.7 million (10%) from $16.7 million for
the nine months ended March 31, 2000 to $18.4 million for the nine months ended
March 31, 2001, due primarily to a consistent flow of immediately workable
backlog in Insituform East's licensed Insituform territories during the second
and third quarters 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 $1.6 million from -$3.2
million in the nine months ended March 31, 2000 to -$1.6 million in the nine
months ended March 31, 2001, due primarily to a decrease in Insituform East's
operating loss for the comparable periods from -$2.6 million to -$0.7 million.
Consolidated cost of sales decreased 0.5% in the first nine months of fiscal
year 2001 as compared to the first nine months of fiscal year 2000. As a result,
gross profit as a percentage of sales increased from a gross profit of 3% to a
gross profit of 12%. This increase is due primarily to reduced semi-fixed
operating costs during the first nine 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 6%, primarily as a result of the cost
reduction program more than offsetting the impact of additional legal expense.
The parent company's unallocated general corporate expenses increased 56%, from
$566,823 to $881,971, primarily due to an increase in legal fees and the
recognition on January 1, 2001 of an additional year's increase in liability for
the parent company's supplemental retirement plan.

         Other income (expense) decreased from a net gain of $701,576 to a net
loss of ($599,840) 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 nine months ended March 31, 2001, the Company's operating
activities used $1.4 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 $1.6 million in
depreciation and amortization expenses included in operating results and the
effect of $0.5 million of Insituform East's consolidated loss attributable to
non-owned interests in Insituform East, and (ii) the changes in items that did
affect the amount of cash held, including a $1.6 million increase in accounts
receivable, due primarily to delays in customer collections from Insituform
East's customers.

         Investing activities provided $0.9 million in cash during the nine
months ended March 31, 2001, primarily due to the timing between purchases and
redemptions of its investments in marketable debt securities. The Company used
$0.2 million in financing activities, primarily for payment of dividends by the
parent company, CERBCO.

         Despite the $0.7 million net decrease in cash during the first nine
months of fiscal year 2001, the Company's liquidity remained strong with working
capital of $16.1 million and a current ratio of 5.3 to 1 at March 31, 2001. 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 $13.2 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

         Not applicable.

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 March 31, 2001; Statement
                of Operations Information for the nine months ended March 31,
                2001; Balance Sheet Information and Consolidating Elimination
                Entries as of March 31, 2001.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed during the three months ended March
31, 2001.

                                   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: May 10, 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)