SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[ X ]QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

                                       OR

[  ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

          From the transition period from ___________ to ____________.

                         Commission File Number 0-23819


                            COLE COMPUTER CORPORATION
         ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

        Nevada                                                 76-0547762
-----------------------------                   --------------------------------
(State or other  jurisdiction                  (IRS Employer Identification No.)
 of  incorporation  or  organization)


               11711 South Portland, Oklahoma City, Oklahoma 73170
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (405) 491-7300
                           ---------------------------
                           (Issuer's telephone number)

                                       N/A
               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate  by check mark  whether the  registrant  (1) filed all reports
required to be filed by Section 13 or 15(d) of the  Exchange Act during the past
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days:

                                  Yes : X  No

As of August 13,  2001,  15,507,400  shares of Common  Stock of the issuer  were
outstanding.


<PAGE>

                            COLE COMPUTER CORPORATION
                                   FORM 10-QSB

                                      INDEX

                                     PART I

Item 1.   Financial Statements                                               F-3
Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                          F-7

                                     PART II

Item 1.   Legal Proceedings                                                  F-8
Item 2.   Changes in Securities and Use of Proceeds                          F-8
Item 6.   Exhibits and Reports on Form 8-K                                   F-9

          Signatures                                                         F-9




<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements
                            COLE COMPUTER CORPORATION
                             CONDENSED BALANCE SHEET

                                                                June 30,
                                                                  2001
                                                               --------------
                                                               Unaudited)
ASSETS

Current assets:
  Cash                                                           $  73,677
  Accounts receivable - trade                                      814,920
  Inventory                                                        558,573
  Other current assets                                              48,446
                                                               --------------
    Total current assets                                         1,495,616

Equipment, less accumulated depreciation of $192,942               311,077
Other                                                                4,000
                                                               --------------
                                                               $ 1,810,693
                                                               ==============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Notes payable                                                   $158,228
  Current portion of installment notes payable                      30,044
  Demand note payable to stockholder                                 7,179
  Accounts payable                                               1,800,244
  Accrued expenses                                                 121,231
                                                               --------------
    Total current liabilities                                    2,116,926
                                                               --------------

Stockholders' equity (deficit):
  Common stock, $.001 par value, 25,000,000 shares
    Authorized:  15,507,400 shares issued and outstanding:          15,507
  Paid-in capital                                                2,310,386
  Accumulated deficit                                          (2,632,126)
                                                               --------------
    Total stockholders' equity (deficit)                         (306,233)
                                                               --------------
                                                               $ 1,810,693
                                                               ==============


              See accompanying notes to interim condensed financial
                                  statements.

                                      F-3

<PAGE>

--------------------------------------------------------------------------------
                            COLE COMPUTER CORPORATION
                        CONDENSED STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>

                                               Three months ended
                                                    June 30,                      Six months ended June 30,
                                            2001               2000                2001                2000
                                       ----------------   ----------------   ------------------   ----------------
<S>                                    <C>                <C>                <C>                  <C>

Revenues:
  Retail                                 $ 2,764,485         $ 2,055,383          $ 5,482,321         $ 4,523,726
  Wholesale                                  779,354                   -            1,793,141                   -
                                       ----------------   ----------------   ------------------   -----------------
    Total revenue                          3,543,839           2,055,383            7,275,462           4,523,726
                                       ----------------   ----------------   ------------------   -----------------

Cost of sales:
  Retail                                   2,310,542           1,855,275            4,523,233           3,898,113
  Wholesale                                  773,413                   -            1,780,419                   -
                                       ----------------   ----------------   ------------------   -----------------
    Total cost of sales                    3,083,955           1,855,275            6,303,652           3,898,113
                                       ----------------   ----------------   ------------------   -----------------
Gross margin                                 459,884             200,108              971,810             625,613

Selling expenses                             296,496             392,367              598,104             813,709
General and administrative                   160,881             644,296              348,597             937,921
                                       ----------------   ----------------   ------------------   -----------------
                                             457,377           1,036,663              946,701           1,751,630
                                       ----------------   ----------------   ------------------   -----------------

Income (loss) from operations                  2,507           (836,555)               25,109         (1,126,017)

Other income (expense):
Loss on sale of assets                             -             (5,446)                    -             (5,446)
Interest expense, net                        (2,026)            (13,008)              (4,811)            (25,522)
                                       ----------------   ----------------   ------------------   -----------------
                                             (2,026)            (18,454)              (4,811)            (30,968)
                                       ----------------   ----------------   ------------------   -----------------
                                       ----------------   ----------------   ------------------   -----------------

                                       ----------------   ----------------   ------------------   -----------------
Net income (loss)                             $  481         $ (855,009)             $ 20,298       $ (1,156,985)
                                       ================   ================   ==================   =================

Basic and diluted income (loss) per
 common share                                  $0.00             $(0.08)                $0.00             $(0.11)
                                       ================   ================   ==================   =================

Weighted average shares outstanding       11,467,931          11,132,400           11,463,765          10,641,267
                                       ================   ================   ==================   =================
</TABLE>



              See accompanying notes to interim condensed financial
                                  statements.

                                      F-4
<PAGE>


                            COLE COMPUTER CORPORATION
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>


                                                              Six months ended June 30,
                                                         -------------------------------------
                                                               2001                2000
                                                         -------------------------------------
<S>                                                        <C>                   <C>

Cash flows from operating activities:
  Net income (loss)                                             $ 20,298        $(1,156,985)
    Adjustments to reconcile net income to net cash
      used in operating activities:
    Stock issued for services                                      7,000             390,000
    Depreciation and amortization                                 45,492              44,195
    Loss on sale of asset                                              -               5,446
  Changes in operating assets and liabilities
    Accounts receivable                                           37,419             (4,171)
    Inventory                                                     56,096               3,044
    Other current assets                                        (14,472)            (12,984)
    Income tax funds receivable                                        -              10,090
    Accounts payable and accrued expenses                      (236,758)             (6,110)
                                                         -----------------   -----------------
        Net cash used in operating activities                   (84,925)           (727,475)
                                                         -----------------   -----------------

Cash flows from investing activities:
  Purchase of equipment                                         (27,087)           (194,086)
  Proceeds from sale of assets                                         -               6,000
                                                         -----------------   -----------------
        Net cash used in investing activities                   (27,087)           (188,086)
                                                         -----------------   -----------------

Cash flows from financing activities:
  Stock issued for cash                                                              750,000
  Proceeds from installment notes payable                         15,000             106,619
  Advances by (repayments to) founding stockholder               (7,519)              69,373
  Payments on notes payable                                            -            (33,370)
  Payments on installment notes payable                         (14,543)            (34,852)
                                                         -----------------   -----------------
        Net cash provided by (used in) financing activities      (7,062)             857,770
                                                         -----------------   -----------------

Net increase (decrease) in cash and cash equivalents           (119,074)            (57,791)
Cash and cash equivalents at beginning of period                 192,751             154,791
                                                         -----------------   -----------------
Cash and cash equivalents at end of period                      $ 73,677             $97,000
                                                         =================   =================

Cash paid for:
  Interest                                                       $ 4,811             $25,587

</TABLE>




              See accompanying notes to interim condensed financial
                                  statements.

                                      F-5
<PAGE>

                            COLE COMPUTER CORPORATION
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001


Note 1:Presentation

The  condensed  balance  sheet of the Company as of June 30,  2001,  the related
condensed  statements of operations  for the three and six months ended June 30,
2001 and 2000 and the statements of cash flows for the six months ended June 30,
2001 and 2000 included in the condensed financial  statements have been prepared
by the Company  without audit.  In the opinion of management,  the  accompanying
condensed  financial  statements include all adjustments  (consisting of normal,
recurring  adjustments)  necessary to summarize  fairly the Company's  financial
position and results of operations. The results of operations for the six months
ended June 30, 2001 are not necessarily  indicative of the results of operations
for the full year or any other interim period. The information  included in this
Form 10-QSB  should be read in  conjunction  with  Management's  Discussion  and
Analysis  and  Financial  Statements  and  notes  thereto  included  in the Cole
Computer Corporation's December 31, 2000 Form 10-KSB.

                                      F-6
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

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.  The  Company's  actual  results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company's  filings with the  Securities  and Exchange
Commission,  general economic conditions, and changes in the assumptions used in
making such forward looking statements.

GENERAL OVERVIEW

Electronic Service Co., Inc. ("ESCI") was formed in November 1991 as an Oklahoma
corporation  for the purpose of acquiring  and operating an  electronics  repair
business.  In 1996, the Company adopted the d.b.a.  Computer Masters and changed
its business to personal computer "clone" hardware assembly,  sales, and repair,
utilizing both Intel and AMD  microprocessors.  The Company  changed its name to
Cole  Computer  Corporation  (the  "Company")  and its  state  of  incorporation
(Nevada) incident to its reverse acquisition ("reorganization") in 1998. ESCI is
now a wholly-owned  subsidiary of the Company.  The Company has thirteen  retail
stores in Oklahoma,  Arkansas and Texas,  and sells to area government  agencies
and military  installations.  The Company also sells to  distributors  and other
resellers.

RESULTS OF OPERATIONS

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2000

Retail sales for the three  months ended June 30, 2001  increased by $709,102 or
34% to $2,764,485 from $2,055,383 for the corresponding period of the prior year
due to the Company's  strategic  advertising  and moving three retail outlets to
higher  traffic  areas.  Walk-in  traffic for these  locations  has increased by
approximately  25%.  For the six months  ended  June 30,  2001  retail  revenues
increased $958,595 or 21% to $5,482,321 from $4,523,726 for the six months ended
June 30, 2000 for the reasons discussed above.

The  Company  experienced  an increase in the retail cost of sales for the three
months  ended June 30,  2001 of $455,267  or 25% from  $1,855,275  for the three
months  ended June 30, 2000  compared to  $2,310,542  for the three months ended
June 30, 2001.  Management  attributes  the increase in retail cost of sales for
the three months ended June 30, 2001 due to increased  sales. For the six months
ended June 30, 2001 retail cost of sales  increased  $625,120 to $4,523,233 from
$3,898,113  for the six months ended June 30, 2000.  The increase in retail cost
of sales for the six  months  ended  June 30,  2001 was due to the  increase  in
retail sales.

Selling  expenses for the three months ended June 30, 2001  decreased by $95,871
or 24% to $296,496 from $392,367 for the corresponding period of the prior year.
The decrease is attributable to the Company's  focus on controlling  costs.  For
the six months ended June 30, 2001 selling expenses decreased $215,605 or 26% to
$598,104  from  $813,709  for the  corresponding  period of the prior year.  The
decrease is  attributable  to the  Company's  controlling  costs and  includes a
decrease in rent and utility expenses.

General and  administrative  expenses  for the three  months ended June 30, 2001
decreased by $483,415 or 75% to $160,881  from  $644,296  for the  corresponding
period of the prior year. The decrease is attributable to the Company  incurring
significant costs in 2000 for a strategic alliance which broadened the Company's
market including a process to bid on governmental contracts.  For the six months
ending June 30, 2001 general and  administrative  expenses decreased $589,324 or
63% to $348,597  from $937,921 for the  corresponding  period of the prior year.
The decrease is attributable to the reason discussed above.

Net income for the three  months  ended June 30,  2001  increased  to $481 or by
$855,490 from a net loss of $855,009 for the  corresponding  period of the prior
year.  The  increase is largely  attributable  to the  increased  revenues,  the
reduction of selling expenses,  and the reduction in general and  administrative
expenses.  For the three months ended June 30, 2001 and 2000 the Company did not
record a tax benefit or expense.  For the six months  ended June 30,  2001,  the
Company  recorded net income of $20,298 or an increase of $1,177,283  from a net
loss of  $1,156,985  for the  corresponding  period of the  previous  year.  The
Company did not record a tax  benefit or expense  for the six months  ended June
30, 2001 and 2000. The reason for the increase in net income is principally  due
to the increased revenues, reduced selling expenses, and the reduced general and
administrative expenses.

                                      F-7
<PAGE>

Liquidity and Capital Resources

At June 30, 2001 the Company had  negative  working  capital of  $621,310.  This
compares with negative working capital of $596,046 as of December 31, 2000.

For the six months  ended June 30,  2001 cash used in  operations  decreased  to
$84,925 from cash used in operations of $727,475 for the corresponding period of
the prior year  principally  due to the Company earning a net income for the six
months  ended  June 30,  2001 as opposed  to the net loss  incurred  for the six
months ended June 30, 2000.

For the six  months  ended  June 30,  2001  cash  used in  investing  activities
decreased to $27,087 from cash used in investing  activities of $188,096 for the
corresponding  period of the prior year as the Company has  actively  controlled
costs and correspondingly its purchases of property and equipment.

Net cash used in financing activities was $7,062 from cash provided by financing
activities  of $857,770  for the  corresponding  period of the prior  year.  The
Company  received  $750,000 from the sale of its common stock for the six months
ended June 30, 2000.

Factors That May Affect Future Results

Competition:  The computer industry is highly  competitive and requires constant
investment in research and  development  expenditures in order to keep pace with
technology and  competitors'  products.  The success of the Company depends upon
its ability to develop new  products and to create  market  demand for these new
and other existing products.  If the Company is unable to compete effectively or
acquire   additional   financing  to  fund  future   research  and   development
expenditures,  it  would  have a  materially  adverse  effect  on the  company's
business  operations  and the Company would not be unable to continue  marketing
and developing products

Dependence Upon External  Financing:  The Company has been building its business
through  revenues  generated  from  operations  supplemented  by the sale of its
common  stock.  The ability of the Company to continue its growth and expand its
business  is  dependent  upon the  ability of the  Company  to raise  additional
financing  either through the issuance of additional  stock or the incurrence of
debt.

PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings

None

ITEM 2: Changes in Securities and Use of Proceeds

During the quarter ended June 30, 2001, the Company  issued its president,  John
Ruth,  50,000  shares  of its  common  stock in  connection  with an  employment
agreement.

                                      F-8
<PAGE>

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a)  Exhibits
         None

         b) Reports on Form 8-K

         None



                                                         SIGNATURES

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


                                                  COLE COMPUTER CORPORATION

Date: August 13, 2001                              By:/s/ Homer Cole III
                                                      ------------------------
                                                       Homer O. Cole III,
                                                       Director and CEO