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

                                   FORM 10-Q

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

OR

[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

   For the transition period from ..................to........................

                      For the quarter ended March 31, 2001
                         Commission File Number 0-21717

                           CASCO INTERNATIONAL, INC.
             (Exact Name of Registrant as specified in its charter)

                Delaware                                56-0526145
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                    Identification No.)

              13900 Conlan Circle, Suite 150, Charlotte, NC 28277
               (Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code (704) 482-9591
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, $0.01 par value
                                (Title of Class)

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 __.

The aggregate  market value of the voting shares held by  non-affiliates  of the
Registrant  as of May 11, 2001 was  $3,388,695  (computed  by  reference  to the
average bid and asked prices of such shares on such date).

Number  of  Common  Shares,  each  with  $0.01  par  value,  of  the  Registrant
outstanding as of date: May 11, 2001: 1,774,186 Common Shares.


<PAGE>

<TABLE>
<CAPTION>

     PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                            CASCO INTERNATIONAL, INC.
                                 BALANCE SHEETS
                      March 31, 2001 and December 31, 2000


                 ASSETS                                 2001            2000
                                                    -----------     -----------
                                                    (unaudited)
<S>                                                     <C>             <C>

Current Assets:

     Cash ......................................   $    581,073    $      4,551
     Accounts receivable .......................      2,824,678       4,955,595
     Inventory .................................      4,178,431       4,316,076
     Prepaid expenses ..........................      1,046,386         959,623
     Deferred tax asset ........................        102,000         102,000
                                                     ----------      ----------
                 Total current assets ..........      8,732,568      10,337,845

Buildings and equipment:
     Buildings .................................      2,657,263       2,657,263
     Equipment .................................      3,557,813       3,537,335
                                                     ----------      ----------
                                                      6,215,076       6,194,598
     Less accumulated depreciation .............     (3,288,013)     (3,137,550)
                                                     ----------      ----------
                                                      2,927,063       3,057,048
Land ...........................................        111,468         111,468
                                                     ----------      ----------
                 Total property and equipment, net    3,038,531       3,168,516

Other assets:
     Cost in excess of net assets acquired, net of
     accumulated amortization of $649,384 and
     $615,471 respectively .......................    2,236,685       2,270,598
Other ............................................      774,715         767,167
                                                      ---------      ----------
                                                      3,011,400       3,037,765
                                                     ----------      ----------
TOTAL ASSETS ..................................... $ 14,782,499      16,544,126
                                                     ==========      ==========



    The accompanying notes are an integral part of the financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                            CASCO INTERNATIONAL, INC.
                                 BALANCE SHEETS
                      MARCH 31, 2001 AND DECEMBER 31, 2000


    LIABILITIES AND STOCIHOLDERS' EQUITY                2001            2000
                                                   ------------    ------------
                                                   (unaudited)
Liabilities:
<S>                                                      <C>               <C>

     Accounts payable ..........................   $    766,226    $    488,726
     Short-term debt obligations ...............        144,020       1,858,485
     Accrued liabilities .......................        150,867         329,858
     Advanced deposits-current .................      2,615,550       2,615,550
     Accrued taxes payable .....................           --           125,000
                                                   ------------    ------------
                 Total current liabilities .....      3,676,663       5,417,619
                                                   ------------    ------------

Long-term debt .................................      2,022,947       2,054,236
Advanced deposits-noncurrent ...................      1,945,932       1,966,003
Deferred tax liability .........................        559,075         545,775
                                                   ------------    ------------

Total Liabilities ..............................      8,204,617       9,983,633
Commitments and contingencies ..................           --               --

Stockholders' equity:
     Preferred Shares:  $.01 par value; authorized
       300,000 shares; none issued and outstanding         --               --
     Common Shares par value $.01, authorized
       5,000,000, issued 1,783,200 ...............       17,832          17,832
     Capital in excess of par value ..............    6,417,586       6,417,586
     Retained earings (deficit) ..................      160,492         143,103
                                                    -----------     -----------
                                                      6,595,910       6,578,521
     Less treasury stock, at cost 9,014 shares ...      (18,028)        (18,028)
                                                    -----------     -----------

                 Total stockholders' equity ......    6,577,882       6,560,493
                                                    -----------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $ 14,782,499      16,544,126
                                                    ===========     ===========


</TABLE>

    The accompanying notes are an integral part of the financial statements.

<PAGE>
<TABLE>
<CAPTION>

                            CASCO INTERNATIONAL, INC.
                             STATEMENT OF OPERATIONS
               For the three months ended March 31, 2001 and 2000
                                   Unaudited

                                                       Three Months
                                                   --------------------
                                                   2001            2000
                                                ----------    -----------
<S>                                               <C>            <C>

Revenue ....................................   $ 5,336,315    $ 5,242,964

Operating costs and expenses:
     Cost of goods sold ....................     2,617,167      2,735,951
     Selling, general and administrative ...     2,452,016      2,271,797
     Depreciation and amortization .........       189,384        188,975
                                               -----------    -----------
          Total operating costs and expenses     5,258,567      5,196,723

Operating income (loss) ....................        77,748         46,241

Other income and (expenses)
     Interest expense ......................       (47,059)       (64,811)
                                               -----------    -----------
          Total other income and (expenses)        (47,059)       (64,811)

Income (loss) before income taxes ..........        30,689        (18,570)
Benefit (provision) for income taxes .......       (13,300)         7,400
                                               -----------    -----------

Net Income (loss) ..........................   $    17,389    $   (11,170)
                                               ===========    ===========
EARNINGS PER SHARE BASIC
Net Income (loss) ..........................   $      0.01    $     (0.01)
                                               ===========    ===========

EARNINGS PER SHARE DILUTIVE
Net Income (loss)...........................   $      0.01    $     (0.01)
                                               ===========    ============

Weighted average common shares outstanding .
    basic                                        1,774,186      1,783,200
                                               ===========    ============
Weighted average common shares outstanding .
    dilutive                                     1,775,890      1,783,200
                                               ===========    ============


    The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                            CASCO INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
               For the three months ended March 31, 2001 and 2000
                                    Unaudited

                                                          2001           2000
                                                      ----------     ----------
<S>                                                     <C>              <C>

Cash flows from operating activities:
     Net (loss) income ............................  $    17,389    $   (11,170)
     Adjustments to reconcile net (loss) income to cash
        provided by operating activities:
        Depreciation and amortization ..............     189,384        188,975
        Deferred provision (benefit) ...............      13,300         (7,400)
        Changes in assets and liabilities:
        (Increase) decrease in assets:
           Accounts receivable .....................   2,130,917      1,949,804
           Inventory ...............................     137,645        283,298
           Prepaid expenses and other assets .....       (99,319)        10,793
        Increase (decrease) in liabilities:
           Accounts payable and accrued liabilities       98,509       (659,277)
           Taxes Payable ...........................    (125,000)      (355,000)
           Advance deposits ........................     (20,071)       (56,735)
                                                      ----------     ----------
             Total adjustments ....................    2,325,365      1,354,458
                                                      ----------     ----------

Net cash provided by operating activities ........     2,342,754      1,343,288
                                                      ----------     ----------

Cash flows from investing activities:
     Sale of equipment ...........................          --           17,890
     Payments for purchases of property and equipment    (20,478)       (59,215)
                                                      ----------     ----------
Cash used in investing activities ................       (20,478)       (41,325)

Cash flows from financing activities:
     Proceeds from debt obligation ...............     2,195,964      4,887,579
     Principal payments on debt ..................    (3,941,718)    (6,194,542)
                                                      ----------     ----------
Cash used in financing activities ................    (1,745,754)    (1,306,963)

Increase (decrease) in cash ......................       576,522         (5,000)
Cash, beginning of period ........................         4,551          6,797
                                                      ----------      ---------

Cash, end of period ..............................   $   581,073          1,797
                                                      ==========      =========

Other Cash Flow Information:
     Cash payments during the year for:
        Interest .................................   $    51,677         73,427
        Income taxes, net of refunds .............       279,200        355,000




    The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>


                           CASCO INTERNATIONAL, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                   Unaudited

     The accompanying  financial  statements have not been audited,  but reflect
all adjustments  which,  in the opinion of management,  are necessary for a fair
presentation of financial position, results of operations and cash flows for the
periods presented.  All adjustments are of a normal and recurring nature.  These
financial  statements  should be read in conjunction with the Company's  audited
financial  statements  and notes thereto for the fiscal year ended  December 31,
2000.

     During the three months ended March 31, 2001, no options were granted under
the Company's 2000 Incentive Stock Option Plan.

     Effects  of  Recent  Accounting  Pronouncements  - In  December  1999,  the
Securities and Exchange  Commission issued Staff Accounting Bulletin ("SAB") No.
101, "Revenue Recognition in Financial Statements." The guidance in SAB 101 must
be adopted during the fourth quarter of fiscal 2000 and the effects, if any, are
required to be recorded through a retroactive,  cumulative-effect  adjustment as
of the  beginning of the fiscal year,  with a  restatement  of all prior interim
quarters  in the year.  Management  has  reviewed  their  policies  for  revenue
recognition in comparison to the  requirements  in SAB 101and no change occurred
to its income statement presentation, operating results or financial position as
a result of implementing SAB 101.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000:

     Revenues  for the three  months  ended  March 31, 2001  approximated  $5.34
million,  compared to $5.24 million in revenues for the three months ended March
31,  2000,  an  increase  of 1.78% or  approximately  $93,000.  The  increase is
attributable to new customers in the new markets with employed account managers.

     Cost of goods sold for the three months  ended March 31, 2001  approximated
$2.62 million, compared to approximately $2.74 million of cost of goods sold for
the three  months  ended March 31,  2000,  a decrease of 4.34% or  approximately
$119,000. The decrease in cost of goods sold was attributable to the increase in
the number of new  accounts  sold at the current  price level and the  continued
exiting of low margin  custom  accounts.  As a percentage  of revenues,  cost of
goods sold  decreased to 49.04% for the three months ended March 31, 2001,  from
52.18% for the three months ended March 31, 2000. The 3.14% decrease in the cost
of goods sold, as a percentage of revenues was  principally  attributable to the
Company's decision to implement yearly price increases to existing customers, as
well as an increase  in the number of new  accounts  sold at the  current  price
level and the continued exiting of low margin custom accounts.

     Selling,  general,  and  administrative  expense for the three months ended
March 31, 2001  approximated  $2.45  million,  compared to $2.27 million for the
three  months  ended  March 31,  2000,  an  increase  of 7.93% or  approximately
$180,200.  The  increase in selling,  general,  and  administrative  expense was
principally attributable to the increased marketing of the company's programs as
well as costs  associated with the potential merger with Davis Holdings of North
Carolina.  As a percentage  of  revenues,  selling,  general and  administrative
increased to 45.95% for the three  months ended March 31, 2001,  from 43.33% for
the three  months ended March 31, 2000.  The 2.62%  increase as a percentage  of
revenues  was  principally  attributable  to  the  increased  marketing  of  the
company's  programs as well as costs  associated with the potential  merger with
Davis Acquisition of North Carolina (the "Davis Group").
<PAGE>

     Interest expense was approximately $47,000 for the three months ended March
31,  2001,  compared to $65,000 for the three  months  ended March 31,  2000,  a
decrease  of  approximately  $18,000.  The  decrease  in  interest  expense  was
primarily due to a decreased average balance on the Company's line of credit and
the reduction of the Company's long-term debt.

     Depreciation and amortization  expense was  approximately  $189,000 for the
three  months  ended March 31,  2001,  compared to $189,000 for the three months
ended March 31, 2000.

     Income tax provision was $13,300 for the three months ended March 31, 2001,
compared to an income tax benefit of $7,400 for the three months ended March 31,
2000. The provisions for income tax were calculated through the use of estimated
income tax rates based upon the income before taxes.


LIQUIDITY AND CAPITAL RESOURCES

     The Company's  primary  sources of liquidity  have been cash generated from
operating  activities and amounts  available under its existing credit facility.
The Company's primary uses of funds consist of financing inventory,  receivables
and acquisitions.

     The  Company  has  adopted a growth  strategy  which  focuses on  increased
efforts of the Company's  existing sales force and the use of independent  field
representatives  in order to expand  current  market  share  and enter  into new
markets.

     The Company  anticipates  that  operating cash flows during the next twelve
months, coupled with its ability to borrow under its credit facility, will cover
operating  expenditures  and meet  short-term  debt  obligations.  The Company's
credit facility is due and payable in full on July 30, 2001. Although the lender
has not issued a commitment to do so, the Company's relationship with its lender
is  favorable  and the  Company  anticipates  that the credit  facility  will be
renewed when due.

     The  Company  does not  anticipate  any  material  expenditures  out of the
ordinary  course of business for property and  equipment  during the next twelve
months.  Management  believes  that  present  resources  will  meet  anticipated
requirements.

     On May 8, 2001 the Company  announced that it has entered into an Agreement
and Plan of  Merger  with  Davis  Holdings  of North  Carolina,  Inc.  and Davis
Acquisition of North  Carolina,  Inc. The completion of the merger could have an
effect  on the  Company's  liquidity  and  capital  structure.  The  Company  is
concerned  with  the  uncertainty  of the  economy  and the  uncertainty  of the
increased unemployment rates in recent months. If these trends would continue it
could affect the  liquidity  in an adverse way over an extended  period of time.
The Company is aware of no legal or other contingencies, the effect of which are
believed by management to be reasonably likely to have a material adverse effect
on the Company's financial statements.


<PAGE>


SEASONALITY

     The Company's  business is highly seasonal,  with  approximately 36% of its
revenues and most of its profits  recorded in the months of November,  December,
and January. As a result, the Company's working capital requirements are highest
during  November and December when the  combination of receivables and inventory
are at peak levels.  The Company typically  experiences losses in its second and
third quarters.

     As the results of the Company's  growth  strategy  develop,  the effects of
seasonality should be diminished. The business segments on which the Company has
chosen  to  focus  offer  steadier  revenue  flows,  as well as more  consistent
requirements for working capital.


INFLATION

     Although the Company  cannot  determine  the precise  effects of inflation,
inflation has an influence on the cost of the  Company's  products and services,
supplies, salaries, and benefits. The Company attempts to minimize or offset the
effects of inflation through increased sales volumes and sales prices,  improved
productivity,  alternative  sourcing of products and supplies,  and reduction of
other costs.  The Company  generally has been able to offset the impact of price
increases  from  suppliers by increases in the selling  prices of the  Company's
products and services.


CAUTIONARY STATEMENT

     Statements  included  in  this  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations,  in other sections of this Annual
Report,  and in future  filings by the Company with the  Securities and Exchange
Commission, in the Company's press releases and in oral statements made with the
approval of an authorized  executive officer which are not historical or current
facts including,  without limitation,  not discussed its ability to grow through
acquisition  and strategic  alliances and through  expanding its current  market
share and entering new markets,  the adequacy of the company's cash resources to
fund its current  operations,  the anticipated  renewal of the Company's  credit
facility,  the Company's  expectation  with respect to expenditures for property
and  equipment,  and the Company's  expectations  with respect to the diminished
effect of  seasonality  on its business are  "forward-looking  statements"  made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995 and are subject to certain risks and uncertainties that could
cause actual  results to differ  materially  from  historical  results and those
presently  anticipated  or  projected.  Readers are cautioned not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made. The following important factors, among others, in some cases have affected
and in the future could affect the Company's  actual results and could cause the
Company's actual financial  performance to differ materially from that expressed
in any forward-looking  statement: (i) the competitive conditions that currently
exist in the Company's  industry,  which could adversely  impact sales and erode
gross margins;  (ii) many of the Company's  competitors are significantly larger
and better  capitalized  than the Company;  (iii) the Company's  loan  agreement
contains a number of  significant  covenants  that  restrict  the ability of the
Company to engage in certain activities,  including the payment of dividends and
requires  that the Company  maintain  specified  financial  ratios,  including a
minimum capital base, and minimum pretax profits from  operations;  and (iv) the
inability to carry out marketing and sales plans would have a materially adverse
impact  on  the  Company's  profitability.  The  foregoing  list  should  not be
construed as exhaustive and the Company  disclaims any obligations  subsequently
to revise any  forward-looking  statements  to reflect  events or  circumstances
after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to the impact of interest  rate  changes on its debt
obligations.  The Company is not exposed to foreign currency  exchange rate risk
or investment risk.

     Interest Rate Risk. The Company's  exposure to market rate risk for changes
in interest rates relates primarily to the Company's  short-term debt obligation
line of  credit.  The  interest  rate on this line of  credit is prime  plus 1/4
percent.  The  prime  interest  rate at  March  31,  2001 was 8.0  percent.  The
Company's line of credit is renewable and negotiable  yearly. The fluctuation of
the  interest  rate may increase  interest  expense if the prime  interest  rate
increases before the line of credit could be renegotiated to a fixed rate loan.


                          PART II - OTHER INFORMATION


ITEM 1:   LEGAL PROCEEDINGS

     The Company is not  involved in any  material  pending  legal  proceedings,
other than ordinary, routine litigation incidental to its business.

ITEM 2:   CHANGES IN SECURITIES
             None

ITEM 3:   DEFAULTS UPON SENIOR SECURITIES
             None

ITEM 4:   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
             None

ITEM 5:   OTHER INFORMATION

     A group  headed  by the Davis  Group  has  offered  to  acquire  all of the
outstanding  shares  of the  Company  not  currently  held by  them.  A  Special
Committee  of the outside  directors  was formed to  consider  the offer and has
indicated  that it will  recommend  for  approval  the latest offer of $2.10 per
share for the outstanding shares of common stock.

ITEM 6:   EXHIBITS AND REPORTS ON FORM 8K

              (a) Exhibits.

                  None


(b)  Reports on Form 8-K
 None

<PAGE>

                                   SIGNATURE

     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                       CASCO INTERNATIONAL, INC.
                                                       Registrant

Date:   May 15, 2001                            By:   /s/ Jeffrey A. Ross
                                                      -------------------------
                                                       Jeffrey A. Ross
                                                       Principal Financial and
                                                       Accounting Officer