U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10QSB


        [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For  the  Quarterly  Period  Ended  June  30,  2001

                        Commission File Number: 0-24058

                              ATOMIC BURRITO, INC.
             (Exact name of registrant as specified in its charter)

               Oklahoma                                  73-1571194
  -----------------------------------        -----------------------------------
  (State  or  other  jurisdiction  of        (IRS  Employer  Identification No.)
  incorporation  or  organization)

                         1601 NW Expressway, Suite 1910
                          Oklahoma City, Oklahoma 73118
              (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (405) 848-0996


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15 (d) of the  Securities  Exchange Act of 1934 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 at least the
past  90  days.  Yes  [X]  No  [ ]


  Shares  of  Common  Stock,  $.001  par  value,
  outstanding  as  of  August  14,  2001                        5,357,121

  Traditional  Small  Business  Disclosure  Format:  Yes  [X]  No  [ ]



                              ATOMIC BURRITO, INC.



                                      INDEX
                                                                            Page
                                                                            ----

PART  I.  FINANCIAL  INFORMATION

    Item  1    Financial  Statements

               Consolidated Balance Sheets - June 30, 2001 (unaudited)
               and  December  31,  2000                                      4-5

               Consolidated  Statements  of  Income  (unaudited)  -
               For the Three and Six Months Ended
               June 30, 2001 and 2000                                          6

               Consolidated Statements of Stockholders'
               Equity (unaudited) - For the Six Months
               Ended June 30, 2001 and the Year Ended
               December 31, 2000                                               7

               Consolidated Statements of Cash Flows (unaudited)  -
               For the Six Months Ended June 30, 2001 and 2000               8-9

               Notes to Consolidated Financial Statements (unaudited)      10-13

    Item  2     Management's Discussion and Analysis of Financial
               Condition  and  Results  of  Operations                     13-18

PART  II.  OTHER  INFORMATION

    Item  1     Legal  Proceedings                                            19

    Item  2     Exhibits  and  Reports  on  Form  8-K                         20


                                        2


                              ATOMIC BURRITO, INC.


                          PART I. FINANCIAL INFORMATION
                          Item 1. Financial Statements
                             June 30, 2001 and 2000



              Forming a part of Form 10-QSB Quarterly Report to the
                       Securities and Exchange Commission

This quarterly  report on Form 10-QSB should be read in conjunction  with Atomic
Burrito,  Inc.'s  Annual  Report on Form 10-KSB for the year ended  December 31,
2000.


















                                        3

                              ATOMIC BURRITO, INC.
                           CONSOLIDATED BALANCE SHEET
                      JUNE 30, 2001 AND DECEMBER 31, 2000
                                  PAGE 1 OF 2



                                                       June 30,     December 31,
                                                         2001           2000
                                                      -----------   ------------
                                                      (Unaudited)
ASSETS
CURRENT  ASSETS:
                                                              
  Cash                                                $   156,068   $    78,925
  Accrued interest receivable                              28,975         1,918
  Accounts receivable - other                              13,545         9,514
  Current portion of notes receivable                      27,036        37,266
  Current portion of minimum lease
    payments receivable                                     9,671             -
  Inventories                                              44,911        61,815
  Prepaid expenses                                         36,553        64,169
  Deferred income taxes                                         -       100,000
                                                      -----------   -----------

      Total current assets                               316,759        353,607
                                                      ----------   ------------

PROPERTY AND EQUIPMENT                                 1,951,344      2,900,795
  Accumulated depreciation                            (1,418,127)    (1,901,884)
                                                      ----------   ------------

                                                         533,217        998,911
                                                      ----------   ------------

OTHER  ASSETS:
  Notes receivable from affiliate                        574,801        630,000
  Notes receivable, net of current portion
    shown  above, net of reserve of $400,000
    and $350,000 at June 30, 2001 and
    December 31, 2000                                    347,822        367,734
  Long term portion of minimum lease payments
    Receivable                                           109,540              -
    Goodwill, net of accumulated amortization
      of $13,456 at December 31, 2000                          -         80,734
    Covenant not to compete, net of accumulated
      amortization  of $23,333 and $13,333 at
      June 30, 2001 and December 31, 2000                 36,667         46,667
    Deposits and other                                    62,938         62,938
    Investments                                           57,400        177,400
                                                      ----------   ------------
                                                       1,189,168      1,365,473
                                                      ----------   ------------

                                                     $ 2,039,144  $   2,717,991
                                                      ==========   ============


                See accompanying notes to financial statements.

                                        4


                              ATOMIC BURRITO, INC.
                           CONSOLIDATED BALANCE SHEET
                      JUNE 30, 2001 AND DECEMBER 31, 2000
                                  PAGE 2 OF 2



                                                       June 30,     December 31,
                                                         2001           2000
                                                      -----------   ------------
                                                      (Unaudited)
ASSETS
CURRENT  ASSETS:
LIABILITIES  AND  STOCKHOLDERS'  EQUITY
CURRENT  LIABILITIES:
                                                              
  Accounts payable                                    $   415,561   $   573,067
  Accrued liabilities                                     116,213       196,010
  Note payable - related party                                  -        28,005
  Current portion of long-term debt                       308,901       798,290
  Current portion of capital leases                        42,802        45,692
                                                      -----------   -----------

      Total current liabilities                           883,477     1,641,064
                                                      -----------   -----------

LONG-TERM DEBT, NET OF CURRENT PORTION SHOWN ABOVE        367,409       366,612
                                                      -----------   -----------

OBLIGATION  UNDER  CAPITAL  LEASE,
  net of current portion shown above                      130,486       146,648
                                                      -----------   -----------

MINORITY INTERESTS                                          4,962         4,962
                                                      -----------   -----------

COMMITMENTS AND CONTINGENCIES                                   -             -
                                                      -----------   -----------

STOCKHOLDERS'  EQUITY:
  10% convertible preferred stock, Series A,
    $10 par value, 500,000 shares authorized,
    40,000  shares  issued and outstanding at
    June 30, 2001 and December 31, 2000                   400,000       400,000
  10% convertible preferred stock, Series B,
    $10  par  value, 100,000 shares authorized,
    no  shares  issued  and outstanding at
    June 30, 2001 and December 31, 2000                         -             -
  10% convertible preferred stock, Series C,
    $10  par  value, 6,000 shares authorized,
    6,000 shares issued and outstanding at
    June 30, 2001 and December 31, 2000                    60,000        60,000
 10% convertible preferred stock, Series D,
    $10 par value, 80,000 shares authorized,
    no shares issued and outstanding at
    June 30, 2001 and December 31, 2000                         -             -
  Common stock, $.001 par value, 25,000,000 shares
    authorized; 5,357,121 and 4,915,621 shares
    issued and outstanding as of June 30, 2001 and
    December 31, 2000, respectively                         5,357         4,916
  Additional paid-in capital                            5,169,879     5,106,595
  Accumulated deficit                                  (4,982,426)   (5,012,806)
                                                      -----------   -----------

      Total stockholders' equity                          652,810       558,705
                                                      -----------   -----------

                                                      $ 2,039,144   $ 2,717,991
                                                      ===========   ===========


                See accompanying notes to financial statements.

                                        5


                              ATOMIC BURRITO, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
      FOR THE THREE MONTHS AND THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                                  FOR THE THREE              FOR THE SIX
                                  MONTHS ENDED               MONTHS ENDED
                               JUNE 30,     JUNE 30,     JUNE 30,     JUNE 30,
                                 2001         2000         2001         2000
                              -----------  -----------  -----------  -----------
                              (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
REVENUES:
  Beverage and food sales     $   474,200  $   838,833  $ 1,388,538  $1,816,959
  Admission fees                   67,910      245,822      187,451     516,289
  Gain on sale of assets          675,234            -      675,234           -
  Other income                     85,588       94,492      161,052     182,375
                               ----------   ----------  -----------  ----------
                                1,302,932    1,179,147    2,412,275   2,515,623
                               ----------   ----------  -----------  ----------

COSTS  AND  EXPENSES:
  Cost of products and services   604,914    1,035,914    1,692,987   2,141,293
  General and
    administrative expense        115,016      113,737      248,686     311,227
  Depreciation and
    amortization                   79,718       91,273      133,556     138,434
  Interest expense                 33,558       39,019       74,474      64,722
                               ----------   ----------  -----------  ----------
                                  833,206    1,279,943    2,149,703   2,655,676
                               ----------   ----------  -----------  ----------

INCOME (LOSS) BEFORE INCOME
  TAXES AND MINORITY INTERESTS    469,726     (100,796)     262,572    (140,053)

INCOME TAX (EXPENSE)             (100,000)           -     (100,000)          -
                               ----------   ----------  -----------  ----------

INCOME (LOSS) BEFORE
  MINORITY INTERESTS              369,726     (100,796)     162,572    (140,053)

MINORITY INTERESTS IN (INCOME)
  LOSS OF CONSOLIDATED
  SUBSIDIARIES                          -       34,197            -      45,840
                               ----------   ----------  -----------  ----------

NET INCOME (LOSS) BEFORE
  DISCONTINUED OPERATIONS         369,726      (66,599)     162,572     (94,213)

LOSS ON DISCONTINUED
  OPERATIONS                     (132,192)    (189,653)    (132,192)   (297,371)
                               ----------   ----------  -----------  -----------

NET INCOME (LOSS)                 237,534     (256,252)      30,380    (391,584)

PREFERRED STOCK DIVIDENDS               -            -            -           -
                              ----------   ----------  -----------   ----------

NET INCOME (LOSS) APPLICABLE
  TO COMMON STOCK              $  237,534   $ (256,252) $    30,380  $ (391,584)
                               ==========   ==========  ===========  ==========

BASIC EARNINGS PER SHARE       $     0.05   $    (0.06) $      0.01  $    (0.09)
                               ==========   ==========  ===========  ==========

DILUTED EARNINGS PER SHARE            N/A          N/A          N/A         N/A
                               ==========   ==========  ===========  ==========

AVERAGE COMMON AND COMMON
  EQUIVALENT:
    BASIC SHARES                5,127,669    4,364,214    5,031,132   4,310,499
                               ==========   ==========   ==========   =========

                See accompanying notes to financial statements.

                                        6

                              ATOMIC BURRITO, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
    FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED) AND FOR THE YEAR ENDED
                                DECEMBER 31, 2000


                        Series A         Series B       Series C        Series D
                    10% Convertible  10% Convertible 10% Convertible 10% Convertible  Common
                    Preferred Stock  Preferred Stock Preferred Stock Preferred Stock  Stock
                          Value            Value           Value           Value      0.001   Additional               Total
                           of               of              of              of         par     Paid-In   Accumulated Stockholders'
                         Shares           Shares          Shares          Shares     Value(1) Capital(1)   Deficit     Equity
                    ---------------  --------------- --------------- --------------- -------- ---------- ----------- -------------
                                                                                               
Balance,
  December 31, 1999     $ 400,000        $       -       $       -       $      -    $ 4,236  $4,754,851 $(3,427,127)  $1,731,960

Exercise of stock
  options                       -                -               -               -       170     127,254           -      127,424

Preferred Stock issued          -                -          60,000               -         -           -           -       60,000

Common stock issued
  to purchase interest
  in Boots, Inc.                -                -               -               -       200     149,800           -      150,000

Common stock issued
  for cash                      -                -               -               -       310      74,690           -       75,000

Net loss for the
  twelve months ended
  December 31, 2000             -                -               -               -         -           -  (1,585,679)  (1,585,679)
                        ---------------------------------------------------------------------------------------------------------

Balance,
  December 31, 2000       400,000                -          60,000               -     4,916   5,106,595  (5,012,806)     558,705

Share adjustment on
  Boots, Inc.
  acquisition                   -                -               -               -       100        (100)          -            -

Issuance of stock for
  Services rendered             -                -               -               -        91      13,634           -       13,725

Common stock issued in
  conversion of
  Rockwell, LLC note
  payable to equity             -                -               -               -       250      49,750           -       50,000

Net income for the
  six months ended
  June 30, 2001                 -                -               -               -         -           -      30,380       30,380
                        ---------------------------------------------------------------------------------------------------------

Balance,
  June 30, 2001         $ 400,000        $       -       $  60,000       $       -   $ 5,357  $5,169,879 $(4,982,426)   $ 652,810
                        =========================================================================================================




                See accompanying notes to financial statements.

                                        7

                              ATOMIC BURRITO, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                  PAGE 1 OF 2


                                                        2001          2000
                                                                   -----------
                                                     (Unaudited)   (Unaudited)
                                                      ------------   ----------
                                                               
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) before discount operations        $    162,572   $ (94,212)
  Net income (loss) from discounted operations            (132,192)   (297,371)
  Adjustments to reconcile net loss to net cash
    used  in  operating  activities  -
    Depreciation and amortization                          133,556     220,554
    Gain on sale of assets                                (675,234)          -
    Bad debt provision                                      50,000           -
    Deferred income tax expense (benefit)                  100,000           -
    Other                                                   (7,906)          -
    Minority interests in earnings of subsidiaries               -     (45,840)
    Changes in assets (increase) decrease  -
      Accounts and minimum lease payments receivable       (26,268)     20,158
      Due from related parties                              (4,031)          -
      Inventories                                           16,904      (8,948)
      Prepaid expenses                                      41,341     (14,616)
      Deposits and other assets                                  -     (11,934)
    Changes in liabilities increase (decrease) -
      Accounts payable                                    (137,307)    162,673
      Accrued expenses                                     (79,797)     13,228
                                                      ------------   ---------
          Net cash (used in)operating activities          (558,362)    (56,308)
                                                      ------------   ---------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES:
  Disposal of property and equipment                     1,098,965           -
  Collections of notes receivable                           12,288           -
  Loan advances                                            (32,145)          -
  Acquisition of property and equipment                       (859)   (331,504)
                                                      ------------   ---------
          Net cash provided by (used in)
            investing activities                         1,078,249    (331,504)
                                                      ------------   ---------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES:
  Partnership distributions to minority interests                -      (2,500)
  Sale of common stock                                           -     124,424
  Borrowings under notes payable and capital leases         40,007     370,877
  Repayments of notes payable and capital leases          (482,751)   (102,760)
                                                      ------------   ---------
          Net cash provided by (used in)
            financing activities                          (442,744)    390,041
                                                      ------------   ---------

NET (DECREASE) INCREASE IN CASH                             77,143       2,229

CASH, BEGINNING OF PERIOD                                   78,925     172,622
                                                      ------------   ---------

CASH, END OF PERIOD                                   $    156,068   $ 174,851
                                                      ============   =========


                 See accompanying notes to financial statements.

                                        8

                              ATOMIC BURRITO, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                  PAGE 2 OF 2



                                                        2001          2000
                                                                   -----------
                                                     (Unaudited)   (Unaudited)
                                                      ------------   ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                                               
     Cash paid for interest                           $     62,566   $  77,914
                                                      ============   =========



SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  TRANSACTIONS
During January 2001, the Company issued 91,500 shares of common stock for public
Relations  services  to  be  rendered.  This  transaction was valued at $13,725.

During  January  2001,  the  Company  issued an additional 100,000 shares of its
common  stock  to  complete the exchange for the 20% interest in Incahoots, Ltd.
not owned by the Company. This transaction resulted in a reduction of additional
paid-in  capital  of  $100.

During  June  2001,  the  Company  issued  250,000  shares  of  common  stock in
conversion  of  a  $50,000  note  payable  to  equity.

During May 2001, the Company leased the furniture and equipment from its Houston
location  to  a third party. This transaction was treated as a capital lease for
financial  reporting  purposes  with  no  gain or loss recognized. The Company's
$120,000  basis  in  this  equipment  was reclassified as minimum lease payments
receivable.

                See accompanying notes to financial statements.


                                        9

                              ATOMIC BURRITO, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


Note 1 - GENERAL

In  the  opinion  of  Atomic  Burrito,  Inc.  (the  "Company"), the accompanying
unaudited  consolidated financial statements contain all adjustments (consisting
of  only  normal  recurring  accruals) necessary to present fairly the Company's
financial  position  as  of  June 30, 2001 and the results of its operations and
cash  flows  for  the  three  and six months ended June 30, 2001 and 2000. These
statements  are  condensed and, therefore, do not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements.  The  statements  should  be read in conjunction with the
consolidated financial statements and footnotes included in the Company's Annual
Report  on  Form  10KSB  for  the  year  ended December 31, 2000. The results of
operations  for  the  three  and six months ended June 30, 2001 and 2000 are not
necessarily  indicative  of  the  results  to  be  expected  for  the full year.

Operating  results  were  reclassified  for 2000 to segregate  the  discontinued
operations of the Atomic Burrito Restaurants from continuing operations.

Note 2 - MINIMUM LEASE PAYMENTS RECEIVABLE

On  May  15,  2001,  the  Company  entered  into  a  lease  agreement with AB of
Tulsa-II,  LLC  (Lessee)  to sell the furniture equipment and signage previously
used  by  the  Company in the discontinued operations of the Houston, TX, Atomic
Burrito restaurant. The lease agreement provides for a monthly payment of $1,250
through June, 2011 and requires the Lessee to pay any and all property taxes and
to  provide  insurance  on the property throughout the term of the lease. At the
end  of the lease, the Lessee has the option to purchase the property at current
market  value.

Net investment in sales-type lease as of June 30, 2001, is as follows:


                                                       
          Minimum future lease payments
               Current portion                            $   9,671
               Long-term portion                            109,540
                                                          ---------

                                                            119,211
          Unearned interest income                           29,539
                                                          ---------

                                                          $ 148,750
                                                          =========

Minimum future lease payments receivable include the following:

          2001                                            $   4,798
          2002                                                9,934
          2003                                               10,402
          2004                                               10,892
          2005                                               11,404
          Thereafter                                         71,781
                                                          ---------

                                                          $ 119,211
                                                          =========


Note 3- NOTES RECEIVABLE

        The Company had the  following  notes receivable at June 30, 2001:

           9% note receivable due from a
           corporation, due October 2005                              $  75,000


           9% note receivable due from a
           corporation, due October 2005                                150,000

           9% note receivable due from a
           corporation, due October 2005                                160,000

           9% note receivable due from a
           corporation, due October 2005                                 32,146

           8%  note  receivable  due  from
           an individual, payable in monthly
           installments of $3,536, including
           interest, due September 2007                                 357,712
                                                                     ----------

                                                                        774,858
               Less: Reserve for doubtful
               collectibility                                          (400,000)
                                                                     ----------
           Total, net of reserve for collectibility                     374,858

           Less:  Current portion                                       (27,036)
                                                                     ----------
           Long-term portion                                        $   347,822
                                                                     ==========

                                       10


Note 4 - NOTES RECEIVABLE FROM AFFILIATES

        The Company had the following  notes  receivable  due from affiliates as
        of March 31, 2001:

           6% note receivable due from a
           corporation in March 2001                                  $  44,801

           6% note receivable due from
           a corporation in April 2002                                   50,000

           8% note receivable due from a
           corporation in April 2001                                    480,000
                                                                      ---------

               Total notes receivable - affiliates                    $ 574,801
                                                                      =========

        As approved by the Board of Directors,  interest  income on these  notes
        has been waived  through  April,  2003,  contingent  upon the  continued
        waiver  of dividends on the  40,000 shares  of 10% convertible  series A
        preferred stock held by the affiliate.   Through a  plan approved by the
        Board of Directors,  the  Company  offset  a note payable of $35,000 and
        Other  accounts  payable  of  $20,199  against notes receivable from the
        affiliate during the second quarter of 2001.  This plan also includes an
        agreement  to  pay at least 5% of the  principle balance on the $480,000
        receivable note annually beginning in 2002 until maturity.

Note 5 - PROPERTY AND EQUIPMENT

        Property and equipment as of June 30, 2001, include the following:

           Leasehold and other improvements                          $1,345,065
           Restaurant and club equipment                                333,420
           Furniture and fixtures                                       207,481
           Signage                                                       65,378
                                                                     ----------

                                                                      1,951,344
           Less accumulated depreciation                             (1,418,127)
                                                                     ----------
                Total property and equipment                         $  533,217
                                                                     ==========




                                       11


Note 6 - DISCONTINUED OPERATIONS

        On August 30, 2000, the Company  announced its intentions to discontinue
        its Atomic  Burrito  Restaurant  operations.  Accordingly  the following
        sales occurred prior to December 31, 2000:

        (1)The Company president resigned and formed Three B's Restaurant Group,
           Inc.(Three  B's),  which  bought  from  the  Company  its  subsidiary
           company,  which  held the  restaurant  concept,  Atomic  Development,
           Inc.(Development)  and two companies which held the majority interest
           in two restaurant locations,  AB of Tulsa-I,  L.L.C.(Tulsa) and AB of
           Wichita-I,  L.L.C.(Wichita)  for $425,000 on November 30, 2000. Three
           B's  acquired  the leases for the two  restaurant  locations  and all
           assets and liabilities of the entities sold. However, the Company was
           required  to reduce  accounts  payable of Tulsa by  $40,000  and loan
           Wichita  $40,000  which is to be repaid  beginning May 30, 2001 at an
           interest rate of 9% per annum with a first payment of $4,000 and $550
           monthly  thereafter until October 31, 2005 with the remaining balance
           being due at that  time.  At June 30, 2001, $32,146 had been advanced
           on the note.

           Three B's issued  three  notes as  consideration  for the sale of the
           above mentioned entities, as follows:  Development - $75,000, Tulsa -
           $160,000 and Wichita - $150,000. All notes bear interest at a rate of
           9% per annum,  have monthly  payments  scheduled to commence  June 1,
           2001 with  final  payment  due on  October  31,  2005.  The notes are
           collateralized by all of the assets of the entities acquired by Three
           B's with  requirements  of the  Company  to provide  satisfaction  on
           certain  liabilities of the entities sold to Three B's. In connection
           with this  transaction,  the  Company has  provided  for a reserve of
           $127,000  to cover  future  possible  losses  which  could arise from
           disputes  resulting  in  adjustments  in  amounts  paid on the  notes
           receivable.

        (2)The Company sold its Norman restaurant  location to Atomic Restaurant
           Group,  L.L.C.  (ARG) on September  15,  2000.  The sales price was a
           $370,000 note payable in  installments  at 8% beginning  November 15,
           2000 for  $3,535.91  until paid in full on September  15,  2007.  The
           Company also  sold all its  assets at the  Norman  location  but  was
           still  liable  for  the  liabilities  in the AB of  Norman-I,  L.L.C.
           entity,  which  included  the  obligations  on  the  Norman  location
           equipment.   As of June 30, 2001, no  payments have been made on this
           note.   The  Company  has  provided  a   $273,000  reserve  to  cover
           future  possible losses, which could arise from disputes resulting in
           adjustments in amounts paid on the note receivable.

        The  Houston  and  Oklahoma City  locations  ceased  operations  and the
        equipment  at the Houston  location  has been  written down to $120,000.
        The Company  has  entered  into  a  lease  agreement  with  Three B's to
        purchase the equipment from the Houston location, which is being used in
        a new  restaurant  location  recently  opened  in  Tulsa.   Property and
        equipment  from  the  Oklahoma City  location  valued  at  approximately
        $146,000 by  the Company, has been moved to a storage facility in Tulsa.
        According  to  Company  management,  Three B's  has  agreed to lease the
        equipment for use  in  a third restaurant location in Tulsa currently in
        development.   All leasehold  improvements at the Oklahoma City location
        reverted  to  the  landlord  of  the  property under mutual agreement to
        cancel the remaining term of the lease.


                                       12


Note 7 - SALE OF WICHITA CLUB

        On  March 7,  2001,  the  Company  agreed  to the sale of its  nightclub
        business in Wichita,  Kansas for  $1,200,000 in cash.  The sale included
        the equipment and improvements,  the lease, permits and licenses at this
        location, together  with  certain  other  assets at this  location.  The
        Company  closed  on this  sale on April 11,  2001,  realizing  a gain of
        approximately $675,000 in connection with this transaction.





















                                       13


PART  1  -  Item  2


Management's  Discussion and Analysis  of Financial  Condition  and  Results  of
Operations


PART  I

Special  Note  Regarding  Forward-Looking  Statements

Certain  statements in this Form 10-QSB under "Item 1. Description of Business",
"Item 3. Legal Proceedings",  "Item 6. Management's Discussion and Analysis" and
elsewhere  constitute  "forward-looking  statements"  within  the meaning of the
Private  Securities  Litigation  Reform  Act  of  1995  (the "Reform Act"). Such
forward-looking   statements  involve known and unknown risks, uncertainties and
other  facts  which may cause the actual results, performance or achievements of
Atomic  Burrito,  Inc.  (the  "Company")  and  its  subsidiaries  and affiliated
partnerships  to be materially different from any future results, performance or
achievements  expressed  or  implied  by  such  forward-looking statements. Such
factors  include,  among  others,  the following:  general economic and business
conditions;  competition;  success  of  operating  initiatives;  development and
operating  costs;  advertising  and  promotional   efforts;  adverse  publicity;
customer  appeal  and  loyalty;  availability,  locations and terms of sites for
nightclub  development;  changes  in  business  strategy  or  development plans;
quality  of management; availability, terms and development of capital; business
abilities  and judgment of personnel; availability of qualified personnel; food,
labor  and  employee  benefit  costs;  changes in, or the failure to comply with
government regulations; regional weather conditions; construction schedules; and
other factors referenced in the Form 10-QSB. The use in this Form 10-KSB of such
words as "believes", "anticipates", "expects", "intends" and similar expressions
are  intended  to identify forward-looking statements, but are not the exclusive
means of identifying such statements. The success of the Company is dependent on
the  efforts  of  the Company and its management and personnel and the manner in
which  they  operate  and  develop  stores.

General

The Company owns and operates a western nightclub located in St Louis, Missouri.
During  April,  2001  the  Company sold its western nightclub located in Wichita
Kansas.

In June 1998, the Company formed a subsidiary corporation, Atomic Burrito, Inc.,
through  which  to  develop  a  new  restaurant  concept.  Subsequently,  Atomic
Burrito,  Inc.  entered  into  license  agreements  for   two  "Atomic  Burrito"
restaurants to be located in Stillwater and Norman, Oklahoma, and entered into a
third  license agreement for a restaurant in Longview, Washington.  In addition,
in  October 1998, the Company  entered into a joint venture  agreement  with New
York Bagel  Enterprises,  Inc., ("New York Bagel") for the joint  development of
"Atomic  Burrito"  restaurants.  The  agreement  provides  for New York Bagel to

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contribute  certain of its restaurant  locations,  including  leases,  leasehold
improvements,  and  equipment  for a 40%  interest in the  operation,  while the
Company would contribute up to $150,000 for the remodel and conversion costs, as
well  as  for  additional  equipment.  The  first  unit  opened in March 1999 in
Tulsa,  Oklahoma, while the second unit opened in April 1999 in Wichita, Kansas.

In September 1999, the Company  and New York Bagel agreed to terminate the joint
venture agreement  as it related  to additional development, and New York  Bagel
agreed  to  sell  its interest in the two operations in Tulsa and Wichita to the
Company.  New  York  Bagel's  stated reasons or the termination were the lack of
expansion  capital  on  the  part  of either of the parties, and their desire to
move  in  a  different   direction.   Subsequently,  New York  Bagel  filed  for
protection  under  Chapter 13  of the  Federal Bankruptcy Statutes.  The Company
did  not  exercise  its  option  to  purchase New York Bagel's interest in these
restaurants  and  as  described  below,  subsequently sold its interest in these
operations  to  its  former  president.

In December, 1999,  the  original  licensees  who  had  previously opened Atomic
Burrito  units in Stillwater and Norman, Oklahoma, approached the Company with a
plan to sell their Norman restaurant to the Company.  They had previously closed
their  Stillwater  restaurant  and were  in the process of expanding their other
restaurant and  brew pub operations in both Oklahoma and Texas.  Thereafter, the
Company entered  into an agreement, effective December 31, 1999, to purchase the
Norman restaurant  from  the  licensee  for  the  issuance of 360,000 (valued at
$270,000) shares of  the  Company's  common stock  as  well as the assumption of
certain liabilities  totaling  $60,967, giving  the transaction a total value of
$330,967.

During  September,  1999,  the  Company  opened  an Atomic Burrito restaurant in
Houston,  Texas  in  which  it  owned  a  50%  interest.

During  February,  2000,  the  Company  opened  an  Atomic Burrito restaurant in
Oklahoma  City  in  which  it  owned  a  100%  interest.

During  September, 2000, The Company's Board of Directors decided to discontinue
its  efforts  to  develop  and  expand  the  Atomic  Burrito Restaurant concept.

In  September  2000,  the  Company  sold  the property, equipment, and leasehold
improvements  on  its Norman Atomic Burrito restaurant to an LLC in which one of
the  principals  is  a  former Company employee.  In connection with the sale of
these  assets, the LLC agreed to sublease land and building associated with this
restaurant.  This  property  was  sold  in  exchange  for  a  $370,000  8%  note
receivable.

In  November,  the  Company  sold  its  interest in the Tulsa and Wichita Atomic
Burrito  restaurant  operations  to a company controlled by the Company's former
president for $180,000 and $170,000 respectively.  The sale was consummated with
a $40,000 down payment and the issuance of 8% notes receivable in the amounts of
$160,000  for  the  Tulsa  operations  and  $150,000 for the Wichita operations.

Also  in  November  the  Company  sold  its stock in Atomic Development, Inc., a
wholly  owned subsidiary established to oversee the development and franchise of

                                       15


the  Atomic Burrito concept, for $75,000, to the same company that purchased the
Tulsa  and  Wichita  Atomic  Burrito  restaurants.

At  December  31,  2000,  the Company recorded an allowance for bad debts in the
amount  of  $350,000 associated with the above described notes.  This charge was
taken to the losses on discontinued operations for financial reporting purposes.
At  June 30, 2001, the Company added an additional $50,000 to this allowance for
bad  debts.

In September, 2000, the Company closed its Houston Atomic Burrito location.  The
leasehold  improvements  on  this  location  were  forfeited  to the landlord in
release  from any future lease obligations.  During May 2001 the Company entered
into  a lease agreement to lease the furniture and fixtures from the location to
a  third party.  Terms for the lease call for lease payments of $1,250 per month
over  the  10  year  term  of  the  lease.

In September, 2000, the Company closed its Oklahoma City Atomic Burrito location
and  is  currently  seeking  a  buyer  to take over this location and assume the
lease.  As of  June  30, 2001, the Company has placed the furniture and fixtures
from  this  location  in  storage  and  returned  the  property to the landlord.
Management believes it will be  able  to recover its remaining basis of $146,421
in this  equipment  by  either  selling  or  leasing  this  equipment  to  third
parties.


Liquidity  and  Capital  Resources

As  of  June 30, 2001, the Company had cash of $156,068. This amount represented
an  increase  of  $77,143 or 98% from cash at December 31, 2000. The increase in
cash  from  year-end  reflects  proceeds  from the sale of the Wichita nightclub
offset  in  part  by  a  $772,952 reduction in liabilities and current operating
losses  from  operating  activities  of  $205,969 and the loss from discontinued
operations  of  $132,192.

As  of  June  30,  2001,  the Company's working capital position (current assets
minus  current  liabilities)  was  a negative  $(566,159) compared to a negative
$(1,287,457)  at  December 31, 2000. The increase in working capital of $721,298
was  due  primarily  to  a  $517,394  reduction in notes payable combined with a
$237,303  reduction  in  accounts  payable  and  accrued  liabilities.  This
significant improvement in the Company's working capital position is a result of
the  sale  of  the  Wichita  nightclub.

Property  and  equipment is made up primarily of assets  required to operate the
St. Louis nightclub and certain restaurant equipment which the Company is either
leasing  or  attempting  to  dispose  of.  Property  and  equipment decreased by
$776,541  during  the  six  months  ended  June 30, 2001.  This decrease was due
primarily  to  the  sale  of  the  Wichita  nightclub.

The  deferred  income  tax asset  of $100,000 reflected on the books at December
31,  2000  was  utilized  for financial reporting purposes during the six months
ended  June 30, 2001 to offset the tax liability associated with the gain on the

                                       16


sale  of  the Wichita nightclub.  At June 30, 2001 the Company had approximately
$2,800,000 in deferred tax assets which were fully reserved and not reflected on
the  Company's balance sheet at that date.  At December 31, 2000 the Company had
approximately $4,400,000 in net operating losses which will expire commencing in
2013  if  not  utilized.

On April 10, 2001, the Company sold its Wichita Kansas night club operations for
$1,200,000.  This  sale  resulted  in  a  gain  of  $675,234  and  provided cash
$1,032,250  to  pay  down existing debts and to finance future expansions of the
night  club  operations.

During  the  quarter  ended  June  30, 2001, notes receivable from an affiliated
Company  were  reduced by $55,199, leaving notes outstanding at June 30, 2001 to
this  affiliate  in  the  amount of $574,801.  No interest have been received or
accrued  on  these  notes,  as  the  affiliate  has waiver its rights to receive
preferred  stock  dividends.

During  the  period  ended  June  30,  2001, notes payable totaling $50,000 were
converted  to  250,000  shares  of  the  Company's  common  stock.

RESULTS  OF  OPERATIONS

Comparison  of  the  Three  Months  Ended  June  30,  2001  and  2000

During  the  quarter  ended  June  30,  2001  the  Company enjoyed net income of
$237,534  as  compared  to  a  loss of ($256,252) for the quarter ended June 30,
2000.  The  following  analysis  explains  this  change:

Food  and Beverage Sales - During the three months ended June 20, 2001, food and
beverage  sales  decreased  by  43%  or  $364,633  from  $838,833 during 2000 to
$474,200 during 2001.  This decrease is due primarily to the sale of the Wichita
nightclub  on  April  10,  2001.

Admissions  Fees  -  During the three months ended June 30, 2001, Admission fees
decrease  by  72%  or  177,912  from  $245,822  in 2000 to $67,910 in 2001. This
decrease  was due in part to the sale of the Wichita nightclub on April 10, 2001
and  in  part  to  the  Company's  policy  of  giving  admissions  fees  to live
entertainment  in  lieu  of  paying  booking  fees  to  these  entertainers.

Gain  on  Sale  of  Assets  -  During  the three months ended June 30, 2001, the
Company  recognized  a  $675,234  gain  on  the  sale of the Wichita night club.

Other  Income  - Other income decreased by 10% or $9,365 from $94,492 during the
quarter  ended  June 30, 2000 to $85,127 during the quarter ended June 30, 2001.
This  decrease  was  due  primarily  to  the  sale  of  the  Wichita  nightclub.

Cost  of  Products and Services - Cost of products and services decreased by 42%
or  $431,000  from  $1,035,914  in  the  quarter ended June 30, 2000 to $604,914
during  the quarter ended June 30, 2001.  This decrease was due primarily to the
sale  of  the  Wichita  nightclub.

General  and  Administrative  Expenses  -  General  and  administrative expenses
remained  at  approximately  the  same level for the three months ended June 30,

                                       17


2001  as  compared  to  June  30,  2000  at  $115,016 and $113,737 respectively.

Depreciation  Expense  -  Depreciation  expense decreased by 13% or $11,555 from
$91,273  during  the  quarter  ended June 30, 2000 to $79,718 during the quarter
ended  June  30,  2001.  This  decrease  results  primarily from the sale of the
Wichita  night  club.

Interest  Expense  -  Interest  expense  decreased by 14% or $5,461 from $39,019
during  the quarter ended June 30, 2000 to $33,558 during the quarter ended June
30,  2001.  This  decrease  is  due  primarily  to  reductions in debt occurring
subsequent  to  the  sale  of  the  Wichita  nightclub.

Income  Tax  Expense  -  During  the  quarter  ended  June  30, 2001 the Company
recognized  $100,000  in  income  tax  expense reflecting the utilization of its
deferred tax asset in the amount of $100,000 to offset gains associated with the
sale  of  the  Wichita  nightclub.

Loss  From Discontinued Operations - Losses from discontinued operations totaled
$132,192  for  the quarter ended June 30, 2001 as compared to losses of $189,653
for  the  comparable  period  in 2000.  During 2000 this loss represents the net
loss  incurred  by  Atomic Burrito restaurants which were being operated at that
time.  The  loss  for  the  quarter  ended  June 30, 2001 includes an additional
$50,000 provision for bad debts associated with the notes receivable received in
consideration  for the  sale of certain restaurant operations along with certain
expenses  incurred  on  the  Oklahoma  City  and  Norman  locations.

Comparison  of  the  Six  Months  Ended  June  30,  2001  and  2000.

During  the  six  months  ended  June 30, 2001 the Company enjoyed net income of
$30,380  as  compared  to a loss of ($391,584) for the six months ended June 30,
2000.  The  following  analysis  explains  this  change:

Food  and  Beverage  Sales - During the six months ended June 20, 2001, food and
beverage  sales  decreased  by  23%  or  $428,421 from $1,816,959 during 2000 to
$1,388,538  during  2001.  This  decrease  is  due  primarily to the sale of the
Wichita  nightclub  on  April  10,  2001.

Admissions  Fees  -  During  the  six months ended June 30, 2001, Admission fees
decrease  by  64%  or  $328,838  from $516,289 in 2000 to $187,451 in 2001. This
decrease  was due in part to the sale of the Wichita nightclub on April 10, 2001
and  in  part  to  the  Company's  policy  of  giving  admissions  fees  to live
entertainment  in  lieu  of  paying  booking  fees  to  these  entertainers.

Gain  on Sale of Assets - During the six months ended June 30, 2001, the Company
recognized  a  $675,234  gain  on  the  sale  of  the  Wichita  night  club.

Other Income - Other income decreased by 12% or $21,323 from $182,375 during the
six  months ended June 30, 2000 to $161,052 during the six months ended June 30,
2001.  This  decrease  was  due  primarily to the sale of the Wichita nightclub.

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Cost  of  Products and Services - Cost of products and services decreased by 21%
or  $448,306 from $2,141,293 in the six months ended June 30, 2000 to $1,692,987
during  the  six months ended June 30, 2001.  This decrease was due primarily to
the  sale  of  the  Wichita  nightclub.

General  and  Administrative  Expenses  -  General  and  administrative expenses
decreased by 20% or $62,541 from $311,227 for the six months ended June 30, 2000
to  $246,686  for  the  six  months  ended  June  30,  2001.  This  decrease  is
attributable  to managements efforts to reduce administrative salaries and other
administrative  costs  as  operating  activities  have  been  reduced.

Depreciation  Expense  -  Depreciation  expense  decreased  by 4% or $4,878 from
$138,434  during  the  six months ended June 30, 2000 to $133,556 during the six
months  ended  June  30, 2001.  This decrease results primarily from the sale of
the  Wichita  night  club.

Interest  Expense  -  Interest  expense  increased by 15% or $9,752 from $64,722
during the six months ended June 30, 2000 to $74,474 during the six months ended
June  30,  2001.

Income  Tax  Expense  -  During  the  six months ended June 30, 2001 the Company
recognized  $100,000  in  income  tax  expense reflecting the utilization of its
deferred tax asset in the amount of $100,000 to offset gains associated with the
sale  of  the  Wichita  nightclub.

Loss  From Discontinued Operations - Losses from discontinued operations totaled
$132,192  for  six months  ended June 30, 2001 as compared to losses of $297,371
for  the  comparable  period  in 2000.  During 2000 this loss represents the net
loss  incurred  by  Atomic Burrito restaurants which were being operated at that
time.  The  loss  for  the six months ended June 30, 2001 includes an additional
$50,000  provision  for  bad  debts  associated  with  certain  notes receivable
received  in  consideration  for the sale of certain restaurant operations along
with  certain  expenses  incurred  on  the  Oklahoma  city and Norman locations.


PART  II  -  OTHER  INFORMATION

Item  1  -  Legal  Proceedings

Special  Note:  Certain statements set forth below under this caption constitute
forward-looking  statements"  within the meaning of the Reform Act. See "Special
Note  Regarding  Forward  Looking Statements" for additional factors relating to
such  statements.

The  Company  is  involved  in  various legal actions associated with the normal
conduct  of its business operations. No such actions involve known material gain
or  loss contingencies not reflected in the consolidated financial statements of
the  Company.

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

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During  the  second  quarter of 2001, the Company did not submit any matter to a
vote  of  its  shareholders.

Item  6  -  Exhibits  and  Reports  on  Form  8-K

(a)  Exhibits:
     None

(b)  Reports  on  Form  8-K
     No  reports  8-K  were  filed  during  the  quarter  ended  June  30, 2001.


                                   SIGNATURES


     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto  duly  authorized.

August  14,  2001                    Atomic  Burrito,  Inc.

                                     By:/s/  Don  W.  Grimmett
                                       ------------------------
                                       Don  W.  Grimmett,  President










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