U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

                 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
                 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
    THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM _________ TO __________

COMMISSION FILE NUMBER

NORSTAR GROUP, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


               UTAH                                            59-1643698
 -------------------------------                           -------------------
 (STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)                           IDENTIFICATION NO.)

           6365 NW 6th WAY, SUITE 160, FORT LAUDERDALE, FLORIDA 33309
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 772-0240
     Check whether the issuer (1) filed all reports required to be filed by
 Section 13 or 15 (d) of the Securities Exchange Act during the past 12 months
 (or 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 [  ]

       At October 31, 2001 there were issued and outstanding 18,743,825
                            shares of Common Stock.

   Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]










                      NorStar Group, Inc. and Subsidiaries

         Index to Unaudited Condensed Consolidated Financial Statements




                                                                                          PAGE
                                                                                          ----
                                                                                    
Part I - Financial Information

Item 1.       Financial Statements

              Condensed Consolidated Balance Sheet at September 30, 2001
              (Unaudited)                                                                   F-2

              Condensed Consolidated Statements of Operations
              Nine and Three Months Ended September 30, 2001 and 2000 (Unaudited)           F-3

              Condensed Consolidated Statement of Changes in Stockholders' Equity
              Nine Months Ended September 30, 2001 (Unaudited)                              F-4

              Condensed Consolidated Statements of Cash Flows
              Nine Months Ended September 30, 2001 and 2000 (Unaudited)                     F-5

              Notes to Condensed Consolidated Financial Statements                        F-6/8





                                      F-1



                      NorStar Group, Inc. and Subsidiaries

                      Condensed Consolidated Balance Sheet
                         September 30, 2001 (Unaudited)





                                                                              
                                      Assets
Current assets - cash                                                            $     4,783
Equipment, net of accumulated depreciation of $1,749                                   2,445
Capitalized web site and development costs                                           238,391
Mineral rights, at estimated net realizable value                                         --
                                                                                 -----------
          Total                                                                  $   245,619
                                                                                 ===========


                        Liabilities and Stockholders' Equity

Current liabilities:
    Noninterest bearing demand notes payable to stockholders                     $    98,809
    Accounts payable and accrued expenses                                             68,491
                                                                                 -----------
          Total liabilities                                                          167,300
                                                                                 -----------

Commitments and contingencies

Stockholders' equity:
    Class A convertible preferred stock, par value $10 per
       share; 1,000,000 shares authorized; none issued                                    --
    Class B preferred stock, par value $10 per share;
       1,000,000 shares authorized; none issued                                           --
    Common stock, par value $.01 per share; 150,000,000
       shares authorized; 18,743,825 shares issued and outstanding                   187,438
    Additional paid-in capital                                                     6,162,590
    Accumulated deficit                                                           (6,271,709)
                                                                                 -----------
          Total stockholders' equity                                                  78,319
                                                                                 -----------
          Total                                                                  $   245,619
                                                                                 ===========





See Notes to Condensed Consolidated Financial Statements.



                                      F-2


                      NorStar Group, Inc. and Subsidiaries

                 Condensed Consolidated Statements of Operations
             Nine and Three Months Ended September 30, 2001 and 2000
                                   (Unaudited)




                                                                 Nine Months Ended                   Three Months Ended
                                                                    September 30,                      September 30,
                                                             ---------------------------        ---------------------------
                                                                2001             2000              2001             2000
                                                             ----------       ----------        ----------       ----------
                                                                                                     
Revenues                                                     $       --       $       --        $       --       $       --
                                                             ----------       ----------        ----------       ----------
Operating expenses:
    Selling                                                     142,375           10,623             1,000            3,138
    General and administrative                                   66,622          126,502            16,420           33,688
    Research and development                                     47,799                             15,000
                                                             ----------       ----------        ----------       ----------
        Totals                                                  256,796          137,125            32,420           36,826
                                                             ----------       ----------        ----------       ----------
Net loss                                                     $ (256,796)      $ (137,125)       $  (32,420)      $  (36,826)
                                                             ==========       ==========        ==========       ==========

Basic net loss per common share                              $     (.01)      $     (.01)       $   (  -- )      $   (  -- )
                                                             ==========       ==========        ==========       ==========

Basic weighted average common
    shares outstanding                                       18,743,825       15,493,825        18,743,825       15,493,825
                                                             ==========       ==========        ==========       ==========













See Notes to Condensed Consolidated Financial Statements.



                                      F-3

                      NorStar Group, Inc. and Subsidiaries

       Condensed Consolidated Statement of Changes in Stockholders' Equity
                      Nine Months Ended September 30, 2001
                                   (Unaudited)




                                        Common Stock
                                --------------------------      Additional
                                 Number of                       Paid-in       Accumulated       Unearned
                                  Shares          Amount         Capital         Deficit       Compensation        Total
                                ----------     -----------     -----------    --------------   ------------     -----------
                                                                                              
Balance, January 1, 2001        18,743,825     $   187,438     $ 6,162,590    $   (6,014,913)   $  (141,375)    $   193,740
                                ----------     -----------     -----------    --------------    -----------     -----------

Amortization of unearned
    compensation                                                                                    141,375         141,375

Net loss                                                                            (256,796)                      (256,796)
                                ----------     -----------     -----------    --------------    -----------     -----------

Balance, September 30, 2001     18,743,825     $   187,438     $ 6,162,590    $(6,271,709)      $        --     $    78,319
                               ===========     ===========     ===========    ==============    ===========     ===========








See Notes to Condensed Consolidated Financial Statements.




                                      F-4

                      NorStar Group, Inc. and Subsidiaries

                 Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 2001 and 2000
                                   (Unaudited)




                                                                           2001               2000
                                                                        ---------           ---------
                                                                                      
Operating activities:
     Net loss                                                           $(256,796)          $(137,125)
     Adjustments to reconcile net loss to net cash
        used in operating activities:
        Amortization of unearned compensation                             141,375
        Depreciation                                                        1,050                 450
        Changes in operating assets and liabilities - accounts
           payable and accrued expenses                                     2,862              13,674
                                                                        ---------           ---------
               Net cash used in operating activities                     (111,509)           (123,001)
                                                                                            ---------

Investing activities:
     Web site and development costs capitalized                                               (25,279)
     Purchases of equipment                                                                    (4,194)
                                                                                            ---------
               Net cash used in investing activities                                          (29,473)
                                                                                            ---------

Financing activities - proceeds from issuance (repayments)
     of notes payable to stockholders                                      98,809              (9,500)
                                                                        ---------           ---------

Net decrease in cash                                                      (12,700)           (161,974)

Cash, beginning of period                                                  17,483             179,176
                                                                        ---------           ---------

Cash, end of period                                                     $   4,783           $  17,202
                                                                        =========           =========











See Notes to Condensed Consolidated Financial Statements.



                                      F-5


                      NorStar Group, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1 - Business and basis of presentation:

               In the opinion of management, the accompanying unaudited
               condensed consolidated financial statements reflect all
               adjustments, consisting of normal recurring accruals, necessary
               to present fairly the financial position of NorStar Group, Inc.
               and its subsidiaries (the "Company") as of September 30, 2001,
               and the Company's results of operations for the nine and three
               months ended September 30, 2001 and 2000, changes in
               stockholders' equity for the nine months ended September 30, 2001
               and cash flows for the nine months ended September 30, 2001 and
               2000. Pursuant to the rules and regulations of the United States
               Securities and Exchange Commission (the "SEC"), certain
               information and disclosures normally included in financial
               statements prepared in accordance with accounting principles
               generally accepted in the United States of America have been
               condensed in or omitted from these consolidated financial
               statements unless significant changes have taken place since the
               end of the most recent fiscal year. Accordingly, these unaudited
               condensed consolidated financial statements should be read in
               conjunction with the audited consolidated financial statements as
               of December 31, 2000 and for the years ended December 31, 2000
               and 1999 and the notes thereto (the "Audited Financial
               Statements") and the other information included in the Company's
               Annual Report on Form 10-KSB (the "Form 10-KSB") for the year
               ended December 31, 2000.

               The results of operations for the nine and three months ended
               September 30, 2001 are not necessarily indicative of the results
               to be expected for the full year ending December 31, 2001.

               The accompanying condensed consolidated financial statements have
               been prepared assuming that the Company will continue as a going
               concern. However, the Company has not generated any significant
               revenues on a sustained basis from its current operations.
               Management estimates that the Company will not begin to generate
               revenues from sales of memberships to subscribers until the first
               quarter of the year ending December 31, 2002. As shown in the
               accompanying condensed consolidated financial statements, the
               Company incurred net losses of approximately $257,000 and
               $137,000 for the nine months ended September 30, 2001 and 2000,
               respectively, although a substantial portion of the loss in 2001
               was attributable to noncash charges for the fair value of shares
               and stock options issued for services, compensation and other
               expenses. As of September 30, 2001, the Company had a cash
               balance of only $4,800, a working capital deficiency of
               approximately $163,000 and an accumulated deficit of $6,272,000.
               Management believes that the Company will continue to incur net
               losses through at least September 30, 2002 and that it will need
               additional equity and/or debt financing of at least $2,000,000 to
               enable it to fully develop its web services and its proprietary
               virtual reality products as initially planned and sustain its
               operations until it can achieve profitability and generate cash
               flows from its operating activities on a recurring basis. These
               matters raise substantial doubt about the Company's ability to
               continue as a going concern.



                                      F-6

                      NorStar Group, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1 - Business and basis of presentation (concluded):

               Management is attempting to obtain additional financing for the
               Company through the issuance of equity securities, loans from
               financial institutions and/or agreements with strategic partners.
               However, management cannot assure that the Company will be able
               to sell equity securities, obtain loans from financial
               institutions and/or form strategic alliances that will generate
               financing on acceptable terms. If the Company is not able to
               obtain adequate financing, it may have to curtail or terminate
               some or all of its operations.

               The accompanying condensed consolidated financial statements do
               not include any adjustments related to the recoverability and
               classification of assets or the amounts and classification of
               liabilities that might be necessary should the Company be unable
               to continue its operations as a going concern.

Note 2 - Earnings (loss) per common share:

               As further explained in Note 2 of the notes to the Audited
               Financial Statements, the Company presents basic earnings (loss)
               and, if appropriate, diluted earnings per share in accordance
               with the provisions of Statement of Financial Accounting
               Standards No. 128, "Earnings per Share". Diluted per share
               amounts have not been presented in the accompanying unaudited
               condensed consolidated statements of operations because the
               Company had net losses for the nine and three months ended
               September 30, 2001 and 2000 and, accordingly, the assumed effects
               of the exercise of outstanding stock options (see Note 5 herein)
               would have been anti-dilutive.

Note 3 - Income taxes:

               As of September 30, 2001, the Company had net operating loss
               carryforwards of approximately $6,272,000 available to reduce
               future Federal taxable income which, if not used, will expire at
               various dates through 2021. The Company had no other material
               temporary differences as of that date. Due to the uncertainties
               related to, among other things, the changes in the ownership of
               the Company, which could subject those loss carryforwards to
               substantial annual limitations, and the extent and timing of its
               future taxable income, the Company offset the deferred tax assets
               attributable to the potential benefits of approximately
               $2,509,000 from the utilization of those net operating loss
               carryforwards by an equivalent valuation allowance as of
               September 30, 2001.

               The Company had also offset the potential benefits from net
               operating loss carryforwards by equivalent valuation allowances
               during 2000. As a result of the increases in the valuation
               allowance of $103,000 and $54,000 during the nine months ended
               September 30, 2001 and 2000, respectively, and $14,000 during the
               three months ended September 30, 2001 and 2000, respectively, the
               Company did not recognize any credits for income taxes in the
               accompanying condensed consolidated statements of operations to
               offset its pre-tax losses in any of those periods.



                                      F-7

                      NorStar Group, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 4 - Stock option plan:

               On April 17, 2000, the Board of Directors approved a Stock Option
               Plan (the "Plan") whereby up to 2,000,000 shares of the Company's
               common stock may be granted to key personnel in the form of
               incentive stock options and nonstatutory stock options, as
               defined under the Internal Revenue Code. Key personnel eligible
               for these awards may include all present and future employees of
               the Company and individuals who are consultants to the Company as
               well as nonemployee directors of the Company. Under the Plan, the
               exercise price of options must be at least 100% of the fair
               market value of the common stock on the date of grant (the
               exercise price of an incentive stock option for an optionee that
               holds more than 10% of the combined voting power of all classes
               of stock of the Company must be at least 110% of the fair market
               value on the date of grant). The maximum term of any stock option
               granted may not exceed ten years (or five years for an optionee
               that holds 10% or more of the Company's stock) from the date of
               grant.

               As of October 25, 2001, no stock options had been awarded under
               the Plan.

Note 5 - Consulting agreements

               On April 17, 2000, the Company entered into agreements with three
               consultants that expired on April 17, 2001. Under these
               agreements, the consultants were, among other things, assisting
               the Company in finding businesses located primarily in England,
               other European countries and the Northeastern section of the
               United States that would advertise in and/or link to the
               Company's online community. As of October 25, 2001, management of
               the Company and the consultants were negotiating, but had not
               consummated, extensions of these agreements.

               As consideration for their services, the three consultants
               received options to purchase a total of 1,300,000 shares of the
               Company's common stock that were exercisable at $.40 per share at
               any time during the terms of the consulting agreements. The
               options expired on April 17, 2001. As further explained in Note 2
               of the notes to the Audited Financial Statements, the aggregate
               fair value of the options granted to the consultants as of the
               date of grant was $377,000. The Company recorded the aggregate
               fair value as unearned compensation which it amortized to expense
               over the period from April 17, 2000 to April 17, 2001.

                                      * * *




                                      F-8


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS ON PLAN OF OPERATION

The following discussion regarding NorStar and its business and operations
contains "forward-looking statements" within the meaning of Private Securities
Litigation Reform Act 1995. Such statements consists of any statement other than
a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof of other variations thereon or comparable
terminology. The reader is cautioned that all forward-looking statements are
necessarily speculative and there are certain risks and uncertainties that could
cause actual events or results to differ materially from those referred to in
such forward-looking statements. NorStar does not have a policy of updating or
revising forward-looking statements and thus it should not be assumed that
silence by management of NorStar over time means that actual events are bearing
out as estimated in such forward-looking statements.

OVERVIEW

NorStar Group, Inc. was originally incorporated in the State of Utah in March
1961 as Florist Accounting Services, Inc., a finance company that was primarily
engaged in factoring accounts receivables for florists in Utah. The Company was
unable to develop a profitable operation and became inactive until April 1992.
During the period from April 1992 through September 30, 2001 the Company
acquired and/or began to develop and dispose of, several businesses and certain
other investments. In 1998, the company began the development of its Internet
business which involves the creation of a portal to a cyber-city, an on-line
community of "One Stop Shopping" for products, entertainment, education and
business services. The on-line community is being developed through VeeAreCity
and the Burbs. The portal is designed to provide subscriber/member with access
to several web browsers, a directory to thousands of stores, three dimensional
virtual reality ("VR") chat rooms, forums and game rooms, a VR dating service,
VR business conference room, specialty advertising rooms with VR activities and
global e-mails. The Company is developing and expanding its Internet portal
services. Norstar is also continuing with ongoing research and development of
its proprietary virtual reality products. The Company also holds mineral rights
attributable to 17 claims that were acquired for gold mines located in the Gold
Mountain mining district of Esmeralda County Nevada. However, management does
not expect mining operations to become one of the Company's core businesses.

RESULTS OF OPERATIONS:

Nine and Three months ended September 30, 2001 as compared to the Nine and Three
months ended September 30, 2000.

During the nine months ended September 30, 2001, the Company's operating
expenses increased by approximately $120,000 to approximately $257,000 from
approximately $137,000 for the nine months ended September 30, 2000. The primary
cause of the increase was non-cash charges of approximately $141,000 relating to
amortization of unearned compensation which resulted from the issuance of stock
options to consultants relating to the agreements described below. This increase
was offset by a slight reduction in corporate overhead.

On April 17, 2000, the Company entered into agreements with three consultants.
Under these agreements, the consultants will, among other things, assist the
Company in finding businesses located primarily in England, other European
countries and the Northeastern section of the United States of America that will
advertise in and/or link to




                                       2


the Company's on-line community. The three consultants received options to
purchase a total of 1,300,000 shares of the Company's common stock that will be
exercisable at $.40 per share at any time during the term of the consulting
agreements as consideration for their services.

The aggregate fair value of the options granted to the consultants of $377,000
as of the date of grant, as determined based on the Black-Scholes option-pricing
model, was recorded as unearned compensation, which will be amortized to expense
over the periods in which the related services are rendered, as required by
generally accepted accounting principles in the United States of America.

During the Three months ended September 30, 2001, the Company's operating
expenses decreased by approximately $5,000 to approximately $32,000 from
approximately $37,000 for the three months ended September 30, 2000. This
decrease was primarily a result of the company reducing its corporate spending
until which time its financing is in place.

As a result of the above, the Company incurred a loss of approximately $257,000
and $32,000 for the nine and three months ended September 30, 2001,
respectively, as compared to approximately $137,000 and $37,000 for the
comparable period ended September 30, 2000.

    (a) Liquidity and Capital Resources

NorStar's consolidated financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has not generated
any significant revenues on a sustained basis from its current operations. As
shown in the condensed consolidated financial statements, the Company has
continued to incur net losses, although a substantial portion of the losses was
attributable to noncash charges for the fair value of shares and stock options
issued for services, compensation and other expenses. As of September 30, 2001,
the Company had a cash balance of only $5,000, a working capital deficiency of
approximately $163,000 and an accumulated deficit of $6,272,000. Management
believes that the Company will continue to incur net losses through at least
September 30, 2002 and that it will need additional equity and/or debt financing
of at least $2,000,000 to enable it to fully develop its web services and
development of its proprietary virtual reality products as initially planned and
sustain its operations until it can achieve profitability and generate cash
flows from its operating activities on a recurring basis. These matters raise
substantial doubt about the Company's ability to continue as a going concern.

Management is attempting to obtain additional financing for the Company through
the issuance of equity securities, loans from financial institutions and/or
agreements with strategic partners. However, management cannot assure that the
Company will be able to sell equity securities, obtain loans from financial
institutions and/or form strategic alliances that will generate financing on
acceptable terms. If the Company is not able to obtain adequate financing, it
may have to curtail or terminate some or all of its operations.

We do not believe that our business is subject to seasonal trends or inflation.
On an ongoing basis we will attempt to minimize any effect of inflation on our
operating results by controlling operating costs and whenever possible, seeking
to insure that subscription rates and usage fees reflect increases in costs due
to inflation.




                                       3


The Company believes the following trends, events and uncertainties could have a
material impact on their short-term and/or long-term liquidity. The market for
Internet discount services and product programs is relatively new and is
evolving rapidly. NorStar's future growth is dependent upon its ability to
create, develop and distribute programs that are accepted by its clients as an
integral part of their business model for communicating with their targeted
audiences. Demand and market acceptance of discount products and service
programs is dependent upon a number of factors, including the growth in consumer
access to and acceptance of these programs, the willingness of service and
product providers to offer their services and products to customers of NorStar
at a discount, and NorStar's ability to develop and maintain distribution
channels to sell memberships to consumers. The failure of providers or consumers
to participate in NorStar's programs or substantial increases in the adequacy or
availability of other programs could have a material and adverse impact on
NorStar's business, operating results and financial condition. In addition,
NorStar does not have long-term contracts and needs to establish relationships
with new vendors. As a result, providers of discounted services or products to
NorStar's members may unilaterally reduce the scope of, or terminate their
relationships with NorStar. The termination of NorStar's business relationship
or a material

reduction in the availability of services or products from any of NorStar's
significant providers or networks thereof or NorStar's failure to develop
significant new provider relationships would materially and adversely affect its
business, operating results and financial condition.

NorStar believes that within the market niche it seeks to develop, the following
known trends, events or uncertainties that have had or that are reasonably
expected to have a material impact on their net sales or revenues or income from
their continuing operations will include the following: (i) The market for
discounted products and services is characterized by rapid changes in
participating companies, consumers and service provider requirements and
preferences, new service and product introductions and evolving industry
standards that could render NorStar's existing service practices and
methodologies obsolete; (ii) NorStar's success will depend, in large part, on
its ability to improve its existing services, develop new services and solutions
that address the increasingly sophisticated and varied needs of NorStar's
clients, and respond to technological advances, emerging industry standards and
practices, and competitive service offerings; and (iii) NorStar may not be
successful in responding quickly, cost-effectively and sufficiently to these
developments. If NorStar is unable, for technical, financial or other reasons,
to adapt in a timely manner in response to changing market conditions or these
requirements, its business, results of operations and financial condition would
be materially adversely affected.





                                       4


PART II - OTHER INFORMATION

Item 1.           Legal proceedings

                  None.

Item 2.           Changes in Securities

                  None.

Item 3.           Default in Senior Securities

                  None.

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

                  None.

Item 5.           Other Information

                  None.

Item 6.           Exhibits and Reports on Form 8-K

         (a)      There were no Current Reports on Form 8-K filed
                  by the registrant during the quarter ended SEPTEMBER 30, 2001.






                                       5


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Company duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       NORSTAR GROUP, INC.


                                       By: /s/ Harry DiFrancesco
                                           -------------------------------------
                                               Harry DiFrancesco
                                               President

Date: NOVEMBER 6, 2001


In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Company in the capacities set forth and on
the dates indicated.




              Signature                     Position                               Date
              ---------                     --------                               ----

                                                                     
 By: /s/ Harry DiFrancesco             President and Chairman              Date: September 30, 2001
     -------------------------------   of the Board
        Harry DiFrancesco



 By: /s/ Andrew S. Peck                Vice President of Finance           Date: September 30, 2001
     -------------------------------   Secretary and Director
        Andrew S. Peck



 By: /s/ Maynard Neil Abogov           Vice President of Sales             Date: September 30, 2001
     -------------------------------   and Management and Director
         Maynard Neil Abogov



By:/s/ Jay Sanet                       Vice President of                   Date: September 30,2001
   ---------------------------------   Corporate Development and Director
                   Jay Sanet







                                       6