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


FORM 10-Q


Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the quarterly period ended 	Commission file Number
June 30, 2001	0-9180


Thermal Energy Storage, Inc.
(Exact name of registrant as specified in its charter.)

	Colorado	95-3333931
(State of incorporation)	(IRS Employer Identification No.)

6362 Ferris Square, Suite C
San Diego, CA 92121
(Address of principal executive offices)

Registrant's telephone number, including area code:
(858) 453-1395

Indicate by check mark whether the registrant(1) has filed all reports
 required to be filed by Section 13 or 15(d) of the Securities Exchange
 Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
 has been subject to such filing requirements for the past 90 days.

YES []	NO [X ]

	Indicate the number of shares outstanding of each of the
 issuer's classes of common stock, as of the close of the period
covered by this report: Common Stock, $.001 Par Value - 59,131,289
shares




CONTENTS PAGEPART I. FINANCIAL INFORMATION

ITEM 1.
Financial Statements

	Balance Sheets as of March 31, 2001
and June 30, 2001	1

	Statements of Operations for the three months ended
 June 30, 2001	2

	Statements of Cash Flows for the three months ended
 June 30, 2001	3

	Notes to Financial Statements	4

ITEM 2. Management's Discussion and Analysis of Financial
 Condition and
Results of Operations	5

ITEM 3. Quantitative and Qualitative Disclosures About Market
 Risk	7

SIGNATURE PAGE	8


PART I. - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

THERMAL ENERGY STORAGE, INC.
BALANCE SHEETS
(Unaudited)

(Amounts in thousands, except per share data)*


June 2001
March 2001
ASSETS
($000)
($000)
	Current assets


	Cash
12
11
	Accounts receivable
0
0
	Inventories
1
1
	Prepaid expenses
2
2
	Total current assets
15
14



Property and equipment less accumulated depreciation of $109,623
0
0



TOTAL ASSETS

14



LIABILITIES AND STOCKHOLDERS' DEFICIT
($000)
($000)
	Current liabilities


	Accounts payable
         24
24
	Accrued payroll
       131
   131**
            Accured legal settlement
25
25
	Payable to officers and affiliates
569
569
	Total current liabilities
750
  750**



Stockholder's deficit


	Common stock par value $.001 per share Authorized
110,000,000 shares Issued and outstanding 58,931,289 shares


59


59
	Additional paid in capital
4,046
4,046
      Current profit/loss
1
           (25)
	Accumulated deficit
	Total stockholders' deficit
(4,841)
        (4,816)**

      (735)
    (736)**
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT (1)

15

14
(*) Numbers may not add due to rounding
(**) Corrected
See Accompanying Notes to Financial Statements



THERMAL ENERGY STORAGE, INC.
STATEMENTS OF
 OPERATIONS
FOR THE THREE MONTHS
ENDED
 JUNE 30, 2001 AND 2000
(Unaudited)(Amounts in thousands,
 except per share data)*


Results of Operations
June 30, 2001
($000)
June 30, 2000
($000)
Contract services
0
0
Cost of revenues
0
1
Gross profit (loss)
0
(1)
Operating Expenses


	Research and Development
0
0
	Selling, general and administrative expenses
0
0
      Accrued legal settlement
0
0
Operating profit (loss)
0
(1)
	Transfer fees
1
0
	Other income
0
3
Net income (loss) (1)
1
2
Accumulated deficit -  Beginning of period
(4,841)
(4,818)
Accumulated deficit -  End of period
(4,840)
(4,816)
Loss per share
($0.000)
($0.000)

(*) Numbers may not add due to rounding
(**) Corrected
See Accompanying Notes to Financial Statements


THERMAL ENERGY STORAGE, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000
(Unaudited)
(Amounts in thousands)*


Cash flow from operating activities:
June 30, 2001
($000)
June 30, 2000
($000)



Income (loss) from operations
1
2
Adjustments to reconcile net  income to net cash provided by
operating activities


	Depreciation
0
0
Decrease (increase) from changes:


	Receivables
0
0
	Prepaid expenses
0
(1)
	Accounts payable
0
(2)
      Accrued legal settlement
0
0
	Payable to officers & affiliates
0
0
Net provided by operating activities
1
(1)
Net cash provided from financing activities


Increase (Decrease) in cash
1
(1)
Cash at beginning of year
11
5
Cash at end of period
12
5






(*) Numbers may not add due to rounding
See Accompanying Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS
 ENDED JUNE 30, 2001
(UNAUDITED)

1. BASIS OF PRESENTATION

FINANCIAL INFORMATION - The accompanying financial
statements have been prepared assuming the Company will continue
 as a going concern; they do not include adjustments relating to the
recoverability of recorded asset amounts and classification of assets
and liabilities that would be necessary should the Company be unable
 to continue as a going concern.  The going concern basis might not be
 appropriate since the Company has required additional funds in the
 form of loans from the President's solely owned consulting company
to sustain operations.  As of June 30, 2001 its current liabilities
exceeded its current assets and total liabilities exceeded its total assets.

The financial information has been prepared by Thermal Energy Storage,
 Inc., without audit, in accordance with the instructions to Form 10-Q
 and therefore does not include all information and footnotes necessary
for a fair presentation of financial position, and results of operations and
 cash flows in accordance with generally accepted accounting principles.

ACCOUNTING ESTIMATES - The preparation of financial statements
 in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
 amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.  Actual results may
 differ from those estimates.

UNAUDITED INTERIM FINANCIAL DATA - In the opinion of
management, the unaudited consolidated financial statements for the
interim periods presented reflect all adjustments, consisting of only
 normal recurring accruals, necessary for a fair presentation of the
 financial position and results of operations as of and for such periods
 indicated.  These financial statements and notes thereto should be
 read in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K (including
 items incorporated by reference therein) for the year ended
 December 31, 2000.  Results for the interim period presented
 herein are not necessarily indicative of results which may be reported
 for any other interim period or for the entire fiscal year.


THERMAL ENERGY STORAGE, INC.
June 30, 2001

ITEM 2. Management's Discussion and Analysis of Financial Condition
 and Results of Operations

RESULTS OF OPERATIONS
	As of June 30, 2001 cash and cash equivalents amounted
 to $11,963 as compared to $11,168 as of  March 31, 2001.  The
increase since March 31, 2001 was attributable to stock transfer fee
 revenues of $805 less a bank charge of $10.

	As of June 30, 2001 total shareholders' deficit amounted
 to $(4,840,227) as compared to $(4,841,022) at March 31, 2001.
The decrease in deficit since March 31, 2001 was attributable to the
 net operating profit of $795.

RESEARCH AND DEVELOPMENT
	There were no
 research and development expenses during the period.

SALES AND MARKETING
	There were no sales and marketing expenses during
 the period.

GENERAL AND ADMINISTRATIVE
	General and administrative expenses included the
 bookkeeping, accounting, and SEC report preparation expenses,
 and accrued management compensation due.  The Company's
 President continues to support the company's projects without
current compensation.

LIQUIDITY AND CAPITAL RESOURCES
	Since inception, The Company has funded its operations
 primarily through the private sale of equity securities, borrowings
 from certain of its investors for bridge financing, bank borrowings,
 its initial public offering, which resulted in net proceeds to the
Company of approximately $4 million.  As of June 30, 2001,
The Company had approximately $11,963 in cash and cash
 equivalents.

	Net cash consumed by operating activities was
approximately $10 for the three months ended June 30, 2001.

	The Company requires working capital to fund its business,
particularly to finance research, development, and design activities.
 The Company's future capital requirements will depend on many
factors, including the timing and extent of spending to support system
development efforts and the development of sales, marketing and
support; the timing of introductions of new products and enhancements
 to existing products; and overall industry conditions. The Company
 believes that it must and can obtain additional working capital to
 sustain operations and provide for the future expansion and
development of its business over the next 12 months.

SECURITIES MARKET & FINANCING ACTIVITIES
	Through the second quarter, the Common Shares of
 the Company were traded via an over-the-counter bulletin board
 (OTCBB) and quoted under the symbol "THES".  TESI Common
Shares are not currently quoted by the National Quotation Bureau.
The Company acts as Transfer Agent for the Common Shares.
 There are approximately 3,000 shareholders of record of Common
 Shares.

	The Company has not, since inception, declared or paid
a cash or other dividend with respect to the Common Shares.
 Management does not contemplate the payment of such dividend
on the Common Shares in the foreseeable future.

	On June 26, 1984, the Company was removed from the
NASDAQ automated reporting system as the Company was not in
compliance with requirements of the NASD Bylaws because it no
 longer met the financial net worth standards set by NASDAQ.

DELINQUENT FILINGS AND EFFECTS IN MARKET FOR
 SECURITIES

	The Company did not hold its annual meeting in 1989 or
1990 until November of each year, and did not hold an annual meeting
 in 1992, 1994, 1995, 1996, 1997, 1998 and 1999 or 2000, and did
 not timely file all of the quarterly form 10-Q reports required to be
 filed under Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, therefore, the Company failed during these periods to
 qualify for the use of Rule 144 under the Securities Act of 1933.

	In 1998 the company failed to file the first of two required
Y2K compliance reports and in 1999 the Securities and Exchange
 Commission cited the Company for violations of Section 17 (a)(3)
and Section 17A (d) (1) of the Securities Exchange Act of 1934 and
 Rule 17Ad-18.  In 1999 the company submitted the first and second
 of the required Y2K planning reports, and entered into a settlement
 agreement with the Securities and Exchange Commission ordering the
 firm to cease and desist from further such violations.  The civil penalty
 was waived by the SEC because of the financial condition of the
Company.

	Through the second quarter, the Common Shares of the
Company were traded in the National Association of Securities Dealers
Over-the- Counter Bulletin Board market under the symbol THES.
 In late March the Company received a third-party notice that the
Company was to be removed from the Bulletin Board until it came into
 compliance with SEC financial reporting requirements.  The Company
 has not submitted audited financial statements in its 10-K annual reports
since 1991 as a cost-saving measure. The management is unaware of
 any material deficiencies in the financial statements and has not had
disagreements with the CPA firm, William G. McKee Inc., that prepared
 the Company's corporate tax returns.  The management believes that
 until the company is in compliance with reporting requirements the
 Company's shares will be traded via "Pink Sheets" and market makers.

Sales of restricted Common Shares under Rule 144 under the Securities
 Act of 1933 are available.


ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

	The company has not prepared quantitative evaluations of
 market risks for its systems.  In the recent past regulatory actions have
made the use of the Company's clathrate formers impracticable,
precluding the sale of the company's systems, both for thermal energy
 storage and for desalination.  The research completed to date into
 alternative clathrate formers to find a suitable chemical that is safe,
non-toxic, and commercially available at prices that result in competitive
 desalination systems has been encouraging. There is no assurance,
however, that the Company will be able to find a suitable clathrate
 former for desalination or thermal storage systems, nor is there assurance
 that future regulatory actions will not have a similar adverse effect on the
ability of the Company to market its systems.

	The Company's product and proposed products are subject
to, or are affected directly and indirectly by various aspects of federal,
state and local governmental regulations and tax laws.  The federal excise
 tax imposed on R11, which made the Company's use of R11 impractical,
 is an example.  After 2003 the clathrate former R141b will also be
 prohibited by EPA regulations.  Residential and commercial use of the
Company's thermal energy storage systems is also affected by various state
 and local building codes.  Such regulations, while not directed specifically
 to thermal energy storage devices, can impact the use of systems in which
 the Company's energy storage units are used.

	There is growing interest and activity at all levels relating to
 government and industry regulation of alternate energy sources.
 Governmental entities could impose regulations applicable to the
Company and its products, which might require the Company to submit
 its systems to various testing, certification and labeling programs.
Management also expects that private industry associations will become
 more active in this area.  In the future the Company may also be required
 to submit its products for testing and certification to independent
 organizations.  Compliance with future regulatory or private industry
 standards could involve substantial costs and have a material impact
 on Company operations.

THERMAL ENERGY STORAGE, INC.

SIGNATURE PAGE


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





	THERMAL ENERGY STORAGE, INC.
	Registrant


Date: November 8, 2001	By: /s/ Richard A. McCormack
	__________________________
	Richard A. McCormack
	President







	4