SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

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


         Date of Report (Date of earliest event reported) March 2, 2001


                            THE TESSERACT GROUP, INC.
             (Exact name of registrant as specified in its charter)


         Minnesota                      1-11111                  41-1581297
(State or Other Jurisdiction    (Commission File Number)        (IRS Employer
     of Incorporation)                                       Identification No.)


      4515 E. Muirwood Drive
         Phoenix, Arizona                                           85048
(Address of Principal Executive Offices)                          (Zip Code)


       Registrant's telephone number, including area code (480) 940-6300


          (Former Name or Former Address, if Changed Since Last Report)

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

     SALE OF PARADISE LANE SCHOOL

     On March 2, 2001, The TesseracT  Group,  Inc. ("we" or us") sold certain of
our assets to Gan Yeladeem,  an Arizona non-profit  corporation  ("GY"). We made
this sale pursuant to the terms of a Purchase and Sale Agreement, dated February
6, 2001, by and between us and GY.

     In this  transaction,  we sold certain of our assets  including  equipment,
personal property,  records, files and goodwill related to the property commonly
known as the Paradise Lane School in Phoenix,  Arizona. In consideration for the
sale of these assets we received  $250,000 with $150,000 paid at closing and the
balance evidenced by a promissory note secured by the purchased assets.

ITEM 5. OTHER EVENTS

     As previously  disclosed,  The TesseracT  Group,  Inc. and its wholly owned
subsidiary,   Sunrise   Educational   Services,   Inc.   ("Sunrise")  filed  for
reorganization  under Chapter 11 of the United States Bankruptcy Code on October
6, 2000.  Monthly  Operating  Reports for January  2001 as filed with the United
States  Bankruptcy  Court for the District of Arizona for The  TesseracT  Group,
Inc. and Sunrise are attached hereto as Exhibits 99.1 and 99.2.

     Effective March 15, 2001, our Chief Executive  Officer,  Dr. Lucian Spataro
resigned.  Dr.  Spataro will remain on the  company's  Board of  Directors.  Dr.
Spataro  resigned to pursue other  interests.  The press release  related to Dr.
Spataro's resignation is attached hereto as Exhibit 99.3.

ITEM 7. EXHIBITS

     EXHIBIT NO.
     -----------

        10.1       Purchase and Sale Agreement between the TesseracT Group, Inc.
                   and Gan Yeladeem

        99.1       Monthly Operating Report of The TesseracT Group, Inc. for
                   January 2000

        99.2       Monthly Operating Report of Sunrise for January 2000

        99.3       Press Release regarding Chief Executive Officer resignation
                   dated March 5, 2001

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                                   SIGNATURES

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

                                         THE TESSERACT GROUP, INC.


Dated:  March 13, 2001                   By: /s/ Douglass E. Snell
                                            ---------------------------------
                                            Douglass E. Snell
                                            Controller

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