SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-QSB

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

For the quarterly period ended September 30, 2000

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

For the transition period

Commission file number 000-25111

Directrix, Inc.
(Exact name of registrant as specified in its charter)

Delaware 13-4015248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

236 West 26th Street, Suite 12W, New York, NY 10001
(Address of principal executive offices)

(212) 741-6511
(Registrant's telephone number, including area code)

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
filing requirements for the past 90 days.

Yes [X] No [ ]

Number of shares outstanding of Registrant's Common Stock as of October 31, 2000
was 2,239,785.

PART I

ITEM 1: FINANCIAL STATEMENTS
DIRECTRIX, INC.
CONSOLIDATED BALANCE SHEETS
____________________________________________________________________________________________________________________________________

Sept 30, March 31,
2000 2000
----------------------------------------
(unaudited) (derived from
audited financial
statements)

ASSETS:

Current assets:
Cash and cash equivalents .................................................. $ 3,000 $ 324,000
Accounts receivable, net ................................................... 887,000 825,000
Prepaid expenses and other current assets .................................. 95,000 87,000
--------------- ----------------
Total current assets ........................................ 985,000 1,236,000
Property and equipment, net ..................................................... 4,707,000 5,141,000
Library of movies, net .......................................................... 789,000 1,122,000
Deferred financing costs ........................................................ 408,000 562,000
Other assets .................................................................... 42,000 93,000
--------------- ----------------
Total assets ................................................ $ 6,931,000 $ 8,154,000
=============== ================

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
Accounts payable ............................................................ $ 3,891,000 $ 1,867,000
Customer deposits ........................................................... 171,000 110,000
Accrued expenses and other current liabilities .............................. 389,000 322,000
--------------- ----------------
Total current liabilities ................................... 4,451,000 2,299,000

Transponder lease liability ..................................................... 464,000 464,000
Other liabilities ............................................................... 83,000 96,000
Revolving line of credit ........................................................ 3,517,000 1,913,000
--------------- ----------------
Total liabilities ........................................... 8,515,000 4,772,000
--------------- ----------------

Commitments and contingencies

Stockholders' equity

Common stock, $.01 par value; authorized 25,000,000 shares; 2,179,785 shares issued
and outstanding at September 30, 2000 and March 31, 2000, respectively ..... 22,000 22,000
Additional paid-in capital .................................................. 20,818,000 20,833,000
Accumulated deficit ......................................................... (22,424,000) (17,473,000)
--------------- ----------------
Total stockholders' equity .................................. (1,584,000) 3,382,000
--------------- ----------------
Total liabilities and stockholders' equity .................. $ 6,931,000 $ 8,154,000
=============== ================

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

DIRECTRIX, INC.
CONSOLIDATED STATEMENTS of OPERATIONS (unaudited)
____________________________________________________________________________________________________________________________________

THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------------------------------- -------------------------------------

Revenues ............................................ $ 1,169,000 $ 2,421,000 $ 2,810,000 $ 4,836,000
----------------- ----------------- ----------------- -----------------

Operating expenses:
Salaries, wages and benefits .................... 827,000 764,000 1,636,000 1,447,000
Library amortization ............................ 162,000 90,000 333,000 184,000
Satellite costs ................................. 1,690,000 1,642,000 3,363,000 3,214,000
Broadband expenses .............................. 112,000 -- 112,000 --
Selling, general and administrative expenses .... 707,000 1,026,000 1,268,000 2,094,000
Depreciation .................................... 351,000 327,000 699,000 597,000
----------------- ----------------- ----------------- -----------------
Total operating expenses ................. 3,849,000 3,849,000 7,411,000 7,536,000
----------------- ----------------- ----------------- -----------------

Loss from operations ..................... (2,680,000) (1,428,000) (4,601,000) (2,700,000)

Interest expense .................................... (205,000) (33,000) (350,000) (68,000)
Gain on sale of marketable securities ............... -- -- -- 488,000
----------------- ----------------- ----------------- -----------------

Net loss ................................. $ (2,885,000) $ (1,461,000) $ (4,951,000) $ (2,280,000)
================= ================= ================= =================

Net loss per common share
Basic and Diluted ............................. $ (1.32) $ (0.69) $ (2.27) $ (1.08)
================= ================= ================= =================

Weighted average number of shares outstanding:
Basic and Diluted (Note 7) .................... 2,179,785 2,119,785 2,179,785 2,111,916
================= ================= ================= =================

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

DIRECTRIX, INC.
CONSOLIDATED STATEMENT of STOCKHOLDERS' EQUITY (unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000
____________________________________________________________________________________________________________________________________

Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
------------ ---------------- ---------------- --------------

Balance at March 31, 2000 ........................................ $ 22,000 $ 20,833,000 $ (17,473,000) $ 3,382,000)

Adjustment to value of warrants issued in connection with
credit facility ........................................... -- (15,000) -- (15,000)

Net loss ..................................................... -- -- (4,951,000) (4,951,000)

------------ ---------------- ---------------- --------------
Balance at September 30, 2000 .................................... $ 22,000 $ 20,818,000 $ (22,424,000) $ (1,584,000)
============ ================ ================ ==============

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

DIRECTRIX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
____________________________________________________________________________________________________________________________________

Six months ended September 30,
2000 1999
---- ----

Cash flows from operating activities:
Net loss ...................................................................... $ (4,951,000) $ (2,280,000)
------------------- -------------------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment ........................................ 699,000 597,000
Amortization of library of movies ............................................. 333,000 184,000
Amortization of deferred financing costs ...................................... 139,000 45,000
Gain on sale of marketable securities ......................................... -- (488,000)
Bad debt expense .............................................................. 200,000 581,000
Changes in assets and liabilities:
Increase in accounts receivable .......................................... (262,000) (1,488,000)
Increase in prepaid expenses and other current assets .................... (8,000) (104,000)
Decrease (increase) in other assets ...................................... 51,000 (27,000)
Increase in accounts payable and accrued expenses ........................ 2,091,000 1,381,000
Increase in customer deposits ............................................ 61,000 --
Decrease in other liabilities ............................................ (13,000) --
------------------- -------------------
Total adjustments .............................................. 3,291,000 681,000
------------------- -------------------
Net cash used in operating activities .......................... (1,660,000) (1,599,000)
------------------- -------------------
Cash flows from investing activities:
Proceeds from sale of Playboy Stock ...................................... -- 2,388,000
Purchase of property and equipment ....................................... (265,000) (2,611,000)
------------------- -------------------
Net cash (used in) provided by investing activities ............ (265,000) (223,000)
------------------- -------------------
Cash flows from financing activities:
Repayment of long-term debt and capital lease obligations ................ -- (202,000)
Borrowings under revolving line of credit ................................ 1,604,000 --
Borrowings from margin account ........................................... -- 700,000
------------------- -------------------
Net cash provided by financing activities ...................... 1,604,000 498,000
------------------- -------------------
Net decrease in cash and cash equivalents ...................... (321,000) (1,324,000)
Cash and cash equivalents, beginning of the period ................................ 324,000 1,450,000
------------------- -------------------
Cash and cash equivalents, end of the period ................... $ 3,000 $ 126,000
=================== ===================

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ....................................................... $ 145,000 $ 21,000
=================== ===================

Supplemental schedule of non-cash investing and financing activities:
Adjustment to value of warrants issued in connection with the
revolving line of credit ................................................. $ (15,000) $ --

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

DIRECTRIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (unaudited)
________________________________________________________________________________

1. In the opinion of Directrix, Inc. ("Directrix"), the accompanying
unaudited financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
as of September 30, 2000, and the results of operations and cash flows for the
six and three months ended September 30, 2000.

2. The results of operations for the six and three months ended September
30, 2000 are not necessarily indicative of the results to be expected for the
full year.

3. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles ("GAAP") have been condensed or omitted. These financial statements
should be read in conjunction with the financial statements and notes thereto
included in Directrix's Annual Report on Form 10-KSB for the year ended March
31, 2000.

4. Directrix, a Delaware corporation, is a full service provider of
digital video asset management services, primarily to the entertainment
industry. Directrix provides all of the technical services required to create,
support and deliver digital video programming and data services from its
advanced digital network facility. Directrix offers a number of services
including digital video playback, downlink and uplink, satellite space segments,
digital video archiving and trafficking, video Internet streaming, digital
ad insertion and digital archiving and distribution for VOD (Video-on-Demand)
platforms.

Spice Entertainment Companies, Inc. ("Spice") formed Directrix in 1998
in contemplation of Spice's acquisition by Playboy Enterprises, Inc.
("Playboy"). On the March 15, 1999 closing of the Playboy transaction, Spice
transferred its network services division to Directrix including Spice's master
control and digital playback facility ("Operations Facility"), service
agreements to provide network creation, playback and other technical services to
Emerald Media, Inc. ("EMI") and others, an option (the "EMI Option") to acquire
the network business or stock of EMI, certain rights in Spice's library of adult
films, approximately $0.8 million in cash, certain prepaid assets and accounts
receivable. Spice also transferred 173,784 shares of Playboy Class B Common
Stock to Directrix that it had acquired as part of the Playboy transaction.
Directrix also assumed certain liabilities related to the transferred assets.
Spice then spun off Directrix to its former stockholders, distributing the
Directrix stock as part of the merger consideration.

5. Directrix commenced operations as a stand-alone business following its
spin-off from Spice on March 16, 1999. Directrix incurred net losses of
approximately $5.0 million and $2.9 million for the six and three months ended
September 30, 2000, respectively. Directrix also incurred a net loss of $6.1
million for the year ended March 31, 2000. At September 30, 2000, Directrix had
a working capital deficiency of $3.5 million. These matters raise substantial
doubt about Directrix's ability to continue as a going concern. Directrix's
continued existence is dependant upon several factors, including its ability to
generate operating cash flow via execution of its long-term business plan, and
secure additional financing to provide for the immediate deficiency in working
capital.

On September 1, 1999, Directrix relocated its Operations Facility to a
new facility in Northvale, New Jersey. The new fully automated network
origination and digital video asset management center is designed to be a 24
hours a day by 7 days a week full service provider of all the technical and
creative services required to develop, support and deliver network television,
video, audio and data services via satellite, fiber and Internet.

Management believes that the relocation and buildout of the Operations
Facility is critical to the realization of Directrix's long-term business plan.
Management also believes that since the buildout of the Operations Facility is
substantially complete, Directrix now has the capacity to increase revenue by
using its technological resources to expand its customer base and develop new
business lines without significantly changing its cost structure and, as a
result, generate operating cash flow. However, there can be no assurance that
management will actually be successful at executing its long-term business plan
or that the successful implementation of the business plan will improve
operating results.

Directrix has a $3.5 million revolving line of credit (the "Credit
Facility") and has drawn down the entire line of credit as of September 30,
2000. On October 16, 2000, Directrix and the providers of the Credit Facility
(the "Lenders") agreed to modify the terms of the Credit Facility (the
"Amendment"). The Amendment provides for an increase in the Credit Facility from
$3.5 million to $4.5 million, and a modification of the financial covenants. In
consideration of their agreeing to provide the additional Credit Facility and
the modification of the covenants, Directrix granted the Lenders an aggregate of
60,000 Common Stock purchase warrants, exercisable for ten years at $0.01 per
share.

Directrix leases four satellite transponders under various lease
agreements (as amended), with monthly transponder leases payments aggregating
$520,000. The lease agreements expire at various times through November, 2004.
In December, 1999, Directrix entered into an agreement to defer approximately
$1.0 million of lease payments to be paid in twenty-four equal monthly
installments of $40,833 beginning April 1, 2000 of which $0.5 million is
classified as non-current. At September 30, 2000, Directrix had a current
transponder lease liability of $2.9 million, which included $2.2 million of past
due amounts from June 1, 2000 to September 30, 2000.

Directrix is in final negotiations with its transponder provider to
amend its existing lease agreements, which would substantially reduce its
monthly transponder costs. Under terms of the proposed amendment, the expiration
date of all of the agreements would be extended to October 31, 2005, the number
of leased transponders would be reduced from four to three and would have a
lower level of protection in the first year if a transponder fails. Once
amended, Directrix monthly transponder costs would be reduced from $520,000 to
$240,000 for the twelve months ending October 31, 2001, $300,000 for the next
twelve months and $345,000 for the final thirty-six months ending October 31,
2005. The proposed amendment would also provide for the combined indebtness of
approximately $4.0 million outstanding as of October 31, 2000 to be rolled into
an 11% interest bearing note maturing October 31, 2004. Repayment of the note
would be based on an amortization schedule that provides for amortization
payments of $100,000 a quarter beginning in July, 2001, $250,000 a quarter
beginning in July, 2002 and a final balloon payment of approximately $1,350,000
at maturity. If Directrix completes an equity offering with at least $20 million
in proceeds, it must prepay the outstanding amount owed. If Directrix completes
an equity offering with at least $10 million in proceeds, it must use 20% of the
proceeds to prepay a portion of the outstanding amount owed. There can be no
assurance that management will be successful in its efforts to finalize the
renegotiation of its existing transponder lease agreements.

Management forecasts that Directrix will require additional funding to
provide for the deficiency in working capital until Directrix generates
operating cash flow. Management believes that it has access to potential sources
of capital sufficient enough to meet Directrix's needs over the next twelve
months. The potential sources of capital include, but are not limited to: (i) an
additional increase in its line of credit, (ii) the sale of the EMI Option
and/or (iii) a possible private placement of equity securities with individual,
institutional and strategic investors. There can be no assurance, however, that
management will be successful in its efforts to obtain sufficient capital.

6. During the six months ended September 30, 1999, Directrix sold 73,784
shares of Playboy stock contributed by Spice at Closing for net cash proceeds of
approximately $2.4 million, resulting in a gain of approximately $0.5 million.

7. Net loss per share for the six and three months ended September 30,
1999 and September 30, 2000 are calculated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." Since
Directrix reported a net loss for all periods presented, basic and diluted
earnings per share exclude dilution and are computed by dividing net loss
attributable to common shareholders by the weighted-average common shares
outstanding for the period. Common Stock purchase options were excluded from the
calculation of earnings per share because their effect would be anti-dilutive.
Directrix had 312,973 Common Stock options outstanding as of September 30,
2000.

8. Directrix capitalizes the acquisition costs for the rights to movie
titles purchased or licensed. The acquisition costs are amortized on a
straight-line basis over the shorter of the useful life or the license period,
ranging from one to five years. Effective April 1, 2000, Directrix reduced the
estimated life of its library of movies to two years.

9. To assist Directrix in achieving its business objectives, Messrs.
Faherty, McDonald and Kirby, Directrix's Chief Executive Officer, President and
Chief Operating Officer, respectively, voluntarily agreed to a reduction in
their annual salaries of $200,000 for Mr. Faherty, $24,750 for Mr. McDonald
and $22,584 for Mr. Kirby. The salary reductions took effect on June 24, 2000
and will continue for the remainder of the year ended March 31, 2001. In
consideration of their agreements to the salary reduction, the Compensation
Committee of the Board of Directors granted each of Messrs. McDonald and Kirby
5,000 fully vested options to acquire shares of the Common Stock of Directrix
exercisable at $4.00 per share, the closing price of Directrix's stock on June
22, 2000. In consideration of Mr. Faherty's agreement to the salary reduction,
after considering several alternatives, the Compensation Committee has decided
to grant Mr. Faherty 25,000 fully vested options to acquire shares of the Common
Stock of Directrix exercisable at $2.25 per share, the closing price of
Directrix's stock on September 18, 2000.

On May 1, 2000, pursuant to employment agreements, Directrix granted
employees an aggregate of 40,000 options to acquire shares of the Common Stock
of Directrix exercisable at $5.75 per share, the fair market value of the Common
Stock on the date of grant.

In accordance with APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its stock incentive
plans, Directrix did not recognize compensation expense in connection with the
above mentioned grants because the exercise price was equal to the market value
of the stock on the grant date.

In May, 2000, Directrix entered into a four-month agreement with one of
its non-employee directors to provide various consulting services to Directrix.
In consideration for providing these services, Directrix agreed to pay an
aggregate of $20,000 over the term of the agreement.

10. Directrix's service agreements with Playboy and Califa currently expire
on March 15, 2001. Directrix is currently in negotiations to extend the term of
these agreements and is seeking to add additional networks and services.
However, there is no assurance that Directrix will be able to extend the terms
of these agreements.

Effective December 1, 2000, Directrix entered into a satellite services
agreement with TV X Broadcasting ("TV X"), pursuant to which Directrix will
provide playback, uplink and compressed transponder services for three TV X
networks. The TV X networks are scheduled to launch in December, 2000 and will
be originated and uplinked through the Directrix Operations Facility.

On July 31, 2000, Directrix entered into an agreement with Akamai
Technologies, Inc. ("Akamai") to act as a authorized reseller to market, resell
and support Akamai's broadband static and streaming services to content
providers over the Directrix Network. Directrix expects to begin generating
revenues from broadband services in its fiscal third quarter ended December 31,
2000.

11. In August, 2000, in order to segregate its broadband services from its
other business lines, Directrix formed two-wholly owned subsidiaries, Directrix
Broadband, Inc. and Directrix Satellite, Inc.

DIRECTRIX, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________________________________________________________________________________

Except for the historical information contained therein, the matters discussed
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations" are not historical facts, but are "forward-looking statements," as
that term is defined in the Private Securities Litigation Reform Act of 1995. In
addition, Directrix or its representatives have made and may continue to make
forward-looking statements, orally or in writing, in other contexts, such as in
reports filed with the Securities and Exchange Commission, press releases or
statements made with the approval of an authorized Directrix executive officer.
These forward-looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "plans," "may," "will," "would,"
"could," "should," "anticipates," "estimates," "project," "intend," or "outlook"
or the negative of these words or other variations of these words or other
comparable words, or by discussion of strategy that involve risks and
uncertainties. These forward-looking statements are only predictions, and actual
events or results may differ materially as a result of a wide variety of factors
and conditions, many of which are beyond Directrix's control.

Overview

Directrix is a Delaware corporation formed by Spice in contemplation of
the Spice's acquisition by Playboy. On March 15, 1999, prior to the Closing,
Spice contributed to Directrix, among other things, all of the assets and
liabilities associated with the Operations Facility, the EMI Option and the
rights to distribute the explicit version of Spice's adult films in the C-Band
direct-to-home ("DTH") market and over the Internet. Spice also contributed
approximately $0.8 million in cash, accounts receivable and other current assets
totaling approximately $1.2 million and 173,784 shares of Playboy stock valued
at approximately $4.5 million, which were purchased by Spice prior to the
Closing.

On September 1, 1999, Directrix relocated its Operations Facility to a
new facility located in Northvale, New Jersey. The new fully automated network
origination and digital video asset management center is designed to be a 24
hours a day by 7 days a week full service provider of all the technical and
creative services required to develop, support and deliver network television,
video, audio and data services via satellite, fiber and Internet.

For the period from April 1, 1999 to December 31, 1999, Directrix
recorded revenues from EMI based on contractual amounts. Prior to that time,
Directrix had been recording revenues from EMI based on cash receipts. During
the fourth quarter ended March 31, 2000, due to renewed uncertainty surrounding
EMI's ability to pay for all services provided, Directrix resumed recording
revenues from EMI based on cash receipts. For the six and three months ended
September 30, 1999, Directrix recorded bad debt expense associated with EMI of
approximately $0.6 million and $0.4 million, respectively.

Directrix's service agreements with Playboy and Califa currently expire
on March 15, 2001. Directrix is currently in negotiations to extend the term of
these agreements and is seeking to add additional networks and services.

Effective December 1, 2000, Directrix entered into a satellite services
agreement with TV X Broadcasting ("TV X"), pursuant to which Directrix will
provide playback, uplink and compressed transponder services for three TV X
networks. The TV X networks are scheduled to launch in December 2000 and will be
originated and uplinked through the Directrix Operations Facility.

On July 31, 2000, Directrix entered into an agreement with Akamai
Technologies, Inc. ("Akamai") to act as an authorized reseller to market, resell
and support Akamai's broadband static and streaming services to content
providers over the Directrix Network. Directrix expects to begin generating
revenues from broadband services in its fiscal third quarter ended December 31,
2000.

In August, 2000, in order to segregate its broadband services from its
other business lines, Directrix formed two-wholly owned subsidiaries, Directrix
Broadband, Inc. and Directrix Satellite, Inc.

Results of Operations

Net Loss. For the six and three months ended September 30, 2000,
Directrix reported a net loss of approximately $5.0 million and $2.9 million,
respectively, as compared to a net loss of $2.3 million and $1.5 million for the
corresponding periods in 1999. The increase in net loss for the six and three
months ended September 30, 2000 was primarily attributable to a decrease in
revenue from EMI of $2.0 million and $1.2 million for the same periods in 1999.
Also contributing to the increase in net loss for the six months ended September
30, 2000 was the inclusion of a gain on the sale of Playboy stock of
approximately $0.5 million in the net loss for the six months ended September
30, 1999. Increases in salary expense, library amortization, satellite expense,
broadband expense, depreciation expense and interest expense totaling
approximately $1.0 million and $0.5 million for the six and three months ended
September 30, 2000, respectively, were mostly offset by a decrease in selling,
general and administrative expenses of approximately $0.8 million and $0.3
million for the corresponding periods in 1999.

Revenues. Total revenue for the six and three months ended September
30, 2000 decreased by $2.0 million and $1.3 million as compared to the same
periods in 1999. The decrease in revenue was primarily attributable to a
decrease in revenue associated with the recording of EMI revenue based on cash
receipts for the six and three months ended September 30, 2000 as compared to
recording EMI revenue based on contractual amounts for the same periods in 1999.

Salaries, Wages and Benefits. Salaries, wages and benefits for the six
and three months ended September 30, 2000 increased by $0.2 million and $0.1
million as compared to the same period in 1999. The increase in salaries, wages
and benefits was primarily attributable to the addition of two senior sales and
marketing executives in April, 2000.

Library Amortization. Library amortization for the six and three months
ended September 30, 2000 increased by approximately $0.1 million for each
period, respectively, as compared to the same periods in 1999. The increase in
library amortization was attributable to the additional amortization from the
acquisition of EMI's library of movies acquired on September 30, 1999 and
Directrix's reduction of the estimated life of its library of movies to two
years effective April 1, 2000.

Satellite Costs. Satellite costs for the six and three months ended
September 30, 2000 increased by approximately $0.1 million for each period,
respectively, as compared to the same periods in 1999. The increase in satellite
costs was primarily attributable to the replacement of a pre-emptible
transponder lease with a non-preemptible transponder lease during November,
1999.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the six and three months ended September 30, 2000
decreased by approximately $0.8 million and $0.3 million as compared to the
corresponding periods in 1999. The decrease was primarily attributable to a
decrease in provision for bad debt expense relating to EMI of $0.6 million and
$0.4 million, respectively, as compared to the corresponding periods in 1999.
Also contributing to the decrease in selling, general and administrative
expenses for the six and three months ended September 30, 2000 were decreases in
production services, rent and utilities and temporary help expenses totaling
approximately $0.5 million and $0.3 million, offset by the inclusion of a
reversal of approximately $0.2 million of expense associated with the issuance
of stock options to non-employee directors recorded in the three months ended
June 30, 1999. The reversal was recorded on September 30, 1999 in accordance
with revised interpretations of APB No. 25, "Accounting for Stock Issued to
Employees."

Depreciation of Fixed Assets. Depreciation of fixed assets for the six
months ended September 30, 2000 increased by approximately $0.1 million as
compared to the same period in 1999. The increase was primarily attributable to
fixed assets associated with the relocation and buildout of the Operations
Facility at Northvale, New Jersey. Depreciation of fixed assets for the three
months ended September 30, 2000 was comparable to the corresponding period in
1999.

Interest Expense. Interest expense for the six and three months ended
September 30, 2000 increased by approximately $0.3 million and $0.2 million as
compared to the same periods in 1999. The increase was attributable to interest
on the amounts drawn down from Directrix's revolving line of credit and the
amortization of additional Common Stock purchase warrants issued in February,
2000 in connection with the revolving line of credit.

Liquidity and Capital Resources

1. On March 31, 2000 and September 30, 2000, Directrix had working
capital deficiency of approximately $1.1 million and $3.5 million, respectively.
The decline in working capital during the six and three months ended September
30, 2000 was primarily attributable to operating losses of $4.6 million and
$2.7 million for the corresponding periods.

Directrix has a revolving line of credit of $3.5 million ("Credit
Facility") pursuant to the terms of a March 15, 1999 Security and Loan
Agreement, as amended by the Amended and Restated Loan and Security Agreement
(as amended, the "Amended Loan Agreement") dated February 15, 2000. Under the
terms of the Amended Loan Agreement, the Credit Facility was increased from $1.5
million to $3.5 million, the maturity date of the Credit Facility was changed
from March 15, 2004 to March 15, 2002 and the terms of the Loan Agreement were
modified to provide that Directrix was not permitted to draw down on the Credit
Facility after March 15, 2001. The providers of the Credit Facility include the
Chairman of the Board and Chief Executive Officer, the President and a Director
of Directrix, as well as two unrelated parties (collectively, the "Lenders").
The Credit Facility bears interest at 11% per annum, payable monthly, and
matures on March 15, 2002. In consideration of their agreeing to provide the
Credit Facility, Directrix granted the Lenders an aggregate of 105,000 Common
Stock purchase warrants, exercisable for ten years at $0.01 per share. The
aggregate fair market value of the warrants (determined using the Black-Scholes
pricing model) amounts to approximately $0.7 million and is being amortized over
the term of the Credit Facility. All of the warrants were exercised as of
September 30, 2000.

As of September 30, 2000, Directrix has drawn down the $3.5 million
from the Credit Facility. On October 16, 2000, Directrix and the Lenders agreed
to modify the terms of the credit facility (the "Amendment"). The Amendment
provides for an increase in the Credit Facility from $3.5 million to $4.5
million, and a modification of the financial covenants. In consideration of
their agreeing to provide the additional Credit Facility and the modification of
the covenants, Directrix granted the Lenders an aggregate of 60,000 Common Stock
purchase warrants, exercisable for ten years at $0.01 per share.

Directrix is in final negotiations with its transponder provider to
amend its existing lease agreements, substantially reducing its monthly
transponder costs. Under terms of the proposed amendment, the expiration date of
all of the agreements would be extended to October 30, 2005, the number of
leased transponders would be reduced from four to three, the transponders would
be relocated to a different satellite and would have a lower level of protection
if a transponder fails. Once amended, Directrix monthly transponder costs would
be reduced from $520,000 to $240,000 for the 12 months ending October 31, 2001,
$300,000 for the next 12 months and $345,000 for the final 12 months ending
October 31, 2005. The proposed amendment would also provide for the structured
repayment of the approximately $4.0 million outstanding amount owed as of
October 31, 2000 as follows: (i) four quarterly payments of $100,000 beginning
in July, 2001; (ii) nine quarterly payments of $250,000 beginning in July, 2002
and (iii) a final balloon payment of the approximately $1,350,000 balance on
[July 1, 2004]. Interest on the past due amounts will accrue at 11% and be
payable monthly. If Directrix completes an equity offering with at least $20
million in proceeds, it must prepay the outstanding amount owed. If Directrix
completes an equity offering with at least $10 million in proceeds, it must use
10% of the proceeds to prepay a portion of the outstanding amount owed.
Prepayment is also required in certain other circumstances. There can be no
assurance that management will be successful in its efforts to finalize the
renegotiation of its existing transponder lease agreements.

As previously mentioned, Directrix commenced operations as a
stand-alone business following its spin-off from Spice on March 16, 1999.
Directrix incurred net losses of approximately $5.0 million and $2.9 million for
the six and three months ended September 30, 2000, respectively. Directrix also
incurred a net loss of $6.1 million for the year ended March 31, 2000. At
September 30, 2000, Directrix had a working capital deficiency of $3.5 million.
These matters raise substantial doubt about Directrix's ability to continue as a
going concern. Directrix's continued existence is dependant upon several
factors, including its ability to generate operating cash flow via execution of
its long term business plan, and secure additional financing to provide for the
immediate deficiency in working capital.

Management forecasts that Directrix will require additional funding to
provide for the deficiency in working capital until Directrix generates
operating cash flow. Management believes that it has access to potential sources
of capital sufficient enough to meet Directrix's needs over the next twelve
months. The potential sources of capital include, but are not limited to: (i) an
additional increase in its line of credit, (ii) the sale of the EMI option
and/or (iii) a possible private placement of equity securities with individual,
institutional and strategic investors. There can be no assurance, however, that
management will be successful in its efforts to obtain sufficient capital,
execute its long-term business plan, or that the successful implementation of
the business plan will improve operating results.

2. During the three months ended June 30, 1999, Directrix sold 73,784
shares of Playboy stock contributed by Spice at Closing for net cash proceeds
aggregating approximately $2.4 million, resulting in a gain of approximately
$0.5 million.

3. Certain payments made by Spice prior to Closing resulted in a dispute
between Playboy and Directrix. As a result, Playboy withheld approximately $0.5
million of severance payments payable to the Chief Executive Officer of
Directrix. Pending resolution of the dispute, Directrix loaned approximately
$0.6 million to the Chief Executive Officer. The loan was secured by an
assignment of the withheld severance payments. In September, 1999, Playboy and
Directrix settled the dispute, at which time Playboy paid the severance to the
Chief Executive Officer, and the Chief Executive Officer repaid the loan to
Directrix.

PART II - OTHER INFORMATION

Item 1: Legal Proceedings.

None.

Item 6: Exhibits and Reports On Form 8-K.

(a) Exhibits.

Exhibit 10.20 - First Amendment to Amended and Restated Loan and
Security Agreement

Exhibit 27.00 - Financial Data Schedule.

(b) Reports on Form 8-K.

None.

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 of the
undersigned, thereunto duly authorized.

DIRECTRIX, INC.

Dated: November 20, 2000

By:/s/ Donald J. McDonald, Jr.
----------------------------------------
Donald J. McDonald, Jr.
President, Director, Chief Financial
Officer and Principal Accounting Officer