UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, DC. 20549

                                  FORM 10-K
 (mark one)
   [ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED OCTOBER 31, 2004

                                      OR

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

       FOR THE TRANSITION PERIOD FROM ______________ TO ______________.

                        COMMISSION FILE NUMBER 0-22636

                     DIAL THRU INTERNATIONAL CORPORATION
            (Exact name of registrant as specified in its charter)

            DELAWARE                                75-2461665
 ------------------------------        ------------------------------------
 State or other jurisdiction of        (I.R.S. Employer Identification No.)
 Incorporation or organization

           17383 SUNSET BOULEVARD, SUITE 350 LOS ANGELES, CA 90272
           -------------------------------------------------------
           (Address of principal executive offices)     (Zip Code)

      Registrant's telephone number, including area code (310) 566-1700

         SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                     NONE

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        COMMON STOCK, $0.001 PAR VALUE
                        ------------------------------
                               (title of class)

 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 [X] No [ ]

 Indicate by check mark if disclosure  of delinquent filers pursuant to  Item
 405 of Regulation S-K is not contained herein, and will not be contained, to
 the best  of  registrant's knowledge,  in  definitive proxy  or  information
 statements incorporated by reference  in Part III of  this Form 10-K or  any
 amendment to this Form 10-K. [X]

 Indicate by check mark  whether the registrant is  an accelerated filer  (as
 defined in Rule 12b-2 of the Act). Yes [  ] No [ X]

 The aggregate market value of shares of common stock held by  non-affiliates
 of the registrant as of April 30, 2004 was approximately $2,450,375 based on
 the average bid and ask price  of a share of common  stock as quoted on  the
 OTC Bulletin Board of $0.17.


 As of January 24, 2005, 23,034,151 shares of common stock of the registrant
 were outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE.
                                    None.

<PAGE>

                          FORWARD-LOOKING STATEMENTS

 This Annual Report  on Form 10-K  (this "Report") includes  "forward-looking
 statements" within the meaning of Section 27A of the Securities Act of 1933,
 as amended  (the  "Securities  Act"), and  Section  21E  of  the  Securities
 Exchange Act  of 1934,  as amended  (the "Exchange  Act").   Forward-looking
 statements are statements other than historical information or statements of
 current condition. Some forward-looking statements may be identified by  the
 use  of  such  terms  as  "expects",  "will",  "anticipates",   "estimates",
 "believes", "plans" and  words  of  similar meaning.  These  forward-looking
 statements relate to  business plans,  programs, trends,  results of  future
 operations, satisfaction  of future  cash  requirements, funding  of  future
 growth, acquisition  plans and  other matters.  In light  of the  risks  and
 uncertainties inherent  in  all such  projected  matters, the  inclusion  of
 forward-looking statements in  this Form 10-K  should not be  regarded as  a
 representation by us or any other  person that our objectives or plans  will
 be achieved or that our operating  expectations will be realized.   Revenues
 and results  of  operations  are difficult  to  forecast  and  could  differ
 materially from  those  projected in  forward-looking  statements  contained
 herein, including without limitation statements regarding our belief of  the
 sufficiency  of  capital  resources  and  our  ability  to  compete  in  the
 telecommunications  industry.   Actual  results  could  differ  from   those
 projected in any forward-looking statements for, among others, the following
 reasons: (a) increased competition from  existing and new competitors  using
 voice over Internet protocol ("VoIP") to provide telecommunications services
 over the Internet,  (b) the relatively  low barriers to  entry for  start-up
 companies  using  VoIP  to  provide  telecommunications  services  over  the
 Internet, (c)  the  price-sensitive  nature  of  consumer  demand,  (d)  the
 relative lack of  customer loyalty to  any particular  provider of  services
 over the  Internet,  (e) our  dependence  upon favorable  pricing  from  our
 suppliers to  compete  in  the telecommunications  industry,  (f)  increased
 consolidation in the telecommunications industry, which may result in larger
 competitors being able to compete more  effectively, (g) failure to  attract
 or retain key employees, (h) continuing changes in governmental  regulations
 affecting the telecommunications industry and the Internet and (i)  changing
 consumer demand,  technological  developments and  industry  standards  that
 characterize the  industry.   We do  not undertake  to update  any  forward-
 looking statements contained herein. For a  discussion of these factors  and
 others, please see "Risk  Factors" in Item  1 of this  Report.  Readers  are
 cautioned not to place undue reliance on the forward-looking statements made
 in this Report or in any document or statement referring to this Report.


                                    PART I

 Item 1.  Business.

 Our Company

 Throughout this Annual Report, the term "we", "Dial Thru" and the  "Company"
 refer  to  Dial  Thru  International  Corporation,  a  Delaware  corporation
 formerly known as ARDIS Telecom & Technologies, Inc., successor by merger to
 Canmax Inc., and its subsidiaries.  The Company was incorporated on July 10,
 1986 under the Company Act of  the Province of British Columbia, Canada.  On
 August 7,  1992, we  renounced our  original province  of incorporation  and
 elected to continue our domicile under the laws of the State of Wyoming, and
 on November 30, 1994 our name was changed  to "Canmax Inc."  On February  1,
 1999, we reincorporated under  the laws of the  State of Delaware under  the
 name "ARDIS Telecom & Technologies, Inc."  On November 2, 1999, we  acquired
 substantially all  of the  business and  assets of  Dial Thru  International
 Corporation, a  California  corporation  (the "DTI  Acquisition"),  and,  on
 January 19, 2000,  we changed our  name from ARDIS  Telecom &  Technologies,
 Inc. to "Dial Thru International Corporation."   Our common stock  currently
 trades on the OTC Bulletin Board under the symbol "DTIX."

 From our inception  until 1998 we  provided retail  automation software  and
 related services to the retail  petroleum and convenience store  industries.
 In 1998  we decided  that the  rapidly expanding  telecommunications  market
 presented an  opportunity to  utilize some  of  the technology  and  support
 capabilities  that   we   had   developed,   and   we   entered   into   the
 telecommunications industry  via  the  pre-paid  long  distance  market.  In
 December 1998,  we sold  our retail  automation  software business  and  now
 operate only in the telecommunications marketplace.

 Our principal executive offices are located at 17383 Sunset Boulevard, Suite
 350, Los Angeles, California 90272, our  telephone number is (310)  566-1700
 and our website address is www.dialthru.com.

 Recent Developments

 On July 24, 2003 we entered into an agreement with GCA Strategic  Investment
 Fund Limited that provided us with a  loan of $550,000, which has been  used
 for the Company's ongoing  working capital needs.  In  January 2004, as  per
 the terms of the agreement, this loan became a convertible debenture with  a
 maturity date of November  8, 2004.  Currently,  this debenture has  matured
 and is due  on demand.  This debenture continues  to accrue interest at  the
 stated rate.

 Development of Our Telecommunications Business

 In January  1998, we  acquired US  Communication Services,  Inc. ("USC"),  a
 provider of  prepaid phone  cards, public  Internet  access kiosks  and  pay
 telephones.  While the USC acquisition did not proceed as intended,  leading
 to our rescission of the transaction in May 1998, we decided to develop  our
 in-house  capabilities  to  expand  our  telecommunications  operations  and
 continued to focus on the rapidly growing prepaid phone card market.  In the
 second quarter  of fiscal  1999, we  purchased telecommunications  switching
 equipment  and  an  enhanced  services  platform.   Following  a  period  of
 development, implementation  and  testing,  we  commenced  operations  as  a
 facilities-based carrier  in the  fourth quarter  of our  1999 fiscal  year.
 Calls made  with  our prepaid  phone  cards  were then  routed  through  our
 switching facilities, giving  us better control  over costs  and quality  of
 service.

 In November 1999, we completed the DTI Acquisition and continued  operations
 of its  facilities-based  telecommunications carrier  business  through  its
 subsidiary, Dial Thru.com.   During  the first  quarter of  fiscal 2000,  we
 appointed John Jenkins (founder of the acquired business) to the position of
 President and Chief Operating Officer of our Company.  In the third  quarter
 of fiscal 2000, we relocated our  Texas operations, including our  switching
 facilities, to a location  in downtown Los  Angeles, California. During  the
 fourth quarter of  fiscal 2001, Mr.  Jenkins was appointed  by our Board  of
 Directors to the position of Chairman of the Board and also became our Chief
 Executive Officer.  At that time  we announced the creation of our  "Bookend
 Strategy" and  the  roll  out  of  our  facilities-based  Internet  Protocol
 network, whereby we sell voice over  Internet protocol ("VoIP") to allow  us
 to compete in the international telecommunications market.

 Mr. Jenkins continued  the merger of  operations of the  two businesses  and
 increased our emphasis  on the international  wholesale and retail  business
 segment while reducing  our focus on  the prepaid domestic  market.  We  now
 operate as a facilities-based global Internet protocol ("IP") communications
 company  providing  connectivity   to  international  markets   experiencing
 significant  demand  for  IP enabled  services.  We  provide  a  variety  of
 international telecommunications  services,  including the  transmission  of
 voice  and  data  traffic   and  the  provision   of  Web-based  and   other
 communications services,  which  are  targeted to  small  and  medium  sized
 enterprises  ("SMEs"),  wholesale   carriers  providing  international   and
 domestic long distance traffic  and consumers.   We utilize VoIP  packetized
 voice technology (and  other compression techniques)  to improve both  costs
 and efficiencies of  telecommunication transmissions, and  are developing  a
 private VoIP  telephony network.   We  utilize  digital fiber  optic  cable,
 international satellites and the Internet to transport our communications.

 During the fourth quarter of fiscal 2001, we acquired the assets and certain
 of the liabilities of Rapid Link, Incorporated ("Rapid Link"), a provider of
 integrated data  and voice  communications services  to both  wholesale  and
 retail  customers  around  the  world.  Rapid  Link's  global  VoIP  network
 reaches thousands of retail customers, primarily in Europe  and  Asia.  This
 acquisition has significantly enhanced  our product lines, particularly  our
 Dial  Thru  and  Re-origination  services,  Global  Roaming  products,   and
 wholesale termination.  Furthermore, the acquisition has allowed us to  roll
 out services to additional international markets and more rapidly expand our
 VoIP strategy due to the engineering  and operational expertise acquired  in
 the transaction.

 Our Business Strategy

 Our primary business concentrates on the marketing of IP telephony services,
 including voice, fax, data and other  Web-based services.  The term  Bookend
 Strategy describes our primary focus, which is to provide  telecommunication
 services originating in  foreign countries and  in the corresponding  ethnic
 segment domestically  in the  United States  via the  Internet to  transport
 various forms of communications.  These services are provided primarily  via
 the public Internet, utilizing VoIP and other digitized voice  technologies.
 VoIP is voice communication that has been converted into digital packets and
 is then addressed, prioritized, and transmitted  over any form of  broadband
 network utilizing the technology  that makes the  Internet  possible.  These
 technologies allow us to transmit voice  communications with the same  high-
 density compression as  networks initially designed  for data  transmission,
 and at the same time utilize  a common network for providing customers  with
 data and other Web-based services.

 By utilizing VoIP over the public  Internet, we avoid the high network  cost
 associated with private line connections to each international  destination,
 which would require us to lease a dedicated line for a set period of time at
 a set rental rate and to "fill" idle network capacity with traffic in  order
 to offset the high fixed costs of such a private line.  The primary focus of
 our business is to sell a  bundled solution of communication services,  such
 as international dial thru, re-origination and fax over the Internet to SMEs
 worldwide. We also sell telecommunications services for both the foreign and
 domestic  termination  of  international  long  distance  traffic  into  the
 wholesale market.  Our  primary objective  in  selling  into  the  wholesale
 market is to take advantage of  below market international rates that  arise
 from time to time while we are developing revenue from our retail  marketing
 operations.  We expanded the offering of our wholesale services beginning in
 the 2002 fiscal year  and believe that  additional market opportunities  for
 select wholesale routes will be available to us in our current fiscal  year.
 In some markets, where the price advantages and capacity limitations do  not
 provide  for  significant  retail  opportunities,  we  sell  only  wholesale
 terminations.

 A key part of the Bookend Strategy is the establishment of direct routes for
 telecommunications traffic  to and  from a  target country.   Once  we  have
 determined that a particular country meets our requirements for availability
 of  retail  revenue  opportunities,  we then  must determine the best manner
 to  establish  dedicated  connectivity.  This  is  usually  accomplished  by
 establishing a  licensing  agreement  within the  country,  whereby  we  are
 licensed to sell these communication products.   We then make these products
 available to SMEs in the target country through public Internet  connections
 and apply the appropriate technology to  provide for the compression of  the
 telecommunications  traffic  over  these   routing  options.  The   emerging
 technology that is best  suited for the majority  of these installations  is
 VoIP.

 We primarily focus on markets where competition is not keen.  These  markets
 include regions where  the deregulation of  telecommunications services  has
 not been completed and smaller markets that have not attracted large  multi-
 national providers.  South  Africa, Asia, and parts  of South America  offer
 the greatest abundance of these target markets.

 The explosive growth of the Internet has accelerated the rapid merger of the
 worlds of  voice-based and  data-based communications.  By first  digitizing
 voice signals, then utilizing the same packetizing technology that makes the
 Internet possible, VoIP  provides for a  cost effective manner  in which  to
 perform the signal compression needed to maximize the return from the use of
 the public Internet.  In this way, not only has efficiency of the  dedicated
 circuits been improved, but use of the public Internet provides a much  more
 cost effective  means  of  transmission and  rapid  deployment  compared  to
 traditional private leased lines and circuits.

 We currently operate our domestic telecommunications switching facilities in
 Los Angeles, California and New York, New York, providing for long  distance
 services  worldwide.  Development  of  the  private  IP  network and the use
 of  VoIP  technology  have  improved  both   the   cost   and   quality   of
 telecommunications services,  as well  as  facilitating our  expansion  into
 other Internet related opportunities.

 Our Products and Services

 Dial Thru and Re-origination Services

 We provide a variety of international Dial Thru and Re-origination services.
 These services,  while  still  contributing a  significant  portion  of  our
 revenues, will continue to decrease as a percentage of our total revenues as
 we continue to develop  and market new services.  Generally,  the Dial  Thru
 and  Re-origination  services  are  provided  to  customers  that  establish
 deposits or prepayments with us to  be used for long-distance  calling.  The
 Dial Thru service allows  customers the convenience  of making local  and/or
 international calls in the same manner as traditional long distance dialing.
 In those markets in which we cannot currently provide Dial Thru service,  we
 offer our  Re-origination service,  which allows  a  caller outside  of  the
 United States to place a long  distance telephone call that appears to  have
 originated from our switch  in Los Angeles to  the customer's location,  and
 then connects the call  through our network  to anywhere in  the world.   By
 completing the calls in this manner, we are able to provide very competitive
 rates to the customer.  Wherever possible, we route  calls over our  private
 network.  By using VoIP to compress voice and data transmissions across  the
 public Internet,  we are  able to  offer these  services at  costs that  are
 substantially less than traditional communications services.

 International Wholesale Termination

 Primarily as a result  of our acquisition of  Rapid Link, we began  offering
 international  call  completion  on  a  wholesale  basis  to   international
 telecommunications companies.   Our service enables  our customers to  offer
 their own customers  phone to  phone global voice  and fax  services.   This
 service provides our customers with high quality and low cost long  distance
 without our customers having  to deploy their own  VoIP infrastructure.   We
 can also provide additional termination opportunities to customers that have
 developed their  own  VoIP  networks  with  nearly  instant  access  to  our
 termination points  by  connecting  to these  customers  via  the  Internet.
 Therefore, we  have  the  capability  to  offer  our  services  to  carriers
 connecting to our  network through  traditional dedicated  switch to  switch
 connections, and through the public  Internet whereby our customers  connect
 to our network using their own VoIP equipment.

 Global Roaming

 Our Global Roaming service provides customers a single account number to use
 to initiate phone-to-phone calls from  locations throughout the world  using
 specific  toll-free  access  numbers.  This  service  enables  customers  to
 receive the  cost benefits  associated with  our telecommunications  network
 throughout  the  world.  This  product  will begin  to  account for  a  more
 significant amount of  our revenue  due to  the acquisition  of Rapid  Link,
 which provides this product to its retail customers around the world.

 FaxThru

 We offer  FaxThru  and "store  and  forward"  fax services,  which  allow  a
 customer to  send a  fax to  another party  utilizing the  Internet  without
 incurring  long   distance   or  similar   charges.   From  the   customer's
 perspective, these products function exactly like traditional fax  services,
 but with significant savings in long distance charges.

 VoIP Retail

 We offer  several  VoIP  programs  to  the  business  office,  the  business
 professional that may have  a home office  and the consumer.   We provide  a
 full array of VoIP communication services by connecting a VoIP gateway  from
 a single line to up to a total of 120 lines in one office.  We will  shortly
 introduce a VoIP-based executive phone that plugs into the USB port of a lap
 top or desk top computer.  We call this product our "Executel" and it allows
 a business executive to connect  his or her computer  to any hotel or  other
 internet connection, while  he or  she is  traveling and  provides the  same
 discounted calling plans and connectivity he or she receives from us at  his
 or  her home office. In addition,  telephone  numbers follow the  executives
 wherever they go, so no matter where they travel, their customers can always
 get a hold of them.  In addition  to our "Executel", we are introducing  our
 "Rapid Link"  product,  which is  a  two line  router  that plugs  into  any
 internet connection in a customer's home or office.  This allows the user to
 have both a business line and  a fax line for the same  low price.   All  of
 our products run on a centrally  managed and hosted telephony solution  that
 supports local, long distance and international calling.

 Our VoIP products use Session Initiation Protocol, or SIP, signaling,  which
 empowers edge devices,  such as multimedia  terminal adapters, to  establish
 and  manage  voice calls  on all  types  of internet  systems.  Our  systems
 provide an end user with a local phone number for inbound calling and  comes
 with a  full set  of features  and  functionality, including  call  waiting,
 caller  ID,  three-way  conference   calling,  and  "follow  me"   features.
 Additional features include web-based  tools allowing subscribers to  manage
 their telephony  features online,  manage their  accounts, and  check  their
 voice  mail.   This  allows the  operator  to  provision  accounts,  provide
 customer  support,  and   create  a  unified   bill  for  high-speed   data,
 telecommunications and other services or organize  their bill in any  format
 to accommodate cost controls for their business accounting.

 While we are optimistic that our VoIP-based retail products will provide  us
 with meaningful growth opportunities in our current fiscal year, we have yet
 to derive material  revenues from  any  of  these products.  The  continuing
 viability of our  business and  operations is  dependant  on our ability  to
 exploit this retail opportunity  and we can give  you no assurances that  we
 will be successful.

 Suppliers

 Our   principal   suppliers   consist   of   domestic   and    international
 telecommunications carriers.  Relationships  currently exist with  a  number
 of reliable  carriers.  Due  to  the  highly   competitive  nature  of   the
 telecommunications business, we believe that the  loss of any carrier  would
 not have a long-term material impact on our business.

 Customers

 We focus our retail  sales and marketing  efforts toward SMEs,  particularly
 those located in foreign  markets where telecommunications deregulation  has
 not taken place  or is currently  underway, residential  customers in  those
 same  markets  and  in the United States,  and  wholesale customers  located
 both  domestically and internationally.  We  rely  heavily  on  the  use  of
 commissioned agents  to generate  retail sales  in the  foreign markets.  By
 doing  so,  we  believe  that  we establish  a wide base  of  customers with
 little  vulnerability  based on lack  of  customer  loyalty.   Our wholesale
 customers  are  primarily  large  public  telecommunications  customers   in
 the  United  States,  and medium to  large  foreign  Postal,  Telephone  and
 Telegraph companies, which  are  those  entities  responsible  for providing
 telecommunications services in  foreign markets and  are usually  government
 owned or controlled.   During the year ended  October 31, 2004, we  provided
 wholesale services to a customer who  accounted for 17% of our revenues  and
 to another customer who accounted for 13%  of our revenues.  We believe  the
 loss of any individual customer would not materially impact our business.

 Competition

 The telecommunications  services  industry is  highly  competitive,  rapidly
 evolving and  subject  to  constant technological  change.  Other  providers
 currently offer  one  or  more  of  each of  the  services  offered  by  us.
 Telecommunications service companies compete  for consumers based on  price,
 with the dominant  providers conducting extensive  advertising campaigns  to
 capture  market  share.  As  a  service   provider  in  the  long   distance
 telecommunications industry, we compete with such dominant providers as AT&T
 Corp., MCI, Sprint Corporation  and Qwest Communications International,  all
 of which are substantially  larger than us and  have the resources,  history
 and  customer   bases   to  dominate   virtually   every  segment   of   the
 telecommunications market.

 A substantial majority of the telecommunications traffic around the world is
 carried  by  dominant  carriers  in  each market.  These carriers,  such  as
 British Telecom and Deutsche Telekom,  have started to deploy  packet-switch
 networks for voice and  fax traffic.  In  addition, other industry  leaders,
 such as AT&T, MCI, Sprint and Qwest Communications International, as well as
 large cable companies, have begun to offer Internet telephony services  both
 in the United States and internationally.  These and other competitors  will
 be able to bundle services and products that are not offered by us, together
 with Internet telephony services, to gain a competitive advantage over us in
 the marketing and distribution of products and services

 We  also  compete   with  other  smaller   carriers  including  IDT   Corp.,
 deltathree.com, Primus Telecommunications Group,  Inc., Net2Phone Inc.,  8x8
 Inc., and private companies such as Vonage.  Additionally, a number of  non-
 traditional  competitors  have  been  attracted  to  the  market,  including
 internet-based service providers.  We also believe that existing competitors
 are likely  to continue  to  expand their  service  offerings to  appeal  to
 retailers and consumers especially in the area of VoIP.

 The market for international voice and fax call completion services is  also
 highly competitive.  We compete  both  in the market  for enhanced  Internet
 communication services and the market for carrier transmission services.  We
 believe that  the  primary competitive  factors  in the  Internet  and  VoIP
 communications business  are  quality  of service,  price,  convenience  and
 bandwidth.  We  believe   that  the  ability   to  offer  enhanced   service
 capabilities, including new services, will become an increasingly  important
 competitive factor in the near future.

 Future competition  could come  from  a variety  of  companies both  in  the
 Internet and telecommunications industries.  We also compete in the  growing
 markets of  providing Re-origination  services,  Dial Thru  services,  dial-
 around, 10-10-XXX calling  and other calling  services.  In  addition,  some
 Internet service providers have begun enhancing their real-time  interactive
 communications and,  although  these  companies have  initially  focused  on
 instant messaging, we  expect them to  provide PC-to-phone  services in  the
 future.

 Internet Telephone Service Providers

 During the  past  several  years, a  number  of  companies  have  introduced
 services that make Internet  telephony or voice  services over the  Internet
 available to  businesses and  consumers.   iBasis,  Teleglobe  International
 Holdings and the wholesale divisions  of Net2Phone and deltathree.com  route
 traffic to  destinations worldwide  and  compete  directly  with  us.  Other
 Internet telephony service providers focus on a retail customer base and may
 in the future compete  with  us.  These companies offer  the kinds of  voice
 services we intend to offer in the future. In addition, companies  currently
 in related  markets have  begun  to provide  VoIP  services or  adapt  their
 products to enable  voice over  the  Internet services.  It  is likely  that
 these companies will migrate  into the Internet  telephony market as  direct
 competitors.

 Regulation of Internet Telephony and the Internet

 The  use  of  the  Internet  and  private  IP  networks  to  provide   voice
 communications services is  a relatively  recent market  development.   2004
 marked a turning point for IP  voice communications, popularly called  Voice
 over  IP  ("VoIP"),  as  a  large  number  of  established  players  in  the
 traditional voice business, such as  AT&T, Verizon, SBC Communications,  and
 others announced  their plans  for offering  VoIP  services.   Although  the
 provision of such services is currently  permitted by United States law  and
 remains largely  unregulated  within  the  United  States,  several  foreign
 governments have  adopted laws  and/or regulations  that could  restrict  or
 prohibit the provision of voice communications services over the Internet or
 private IP networks.  More aggressive regulation of the Internet in general,
 and Internet telephony providers  and services specifically, may  materially
 and adversely affect our  business, financial conditions, operating  results
 and future  prospects,  particularly  if increased  numbers  of  governments
 impose regulations restricting the use and sale of IP telephony services.

 United States.   In  an  April  10, 1998  Report  to Congress,  the  Federal
 Communications Commission  ("FCC") declined  to conclude  that IP  telephony
 services constitute telecommunications services  and instead indicated  that
 it would undertake a subsequent examination of the question whether  certain
 forms  of  Internet  telephony  are  "information"  or  "telecommunications"
 services.  The  FCC indicated  that, in the  future, it  would consider  the
 extent  to   which  Internet   telephony  providers   could  be   considered
 "telecommunications  carriers"   subject   to  the   regulations   governing
 traditional telephone companies,  such as the  imposition of access  charges
 and Universal Service Fund ("USF") obligations.

 The future is upon us and,  in 2004, the FCC  issued a handful of  decisions
 addressing the regulatory treatment of specific VoIP services.  The FCC also
 initiated a broad  rulemaking proceeding  aimed at  developing policies  and
 rules  regarding the  regulatory treatment of  all IP-enabled  services.  In
 addition, the FCC made progress on several other proceedings that may impact
 the  costs  and  regulatory  requirements  associated  with  providing   our
 communications services, including our IP-based services.  These proceedings
 include universal service and intercarrier compensation reform, expansion of
 the Communications  Assistance  for  Law Enforcement  Act  ("CALEA")  to  IP
 services, and a handful of pending Declaratory Ruling filings pertaining  to
 several issues affecting IP communications services.

 On February  12, 2004,  the FCC  adopted  an Order  addressing  Pulver.com's
 Petition for Declaratory  Ruling regarding  the classification  of its  Free
 World Dialup ("FWD").  FWD  is  a free, PC-to-PC  VoIP service  and the  FCC
 concluded that  the  service  does not  constitute  "telecommunications"  as
 defined by the  Telecommunications Act of  1996 ("1996  Act") and  therefore
 would remain an unregulated information service.

 On April 21,  2004, the FCC  reached a contrasting  conclusion in regard  to
 AT&T's Petition for a Declaratory Ruling that access charges do not apply to
 its phone-to-phone VoIP service  in which calls  originate and terminate  on
 circuit switched Public Switched Telephone Network ("PSTN") facilities,  but
 are routed on the  Internet backbone.  The  FCC rejected AT&T's request  and
 ruled that the service at issue is a "telecommunications service" upon which
 interstate access  charges may  be assessed  and  to which  USF  obligations
 apply.

 Because our communications services do not share the same characteristics as
 either Pulver's FWD service or AT&T's phone-to-phone VoIP service, we do not
 believe our company and its ability to continue providing its communications
 services are directly affected  by either of these  decisions in a  material
 way.

 On November 9,  2004, the  FCC declared that  a type  of Internet  telephony
 service offered  by  Vonage  Holdings Corp.,  called  DigitalVoice,  is  not
 subject  to  traditional  state public  utility  regulation.  The  FCC  also
 concluded that other types of IP-enabled services, such as those offered  by
 cable companies, that  have basic characteristics  similar to  DigitalVoice,
 would also  not be  subject  to  traditional state  regulation.  The  Vonage
 decision makes  it  clear that  the  FCC,  not state  commissions,  has  the
 responsibility and obligation to decide whether certain regulations apply to
 IP-enabled services.  The Vonage decision also makes clear that the FCC  has
 the power  to  preempt  state regulations  that  thwart  or  impede  federal
 authority over interstate communications.  Some states, including California
 and Ohio, recently  appealed the  FCC's Vonage  decision.   These and  other
 states seek a continuing role in  the regulation of IP-based  communications
 services.

 It  is  too  early  to  determine  whether  the  FCC's Vonage decision  will
 benefit our company.  If the Vonage decision is overturned,  however,  state
 governments and their  regulatory authorities may  assert jurisdiction  over
 the provision of intra-state IP  communications services where they  believe
 that  their  telecommunications  regulations  are  broad  enough  to   cover
 regulation of  IP  services.   Various  state  regulatory  authorities  have
 initiated proceedings to examine the regulatory status of Internet telephony
 services.   While  a  majority   of  state  commissions  have  not   imposed
 traditional telecommunications regulatory  requirements on  IP telephony  at
 this  time,  some  states  have  issued  rulings  that  may  be  interpreted
 differently.  If  the states  require these  VoIP providers  to register  as
 telecommunications  providers,  other VoIP  providers  may be  targeted  and
 subjected to significant additional fees and charges.

 Ultimately,  while  the  FCC  made  progress  towards  clarifying  the  role
 regulation will play in the future  of advanced communications networks  and
 services in 2004, the key rulings, decisions, and regulations are likely  to
 occur in 2005 and beyond.

 Of particular importance are FCC proceedings related to IP-Enabled Services,
 USF reform, intercarrier compensation reform and CALEA.  We cannot speculate
 as to the outcome of any of these on-going proceedings and therefore  cannot
 predict the impact FCC decisions may have on our business.

 International.  The  regulatory treatment of  IP communications outside  the
 United States varies significantly from country to country.  The regulations
 global IP providers are subject to in many jurisdictions change from time to
 time, they may  be difficult  to obtain  or it  may be  difficult to  obtain
 accurate  legal   translations  where   official  legal   translations   are
 unavailable.  Additionally,  in  our experience,  the enforcement  of  these
 regulations  does  not always  track the  letter  of  the law.  Accordingly,
 although we  devote considerable  resources to  maintaining compliance  with
 these regulations, we cannot be certain  that we are in compliance with  all
 of the relevant regulations at any given point in time.

 While some countries prohibit IP telecommunications, others have  determined
 that   IP   services   offer    a   viable   alternative   to    traditional
 telecommunications services.  As the Internet telephony market has expanded,
 regulators have begun to reconsider  whether to regulate Internet  telephony
 services.

 In  July  2003,   a  package  of   European  Union   ("EU")  Directives   on
 Communications became  effective and  significantly altered  the  regulatory
 regime applicable to  communications services in  the EU.   Unlike the  U.S.
 system of individualized  licenses, the EU  adopted an  approach that  would
 permit providers to  avoid registration  or licensing  requirements in  most
 circumstances if  the provider  simply  complied with  specific  conditions.
 This regulatory regime extends to all providers of electronic communications
 networks and  electronic communications  services. In  essence, rather  than
 require licensing,  the EU  provided a  "rulebook" with  which providers  of
 electronic communications networks and services must comply.

 Under this "self-policing"  system, each national  regulatory authority  has
 the power to set the various general and specific conditions, but the  types
 and scope of such conditions are strictly limited by the EU Directives.

 Adopting this general approach, the UK regulatory authority - the Office  of
 Communications ("OFCOM")  -  established General  Conditions  applicable  to
 providers of  electronic  communications  networks  and  services.  It  also
 published certain  informal guidelines  for VoIP  providers in  the UK.  The
 Informal Guidelines provided  insight as to  under what circumstances  OFCOM
 would deem that  a VoIP  service would be  treated as  a Publicly  Available
 Telephone  Service  ("PATS")  and   therefore  subject  to  the   additional
 obligations.  Under  these   Guidelines  a  company   is  subject  to   PATS
 obligations:

   *  If  the  VoIP  provider  markets  its  services  as  a  substitute  for
      traditional telephone service;
   *  If the services appear to the customer to be a substitute for telephone
      service with which they  would expect to  access emergency services  or
      directory assistance; or
   *  The  service  provides  the  customer's   sole  means  to  access   the
      traditional circuit switched telephone network.

 However, where a VoIP provider service is being offered as an "adjunct to  a
 traditional telephone service" or as a "secondary service," it is likely not
 to be considered as a PATS.  While the Informal Guidelines were  non-binding
 and subject to  change at any  time, they provided  important insight as  to
 OFCOM's view of how VoIP should be treated in the UK.

 In early  September 2004,  both the  European  Commission ("EC")  and  OFCOM
 proceeded with  consultations  and  declarations  designed  to  clarify  the
 regulatory obligations applicable to VoIP providers.  The EC inquiry  raised
 general questions concerning VoIP - similar to those being considered at the
 FCC in its IP-Enabled  Services NPRM.  OFCOM  actually reached decisions  on
 number portability  and  geographic  and  non-geographic  number  assignment
 available to VoIP  providers. In this  regard, OFCOM decided  that it  would
 permit the assignment of geographic telephone numbers directly to both  PATS
 and non-PATS  VoIP providers  within the  UK.  In  addition,  the  regulator
 authorized the allocation  of numbers  from  a non-geographic specific  area
 code - (056).

 While OFCOM's  framework  provides  some  exciting  opportunities  for  VoIP
 providers offering services in the UK (such as the ability to receive direct
 number assignments and  non-geographic area codes),  the rules suggest  that
 further rule revisions on number portability, "999" emergency services,  and
 network reliability requirements will be forthcoming in 2005.  In  addition,
 because OFCOM's rules and other member  state frameworks are subject to  the
 outcome of the  larger EU proceeding,  it appears likely  that providers  of
 VoIP in Europe must  wait until 2005 before  a clearer regulatory  framework
 emerges.  Until this time, with the exception of the UK, the EU's January 5,
 2001, decision  to  exclude VoIP  from  the definition  of  voice  telephony
 appears controlling  except  where the  services  satisfy all  four  of  the
 following conditions  applicable  to "voice  telephony":  (1) service  is  a
 commercial offering, (2)  offered to the  public, (3) provided  to and  from
 public switched network termination points and (4) involves real time speech
 of a quality and reliability level similar to PSTN.

 To date, the EC has not ruled that any particular type of VoIP service (such
 as  computer-to-computer   or  phone-to-phone)   satisfies  all   of   these
 conditions.  While the EC monitors  and supervises the Member States of  the
 EU  subject  to  the  principle  of   supremacy  of  EU  law,  the   primary
 responsibility for implementing  the provisions of  specific EU  legislation
 lies  with  regulatory  authorities  of  the  Member  States.   Accordingly,
 although the  Member  States are  required  to adhere  to  the EU  laws,  an
 individual country may decide  that a particular VoIP  service meets all  of
 the conditions necessary to be regulated  as traditional voice services,  as
 the UK did  in 2004.   We  cannot guarantee  that other  Member States  will
 refrain from imposing additional regulations on our specific VoIP services.

 Other countries, including those in which the governments prohibit or  limit
 competition for  traditional  voice  telephony services,  generally  do  not
 permit Internet telephony services or strictly  limit the terms under  which
 those services  may  be provided.  Still other  countries regulate  Internet
 telephony services  like  traditional voice  telephony  services,  requiring
 Internet  telephony companies  to make universal  service contributions  and
 pay  other  taxes.  While  some  countries subject IP telephony providers to
 reduced  regulations,  others  have  moved  towards  liberalization  of  the
 IP  communications  sector  and  have  lifted  bans   on  provision   of  IP
 telecommunications services.  We cannot predict  how a regulatory or  policy
 change of a particular country might  affect the provision of our  services.
 We  believe  that  while   increased  regulations  and  restrictions   could
 materially  threaten  our  ability  to  provide  services,  the  lifting  of
 regulations in a country  generally will enable use  to expand our  services
 and presence in that country.

 Regulation of the Internet.  In addition to regulations addressing  Internet
 telephony and broadband  services, other regulatory  issues relating to  the
 Internet, in  general, could  affect our  ability to  provide our  services.
 Congress has  adopted  legislation that  regulates  certain aspects  of  the
 Internet, including online  content, user privacy,  taxation, liability  for
 third-party   activities  and  jurisdiction.   In  addition,  a  number   of
 initiatives pending in  Congress and  state legislatures  would prohibit  or
 restrict advertising  or  sale  of certain  products  and  services  on  the
 Internet, which may have the effect of raising the cost of doing business on
 the Internet generally.  The potential effect, if any, of these  initiatives
 on the development of our business remains uncertain.

 Federal, state, local and foreign governmental organizations are considering
 other legislative and regulatory proposals that would regulate the Internet.
 We cannot predict  whether new taxes  will be imposed  on our services  both
 nationally and internationally, and depending on the type of taxes  imposed,
 whether  and  how  our services  would  be  affected  thereafter.  Increased
 regulation of the Internet may decrease its growth and hinder  technological
 development, which may negatively impact the cost of doing business via  the
 Internet or otherwise  materially adversely affect  our business,  financial
 condition and results of operations.

 Sales and Marketing

 We market long  distance telecommunications products  and services from  our
 office in Los  Angeles, California.   We also have  a regional sales  office
 located in Johannesburg, South Africa.  Our  revenues are primarily  derived
 from direct  sales  to  business and  residential  accounts,  sales  through
 commissioned  agents  and  wholesale   sales  to  other   telecommunications
 providers.   We  plan  to expand  our  sales  effort to  both  domestic  and
 international business  accounts,  as  well as  add  products  and  services
 targeted toward residential customers in both markets.

 We have  substantial  revenues in  foreign  markets. For  the  years  ending
 October 31, 2004, 2003 and 2002, $2.9  million or 22%, $2.7 million or  15%,
 and $2.6 million or 14% of our total revenue from continuing operations  for
 each year, respectively,  originated from Western  Europe, Africa and  South
 East Asia.

 Intellectual Property

 We do not hold  any patents or  trademarks.  Our  products and services  are
 available to other telecommunication companies.

 Employees

 As of January 24, 2005, we have  1 part-time and 37 full-time employees,  17
 of which perform administrative and financial functions, 13 of which perform
 customer support duties and 8 of which have experience in telecommunications
 operations and/or sales.  12 current  employees are located in Los  Angeles,
 California  and  26  employees  operate  in  other  offices  worldwide.   No
 employees are represented  by a labor  union, and we  consider our  employee
 relations to be good.

 Availability of Reports

 We file  reports  on  a  regular basis  with  the  Securities  and  Exchange
 Commission, including, but not limited to Forms 8-K, 10-K, 10-Q and Schedule
 14-A.  The public may read  and copy any materials we  file with the SEC  at
 the SEC's Public  Reference Room  at 450  Fifth Street,  NW, Washington,  DC
 20549.  Information  on the operation  of the Public  Reference Room may  be
 obtained by  calling  the SEC  at  1-800-SEC-0330.   The  SEC  maintains  an
 Internet  site  (http://www.sec.gov)  that   contains  reports,  proxy   and
 information statements, and  other information regarding  issuers that  file
 electronically with the SEC.

 Risk Factors

 Our cash flow may not be sufficient to satisfy our cost of operations

 For the years ended October 31, 2004, 2003 and 2002, we recorded net  losses
 from continuing operations of approximately  $0.8 million, $5.1 million  and
 $3.5 million,  respectively,  on  revenues  from  continuing  operations  of
 approximately $13.4 million, $17.7 million and $18.4 million,  respectively.
 As a result,  we  currently have a substantial  working capital deficit.  In
 addition, approximately  50%  of  our trade  accounts  payable  and  accrued
 liabilities are past due.  To be  able to service our debt obligations  over
 the course of the  2005 fiscal year we  must generate significant cash  flow
 and obtain additional financing.   If we  are unable to  do so or  otherwise
 unable to obtain funds necessary to make required payments on our trade debt
 and other indebtedness, it is likely that we  will  not be able to  continue
 our operations.

 Our operating history makes  it difficult to  accurately assess our  general
 prospects in the  VoIP portion of  the telecommunications  industry and  the
 effectiveness  of  our  business strategy.  In  addition,  we  have  limited
 meaningful historical financial data upon which to forecast our future sales
 and operating expenses.  Our  future  performance  will also  be subject  to
 prevailing economic conditions and to financial, business and other factors.
 Accordingly, we cannot assure  you that we  will successfully implement  our
 business strategy or that our actual future cash flows from operations  will
 be sufficient to satisfy our debt obligations and working capital needs.

 To implement our  business strategy, we  will also need  to seek  additional
 financing.   There  is  no assurance  that  adequate  levels  of  additional
 financing will be available at all or on acceptable terms. In addition,  any
 additional financing  will  likely result  in  significant dilution  to  our
 existing stockholders.  If we are  unable to obtain additional financing  on
 terms that are acceptable to us, we could be forced to dispose of assets  to
 make  up  for  any  shortfall  in  the  payments  due  on  our  debt   under
 circumstances that might not be favorable to realizing the highest price for
 those assets.  A  portion of  our assets consist  of intangible assets,  the
 value of which will depend upon a variety of factors, including the  success
 of our business.  As a result, if we do need  to sell any of our assets,  we
 cannot assure  you that  our assets  could be  sold quickly  enough, or  for
 amounts sufficient, to meet our obligations.

 We face competition from numerous, mostly well-capitalized sources

 The market for  our products and  services is highly  competitive.  We  face
 competition from  multiple  sources, virtually  all  of which  have  greater
 financial resources  and a  substantial presence  in our  markets and  offer
 products or services similar to our services.  Therefore, we may not be able
 to successfully compete in our markets,  which could result in a failure  to
 implement our business strategy, adversely affecting our ability to  attract
 and retain new customers.  In addition, competition within the industries in
 which we operate  is characterized by,  among other factors,  price and  the
 ability to offer  enhanced services.   Significant  price competition  would
 reduce the  margins realized  by us  in our  telecommunications  operations.
 Many of  our  competitors have  greater  financial resources  to  devote  to
 research, development and marketing, and may be able to respond more quickly
 to new or merging technologies and changes in customer requirements.  If  we
 are unable to  provide value-added Internet  products and  services then  we
 will be unable  to compete in  certain segments of  the market, which  could
 have an adverse impact on our business.

 The regulatory environment in our industry is very uncertain

 The legal and regulatory environment pertaining to the Internet is uncertain
 and changing rapidly as the use of the Internet increases.  For example,  in
 the United States, the  FCC is considering whether  to impose surcharges  or
 additional regulations upon certain providers of Internet telephony.

 In addition, the regulatory treatment of  Internet telephony outside of  the
 United States varies  from country to  country.  There  can be no  assurance
 that there will not be legally  imposed interruptions in Internet  telephony
 in these and other foreign countries.  Interruptions or restrictions on  the
 provision of Internet  telephony in foreign  countries may adversely  affect
 our ability to continue to offer services in those countries, resulting in a
 loss of customers and revenues.

 New regulations could increase the cost of doing business over the  Internet
 or restrict or prohibit the delivery  of our products or services using  the
 Internet. In addition to new regulations being adopted, existing laws may be
 applied to the Internet.  Newly existing laws may cover issues that  include
 sales and  other  taxes, access  charges,  user privacy,  pricing  controls,
 characteristics and quality of  products and services, consumer  protection,
 contributions to the USF (an FCC-administered fund for the support of  local
 telephone service  in rural  and  high-cost areas),  cross-border  commerce,
 copyright, trademark and patent infringement, and other claims based on  the
 nature and content of Internet materials.

 Changes in the technology relating to Internet telephony could threaten  our
 operations

 The industries in  which we  compete are  characterized, in  part, by  rapid
 growth, evolving industry standards,  significant technological changes  and
 frequent product enhancements.  These characteristics could render  existing
 systems and strategies obsolete  and require us to  continue to develop  and
 implement new products  and services, anticipate  changing consumer  demands
 and respond to emerging  industry standards and  technological changes.   No
 assurance can be given that we  will be able to  keep pace with the  rapidly
 changing  consumer  demands,  technological  trends  and  evolving  industry
 standards.

 We need to develop and maintain strategic relationships around the world  to
 be successful

 Our international business,  in part, is  dependent upon relationships  with
 distributors, governments  or providers  of telecommunications  services  in
 foreign  markets.  The failure to  develop or  maintain these  relationships
 could have an adverse impact on our business.

 We rely on two key senior executives

 Our success is dependent on our  senior management team of John Jenkins  and
 Allen Sciarillo and our future success will depend, in large part, upon  our
 ability to retain these two individuals.

 The expansion of our VoIP product offerings is essential to our survival

 We  intend  to  expand   our  VoIP  network  and   the  range  of   enhanced
 telecommunications services that we provide. Our expansion prospects must be
 considered in  light  of the  risks,  expenses and  difficulties  frequently
 encountered by companies in new and rapidly evolving markets.

 Our OTC  Bulletin Board  listing negatively  affects  the liquidity  of  our
 common stock

 Our common stock currently trades on the OTC Bulletin Board.  Therefore,  no
 assurances can be given that a liquid trading market will exist at the  time
 any investor  desires to  dispose of  any  shares of  our common  stock.  In
 addition, our common stock is subject  to the so-called "penny stock"  rules
 that impose  additional sales  practice requirements  on broker-dealers  who
 sell such  securities  to  persons  other  than  established  customers  and
 accredited investors (generally defined as an  investor with a net worth  in
 excess of  $1  million or  annual  income exceeding  $200,000,  or  $300,000
 together with a spouse).  For transactions covered by the penny stock rules,
 a broker-dealer must make a suitability determination for the purchaser  and
 must have received the purchaser's written consent to the transaction  prior
 to  sale.  Consequently,  both  the  ability  of  a  broker-dealer  to  sell
 our  common stock  and  the ability  of holders of our  common stock to sell
 their securities  in  the secondary  market may be adversely  affected.  The
 Securities and Exchange  Commission has  adopted regulations  that define  a
 "penny stock" to be an equity security that has a market price of less  than
 $5.00  per  share,  subject  to  certain  exceptions.  For  any  transaction
 involving a  penny stock,  unless exempt,  the rules  require the  delivery,
 prior to the  transaction, of a  disclosure schedule relating  to the  penny
 stock market.  The  broker-dealer must disclose  the commissions payable  to
 both the broker-dealer and the registered representative, current quotations
 for the securities and, if the broker-dealer is to sell the securities as  a
 market maker,  the broker-dealer  must disclose  this fact  and the  broker-
 dealer's presumed control over the market. Finally, monthly statements  must
 be sent disclosing recent price information for the penny stock held in  the
 account and information on the limited market in penny stocks.


 Item 2. Properties.

 We lease approximately 6,796  square feet in two  locations in Los  Angeles,
 California.   Our principal  executive office  is  located at  17383  Sunset
 Boulevard, Suite  350,  in  Los  Angeles,  California.  Our  operations  and
 information systems are located in Los Angeles and New York, New York, where
 we lease 104 square  feet under a  month-to-month co-location agreement.  We
 also have a sales and administrative  office in Johannesburg, South  Africa.
 We believe  that our  facilities  are sufficient for  the operation  of  our
 business for the  foreseeable future.  The  expiration dates  of the  above-
 mentioned lease agreements are as follows:

 February 28, 2006   South Africa office
 July 12, 2006       Los Angeles - operations and information systems office
 April 30, 2007      Los Angeles - executive office


 Item 3. Legal Proceedings.

 On June  12, 2001,  Cygnus  Telecommunications Technology,  LLC  ("Cygnus"),
 filed a patent  infringement suit (case  no. 01-6052) in  the United  States
 District  court,  Central  District  of  California,  with  respect  to  our
 "international reorigination" technology.  The injunctive relief that Cygnus
 sought in this suit has been denied, but Cygnus continues to seek a  license
 fee for  the use  of the  technology.   We believe  that no  license fee  is
 required as the  technology described in  the patent is  different from  the
 technology used by us.

 In August  2002, Cygnus  filed  a motion  for  a preliminary  injunction  to
 prevent us from providing "reorigination" services.  We filed a cross motion
 for summary judgment  of non-infringement.   Both motions were  denied.   On
 August 22,  2003, we  re-filed  the motion  for  summary judgment  for  non-
 infringement.  In  response  to  this  filing,  in August  2004,  the  court
 narrowly defined the issue to relate  to a certain reorigination  technology
 which we believe we do not now use and have not ever utilized to provide any
 of our telecommunications services.   We intend  to continue defending  this
 case vigorously, and though our ultimate legal and financial liability  with
 respect to such  legal proceeding is  therefore expected to  be minimal,  it
 cannot be estimated with any certainty at this time.

 The State  of Texas  ("Texas") performed  a sales  tax audit  of our  former
 parent, Canmax Retail Systems ("Canmax"), for the years 1995 to 1999.  Texas
 determined that we did not properly remit sales tax on certain transactions,
 including asset  purchases and  software  development projects  that  Canmax
 performed for specific customers.  Our  current and former management  filed
 exceptions, through  our  outside  sales tax  consultant,  to  Texas'  audit
 findings, including the non-taxable nature  of certain transactions and  the
 failure of  Texas  to  credit our  account  for sales  tax  remittances.  In
 correspondence from Texas in June 2003, Texas agreed to consider  offsetting
 remittances received by Canmax during the  audit period.  Texas has  refused
 to consider  other potential  offsets.   Based on  this correspondence  with
 Texas, our estimate of  the potential liability  was originally recorded  at
 $350,000 during  fiscal year  2003.   Based on  further correspondence  with
 Texas, this estimated  liability was increased  to $1.1  million during  the
 first  quarter  of  fiscal  year  2004.   Since  this  sales  tax  liability
 represents an  adjustment to  amounts  previously reported  in  discontinued
 operations, it was classified separately during the first quarter of  fiscal
 year 2004 in  discontinued operations, and  is included in  the October  31,
 2004  consolidated   balance  sheet   in  "Net   current  liabilities   from
 discontinued  operations".  We  believe  that  Canmax properly  remitted  an
 appropriate amount of sales tax to Texas, and we do not believe that  Texas'
 position reflects the appropriate  amount of tax  remitted during the  audit
 period mentioned above and  will continue to pursue  this issue with  Texas.
 Ultimately, there is a good possibility that we will be liable for all or  a
 material portion of  this amount.   We  are also  aggressively pursuing  the
 collection of unpaid  sales taxes from  former customers  of Canmax,  though
 there can be no assurance  that we will be  successful with respect to  such
 collections.

 On  January  12,  2004,  we  filed  a  suit  against  Southland  Corporation
 ("Southland") in the 162nd District Court in Dallas Texas.  Our suit  claims
 a breach of agreement on  the part of Southland  in failing to reimburse  us
 for taxes paid to Texas as well as related taxes for which we are  currently
 being held responsible by Texas.  Our suit seeks reimbursement for the taxes
 paid and a determination by the  court that Southland is responsible to  pay
 the remaining tax liability to Texas.  We are discussing possible settlement
 options with Southland, but as of yet, no agreement has been reached.

 On July 20, 2004,  we filed a  suit against Q  Comm International, Inc.  ("Q
 Comm") in Federal Court in  the Central District of  Utah.  Our suit  claims
 damages of $4  million plus  attorneys' fees  and costs  resulting from  the
 breach of  a purchase  agreement by  Q  Comm relating  to  the sale  of  our
 internally  constructed   equipment  for   the  prepaid   telecommunications
 industry.  Pursuant to the terms of the purchase agreement, we would deliver
 the source  code of  certain proprietary  software in  consideration for  an
 aggregate purchase  price of  $4 million,  of which  $1 million  was due  at
 closing and the remainder was due over three years.  Following execution  of
 the agreement, we tendered the software  source code to Q Comm.  However,  Q
 Comm failed to pay us  the initial amount due  under the agreement and  made
 copies  of  the  source  code  without our  permission.   We  are  currently
 preparing for trial, which has been set  for the first two weeks of  January
 2006.  We are confident that we will prevail.


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

 No matters were submitted to a vote of security holders during the fourth
 quarter of the fiscal year covered by this Report.


                                   PART II

 Item 5.  Market  for  Registrant's Common  Equity  and  Related  Stockholder
 Matters.

 Market For Our Common Stock

 Our common stock,  $0.001 par  value, is quoted  on the  OTC Bulletin  Board
 under the trading symbol "DTIX".  Each share ranks equally as to  dividends,
 voting rights,  participation  in assets  on  winding-up and  in  all  other
 respects. No  shares  have  been  or  will be  issued  subject  to  call  or
 assessment.  There are  no preemptive rights,  provisions for redemption  or
 purpose for either cancellation  or surrender or  provisions for sinking  or
 purchase funds.

 The following table sets forth, for  the fiscal periods indicated, the  high
 and low closing sales price per share of our common stock as reported on the
 OTC Bulletin Board.   The market  quotations presented reflect  inter-dealer
 prices, without  retail  mark-up,  mark-down  or  commissions  and  may  not
 necessarily reflect actual transactions.


                                           COMMON STOCK
                                          CLOSING PRICES
                                          --------------
                                          HIGH       LOW
                                         ------     -----
 FISCAL 2003
      First Quarter . . . . . .         $ 0.40     $ 0.12
      Second Quarter  . . . . .         $ 0.33     $ 0.11
      Third Quarter . . . . . .         $ 0.19     $ 0.10
      Fourth Quarter  . . . . .         $ 0.26     $ 0.10

 FISCAL 2004
      First Quarter . . . . . .         $ 0.25     $ 0.17
      Second Quarter  . . . . .         $ 0.23     $ 0.10
      Third Quarter . . . . . .         $ 0.18     $ 0.12
      Fourth Quarter  . . . . .         $ 0.16     $ 0.10


 The closing price for our  common stock on January  24, 2005 as reported  on
 the OTC Bulletin Board was $0.35.

 Dividends

 We have never declared or paid any cash dividends on our common stock and do
 not presently  intend to  pay cash  dividends  on our  common stock  in  the
 foreseeable future. We intend to retain future earnings for reinvestment  in
 our business.

 Holders of Record

 There were 486 stockholders of record as of January 24, 2005.

 Recent Sales of Unregistered Securities

 In September 2004, Mr. Jenkins, Mr. Sciarillo and Mr. Vierra, holders of 10%
 convertible  notes,  converted  a  total  aggregate  of  $877,500  of  their
 principal balances into, respectively, 6,250,000, 250,000 and 250,000 shares
 of our common stock.  We relied on the exemption from registration  provided
 by Section 4(2) of the Securities  Act for this non-public offering  because
 the securities were sold  to a limited number  of purchasers with  financial
 experience who had pre-existing relationships with us.

<PAGE>
<TABLE>

 Item 6.  Selected Financial Data.

                                                       FISCAL YEARS ENDED OCTOBER 31,
                                           -----------------------------------------------------
                                            2004        2003       2002        2001       2000
                                           -------     -------    -------     -------    -------
 <S>                                      <C>         <C>        <C>         <C>        <C>
 CONSOLIDATED STATEMENTS OF OPERATIONS
  DATA (1):
 Revenues                                 $ 13,381    $ 17,655   $ 18,409    $  6,642   $  8,591
 Cost of revenues                           10,045      13,129     11,540       4,668      9,971
 Operating expenses                          3,541       8,470      9,115       5,147      9,142
 Other income (expense)                       (589)     (1,125)    (1,279)        646       (665)
 Income (loss) from continuing operations     (794)     (5,069)    (3,525)     (2,527)   (11,187)
 Income (loss) from discontinued
   operations                                1,501      (1,553)    (1,159)       (157)         -
 Net income (loss)                             707      (6,622)    (4,684)     (2,684)   (11,187)

 Income (loss) from continuing operations
   per share (basic and diluted)          $  (0.05)   $  (0.31)  $  (0.25)   $  (0.23)  $  (1.31)
 Net income (loss) per share
   (basic and diluted)                    $   0.04    $  (0.41)  $  (0.34)   $  (0.25)  $  (1.31)

 CONSOLIDATED BALANCE SHEET DATA (1):
 Total assets
     Continuing operations                $  4,361    $  4,838   $  8,338    $ 11,255   $  6,102
     Discontinued operations                     -         242        742       1,389          -
 Working capital (deficiency)
     Continuing operations                  (8,159)     (7,134)    (6,774)     (6,626)    (4,829)
     Discontinued operations                 1,100      (2,843)    (2,030)          -          -
 Noncurrent obligations
     Continuing operations,
       net of discount                           -       1,716        892       1,967        119
     Discontinued operations                     -           -          -           -          -
 Shareholders' equity (deficit)             (6,523)     (8,222)    (1,975)      2,079        508

 --------------------
 (1) All numbers, other than per share numbers, are in thousands. The results
 of operations of our German subsidiary, Rapid Link Telecommunications, GmbH,
 has been presented in the  financial statements as discontinued  operations.
 Results of operations in prior years  have been restated to reclassify  this
 business as discontinued operations.
</TABLE>

 Item 7. Management's Discussion and Analysis of Financial Condition and
      Results of Operations for the Fiscal Years Ended October 31, 2004, 2003
      and 2002.

 This Annual Report on Form 10-K contains "forward-looking statements" within
 the meaning  of Section  27A  of the Securities Act of 1933 and Section  21E
 of  the  Securities  Exchange  Act  of  1934.  These  statements  relate  to
 expectations concerning matters that are not  historical facts.  Words  such
 as "projects",  "believe",  "anticipates",  "estimate",  "plans",  "expect",
 "intends", and  similar  words  and expressions  are  intended  to  identify
 forward-looking  statements.   Although  the   Company  believes  that  such
 forward-looking statements are  reasonable, we cannot  assure you that  such
 expectations will prove  to be  correct.   Factors that  could cause  actual
 results to differ  materially from  such expectations  are disclosed  herein
 including, without limitation, in the "Risk Factors" located in PART I, Item
 1.  All forward-looking statements attributable to the Company are expressly
 qualified in their  entirety by such  language and we  do not undertake  any
 obligation to update any forward-looking statements.  You are also urged  to
 carefully review and  consider the various  disclosures we  have made  which
 describe certain factors which affect  our business throughout this  Report.
 The following discussion and analysis of financial condition and results  of
 operations covers the years ended October 31, 2004, 2003 and 2002 and should
 be read in conjunction with our  Financial Statements and the Notes  thereto
 commencing at page F-1 hereof.

 General

 On November 2, 1999, we consummated  the DTI Acquisition and, in the  second
 quarter of fiscal 2000,  we shifted focus toward  our global VoIP  strategy.
 This change in focus has lead to  a significant shift from our prepaid  long
 distance operations toward higher margin international wholesale and  retail
 telecommunication opportunities.   This  strategy allows  us to  form  local
 partnerships with foreign PTT's and to provide IP enabled services based  on
 the in-country regulatory environment affecting telecommunications and  data
 providers. In the third quarter of fiscal 2000, we further concentrated  our
 efforts toward our  global VoIP  telecommunications strategy  by moving  our
 operations to Los Angeles, California.  This consolidation and reduction  in
 staff has allowed us to significantly reduce our overhead, and although  our
 operations have  not  yet  produced positive  cash  flow,  we  believe  that
 continued cost  reductions and  moderate revenue  growth would  allow us  to
 achieve positive results in the near future.

 On October 12, 2001, we completed the acquisition from Rapid Link of certain
 assets and executory  contracts of  Rapid Link, USA,  Inc. and  100% of  the
 common stock  of  Rapid Link  Telecommunications,  GmbH, a  German  company.
 Rapid Link provides  integrated data  and voice  communications services  to
 both wholesale and  retail customers around  the world. Rapid  Link built  a
 large residential  retail customer  base in  Europe  and Asia,  using  Rapid
 Link's  network  to  make  international   calls  anywhere  in  the   world.
 Furthermore, Rapid Link  developed a VoIP  network using  Clarent and  Cisco
 technology which we have used to  take advantage of wholesale  opportunities
 where rapid deployment and time to market are critical.   A majority of  our
 revenue in our 2003 and  2002 fiscal years was  derived from our Rapid  Link
 acquisition.

 On  November 19, 2002  we  entered into  an  agreement with  Global  Capital
 Funding Group, L.P. that provided us with a two year loan of $1.25  million,
 with a maturity date  of November 8,  2004.  $443,000  of the proceeds  from
 this financing were  used to pay  off the remaining  balance of Dial  Thru's
 April 2001 convertible  debenture with  Global Capital  while the  remaining
 $807,000 has  been used  for our  Company's ongoing  working capital  needs.
 Currently, this loan has matured and is due on demand.  This loan  continues
 to accrue interest at the stated rate.

 On July 24, 2003 we entered into an agreement with GCA Strategic  Investment
 Fund Limited that provided us with a  152-day loan of $550,000.  On  January
 2, 2004,  per  the  terms  of  this  loan  agreement,  this  loan  became  a
 convertible debenture with a  maturity date of November  8, 2004.  The  loan
 proceeds have been  used for our  Company's ongoing  working capital  needs.
 Currently, this debenture has matured and is due on demand.  This  debenture
 continues to accrue interest at the stated rate.

 On August 1, 2003, our German Subsidiary, Rapid Link Telecommunications GmbH
 received approval for its insolvency filing and was turned over to a trustee
 who is responsible for liquidating the  operation.  We have determined  that
 we no longer control the operations  of this subsidiary and that our  parent
 entity has  no  legal  obligation  to pay  the  liabilities  of  Rapid  Link
 Telecommunications, GmbH.

 The telecommunications  industry continues  to evolve  towards an  increased
 emphasis on IP related products and services.  We have focused our  business
 towards these types of products and  services for the last couple of  years.
 Furthermore, we  believe the  use  of the  Internet  to provide  IP  related
 telephony services  to  the end  user  customer,  either as  a  stand  alone
 solution or bundled  with other  IP products,  will continue  to impact  the
 industry as large companies like Time Warner and AT&T look to capitalize  on
 their existing cable infrastructures, and smaller companies look to  provide
 innovative solutions to  attract commercial and  residential users to  their
 product offerings.

 We will focus on the growth of our VoIP business by adding new products  and
 services that we can  offer to end  user customers.   We are also  exploring
 opportunities to  provide  current  customers, and  attract  new  customers,
 through the  sale  of specialized  Internet  phones to  allow  customers  to
 connect their phones to their existing Dial-Up or DSL Internet  connections.
 These Internet phones will allow the user to originate phone calls over  the
 Internet, thereby  bypassing the  normal costs  associated with  originating
 phone calls over existing land lines.  By avoiding these costs, we are  able
 to offer lower  priced services to  these customers, which  we believe  will
 allow us  to  attract additional  users.   We  also  believe there  will  be
 considerable demand for  this type of  product in  certain foreign  markets,
 where end users pay a significant premium to their local phone companies  to
 make long distance phone calls.  While we expect the growth in our customers
 and suppliers and the introduction of innovative product offerings to retail
 users, specifically  Internet  phones, to  have  a positive  impact  on  our
 revenues and  earnings, we  cannot  predict when  this  will happen,  or  be
 certain that it will happen at all.   The revenue and costs associated  with
 the Internet phone product offerings will depend on the number of  customers
 and contracts we obtain.  In  many ways, our ability to maintain  operations
 in the foreseeable future will be dictated by our ability to quickly  deploy
 VoIP products into  selected markets and  to realize  high quality  revenues
 from these products and  related telecommunications sources.   Any delay  in
 our expansion  of  VoIP products  and  services will  adversely  affect  our
 financial condition and cash flow and  could ultimately cause us to  greatly
 reduce or even cease operations.

 See  "Risk Factors"  above for  discussion of  the impact  of market  risks,
 financial risks and other uncertainties.   Please also see  "Forward-Looking
 Statements" above relating to  statements other than historical  information
 or statements of current condition.

 Critical Accounting Policies

 The consolidated financial  statements include accounts  of our Company  and
 all of  our  majority-owned  subsidiaries.   The  preparation  of  financial
 statements in conformity  with accounting principles  generally accepted  in
 the United States requires us to  make estimates and assumptions in  certain
 circumstances that affect amounts reported in the accompanying  consolidated
 financial statements and  related footnotes.   In preparing these  financial
 statements, we have made our best estimates and judgments of certain amounts
 included  in  the   financial  statements,  giving   due  consideration   to
 materiality.  We do not believe there is a great likelihood that  materially
 different amounts  would  be reported  related  to the  accounting  policies
 described below.  However, application of these accounting policies involves
 the exercise of judgment and use  of assumptions as to future  uncertainties
 and, as a result, actual results could differ from these estimates.

 Revenue Recognition

 Our revenues are generated at the time a customer uses our network to make a
 phone  call.  We sell our  services to SMEs  and end-users  who utilize  our
 network for  international re-origination  and dial  thru services,  and  to
 other providers of long  distance usage who utilize  our network to  deliver
 domestic and international  termination of minutes  to their own  customers.
 At times we receive  payment from our customers  in advance of their  usage,
 which we record as deferred revenue, recognizing revenue as calls are  made.
 The Securities and Exchange Commission's Staff Accounting Bulletin No.  104,
 "Revenue Recognition",  provides guidance  on the  application of  generally
 accepted accounting principles to selected  revenue recognition issues.   We
 have concluded that  our revenue recognition  policy is  appropriate and  in
 accordance  with  generally   accepted  accounting   principles  and   Staff
 Accounting Bulletin No. 104.

 Allowance for Uncollectible Accounts Receivable

 Accounts receivable are reduced by an allowance for amounts that may  become
 uncollectible in the future.  All of our receivables are due from commercial
 enterprises  and  residential  users  in  both  domestic  and  international
 markets.   The  estimated  allowance  for  uncollectible  amounts  is  based
 primarily on our evaluation of the financial condition of the customer,  and
 our estimation of the customer's willingness to pay amounts due.  We  review
 our credit  policies  on  a regular  basis  and  analyze the  risk  of  each
 prospective customer individually in order to minimize our risk.

 Goodwill

 Effective November 1, 2001, we adopted SFAS No, 141, "Business Combinations"
 ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS
 142").  SFAS 141 requires that the purchase method of accounting be used for
 all business combinations initiated after June 30, 2001, and also  specifies
 the criteria  for  the  recognition of  intangible  assets  separately  from
 goodwill.  Under SFAS 142, goodwill is no longer amortized but is subject to
 an impairment  test  at least  annually  or more  frequently  if  impairment
 indicators arise.  In accordance with SFAS 142, an annual impairment test of
 goodwill was  performed  by an  independent  valuation firm  in  the  fourth
 quarters of fiscal years 2004 and 2003.  The valuation process appraised our
 assets  and  liabilities using  a combination  of present value and multiple
 of earnings valuation  techniques.  The  results  of both  impairment  tests
 indicated goodwill was not impaired.

 Financing,  Warrants   and  Amortization   of   Warrants  and   Fair   Value
 Determination

 We have traditionally financed our operations  through the issuance of  debt
 instruments that are convertible into our common stock, at conversion  rates
 at or  below the  fair market  value of  our  common stock  at the  time  of
 conversion,  and  typically  include  the issuance  of  warrants.   We  have
 recorded debt discounts in connection  with these financing transactions  in
 accordance  with  Emerging   Issues  Task   Force  Nos.   98-5  and   00-27.
 Accordingly, we recognize the beneficial conversion feature imbedded in  the
 financings and the fair value of  the related warrants on the balance  sheet
 as debt discount.   The  debt discount  is amortized  over the  life of  the
 respective debt instrument.

 Carrier Disputes

 We review  our vendor  bills on  a monthly  basis and  periodically  dispute
 amounts invoiced by our carriers.   We review our outstanding disputes on  a
 quarterly basis as part of the overall review of our accrued carrier  costs,
 and adjust our liability based on management's estimate of amounts owed.

<PAGE>
<TABLE>

 Results of Operations

 Our operating results for the last three fiscal years are as follows:

                                                        % of        % Change                   % of       % Change
                                         Year Ended Revenue 2004  2003 to 2004   Year Ended Revenue 2003  2002 to 2003  Year Ended
                                           Oct 31     Increase      Increase       Oct 31     Increase     Increase       Oct 31
                                            2004       (Decr)        (Decr)         2003       (Decr)       (Decr)          2002
                                         -----------  --------    ------------  ------------  --------    ------------  -----------
 <S>                                    <C>             <C>          <C>        <C>            <C>          <C>        <C>
 REVENUES                               $ 13,380,510     100%         (24%)     $ 17,654,794    100%          (4%)     $ 18,408,649

 COSTS AND EXPENSES
  Costs of revenues                       10,045,063      75%         (23%)       13,128,924     74%          14%        11,539,562
  Sales and marketing                        400,559       3%         (43%)          700,404      4%         (21%)          885,661
  General and administrative               2,990,630      22%         (22%)        3,812,639     22%         (34%)        5,760,179
  Impairment charge related to write
    down of advertising credits                    -       -         (100%)        2,376,678     13%           -                  -
  Impairment charge related to write
    down of assets held for resale                 -       -            -                  -      -         (100%)          320,307
  Gain (loss) on disposal of                       -       -         (100%)          241,935      1%       (2772%)           (9,053)
    equipment
  Gain on settlement of liabilities         (466,000)     (3%)          -                  -      -            -                  -
  Depreciation and amortization              615,883       5%         (54%)        1,338,351      8%         (38%)        2,158,135
                                         -----------  --------    ------------  ------------  --------    ------------  -----------
  Total costs and expenses                13,586,135     102%         (37%)       21,598,931    122%           5%        20,654,791
                                         -----------  --------    ------------  ------------  --------    ------------  -----------
  Operating loss                            (205,625)     (2%)        (95%)       (3,944,137)   (22%)         76%        (2,246,142)

 OTHER INCOME (EXPENSE)
  Interest expense and financing costs      (613,511)     (5%)        (46%)       (1,131,806)    (6%)         (9%)       (1,247,488)
  Foreign exchange                            24,919       -          251%             7,097      -         (122%)          (31,976)
                                         -----------  --------    ------------  ------------  --------    ------------  -----------
  Total other expense, net                  (588,592)     (4%)        (48%)       (1,124,709)    (6%)        (12%)       (1,279,464)

                                         -----------  --------    ------------  ------------  --------    ------------  -----------
 LOSS FROM CONTINUING OPERATIONS            (794,217)     (6%)        (84%)       (5,068,846)   (29%)         44%        (3,525,606)

 INCOME (LOSS) FROM DISCONTINUED           1,501,147      11%        (197%)       (1,553,465)    (9%)         34%        (1,158,574)
   OPERATIONS
                                         -----------  --------    ------------  ------------  --------    ------------  -----------
 NET INCOME (LOSS)                      $    706,930       5%        (111%)     $ (6,622,311)   (38%)         41%      $ (4,684,180)
                                         ===========  ========    ============  ============  ========    ============  ===========

 INCOME (LOSS) PER SHARE:
   Basic and diluted income (loss)
     per share
   Continuing operations                $     (0.05)                            $     (0.31)                           $      (0.25)
   Discontinued operations                     0.09                                   (0.10)                                  (0.09)
                                         ----------                              ----------                             -----------
                                        $      0.04                             $     (0.41)                           $      (0.34)
                                         ==========                              ==========                             ===========

</TABLE>

 Results of Operations-2004 Versus 2003

 Operating Revenues

 Our revenues decreased from $17.7 million for the fiscal year ended  October
 31, 2003  to  $13.4  million for the fiscal year ended  October 31, 2004,  a
 24% decline.  Wholesale  and  retail revenues  decreased  by  20%  and  33%,
 respectively, period to period.

 The decrease in  wholesale revenues for  the fiscal year  ended October  31,
 2004  is  attributable  to   a  decrease  in   the  number  of   termination
 opportunities  available  to  us  to  offer  our  customers.    Due  to  the
 competitive  nature  of  the  wholesale  telecommunications  business,   our
 customers frequently request a reduction in the per minute termination rates
 that we offer them.  At times, our suppliers are not able to offer us  lower
 rates in order to  maintain the minutes we  are terminating to  them.  As  a
 result,  our  wholesale  revenues  fluctuate  depending  on  the  number  of
 termination opportunities available to us at  any one time.  We are  working
 with new providers in  an effort to recapture  our lost revenue, though  the
 results of these discussions are not presently  known.  If we are unable  to
 attract and  retain new  wholesale customers,  our wholesale  revenues  will
 continue to erode.

 The decrease in retail revenues for  the fiscal year ended October 31,  2004
 is primarily attributable  to increased competition  in our largest  foreign
 markets, including  competition from  the incumbent  phone company  in  each
 market.  Furthermore,  a significant portion  of our  retail business  comes
 from members of  the United States  military stationed  in foreign  markets.
 The March  2003  redeployment  of  troops  into  Iraq,  where  we  have  not
 historically provided long distance  service, resulted in  a decline in  our
 retail sales to these  military customers who  were previously stationed  in
 foreign markets  that we  serviced.   We currently  offer services  to  U.S.
 troops in Iraq on a limited basis and hope to increase these services during
 fiscal year  2005.   We  are  exploring  opportunities to  grow  our  retail
 business, utilizing our in-house sales group and our outside agents, through
 the  introduction  of  new  products  and  services,  focusing  our  efforts
 principally on  the sale  of Internet  phones that  allow users  to  connect
 specialized Internet  phones  to  their existing  Dial-Up  or  DSL  Internet
 connections.  If  we are unable  to stabilize our  retail revenues from  the
 U.S. military and grow  our retail revenues  from VoIP-based products,  this
 category of revenue will also continue to decline.

 Costs of Revenues

 Our costs  of revenues  as a  percentage of  revenues has  increased by  one
 percent due to  a decline  in our  retail traffic  (see "Revenues"  directly
 above) which  realizes higher  margins than  our wholesale  traffic.   As  a
 majority of  our  costs  of  revenues are  variable,  based  on  per  minute
 transportation costs, costs  of revenues as  a percentage  of revenues  will
 fluctuate, from period to period, depending  on the traffic mix between  our
 wholesale and retail products

 Sales and Marketing Expenses

 A significant component  of our revenue  is generated by  outside agents  or
 through periodic newspaper advertising, which is managed by a small in-house
 sales and marketing organization.  The reduction in our sales and  marketing
 costs is primarily due to lower agent  commission costs which are paid as  a
 percentage of our revenue, as well as a reduction in our advertising  costs.
 During the fiscal year ended October 31, 2003, a significant portion of  our
 advertising costs related to the introduction of new product lines.   During
 the fiscal year  ended October 31,  2004, we have  focused our attention  on
 increasing revenues through the efforts of our agents.  We will continue  to
 focus our sales and marketing efforts on periodic newspaper advertising, the
 establishment of distribution  networks to facilitate  the introduction  and
 growth of new products and services, and agent related expenses to  generate
 additional revenues.

 General and Administrative Expenses

 We have reduced  our general and administrative expenses for the fiscal year
 ended October 31, 2004  compared  to the prior fiscal year primarily through
 the elimination  of personnel  and  personnel related costs,  which resulted
 in  a  decrease  in  costs  of  approximately  $531,000.  A portion  of this
 $531,000 decrease is due  to the closure  of our  Atlanta office  during the
 third  quarter  of fiscal year 2003.  The remaining decrease  in general and
 administrative expenses  of approximately $291,000  is  due  to decreases in
 several  expense  categories during fiscal year 2004.  We review our general
 and  administrative  expenses  regularly  and  continue  to manage the costs
 accordingly to support our current and anticipated future business.

 Impairment Charge Related to Write Down of Advertising Credits

 During fiscal year 2000, we issued common stock in exchange for  advertising
 credits.   As our  ability to  use  these credits  is  uncertain,  we  have
 concluded  that  the   carrying  value   of  these   credits  is   impaired.
 Accordingly, we  wrote  off the  remaining  advertising credits  during  the
 fiscal year  ended  October 31,  2003.   (See  Note  4 to  the  Consolidated
 Financial Statements.)

 Gain (Loss) on Disposal of Equipment

 During the  fiscal year  ended  October 31,  2003,  we closed  our  Atlanta,
 Georgia office  and  expensed  the remaining  book  value  of  the  office's
 leasehold  improvements.  During  the  same  fiscal year,  we  expensed  the
 remaining book value of computer software which was no longer utilized.

 Gain on Settlement of Liabilities

 During the second quarter  of fiscal year 2003,  we vacated our office space
 in Atlanta, Georgia.  At that time,  we began negotiations with the landlord
 to terminate our lease agreement.  In October 2004,  we reached an agreement
 with the landlord  to  pay  $100,000 in settlement of all outstanding rents,
 payable in monthly installments of $5,000 through May 2006.  As a result, we
 recorded  $241,000 as Gain  on  Settlement  of Liabilities during the fourth
 quarter of fiscal year 2004, representing the difference between our accrued
 rent and the settlement amount.

 In connection  with  the  acquisition  of the  assets  and  certain  of  the
 liabilities of Rapid  Link, Incorporated  ("Rapid Link")  during the  fiscal
 year ended October 31,  2001, we recorded  certain liabilities of  $255,000,
 and continued to hold those liabilities pending a final settlement with  the
 Rapid  Link  trustee.  During the  fiscal year  ended  October 31, 2004,  we
 agreed to pay $30,000 to the trustee, and recorded the remaining $225,000 to
 Gain on Settlement of Liabilities.

 Depreciation and Amortization

 Depreciation and  amortization has  decreased as  a  larger portion  of  our
 assets still in use have become  fully depreciated, including a majority  of
 the assets acquired  from Rapid Link.   A majority  of our depreciation  and
 amortization expense relates to the equipment utilized in our VoIP network.

 Interest Expense and Financing Costs

 Interest expense and financing costs were due primarily to the  amortization
 of deferred financing fees and debt discount on our convertible  debentures,
 notes payable  and  notes  payable  to  related  parties.  The  decrease  in
 interest expense and financing costs primarily  relates to the reduction  in
 such amortization  due to  our related  party notes  payable reaching  their
 maturity date during the fourth quarter of  fiscal year 2003 as well as  the
 early repayment of one of our convertible debentures through the issuance of
 a  note  payable  during  the  first  quarter  of  fiscal  year  2003.   All
 unamortized debt  discount associated  with  this  convertible debenture was
 expensed  at the time of repayment.  A further explanation of these  changes
 can be found in the Liquidity and Capital Resources section.

 Income (loss) from discontinued operations

 Income (loss) from discontinued operations for fiscal year ended October 31,
 2004 relates to  an increase  in our estimated  sales tax  liability to  the
 State of Texas  of $750,000, offset  by the write-off  of the remaining  net
 liability of  our German  subsidiary,  Rapid Link  Telecommunications  GMBH,
 totaling $2,251,000.   Income (loss)  from discontinued  operations for  the
 fiscal year  ended  October 31, 2003  relates to  the losses  of Rapid  Link
 Telecommunications GMBH,  in  the  amount  of  $1,203,000  and  an  original
 estimate of  the Company's  sales tax  liability to  the State  of Texas  of
 $350,000.

 In the fourth  quarter of fiscal  2003, Rapid  Link Telecommunications  GMBH
 filed for insolvency.  The net liability associated with the disposal of the
 assets  and   liabilities  of   Rapid   Link  Telecommunications   GMBH   of
 approximately $2.3 million was included in the balance sheet at October  31,
 2003 and  classified as  Discontinued Operations.   During  the fiscal  year
 2004, we determined  that we  no longer  controlled the  operations of  this
 subsidiary and that  the parent entity  had no legal  obligation to pay  the
 liabilities of Rapid  Link Telecommunications GMBH.  Accordingly,  we  wrote
 off the  remaining net  liability of  $2,251,000 and  included the  gain  in
 Discontinued Operations during the fiscal year ended October 31, 2004.

 During the first quarter of fiscal  year 2004, we determined based on  final
 written communications with the State of Texas that the liability for  sales
 taxes (including  penalties  and  interest) totaled  $1.1  million.  We  had
 previously accrued an estimated settlement amount of $350,000.  Accordingly,
 we accrued an additional $750,000.  The sales tax amount due is attributable
 to audit findings  of our  former parent,  Canmax Retail  Systems, from  the
 State of Texas for the years 1995 to 1999.  These operations were previously
 classified as discontinued after we changed our business model from a  focus
 on domestic  prepaid  phone  cards to  international  wholesale  and  retail
 business.  The  State of  Texas determined that  we did  not properly  remit
 sales tax on certain transactions.  Management believes that the amount  due
 has been improperly assessed and will continue to pursue a lesser settlement
 amount, though we cannot assure you that this matter will be resolved in the
 Company's favor.  Since this sales tax liability represents an adjustment to
 amounts previously  reported in  Discontinued  Operations, this  amount  was
 classified during the  fiscal year ended  October 31,  2004 as  Discontinued
 Operations.  (See Note 3 to the Consolidated Financial Statements.)

 Results of Operations-2003 Versus 2002

 Operating Revenues

 Our wholesale revenues increased by 41% and our retail revenues decreased by
 44% for the fiscal year ended October 31, 2003, compared to the prior fiscal
 year.  The increase in wholesale revenues for the fiscal year ended  October
 31, 2003 is attributable  to additions to our  wholesale sales force  during
 fiscal  year   2002,  which   focuses   on  developing   greater   wholesale
 opportunities both  in customer  growth and  the development  of  additional
 points of termination.  The decrease in retail revenues for the fiscal  year
 ended October 31, 2003 is primarily attributable to increased competition in
 our largest foreign markets, including competition from the incumbent  phone
 company in each  market. Furthermore, a  significant portion  of our  retail
 business comes  from members  of the  United  States military  stationed  in
 foreign markets.   The  redeployment  of  troops  into Iraq  in  March  2003
 resulted in a decline in retail  customers.  We are exploring  opportunities
 to grow  our retail  business through  use of  our advertising  credits  and
 newspaper advertising.

 Costs of Revenues

 Included in our cost of revenues  for fiscal year 2002 are credits  received
 from two vendors totaling $729,000 relating  to disputes for minutes  billed
 in error for periods prior to fiscal 2002.  Without these credits, costs  of
 revenues as a percentage of revenues  for the fiscal year ended  October 31,
 2002 would have been 67%.  Our costs of revenues as a percentage of revenues
 has increased due to a decline  in our retail traffic which realizes  higher
 margins than our wholesale  traffic.  Costs of  revenues as a percentage  of
 revenues will fluctuate, from period to period, depending on the traffic mix
 between our wholesale and retail products.

 General and Administrative Expenses

 Included in  general and  administrative expenses  is  bad debt  expense  of
 $28,000 and  $685,000 for  the fiscal  years ended  October 2003  and  2002,
 respectively.  For the 2002 fiscal year, bad debt expense includes  $216,000
 attributable to  non-payment from  a single  wholesale  customer.   We  have
 implemented strict  credit  policies  and systems  to  closely  monitor  our
 wholesale traffic daily to  reduce the risk  of bad debt.   We have  further
 reduced our general and administrative costs by approximately $983,000,  for
 the fiscal year ended October 31, 2003, through the elimination of personnel
 and personnel  related costs.   We  review  our general  and  administrative
 expenses regularly, and continue to manage the costs accordingly to  support
 the current and anticipated future business.

 Sales and Marketing Expenses

 A significant component of  our revenues is generated  by outside agents  or
 through newspaper and periodical  advertising, which is  managed by a  small
 in-house sales and marketing  organization.  We will  continue to focus  our
 sales and  marketing efforts  on newspaper  and periodical  advertising  and
 agent  related expenses  to generate  additional revenues.  The  use of  our
 advertising credits is expected to increase sales and marketing expenses  in
 absolute dollars in future periods.

 Impairment Charge Related to Write Down of Advertising Credits

 During fiscal year 2000, we issued common stock in exchange for  advertising
 credits.  As our  ability to use these  credits is uncertain, in  accordance
 with Generally  Accepted  Accounting Principles,  we  have written  off  the
 remaining advertising credits during the fiscal year ended October 31, 2003.
 (See Note 4 to the Consolidated Financial Statements.)

 Impairment Charge Related to Write Down of Assets Held for Resale

 Assets held  for  resale  represents internally  constructed  equipment  for
 prepaid telecommunications.  As the potential ability to sell this equipment
 is uncertain, in accordance  with Generally Accepted Accounting  Principles,
 this equipment was  written off  during the  fiscal year  ended October  31,
 2002.  (See Note 9 to the Consolidated Financial Statements.)

 Gain (Loss) on Disposal of Equipment

 During the  fiscal year  ended  October 31,  2003,  we closed  our  Atlanta,
 Georgia office  and  expensed  the remaining  book  value  of  the  office's
 leasehold improvements.   During  the  same  fiscal year,  we  expensed  the
 remaining book value of computer software which was no longer utilized.

 Depreciation and Amortization

 Depreciation and amortization has decreased as a portion of our assets still
 in use have  become fully depreciated,  including a majority  of the  assets
 acquired from Rapid Link.  A majority of  our depreciation and  amortization
 expense  relates  to  the  equipment  utilized  in  our  VoIP  network.   In
 accordance  with  Statement  of  Accounting  Standards  No.  142,  effective
 November 1, 2001, we no longer amortize goodwill.

 Interest Expense and Financing Costs

 Interest expense and financing costs were due primarily to the  amortization
 of deferred financing fees and debt  discount on our convertible  debentures
 and our related party notes payable.

 Income (loss) from discontinued operations

 Income (loss) from discontinued operations for the fiscal year ended October
 31, 2003 relates to the losses of Rapid Link Telecommunications GMBH, in the
 amount of $1,203,000  and an original  estimate of the  Company's sales  tax
 liability of $350,000.  Income (loss)  from discontinued operations for  the
 fiscal year  ended October  31, 2002  relates to  the losses  of Rapid  Link
 Telecommunications GMBH.

 In the fourth  quarter of fiscal  2003, Rapid  Link Telecommunications  GMBH
 filed for insolvency.  The net liability associated with the disposal of the
 assets  and   liabilities  of   Rapid   Link  Telecommunications   GMBH   of
 approximately $2.3 million was included in the balance sheet at October  31,
 2003 and  classified as  Discontinued Operations.   During  the fiscal  year
 2004, we determined  that we  no longer  controlled the  operations of  this
 subsidiary and that  the parent entity  had no legal  obligation to pay  the
 liabilities of Rapid  Link Telecommunications GMBH.   Accordingly, we  wrote
 off the  remaining net  liability of  $2,251,000 and  included the  gain  in
 Discontinued Operations during the fiscal year ended October 31, 2004.

 During the first quarter of fiscal  year 2004, we determined based on  final
 written communications with the State of Texas that the liability for  sales
 taxes (including  penalties and  interest) totaled  $1.1  million.   We  had
 previously accrued an estimated settlement amount of $350,000.  Accordingly,
 we accrued an additional $750,000.  The sales tax amount due is attributable
 to audit findings  of our  former parent,  Canmax Retail  Systems, from  the
 State of Texas for the years 1995 to 1999.  These operations were previously
 classified as discontinued after we changed our business model from a  focus
 on domestic  prepaid  phone  cards to  international  wholesale  and  retail
 business.  The  State of  Texas determined that  we did  not properly  remit
 sales tax on certain transactions.  Management believes that the amount  due
 has not  been  properly  assessed  and will  continue  to  pursue  a  lesser
 settlement amount, though  we cannot  assure you  that this  matter will  be
 resolved in the Company's favor.  Since this sales tax liability  represents
 an adjustment  to amounts  previously reported  in Discontinued  Operations,
 this  amount was  classified  during the fiscal year ended  October 31, 2004
 as Discontinued  Operations.  (See  Note  3  to  the Consolidated  Financial
 Statements.)

 Liquidity and Sources of Capital

 Although we have significantly reduced our  operating loss, to date we  have
 been generally unable  to achieve positive  cash flow on  a quarterly  basis
 primarily due to the fact that our present lines of business do not generate
 a volume  of business sufficient to cover our overhead costs.   Furthermore,
 approximately  50%  of our  trade  accounts  payable and accrued liabilities
 are past due.  Our future operating success  is extremely  dependent on  our
 ability to  quickly generate  positive  cash flow  from  our VoIP  lines  of
 products and services.  Any failure of  this business plan will result in  a
 cash flow crisis and could force us to seek alternative sources of financing
 or  to   greatly  reduce  or   discontinue  operations.   Although   various
 possibilities for obtaining  financing or effecting  a business  combination
 have been discussed  from time  to time, there  are no  agreements with  any
 party to raise money or combine with another entity.  Further,  negotiations
 with our existing  lenders have not  resulted in any  extension of past  due
 obligations,  which  could therefore  be  declared  due  and  accelerated at
 any  time.  Any  additional financing  we may  obtain will  involve material
 and substantial  dilution  to  existing  stockholders.  In such  event,  the
 percentage ownership of our current stockholders will be materially reduced,
 and any new  equity securities sold  by us may  have rights, preferences  or
 privileges senior to our current common  stockholders.  If we are unable  to
 obtain additional  financing,  our operations  in  the short  term  will  be
 materially affected and we  may not be  able to remain  in business.   These
 circumstances raise substantial doubt  as to the ability  of our Company  to
 continue as a going concern.

 At October  31, 2004,  we had  cash  and cash  equivalents of  $586,000,  an
 increase  of  $81,000  from  the  balance  at  October  31,  2003.   We  had
 significant working capital deficits at both October 31, 2004 and 2003.

 Net cash  provided  by operating  activities  of continuing  operations  was
 $260,000 for the fiscal  year ended October 31,  2004, compared to net  cash
 used in operating activities  of continuing operations  of $684,000 for  the
 fiscal year ended  October 31,  2003.  The  net cash  provided by  operating
 activities of continuing operations  for the fiscal  year ended October  31,
 2004 was primarily due to a net loss from continuing operations of  $794,000
 adjusted for:  non-cash  interest  expense  of  $182,000;  depreciation  and
 amortization of $616,000; gain on  settlement of liabilities of  ($466,000);
 and net changes in operating assets  and  liabilities of $693,000, which was
 primarily an increase in  accrued liabilities  of $665,000.  For the  fiscal
 year  ended October 31,  2003, the net cash  used in operating activities of
 continuing  operations  was  primarily due  to a net  loss  from  continuing
 operations of $5,069,000 adjusted for: loss from disposal of fixed assets of
 $242,000; impairment charge related  to  write  down  of advertising credits
 of  $2,377,000;  non-cash  interest expense  of $689,000;  depreciation  and
 amortization  of  $1,338,000;  and  net  changes  in  operating  assets  and
 liabilities of ($302,000).

 Net cash used in investing activities of continuing operations for the years
 ended October 31, 2004 and 2003 was $145,000 and $192,000, respectively, and
 relate to the purchase of property and equipment.

 Net cash  used in  financing activities  of  continuing operations  for  the
 fiscal year ended October  31, 2004, totaled $34,000,  compared to net  cash
 provided by financing activities of continuing operations of $1,169,000  for
 the fiscal year ended October 31, 2003.   For the fiscal year ended  October
 31, 2004, net cash used in financing activities of continuing operations was
 due to payments on capital  leases.  For the  fiscal year ended October  31,
 2003, net cash provided by financing activities of continuing operations was
 due to $1,800,000 in net proceeds from notes payable, offset by $105,000  in
 payments on  capital leases,  $82,000 of  financing  fees, and  $443,000  in
 payments on convertible debentures.

 We have an accumulated deficit of approximately $46.5 million as of  October
 31, 2004 as  well as significant  working capital deficit.   Funding of  our
 working capital deficit, current and future operating losses, and  expansion
 will require continuing capital investment which may not be available to us.

 Since the  beginning of  April 2001,  we have  raised $5.7  million in  debt
 financing.

 Although to date we have been able to arrange the debt facilities and equity
 financing described below, there can be no assurance that sufficient debt or
 equity financing will continue to be available in the future or that it will
 be available on terms acceptable to us.  As of October 31, 2004, we had $3.8
 million of notes payable  and convertible debentures  which have matured  or
 mature within  the  next year  as  well as  a  significant amount  of  trade
 payables and accrued liabilities  which are past due.   We will continue  to
 explore external financing opportunities and renegotiation of our short-term
 debt with our current  financing partners  in order  to extend the terms  or
 retire these obligations.   Approximately 39% of the short-term debt is  due
 to our senior management.  Our management is committed to the success of our
 Company as is evidenced by the level  of financing it has made available  to
 our Company.  Failure  to obtain sufficient  capital will materially  affect
 our Company's  operations and  financial  condition.   As  a result  of  the
 aforementioned factors and related uncertainties, there is significant doubt
 about our Company's ability to continue as a going concern.

 Our current capital expenditure requirements are not significant,  primarily
 due to the equipment acquired from Rapid Link.  Our capital expenditures for
 the fiscal  year  ended  October  31,  2004 were  $145,000  and  we  do  not
 anticipate significant spending for fiscal year 2005.

 In October 2001, we executed 10% convertible notes (the "Notes") with  three
 of our executives, which provided financing of $1,945,958.  With an original
 maturity date of October  24, 2003, these Notes  were amended subsequent  to
 fiscal year 2002  to mature on  February 24, 2004.   Currently, these  Notes
 have matured and are due on demand.  These Notes continue to accrue interest
 at the stated rate.  These Notes are secured by selected Company assets  and
 are convertible into our  common stock at  the option of  the holder at  any
 time.  The conversion price is equal to the closing bid price of our  common
 stock on the last trading day immediately preceding the conversion.  We also
 issued to  the holders  of the  Notes warrants  to acquire  an aggregate  of
 1,945,958 shares of common  stock at an exercise  price of $0.78 per  share,
 which expire on October 24, 2006.  For  the year ended October 31, 2002,  an
 additional $402,433  was  added  to the  Notes  and  an  additional  402,433
 warrants to acquire  our common  stock were  issued in  connection with  the
 financing.  During  fiscal year 2004,  the holders of  the Notes elected  to
 convert $877,500 of the  Notes into 6,750,000 shares  of common stock.   The
 outstanding balance of these Notes at October 31, 2004 totals $1,470,890.

 In January  2002,  we  executed a  6%  convertible  debenture  (the  "Second
 Debenture") with  GCA  Strategic  Investment  Fund  Limited  ("GCA"),  which
 provided financing of $550,000 and had an original maturity date of  January
 28, 2003.  The Second Debenture  was amended subsequent to fiscal year  2002
 to mature on  November 8, 2004.   The Second  Debenture matured in  November
 2004 and is currently due on demand.  Although no event of default has  been
 declared by the lender, we are  technically in default under this  agreement
 and are currently negotiating with this  party to extend the maturity  date.
 The Second Debenture continues to accrue  interest at the stated rate.   The
 conversion price is equal to the lesser  of (i) 100% of the volume  weighted
 average of sales price as reported by the Bloomberg L.P. of the common stock
 on the  last trading  day immediately  preceding  the Closing  Date  ("Fixed
 Conversion Price")  and (ii)  85% of  the average  of the  three (3)  lowest
 volume weighted average sales  prices as reported  by Bloomberg L.P.  during
 the twenty (20)  Trading Days immediately  preceding but  not including  the
 date of the related Notice of Conversion ("the  "Formula Conversion Price").
 In an event of  default the amount  declared due and  payable on the  Second
 Debenture shall be  at the  Formula Conversion  Price.   During fiscal  year
 2003, GCA converted $50,000  of the Second Debenture  and $3,463 of  accrued
 interest into approximately 374,000 shares of  common stock.  During  fiscal
 year 2004, GCA converted $10,000 of the Second Debenture and $730 of accrued
 interest into approximately 82,000 shares of common stock.  The  outstanding
 balance on the Second Debenture is $490,000 at October 31, 2004.

 In November 2002, we executed a 12% note payable (the "GC-Note") with Global
 Capital Funding Group, L.P.,  which provided financing  of $1,250,000.   The
 GC-Note matured  on  November  8,  2004 and  is  currently  due  on  demand.
 Although no  event  of default  has  been declared  by  the lender,  we  are
 technically in default  under this agreement  and are currently  negotiating
 with this  party to  extend the  maturity date.   The  GC-Note continues  to
 accrue interest at the stated rate.   The Company also issued to the  holder
 of the GC-Note warrants to acquire an aggregate of 500,000 shares of  common
 stock at an exercise price of $0.14  per share, which expire on November  8,
 2007.

 In July  2003, we  executed a  10% note  payable (the  "GCA-Note") with  GCA
 Strategic Investment  Fund Limited,  which provided  financing of  $550,000.
 The GCA-Note's maturity date was  December 23, 2003.   Per the terms of  the
 GCA-Note agreement, in the event the  GCA-Note is not repaid in full  within
 10 days of the  maturity date, the  terms of the  GCA-Note shall become  the
 same as those of the Second Debenture.  Effective January 2, 2004, the  GCA-
 Note's terms became the same  as those of the  Second Debenture which had  a
 maturity date of November  8, 2004.  The  GCA-Note matured in November  2004
 and is currently  due on  demand.   Although no  event of  default has  been
 declared by the lender, we are  technically in default under this  agreement
 and are currently negotiating with this  party to extend the maturity  date.
 The GCA-Note  continues to  accrue interest  at the  stated rate.   We  also
 issued to the  holder of the  GCA-Note warrants to  acquire an aggregate  of
 100,000 shares of  common stock  at an exercise  price of  $0.14 per  share,
 which expire on July 24, 2008.


 Item 7a. Quantitative and Qualitative Disclosures About Market Risk.

 We provide our retail services primarily to customers located outside of the
 U.S.  Thus,  our financial  results could  be impacted  by foreign  currency
 exchange rates and market  conditions abroad.  As  most of our services  are
 paid for  in U.S.  dollars, a  strong  dollar could  make  the cost  of  our
 services more expensive  than the services  of non-U.S.  based providers  in
 foreign markets.  In markets where we buy our services in local currency and
 sell those services to U.S. customers, a weak dollar could make our services
 more expensive than our  competitors in foreign markets.   We have not  used
 derivative instruments to  hedge our foreign  exchange risks  though we  may
 choose to do so  in the future.   We believe our pricing  is lower than  the
 incumbent carrier in each market, and therefore, we would not expect to lose
 significant revenues  as a result  of any fluctuations,  although certainly,
 our margin would be negatively impacted by a weak dollar.


 Item 8. Financial Statements and Supplementary Data.

 The information required by Item 8 of this Report is presented in Item 15.


 Item 9.  Changes in  and Disagreements  with Accountants  on Accounting  and
 Financial Disclosure.

 None.


 Item 9a. Controls and Procedures.

 Within the  90 days  prior to  the filing  date of  this Annual  Report,  we
 carried out an evaluation, under the supervision and with the  participation
 of our  Chief Executive  Officer and  our Chief  Financial Officer,  of  the
 effectiveness of the  design and operation  of our  disclosure controls  and
 procedures. Based on this  evaluation, our Chief  Executive Officer and  our
 Chief  Financial  Officer  concluded   that  our  disclosure  controls   and
 procedures are  effective to  ensure that  information  we are  required  to
 disclose in  reports  that we  file  or submit  under  the Exchange  Act  is
 recorded, processed,  summarized,  and  reported  within  the  time  periods
 specified in SEC rules and forms.

 There have been  no significant changes  in our internal  controls or  other
 factors that could significantly affect our internal controls subsequent  to
 the date of their evaluation, including  any corrective actions with  regard
 to significant deficiencies and material weaknesses.


 Item 9b. Other Information.

 None.


                                   PART III

 Item 10. Directors and Executive Officers of the Registrant.

      The following  table  sets  forth  certain  information  regarding  our
 executive officers and directors.


               Name             Age       Position with the Company
          ---------------       ---       --------------------------------
          John Jenkins          43        Chairman, Chief Executive Officer,
                                          President and Director
          Allen Sciarillo       40        Executive Vice President, Chief
                                          Financial Officer, Secretary and
                                          Director
          Lawrence Vierra       59        Director
          Robert M. Fidler      66        Director
          David Hess            43        Director

 JOHN JENKINS has  served as our  Chairman of the  Board and Chief  Executive
 Officer since October 2001, and has  served as our President and a  director
 since December 1999.  Mr.  Jenkins has also served  as the President of  DTI
 Com, Inc., one of our subsidiaries, since  November 1999.  In May 1997,  Mr.
 Jenkins founded Dial Thru International Corporation (subsequently  dissolved
 in November 2000), and served as  its President and Chief Executive  Officer
 until  joining  us  in  November 1999.  Prior to 1997, Mr. Jenkins served as
 the  President and Chief Financial Officer  for  Golden  Line  Technology, a
 French telecommunications company.  Prior to entering the telecommunications
 industry,  Mr. Jenkins  owned  and  operated  several  software,  technology
 and real  estate  companies.  Mr. Jenkins  holds  degrees  in  physics   and
 business/economics.

 ALLEN SCIARILLO  has  been  our  Chief  Financial  Officer,  Executive  Vice
 President and Secretary since July 2001 and was elected as a director in May
 2002.  From  January to March  2001, Mr. Sciarillo  was the Chief  Financial
 Officer  of  Star  Telecommunications,   Inc.,  a  global   facilities-based
 telecommunications carrier.   Prior to that  time, Mr.  Sciarillo served  as
 Chief Financial  Officer of  InterPacket Networks,  a provider  of  Internet
 connectivity to Internet service providers  worldwide, from July 1999  until
 its acquisition  by  American Tower  Corporation  in  December  2000.   From
 October 1997  to June 1999,  he served  as  Chief  Financial  Officer of RSL
 Com  USA,  a  division  of  RSL  Com   Ltd.,   a   global   facilities-based
 telecommunications carrier.  Prior  to joining RSL,  Mr. Sciarillo was  Vice
 President and Controller of Hospitality  Worldwide Services, Inc. from  July
 1996 to October 1997.  Mr. Sciarillo  began his career at Deloitte &  Touche
 and is a Certified Public Accountant.

 LAWRENCE VIERRA has served as one  of our directors since January 2000,  and
 from that time through October 2004, served as our Executive Vice President.
 Currently, Mr. Vierra is a professor at  the University of Las Vegas.   From
 1995 through 1999, Mr. Vierra served as the Executive Vice President of  RSL
 Com USA, Inc.,  an international  telecommunications company,  where he  was
 primarily responsible for international sales.   Mr. Vierra has also  served
 on  the   board   of  directors   and   executive  committees   of   various
 telecommunications companies and he  has extensive knowledge and  experience
 in  the  international sales  and  marketing  of telecommunications products
 and  services.   Mr. Vierra  holds   degrees   in  marketing   and  business
 administration.

 ROBERT M. FIDLER  has served as  one of our  directors since November  1994.
 Mr. Fidler joined Atlantic Richfield Company (ARCO) in 1960, was a member of
 ARCO's executive management team from 1976 to 1994 and was ARCO's manager of
 New Marketing Programs from 1985 until his retirement in 1994.

 DAVID HESS was elected to our Board of Directors  in May 2002.  Mr. Hess  is
 currently the  Managing Partner  of RKP  Steering Group,  a company  he  co-
 founded in August 2003.   From November 2001  until December 2002, Mr.  Hess
 served as the Chief Executive Officer and President, North America of  Telia
 International Carrier, Inc.  Prior to joining Telia, Mr. Hess was part of  a
 turnaround team hired by the board of directors of Rapid Link  Incorporated.
 He served as the  Chief Executive Officer  and as a  director of Rapid  Link
 Incorporated from August  2000 until  September 2001.   On  March 13,  2001,
 Rapid Link Incorporated filed for Chapter 11 bankruptcy protection.   Before
 joining Rapid  Link, Mr.  Hess served  as Chief  Executive Officer  of  Long
 Distance International  from January  1999 until  its acquisition  by  World
 Access in  February 2000.   Mr.  Hess  also served  as President  and  Chief
 Operating Officer of  TotalTel USA from  May 1995 until  January 1999.   Mr.
 Hess received a BA in Communications with a Minor in Marketing from  Bowling
 Green State University.

 Meetings of the Board of Directors

 Our Board  of Directors  held  two meetings  during  the fiscal  year  ended
 October 31, 2004.  The  Board of Directors has  two standing committees:  an
 Audit  Committee  and  a  Compensation  Committee.   There  is  no  standing
 nominating committee.   Each of the  directors attended the  meeting of  the
 Board of Directors and all meetings of any committee on which such  director
 served.

 Code of Business Conduct and Ethics

 We have  adopted  a code  of  business  conduct and  ethics  for  employees,
 executive officers and directors that is designed to ensure that all of  our
 directors, executive officers  and employees meet  the highest standards  of
 ethical conduct.  The code requires  that our directors, executive  officers
 and employees avoid conflicts  of interest, comply with  all laws and  other
 legal requirements, conduct  business in an  honest and  ethical manner  and
 otherwise act with integrity and in our  best interest.  Under the terms  of
 the code, directors, executive officers and employees are required to report
 any conduct that  they believe in  good faith to  be an  actual or  apparent
 violation of the code.

 As a mechanism to  encourage compliance with the  code, we have  established
 procedures to  receive,  retain  and  treat  complaints  received  regarding
 accounting,  internal  accounting  controls  or  auditing   matters.   These
 procedures  ensure   that   individuals  may   submit   concerns   regarding
 questionable accounting or auditing matters in a confidential and  anonymous
 manner.  The code also prohibits  us from retaliating against any  director,
 executive officer or employee who reports  actual or apparent violations  of
 the code.

 Audit Committee Financial Expert

 We currently do not have an  audit committee financial expert as defined  by
 Item 401(h) of Regulation S-K of the Exchange Act 1934.  Our previous  audit
 committee financial expert resigned from our board of directors in September
 2004.  As our current  board of directors does  not have anyone eligible  to
 become our audit committee  financial expert and  be independent within  the
 meaning of Item 7(d)(3)(iv) of Schedule 14A of the above-mentioned act,  our
 board of  directors  is  currently  conducting a  search  for  a  new  audit
 committee financial expert.

 Compliance with Section 16(a) of the Securities Exchange Act of 1934

 Section 16(a) of the Exchange Act requires our directors, executive officers
 and persons who own more than 10% of our  common stock to file with the  SEC
 initial reports of  ownership and  reports of  changes in  ownership of  our
 common  stock  and  other  equity  securities  of  our  Company.   Officers,
 directors and  greater than  10% stockholders  are required  by  regulations
 promulgated by  the SEC  to furnish  us  with copies  of all  Section  16(a)
 reports they file.  Based solely on the review of such reports furnished  to
 us and  written representations  that no  other  reports were  required,  we
 believe that during the  fiscal year ended October  31, 2004, our  executive
 officers, directors and  all persons  who own more  than 10%  of our  common
 stock complied with all Section 16(a) requirements.


 Item 11. Executive Compensation.

 The following  table  summarizes  the compensation  we  paid,  for  services
 rendered to our Company during the fiscal years ended October 31, 2004, 2003
 and 2002 to  our chief executive  officer and all  other executive  officers
 whose total annual salary and bonus exceeded $100,000 during fiscal 2004.

<TABLE>

                                 Summary Compensation Table
                                                                Long Term
                                   Annual Compensation         Compensation
                                   -------------------           Awards
                                                               Securities
 Name and principal                             Other annual   Underlying     All other
      position          Year    Salary   Bonus  compensation  Options/SARs   Compensation
 ------------------------------------------------------------------------------------------
                                  ($)     ($)       ($)           (#)            ($)
 <S>                    <C>    <C>      <C>       <C>          <C>             <C>
 John Jenkins           2004   150,000    -0-       -0-        100,000           -0-
 Chairman, CEO          2003   150,000    -0-       -0-           -0-            -0-
 and President          2002   181,042    -0-       -0-           -0-            -0-

 Allen Sciarillo        2004   130,000    -0-       -0-        100,000           -0-
 Executive Vice         2003   125,000  1,106       -0-           -0-            -0-
 President and Chief    2002   141,667    -0-       -0-           -0-            -0-
 Financial Officer


  Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
                                    Values

 The following table sets forth information with respect to the number of
 options held at fiscal year end and the aggregate value of in-the-money
 options held at fiscal year end by each of the Named Executive Officers.


                  Shares                    Number of securities         Value of unexercised in-
                acquired on   Value    underlying unexercised options  the-money options at fiscal
                 exercise    realized      at fiscal year end (#)           year end ($) (2)
     Name          (#)       ($)(1)    Exercisable      Unexercisable  Exercisable    Unexercisable
 -------------- -----------  --------  -----------      -------------  -----------    -------------
 <S>               <C>         <C>       <C>              <C>              <C>             <C>
 John Jenkins      -0-         -0-       700,000          100,000           -0-             -0-
 Allen Sciarillo   -0-         -0-       500,000          100,000           -0-             -0-

 (1)  The value realized upon the  exercise of stock  options represents  the
 difference between  the exercise  price of  the stock  option and  the  fair
 market value of the shares, multiplied by the number of options exercised on
 the date of exercise.

 (2)  The value  of "in-the-money"  options  represents the  positive  spread
 between the exercise price of  the option and the  fair market value of  the
 underlying shares based on  the closing stock price  of our common stock  on
 October 31, 2004, which was $0.10 per share.  "In-the-money" options include
 only those options where the fair market  value of the stock is higher  than
 the exercise price of the option on  the date specified.  The actual  value,
 if any, an executive realizes on the exercise of options will depend on  the
 fair market value of our common stock at the time of exercise.
</TABLE>

 Compensation of Directors

 Directors are not  compensated for attending  Board and committee  meetings,
 though our  directors  participate in  our  Equity Incentive  Plan  and  are
 annually awarded  non-qualified  stock options  for  an aggregate  of  5,000
 shares of  our  common stock  for  services rendered  to  our company  as  a
 director.

 Compensation Committee Interlocks and Insider Participation

 None  of our executive officers or directors serve  as  members of the board
 of directors or compensation committee  of any other entity which has one or
 more executive officers serving as a member  of our board of directors.  The
 Compensation Committee is comprised of two non-employee directors, Robert M.
 Fidler and Lawrence Vierra. Nick DeMare served on the Compensation Committee
 through September 19, 2004.


 Item 12. Security Ownership of Certain Beneficial Owners and Management.

 The following table sets forth certain  information as of January 24,  2005,
 concerning those persons  known to us,  based on  information obtained  from
 such persons, our records  and schedules required to  be filed with the  SEC
 and delivered to us, with respect to the beneficial ownership of our  common
 stock by (i) each stockholder known  by us to own beneficially five  percent
 or more  of  such  outstanding  common  stock,  (ii)  each  of  our  current
 directors, (iii) each Named Executive Officer and (iv) all of our  executive
 officers and directors  as a group.   Except as  otherwise indicated  below,
 each of the  entities or  persons named  in the  table has  sole voting  and
 investment power with respect to all shares of our common stock beneficially
 owned.   Effect  has  been  given to  shares  reserved  for  issuance  under
 outstanding stock options and warrants where indicated.

                                                  Number of       Percent of
        Name and address of Beneficial Owner      Shares (1)      Class (2)
        ------------------------------------      -----------     ----------
        John Jenkins                               16,021,575 (3)   51.61%
        17383 Sunset Boulevard,
        Suite 350
        Los Angeles, CA  90272

        Lawrence Vierra                               902,598 (4)    3.81%
        8760 Castle Hill Avenue
        Las Vegas, NV  89129

        Robert M. Fidler
        987 Laguna Road                                14,000 (5)       *
        Pasadena, CA  91105

        David Hess                                          0           *
        545 Alder Avenue
        Westfield, NJ  07090

        Allen Sciarillo                             1,097,598 (6)    4.60%
        17383 Sunset Boulevard,
        Suite 350
        Los Angeles, CA  90272

        All Executive Officers and                 18,035,771       55.41%
        Directors as a group (5 persons)

        *  Reflects less than one percent.
       **  We  have disclosed  in previous reports  that  Global  Capital
           Funding Group,  L.P. ("Global")  and GCA  Strategic Investment
           Fund Limited ("GCA")  beneficially owned  more then 5%  of our
           issued and outstanding common  stock due to the  fact that the
           notes and  convertible  debentures they  hold  are convertible
           within 60 days  into a  number of shares  of our  common stock
           that would exceed 5% of our shares outstanding.  However, both
           Global and GCA have  represented to us that  due to conversion
           caps  set  forth  in  their  respective  agreements  with  our
           Company, they are forbidden  from holding, at  any given time,
           more than  4.9% of  our issued  and outstanding  common stock.
           Consequently, we  are  not  required to  include  them  in our
           beneficial ownership table.

       (1) Beneficial  ownership  is  determined  in accordance  with the
           rules  of  the  SEC.    In  computing  the  number  of  shares
           beneficially owned by a person and the percentage ownership of
           that person, shares of our common  stock subject to options or
           warrants held by  that person  that are exercisable  within 60
           days of January 14, 2005 are deemed outstanding.  Such shares,
           however, are not deemed outstanding  for purposes of computing
           the ownership of any other person.
       (2) Based upon 23,022,129 shares of common stock outstanding as of
           January 14, 2005.
       (3) Includes  (i)  700,000 shares  of common  stock which  may  be
           acquired through  the  exercise  of  options,  (ii)  2,148,390
           shares of  common  stock  which may  be  acquired  through the
           exercise of  warrants, and  (iii) 5,173,185  shares  of common
           stock which  may  be  acquired  through  the  conversion  of a
           convertible note (shares from  conversion calculated using the
           closing bid share price at January  14, 2005 of $0.40); all of
           which are exercisable or convertible within 60 days of January
           14, 2005.
       (4) Includes  (i)  400,000 shares  of common  stock which  may  be
           acquired through  the exercise  of warrants  and  (ii) 247,598
           shares of  common  stock  which may  be  acquired  through the
           conversion of  a  convertible  note  (shares  from  conversion
           calculated using the  closing bid  share price at  January 14,
           2005 of $0.40);  all of  which are exercisable  or convertible
           within 60 days of January 14, 2005.
       (5) Includes 10,000  shares  of common stock which may be acquired
           through  the  exercise  of  option   and  warrants  which  are
           exercisable within 60 days of January 14, 2005.
       (6) Includes  (i)  500,000 shares  of common  stock which  may  be
           acquired through the exercise of  options, (ii) 100,000 shares
           of common stock which may be  acquired through the exercise of
           warrants, and (iii) 247,598  shares of common  stock which may
           be acquired  through  the  conversion  of  a  convertible note
           (shares from conversion calculated using the closing bid share
           price at  January  14,  2005  of  $0.40);  all  of  which  are
           exercisable or convertible within 60 days of January 14, 2005.

 Equity Compensation Plan Information

 The following table provides information about shares of our common stock
 that may be issued under our equity compensation plans, as of October 31,
 2004:

                                                               Number of
                         Number of       Weighted-average      securities
                      securities to be    exercise price       remaining
                        issued upon       of outstanding     available for
                        exercise of          options,       future issuance
                        outstanding          warrants         under equity
                     options, warrants         and            compensation
 Plan Category           and rights           rights       plans (excluding
                        (column (a))                     securities reflected
                                                            in column (a))
 ----------------------------------------------------------------------------
 Equity                1,674,000 (1)          $0.35            1,610,000
 compensation
 plans approved
 by security holders
 ----------------------------------------------------------------------------
 Equity                    -0-                 n/a                 -0-
 compensation
 plans not
 approved by
 security holders
 ----------------------------------------------------------------------------
 Total                1,674,000               $0.35            1,610,000
 ----------------------------------------------------------------------------

 (1)  Amount includes outstanding options granted pursuant to the 2002 Dial
      Thru International Corporation Equity Incentive Plan and the Amended
      and Restated 1990 Dial Thru International Corporation Stock Option
      Plan.

 We adopted the 2002 Equity Incentive Plan ("Incentive Plan"), at our  annual
 shareholder meeting in May 2002.  The Incentive Plan authorizes our Board of
 Directors to grant up  to 2,000,000 options to  purchase our common  shares.
 The maximum number of shares of common stock which may be issuable under the
 Incentive Plan to any individual plan  participant is  500,000  shares.  All
 options granted  under the  Incentive  Plan have  vesting  periods up  to  a
 maximum of five years.   The exercise price of  an option granted under  the
 Incentive Plan shall not be less  than 85% of the  fair value of the  common
 stock on the date such option is granted.

 The  1990  Stock  Option  Plan  ("1990  Stock  Option  Plan"),  as  amended,
 authorizes our  Board of  Directors  to grant  up  to 2,300,000  options  to
 purchase common shares  of the Company.  No options will  be granted to  any
 individual director or employee which will, when exercised, exceed 5% of the
 issued and outstanding shares of the Company. The term of any option granted
 under the 1990 Stock Option Plan is fixed  by the Board of Directors at  the
 time the options are granted, provided  that the exercise period may not  be
 longer than 10 years from the date  of grant. All options granted under  the
 1990 Stock Option Plan  have up to  10 year terms  and have vesting  periods
 that range from 0 to 3 years from the grant date. The exercise price of  any
 options granted under the 1990 Stock Option Plan is the fair market value at
 the date of grant.   Subsequent to  the adoption of  the Incentive Plan,  no
 further options will be granted under the 1990 Stock Option Plan


 Item 13. Certain Relationships and Related Transactions.

 In October 2001, we issued 10%  convertible notes (the "Notes") to three  of
 our executive officers,  each of  whom was also  one of  our directors,  who
 provided financing  to our  Company in  the  aggregate principal  amount  of
 $1,945,958.  The Notes were issued as  follows: (i) a note in the  principal
 amount of $1,745,958 to  John Jenkins, our Chief  Executive Officer; (ii)  a
 note in the principal amount of  $100,000 to Allen Sciarillo, our  Executive
 Vice President  and  Chief  Financial  Officer; and  (iii)  a  note  in  the
 principal amount of $100,000 to Larry Vierra, our Executive Vice  President.
 With an original maturity date of October 24, 2003, these Notes were amended
 to mature on February 24,  2004.  The Notes  have matured and are  currently
 due on demand.  The  notes continue to accrue  interest at the stated  rate.
 Each note is secured  by certain of  our assets.   Each Note was  originally
 convertible at six-month  intervals only,  but was  subsequently amended  in
 November 2002 to provide for conversion  into shares of our common stock  at
 the option of the holder at any time.  The conversion price is equal to  the
 closing bid price of  our common stock on  the last trading day  immediately
 preceding the  conversion.   We also  issued  to the  holders of  the  Notes
 warrants to acquire an aggregate of  1,945,958 shares of common stock at  an
 exercise price of  $0.75 per  share, which  warrants expire  on October  24,
 2006.

 In January and July 2002,  the Notes issued to  Mr. Jenkins were amended  to
 include additional advances in the  aggregate principal amount of  $402,443.
 We also issued to Mr. Jenkins two warrants to acquire an additional  102,443
 and 300,000 shares of  common stock, respectively, at  an exercise price  of
 $0.75, which  warrants  expire  on  January  28,  2007  and  July  8,  2007,
 respectively.

 In September 2004, the holders of  the Notes converted a total aggregate  of
 $877,500 of the outstanding principal into an aggregate of 6,750,000  shares
 of common stock.


 Item 14. Principal Accounting Fees and Services.

 Audit Fees

 The aggregate  fees  billed  by KBA  Group  LLP  for  professional  services
 rendered for  the audit  of the  Company's annual  financial statements  and
 review of the interim financial statements  included in the Company's  Forms
 10-Q, including services related thereto, were  $90,470 and $94,626 for  the
 fiscal years ended October 31, 2004 and 2003, respectively.

 Audit-Related Fees

 There were no audit-related fees billed  by KBA Group LLP during the  fiscal
 years ended October 31, 2004 and 2003.

 Tax Fees

 The aggregate  fees  billed  by KBA  Group  LLP  for  professional  services
 rendered for tax compliance, tax advice and tax planning were $0 and $28,985
 for the fiscal  years ended October  31, 2004 and  2003, respectively.   The
 services comprising  the fees  reported as  "Tax Fees"  included tax  return
 preparation, consultation regarding various tax issues and support  provided
 to management in connection with income and other tax audits.

 All Other Fees

 The aggregate  fees  billed  by KBA  Group  LLP  for  professional  services
 rendered for the review  of registration statements were  $0 and $6,195  for
 the fiscal years ended October 31, 2004 and 2003, respectively.


                                   PART IV

 Item 15. Exhibits, Financial Statement Schedules.

 (a)

      (1) and (2) list of financial statements

 The response to this item is submitted as a separate section of this Report.
 See the index on Page F-1.

      (3) exhibits

 The following is a  list of all exhibits  filed with this Report,  including
 those incorporated by reference.

 2.1    Agreement  and Plan of  Merger dated as  of January  30, 1998,  among
   Canmax Inc.,  CNMX MergerSub, Inc.  and US  Communications Services,  Inc.
   (filed as Exhibit 2.1 to Form 8-K dated January 30, 1998 (the "USC  8-K"),
   and incorporated herein by reference)

 2.2    Rescission Agreement dated June  15, 1998 among Canmax Inc., USC  and
   former principals of USC (filed as Exhibit 10.1 to Form 8-K dated  January
   15,  1998  (the   "USC  Rescission  8-K"),  and  incorporated  herein   by
   reference)

 2.3    Asset Purchase Agreement by  and among Affiliated Computed  Services,
   Inc.,  Canmax and  Canmax Retail  Systems, Inc.  dated September  3,  1998
   (filed as Exhibit  10.1 to the Company's Form  8-K dated December 7,  1998
   and incorporated herein by reference)

 2.4    Asset Purchase Agreement dated November 2, 1999 among ARDIS Telecom &
   Technologies,  Inc.,  Dial  Thru  International  Corporation,  a  Delaware
   corporation,   Dial   Thru   International   Corporation,   a   California
   corporation,  and John  Jenkins (filed  as Exhibit  2.1 to  the  Company's
   Current Report on Form 8-K dated November 2, 1999 and incorporated  herein
   by reference)

 2.5    Stock and Asset Purchase  Agreement, dated as of September 18,  2001,
   by  and among  Rapid  Link USA,  Inc.,  Rapid  Link Inc.,  and  Dial  Thru
   International Corporation. (filed as Exhibit 2.1 to the Company's Form  8-
   K dated October 29, 2001 and incorporated herein by reference)

 2.6    First Amendment to Stock and Asset Purchase  Agreement, dated  as  of
   September 21, 2001,  by and among Rapid Link  USA, Inc., Rapid Link  Inc.,
   and Dial  Thru International  Corporation. (filed  as Exhibit  2.2 to  the
   Company's  Form 8-K  dated October  29, 2001  and incorporated  herein  by
   reference)

 2.7    Second Amendment to Stock  and Asset Purchase Agreement, dated as  of
   October 12, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,  and
   Dial  Thru  International  Corporation.  (filed  as  Exhibit  2.3  to  the
   Company's  Form 8-K  dated October  29, 2001  and incorporated  herein  by
   reference)

 2.8    Third Amendment  to Stock and Asset  Purchase Agreement, dated as  of
   October 30, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,  and
   Dial  Thru  International  Corporation.  (filed  as  Exhibit  2.4  to  the
   Company's Form  8-K dated  December 28,  2001 and  incorporated herein  by
   reference)

 2.9    Fourth Amendment to Stock  and Asset Purchase Agreement, dated as  of
   November 30,  2001, by and among  Rapid Link USA,  Inc., Rapid Link  Inc.,
   and Dial  Thru International  Corporation. (filed  as Exhibit  2.5 to  the
   Company's Form  8-K dated  December 28,  2001 and  incorporated herein  by
   reference)

 3.1    Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the
   Company's Annual  Report on Form  10-K for the  fiscal year ended  October
   31, 1999 (the "1999 Form 10-K") and incorporated herein by reference)

 3.2    Amended  and  Restated Bylaws of Dial Thru International  Corporation
   (filed as  Exhibit 3.2 to the  1999 Form 10-K  and incorporated herein  by
   reference)

 3.3*   Amendment to Certificate of Incorporation dated January 11, 2005  and
   filed with the State of Delaware on January 13, 2005

 4.1    Registration Rights  Agreement between  Canmax  and the  Dodge  Jones
   Foundation (filed  as Exhibit 4.02  to Canmax's Quarterly  Report on  Form
   10-Q  for the  period ended  April  30, 1997  and incorporated  herein  by
   reference)

 4.2    Registration  Rights  Agreement between  Canmax and  Founders  Equity
   Group, Inc. (filed  as Exhibit 4.02 to  Canmax's Quarterly Report on  Form
   10-Q  for the  period ended  April  30, 1997  and incorporated  herein  by
   reference)

 4.3    Amended  and  Restated Stock Option Plan of  Dial Thru  International
   Corporation (filed as Exhibit 4.3  to the 1999 Form 10-K and  incorporated
   herein by reference)

 4.4    Securities Purchase Agreement dated  April 11, 2001 (filed as Exhibit
   4.1  to the  Registrant's Quarterly  Report on  Form 10-Q  for the  period
   ended April 30, 2001 and incorporated herein by reference)

 4.5    Registration Rights Agreement dated  April 6, 2001 between Dial  Thru
   International Corporation  and Global Capital  Funding Group, L.P.  (filed
   as  Exhibit 4.2  to the  Company's  Form S-3,  File #333-71406,  filed  on
   October 11, 2001 and incorporated herein by reference)

 4.6   6 % Convertible Debenture of  Dial Thru International Corporation  and
   Global Capital Funding Group, L.P. (filed as Exhibit 4.3 to the  Company's
   Form  S-3, File  333-71406, filed  on October  11, 2001  and  incorporated
   herein by reference)

 4.7    Form of  Common Stock Purchase Warrant  dated April 11, 2001  between
   Global  Capital   Funding  Group,   L.P.  and   Dial  Thru   International
   Corporation (filed  as Exhibit 4.4  to the Company's  Form S-3, File  333-
   71406, filed October 11, 2001 and incorporated herein by reference)

 4.8    Form  of Common Stock  Purchase Warrant dated  April 6, 2001  between
   D.P. Securities,  Inc. and Dial Thru  International Corporation (filed  as
   Exhibit 4.5 to  the Company's Form S-3,  File 333-71406, filed on  October
   11, 2001 and incorporated herein by reference)

 4.9    Securities Purchase  Agreement issued January  28, 2002 between  Dial
   Thru International Corporation  and GCA Strategic Investment Fund  Limited
   (filed as Exhibit 4.1 to the Company's Form S-3, File 333-82622, filed  on
   February 12, 2002 and incorporated herein by reference)

 4.10    Registration Rights Agreement dated  January 28,  2002 between  Dial
   Thru International Corporation  and GCA Strategic Investment Fund  Limited
   (filed as Exhibit 4.2 to the Company's Form S-3, File 333-82622, filed  on
   February 12, 2002 and incorporated herein by reference)

 4.11    6% Convertible Debenture of  Dial Thru International Corporation and
   GCA  Strategic  Investment Fund  Limited  (filed  as Exhibit  4.3  to  the
   Company's  Form  S-3, File  333-82622,  filed  on February  12,  2002  and
   incorporated herein by reference)

 4.12    Common Stock Purchase  Warrant dated  January 28,  2002 between  GCA
   Strategic Investment Fund Limited and Dial Thru International  Corporation
   (filed as Exhibit 4.4 to the Company's Form S-3, File 333-82622, filed  on
   February 12, 2002 and incorporated herein by reference)

 10.1    Employment Agreement,  dated June  30,  1997 between  Canmax  Retail
   Systems, Inc.  and Roger Bryant  (filed as Exhibit 10.3  to the  Company's
   Registration Statement on Form  S-3, File No. 333-33523 (the "Form  S-3"),
   and incorporated herein by reference)

 10.2    Commercial Lease Agreement between Jackson--Shaw/Jetstar Drive  Tri-
   star Limited Partnership  and the Company (filed  as Exhibit 10.20 to  the
   Company's  Annual  Report  on  Form  10-K  dated  October  31,  1998,  and
   incorporated herein by reference)

 10.3    Employment Agreement, dated November 2, 1999 between ARDIS Telecom &
   & Technologies, Inc.  and John Jenkins (filed as  Exhibit 4.3 to the  2000
   Form 10-K and incorporated herein by reference)

 14.1   Code of Business Conduct and Ethics for Employees, Executive Officers
 and Directors (filed as Exhibit 14.1 to the 2003 Form 10-K and  incorporated
 herein by reference)

 21.1*  Subsidiaries of the Registrant

 23.1*  Consent of Independent Registered Public Accounting Firm

 31.1*  Certificate of Chief Executive Officer pursuant to Rule 13a-14(a) and
        Rule 15d-14(a) of the Securities Exchange Act of 1934

 31.2*  Certificate of Chief Financial Officer pursuant to Rule 13a-14(a) and
        Rule 15d-14(a) of the Securities Exchange Act of 1934

 32.1*  Certificate of Chief Executive Officer  pursuant to 18 U.S.C. Section
        1350

 32.2*  Certificate of Chief Financial Officer  pursuant to 18 U.S.C. Section
        1350

 * Filed herewith.
                                  SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities
 Exchange Act of 1934, the registrant has duly caused this Report to be
 signed in its behalf by the undersigned thereunto duly authorized.

 Date: January 31, 2005


                                         /s/ JOHN JENKINS
                                         John Jenkins,
                                         Chairman of the Board and Chief
                                         Executive Officer


                     DIAL THRU INTERNATIONAL CORPORATION

 Date: January 31, 2005

 Pursuant to the requirements of the Securities Exchange Act of 1934, as
 amended, this report has been signed below by the following persons on
 behalf of the Registrant in the capacities and on the dates indicated.



     NAME                        TITLE                         DATE
     ----                        -----                         ----

 /s/ JOHN JENKINS         Chairman, Chief Executive       January 31, 2005
 John Jenkins             Officer and President and
                          Director

 /s/ ALLEN SCIARILLO      Chief Financial Officer         January 31, 2005
 Allen Sciarillo          and secretary (principal
                          financial and principal
                          accounting officer)

 /s/ LAWRENCE VIERRA      Executive Vice President        January 31, 2005
 Lawrence Vierra          and Director

 /s/ ROBERT M. FIDLER     Director                        January 31, 2005
 Robert M. Fidler

 /s/ DAVID HESS           Director                        January 31, 2005
 David Hess


<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES

                        INDEX TO FINANCIAL STATEMENTS


 1. Consolidated Financial Statements

    Report of Independent Registered Public Accounting Firm             F-2

    Consolidated Balance Sheets at October 31, 2004 and 2003            F-3

    Consolidated Statements of Operations for the fiscal years
     ended October 31, 2004, 2003 and 2002                              F-4

    Consolidated Statement of Shareholders' (Deficit) Equity for
     the fiscal years ended October 31, 2004, 2003 and 2002             F-5

    Consolidated Statements of Cash Flows for the fiscal years ended
     October 31, 2004, 2003 and 2002                                    F-6

    Notes to Consolidated Financial Statements                          F-7

 2. Financial Statement Schedule

    Report of Independent Registered Public Accounting Firm
      as to Schedule                                                    S-1

    Schedule II - Valuation and Qualifying Accounts                     S-2


    All other schedules are omitted because they are not applicable or
 because the required information is shown in the consolidated financial
 statements or notes thereto.

<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           -------------------------------------------------------

 To the Board of Directors and Shareholders of
 Dial Thru International Corporation

 We have audited the accompanying consolidated balance sheets of Dial Thru
 International Corporation and subsidiaries as of October 31, 2004 and 2003,
 and the related consolidated statements of operations, shareholders' equity
 (deficit) and cash flows for the years ended October 31, 2004, 2003 and
 2002.  These consolidated financial statements are the responsibility of the
 Company's management.  Our responsibility is to express an opinion on these
 consolidated financial statements based on our audits.

 We conducted our audits in accordance with the standards of the Public
 Company Accounting Oversight Board (United States).  Those standards require
 that we plan and perform the audit to obtain reasonable assurance about
 whether the financial statements are free of material misstatement.  An
 audit includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation.  We believe that our audits provide a reasonable basis
 for our opinion.

 In our opinion, the consolidated financial statements referred to above
 present fairly, in all material respects, the financial position of Dial
 Thru International Corporation and subsidiaries as of October 31, 2004 and
 2003, and the results of their operations and their cash flows for the years
 ended October 31, 2004, 2003 and 2002, in conformity with accounting
 principles generally accepted in the United States of America.

 The accompanying consolidated financial statements have been prepared
 assuming that the Company will continue as a going concern.  As discussed
 in Note 1 to the consolidated financial statements, the Company has suffered
 recurring losses from continuing operations during each of the last three
 fiscal years.  Additionally, at October 31, 2004, the Company's current
 liabilities exceeded its current assets by $9.3 million and the Company
 has a shareholders' deficit totaling $6.5 million.  These conditions raise
 substantial doubt about the Company's ability to continue as a going
 concern. Management's plans as they relate to these issues are also
 explained in Note 1.  The consolidated financial statements do not include
 any adjustments that might result from the outcome of this uncertainty.


 /s/ KBA GROUP LLP
 Dallas, Texas
 December 9, 2004

                                      F-2
<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


                   ASSETS
                   ------                              October 31,  October 31,
                                                           2004         2003
                                                        ----------   ----------
 CURRENT ASSETS
   Cash and cash equivalents                           $   586,389  $   505,256
   Trade accounts receivable, net of allowance
    for doubtful accounts of $122,291 at October
    31, 2004 and $295,094 at October 31, 2003              841,127      872,610
   Prepaid expenses and other current assets               197,968      230,997
                                                        ----------   ----------
       Total current assets                              1,625,484    1,608,863
                                                        ----------   ----------

 PROPERTY AND EQUIPMENT, net                               869,957    1,340,986
 GOODWILL, net                                           1,796,917    1,796,917
 OTHER ASSETS                                               69,050       91,434
 NET LONG-TERM ASSETS OF DISCONTINUED OPERATIONS                 -      242,334
                                                        ----------   ----------
 TOTAL ASSETS                                          $ 4,361,408  $ 5,080,534
                                                        ==========   ==========

    LIABILITIES AND SHAREHOLDERS' DEFICIT
    -------------------------------------

 CURRENT LIABILITIES
   Capital lease obigation                             $   126,196  $   146,140
   Trade accounts payable                                2,791,545    2,814,472
   Accrued liabilities                                   1,142,829    1,377,307
   Accrued interest (including $759,692 to related
     parties at October 31, 2004 and $539,125 at
     October 31, 2003)                                   1,154,284      721,632
   Deferred revenue                                        380,444      356,999
   Deposits and other payables                             428,109      430,678
   Convertible debentures                                1,040,000            -
   Note payable, net of unamortized debt discount
     of $2,847 at October 31, 2003                       1,250,000      547,153
   Notes payable to related parties                      1,470,890    2,348,401
   Net current liabilities of discontinued operations    1,100,000    2,843,481
                                                        ----------   ----------
       Total current liabilities                        10,884,297   11,586,263
                                                        ----------   ----------

 NOTE PAYABLE, net of unamortized debt discount of
   $22,838 at October 31, 2003                                   -    1,227,162
 CONVERTIBLE DEBENTURES, net of unamortized debt
   discount of $10,756 at October 31, 2003                       -      489,244

 COMMITMENTS AND CONTINGENCIES (NOTES 1 AND 13)

 SHAREHOLDERS' DEFICIT
   Preferred stock, $.001 par value; 10,000,000
     shares authorized; none issued and outstanding              -            -
   Common stock, $.001 par value; 44,169,100 shares
     authorized;  23,034,151 shares issued at
     October 31, 2004 and 16,201,803 shares
     issued at October 31, 2003                             23,034       16,202
   Additional paid-in capital                           40,055,719   39,070,235
   Accumulated deficit                                 (46,546,772) (47,253,702)
   Treasury stock, 12,022 common shares at cost            (54,870)     (54,870)
                                                        ----------   ----------
       Total shareholders' deficit                      (6,522,889)  (8,222,135)
                                                        ----------   ----------
 TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT           $ 4,361,408  $ 5,080,534
                                                        ==========   ==========

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

                                      F-3
<PAGE>
<TABLE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS



                                                            Year Ended October 31,
                                                 -----------------------------------------
                                                     2004           2003           2002
                                                 -----------    -----------    -----------
 <S>                                            <C>            <C>            <C>
 REVENUES                                       $ 13,380,510   $ 17,654,794   $ 18,408,649

 COSTS AND EXPENSES
  Costs of revenues                               10,045,063     13,128,924     11,539,562
  Sales and marketing                                400,559        700,404        885,661
  General and administrative                       2,990,630      3,812,639      5,760,179
  Depreciation and amortization                      615,883      1,338,351      2,158,135
  Impairment charge related to write down of
    advertising credits                                    -      2,376,678              -
  Impairment charge related to write down of
    assets held for resale                                 -              -        320,307
  Gain (loss) on disposal of equipment                     -        241,935         (9,053)
  Gain on settlement of liabilities                 (466,000)             -              -
                                                 -----------    -----------    -----------
    Total costs and expenses                      13,586,135     21,598,931     20,654,791


    Operating loss                                  (205,625)    (3,944,137)    (2,246,142)

 OTHER INCOME (EXPENSE)
  Interest expense and financing costs              (396,899)      (896,966)    (1,043,416)
  Related party interest expense and
    financing costs                                 (216,612)      (234,840)      (204,072)
  Foreign currency exchange gains (losses)            24,919          7,097        (31,976)
                                                 -----------    -----------    -----------
   Total other expense, net                         (588,592)    (1,124,709)    (1,279,464)
                                                 -----------    -----------    -----------
 LOSS FROM CONTINUING OPERATIONS                    (794,217)    (5,068,846)    (3,525,606)

 INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
   net of income taxes of $0 for all periods       1,501,147     (1,553,465)    (1,158,574)
                                                 -----------    -----------    -----------
 NET INCOME (LOSS)                              $    706,930   $ (6,622,311)  $ (4,684,180)
                                                 ===========    ===========    ===========
 NET INCOME (LOSS) PER SHARE:
  Basic and diluted net income (loss) per share
    Continuing operations                       $      (0.05)  $      (0.31)  $      (0.25)
    Discontinued operations                             0.09          (0.10)         (0.09)
                                                 -----------    -----------    -----------
                                                $       0.04   $      (0.41)  $      (0.34)
                                                 ===========    ===========    ===========
 WEIGHTED AVERAGE SHARES USED IN THE CALCULATION
   OF PER SHARE AMOUNTS:
     Basic and diluted weighted average
       common shares                              16,998,795     15,999,179     13,935,782
                                                 ===========    ===========    ===========

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


                                      F-4

</TABLE>
<PAGE>
<TABLE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) EQUITY
                                                                                                      Other
                                                                                                   Accumulated Receivable -
                                     Common   Common Stock  Treasury    Additional    Accumulated Comprehensive Common
                                     Shares      Amount       Stock   Paid-in Capital   Deficit   Income/(Loss)  Stock      Total
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
<S>                               <C>         <C>           <C>        <C>           <C>           <C>        <C>       <C>
Balance at October 31, 2001        12,119,090 $     12,119  $(54,870)  $ 38,174,587  $(35,947,212) $ (88,548) $(17,080) $ 2,078,996


Shares issued upon exercise
  of options and warrants             175,000          175         -         69,825             -          -         -       70,000
Retirement of shares as payment
  for options                        (100,000)        (100)        -        (69,900)            -          -         -      (70,000)
Issuance of common stock
  in connection with
  consulting agreement                 25,000           25         -         13,725             -          -         -       13,750
Conversion of convertible notes
  including accrued interest        2,855,826        2,856         -        528,969             -          -         -      531,825
Issuance of warrants in connection
  with convertible debentures               -            -         -         17,096             -          -         -       17,096
Embedded beneficial conversion
  feature related to issuance
  of note payable                           -            -         -        114,154             -          -         -      114,154
Issuance of warrants in connection
  with convertible notes-related
  party                                     -            -         -         45,607             -          -         -       45,607
Cash received for subscription
  receivable-common stock                   -            -         -              -             -          -    15,179       15,179
COMPREHENSIVE INCOME (LOSS)
 Net loss                                   -            -         -              -    (4,684,179)         -         -   (4,684,180)
 Foreign currency translation
   adjustment                               -            -         -              -             -   (107,509)        -     (107,509)
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Total Comprehensive Income (Loss)           -            -         -              -    (4,684,179)  (107,509)        -   (4,791,689)
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Balance at October 31, 2002        15,074,916       15,075   (54,870)    38,894,063   (40,631,391)  (196,057)   (1,901)  (1,975,081)
-----------------------------------------------------------------------------------------------------------------------------------

Conversion of convertible notes
  including accrued interest        1,098,052        1,098         -        108,099             -          -         -      109,197
Issuance of warrants in connection
  with convertible debentures               -            -         -         17,208             -          -         -       17,208
Issuance of warrants in connection
  with notes payable                        -            -         -         52,795             -          -         -       52,795
Adjustment of outstanding shares       28,835           29         -            (29)            -          -         -            -
Write off of subscription receivable        -            -         -         (1,901)            -          -     1,901            -
COMPREHENSIVE INCOME (LOSS)
 Net loss                                   -            -         -              -    (6,622,311)         -         -   (6,622,311)
 Foreign currency translation
   adjustment                               -            -         -              -             -    196,057         -      196,057
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Total Comprehensive Income (Loss)           -            -         -              -    (6,622,311)   196,057         -   (6,426,254)
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Balance at October 31, 2003        16,201,803       16,202   (54,870)    39,070,235   (47,253,702)         -         -   (8,222,135)
-----------------------------------------------------------------------------------------------------------------------------------
Conversion of convertible notes
 including accrued interest         6,832,348        6,832         -        881,398             -          -         -      888,230
Embedded beneficial conversion
 feature related to issuance
 of convertible debt                        -            -         -        104,086             -          -         -      104,086
Net income                                  -            -         -              -       706,930          -         -      706,930
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Balance at October 31, 2004        23,034,151 $     23,034  $(54,870)  $ 40,055,719  $(46,546,772) $       -   $     -  $(6,522,889)
===================================================================================================================================

 The accompanying notes are an integral part of this consolidated financial statement.


                                      F-5

</TABLE>
<PAGE>
<TABLE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                 Year Ended October 31,
                                                          ---------------------------------------
                                                             2004          2003          2002
                                                          ----------    -----------    -----------
 <S>                                                    <C>            <C>            <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
   OF CONTINUING OPERATIONS
  Net loss from continuing operations                   $   (794,217)  $ (5,068,846)  $ (3,525,606)
  Adjustments to reconcile net loss from continuing
    operations to net cash provided by (used in)
    operating activities:
    (Gain) loss from disposal of fixed assets                      -        241,935         (9,053)
    Impairment charge related to write down
      of assets held for resale                                    -              -        320,307
    Impairment charge related to write down
      of advertising credits                                       -      2,376,678              -
    Fair value of stock and warrants issued
      for services                                                 -              -         13,750
    Bad debt expense                                          30,000         28,268        685,059
    Non-cash interest expense (including related
      party interest of $0, $423,291 and $441,787)           181,525        688,732        924,340
    Gain on settlement of liabilities                       (466,000)             -              -
    Depreciation and amortization                            615,883      1,338,351      2,158,135
    Effects of changes in foreign exchange rates                   -         13,066        (39,792)
    (Increase) decrease in:
      Trade accounts receivable                                1,483         64,739       (372,978)
      Prepaid expenses and other current assets               33,029       (106,152)      (108,468)
      Other assets                                           (18,614)        (1,623)        12,421
    Increase (decrease) in:
      Trade accounts payable                                  (8,473)      (851,186)      (730,283)
      Accrued liabilities                                    664,892        580,570        578,783
      Deferred revenue                                        23,445         25,213       (406,790)
      Deposits and other payables                             (2,569)       (13,526)       444,204
                                                          ----------    -----------    -----------
  Net cash provided by (used in) operating activities
    of continuing operations                                 260,384       (683,781)       (55,971)
                                                          ----------    -----------    -----------
 CASH FLOWS FROM INVESTING ACTIVITIES
   OF CONTINUING OPERATIONS
  Purchase of property and equipment                        (144,854)      (192,150)      (303,460)
                                                          ----------    -----------    -----------
  Net cash used in investing activities
    of continuing operations                                (144,854)      (192,150)      (303,460)
                                                          ----------    -----------    -----------
 CASH FLOWS FROM FINANCING ACTIVITIES
   OF CONTINUING OPERATIONS
  Proceeds from notes payable                                      -      1,800,000              -
  Proceeds from convertible debentures                             -              -        550,000
  Proceeds from related party notes payable                        -              -        300,000
  Payments on capital leases                                 (34,397)      (105,387)      (105,784)
  Deferred financing fees                                          -        (82,441)       (92,625)
  Subscription receivable-common stock                             -              -         15,179
  Payments on convertible debentures                               -       (443,000)             -
                                                          ----------    -----------    -----------
  Net cash provided by (used in) financing activities
    of continuing operations                                 (34,397)     1,169,172        666,770
                                                          ----------    -----------    -----------
 NET CASH USED IN DISCONTINUED OPERATIONS                          -        (57,298)      (112,143)
                                                          ----------    -----------    -----------
 NET INCREASE IN CASH AND CASH EQUIVALENTS                    81,133        235,943        195,196

 Cash and cash equivalents at beginning of year              505,256        269,313         74,117
                                                          ----------    -----------    -----------
 Cash and cash equivalents at end of year                $   586,389   $    505,256   $    269,313
                                                          ==========    ===========    ===========

 SUPPLEMENTAL INFORMATION AND SCHEDULE OF NON CASH
   INVESTING AND FINANCING ACTIVITIES
  Conversion of convertible debenture and
    accrued interest to common stock                     $   888,230   $    109,197   $    531,825
  Fair value of warrants issued with debt                          -         70,003         62,704
  Beneficial conversion feature of convertible
    debentures recorded as debt discount                     104,086              -        114,154
  Note payable exchanged for convertible debenture           550,000              -              -
  Cash paid for interest                                           -         35,000              -
  Exercise of stock options in exchange for retirement
    of 100,000 common shares                                       -              -         70,000

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

                                      F-6

</TABLE>
<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 Organization
 ------------
 Dial  Thru  International  Corporation   and  subsidiaries  ("DTI"  or   the
 "Company"), was incorporated on July 10,  1986 under the Company Act of  the
 Province of  British Columbia,  Canada.   On  August  7, 1992,  the  Company
 renounced its original province of incorporation and elected to continue its
 domicile under the laws of the State  of Wyoming, and on November 30,  1994,
 its name was changed to Canmax Inc.   On February 1, 1999, this  predecessor
 company reincorporated under the laws of  the State of Delaware and  changed
 its name to ARDIS Telecom & Technologies, Inc.

 On November 2, 1999, the Company acquired substantially all of the  business
 and assets of Dial Thru International Corporation, a California corporation,
 along with the rights to the name "Dial Thru International Corporation."  On
 January 19,  2000,  the  Company  changed its  name  from  ARDIS  Telecom  &
 Technologies,  Inc.  to  Dial  Thru International  Corporation.   DTI  is  a
 facilities-based, global  Internet  Protocol ("IP")  communications  company
 providing connectivity  to  international markets  experiencing  significant
 demand for IP  enabled services.   DTI provides a  variety of  international
 telecommunications services targeted to  small and medium sized  enterprises
 ("SME's") that include the  transmission of voice and  data traffic and  the
 provision of Web-based and other communications services.  The Company  also
 sells  telecommunications  services  for  both  the  foreign  and   domestic
 termination of  international  long  distance  traffic  into  the  wholesale
 market.  DTI utilizes Voice over Internet Protocol ("VoIP") packetized voice
 technology (and  other  compression techniques)  to  improve both  cost  and
 efficiencies of telecommunication transmissions, and is developing a private
 VoIP network.  DTI  utilizes  state-of-the-art digital  fiber  optic  cable,
 oceanic cable  transmission  facilities, international  satellites  and  the
 Internet to transport the Company's communications.

 Nature of Business
 ------------------
 In  November  1999   with  the  acquisition   of  Dial  Thru   International
 Corporation, the Company  changed its focus  from prepaid  calling cards  to
 becoming a full service,  facility-based provider of communication  products
 to small and medium size businesses, both domestically and  internationally.
 The Company  currently  provides a  variety  of international  and  domestic
 communication services including international re-origination and dial thru,
 Internet voice and fax services, e-Commerce solutions and other  value-added
 communication services, using  its VoIP Network  to effectively deliver  the
 products to the end user.

 To further enhance its product offerings and accelerate its growth plans, in
 October 2001, the Company acquired certain  assets and liabilities of  Rapid
 Link, USA, Inc. ("Rapid  Link USA") and  100% of the  common stock of  Rapid
 Link Telecommunications, GmbH, ("Rapid Link Germany") a German Company, from
 Rapid Link, Incorporated ("Rapid Link").   Rapid Link is a leading  provider
 of high quality integrated  data and voice  communications services to  both
 wholesale and retail customers around the  world.  Rapid Link's global  VoIP
 network reaches thousands of retail customers, primarily in Europe and Asia.
 The  acquisition  enhanced  the  Company's  product  offerings  and  rapidly
 expanded the Company's VoIP strategy due to the engineering and  operational
 expertise acquired in the transaction.   During 2003, management decided  to
 discontinue its continued  financial support of  Rapid Link  Germany and  on
 August 1,  2003, Rapid  Link Germany  received approval  for its  insolvency
 filing.   Accordingly,  the  operations of  Rapid  Link  Germany  have  been
 reflected  as  discontinued   operations  in   the  accompanying   financial
 statements for all periods presented.

 Financial Condition
 -------------------
 The Company is subject to various risks in connection with the operation  of
 its  business  including,  among  other  things,  (i)  changes  in  external
 competitive market factors,  (ii) inability to  satisfy anticipated  working
 capital or other  cash requirements, (iii)  changes in  the availability  of
 transmission facilities, (iv) changes in the Company's business strategy  or
 an inability to  execute is  strategy due  to unanticipated  changes in  the
 market, (v) various competitive  factors that may  prevent the Company  from
 competing successfully in the  marketplace, and (vi)  the Company's lack  of
 liquidity and its ability to raise  additional capital.  The Company has  an
 accumulated deficit of approximately $46.5 million  as of October 31,  2004,
 as well as a working capital deficit of approximately $9.3 million.  Funding
 of the  Company's  working capital  deficit,  current and  future  operating
 losses, and  expansion  of  the  Company  will  require  continuing  capital
 investment.   Historically, some  of the  funding of  the Company  has  been
 provided by a major  shareholder.  The Company's  strategy is to fund  these
 cash requirements through debt facilities and additional equity financing.

 Although the Company  has been able  to arrange debt  facilities and  equity
 financing to date, there can be no assurance that sufficient debt or  equity
 financing will continue to  be available in  the future or  that it will  be
 available on terms acceptable to the Company.  Failure to obtain  sufficient
 capital could  materially  affect  the Company's  operations  and  expansion
 strategies.   The  Company  will  continue  to  explore  external  financing
 opportunities and  renegotiation of  its  short-term debt with  its  current
 financing  partners   in   order   to extend the   terms   or   retire these
 obligations.   At October 31, 2004, approximately 39% of the short-term debt
 is due to the senior management of the Company.   Management is committed to
 the growth  and success  of the  Company as  is evidenced  by the  level  of
 financing they have made available to the Company.

                                      F-7
<PAGE>

 As  a  result  of  the  aforementioned  factors  and  related uncertainties,
 there  is substantial doubt  about the  Company's ability  to continue  as a
 going concern.  The  consolidated  financial  statements do not  include any
 adjustments  to  reflect   the  possible  effects   of  recoverability   and
 classification of assets or classification  of liabilities which may  result
 from the inability of the Company to continue as a going concern.


 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Principles of Consolidation
 ---------------------------
 The accompanying consolidated financial  statements include the accounts  of
 the Company  and its  wholly-owned subsidiaries,  Dial Thru,  Inc., a  Texas
 corporation, DTI Com, Inc., a Delaware corporation, Dial Thru  International
 Argentina  S.A.,  Dial  Thru   International  Venezuela,  S.A.,  Dial   Thru
 International Corporation,  South Africa,  and Rapid  Link GmbH,  a  Germany
 company, which is  currently in liquidation.   All significant  intercompany
 accounts and transactions have been eliminated.

 Revenue Recognition
 -------------------
 Revenues generated by international  re-origination, dial thru services  and
 international wholesale termination are based on minutes of customer  usage.
 The Company records payments received in  advance as deferred revenue  until
 such services are  provided. This policy  applies to  all international  re-
 origination and dial thru  services revenues, and  is currently the  primary
 source of the Company's revenue.

 Cash and Cash Equivalents
 -------------------------
 The Company  considers  all  highly liquid  investments  purchased  with  an
 original maturity of three months or less to be cash equivalents.  Cash  and
 cash equivalent deposits are at risk to the extent that they exceed  Federal
 Deposit Insurance Corporation insured amounts.   To minimize this risk,  the
 Company places  its  cash and  cash  equivalents with  high  credit  quality
 financial institutions.

 Accounts Receivable
 -------------------
 Trade accounts receivable are  stated at the amount  the Company expects  to
 collect.   The  Company  maintains  allowances  for  doubtful  accounts  for
 estimated losses  resulting from  the inability  of  its customers  to  make
 required  payments.   Management  considers   the  following  factors   when
 determining the  collectibility  of  specific  customer  accounts:  customer
 credit-worthiness, past  transaction  history  with  the  customer,  current
 economic industry trends,  and changes in  customer payment terms.   If  the
 financial  condition  of  the  Company's  customers  were  to   deteriorate,
 adversely affecting their  ability to make  payments, additional  allowances
 would be required.  Based on  management's assessment, the Company  provides
 for estimated  uncollectible amounts  through a  charge  to earnings  and  a
 credit to  a valuation  allowance.  Interest  is  typically not  charged  on
 overdue  accounts receivable.  Balances  that remain  outstanding after  the
 Company has used  reasonable collection efforts  are written  off through  a
 charge to the valuation allowance and a credit to accounts receivable.

 Property and Equipment
 ----------------------
 Property and  equipment are  stated at  cost. Depreciation  of property  and
 equipment is calculated  using the straight-line  method over the  estimated
 useful lives of  the assets ranging  from three to  seven years.   Equipment
 held under  capital leases  and leasehold  improvements are  amortized on  a
 straight-line basis over  the shorter  of the  remaining lease  term or  the
 estimated useful life of the related asset ranging from three to five years.
 Expenditures for repairs and maintenance are charged to expense as incurred.
 Major renewals and betterments are capitalized.

 Goodwill
 --------
 Effective November  1, 2001,  the Company  adopted SFAS  No, 141,  "Business
 Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other  Intangible
 Assets" ("SFAS  142").   SFAS  141  requires  that the  purchase  method  of
 accounting be used for  all business combinations  initiated after June  30,
 2001, and  also specifies  the criteria  for the  recognition of  intangible
 assets separately from  goodwill.   Under SFAS  142, goodwill  is no  longer
 amortized but is  subject to an  impairment test at  least annually or  more
 frequently  if  impairment  indicators  arise.  In accordance with SFAS 142,
 an  annual impairment  test  of  goodwill  was performed  by an  independent
 valuation  firm  in  the fourth  quarters  of fiscal years  2004,  2003  and
 2002.  The valuation process appraised the Company's  assets and liabilities
 using a  combination  of  present  value  and multiple of earnings valuation
 techniques.  The results of the impairment tests indicated that goodwill was
 not impaired.

 Long-Lived Assets
 -----------------
 Long-lived assets are reviewed for impairment whenever events or changes  in
 circumstances indicate that the carrying amount  of the assets might not  be
 recoverable.  The Company does not  perform a periodic assessment of  assets
 for impairment in the absence of such information or indicators.  Conditions
 that would necessitate an  impairment include a  significant decline in  the
 observable market value of an asset,  a significant change in the extent  or
 manner in which an asset is used, or a significant adverse change that would
 indicate that the  carrying amount of  an asset or  group of  assets is  not
 recoverable.   For  long-lived assets  to  be  held and  used,  the  Company
 recognizes an impairment  loss only  if an  impairment is  indicated by  its
 carrying value not being recoverable through  undiscounted cash flows.   The
 impairment loss is the difference between  the carrying amount and the  fair
 value of the asset estimated using discounted cash flows.  Long-lived assets
 held for sale are reported at the lower of cost or fair value less costs  to
 sell.   During fiscal  2002, the  Company wrote  down certain  property  and
 equipment held for resale.  The  property and equipment was written down  by
 $320,307 to $0,  its estimated  fair value.   The estimated  fair value  was
 based on comparable market value.

 Net Income (Loss ) Per Share
 ----------------------------
 Basic net income  (loss) per share  is computed using  the weighted  average
 number of shares of  common stock outstanding during  the year. Diluted  net
 income (loss) per  share is computed  using the weighted  average number  of
 shares of common  stock outstanding during  the year  and common  equivalent
 shares consisting  of stock  options, warrants,  and convertible  debentures
 (using the treasury stock method) to the extent they are dilutive.

 The shares  issuable  upon  the exercise  of  stock  options,  warrants  and
 convertible debentures  are  excluded from  the  calculation of  net  income
 (loss) per share  for the years  ended October 31,  2004, 2003  and 2002  as
 their effect would  be antidilutive.   At October 31,  2004, 2003 and  2002,
 there were  41,235,234,  30,891,492  and  41,038,893  shares,  respectively,
 potentially  issuable   from  outstanding   stock  options,   warrants   and
 convertible debentures.

 Income Taxes
 ------------
 The  Company  utilizes  the  asset  and  liability  approach  to   financial
 accounting and  reporting  for income  taxes.   Deferred  income  taxes  and
 liabilities are  computed for  differences between  the financial  statement
 carrying amounts and tax basis of assets and liabilities that will result in
 taxable or deductible amounts  in the future based  on enacted tax laws  and
 rates applicable to  the periods in  which the differences  are expected  to
 affect taxable income.  Valuation allowances are recorded when necessary  to
 reduce deferred tax assets  to the amount expected  to be realized.   Income
 tax expense or benefit is the tax payable or refundable for the period  plus
 or  minus  the  change  during  the  period  in  deferred  tax  assets   and
 liabilities.

 Estimates and Assumptions
 -------------------------
 The preparation  of  financial  statements  in  conformity  with  accounting
 principles generally accepted  in the United  States requires management  to
 make estimates  and assumptions  that effect  the  amounts reported  in  the
 financial statements  and accompanying  notes. Actual  results could  differ
 from those estimates.

 Fair Market Value of Financial Instruments
 ------------------------------------------
 The carrying amount for current assets  and liabilities,  and long-term debt
 (all current at October 31, 2004)  is not  materially  different  than  fair
 market  value because  of the short maturity of the instruments and/or their
 respective interest rate amounts.

 Stock-Based Compensation
 ------------------------
 The Company accounts for  stock-based employee compensation arrangements  in
 accordance with provisions  of Accounting Principles  Board ("APB")  Opinion
 No. 25, "Accounting for  Stock Issued to Employees,"  and complies with  the
 disclosure  provisions  of  SFAS   No.  123,  "Accounting  for   Stock-Based
 Compensation," as  amended  by  SFAS No.  148  "Accounting  for  Stock-Based
 Compensation - Transition  and  Disclosure".   Under  APB  Opinion  No.  25,
 compensation expense for employees  is based on the  excess, if any, on  the
 date of grant, of fair value of the Company's stock over the exercise price.
 Accordingly, no compensation cost has been recognized for its employee stock
 options in the financial statements during the years ended October 31, 2004,
 2003 and 2002 as the  fair market value on  the grant date approximates  the
 exercise price. Had the  Company determined compensation  cost based on  the
 fair value at the  grant date for  its stock options  under SFAS No.123,  as
 amended by SFAS No.  148, the Company's pro  forma net loss from  continuing
 operations for the years  ended October 31, 2004,  2003 and 2002 would  have
 been as follows:

                                       2004           2003           2002
                                   -----------    -----------    -----------
    Net loss from continuing
     operations, as reported      $   (794,217)  $ (5,068,846)  $ (3,525,606)

    Add: Stock-based employee
    compensation expense
    included in reported
    net loss from continuing
    operations                               -              -              -

    Deduct: Stock-based employee
    compensation expense
    determined under the
    fair value based method           (150,185)      (252,040)      (343,700)
                                   -----------    -----------    -----------
    Pro forma net loss from
    continuing operations         $   (944,402)  $ (5,320,886)  $ (3,869,306)
                                   ===========    ===========    ===========

    Net loss per share from
    continuing operations -
    basic and dilutive, as
    reported                      $      (0.05)  $      (0.31)  $      (0.25)
                                   ===========    ===========    ===========

    Net loss per share from
    continuing operations -
    basic and dilutive, pro forma $      (0.06)  $      (0.33)  $      (0.28)
                                   ===========    ===========    ===========

 For purposes  of pro  forma disclosures,  the estimated  fair value  of  the
 options is amortized to expense over  the options' vesting periods.  Because
 options vest  over a  period  of several  years  and additional  awards  are
 generally made each year, the pro  forma information presented above is  not
 necessarily indicative of the effects on reported or pro forma net  earnings
 or losses for future years.

 The fair  value of  all options  and warrants  for shares  of the  Company's
 common stock issued to employees has been determined using the Black-Scholes
 option pricing model with the following assumptions:

                                  2004           2003           2002
  ------------------------------------------------------------------
  Risk-free interest rate           3%             3%             4%
  Expected dividend yield           0%             0%             0%
  Expected lives               2 years        3 years        5 years
  Expected volatility             100%    126% - 221%     99% - 157%

 Comprehensive Income (Loss)
 ---------------------------
 Comprehensive income  (loss) is  the increase  or  decrease in  equity  from
 sources other  than owners.   The  major component  of the  Company's  other
 comprehensive income  (loss) consists  of  unrealized income  from  currency
 translation, which  is  stated  as a  component  of  shareholders'  deficit.
 During the  fourth  quarter  of  fiscal  year  2003,  the  Company's  German
 subsidiary filed for  insolvency.   Accordingly, subsequent  to October  31,
 2003,  there  is no longer a foreign currency translation adjustment and  no
 comprehensive income (loss).

 Foreign Currency Translation and Foreign Currency Transactions
 --------------------------------------------------------------
 The Company's foreign operations are  subject to exchange rate  fluctuations
 and foreign currency transaction costs.  Monetary assets and liabilities  of
 subsidiaries domiciled outside the United States are translated at rates  of
 exchange existing  at  the  balance  sheet  date  and  non-monetary  assets,
 liabilities and equity  are translated  at  historical rates.  Revenues  and
 expenses are translated at average rates  of exchange prevailing during  the
 year. The  resulting  translation adjustments  are  recorded as  a  separate
 component of shareholders'  deficit.  During  the fourth  quarter of  fiscal
 year  2003,   the  Company's   German  subsidiary   filed  for   insolvency.
 Accordingly, subsequent to October  31, 2003, there is  no longer a  foreign
 currency translation adjustment.  Foreign currency transactions resulting in
 gains and losses are recorded in the Statement of Operations.

 Advertising
 -----------
 Advertising costs are expensed as incurred and totaled $7,209, $103,603 and
 $248,200 for the years ended October 31, 2004, 2003 and 2002, respectively.

 Reclassifications
 -----------------
 Certain reclassifications  were  made  to the  2003  and  2002  consolidated
 financial statements to conform to the current year presentation.

 Recent Accounting Pronouncements
 --------------------------------
 In   December  2004,   the  Financial  Accounting  Standards  Board   issued
 Statement   of  Financial  Accounting  Standards  No.  123   (revised  2004)
 ("Statement 123(R)"), "Share-Based  Payment",  which revised  SFAS  No. 123,
 "Accounting for  Stock-Based Compensation".  This statement  supercedes  APB
 Opinion  No.  25, "Accounting  for Stock Issued  to Employees".  The revised
 statement addresses the accounting for share-based payment transactions with
 employees and other  third parties, eliminates  the ability  to account  for
 share-based compensation transactions  using APB  25 and  requires that  the
 compensation costs  relating  to  such transactions  be  recognized  in  the
 consolidated statement of operations.  The revised statement is effective as
 of the first interim period beginning after June 15, 2005.  The Company will
 adopt  the statement  on August 1, 2005 as required.  The impact of adoption
 of Statement 123(R) cannot be predicted at this time because  it will depend
 on levels  of share-based  payments granted  in the future.  However had the
 Company  adopted  Statement  123(R)  in prior periods,  the impact  of  that
 standard would  have  approximated the impact  of Statement 123 as described
 in  the  disclosure  of  pro  forma  net  loss and net loss per share in the
 stock-based  compensation  accounting policy  note included in Note 2 to the
 consolidated financial statements.


 NOTE 3 - DISCONTINUED OPERATIONS

 Rapid Link Telecommunications GMBH
 ----------------------------------
 In the fourth quarter of fiscal year 2003,  the Company's German Subsidiary,
 Rapid  Link  Telecommunications  GMBH  ("Rapid  Link  Germany"),  filed  for
 insolvency.  The net  liability of approximately $2.3  million  was included
 in the balance sheet  and classified as Discontinued  Operations  at October
 31, 2003.   During  the  first quarter  of  fiscal year  2004,  the  Company
 determined that it no  longer controlled the operations  of this  subsidiary
 and that the parent entity  had  no legal obligation  to pay the liabilities
 of  Rapid Link  Germany.  Accordingly,  the Company wrote  off the remaining
 net liability of $2,251,000 and included the gain in Discontinued Operations
 during the first quarter of fiscal year 2004.

 The following  table presents  selected balance sheet  information for Rapid
 Link Germany at October 31, 2003:

    Current assets
       Cash                                   $     164,878
       Trade accounts receivable, net               416,013
       Other current assets                         192,917
                                               ------------
    Total current assets                            773,808
                                               ------------
    Current liabilities
       Current portion of capital lease
         obligations                                144,643
       Trade accounts payable                     2,612,864
       Accrued liabilities                           86,877
       Deferred revenue                             422,905
                                               ------------
    Total current liabilities                     3,267,289
                                               ------------
    Net current liabilities of
    discontinued operations                   $   2,493,481
                                               ============

    Property and equipment
       Telecom equipment                      $           -
       Furniture, fixtures, equipment                     -
       Computers                                          -
       Software                                           -
       Leasehold improvements                             -
       Accumulated depreciation and
         amortization                                     -
                                               ------------
    Total property and equipment, net                     -
                                               ------------

    Other assets and long-term liabilities
       Capital lease obligations                     (9,644)
       Other                                        251,978
                                               ------------
    Total other assets, net                         242,334
                                               ------------
    Net long-term assets of
    discontinued operations                   $     242,334
                                               ============

 The following  table  presents  summary operating  results  for  Rapid Link
 Germany for the years ended October 31:

                                              2003               2002
                                          ------------       ------------
   Revenues                              $   3,598,007      $   4,559,411
   Costs and expenses                        4,801,472          5,717,985
                                          ------------       ------------
   Loss from discontinued operations     $  (1,203,465)     $  (1,158,574)
                                          ============       ============

 Canmax Retail Systems
 ---------------------
 During the first quarter of fiscal  year 2004, the Company determined  based
 on final written communications with the State of Texas that the Company had
 a liability for sales taxes (including penalties and interest) totaling $1.1
 million.  The Company had previously accrued an estimated settlement  amount
 of  $350,000 during  fiscal year 2003.  During the  first quarter of  fiscal
 year 2004, the Company accrued an additional $750,000.  The sales tax amount
 due is attributable to audit  findings of the State  of Texas for the  years
 1995 to  1999 associated  with the  Company's former  parent, Canmax  Retail
 Systems.  These operations were previously classified as discontinued  after
 the Company changed  its business  model from  a focus  on domestic  prepaid
 phone cards to international wholesale and  retail business, operating as  a
 facilities-based global Internet  protocol communications company  providing
 connectivity to international markets.  The  State of Texas determined  that
 the Company did not properly remit  sales tax on certain transactions.   The
 Company's current and former management believes that the amount due has not
 been properly  assessed and  will continue  to  pursue a  lesser  settlement
 amount.  Since this sales tax liability represents an adjustment to  amounts
 previously reported in Discontinued Operations, the amount was classified as
 Discontinued Operations. The amount that the State of Texas assessed of $1.1
 million  has been accrued  as a liability and is included in the October 31,
 2004 Consolidated Balance Sheet as Discontinued Operations. (See Note 13.)


 NOTE 4 - ADVERTISING CREDITS

 On  September 8, 2000, the Company  issued 914,285 shares  (which are  fully
 vested and nonforfeitable)  of the Company's  common stock  in exchange  for
 $3.2 million face value of advertising  credits.  These credits were  issued
 by Millenium Media  Ltd. and  Affluent Media  Network, national  advertising
 agencies and media placement brokers.  The Company recorded the  advertising
 credits on the  date the shares  were issued, September  8, 2000, using  the
 Company's  quoted  common  stock  price of  $3.3125,  totaling   $3,028,569.
 During the  fiscal year  ended October  31, 2000,  the Company  recorded  an
 impairment charge of $575,542 to reduce the credits to their estimated  fair
 value, and sold a portion of the  credits for cash, reducing the balance  by
 an additional $76,349.  The estimated fair value was established at the  end
 of fiscal 2000 using a discount of 25%  off the face value, which was  based
 on management's estimate of the  dollar value of the  credits to be used  in
 settling various outstanding trade obligations. Such credits can be used  by
 the Company to place  electronic media and  periodical advertisements.   The
 primary use for  the media credits  was to advertise  products and  services
 domestically.  Although the Company has  explored product offerings that  it
 believed would benefit from  the form of  advertising described herein,  the
 Company's limited financial resources have delayed the development of  those
 products and  it is  unclear whether  the Company  will have  the  resources
 necessary to develop products that  could effectively use these  advertising
 credits.  Furthermore, management has received limited cooperation from  its
 media placement brokers regarding the use of the credits, and therefore, has
 begun  contacting  the  actual underlying provider of the advertising.  This
 contact  has not provided  any certainty as to the Company's  ability to use
 the credits.  Therefore, the Company wrote off  the remaining $2,376,678  of
 the advertising credits during the year ended October 31, 2003.


 NOTE 5 - CONVERTIBLE DEBENTURES

 In January 2002, the Company executed a 6% convertible debenture (the  "GCA-
 Debenture") with  GCA  Strategic  Investment  Fund  Limited  ("GCA"),  which
 provided financing of $550,000.  The GCA-Debenture's original maturity  date
 was January 28, 2003.  The GCA-Debenture is secured by certain property  and
 equipment held for sale.  The conversion price is equal to the lesser of (i)
 100% of  the volume  weighted average  of  sales price  as reported  by  the
 Bloomberg L.P.  of the  common stock  on the  last trading  day  immediately
 preceding the Closing Date and (ii) 85%  of the average of the three  lowest
 volume weighted average sales  prices as reported  by Bloomberg L.P.  during
 the twenty Trading Days immediately preceding  but not  including  the  date
 of  the  related  Notice  of  Conversion  (the "Formula Conversion  Price").
 In  an  event  of  default  the  amount  declared  due  and  payable  on the
 GCA-Debenture  shall  be  at the  Formula Conversion  Price.  In  connection
 with the  GCA- Debenture,  the Company  paid  $92,625   in  financing  fees,
 which  were  capitalized  and  amortized  over  the  original  life  of  the
 GCA-Debenture.  At October 31, 2003,  the deferred financing fees were fully
 amortized.  The  Company  calculated  the  beneficial   conversion   feature
 embedded in the GCA-Debenture in accordance  with EITF 98-5 "Accounting  for
 Convertible Securities with Beneficial  Conversion Features or  Contingently
 Adjustable Conversion Ratios" ("EITF-98-5")  and EITF 00-27 "Application  of
 Issue No.  98-5  to  Certain Convertible  Instruments"  ("EITF  00-27")  and
 recorded approximately $114,000 as  debt discount.   This debt discount  was
 amortized over the  original life  of the  GCA-Debenture.  The debt discount
 was  fully amortized at  October 31, 2003.   The Company  also issued to the
 holder  of the  GCA-Debenture  warrants  to acquire  an  aggregate of 50,000
 shares of common stock at an exercise price of $0.41 per share, which expire
 on  January 28, 2007.  The Company  recorded debt discount  of approximately
 $17,000 related to the issuance of the warrants.  The Company determined the
 debt discount by allocating the relative fair value to the GCA-Debenture and
 the warrants, and the Company amortized the debt  discount over the original
 life of the GCA-Debenture.  The debt discount was fully amortized at October
 31, 2003.

 In January 2003, the Company and GCA  agreed to extend the maturity date  of
 the GCA-Debenture to November 8, 2004.  In consideration for this extension,
 in February 2003, the Company adjusted the exercise price of the  previously
 issued warrants to $0.21 per share.   The Company also issued to the  holder
 of the GCA-Debenture warrants  to purchase an  additional 100,000 shares  of
 common stock also at an exercise price  of $0.21 per share, which expire  on
 February  8,  2008.   The  Company  recorded  additional  debt  discount  of
 approximately $17,000 related to the  warrant exercise price adjustment  and
 the issuance of the new warrants.  The Company is amortizing the  additional
 debt discount  over the  GCA-Debenture's extension  period.   For the  years
 ended October 31, 2004 and 2003, the Company recorded approximately  $11,000
 and $6,000, respectively, as interest  expense relating to the  amortization
 of the debt discount.  The debt discount was fully amortized at October  31,
 2004.

 During the years  ended October 31,  2004 and 2003,  GCA elected to  convert
 $10,000 and $50,000, respectively,  of the GCA-Debenture into  approximately
 82,000 and 374,000 shares  of common stock,  respectively.  The  outstanding
 balance of the GCA-Debenture was $490,000  and $500,000 at October 31,  2004
 and 2003, respectively.  The GCA-Debenture  matured in November 2004 and  is
 currently due on demand.  Although no event of default has been declared  by
 GCA, the  Company is  technically in  default under  this agreement  and  is
 currently negotiating with GCA to extend the maturity date.

 In July 2003, the Company executed a 10% note payable (the "GCA-Note")  with
 GCA, which provided  financing of  $550,000.   The GCA-Note  provided for  a
 maturity date of December 23, 2003 and is unsecured.  In the event the  GCA-
 Note was not repaid in full  within 10 days of  the maturity date, the  GCA-
 Note shall be  replaced by  a 6%  convertible debenture.   This  convertible
 debenture would have a maturity date of  November 8, 2004 and be secured  by
 certain property and equipment held for resale.  The conversion price  would
 be equal to the lesser of (i) 100%  of the volume weighted average of  sales
 price as reported  by the Bloomberg  L.P. of the  common stock  on the  last
 trading day immediately  preceding the Closing  Date, which  was $0.20,  and
 (ii) 85% of the  average of the three  lowest volume weighted average  sales
 prices as  reported  by  Bloomberg  L.P.  during  the  twenty  Trading  Days
 immediately preceding but not  including the date of  the related Notice  of
 Conversion (the "Formula Conversion  Price").  In an  event of default,  the
 amount declared due  and payable on  the Debenture would  be at the  Formula
 Conversion Price.  In the event  the GCA-Note was replaced by a  convertible
 debenture, the  GCA-Note would  have a  beneficial conversion  feature.   In
 accordance with  EITF  98-5 and  EITF  00-27,  the intrinsic  value  of  the
 beneficial conversion feature  was calculated as  approximately $104,000  at
 the commitment date  using the stock  price as of  that date,  and would  be
 recorded if the note was not repaid as noted above.

 The GCA-Note matured during December 2003  and, accordingly, since the  GCA-
 Note remained unpaid as of January 2004, the Company exchanged the note  for
 a convertible  debenture.   Upon  the replacement  of  the GCA-Note  with  a
 convertible debenture, the  Company recorded  debt discount  of $104,000  as
 interest expense during the year ended October 31, 2004.  In connection with
 the GCA-Note, during fiscal year 2003, the Company paid $35,000 as financing
 fees, which were  capitalized and amortized  over the original  life of  the
 GCA-Note.   For the  years ended  October  31, 2004  and 2003,  the  Company
 recorded  approximately  $13,000  and  $22,000,  respectively,  as  interest
 expense relating  to the amortization of these deferred financing fees.  The
 deferred  financing  fees  were  fully amortized  at October  31, 2003.  The
 Company also issued  to the holder  of the GCA-Note  warrants to acquire  an
 aggregate of 100,000 shares  of common stock at  an exercise price of  $0.14
 per share, which expire on July  24, 2008.  The  relative fair value of  the
 warrants of  $7,000 was recorded as  a debt discount which was amortized  to
 interest expense over  the original  term of the  GCA-Note.   For the  years
 ended October 31, 2004 and 2003,  the Company recorded approximately  $3,000
 and $4,000, respectively, as interest  expense relating to the  amortization
 of the debt discount.  The debt discount was fully amortized at October  31,
 2004.  The GCA-Note matured in November 2004 and is currently due on demand.
 Although no  event of  default has  been  declared by  GCA, the  Company  is
 technically in default  under this  agreement and  is currently  negotiating
 with GCA to extend the maturity date.


 NOTE 6 - NOTE PAYABLE

 In November 2002, the  Company executed a 12%  note payable (the  "GC-Note")
 with Global  Capital  Funding  Group,  L.P.,  which  provided  financing  of
 $1,250,000. The GC-Note's maturity date is November 8, 2004.  The GC-Note is
 secured by $1,518,267 of certain property and equipment.  In connection with
 the GC-Note,  the  Company  paid  $47,441  as  financing  fees,  which  were
 capitalized and amortized over the life of the GC-Note.  For the years ended
 October 31, 2004 and  2003, the Company  recorded approximately $23,000  and
 $24,000, respectively, as interest expense  relating to the amortization  of
 these deferred  financing fees.   The  deferred  financing fees  were  fully
 amortized at October 31, 2004.  The Company also issued to the holder of the
 GC-Note warrants to acquire an aggregate  of 500,000 shares of common  stock
 at an exercise price of $0.14 per  share, which expire on November 8,  2007.
 The Company recorded  debt discount of  approximately $46,000, the  relative
 fair value of the warrants, which were  amortized over the two year life  of
 the GC-Note.  For  the years ended  October 31, 2004  and 2003, the  Company
 recorded approximately $23,000 in each year as interest expense relating  to
 the amortization  of  the  debt  discount.   The  debt  discount  was  fully
 amortized at October 31, 2004.  The GCA-Note matured in November 2004 and is
 currently due on demand.  Although no event of default has been declared  by
 the holder, the Company is technically  in default under this agreement  and
 is currently negotiating with the holder to extend the maturity date.


 NOTE 7 - NOTES PAYABLE - RELATED PARTY

 In October 2001, the  Company executed 10%  convertible notes (the  "Notes")
 with three  executives  of the  Company,  which provided  financing  in  the
 aggregate principal amount of $1,945,958. The original maturity date of each
 note  was  October 24,  2003.   In  January 2003,  the  Company's executives
 extended  the maturity date of each note  to February 24, 2004.  These Notes
 are  currently due  on demand.  The Notes are  secured  by  certain  Company
 assets.  Each  Note  is convertible  into the Company's common  stock at the
 option  of  the  holder  at  any  time.  The  conversion  price  is equal to
 the  closing bid price of  the  Company's common stock  on the last  trading
 day  immediately  preceding  the  conversion.  The  Company  has  calculated
 the beneficial  conversion  feature  embedded in  the  Notes  in  accordance
 with  EITF 98-5 and EITF 00-27  and recorded debt discount  of approximately
 $171,000  which was amortized  over  two  years,  the original  term  of the
 Notes.   The Company also issued to  the  holders  of the  Notes warrants to
 acquire an aggregate  of 1,945,958  shares of  common stock  at an  exercise
 price  of  $0.78 per  share, which  expire  on October 24, 2006.  Additional
 debt  discount  of approximately $657,000  was  recorded during  the  fourth
 quarter  of fiscal 2001 relating  to these warrants.  The Company determined
 the additional debt discount  by  allocating  the  relative  fair  value  to
 the  Notes  and  the  warrants.  The  Company amortized  the additional debt
 discount  over  the  life  of  the  Notes.  For  the  year ended October 31,
 2003,  the  Company  recorded  approximately $410,000  of  interest  expense
 relating  to  the amortization  of the debt  discount.   The  debt  discount
 was fully amortized  at  October 31, 2003.  In  January 2002,  an additional
 $102,432  was  added  to the Notes in exchange for an existing note payable.
 The Company  also  issued to  the holder  of the Notes  warrants  to acquire
 an  additional  102,432  shares  of  common  stock at an exercise  price  of
 $0.75, which expire on January 28, 2007.  Additional debt discount,  related
 to these warrants, of  approximately $24,000 was  recorded during the  first
 quarter of fiscal 2002.  The Company determined the additional debt discount
 by allocating the relative fair  value to the Notes  and the warrants.   The
 Company amortized the additional  debt discount over  the remaining life  of
 the Notes.   For  the year  ended  October 31,  2003, the  Company  recorded
 approximately $14,000 of  interest expense relating  to the amortization  of
 the debt discount.   The debt  discount was fully  amortized at October  31,
 2003.  In  July  2002,  an  additional  $300,000  was added  to  the  Notes,
 representing incremental monies loaned by a  shareholder.  The Company  also
 issued to the holder of the Notes warrants to acquire an additional  300,000
 shares of common stock at an exercise  price of $0.75, which expire on  July
 8, 2007.  Additional debt discount of approximately $22,000 was recorded  as
 interest expense during the third quarter  of fiscal 2002 relating to  these
 warrants.  The Company determined the additional debt discount by allocating
 the relative fair value to the Notes and the warrants.

 During the year ended October 31, 2004,  the holder of the Notes elected  to
 convert $877,500 of the  Notes into 6,750,000 shares  of common stock.   The
 outstanding balance of the Notes at October 31, 2004 and 2003 is  $1,470,890
 and $2,348,401,  respectively.  The Notes matured during fiscal 2004 and are
 currently due on demand.


 NOTE 8 - PROPERTY AND EQUIPMENT

 Property and equipment consists of the following at October 31, 2004 and
 2003:

                                                2004              2003
                                             ----------        ----------
   Telephone switch equipment               $ 3,759,818       $ 4,411,325
   Leasehold improvements                       232,917           223,577
   Furniture and fixtures                       852,011           232,916
   Computer equipment                         1,079,159           797,005
   Computer software                             58,378           536,428
                                             ----------        ----------
                                              5,982,283         6,201,251
   Less: accumulated depreciation and
     amortization                            (5,112,326)       (4,860,265)
                                             ----------        ----------
                                            $   869,957       $ 1,340,986
                                             ==========        ==========

 At October 31, 2004 and 2003, the  gross amount of capital lease assets  and
 related accumulated  amortization  recorded  under capital  leases  were  as
 follows:

                                                2004              2003
                                             ----------        ----------
     Telephone switch equipment             $   455,728       $   455,728
     Less: accumulated amortization            (455,728)         (297,330)
                                             ----------        ----------
                                            $         -       $   158,398
                                             ==========        ==========

 Amortization  of  assets  held  under   capital  leases  is  included   with
 depreciation  expense.   Depreciation  and   amortization  expense   totaled
 $615,883, $1,338,351 and $2,158,135 in 2004, 2003 and 2002, respectively.


 NOTE 9 - PROPERTY AND EQUIPMENT HELD FOR SALE

 Property and  equipment  held  for sale  represents  internally  constructed
 equipment for the prepaid telecommunications industry. On October 31,  2000,
 the Company entered into an Asset Purchase Agreement to sell this technology
 for $1  million, however  the sale  was not  consummated. The  Company  will
 continue to search for a buyer for the asset, and is currently utilizing the
 assets as  collateral against  its $550,000  convertible debenture.  As  the
 potential ability to sell this equipment is uncertain, this equipment, which
 had a carrying  value of  $320,307, was  written-off during  the year  ended
 October 31, 2002.


 NOTE 10 - GAIN ON SETTLEMENT OF LIABILITIES

 During  the  second  quarter  of  fiscal  year  2003,  the  Company  vacated
 its  office space  in  Atlanta,  Georgia.  At that  time,  the Company began
 negotiations with the landlord to terminate its lease agreement.  In October
 2004, the Company reached an agreement with the landlord to pay $100,000  in
 settlement  of  all  outstanding  rents,  payable in monthly installments of
 $5,000  through May 2006.  As  a result, the Company  recorded  $241,000  as
 Gain on  Settlement of Liabilities  during the fourth quarter of fiscal year
 2004, representing the difference between the Company's accrued rent and the
 settlement amount.

 In connection  with  the  acquisition  of the  assets  and  certain  of  the
 liabilities of Rapid  Link, Incorporated  ("Rapid Link")  during the  fourth
 quarter of the  fiscal year  ended October  31, 2001,  the Company  recorded
 certain  liabilities  of  $255,000,  and continued to hold those liabilities
 pending a final settlement with  the Rapid Link  trustee.  During the second
 quarter of fiscal year 2004,  the Company agreed to  pay $30,000 in full and
 final settlement to the trustee  and has recorded  the remaining $225,000 as
 Gain on Settlement of Liabilities during the year ended October 31, 2004.


 NOTE 11 - STOCK OPTIONS AND WARRANTS

 Warrant Issuances to Employees
 ------------------------------
 Employee warrant activity for the three years ended October 31, 2004 was as
 follows:
                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2001                    2,755,958   $0.53 - 1.44    $    0.89

 Warrants granted                       402,433           0.75         0.75
 Warrants exercised                           -              -            -
 Warrants canceled                     (145,000)          1.44         1.44
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2002                    3,013,391    0.75 - 1.44         0.83

 Warrants granted                             -              -            -
 Warrants exercised                           -              -            -
 Warrants canceled                     (365,000)   0.53 - 0.81         0.62
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2003                    2,648,391    0.75 - 1.44         0.83

 Warrants granted                             -              -            -
 Warrants exercised                           -              -            -
 Warrants canceled                            -              -            -
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2004                    2,648,391   $0.75 - 1.44    $    0.83
                                      =========    ===========     ========

 The warrants issued to  employees that were exercisable  at the years  ended
 October 31, 2004, 2003 and 2002 were approximately 2,648,000,  2,648,000 and
 1,701,000, respectively.

 Warrant Issuances to Non-Employees
 ----------------------------------
 Non-Employee warrant activity for the three years ended October 31, 2004 was
 as follows:

                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2001                    1,203,300   $0.01 - 3.50    $    1.65

 Warrants granted                        50,000           0.40         0.40
 Warrants exercised                           -              -            -
 Warrants canceled                     (365,800)   0.53 - 0.88         0.74
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2002                      887,500    0.01 - 3.50         1.95

 Warrants granted                       700,000    0.14 - 0.21         0.15
 Warrants exercised                           -              -            -
 Warrants canceled                            -              -            -
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2003                    1,587,500    0.01 - 3.50         1.16

 Warrants granted                             -              -            -
 Warrants exercised                           -              -            -
 Warrants canceled                     (150,000)          3.00         3.00
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2004                    1,437,500   $0.01 - 3.50    $    0.97
                                      =========    ===========     ========

 The majority of  the warrants issued  to non-employees  during fiscal  years
 2003 and 2002 were issued in connection with debt  financing.  The  warrants
 issued to non-employees that were exercisable at October 31, 2004, 2003  and
 2002 totaled 1,437,500, 1,587,500, and 887,500, respectively.

 Stock Options

 2002 Equity Incentive Plan

 The Company adopted the  2002 Equity Incentive  Plan ("Incentive Plan"),  at
 the Company's annual shareholder  meeting in May 2002.   The Incentive  Plan
 authorized the  Board of  Directors  to grant  up  to 2,000,000  options  to
 purchase common shares  of the  Company.  The  maximum number  of shares  of
 common stock  which  may  be  issuable  under  the  Incentive  Plan  to  any
 individual  plan participant is 500,000 shares.  All  options granted  under
 the Incentive Plan have vesting periods up to a maximum of five years.   The
 exercise price of an  option granted under the  Incentive Plan shall not  be
 less than 85% of the fair value of the common stock on the date such  option
 is granted.

 Amended and restated 1990 Stock Option Plan

 The  1990  Stock  Option  Plan  ("1990  Stock  Option  Plan"),  as  amended,
 authorizes the  Board of  Directors  to grant  up  to 2,300,000  options  to
 purchase common shares  of the Company.  No options will  be granted to  any
 individual director or employee which will, when exercised, exceed 5% of the
 issued and outstanding shares of the Company. The term of any option granted
 under the 1990 Stock Option Plan is fixed  by the Board of Directors at  the
 time the options are granted, provided  that the exercise period may not  be
 longer than 10 years from the date  of grant. All options granted under  the
 1990 Stock Option Plan  have up to  10 year terms  and have vesting  periods
 that range from 0 to 3 years from the grant date. The exercise price of  any
 options granted under the 1990 Stock Option Plan is the fair market value at
 the date of grant.

 The Company's stock option activity for the three years ended October 31,
 2004 was as follows:

                                                                   Weighted
                                        Number       Option        Average
                                          of          Price        Exercise
                                        Shares      Per Share      Price
                                      ---------    -----------     --------
 Options outstanding at
  October 31, 2001                    2,182,500   $0.30 - 1.50    $    0.53

 Options granted                        195,000    0.09 - 0.70         0.27
 Options exercised                     (175,000)          0.40         0.40
 Options canceled                      (593,000)   0.30 - 0.78         0.73
                                      ---------    -----------     --------
 Options outstanding at
  October 31, 2002                    1,609,500    0.09 - 1.50         0.44

 Options granted                        187,500    0.11 - 0.18         0.18
 Options exercised                            -         -                 -
 Options canceled                      (353,000)   0.11 - 1.50         0.43
                                      ---------    -----------     --------
 Options outstanding at
  October 31, 2003                    1,444,000    0.09 - 1.50         0.41

 Options granted                        410,000    0.11 - 0.14         0.12
 Options exercised                            -         -                 -
 Options canceled                      (180,000)   0.09 - 0.78         0.32
                                      ---------    -----------     --------
 Options outstanding at
  October 31, 2004                    1,674,000   $0.11 - 1.50    $    0.35
                                      =========    ===========     ========

<TABLE>

 The following table summarizes information about employee compensatory stock
 options and warrants outstanding at October 31, 2004:

                                                 Weighted
                                  Weighted       Average
     Range of       Options/      Average    Exercise Price of  Options/       Prices of
     Exercise       Warrants     Remaining   Options/Warrants   Warrants   Options/Warrants
      Prices       Outstanding      Life       Outstanding     Exercisable    Exercisable
   ------------     ---------       ----           ----         ---------         ----
  <S>              <C>             <C>            <C>          <C>               <C>
  $0.11 - $0.78     1,672,000       3.61          $0.35         1,285,333        $0.41
  $1.44 - $1.50       302,000       0.15           1.44           302,000         1.44
                    ---------       ----           ----         ---------         ----
                    1,974,000       3.08          $0.52         1,587,333        $0.61
                    =========       ====           ====         =========         ====
</TABLE>

 The weighted average grant date fair value of all stock options granted to
 employees during the fiscal year ended October 31, 2004 was $0.07 a share.


 NOTE 12 - INCOME TAXES

 Deferred income taxes reflect the net  tax effects of temporary  differences
 between the  carrying  amounts  of  assets  and  liabilities  for  financial
 reporting  purposes  and  the  amounts  reported  for  income  tax purposes.
 Significant  components of the Company's deferred tax assets and liabilities
 at October 31, 2004 and 2003 are as follows:

                                             2004             2003
                                          ----------       ----------
 Deferred tax assets
   Net operating loss carryovers         $15,205,732      $14,527,382
   Accounts receivable                        41,579          100,332
   Advertising credits                       977,185          977,185
   Property and equipment                          -           69,154
   Accrued liabilities                        34,694           34,918
                                          ----------       ----------
     Total gross deferred tax assets      16,259,190       15,708,971

 Deferred tax liabilities
   Property and equipment                    (45,142)               -
                                          ----------       ----------
     Total gross deferred tax liabilities    (45,142)               -
                                          ----------       ----------
                                          16,214,048       15,708,971

       Valuation allowance               (16,214,048)     (15,708,971)
                                          ----------       ----------
   Net deferred tax assets               $         -      $         -
                                          ==========       ==========

 The increase in the valuation allowance for the years ended October 31, 2004
 and 2003 of $505,000 and $1.6 million,  respectively,  was related primarily
 to a change in U.S. operating loss carryforwards.

 At October 31, 2004, the Company  has U.S. net operating loss  carryforwards
 for federal income tax purposes of  approximately $45 million, which  expire
 in 2006 through 2024. Utilization of U.S. net operating losses is subject to
 annual limitations provided  for by the  Internal Revenue  Code. The  annual
 limitation may also result in the expiration of net operating losses  before
 utilization.

 Realization of  tax benefits  depends on  having sufficient  taxable  income
 within the  carryback  and  carryforward periods.  The  Company  continually
 reviews the  adequacy  of  the  valuation  allowance  and  recognizes  these
 benefits as reassessment indicates that it is more likely than not that  the
 benefits will be realized.  Based on pretax losses incurred in recent years,
 management  has  established  a valuation allowance  against  the entire net
 deferred asset balance.


 NOTE 13 - COMMITMENTS AND CONTINGENCIES

 The Company is obligated under various capital leases for equipment used  in
 operating the business with  terms expiring at  various dates through  2005.
 The Company leases  its branch office  facilities and  its corporate  office
 under various noncancelable operating leases with terms expiring at  various
 dates through 2007, and has also  entered into various operating leases  for
 equipment used in the  Company's business.   Rental expense from  continuing
 operations for operating leases was $502,940, $474,567 and $400,425 for  the
 years ended October 31, 2004, 2003 and 2002, respectively.

 Future minimum lease payments under noncancelable operating leases and
 capital leases as of October 31, 2004 are as follows:

                                               Capital         Operating
                                                Leases           Leases
                                              ----------       ----------
    Year ending October 31,
                   2005                      $   126,196      $   203,251
                   2006                                -          168,854
                   2007                                -           54,595
                                              ----------       ----------
    Total minimum lease pmts                     126,196      $   426,700
                                                               ==========
    Less: Amount representing interest                 -
                                              ----------
    Present value of net minimum
      capital lease payment                      126,196

    Less:  current installments of
      obligations under capital lease           (126,196)
                                              ----------
    Obligations under capital leases,
      excluding current installments         $         -
                                              ==========

 Legal Proceedings
 -----------------
 The Company, from  time to  time, may be  subject to  legal proceedings  and
 claims in  the ordinary  course of  business,  including claims  of  alleged
 infringement of trademarks and other intellectual property of third  parties
 by the Company. Such  claims, even if not  meritorious, could result in  the
 expenditure of significant financial and managerial resources.

 On June  12, 2001,  Cygnus  Telecommunications Technology,  LLC  ("Cygnus"),
 filed a patent  infringement suit (case  no. 01-6052) in  the United  States
 District  court,  Central  District  of  California,  with  respect  to  the
 Company's "international reorigination" technology.   The injunctive  relief
 that Cygnus sought  in this suit  has been denied,  but Cygnus continues  to
 seek a license fee for the use of the technology.  The Company believes that
 no license fee  is required  as the technology  described in  the patent  is
 different from the technology used by the Company.

 In August  2002, Cygnus  filed  a motion  for  a preliminary  injunction  to
 prevent the Company  from providing "reorigination"  services.  The  Company
 filed a cross motion for summary judgment of non-infringement.  Both motions
 were  denied.  On  August 22,  2003,  the Company  re-filed the  motion  for
 summary judgment for non-infringement.  In  response to this filing,  during
 August 2004, the  court narrowly defined  the issue to  relate to a  certain
 reorigination technology which the Company believes it does not now, nor has
 it ever utilized  to provide any  of its telecommunications  services.   The
 Company intends to continue defending this  case vigorously, and though  its
 ultimate legal and financial liability with respect to such legal proceeding
 is therefore  expected  to be  minimal,  it  cannot be  estimated  with  any
 certainty at this time.

 The State of Texas  ("State") performed a sales  tax audit of the  Company's
 former parent, Canmax Retail Systems ("Canmax"), for the years 1995 to 1999.
 The State determined that  the Company did not  properly remit sales tax  on
 certain transactions,  including asset  purchases and  software  development
 projects  that  Canmax  performed  for specific  customers.   The  Company's
 current and former  management filed exceptions,  through its outside  sales
 tax consultant, to  the State's  audit findings,  including the  non-taxable
 nature of certain transactions  and the failure of  the State to credit  the
 Company's account for  sales tax remittances.   In  correspondence from  the
 State in  June  2003,  the  State  agreed  to  consider  certain  offsetting
 remittances received  by Canmax  during the  audit period.   The  State  has
 refused to consider other potential offsets.   Based on this  correspondence
 with the  State,  management's  estimate  of  the  potential  liability  was
 originally recorded at  $350,000 during the  fiscal year  ended October  31,
 2003.   Based  on further  correspondence  with the  State,  this  estimated
 liability was increased to $1.1 million  during the first quarter of  fiscal
 year 2004.   Since  this sales  tax liability  represents an  adjustment  to
 amounts previously reported  in discontinued operations,  it was  classified
 separately during  the first  quarter of  fiscal year  2004 in  discontinued
 operations, and is  included in the  October 31,  2004 consolidated  balance
 sheet in "Net current liabilities from discontinued operations".  Management
 believes that Canmax properly remitted an appropriate amount of sales tax to
 Texas, and management  does not believe  the State's  position reflects  the
 appropriate amount of tax remitted during  the audit period mentioned  above
 and will continue to pursue this issue with the State.  The Company is  also
 aggressively pursuing  the  collection of  unpaid  sales taxes  from  former
 customers of Canmax, though there can be no assurance that the Company  will
 be successful with respect to such collections.

 On January 12, 2004, the Company filed a suit against Southland  Corporation
 ("Southland") in the 162nd District Court  in Dallas, Texas.  The  Company's
 suit claims a  breach of contract  on the part  of Southland  in failing  to
 reimburse it for taxes paid to the State as well as related taxes for  which
 the Company is currently being held responsible by the State.  The Company's
 suit seeks reimbursement for the taxes paid and a determination by the court
 that  Southland  is  responsible  for paying the remaining  tax liability to
 the State.  The  Company  is  discussing  possible settlement  options  with
 Southland, but as of yet, no agreement has been reached.

 On July 20,  2004, the Company  filed a suit  against Q Comm  International,
 Inc. ("Q Comm")  in Federal  Court in  the Central  District of  Utah.   The
 Company's suit claims damages of $4  million plus attorney's fees and  costs
 resulting from the  breach of a  purchase agreement on  the part  of Q  Comm
 relating to the sale of the  Company's internally constructed equipment  for
 the prepaid  telecommunications industry.   Pursuant  to  the terms  of  the
 purchase agreement, the  Company would deliver  the source  code of  certain
 proprietary software in consideration for an aggregate purchase price of  $4
 million, of which $1 million  was due at closing  and the remainder was  due
 over three  years.   Following  execution  of  the  agreement,  the  Company
 tendered the software source code to Q Comm.  However, Q Comm failed to  pay
 the Company the initial  amount due under the  agreement and made copies  of
 the source code without the Company's permission.  The Company is  currently
 preparing for trial, which has been set  for the first two weeks of  January
 2006.


 NOTE 14 - BENEFIT PLAN

 Effective January 1, 1994, the Company  implemented a 401(k) Profit  Sharing
 Plan for  all employees  of the  Company. The  Plan provides  for  voluntary
 contributions by employees into the Plan subject to the limitations  imposed
 by the Internal Revenue Code Section 401(k). The Company may match  employee
 contributions to a discretionary percentage of the employee's  contribution.
 The Company's matching funds are determined  at the discretion of the  Board
 of Directors and are subject to a six-year vesting schedule from the date of
 original employment. The Company made  no matching contributions during  the
 years ended October 31, 2004, 2003 and 2002.


 NOTE 15 - BUSINESS AND CREDIT CONCENTRATIONS

 In the normal course  of business, the Company  extends unsecured credit  to
 virtually all of its  customers.  Management has  provided an allowance  for
 doubtful accounts which reflects  its estimate of  amounts which may  become
 uncollectible.  In the  event of complete  non-performance by the  Company's
 customers, the maximum exposure to the  Company is the outstanding  accounts
 receivable balance at the  date of non-performance.

 During  the  year  ended  October 31, 2004,  the Company provided  wholesale
 services  to a customer  who  accounted  for 17%  of  revenues  and  another
 customer who accounted for 13%  of revenues.  During the same period, one of
 the  Company's  suppliers  accounted  for approximately 20% of the Company's
 total costs of revenues.  At  October 31, 2004,  another customer  accounted
 for  16% of the Company's trade accounts receivable.  During the  year ended
 October 31, 2003, the Company provided wholesale services to  a customer who
 accounted for 11% of revenues.   During the year ended October 31, 2002, the
 Company provided  wholesale services  to a customer who accounted for 14% of
 revenues.

 Information regarding the Company's domestic and foreign revenues is as
 follows:

                                   All other
                                    foreign
                     Africa        countries        Domestic         Total
                   ----------      ----------      ----------      ----------
    Fiscal 2002   $ 1,392,384     $ 1,184,239     $15,832,026     $18,408,649
    Fiscal 2003     1,323,903       1,346,914      14,983,977      17,654,794
    Fiscal 2004     1,617,433       1,284,641      10,478,436      13,380,510

 No individual foreign country represented more than 10 percent of revenue or
 more than 10 percent of long lived assets for any period presented.


 NOTE 16 - QUARTER-BY-QUARTER COMPARISION

<TABLE>
         Summarized unaudited quarterly financial data for
         the years ended October 31, 2004, 2003 and 2002
         are as follows:


 2004                                      First         Second        Third          Fourth
 Quarters:                              ----------    ----------    ----------     ----------
   <S>                                 <C>           <C>           <C>            <C>
   Revenues, net                       $ 4,344,692   $ 3,342,892   $ 2,940,023    $  2,752,903
   Operating income (loss)                (121,991)      (85,479)     (332,229)        334,074
   Income (loss) from continuing
     operations                           (261,548)     (240,000)     (488,273)        195,604
   Income from discontinued
     operations                          1,501,147             -             -               -
   Net income (loss)                     1,239,599      (240,000)     (488,273)        195,604
   Income (loss) per share-continuing
     operations                              (0.02)        (0.01)        (0.03)           0.01
   Income per share-discontinued
     operations                               0.09             -             -               -

 2003
 Quarters:
   Revenues, net                         4,275,580     4,630,480     4,348,552       4,400,182
   Operating loss                         (436,798)     (384,977)     (166,632)     (2,955,730)
   Loss from continuing operations        (828,386)     (625,444)     (397,855)     (3,217,161)
   Income (loss) from discontinued
     operations                           (253,727)     (666,349)     (949,482)        316,093
   Net loss                             (1,082,113)   (1,291,793)   (1,347,337)     (2,901,068)
   Loss per share-continuing
     operations                              (0.05)        (0.04)        (0.02)          (0.23)
   Income (loss) per share-discontinued
     operations                              (0.02)        (0.04)        (0.06)           0.05

 2002
 Quarters:
   Revenues, net                         5,241,466     4,787,785     4,248,348       4,131,050
   Operating loss                         (783,581)     (695,527)     (608,975)       (158,059)
   Loss from continuing operations      (1,072,322)   (1,018,054)     (960,137)       (475,093)
   Loss from discontinued operations      (213,571)     (221,760)     (122,478)       (600,765)
   Net loss                             (1,285,893)   (1,239,814)   (1,082,615)     (1,075,858)
   Loss per share-continuing
     operations                              (0.08)        (0.07)        (0.07)          (0.03)
   Loss per share-discontinued
     operations                              (0.02)        (0.02)        (0.01)          (0.03)
</TABLE>


 NOTE 17 - CAPITAL STOCK

 During the  year ended  October 31,  2004, three  holders of  the  Company's
 Related Party Notes converted $877,500 of debt into 6,750,000 shares of  the
 Company's stock.

 During the year ended  October 31, 2004,  a holder of  one of the  Company's
 Debentures converted $10,730 of debt and accrued interest into approximately
 82,000 shares of the Company's stock.

 During the year ended  October 31, 2003,  a holder of  one of the  Company's
 Debentures converted $53,463 of debt and accrued interest into approximately
 374,000 shares of the Company's stock.

 During the year ended  October 31, 2003,  a holder of  one of the  Company's
 Debentures converted $55,734 of debt and accrued interest into approximately
 724,000 shares of the Company's stock.

 During the year ended  October 31, 2002,  a holder of  one of the  Company's
 Debentures  converted   $531,487  of   debt   and  accrued   interest   into
 approximately 2,856,000 shares of the Company's stock.

 In November 2001, the Company issued  175,000 shares in connection with  the
 exercise of options.  The exercise  price was  paid with  100,000 shares  of
 common stock, which were subsequently retired.

 In November  2001, the  Company issued  25,000 shares  of common  stock  for
 investor relations services  and were recorded  at the  stock's fair  market
 value.

 During the years ended October 31, 2004, 2003 and 2002, options and warrants
 to purchase 0,  0, and 175,000,  respectively, shares of  common stock  were
 exercised.

 The following table describes stock reserved for future issuances at October
 31, 2004:

                                               # Shares
                                              ----------
       Options                                 3,284,000
       Warrants                                4,085,891
       Convertible debt (1)                   35,475,343
                                              ----------
                                              42,845,234
                                              ==========

           (1) Assumes conversion on October 31, 2004
               under the terms of the related agreements


 NOTE 18 - SUBSEQUENT EVENT

 During November 2004, the Company's security holders passed an amendment
 to the Company's Certificate of Incorporation increasing the number of
 authorized common shares from 44,169,100 to 84,169,100.

<PAGE>


    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS TO SCHEDULE
    ----------------------------------------------------------------------

 Board of Directors and Shareholders of
 Dial Thru International Corporation

 In connection with our audit of the consolidated financial statements of
 Dial Thru International Corporation and Subsidiaries referred to in our
 report dated December 9, 2004, we have also audited Schedule II for the
 years ended October 31, 2004, 2003 and 2002. In our opinion, this schedule
 presents fairly, in all material respects, the information required to be
 set forth therein.

 /s/ KBA GROUP LLP
 Dallas, Texas
 December 9, 2004

                                      S-1

<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES

               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

             For the years ended October 31, 2004, 2003 and 2002


                           Balance at                             Balance at
                            the beg                                the end
                           of period   Additions   Deductions     of period
                          -----------  ----------  -----------   -----------
 2004
 ----
 Allowance for doubtful
   accounts              $   295,094  $   30,000  $202,803 (1)  $   122,291
                          ==========   =========   =======       ==========
 Valuation allowance for
   deferred tax assets   $15,708,971  $  505,077  $      -      $16,214,048
                          ==========   =========   =======       ==========

 2003
 ----
 Allowance for doubtful
   account               $   506,391  $  158,469  $369,766 (1)  $   295,094
                          ==========   =========   =======       ==========
 Valuation allowance for
   deferred tax assets   $14,061,148  $1,647,823  $      -      $15,708,971
                          ==========   =========   =======       ==========

 2002
 ----
 Allowance for doubtful
   accounts              $   228,729  $  711,246  $433,584 (1)  $   506,391
                          ==========   =========   =======       ==========
 Valuation allowance for
   deferred tax assets   $11,274,528  $2,786,620  $      -      $14,061,148
                          ==========   =========   =======       ==========

 (1) Write offs.

                                      S-2
<PAGE>

                                EXHIBIT INDEX

 NO.   DESCRIPTION OF EXHIBIT

  3.3  Amendment to Certificate of Incorporation

 21.1  Subsidiaries of the Registrant

 23.1  Consent of Independent Registered Public Accounting Firm

 31.1  Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)
       and Rule 15d-14(a) of the Securities Exchange Act of 1934

 31.2  Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)
       and Rule 15d-14(a) of the Securities Exchange Act of 1934

 32.1  Certificate of Chief Executive Officer pursuant to 18 U.S.C.
       Section 1350

 32.2  Certificate of Chief Financial Officer pursuant to 18 U.S.C.
       Section 1350