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, 2003

                                      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 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, 2003 was approximately $1,761,583 based on
 the average bid and ask price of common stock as quoted on the OTC  Bulletin
 Board of $0.13.


 As of January 23, 2004, 16,201,803 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  and  its  subsidiaries,  a
 Delaware corporation formerly known as  ARDIS Telecom & Technologies,  Inc.,
 successor by merger to Canmax Inc. 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
 (the "DTI Acquisition") substantially all of the business and assets of Dial
 Thru International Corporation,  a California corporation,  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 web site address is www.dialthru.com.

 Recent Developments

 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.
 A portion 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 and will be used  for
 the Company's ongoing working capital needs.

 On January  27, 2003,  we  amended our  6%  convertible debenture  with  GCA
 Strategic Investment Fund  Limited to change  the debenture's maturity  date
 from January 28, 2003 to  November 8, 2004.   In addition, we cancelled  the
 existing warrants to purchase 50,000 shares  of common stock at an  exercise
 price of $0.41  and issued  warrants to  purchase 150,000  shares of  common
 stock at an exercise price of $0.21 which expire on February 8, 2008.

 On January 27, 2003, we amended our 10% convertible notes with three of  our
 executives to change  the notes'  maturity dates  from October  24, 2003  to
 February 24, 2004.

 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  and
 will  be  used for  the  Company's ongoing  working  capital  needs.  During
 January 2004,  as  per  the terms  of  the  agreement, this  loan  became  a
 convertible debenture with a maturity date of November 8, 2004.

 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,
 oceanic cable  transmission  facilities, 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, 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 in the  2002
 and 2003 fiscal years 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, thereby  giving
 us opportunities for greater profit margins.  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.

 Cooperating with  overseas carriers  and the  incumbent, usually  government
 owned, telephone companies, gives us better  opportunities to engage in  the
 co-branding of jointly  marketed products,  including IP-based  enhancements
 that they have developed,  rather than simply basing  a strategy on  pricing
 arbitrage. As  a result,  we are  regularly invited  to participate  in  new
 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.

 1+ Services and Dial Around Products

 We are  licensed to  provide long  distance service  in most  of the  United
 States and now  have begun  selling our 1+  long distance  service and  dial
 around products to  our SME  customer base.   We are  also targeting  ethnic
 segments  of  the  United States  which  correspond to foreign countries  in
 which we have facilities.  This  allows us  to add  a  complete  package  of
 communication services to the SME customer, furthering our Bookend Strategy.

 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 in the process of taking place, 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.  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.
 Telecommunication 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  have
 recently announced their intention to offer Internet telephony services both
 in the United States and internationally.   These and other competitors  may
 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,  emerging carriers including IDT  Corp.,
 ITXC Corporation, deltathree.com, Primus Telecommunications Group, Inc., and
 Net2Phone Inc. We believe  that additional competitors  may be attracted  to
 the  market,   including   internet-based  service   providers   and   other
 telecommunications companies.  We also believe that existing competitors are
 likely to continue to expand their service offerings to appeal to  retailers
 and consumers.

 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.   ITXC,  iBasis 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 may 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.   These companies  may potentially 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.
 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  phone-to-phone  Internet  telephony are  information  services  or
 telecommunications services.   The  FCC indicated  that, in  the future,  it
 would  consider  the  extent  to  which  phone-to-phone  Internet  telephony
 providers could be considered  "telecommunications carriers" such that  they
 could  be  subject  to  the  regulations  governing  traditional   telephone
 companies such as the  imposition of access charges.   The FCC stated  that,
 although it did not have a sufficient record upon which to make a definitive
 ruling, the  record suggested  that, to  the extent  that certain  forms  of
 phone-to-phone IP telephone  appear to possess  the same characteristics  as
 traditional telecommunications services and to  the extent the providers  of
 those services  obtain  the  same circuit-switched  access  as  obtained  by
 interexchange carriers, the FCC may find it reasonable that they pay similar
 access charges.  The  FCC also recognized, however,  that it would  consider
 whether it should forbear from imposing any of the rules that would apply to
 phone-to-phone   Internet   telephony   providers   as   "telecommunications
 carriers."   To date,  the  FCC has  not  imposed regulatory  surcharges  or
 traditional  common   carrier   regulation  upon   providers   of   Internet
 communications services.

 Although  the  FCC  treats  providers  of  Internet  telephony  services  no
 differently from providers of other  information and enhanced services  that
 are exempt from payment of interstate  access charges, this decision may  be
 reconsidered in the future.  For instance, on April 19, 2001, in Docket  No.
 CC  01-92  the  FCC  adopted a proposal  to  begin a fundamental examination
 of  all  forms   of   intercarrier   compensation  -  the   payments   among
 telecommunications carriers resulting  from their interconnecting  networks.
 The FCC  could  adopt  an  intercarrier  compensation  mechanism  and  other
 regulations that  could result  in an  increase  in the  cost of  the  local
 transmission facilities necessary to complete our calls or a decrease in the
 costs of such facilities to  traditional long distance telephone  companies.
 An increase in our  rates as a result  of new FCC  regulations could have  a
 material adverse  effect  on  our ability  to  compete  with  long  distance
 carriers.

 There are several  proceedings pending before  the FCC that  may affect  the
 regulatory status of Internet telephony.  On October 18, 2002, AT&T filed  a
 petition with  the  FCC seeking  a  declaratory ruling  that  would  prevent
 incumbent local  exchange  carriers,  or ILECs,  from  imposing  traditional
 circuit-switched access charges on phone-to-phone IP services.  On  February
 5, 2003, pulver.com  filed a  petition with  the FCC  seeking a  declaratory
 ruling that  its  "Free  World  Dialup,"  which  facilitates  point-to-point
 broadband   Internet    protocol    voice   communications,    is    neither
 telecommunications nor  a  telecommunications  service as  these  terms  are
 defined in  section  153  of  the  Telecommunications  Act  of  1996.   More
 recently, Vonage filed a petition for declaratory ruling requesting that the
 FCC find  an Order  of the  Minnesota  Public Utilities  Commission  (MNPUC)
 requiring  Vonage  to  comply  with   state  laws  governing  providers   of
 traditional telephone  service to  be preempted  because Vonage's  broadband
 Internet telephony service is an information  service.  These petitions  and
 subsequent industry reactions  may exert  pressure on  the FCC  to render  a
 decision regarding the regulation  of phone-to-phone IP  services.  The  FCC
 could determine,  for instance,  that certain  types of  Internet  telephony
 should be  regulated  like  basic  interstate  telecommunications  services.
 Thus, Internet telephone would  no longer be exempt  from the access  charge
 regime that  permits  local  telephone companies  to  charge  long  distance
 carriers for  the use  of  the local  telephone  networks to  originate  and
 terminate long-distance calls,  generally on a  per minute  basis, which  in
 turn could have a material adverse effect on the company.

 The FCC  could  also  conclude  that  Internet  telephony  providers  should
 contribute to the Universal Service Fund,  which provides support to  ensure
 universal access to telephone service.  The imposition of interstate  access
 charges or universal service contributions would substantially increase  our
 costs of serving our customers in the U.S.  The imposition of regulation and
 contribution requirements might  also negatively affect  the incentives  for
 companies to continue to develop IP technologies to offer VoIP services.  It
 is also possible  that the FCC  might adopt a  regulatory framework  that is
 unique to IP  telephony providers or  one where IP  telephony providers  are
 subject  to  reduced  regulatory  requirements.   We   cannot  predict  what
 regulations, if any, the FCC will impose.

 Other aspects of our services may be subject to state or federal regulation,
 such  as  regulations   relating  to   the  confidentiality   of  data   and
 communications, copyright issues, taxation of  services, and licensing.   In
 addition, changes in the  legal and regulatory  environment relating to  the
 Internet connectivity  market,  including  regulatory  changes  that  affect
 telecommunications costs or that may increase the likelihood of  competition
 from  the   regional  Bell   operating  companies,   or  RBOCs,   or   other
 telecommunications companies, could increase our costs of providing service.

 Moreover, 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.  For instance, a state court in Colorado has  ruled
 that the use of the Internet to provide certain intrastate services does not
 exempt an entity from paying intrastate  access charges.  Prior to  imposing
 any regulatory  burdens  on VoIP  providers,  however, the  Colorado  Public
 Utilities Commission  has opened  a docket  to  investigate whether  it  has
 jurisdiction to regulate VoIP services. The State Public Service  Commission
 of New York (NYPSC) has ruled that another company's particular IP telephony
 services may  be considered  telecommunications services  subject to  access
 charges.   The NYPSC  has, however,  declined to  issue a  broad  regulatory
 policy related to VoIP services in general.  On October 9, 2003, the NY  PSC
 published a notice seeking  comment regarding the regulatory  classification
 of another provider's VoIP services offered over broadband connections.   On
 the other  hand, following  an investigative  workshop held  by the  Florida
 Public Service Commission  on VoIP, the  Florida Legislature  passed a  bill
 that exempts VoIP services offered over broadband from regulation, but  some
 local exchange companies have attempted to interpret the new law as  leaving
 open the issue of access charges.  On  October 16, 2003, a Federal court  in
 Minnesota issued a  permanent injunction  against the  MNPUC preventing  the
 MNPUC from imposing  state regulations on  another provider's VoIP  services
 offered over broadband connections.  This permanent injunction was  recently
 upheld in the face of multiple  challenges.  Prior to the Minnesota  Federal
 court ruling, several  states, including  California, Washington,  Wisconsin
 and Florida issued directives  to various VoIP  providers directing them  to
 register as telecommunications providers.   There can  be no assurance  that
 these states will respect the Minnesota  Federal court ruling or accept  the
 position asserted by the subject VoIP  providers that they are  information,
 as opposed to telecommunications, service providers.  If the states  require
 these VoIP  providers to  register as  telecommunications providers,  others
 VoIP providers may be targeted and subjected to significant additional  fees
 and charges.

 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.   Some  countries currently  impose  little or  no  regulation  on
 Internet telephony  services.   For instance,  on January  5, 2001,  in  the
 European Union  (EU),  the  European Commission  (EC)  released  a  decision
 concluding that VoIP, in general, continues  to fall outside the  definition
 of voice telephony, except where the  services satisfy all of four  specific
 conditions.  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 exception conditions.  As a  result, the EC directed Member States  to
 permit  providers   to   offer   VoIP  under   data   transmission   general
 authorizations  and  without  requiring  compliance  with  more   burdensome
 individual  licenses  and  regulations   applicable  to  traditional   voice
 telephony.  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.   We  cannot
 guarantee  that  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,  other   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 stat  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  European  Union  has  also  enacted  several
 directives relating to the Internet, one of which addresses online commerce.
 Recently, the European  Union adopted a  privacy directive that  establishes
 certain  requirements   with   respect   to,   among   other   things,   the
 confidentiality,  processing  and   retention  of  personally   identifiable
 subscriber information and usage patterns.  The potential effect, if any, of
 these data  protection rules  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 and  an office in Caracas,  Venezuela.
 Our revenues are primarily derived from  direct sales to business  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, 2003, 2002 and 2001, $2.7  million or 15%, $2.6 million or  14%,
 and $5.1 million or 76% of our total revenue from continuing operations  for
 each year, respectively,  originated from Western  Europe, Africa and  South
 East Asia.

 Intellectual Property

 We don't  hold any  significant patents  or trademarks.   Our  products  and
 services are available to other telecommunication companies.

 Employees

 As of January 23, 2004, we have 40 full-time and 1 part-time employees, 9 of
 which perform administrative  and financial functions,  23 of which  perform
 customer support duties and 9 of which have experience in telecommunications
 operations and/or sales.  17 current  employees are located in Los  Angeles,
 California, and  Atlanta,  Georgia,  and 24  employees  operate  in  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, 14-A and S-
 3.  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, 2003, 2002 and 2001, we recorded net  losses
 from continuing operations of approximately  $5.4 million, $3.5 million  and
 $2.5 million,  respectively,  on  revenues  from  continuing  operations  of
 approximately $17.7 million, $18.4  million and $6.6 million,  respectively.
 As a result, we currently have a  substantial  working capital deficit.   In
 addition,  we  have  a  significant  amount  of  trade  payables,  of  which
 approximately 36% is past due.  To  be able to service our debt  obligations
 over the course of  the 2004 fiscal year  we must generate significant  cash
 flow and obtain additional financing. If we are unable to do so or otherwise
 to obtain funds necessary  to make required payments  on our trade debt  and
 other indebtedness, we may 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,  many 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  Universal Service Fund,  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  the 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

 Our principal executive office is located in Los Angeles, California,  where
 we lease 6,796 square feet in two locations. Our operations and  information
 systems are located in Los  Angeles and New York,  New York, where we  lease
 104 square  feet under  a  co-location agreement.  We  also have  sales  and
 administrative offices in Caracas, Venezuela and Johannesburg, South Africa.
 We believe  that our  facilities are  sufficient for  the operation  of  our
 business for the foreseeable future.


 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.  We have  not received a decision  regarding this filing.   We
 intend to continue defending this case vigorously, though its ultimate legal
 and financial  liability with  respect to  such legal  proceeding cannot  be
 estimated with any certainty at this time.

 The State  of Texas  ("State") performed  a sales  tax audit  of our  former
 parent, Canmax Retail Systems ("Canmax"), for  the years 1995 to 1999.   The
 State 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
 managements 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 our account for  sales
 tax remittances.  In correspondence from  the State in June 2003, the  State
 agreed to  consider offsetting  remittances received  by Canmax  during  the
 audit period.  The  State has refused to  consider other potential  offsets.

 Based  on  the correspondence with the State,  during the fiscal year  ended
 October 31, 2003,  our estimate of the potential liability has been recorded
 at  $350,000,  however,  we  cannot  provide  assurance  that  the  ultimate
 liability will  not be greater.  We are  continuing to pursue our options to
 appeal the decision by the State.  Furthermore, we are aggressively pursuing
 the collection of unpaid sales taxes from former customers of Canmax.


 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

 We have only one class  of shares, common stock,  $.001 par value, which  is
 traded on the OTC Bulletin Board.  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.

 Our Common Stock  is currently traded  on the OTC  Bulletin Board under  the
 symbol "DTIX." Our principal executive offices  are located at 17383  Sunset
 Boulevard, Suite  350, Los  Angeles, California,  90272, and  its  telephone
 number is (310) 566-1700.

 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 2002
      First Quarter  . . . . . . . . . . . .         $ 0.70   $ 0.29
      Second Quarter . . . . . . . . . . . .         $ 0.50   $ 0.21
      Third Quarter  . . . . . . . . . . . .         $ 0.29   $ 0.09
      Fourth Quarter . . . . . . . . . . . .         $ 0.13   $ 0.09

 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


 The closing price for our  Common Stock on January  23, 2003 as reported  on
 the OTC Bulletin Board was $0.19.

 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 470 stockholders of record as of January 23, 2004.

 Recent Sales of Unregistered Securities

 In July 2003, we executed a  10% note payable with GCA Strategic  Investment
 Fund Limited, which provided  financing of $550,000.   This note's  maturity
 date was December 23, 2003.   Per the terms of  the agreement, in the  event
 this note is not  repaid in full within  10 days of  the maturity date,  the
 note becomes a convertible debenture.   Effective January 2, 2004, the  note
 became a convertible debenture.  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  (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.  In  an event of default  the
 amount declared due and payable on this debenture shall be at the price  set
 forth in clause (ii) above.  We also issued  to the holder of the this  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.  We relied
 on  the  exemption  from  registration  provided  by  Section  4(2)  of  the
 Securities Act of 1933 for this  non-public offering because the  securities
 were sold to  a single purchaser  with financial experience  who had a  pre-
 existing relationship with us.

 In November 2002, we executed a 12% note payable 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 Company also issued to the holder of the 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.   We
 relied on the exemption  from registration provided by  Section 4(2) of  the
 Securities Act of 1933 for this  non-public offering because the  securities
 were sold to  a single purchaser  with financial experience  who had a  pre-
 existing relationship with us.

 In July 2002, we issued  an amended 10% convertible  note to Mr. Jenkins  to
 reflect the advance of an additional $300,000, which matures on February 24,
 2004.  The 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 Mr. Jenkins at any time prior to
 maturity.  The conversion  price is equal  to the closing  bid price of  our
 common stock on the last trading  day immediately preceding the  conversion.
 In connection with the issuance of the amended note we also issued a warrant
 to Mr. Jenkins to purchase 300,000 shares of our common stock at an exercise
 price of $0.75 per share, which expires on July  8, 2007.  We relied on  the
 exemption from registration provided by Section  4(2) of the Securities  Act
 of 1933 for this non-public offering  because the securities were sold to  a
 single  purchaser  with   financial  experience  who   had  a   pre-existing
 relationship with us.

 In January 2002, we issued an amended 10% convertible note to Mr. Jenkins to
 reflect the advance of an additional $102,433, which matures on February 24,
 2004.  The 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 Mr. Jenkins at any time prior to
 maturity.  The conversion  price is equal  to the closing  bid price of  our
 common stock on the last trading  day immediately preceding the  conversion.
 In connection with the issuance of the amended note we also issued a warrant
 to Mr. Jenkins to purchase 102,433 shares of our common stock at an exercise
 price of $0.75 per share, which expires on  January 28, 2007.  We relied  on
 the exemption from registration provided by  Section 4(2) of the  Securities
 Act of 1933 for this non-public offering because the securities were sold to
 a  single  purchaser  with  financial  experience  who  had  a  pre-existing
 relationship with us.

 In January 2002, we executed a  6% convertible debenture with GCA  Strategic
 Investment  Fund  Limited,  which  provided  financing  of  $550,000.   This
 debenture's original maturity date  was  January 28, 2003.   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.  In an event  of
 default the amount declared  due and payable on  this debenture shall be  at
 the price set forth in clause (ii) above.   We also issued to the holder  of
 the 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.  In January 2003, we and the holder of the debenture agreed to  extend
 the maturity date of the debenture   to November 8, 2004.  In  consideration
 for this extension, in February 2003, we adjusted the exercise price of  the
 previously issued warrants to $0.21 per share.  We also issued to the holder
 of the 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.  We relied on  the exemption from registration provided by  Section
 4(2) of the Securities Act of 1933 for this non-public offering because  the
 securities were sold to a single purchaser with financial experience who had
 a pre-existing relationship with us.

 On October  24,  2001, we  issued  10% convertible  notes  to three  of  our
 executives, which provided financing of $1,945,958.  These notes were issued
 to our Chief Executive Officer for  $1,745,958, our Chief Financial  Officer
 for $100,000, and our Executive Vice  President for $100,000.  The  original
 maturity date of  each note  was October  24, 2003.   In  January 2003,  the
 Company extended the maturity date of each  note to February 24, 2004.   The
 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 holders of  the notes at any  time
 prior to maturity.  The conversion price  is equal to the closing bid  price
 of our  common stock  on  the last  trading  day immediately  preceding  the
 conversion.   We  relied on  the  exemption from  registration  provided  by
 Section 4(2) of  the Securities  Act of  1933 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.

 On October 12,  2001, we  completed the  acquisition of  certain assets  and
 liabilities of Rapid  Link.  The  aggregate purchase  price was  $2,116,481,
 including $1,450,000 in cash, $198,481 in acquisition related costs, and the
 issuance of 600,000  shares of our  common stock, valued  at $468,000.   The
 value of  the 600,000  common shares  was determined  based on  the  closing
 market price of our common stock, $0.78, on October 12, 2001.  We relied  on
 the exemption from registration provided by  Section 4(2) of the  Securities
 Act of 1933 for this non-public offering because the securities were sold to
 a single purchaser with financial experience who had access to our books and
 records.

 On April 11, 2001,  we issued a 6%  convertible debenture to Global  Capital
 Funding Group L.P, which provided financing  of $1,000,000.  This  debenture
 was subsequently paid in  full following the issuance  of a note payable  to
 the holder of this debenture  during November 2002.   On April 11, 2001,  in
 connection with the issuance of this  debenture, we issued to the holder  of
 the debenture warrants to acquire an  aggregate of 100,000 shares of  common
 stock at an exercise  price of $0.89  per share, which  expire on April  11,
 2006.  We relied on the exemption from registration provided by Section 4(2)
 of the  Securities Act  of 1933  for this  non-public offering  because  the
 securities were sold to a single purchaser with financial experience who had
 access to our books and records.

 For services rendered in connection with the above April 11, 2001 debenture,
 we issued to DP Securities, Inc. 25,000 warrants to acquire common stock  at
 an exercise price of $0.89, which  expire on April 11,  2006.  We relied  on
 the exemption from registration provided by  Section 4(2) of the  Securities
 Act of 1933 for this non-public offering because the securities were sold to
 a single purchaser with financial experience who had access to our records.

 On December  15,  2000,  we issued  90,000  shares  of common  stock  to  an
 accredited  investor,  Scotty  Cook,  a  former  Director,  at  no  cost  as
 compensation for  consulting services  performed for  us.   At the  time  of
 issuance, our common  stock price was  $1.125.  We  relied on the  exemption
 from registration provided by Section 4(2) of the Securities Act of 1933 for
 this non-public  offering  because the  securities  were sold  to  a  single
 purchaser with financial experience who had a pre-existing relationship with
 us.

<PAGE>
<TABLE>

 Item 6.  Selected Financial Data

                                                       FISCAL YEARS ENDED OCTOBER 31,
                                           -----------------------------------------------------
                                            2003        2002       2001        2000       1999
                                           -------     -------    -------     -------    -------
 <S>                                      <C>         <C>        <C>         <C>        <C>
 CONSOLIDATED STATEMENT OF OPERATIONS
  DATA (1):
 Revenues                                 $ 17,655    $ 18,409   $  6,642    $  8,591   $  3,117
 Cost of revenues                           13,129      11,540      4,668       9,971      2,982
 Operating expenses                          8,578       9,124      5,147       9,142      4,028
 Other income (expense)                     (1,367)     (1,270)       646        (665)        79
 Gain on sale of software business               -           -          -           -      5,309
 Income (loss) from continuing operations   (5,419)     (3,525)    (2,527)    (11,187)    (3,814)
 Income (loss) from discontinued
   operations                               (1,203)     (1,159)      (157)          -        218
 Extraordinary item - forgiveness of debt        -           -          -           -          -
 Net income (loss)                          (6,622)     (4,684)    (2,684)    (11,187)     1,713

 Income (loss) from continuing
  operations per share                    $  (0.34)   $  (0.25)  $  (0.23)   $  (1.31)  $  (0.56)
 Net income (loss) per share              $  (0.41)   $  (0.34)  $  (0.25)   $  (1.31)  $   0.25

 CONSOLIDATED BALANCE SHEET DATE (1):
 Total assets
     Continuing operations                $  4,839    $  8,338   $ 11,255    $  6,102   $  4,467
     Discontinued operations                   242         742      1,389           -          -
 Working capital (deficiency)
     Continuing operations                  (7,484)     (6,774)    (6,626)     (4,829)     1,251
     Discontinued operations                (2,493)     (2,030)         -           -          -
 Noncurrent obligations
     Continuing operations,
       net of debt discount                  1,716         892      1,967         119        562
     Discontinued operations                     -           -          -           -          -
 Shareholders' equity (deficit)             (8,222)     (1,975)     2,079         508      2,865

 --------------------
 (1) All numbers, other than per share numbers, are in thousands. The results
 of operations of our German subsidiary, Rapid Link Telecommunicaitons, GmbH,
 and our predecessor software business have  been presented in the  financial
 statements as discontinued operations.  Results of operations in prior years
 have  been  restated   to  reclassify  these   businesses  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, 2003, 2002  and
 2001

 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,  2003,  2002, and  2001  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  significant
 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.
 $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  and will be used  for
 the Company's ongoing working capital needs.

 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, the  maturity date  became
 November 8, 2004.   The loan  proceeds have been  and will be  used for  the
 Company's ongoing working capital needs.

 On August 1, 2003, our German Subsidiary, Rapid Link Telecommunications GmbH
 received approval  for its insolvency filing  and has been turned over to  a
 trustee who is responsible for liquidating the operation.

 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  and  feel  we  are  one  of  the  front  runners  in  this  industry.
 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 ATT 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 expect to focus  on the growth  of our VoIP  business through adding  new
 products and services residing on our existing network which we can offer to
 end  user  customers.   We  are  also  exploring  opportunities  to  provide
 current customers, and attract new customers,  through the sale of  Internet
 phones that  allow users  to connect  specialized Internet  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 phones calls  through
 the traditional Public Switched Telephone Network.  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.  It is our intention to  secure
 a purchase agreement with  a supplier of Internet  phones during the  second
 quarter of fiscal 2004.

 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.

 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.  101,
 "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. 101.

 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 and Other Long-Lived Assets

 Property, plant and equipment and other long-lived assets are amortized over
 their useful lives.  Useful  lives are based on  our estimate of the  period
 that the assets will generate revenue.  Goodwill is assessed for  impairment
 at least annually.

 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 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.   Prior to the  second quarter of  fiscal
 2001, we recorded as trade accounts  payable the entire amounts owed to  our
 vendors, including amounts in dispute.   Any disputes resolved and  credited
 to us were recorded as other income at the  time the credit was issued.   We
 subsequently changed  our  policy  to  record  cost  of  revenues  excluding
 disputed amounts.  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   2002 to 2003    Year Ended  Revenue  2001 to 2002    Year Ended
                                         Oct 31 2003    2003   Increase (Decr)  Oct 31 2002   2002   Increase (Decr)  Oct 31 2001
                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
 <S>                                    <C>             <C>        <C>         <C>            <C>        <C>         <C>
 REVENUES                               $ 17,654,794    100%         -4%       $ 18,408,649   100%        177%       $  6,641,818

 COSTS AND EXPENSES
  Costs of revenues                       13,128,924     74%         14%         11,539,562    63%        147%          4,668,418
  Sales and marketing                        700,404      4%        -21%            885,661     5%         10%            808,792
  Non-cash sales and marketing expense             -      -          -                    -     -        -100%            258,616
  General and administrative               3,812,639     22%        -34%          5,760,179    31%         75%          3,297,954
  Impairment charge related to write
    down of advertising credits            2,376,678     13%          -                   -     -           -                   -
  Impairment charge related to write
    down of assets held for resale                 -      -        -100%            320,307     2%          -                   -
  Depreciation and amortization            1,338,351      8%        -38%          2,158,135    12%        176%            781,331
  Sales tax settlement                       350,000      2%          -                   -     -           -                   -
                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
   Total costs and expenses               21,706,996    123%          5%         20,663,844   112%        111%          9,815,111
                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
  Operating loss                          (4,052,202)   -23%         80%         (2,255,195)  -12%        -29%         (3,173,293)

 OTHER INCOME (EXPENSE)
  Interest expense and financing costs    (1,131,806)    -6%         -9%         (1,247,488)   -7%         76%           (710,464)
  Other income related to settlement
    of disputes                                    -      -           -                   -     -        -100%          1,789,373
  Foreign exchange                             7,097      -        -122%            (31,976)    -           -                   -
  Write off of investment
    in marketable securities                       -      -           -                   -     -        -100%           (446,820)
  Gain (loss) on disposal of equipment      (241,935)    -1%      -2772%              9,053     -         -34%             13,693
                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
    Total other income (expense)          (1,366,644)    -8%          8%         (1,270,411)   -7%       -297%            645,782

                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
 LOSS FROM CONTINUING OPERATIONS          (5,418,846)   -31%         54%         (3,525,606)  -19%         39%         (2,527,511)

 LOSS FROM DISCONTINUED OPERATIONS        (1,203,465)    -7%          4%         (1,158,574)   -6%        639%           (156,795)
                                         -----------    ----   ---------------  -----------   ----   ---------------  -----------
 NET LOSS                               $ (6,622,311)   -38%         41%       $ (4,684,180)  -25%         75%       $ (2,684,306)
                                         ===========    ====   ===============  ===========   ====   ===============  ===========

 LOSS PER SHARE:
   Basic and diluted loss per share
     Continuing operations              $      (0.34)                          $      (0.25)                         $      (0.23)
     Discontinued operations                   (0.07)                                 (0.09)                                (0.02)
                                         -----------                            -----------                           -----------
                                        $      (0.41)                          $      (0.34)                         $      (0.25)
                                         ===========                            ===========                           ===========
 SHARES USED IN THE CALCULATION
   OF PER SHARE AMOUNTS:
     Basic and diluted common shares      15,999,179                             13,935,782                           10,900,115
                                         ===========                            ===========                           ===========
</TABLE>
<PAGE>

 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 5 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 11 to the Consolidated Financial Statements.)

 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.

 Sales Tax Settlement

 This estimated cost is attributable to audit findings on our former  parent,
 Canmax Retail Systems, from the State of  Texas for the years 1995 to  1999.
 The State of Texas determined  that we did not  properly remit sales tax  on
 certain  transactions.   Our  current  and  former  managements  have  filed
 exceptions, through our outside sales tax  consultant, to the State's  audit
 findings.  (See Note 14 to the Consolidated Financial Statements).

 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.

 Results of Operations - 2002 Versus 2001

 Operating Revenues

 Revenues for  the fiscal  year ended  October 31,  2002 include  $15,436,000
 resulting from the  customers and infrastructure  acquired from Rapid  Link.
 Recurring revenues not related to Rapid Link were reduced in our 2002 fiscal
 year by $1,005,000,  primarily due to  the loss of  business from two  large
 resellers.  Our retail  and wholesale revenues increased  by 147% and  220%,
 respectively, for the  fiscal year ended  October 31, 2002  compared to  the
 prior fiscal year.  In addition to the growth obtained by the acquisition of
 Rapid  Link,  we  successfully  added   new  wholesale  customers  and   new
 international points of termination.  Furthermore, we added to our wholesale
 sales force to focus on developing greater wholesale opportunities.

 Costs of Revenues

 Costs of revenues increased  due to the growth  in minutes and customers  as
 well as  the  increased  revenue  and  traffic  acquired  from  Rapid  Link.
 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
 improved slightly as the  retail revenue acquired  from Rapid Link  realized
 higher margins than our  existing retail traffic.   This margin  improvement
 was reduced in part by growth in our wholesale traffic.

 General and Administrative Expenses

 The increase in general  and  administrative  expenses  was primarily due to
 the  addition  of  the  Rapid  Link  operations.  Included  in  general  and
 administrative expenses is bad debt expense of $685,000 and $140,000 for the
 fiscal years October 31, 2002 and  2001, respectively.  For the 2002  fiscal
 year, bad debt expense includes $216,000 attributable to non-payment from  a
 single  wholesale  customer.  We  implemented  strict  credit  policies  and
 systems to closely monitor our wholesale traffic daily to reduce the risk of
 bad debt.

 Sales and Marketing Expenses

 The reduction  of  our sales  and  marketing  expenses as  a  percentage  of
 revenues was primarily due to the increase in wholesale customer revenues as
 a percentage of our total revenues.   A majority of our retail revenues  are
 generated  by   outside  agents,   or  through   newspaper  and   periodical
 advertising, which is managed by a small in-house sales and marketing group.
 Alternatively, we  can  generate  significant revenues  from  our  wholesale
 business with relatively  few sales  personnel, as  wholesale customers  are
 usually large international telecommunications  companies that provide  both
 retail and wholesale opportunities to millions of customers worldwide.

 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 11 to the Consolidated Financial Statements.)

 Depreciation and Amortization

 The increase in depreciation  and amortization is  primarily related to  the
 assets of  the  business  acquired from  Rapid  Link.   A  majority  of  our
 depreciation and amortization expenses relate  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.
 Amortization of goodwill  for the  fiscal year  ended October  31, 2001  was
 $172,000.

 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.  For the  fiscal year ended October 31,
 2001,  $710,000  of interest  expense  and  financing costs  were  primarily
 attributable to amortization of  deferred financing  fees  and debt discount
 associated with  our  convertible  notes which were converted to  equity  in
 March 2001,  and the fair value of additional warrants issued to the holders
 of the notes which were fully vested at the time of issuance.

 Other Income Related to Settlement of Dispute

 Settlements with two major carriers over  charges in prior periods  amounted
 to a total  credit to  the statements of  operations of  $1,789,000 for  the
 fiscal year ended October 31, 2001.  Of this amount, $780,000 was the result
 of a settlement with  Star Telecommunications.   Also included was  $447,000
 representing common stock received from Star in connection with our  dispute
 settlement.  This amount was subsequently written off due to the Chapter  11
 bankruptcy filing by Star.

 Liquidity and Sources of Capital

 The growth model for our  business is scaleable, but  the rate of growth  is
 dependent on the  availability of  future financing  for capital  resources.
 Our funding  of  additional  infrastructure  development  will  be  provided
 through the  operations of  our Telecommunications  Business and  externally
 through debt and/or equity  offerings.  We plan  to obtain vendor  financing
 for any equipment needs  associated with expansion.   We believe that,  with
 sufficient capital, we can  significantly accelerate our  growth plan.   Our
 failure to obtain additional financing could delay the implementation of our
 business plan and have a material adverse effect on its business,  financial
 condition and operating results.

 At October  31, 2003,  we had  cash and  cash equivalents  of  approximately
 $505,000, an increase of $236,000 from the balance at October 31, 2002.   We
 had significant working capital deficits at both October 31, 2003 and  2002.
 As of  October 31,  2003, our  current  assets of  approximately  $1,609,000
 included net  accounts  receivable  of  approximately  $873,000,  which  has
 decreased over the balance of $966,000 at October 31, 2002 due to a  decline
 in revenues  as  well as  the  Company implementing  more  stringent  credit
 requirements during fiscal 2002.

 Net cash used in operating activities of continuing operations  was $684,000
 for the fiscal year ended  October 31, 2003,  compared  to net  cash used in
 operating  activities  of continuing operations  of  $56,000  for the fiscal
 year  ended  October 31,  2002.  The net cash used in  operating  activities
 of  continuing  operations  for the  fiscal year ended October 31, 2003  was
 primarily  due  to  a  net loss  from continuing  operations  of  $5,419,000
 adjusted for:  loss from disposal of  fixed  assets  of  $242,000;  non-cash
 interest  expense  of $689,000; depreciation and amortization of $1,338,000;
 net changes in operating assets and  liabilities of $48,000; and  impairment
 charge related to write down of advertising credits of $2,377,000.  For  the
 fiscal  year  ended  October  31, 2002,  the  net  cash  used  in  operating
 activities  of  continuing  operations was  comprised  of  a net  loss  from
 continuing operations of $3,526,000 adjusted  for: impairment charge related
 to  write  down  of  assets  held  for  resale of $320,000; bad debt expense
 of  $685,000;  non-cash  interest  expense  of  $924,000;  depreciation  and
 amortization  of  $2,158,000;  and  net  changes  in  operating  assets  and
 liabilities of ($583,000).

 Net cash used in investing activities of continuing operations for the years
 ended October 31, 2003 and 2002 was $192,000 and $303,000, respectively, and
 relate to the purchase of property and equipment.

 Net cash provided  by financing activities  of continuing operations for the
 fiscal year ended October 31, 2003, totaled $1,169,000, compared to $667,000
 for  the  fiscal  year  ended  October 31, 2002.  For the  fiscal year ended
 October 31, 2003,  significant components of net cash provided  by financing
 activities of continuing operations include  $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.
 For the fiscal  year ended October  31, 2002,  the significant components of
 net cash provided by financing activities  include $300,000 in  net proceeds
 from a  note  issued to  one of  our  executives, $550,000 from the issuance
 of  a  convertible  debenture,  offset  by  $106,000  in payments on capital
 leases, and  $93,000 of financing fees.

 We have an accumulated deficit of approximately $47.2 million as of  October
 31, 2003, 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.   Our strategy is to fund  these
 cash requirements through operations, debt facilities and additional  equity
 financing.  As of the date of this report:

   1) we obtained  additional financing  of $1,250,000  in November  2002,  a
      portion of which was used to  fully pay the April 11, 2001  convertible
      debenture with Global Capital Funding Group, L.P.
   2) we and  GCA Strategic  Investment  Fund Limited  agreed to  extend  the
      maturity date of the  January 2002 debenture from  January 28, 2003  to
      November 8, 2004.
   3) we obtained additional financing of $550,000 in July 2003.

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

 Although we have 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  us.   Failure  to  obtain  sufficient  capital  could
 materially affect our operations and expansion  strategies.  As a result  of
 the aforementioned factors and related uncertainties, there is  considerable
 doubt about our 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,  2003 were  $192,000  and  we  do  not
 anticipate significant spending for fiscal year 2004.

 On April 11, 2001, we executed a 6% convertible debenture (the  "Debenture")
 with  Global  Capital  Funding  Group  L.P,  which  provided  financing   of
 $1,000,000.  The Debenture's maturity date  was April 11, 2003.   Subsequent
 to fiscal year 2002, this debenture was paid in full through the issuance of
 a subsequent loan from Global Capital Funding Group, L.P.

 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  and now  mature on  February 24,  2004.   These Notes  are
 secured by selected Company assets and are convertible into our common stock
 at the option of the holder at any  time prior to maturity.  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 warrants  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.

 In January  2002,  we  executed a  6%  convertible  debenture  (the  "Second
 Debenture") with  GCA  Strategic  Investment Fund  Limited,  which  provided
 financing of $550,000.  With an original maturity date of January 28,  2003,
 the Second Debenture  was amended  subsequent to  fiscal year  2002 and  now
 matures on November 8, 2004.  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.

 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's maturity date is November  8, 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.

 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, 2003, the  GCA-
 Note's terms became  the same as  those of the  Second Debenture.   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.


 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

 Changes in our accountants  were previously reported  in current reports  on
 Form 8-K filed on November 7, 2001, August 2, 2002 and August 23, 2002.


 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.


                                   PART III


 Item 10. Directors and Executive Officer of the Registrant

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


               Name             Age       Position with the Company
          ---------------       ---       --------------------------------
          John Jenkins          42        Chairman, Chief Executive
                                          Officer, President and Director
          Allen Sciarillo       39        Executive Vice President, Chief
                                          Financial Officer, Secretary and
                                          Director
          Lawrence Vierra       58        Executive Vice President and
          Eleizer Gurfel        45        Director
                                          Executive Vice President
          Robert M. Fidler      64        Director
          Nick DeMare           48        Director
          David Hess            42        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  Dial
 Thru.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 our Executive Vice  President and a  director
 since January  2000.   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.

 ELEIZER GURFEL has served  as our Executive Vice  President since May  2002.
 From January 2001 through May 2002, Mr. Gurfel was the President of  Asiatel
 Inc, a privately owned  global facilities-based telecommunications  carrier.
 From November 1999 through December 2000,  Mr. Gurfel was Vice President  of
 InterPacket Networks,  a  provider  of  Internet  connectivity  to  Internet
 Service providers  worldwide.   Prior to  that time,  Mr. Gurfel  was  Chief
 Operating Officer  of  LCR  Telecommunications,  from  August  1997  through
 November 1999

 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.

 NICK DEMARE has served as  one of our directors  since January 1991.   Since
 May 1991, Mr. DeMare has been  the President and Chief Executive Officer  of
 Chase Management  Ltd.,  a  private  company  providing  a  broad  range  of
 administrative, management  and financial  services  to private  and  public
 companies with  varied interests  in  mineral exploration  and  development,
 precious and  base  metals production,  oil  and gas,  venture  capital  and
 computer software.   Mr. DeMare  has served and  continues to  serve on  the
 boards of a  number of  Canadian public companies,  three of  which are  SEC
 reporting  companies;  Hilton  Petroleum,  Ltd.,  Trimark  Energy  Ltd.  and
 California Exploration Ltd.  Mr. DeMare is a Chartered Accountant (Canada).

 DAVID HESS was elected to our Board of Directors in May 2002.  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  one  meeting  during the  fiscal  year  ended
 October 31, 2003.  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 haves  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.

 The code is included in this filing as Exhibit 14.1.

 Audit Committee Financial Expert

 Our board of directors has determined that Nick DeMare is an audit committee
 financial expert  as  defined  by  Item 401(h)  of  Regulation  S-K  of  the
 Securities Exchange Act of 1934, as  amended, and is independent within  the
 meaning of Item 7(d)(3)(iv) of Schedule 14A of that act.


 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, 2003, 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, 2003, 2002
 and 2001 to  our chief executive  officer and all  other executive  officers
 whose total annual salary and bonus exceeded $100,000 during fiscal 2003.

<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           2003   150,000    -0-       -0-           -0-            -0-
 Chairman, CEO          2002   181,042    -0-       -0-           -0-            -0-
 and President          2001   108,833    -0-       -0-        700,000           -0-

 Allen Sciarillo        2003   125,000   1,106      -0-           -0-            -0-
 Executive Vice         2002   141,667    -0-       -0-           -0-            -0-
 President and Chief    2001     -0-      -0-       -0-        500,000           -0-
 Financial Officer

 Eleizer Gurfel         2003   105,000    -0-     44,210          -0-            -0-
 Executive Vice         2002    53,692    -0-      1,268        75,000           -0-
 President              2001     -0-      -0-       -0-           -0-            -0-


  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-       466,667          233,333           -0-             -0-
 Allen Sciarillo   -0-         -0-       333,333          166,667           -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, 2003, which was $0.17 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

 Each of our  directors who  is not one  of our  officers receives  a fee  of
 $1,500 for each Board meeting attended.   Directors are not compensated  for
 attending committee meetings.  Our directors also 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 serves as a member 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.
 During our 2003 fiscal  year, our Compensation  Committee consisted of  Nick
 DeMare and Robert Fidler.


 Item 12. Security Ownership of Certain Beneficial Owners and Management

 The following table sets forth certain  information as of January 23,  2004,
 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)
        ------------------------------------       -----------    ----------
        Dodge Jones Foundation
        400 Pine Street, Suite 900                 1,000,000 (3)     6.17%
        Abilene, Texas 79601

        John Jenkins
        17383 Sunset Boulevard, Suite 350          4,315,057 (4)    22.99%
        Los Angeles, California  90272

        Lawrence Vierra                              405,000 (5)     2.44%
        2353 Dolphin Court
        Henderson, NV  89014

        Nick DeMare                                   20,280 (6)      *
        Chase Management
        1090 West Georgia Street, Suite 1305
        Vancouver, BC V6E 3V7

        Robert M. Fidler                              14,000 (7)      *
        987 Laguna Road
        Pasadena, California 91105

        David Hess                                         0          *
        545 Alder Avenue
        Westfield, New Jersey  07090

        Allen Sciarillo                              433,333 (8)     2.60%
        17383 Sunset Boulevard, Suite 350
        Los Angeles, CA 90272

        Global Capital Funding Group L.P.          1,373,838 (9)     8.15%
        106 Colony Park Drive
        Cumming, GA  30040

        All Executive Officers and Directors      5,187,670         26.44%
        as agroup (6 persons)

        * Reflects less than one percent.

       (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 23, 2004 are
           deemed  outstanding.    Such  shares,  however,  are  not   deemed
           outstanding for purposes of computing  the ownership of any  other
           person.
       (2) Based  upon 16,201,803  shares of Common  Stock outstanding as  of
           January 23, 2004.
       (3) Based upon  information contained  within Schedule 13D filed  with
           the Securities and Exchange Commission on July 2, 1997.
       (4) Includes  2,565,057 shares of  Common Stock which may be  acquired
           through the exercise  of options which  are exercisable within  60
           days of January 23, 2004.
       (5) Includes  400,000  shares of Common  Stock which  may be  acquired
           through the exercise  of options which  are exercisable within  60
           days of January 23, 2004.
       (6) Includes 10,000  shares  of  Common Stock  which may  be  acquired
           through the exercise  of options which  are exercisable within  60
           days of January 23, 2004.
       (7) 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 23, 2004.
       (8) Includes  433,333  shares of Common  Stock which  may be  acquired
           through the exercise of warrants  which are exercisable within  60
           days of January 23, 2004.
       (9) Includes  650,000  shares of Common  Stock which  may be  acquired
           through the exercise of warrants  which are exercisable within  60
           days of January 23, 2004.

 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, 2003:

                                                               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                5,579,891 (1)          $0.83            2,856,000
 compensation
 plans approved
 by security holders

 Equity                    -0-                 n/a                 -0-
 compensation
 plans not
 approved by
 security holders

 Total                 5,579,891              $0.83            2,856,000


 (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.


 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
 subsequent to fiscal year 2002  and now mature on  February 24, 2004.   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 prior  to maturity.   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.


 Item 14. Principal Accounting Fees and Services

 We are not yet required to make  any disclosure under this new Item  because
 the fiscal year covered  by this Annual Report  ended prior to December  15,
 2003.

                                   PART IV

 Item 15. Exhibits, Financial Statements Schedules, and Reports on Form 8-K

 (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)

 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

 21.1* Subsidiaries of the Registrant

 23.1* Consent of KBA Group LLP

 23.2* Information regarding consent of Arthur Andersen LLP

 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.

      (b) reports on form 8-K

 During the quarter ended October 31, 2003, our Company filed two Current
 Reports on Form 8-K.

 1. A report filed on August 1, 2003 described the approval of the insolvency
 filing by the registrant's German subsidiary, Rapid Link, GmbH.

 2. A report filed on September 17, 2003 described the registrant's:
           a. Securities Purchase Agreement dated November 8, 2002 with
              Global Capital Funding Group, L.P.
           b. Securities Purchase Agreement dated July 24, 2003 with GCA
              Strategic Investment Fund Limited.
           c. issuance of a press release setting forth its financial
               results for its third quarter ended July 31, 2003.

<PAGE>

                                  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.

                     DIAL THRU INTERNATIONAL CORPORATION

 Date: January 29, 2004

 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 29, 2004
    John Jenkins             Officer and President and
                             Director

    /s/ ALLEN SCIARILLO      Chief Financial Officer         January 29, 2004
    Allen Sciarillo          and secretary (principal
                             financial and principal
                             accounting officer)

    /s/ LAWRENCE VIERRA      Executive Vice President        January 29, 2004
    Lawrence Vierra          and Director

    /s/ ROBERT M. FIDLER     Director                        January 29, 2004
    Robert M. Fidler

    /s/ NICK DeMARE          Director                        January 29, 2004
    Nick DeMare

    /s/ DAVID HESS           Director                        January 29, 2004
    David Hess

<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES

                        INDEX TO FINANCIAL STATEMENTS


 1. Consolidated Financial Statements

    Reports of Independent Public Accountants                           F-2

    Consolidated Balance Sheets at October 31, 2003 and 2002            F-4

    Consolidated Statements of Operations for the fiscal years
      ended October 31, 2003, 2002 and 2001                             F-5

    Consolidated Statement of Shareholders' (Deficit) Equity for
      the fiscal years ended October 31, 2003, 2002 and 2001            F-6

    Consolidated Statements of Cash Flows for the fiscal years ended
      October 31, 2003, 2002 and 2001                                   F-7

    Notes to Consolidated Financial Statements                          F-8

 2. Financial Statement Schedule

    Reports of Independent Public Accountants 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 CERTIFIED PUBLIC ACCOUNTANTS
              --------------------------------------------------

 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, 2003 and 2002,
 and the related consolidated statements of operations, shareholders' deficit
 and cash flows for the years then ended. 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 auditing standards generally
 accepted in the United States of America. 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, 2003 and
 2002, and the results of their operations and their cash flows for the years
 then ended, in conformity with accounting principles generally accepted in
 the United States of America.

 As described in Note 1 to the October 31, 2003 and 2002 financial
 statements, the accompanying consolidated financial statements have been
 prepared assuming that the Company will continue as a going concern. The
 Company has suffered recurring losses and has used significant cash flows
 in operations during each of the last three fiscal years. Additionally, at
 October 31, 2003, the Company's current liabilities exceeded its current
 assets by $9.9 million and the Company has a shareholders' deficit totaling
 $8.1 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.

 As discussed in Note 1 to the Consolidated Financial Statements, during
 fiscal year 2002, the Company changed its method of accounting for goodwill
 and other intangibles to comply with the accounting provisions of Statement
 of Accounting Standard No. 142 "Goodwill and Other Intangibles".


 /s/ KBA GROUP LLP
 __________________
 KBA GROUP LLP
 Dallas, Texas
 December 12, 2003, except for Note 19,
 as to which the date is January 2, 2004


                                      F-2
<PAGE>

                REPORT OF PREVIOUS INDEPENDENT PUBLIC ACCOUNTANTS
                -------------------------------------------------

 The following  report is  a copy  of a  report previously  issued by  Arthur
 Andersen LLP ("Andersen"), which report has  not been reissued by  Andersen.
 Other than with respect to Andersen's review of our Quarterly Report on Form
 10-Q  for  the  period  ended  January  31,  2002,  none  of  the  financial
 information for our fiscal year ended October 31, 2002 has been reviewed  by
 Andersen. Reclassifications were made to  the financial information for  the
 time period indicated in Andersen's previously issued report to conform that
 report to the  financial statement presentations  made with  respect to  our
 fiscal year ended October 31, 2002.


 To Dial Thru International, Inc.:

 We have audited the accompanying balance  sheet of Dial Thru  International,
 Inc. (a Delaware corporation)  and subsidiaries as of  October 31, 2001  and
 the related statement of operations, shareholders' equity and cash flows for
 the year then ended.  These financial statements  are the responsibility  of
 the Company's management.  Our responsibility is  to express  an opinion  on
 these financial statements based on our audit.

 We conducted  our  audit in  accordance  with auditing  standards  generally
 accepted in the  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
 audit provides a reasonable basis for our opinion.

 In our opinion, the financial statements  referred to above present  fairly,
 in all material respects, the financial position of Dial Thru International,
 Inc. and  subsidiaries as  of October  31,  2001 and  the results  of  their
 operations and their cash flows for  the year then ended in conformity  with
 accounting principles generally accepted in the United States.

 The accompanying 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 operations and  is in a  working capital deficit  position that  raises
 substantial doubt  about  its  ability  to  continue  as  a  going  concern.
 Management's plans concerning these  matters are also  described in Note  1.
 The consolidated financial  statements do not  include any adjustments  that
 might result from the outcome of this uncertainty.

 /s/ ARTHUR ANDERSEN LLP
 ___________________________
 ARTHUR ANDERSEN LLP
 Atlanta, Georgia
 January 9, 2002

                                      F-3

<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


                     ASSETS
                     ------                             October 31, October 31,
                                                           2003          2002
                                                        ----------   ----------
 CURRENT ASSETS
   Cash and cash equivalents                           $   505,256  $   269,313
   Trade accounts receivable, net of allowance
    for doubtful accounts of $295,094 at October
    31, 2003 and $506,391 at October 31, 2002              872,610      965,617
   Prepaid expenses and other current assets               230,997      124,845
                                                        ----------   ----------
       Total current assets                              1,608,863    1,359,775
                                                        ----------   ----------

 PROPERTY AND EQUIPMENT, net                             1,340,986    2,729,122
 ADVERTISING CREDITS, net                                        -    2,376,678
 GOODWILL, net                                           1,796,917    1,796,917
 OTHER ASSETS                                               91,434       75,739
 NET LONG-TERM ASSETS OF DISCONTINUED OPERATIONS           242,334      742,124
                                                        ----------   ----------
 TOTAL ASSETS                                          $ 5,080,534  $ 9,080,355
                                                        ==========   ==========

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

 CURRENT LIABILITIES
   Current portion of capital lease obligations            146,140      257,780
   Trade accounts payable                                2,814,472    3,647,856
   Accrued liabilities                                   2,448,939    1,526,691
   Deferred revenue                                        356,999      331,786
   Deposits and other payables                             430,678      444,204
   Note payable, net of debt discount of $2,847
     at October 31, 2003                                   547,153            -
   Notes payable to related parties, net of debt
     discount of $423,291 at October 31, 2002            2,348,401    1,925,110
   Net current liabilities of discontinued operations    2,493,481    2,030,095
                                                        ----------   ----------
       Total current liabilities                        11,586,263   10,163,522
                                                        ----------   ----------

 CAPITAL LEASE OBLIGATIONS, net of current portion               -       11,549
 NOTE PAYABLE, net of debt discount of $22,838
   at October 31, 2003                                   1,227,162            -
 CONVERTIBLE DEBENTURES, net of debt discount
   of $10,756 at October 31, 2003 and $163,510
   at October 31, 2002                                     489,244      880,365

 COMMITMENTS AND CONTINGENCIES (See Notes 1 and 14)

 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; 16,201,803 shares issued
     at October 31, 2003 and 15,074,916 shares
     issued at October 31, 2002                             16,202       15,075
   Additional paid-in capital                           39,070,237   38,894,065
   Accumulated deficit                                 (47,253,704) (40,631,393)
   Accumulated other comprehensive loss                          -     (196,057)
   Treasury stock, 12,022 common shares at cost            (54,870)     (54,870)
   Subscription receivable - common stock                        -       (1,901)
                                                        ----------   ----------
       Total shareholders' deficit                      (8,222,135)  (1,975,081)
                                                        ----------   ----------
 TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT           $ 5,080,534  $ 9,080,355
                                                        ==========   ==========

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

                                      F-4
<PAGE>
<TABLE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                                            Year ended October 31,
                                                 -----------------------------------------
                                                     2003           2002           2001
                                                 -----------    -----------    -----------
 <S>                                            <C>            <C>            <C>
 REVENUES                                       $ 17,654,794   $ 18,408,649   $  6,641,818

 COSTS AND EXPENSES
 Costs of revenues                                13,128,924     11,539,562      4,668,418
 Sales and marketing                                 700,404        885,661        808,792
 Non-cash sales and marketing expense                      -              -        258,616
 General and administrative                        3,812,639      5,760,179      3,297,954
 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              -
 Depreciation and amortization                     1,338,351      2,158,135        781,331
 Sales tax settlement                                350,000              -              -
                                                 -----------    -----------    -----------
 Total costs and expenses                         21,706,996     20,663,844      9,815,111
                                                 -----------    -----------    -----------

 Operating loss                                   (4,052,202)    (2,255,195)    (3,173,293)

 OTHER INCOME (EXPENSE)
 Interest expense and financing costs             (1,131,806)    (1,247,488)      (710,464)
 Other income related to settlement of disputes            -              -      1,789,373
 Foreign currency exchange gains (losses)              7,097        (31,976)             -
 Write off of investment in marketable securities          -              -       (446,820)
 Gain (loss) on disposal of equipment               (241,935)         9,053         13,693
                                                 -----------    -----------    -----------
 Total other income (expense), net                (1,366,644)    (1,270,411)       645,782
                                                 -----------    -----------    -----------
 LOSS FROM CONTINUING OPERATIONS                  (5,418,846)    (3,525,606)    (2,527,511)

 LOSS FROM DISCONTINUED OPERATIONS, net
   of income taxes of $0 for all periods          (1,203,465)    (1,158,574)      (156,795)
                                                 -----------    -----------    -----------
 NET LOSS                                       $ (6,622,311)  $ (4,684,180)  $ (2,684,306)
                                                 ===========    ===========    ===========
 LOSS PER SHARE:
    Basic and diluted loss per share
      Continuing operations                     $      (0.34)  $      (0.25)         (0.23)
      Discontinued operations                          (0.07)         (0.09)         (0.02)
                                                 -----------    -----------    -----------
                                                $      (0.41)  $      (0.34)  $      (0.25)
                                                 ===========    ===========    ===========
 SHARES USED IN THE CALCULATION
    OF PER SHARE AMOUNTS:
      Basic and diluted common shares             15,999,179     13,935,782     10,900,115
                                                 ===========    ===========    ===========

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

                                      F-5
</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, 2000         9,895,090 $      9,895  $(54,870)  $ 33,838,158  $(33,262,907) $  (5,416) $(17,080) $   507,780


Shares issued upon exercise
  of options and warrants             134,000          134         -         34,223             -          -         -       34,357
Issuance of common stock
  in connection with
  consulting agreement                 90,000           90         -        101,160             -          -         -      101,250
Conversion of convertible notes       400,000          400         -        999,600             -          -         -    1,000,000
Shares issued to a shareholder      1,000,000        1,000         -      1,030,200             -          -         -    1,031,200
Issuance of warrants in connection
  with convertible debentures               -            -         -         79,931             -          -         -       79,931
Embedded beneficial conversion
  feature related to change
  in conversion factor                      -            -         -        828,111             -          -         -      828,111
Issuance of warrants in
  connection with convertible
  notes-related party                       -            -         -        496,598             -          -         -      496,598
Issuance of common stock
  in connection with acquisition
  of rapid link                       600,000          600         -        467,400             -          -         -      468,000
Issuance of warrants in connection
  with convertible notes                    -            -         -        141,841             -          -         -      141,841
Issuance of warrants in connection
  with consulting agreement                 -            -         -        157,366             -          -         -      157,366
COMPREHENSIVE INCOME (LOSS)
  Net loss                                  -            -         -              -    (2,684,306)         -         -   (2,684,306)
  Foreign currency translation
    adjustment                              -            -         -              -             -    (83,132)        -      (83,132)
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Total Comprehensive Income (Loss)           -            -         -              -    (2,684,306)   (83,132)        -   (2,767,438)

Balance at October 31, 2001        12,119,090 $     12,119  $(54,870)  $ 38,174,588  $(35,947,213) $ (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                                     -            -         -         45,608             -          -         -       45,608
Cash received for subscription
  receivable-common stock                   -            -         -              -             -          -    15,179       15,179
COMPREHENSIVE INCOME (LOSS)
  Net loss                                  -            -         -              -    (4,684,180)         -         -   (4,684,180)
  Foreign currency translation
    adjustment                              -            -         -              -             -  $(107,509)        -     (107,509)
                                   ----------  -----------   -------  --------------- ----------- ------------- -------  ----------
Total Comprehensive Income (Loss)           -            -         -              -    (4,684,180)  (107,509)        -   (4,791,689)

Balance at October 31, 2002        15,074,916 $     15,075  $(54,870)  $ 38,894,065  $(40,631,393) $(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)  $ 39,070,237  $(47,253,704) $       -   $     -  $(8,222,135)
===================================================================================================================================

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

                                      F-6
</TABLE>
<PAGE>
<TABLE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                  Year ended October 31,
                                                          ---------------------------------------
                                                             2003          2002           2001
                                                          ----------    -----------    -----------
 <S>                                                    <C>            <C>            <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss from continuing operations                   $ (5,418,846)  $ (3,525,606)  $ (2,527,511)
  Adjustments to reconcile net loss from continuing
    operations to net cash used in operating activities:
    (Gain) loss from disposal of fixed assets                241,935         (9,053)       (13,693)
    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              -              -
    Stock and warrants issued for services                         -         13,750        258,616
    Bad debt expense                                          28,268        685,059        140,167
    Non-cash interest expense                                688,732        924,340        597,731
    Non-cash vendor credit                                         -              -       (780,000)
    Depreciation and amortization                          1,338,351      2,158,135        781,331
    Effects of changes in foreign exchange rates              13,066        (39,792)       (83,132)
    (Increase) decrease in:
      Trade accounts receivable                               64,739       (372,978)      (962,046)
      Prepaid expenses and other current assets             (106,152)      (108,468)       100,408
      Advertising credits                                          -              -         76,349
      Other assets                                            (1,623)        12,421        136,319
    Increase (decrease) in:
      Trade accounts payable                                (851,186)      (730,283)     1,217,182
      Accrued liabilities                                    930,570        578,783        154,874
      Deferred revenue                                        25,213       (406,790)        78,628
      Deposits and other payables                            (13,526)       444,204              -
                                                          ----------    -----------    -----------
  Net cash used in operating activities
    of continuing operations                                (683,781)       (55,971)      (824,777)
                                                          ----------    -----------    -----------
 CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                        (192,150)      (303,460)       (68,651)
  Cash paid for Rapid Link acquisition,
    net of cash acquired                                           -              -     (1,648,650)
                                                          ----------    -----------    -----------
  Net cash used in investing activities
    of continuing operations                                (192,150)      (303,460)    (1,717,301)
                                                          ----------    -----------    -----------
 CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from related party note payable                         -        300,000      1,599,486
  Proceeds from notes payable                              1,800,000              -              -
  Proceeds from convertible debentures                             -        550,000      1,000,000
  Payments on capital leases                                (105,387)      (105,784)       (91,516)
  Deferred financing fees                                    (82,441)       (92,625)             -
  Proceeds from exercise of stock options                          -              -         34,357
  Payments on convertible debentures                        (443,000)             -              -
  Subscription receivable-common stock                             -         15,179              -
                                                          ----------    -----------    -----------
  Net cash provided by financing activities
    of continuing operations                               1,169,172        666,770      2,542,327
                                                          ----------    -----------    -----------
 NET CASH USED IN DISCONTINUED OPERATIONS                    (57,298)      (112,143)             -
                                                          ----------    -----------    -----------
 NET INCREASE IN CASH AND CASH EQUIVALENTS                   235,943        195,196            249

 Cash and cash equivalents at beginning of year              269,313         74,117         73,868
                                                          ----------    -----------    -----------
 Cash and cash equivalents at end of year                $   505,256   $    269,313   $     74,117
                                                          ==========    ===========    ===========
 SUPPLEMENTAL INFORMATION AND SCHEDULE OF NON
   CASH INVESTING AND FINANCING ACTIVITIES
  Conversion of convertible debenture and
    accrued interest to common stock                     $   109,197   $    531,825   $          -
  Fair value of warrants issued with debt                     70,003         62,704        736,458
  Debt issued with embedded beneficial
    conversion feature                                             -        114,154        667,598
  Exercise of stock options in exchange for
    retirement of 100,000 common shares                            -         70,000              -
  Conversion of note payable shareholder
    to note payable related party                                  -              -        346,000
  Conversion of convertible note to common stock                   -              -     (1,000,000)
  Common stock issued for acquisition
    of Dial Thru International                                     -              -      1,031,200
  Common stock issued for acquisition of Rapid Link                -              -        468,000
  Cash paid for interest                                      35,000              -         11,174



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

                                      F-7
</TABLE>
<PAGE>

             DIAL THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES

                       NOTES TO CONSOLIDATED STATEMENTS

 NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 Organization
 ------------
 Dial  Thru  International  Corporation   and  subsidiaries  ("DTI"  or   the
 "Company"), (formerly  ARDIS  Telecom  &  Technologies,  Inc.,  "Ardis"  and
 formerly Canmax, Inc., "Canmax"),  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  are  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 our communications.

 Nature of Business
 ------------------
 During 1998 and  1999, the Company's  operations included  mainly sales  and
 distribution  of  prepaid  domestic  and  international  calling  cards   to
 wholesale and retail  customers. 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.

 In addition to helping companies achieve savings on long-distance voice  and
 fax calls  by routing  calls  over the  Internet  or the  Company's  private
 network, the Company  also offers  new opportunities  for existing  Internet
 Service Providers  ("ISPs")  who want  to  expand into  voice  services  and
 private corporate networks seeking to lower long-distance costs.

                                      F-8
<PAGE>

 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 $47.3 million  as of October 31,  2003,
 as  well  as  a  working  capital  deficit  from  continuing  operations  of
 approximately  $7.5  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.  As of the date of this report:

   1) the Company  obtained additional  financing of  $1,250,000 in  November
      2002, a portion  of which  was used  to fully  pay the  April 11,  2001
      convertible debenture with Global Capital Funding Group L.P.
   2) the Company and GCA Strategic Investment Fund Limited agreed to  extend
      the maturity date of the January  2002 debenture from January 28,  2003
      to November 8, 2004.
   3) the Company  obtained additional financing  of $550,000  in July  2003.
      Since the beginning of April 2001, the Company has raised $5.7  million
      in debt 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.  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   the
 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,  RDST,  Inc.,  a   Texas
 corporation, Dial Thru.com, Inc., a Delaware corporation, and DTI Com  Inc.,
 a California corporation, Dial Thru International Argentina S.A., Dial  Thru
 International Venezuela, C.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
 -------------------
 The following describes the Company's revenue recognition policies:

 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.

 Revenues generated by prepaid phone cards are recognized based on minutes of
 customer usage or  upon the expiration  of cards  containing unused  calling
 time.  The Company records payments received in advance for prepaid services
 as deferred revenue until such related services are provided.

 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.  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  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 and Other Intangible Assets
 ------------------------------------
 Effective November  1, 2001,  the Company  adopted SFAS  No, 141,  "Business
 Combinations" and  SFAS No.  142, "Goodwill  and Other  Intangible  Assets."
 SFAS No. 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 No. 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 No.  142, the Company  performed
 annual impairment tests of  goodwill in the fourth  quarters of fiscal  2003
 and 2002.  The results of  both impairment tests indicated goodwill was  not
 impaired.   Goodwill, net  of accumulated  amortization, was  $1,796,917  at
 October 31, 2003 and 2002.  Had  the Company not amortized goodwill for  the
 year ended October 31, 2001, net  loss would have been $2,512,789, and  loss
 per share would have been $0.23.

 Valuation of Long-Lived Assets
 ------------------------------
 Effective November 1, 2002, the Company  adopted the provisions of SFAS  No.
 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
 144"), which  supersedes SFAS  No. 121,  "Accounting for  the Impairment  of
 Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS  121")
 and accounting and  reporting provisions of  Accounting Principles  Bulletin
 Opinion 30,  "Reporting the  Results  of Operations"  for  a disposal  of  a
 segment. The primary  objective of  SFAS 144  is to  develop one  accounting
 model based on the framework established  in SFAS 121 for long-lived  assets
 to be disposed of and significantly changes the criteria that would have  to
 be met  to classify  an asset  as  held for  sale.  SFAS 144  also  requires
 expected  future  operating  losses  from  discontinued  operations  to   be
 displayed in the period(s) in which the losses are incurred, rather than  as
 of the measurement date.

 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.

 Loss Per Share
 --------------
 Loss per share is  computed using the weighted  average number of shares  of
 common stock  outstanding  during  each year.  Diluted  loss  per  share  is
 computed using  the  weighted  average number  of  shares  of  common  stock
 outstanding during  each 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 loss  per
 share for each  year as their  effect on net  loss for  each year  presented
 would be antidilutive.   At  October 31,  2003, there  are 9,410,197  shares
 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 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
 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, 2003,
 2002 and 2001 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  for the  years
 ended October 31, 2003, 2002 and 2001 would have been as follows:

                                       2003           2002           2001
                                   -----------    -----------    -----------
    Net loss, as reported         $ (6,622,311)  $ (4,684,180)  $ (2,684,306)

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

    Deduct: Stock-based employee
    compensation expense
    determined under the
    fair value based method           (252,040)      (343,700)      (266,067)
                                   -----------    -----------    -----------
    Pro forma net loss            $ (6,874,351)  $ (5,027,880)  $ (2,950,373)
                                   ===========    ===========    ===========

    Net loss per share - basic
    and dilutive, as reported     $      (0.41)  $      (0.34)  $      (0.25)
                                   ===========    ===========    ===========

    Net loss per share - basic
    and dilutive, pro forma       $      (0.43)  $      (0.36)  $      (0.27)
                                   ===========    ===========    ===========

 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 value of  all options and  warrants for shares  of the Company's  common
 stock to employees of the Company has been determined under the market value
 method  using   Black-Scholes  valuation   principles  and   the   following
 assumptions:


                                  2003         2002           2001
  ----------------------------------------------------------------
  Risk-free interest rate           3%           4%             5%
  Expected dividend yield           0%           0%             0%
  Expected lives               3 years      5 years        4 years
  Expected volatility         126-221%   99% - 157%    133% - 159%

 Comprehensive Income (Loss)
 ---------------------------
 SFAS No.  130, "Reporting  Comprehensive Income"  ("SFAS 130"),  sets  forth
 rules for  the reporting  and display  of comprehensive  income (loss)  (net
 income (loss) plus all other changes  in net assets from non owner  sources)
 and its components  in the financial  statements.  At  October 31, 2002  and
 2001 the major component of other  comprehensive income (loss) consisted  of
 an unrealized loss from currency translation, which is stated as a component
 of shareholders' (deficit) equity.

 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.  Foreign currency transactions resulting
 in gains and losses are recorded in the Statement of Operations.

 Reclassifications
 -----------------
 Certain reclassifications  were  made  to the  2002  and  2001  consolidated
 financial statements to conform to the current year presentation.


 NOTE 3 - RAPID LINK ACQUISITION

 On October 12,  2001, DTI completed  the acquisition of  certain assets  and
 liabilities of Rapid Link  USA and 100%  of the common  stock of Rapid  Link
 Germany, from  Rapid  Link. The  acquisition  was accounted  for  under  the
 purchase method of accounting and accordingly, the results of the businesses
 acquired from Rapid Link have been included in operations of the Company  in
 the consolidated financial statements from the  date of acquisition.   Rapid
 Link is a provider of high quality integrated data and voice  communications
 services to  both wholesale  and  retail  customers around  the  world.  The
 aggregate purchase  price  was  $2,116,481, including  $1,450,000  in  cash,
 common stock valued at $468,000, and  an additional $198,481 in  acquisition
 related costs. The value of the  600,000 common shares was determined  based
 on the closing market price of DTI's common shares on October 12, 2001.  The
 value of the common stock is guaranteed by  DTI to be no less than  $300,000
 at the time of the  effectiveness of the Registration  of the shares. As  of
 the effectiveness  of the  Registration Statement  relating to  the  shares,
 completed on March  28, 2002, the  value of the  common stock was  $210,000.
 The incremental amount will be paid in  stock and will not change the  total
 purchase price paid for the Rapid Link acquisition.

 The fair value of assets and liabilities acquired consisted of:


      Cash                                    $     152,000
      Accounts Receivable                           485,645
      Fixed Assets                                4,187,647
      Intangible and others                       1,030,453
      Accrued liabilities                          (833,236)
      Accounts Payable and other                 (1,603,485)
      Deferred revenue                             (612,758)
      Capital leases and other debt                (690,266)
                                               ------------
                                              $   2,116,000
                                               ============

 The following unaudited pro-forma consolidated results of operations for the
 year ended October 31, 2001 assumes that the acquisition had occurred on
 November 1, 2000:

                                                        Unaudited
                                                        Year ended
                                                     October 31, 2001
                                                     ----------------
       Revenues                                        $ 32,933,450
                                                        ===========
       Net loss                                        $ (8,734,575)
                                                        ===========
       Net loss per common share (basic and diluted)   $      (0.76)
                                                        ===========
       Weighted average common shares outstanding
         (basic and diluted)                             11,500,115
                                                        ===========

 NOTE 4 - DISCONTINUED OPERATIONS

 On August 1,  2003, the  Company's German  Subsidiary, Rapid  Link Germany,
 received approval for its  insolvency filing.  Rapid  Link Germany has been
 turned over to a trustee who is responsible for liquidating the entity.  At
 October 31, 2003, certain long-lived assets of Rapid Link Germany have been
 written down to  their fair  value.  Assets  and liabilities  of Rapid Link
 Germany are categorized on the Consolidated  Balance Sheets as Discontinued
 Operations.  Operations of  Rapid Link Germany for  fiscal years 2003, 2002
 and 2001 are  categorized on the  Consolidated Statements  of Operations as
 Discontinued Operations.

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

                                                 2003         2002
                                              ----------   ----------
        Current Assets
          Cash                               $   164,878  $   219,555
          Trade accounts receivable, net         416,013      404,338
          Other current assets                   192,917       20,150
                                              ----------   ----------
            Total current assets                 773,808      644,043
                                              ----------   ----------
         Current liabilities
           Current portion of capital lease
             obligations                         144,643      131,670
           Trade accounts payable              2,612,864    1,739,061
           Accrued liabilities                    86,877       16,225
           Deferred revenue                      422,905      787,182
                                              ----------   ----------
             Total current liabilities         3,267,289    2,674,138
                                              ----------   ----------
           Net current liabilities of
             discontinued operations         $ 2,493,481  $ 2,030,095
                                              ==========   ==========

           Property and equipment
             Telecom Equipment               $         -  $   399,355
             Furniture, Fixtures, Equipment            -       29,367
             Computers                                 -       52,060
             Software                                  -      302,833
             Leasehold Improvements                    -       15,403
             Accumulated depreciation and
              amortization                             -     (324,477)
                                              ----------   ----------
            Total property and equipment, net          -      474,541
                                              ----------   ----------
            Other assets and long-term
              liabilities
            Capital lease obligations             (9,644)     (60,816)
            Other                                251,978      328,399
                                              ----------   ----------
            Total other assets, net              242,334      267,583
                                              ----------   ----------
            Net long-term assets
              of discontinued operations     $   242,334  $   742,124
                                              ==========   ==========


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

                                  2003          2002          2001
                               ----------    ----------    ----------
  Revenues                    $ 3,598,007   $ 4,559,411   $   360,044
  Costs and expenses            4,801,472     5,717,985       516,839
                               ----------    ----------    ----------
  Loss from discontinued
  operations                  $(1,203,465)  $(1,158,574)  $  (156,795)
                               ==========    ==========    ==========


 NOTE 5 - 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 in recent months,
 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 has written
 off  the  remaining  $2,376,678  of the advertising credits  during the year
 ended October 31, 2003.


 NOTE 6 - SETTLEMENT OF LEGAL/CARRIER DISPUTES

 During the quarter  ended January 31,  2001, the Company  settled a  pending
 lawsuit  with  Star  Telecommunications,  Inc.   In  conjunction   with  the
 settlement the Company  received a  carrier usage  credit in  the amount  of
 $780,000 for previous services and future services comprised of one year  of
 no charge domestic  carrier services  for transporting  traffic between  Los
 Angeles, New  York and  Miami.   The $780,000  credit for  past services  is
 recorded  as  Other  Income  Related  To  Settlement  Of  Disputes  in   the
 accompanying statement of operations  for the year  ended October 31,  2001.
 The  Company  also  received  1,100,000  shares  of  common  stock  of  Star
 Telecommunications that  were  recorded  at  fair  value  totaling  $446,820
 recorded as  Other Income  Related To  Settlement  Of Disputes,  which  were
 subsequently written off as Write Off Of Investment In Marketable Securities
 during  the  year  ended  October  31,  2001.   On   March  13,  2001,  Star
 Telecommunications filed for  Chapter 11 reorganization.   The Company  will
 not  be  able  to   utilize  its  carrier   services  agreement  with   Star
 Telecommunications and placed no value on the future services.


 NOTE 7 - NOTES PAYABLE

 Note Payable with Global Capital Funding Group, L.P.
 ----------------------------------------------------
 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 are being amortized over the  life of the GC-Note.  For  the
 year ended October 31, 2003, the  Company recorded approximately $24,000  as
 interest expense relating  to these deferred  financing fees.   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 fair  value of  the  warrants, relating  to  the
 issuance of the warrants.  The Company is amortizing the debt discount  over
 the two year life of the GC-Note.  For the year ended October 31, 2003,  the
 Company recorded approximately $23,000 as  interest expense relating to  the
 warrants.

 Note Payable with GCA Strategic Investment Fund Limited
 -------------------------------------------------------
 In July 2003, the Company 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 and is unsecured.  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 (see Note 8).  In the event  the terms of the GCA-Note become  the
 same  as  the  Second  Debenture,  the  GCA-Note  would  have  a  beneficial
 conversion  feature.   In  accordance   with  EITF   98-5  "Accounting   for
 Convertible Securities with Beneficial  Conversion Features or  Contingently
 Adjustable Conversion  Ratios" ("EITF-98-5"),  the  intrinsic value  of  the
 beneficial conversion feature has been calculated as approximately  $104,000
 at the commitment date using the stock price as of that date.  The value  of
 the beneficial conversion feature will only be recorded at the date in which
 the future event occurs, which, in this case, is 10 days after the  maturity
 date of the note.  The  note matured during December 2003 and,  accordingly,
 since the GCA-Note remained unpaid as of January 2004, the Company  replaced
 the note with a convertible debenture.  Upon the replacement of the GCA-Note
 with a  convertible debenture,  the Company  recorded the  debt discount  of
 $104,000 and will amortize it over the life of the new convertible debenture
 (see Note 19).  In connection with the GCA-Note, the Company paid $35,000 as
 financing fees, which were capitalized and are being amortized over the life
 of the GCA-Note.  For the year ended October 31, 2003, the Company  recorded
 approximately  $22,000  as  interest  expense  relating  to  these  deferred
 financing fees.   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
 Company recorded a debt discount of approximately $7,000, the fair value  of
 the warrants, relating to the issuance of the warrants.  For the year  ended
 October 31,  2003, the  Company recorded  approximately $4,000  as  interest
 expense relating to the warrants.


 NOTE 8 - CONVERTIBLE DEBT

 Convertible Debenture with Global Capital Funding Group L.P.
 ------------------------------------------------------------
 In April  2001,  the  Company  executed  a  6%  convertible  debenture  (the
 "Debenture") with  Global  Capital  Funding  Group  L.P.  ("Global"),  which
 provided financing  of  $1,000,000.   In  November  2002,  Global  converted
 $50,875 of debt and  $4,859 of accrued  interest into approximately  724,000
 shares of the  Company's common stock.   In November  2002, the  Debenture's
 outstanding balance of $443,000 was paid  in full following the issuance  of
 the GC-Note (see Note  7) and the  remaining unamortized deferred  financing
 fees of approximately $131,000  on the Debenture  were recorded as  interest
 expense.

 Convertible Debenture with GCA Strategic Investment Fund Limited
 ----------------------------------------------------------------
 In January  2002,  the Company  executed  a 6%  convertible  debenture  (the
 "Second Debenture")  with GCA  Strategic  Investment Fund  Limited  ("GCA"),
 which  provided  financing  of $550,000.   The Second  Debenture's  original
 maturity date was  January 28,  2003.  The  Second 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
 Debenture shall be at the Formula Conversion Price.  In connection with  the
 Second Debenture, the  Company paid $92,625  in financing  fees, which  were
 capitalized and amortized over  the original life  of the Second  Debenture.
 During the year ended October 31,  2003, the Company recorded  approximately
 $23,000 as interest expense relating to  these financing fees.  The  Company
 calculated  the  beneficial  conversion  feature  embedded  in  the   Second
 Debenture in accordance with EITF  98-5 and recorded approximately  $114,000
 as debt discount.  This debt  discount was amortized over the original  life
 of the  Second Debenture.   During  the  year ended  October 31,  2003,  the
 Company recorded approximately $28,000 as  interest expense relating to  the
 amortization of the debt discount.  The Company also issued to the holder of
 the 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  Second Debenture  and  the
 warrants, and the Company amortized the debt discount over the original life
 of the Second Debenture.  For the  year ended October 31, 2003, the  Company
 recorded approximately $4,000 as interest expense relating to the warrants.

 In January 2003, the Company and GCA  agreed to extend the maturity date  of
 the Second  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 Second  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 Second Debenture's extension  period.
 For the  year ended  October 31,  2003, the  Company recorded  approximately
 $6,000 as interest expense relating to the warrants.

 During the year ended  October 31, 2003, GCA  converted $50,000 of debt  and
 $3,463  of  accrued  interest  into  approximately  374,000  shares  of  the
 Company's common stock, in accordance with the debt conversion terms.


 NOTE 9 - 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  extended  the
 maturity date of each note to February 24,  2004.  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 recorded  debt  discount  of  approximately
 $171,000 which is being amortized over  two years.  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  is
 amortizing 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.   In
 January 2002, an additional $102,433 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 102,433 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 is amortizing  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 warrants.  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.

 The future maturities of the Company's notes payable and convertible debt by
 fiscal year as follows (see Notes 7,8):

       Year ending October 31,
                               2004           $   2,898,401
                               2005               1,750,000
                                               ------------
       Total future maturities                    4,648,401
       Less: unamortized debt discount              (36,441)
                                               ------------
       Total future maturities, net of
         amortized debt discount              $   4,611,960
                                               ============


 NOTE 10 - PROPERTY AND EQUIPMENT

 Property and equipment consists of the following at October 31, 2003 and
 2002:

                                                2003              2002
                                             ----------        ----------
     Telephone switch equipment             $ 4,411,325       $ 4,282,349
     Leasehold improvements                     223,577           301,258
     Furniture and fixtures                     232,916           227,551
     Computer equipment                         797,005           752,899
     Computer software                          536,428           690,939
                                             ----------        ----------
                                              6,201,251         6,254,996
     Less: accumulated depreciation
       and amortization                      (4,860,265)       (3,525,874)
                                             ----------        ----------
                                            $ 1,340,986       $ 2,729,122
                                             ==========        ==========

 At October 31, 2003 and 2002, the  gross amount of capital lease assets  and
 related accumulated  amortization  recorded  under capital  leases  were  as
 follows:

                                                2003              2002
                                             ----------        ----------
     Telephone switch equipment             $   455,728       $   455,728
     Less: accumulated amortization            (297,330)         (228,540)
                                             ----------        ----------
                                            $   158,398       $   227,188
                                             ==========        ==========

 Amortization  of  assets  held  under   capital  leases  is  included   with
 depreciation  expense.   Depreciation  and   amortization  expense   totaled
 $1,338,351, $2,158,135 and $781,331 in 2003, 2002 and 2001, respectively.


 NOTE 11 - 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  was
 written-off during the year ended October 31, 2002.


 NOTE 12 - STOCK OPTIONS AND WARRANTS

 Warrant Issuances to Employees

 Employee warrant activity for the three years ended October 31, 2003 was as
 follows:
                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Warrants outstanding at
  October 31, 2000                      910,000   $0.53 - 1.44    $    1.09

 Warrants granted                     1,945,958        0.78            0.78
 Warrants exercised                           -         -                 -
 Warrants canceled                     (100,000)       0.53            0.53
                                      ---------    -----------     --------
 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
                                      =========    ===========     ========

 The warrants issued to  employees that were exercisable  at the years  ended
 October 31,  2003, 2002  and 2001  were  2,648,000, 1,701,000  and  287,000,
 respectively.

 Warrant Issuances to Non-Employees
 ----------------------------------
 Non-Employee warrant activity for the three years ended October 31, 2003 was
 as follows:
                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
    Warrants outstanding at
     October 31, 2000                   748,800   $0.29 - 3.50    $    1.49

    Warrants granted                    575,000    0.89 - 3.00         2.80
    Warrants exercised                 (100,500)   0.01 - 0.53         0.21
    Warrants canceled                   (20,000)   0.45 - 3.00         0.45
                                      ---------    -----------     --------
    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
                                      =========    ===========     ========

 The majority  of the  warrants issued  to non-employees  during fiscal  year
 2003, 2002 and 2001 were issued  in connection to debt financing (see  Notes
 7,8).  The warrants issued to non-employees that were exercisable at October
 31,  2003,  2002  and  2001   totaled  1,587,500,  887,500  and   1,203,000,
 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,
 2003 was as follows:

                                                                   Weighted
                                       Number        Option        Average
                                         of           Price        Exercise
                                       Shares       Per Share       Price
                                      ---------    -----------     --------
    Options outstanding at
     October 31, 2000                   464,100   $0.30 - 2.50    $    0.67

    Options granted                   1,930,000    0.42 - 1.50         0.55
    Options exercised                   (33,500)   0.30 - 1.41         0.40
    Options canceled                   (178,100)   0.40 - 2.50         1.10
                                      ---------    -----------     --------
    Options outstanding at
     October 31, 2001                 2,182,500    0.30 - 1.50         0.53

    Options granted                     195,000    0.21 - 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
                                      =========    ===========     ========

<TABLE>
 The following table summarizes information about employee warrants and stock
 options outstanding at October 31, 2003:

                                                 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>
  $0.09 - $0.70     1,407,000       2.82           0.40           890,333         0.41
  $0.75 - $0.78     2,383,391       3.97           0.75         2,371,724         0.75
  $1.44 - $1.50       302,000       1.15           1.44           302,000         1.44
                    ---------       ----           ----         ---------         ----
                    4,092,391       3.37           0.68         3,564,057         0.72
                    =========       ====           ====         =========         ====
</TABLE>

 The weighted  average grant  date fair  value of  all options  and  warrants
 granted to employees during the fiscal year ended October 31, 2003 was $0.18
 a share.


 NOTE 13 - 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 used for income tax purposes.  There  are
 no deferred tax liabilities  as of October 31,  2003 and 2002.   Significant
 components of the Company's deferred tax assets at October 31, 2003 and 2002
 are as follows:

                                             2003             2002
                                          ----------       ----------
 Deferred tax assets
   Net operating loss carryovers         $14,527,382      $13,529,415
   Accounts receivable                       100,332          172,173
   Advertising credits                       977,185          190,134
   Property and equipment                     69,154          132,799
   Accrued liabilities                        34,918           36,627
                                          ----------       ----------
     Total gross deferred tax assets      15,708,971       14,061,148

       Valuation allowance               (15,708,971)     (14,061,148)
                                          ----------       ----------
     Net deferred tax assets             $         -      $         -
                                          ==========       ==========

 The increase in the valuation allowance for the years ended October 31, 2003
 and 2002  of  $1.6  million and  $2.8  million,  respectively,  was  related
 primarily to a change in U.S. operating loss carryforwards.

 At October 31, 2003, the Company  has U.S. net operating loss  carryforwards
 for federal income tax purposes of  approximately $43 million, which  expire
 in 2006 through 2023. 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 U.S. net
 deferred asset balance.


 NOTE 14 - 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 $474,567, $400,425 and $188,553 for  the
 years ended October 31, 2003, 2002 and 2001, respectively.

 Future minimum lease payments under noncancelable operating leases and
 capital leases as of October 31, 2003 are as follows:

                                                Capital        Operating
                                                Leases           Leases
                                              ----------       ----------
          Year ending October 31,
                         2004                $   146,624      $   433,078
                         2005                          -          201,641
                         2006                          -          168,854
                         2007                          -           54,595
                                              ----------       ----------
          Total minimum lease pmts               146,624      $   858,168
                                                               ==========
          less: Amt representing interest           (484)
                                              ----------
          Present value of net minimum
               capital lease payment             146,140

          Less: current installments of
             obligations under capital lease    (146,140)
                                              ----------
          Obligations under capital leases,
             excluding current installments  $         -
                                              ==========

 Legal Proceedings
 -----------------
 The Company is not currently a party to any material 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.   The  Company  has not  received  a
 decision regarding this filing.  The  Company intends to continue  defending
 this case vigorously, though its ultimate legal and financial liability with
 respect to such legal proceeding 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 managements 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 offsetting  remittances
 received by  Canmax during  the audit  period.   The  State has  refused  to
 consider other  potential offsets.   Based  on the  correspondence with  the
 State, during the fiscal year ended October 31, 2003, Management's  estimate
 of the potential liability has been recorded at $350,000 and is included  in
 the  accompanying  consolidated  balance   sheet  in  "Deposits  and   other
 payables"; however, management  cannot provide assurance  that the  ultimate
 liability will not  be greater.   The Company  is continuing  to pursue  its
 options to appeal the  decision by the State.   Furthermore, the Company  is
 aggressively pursuing  the  collection of  unpaid  sales taxes  from  former
 customers of Canmax.


 NOTE 15 - 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 seven-year vesting schedule from the  date
 of original employment.  The Company made  no matching contributions  during
 the years ended October 31, 2003, 2002 and 2001.


 NOTE 16 - BUSINESS AND CREDIT CONCENTRATIONS

 During the  year ended  October 31,  2003,  the Company  provided  wholesale
 services to  a customer  who accounted  for approximately  11% of  revenues.
 During the  year ended  October 31,  2002,  the Company  provided  wholesale
 services to  a customer  who accounted  for approximately  14% of  revenues.
 During the  year ended  October 31,  2001,  the Company  provided  wholesale
 services to a customer who accounted for approximately 11% of revenues.

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

                                   All other
                                    foreign
                     Africa        countries        Domestic         Total
                   ----------      ----------      ----------      ----------
    Fiscal 2001   $ 2,953,817     $ 2,116,320     $ 1,571,681     $ 6,641,818
    Fiscal 2002     1,392,384       1,184,239      15,832,026      18,408,649
    Fiscal 2003     1,315,793       1,349,067      14,989,934      17,654,794

 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 17 - QUARTER-BY-QUARTER COMPARISION

<TABLE>
   Summarized unaudited quarterly financial data for the
   years ended October 31, 2003, 2002 and 2001
   are as follows:

 2003                                      First         Second        Third          Fourth
 Quarters:                               ----------    ----------    ----------     ----------
     <S>                                <C>           <C>           <C>            <C>
     Revenues, net                      $ 4,318,055   $ 4,609,051   $ 4,569,165    $ 4,158,523
     Operating loss                        (436,798)     (734,977)     (166,632)    (2,713,795)
     Loss from continuing operations       (828,386)     (975,444)     (397,855)    (3,217,161)
     Income (loss) from discontinued
       operations                          (253,727)     (316,349)     (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)        (0.06)        (0.03)         (0.20)
     Income (loss) per share-
       discontinued operations                (0.02)        (0.02)        (0.06)          0.03

   2002
   Quarters:
     Revenues, net                        5,241,466     4,787,785     4,248,348      4,131,050
     Operating loss                        (792,634)     (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)
     Income (loss) per share-
       discontinued operations                (0.02)        (0.02)        (0.01)         (0.03)


   2001
   Quarters:
     Revenues, net                          890,620       903,639     1,654,079      3,193,480
     Operating loss                        (991,223)     (682,600)     (497,762)    (1,001,708)
     Income (loss) from continuing
       operations                           382,191    (1,193,171)     (594,871)    (1,121,660)
     Loss from discontinued operations            -             -             -       (156,795)
     Net (loss) income                      382,191    (1,193,171)     (594,871)    (1,278,455)
     Loss per share-continuing operations      0.03         (0.11)        (0.05)         (0.10)
     Income (loss) per share-
       discontinued operations                    -             -             -          (0.02)
</TABLE>


 NOTE 18 - CAPITAL 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  (see Note 8).

 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 (see Note 8).

 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 (see Note 8).

 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.

 In October 2001, the  Company issued 600,000 shares  in connection with  the
 Company's purchase of certain assets and executory contracts of Rapid  Link,
 Inc, valued at $468,000 at the date of issuance (see Note 3).

 In March  2001, the  Company  issued 1,000,000  shares  of common  stock  as
 additional consideration  for the  purchase of  Dial Thru  International  in
 accordance with terms of the Asset Purchase Agreement with the seller.

 In March 2001,  the Company's $1  million convertible  note with  accredited
 investors was converted into 400,000 shares  of common stock. In  connection
 with the conversion, the Company issued  additional 150,000 warrants to  the
 investors and recorded deferred financing fees of $96,230.

 In December 2000, the  Company issued 90,000 shares  to Scotty Cook,  former
 Director of the Company, as  compensation for consulting services  performed
 for the Company. The  Company recorded $101,250 as  consulting fees for  the
 year ending October 31, 2001.

 During the years ended October 31, 2003, 2002 and 2001, options and warrants
 to purchase 0,  175,000 and 134,000,  respectively, shares  of common  stock
 were exercised.

 The following table describes stock reserved for future issuances at October
 31, 2003:

                                                          # Shares
                                                         ----------
       Options                                            1,444,000
       Warrants                                           4,235,891
       Convertible debt (1)                              20,815,751
       Shares to be issued in connection
         with acquisition (see Note 3)                      529,412
                                                         ----------
                                                         27,025,054
                                                         ==========


       (1) Assumes conversion on October 31, 2003 under the
           terms of the related agreements


 NOTE 19 - SUBSEQUENT EVENTS

 During January 2004, the Company's GCA-Note was replaced by a convertible
 debenture as per the terms of the related note agreement (see Note 7).

<PAGE>

      REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS AS TO SCHEDULE
      -----------------------------------------------------------------

 Board of Directors and Stockholders
 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 12, 2003, we have also audited Schedule II for the
 years ended October 31, 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
 __________________
 KBA GROUP LLP
 Dallas, Texas
 December 12, 2003



       REPORT OF PREVIOUS INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE
       ----------------------------------------------------------------

 The following  report is  a copy  of a  report previously  issued by  Arthur
 Andersen LLP ("Andersen"), which report has not been reissued by Andersen.

 We have audited, in accordance with auditing standards generally accepted
 in the United States, the financial statements of DIAL THRU INTERNATIONAL
 CORPORATION AND SUBSIDIARIES included in this Form 10-K and have issued our
 report thereon dated January 9, 2002. Our audits were made for the purpose
 of forming an opinion on the basic financial statements taken as a whole.
 The schedule listed in the index is the responsibility of the Company's
 management and is presented for purposes of complying with the Securities
 and Exchange Commission's rules and is not part of the basic financial
 statements. This schedule has been subjected to the auditing procedures
 applied in audit of the basic financial statements and, in our opinion,
 fairly states in all material respects the financial data required to be
 set forth therein in relation to the basic financial statements taken as
 a whole.

 /s/ ARTHUR ANDERSEN LLP
 __________________
 ARTHUR ANDERSEN LLP
 Atlanta, Georgia
 January 9, 2002

                                      S-1
<PAGE>


                      DIAL THRU INTERNATIONAL CORPORATION

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

              For the years ended October 31, 2003, 2002 and 2001


                             Balance at                            Balance at
                              the beg                                the end
                             of period    Additions  Deductions     of period
                             ----------   ---------- -----------   -----------
 2003
 ----
 Allowance for doubtful
   accounts                  $  506,391   $  158,469 $369,766 (1)  $   295,094
                              =========    =========  =======       ==========
 Impairment provision for
   advertising credits       $  563,932   $2,376,678 $      -      $ 2,940,610
                              =========    =========  =======       ==========

 2002
 ----
 Allowance for doubtful
   accounts                  $  228,729   $  711,246 $433,584 (1)  $   506,391
                              =========    =========  =======       ==========
 Impairment provision for
   advertising credits       $  563,932   $        - $      -      $   563,932
                              =========    =========  =======       ==========

 2001
 ----
 Allowance for doubtful
   accounts                  $1,025,766   $  140,167  $937,204 (1)  $   228,729
                              =========    =========   =======       ==========
 Impairment provision for
   advertising credits       $  575,542   $        -  $ 11,610      $   563,932
                              =========    =========   =======       ==========

 (1) Write offs.

                                      S-2
<PAGE>


                                EXHIBIT INDEX

 NO. DESCRIPTION OF EXHIBIT

 14.1  Code of Business Conduct and Ethics for Employees, Executive Officers
       and Directors

 21.1  Subsidiaries of the Registrant

 23.1  Consent of KBA Group LLP

 23.2  Information Regarding Consent of Arthur Andersen

 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