U.S. Securities and Exchange Commission
Washington, D.C.  20549

Gentlemen,

We are transmitting herewith Form 10-QSB for the quarter ended
September 30, 2002
for Diversified Realty, Inc.


                               Diversified Realty, Inc.



                               s/Lori Olson
                                 Lori Olson
                                 Accountant




<PAGE>

                	U.S. Securities and Exchange Commission
                        	Washington, D.C.  20549


                              	FORM 10-QSB

(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

       For the quarterly period ended         September 30, 2002


[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

       For the transition period from                   to

       Commission file number              0-2864


                            DIVERSIFIED REALTY, INC.
       (Exact name of small business issuer as specified in its charter)


          Montana                                  81-0268110
(State or other jurisdiction of         (IRS Employer Identification No.)
incorporation or organization)

              128 Second Street South, Great Falls, Montana   59401
	                   (Address of principal executive offices)

                              (406) 727-2600
	                       (Issuer's telephone number)


                              Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes   X     No


                	APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
	                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes         No


                     	APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

           Class                       Outstanding at September 30, 2002
$.10 Par Value Common Stock                     5,369,240 Shares


Transitional Small Business Disclosure Format (Check One): Yes    ; No  X


<PAGE>


                        	DIVERSIFIED REALTY, INC.


                                 	INDEX

                             	SEPTEMBER 30, 2002

                                                             	Page Number
PART I

Condensed Financial Statements:

  Balance Sheet
    September 30, 2002                                                  2

  Statements of Income -
    Nine Months and Three Months Ended September 30, 2002 and 2001       3

  Statements of Cash Flows -
    Nine Months Ended September 30, 2002 and 2001                        4

  Notes to Financial Statements		                                  5


Management's Discussion and Analysis
  of the Statements of Income		                                    6


PART II

  Other Information	  	                                            7

  Signatures	                                                      8

  Certification								9-10

                                     1

<PAGE>


                        	DIVERSIFIED REALTY, INC.

                             	BALANCE SHEET

                          	AS OF SEPTEMBER 30, 2002


     ASSETS

Current Assets

  Cash                                                        $  2,263,822

  Due From Parent Company                                          112,167

  Prepaid Income Taxes                                              13,032

  Deferred Tax Asset                                                14,450

   Total Current Assets                                          2,403,471

Property, Plant and Equipment, Net                                 191,429

            TOTAL ASSETS                                      $  2,594,900



    LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

  Accounts Payable and Accrued Expenses                       $     37,175

             Total Current Liabilities                              37,175

Stockholders' Equity
  Common Stock - $.10 Par Value,
  11,000,000 shares authorized,
  5,375,000 shares issued                                          537,500
  Additional Paid-In-Capital                                     1,929,408
  Retained Earnings                                                 92,871
  Cost of Common Stock in Treasury                                  (2,054)

             Total Stockholders' Equity                          2,557,725

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $  2,594,900


                      	See Notes to Financial Statements

                                      2
<PAGE>


                        	DIVERSIFIED REALTY, INC.

                         	STATEMENTS OF INCOME

                              For The Three Months         For the Nine Months
                                     Ended                        Ended
                                   September 30,              September 30,
                                2002        2001             2002       2001

Operating Revenues           $ 23,121    $ 18,490         $ 71,957   $101,158

Operating Expenses             15,753      15,385           48,302     48,447

                                7,368       3,105           23,655     52,711

Income Tax Expense               (700)        300            9,850    (20,000)

    Net Income               $  6,668    $ 3 ,405         $ 33,505   $ 32,711




                     	See Notes to Financial Statements


                                     3
<PAGE>


                      	DIVERSIFIED REALTY, INC.

                      	STATEMENTS OF CASH FLOWS

                                                    For The Six Months Ended
                                                        September 30,
                                                         2002           2001

     CASH FLOWS FROM OPERATING ACTIVITIES

Net Cash From Operations                               $ 18,255   $   69,375

Income Taxes Paid in Cash                                  (50)      (10,000)

     Net Cash Provided By
       Operating Activities                              18,205   $   59,375

     CASH FLOWS FROM INVESTING ACTIVITIES

Cash Used For Purchases of Marketable                      -        (648,002)
   Securites Available For Sale

     Net Cash Provided (Used) By
       Investing Activites -      (648,002)

     CASH FLOWS FROM FINANCING ACTIVITIES

Cash Purchases of Treasury Stock                           (248)        (473)

Net Cash Advances
   From (To) Parent Company                               5,300       (8,200)


     Net Cash Provided (Used) By
       Financing Activities                               5,052       (8,673)

NET INCREASE (DECREASE) IN CASH                          38,268     (597,300)

CASH - BEGINNING OF PERIOD                            2,225,554    2,261,860

CASH - END OF PERIOD                                 $2,263,822   $1,664,560


                      	See Notes to Financial Statements

                                     4
<PAGE>


                          DIVERSIFIED REALTY, INC.

                      	NOTES TO FINANCIAL STATEMENTS

                              	September 30, 2002


In the opinion of management, all adjustments necessary (consisting of only
normal recurring accruals) have been made to the unaudited financial
statements to present fairly the financial position as of September 30,
2002 and
the results of the Company's operations for the nine months and three months
ended September 30, 2002 and 2001 and cash flows for the nine months ended
September 30, 2002 and 2001.

The results of operations for the nine months and three months ended
September 30, 2002 and 2001 are not necessarily indicative of the
results to be expected for the full year.


Parent -

M Corp, Great Falls, Montana owns approximately 95% of the outstanding shares
of the Company.



                                  5
<PAGE>



                       DIVERSIFIED REALTY, INC.

                  	MANAGEMENT'S DISCUSSION AND ANALYSIS

                       OF THE INCOME STATEMENT

                            September 30, 2002

A summary of the period to period changes in items included in the statements
of income is shown below.


                                        COMPARISON OF

                           THREE MONTHS                 	NINE MONTHS
                               ENDED	                       ENDED
                           SEPTEMBER 30,	             SEPTEMBER 30,
                          2002 AND 2001                 2002 AND 2001
<TABLE>
<S>                    <C>         <C>               <C>          <C>

Revenues	   $  4,631       25.1%       	 $(29,201)      (28.9%)

Expenses	        368        2.4%              (145)       (0.3%)

Net Income	      3,263       93.8%               794         2.4%

</TABLE>


   Revenues decreased $29,901 (28.9%) in the first nine months of 2002
as compared with the first nine months of 2001 due primarily to the
decrease in interest and dividend revenues of $25,585 (55.7%).  Interest
and dividend revenues decrease primarily due to a decrease in interest
rates earned by the company.  OPerating expenses decreased $145 (0.3%)
in the first nine months of 2002 as compared with the first nine months
of 2001.  Theis is due primarily to the decrease in salaries of $444
(52.2%).  The provision for inocme tax expense decreased $29,850
(149.3%) in the first nine months of 2002 as compared with the first
nine months of 2001 due primarily to the decrease in pretax income.
There was a change in the estimate ($12,650) for the provision
of income taxes for the year ended 2001 because of the nontaxable
income earned by the company.





                                   6


<PAGE>

                       	DIVERSIFIED REALTY, INC.

                              	PART II

                         	OTHER INFORMATION


                           	SEPTEMBER 30, 2002



ITEM 1	LEGAL PROCEEDINGS

       None

ITEM 2	CHANGES IN SECURITIES AND USE OF PROCEEDS

       None

ITEM 3	DEFAULTS UPON SENIOR SECURITIES

       None

ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       None

ITEM 5	OTHER INFORMATION

       None

ITEM 6	EXHIBITS AND REPORTS ON FORM 8-K

       None



                                   7
<PAGE>



                               	SIGNATURES




In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





                           	 DIVERSIFIED REALTY, INC.
                                 	Registrant




Date:  October 19, 2002             s/D. Mellinger
                                      D. Mellinger,
                                      Assistant
                                      Secretary-Treasurer



Date:  October 19, 2002             s/Lori Olson
                                      Lori Olson,
                                        Accountant




                                  8

<PAGE>


                               	CERTIFICATION


I, Paul J. McCann, certify that:

1.  I have reviewed this quarterly report on Form 10-QSB of
    Diversified Realty Inc.

2.  Based on my knowledge, this quarterly report does not contain any
    untrue statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the circomstances
    under which such statements were made, not misleading with respect to
    the period covered by this quarterly report;

3.  Based on my knowledge, the financial statements, and other financial
    inforamtion included in quarterly annual report, fairly present in
    all material respects the financial condition, results of operations
    and cash flows of Diversified Realty, Inc. as of, and for, the
    periods presented in this annual report.

4.  Diversified Realty, Inc.'s other certifying officers and I are responsible
    for establishing and maintaining disclosure controls and procedures (as
    defined in Eschange Act Rules 13a-14 and 15d-14) for Diversified Realty,
    Inc.  We have:

    a.  designed such disclosure controls and procedures to ensure that material
        information relating to Diversified Realty, Inc. is made known to us
        by others within those entities, particularly during the period in which
        this quarterly report is being prepared.

    b.  evaluated the effectiveness Diversified Realty, Inc. disclosure controls
        and prodecures as of a date with 90 days prior to the filing date of
        this quarterly report (the "Evaluation Date"); and

    c.  presented in this quarterly report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5.  Diversified Realty, Inc.'s other certifying officers and I have disclosed,
    based on our most recent evaluation, to Diverdified Realty, Inc. auditors
    and the audit committee of Diversified Realty, Inc. board of directors
    (or persons performing the equivalent functions):

    a.  all significant deficiencies in the design or operation of internal
        controls which could adversely affect Diversified Realty, Inc.'s
        ability to record, process, summarize and report financial data, and
        I have identified for Diversified Realty, Inc.'s auditors any
        material weaknesses in internal controls; and

    b.  any fraud, whether or not material, that involves management or
        other employees who have a significant role in Diversified Realty,
        Inc.'s internal control; and

6.  Diversified Realty, Inc.'s other certifying officers and I have indicated
    in this annual report whether there were significant changes in internal
    controls or in other factors that could significantly affect internal
    controls subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies and
    material weaknesses.

All of the above is to the best of my knowledge.

    Date: October 19, 2002             s/Paul J. McCann
                                         Paul J. McCann



                                  9

<PAGE>

                         CERTIFICATION PURSUANT TO
                         18 U.S.C. SECTION 1350
                         AS ADOPTED UPRSUANT TO
                      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Diversified Realty, Inc. on Form
10-QSB for the period ending September 30, 2002 as filed with the Securites
and Exchange Commission on the date hereof (the "Report"), I, Paul J. McCann,
Representative of Diversified Realty, Inc., certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Subanes-
Oxley Act of 2002, that:

1.  The report fully compiles with the requiremtns of section 13(a) or
    15(d) of the Securities Exchange Act of 1934; and

2.  The information contained in the Report fairly presents, in all
    material respects, the financial condition and result of operations
    of Diversified Realty, Inc.

Date: October 19, 2002                s/Paul J. McCann
                                        Paul J. McCann,
                                        Representative


                                10

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