<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

 Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934,
                  for the fiscal year ended December 31, 2001.

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (Name of Small Business Issuer)

             State or Other Jurisdiction of Incorporation: Delaware

                   IRS Employer Identification No.: 06-1579927


          1133 Broadway, 8th Fl, New York, New York                10011
           (Address of Principal Executive Offices)              (Zip Code)

                                 (212) 741-8934
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock

<TABLE>
<CAPTION>
                                               Name of Each Exchange
           Title of Each Class                 on Which Registered
           -------------------                 -------------------
           <S>                                 <C>
           Common Stock,                          None
           par value $.001
</TABLE>

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. [X] Yes [ ] No.

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-
KSB or any amendment to this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year were: $0.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold is N/A as the securities are not publicly traded.

The number of shares outstanding of the Company's common stock, as of March 28,
2002 is 17,000,000.


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
    <S>                                                                                        <C>
    DESCRIPTION OF BUSINESS                                                                      3
    DESCRIPTION OF PROPERTY                                                                      7
    LEGAL PROCEEDINGS                                                                            9
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                          9
    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                    10
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION            11
    INDEX TO FINANCIAL STATEMENTS                                                               13
    FINANCIAL STATEMENTS                                                                        14
    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS                                24
    EXECUTIVE COMPENSATION                                                                      25
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                              26
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                              27
    EXHIBITS AND REPORTS ON FORM 8-K                                                            28
    SIGNATURES                                                                                  29
    APPENDIX A                                                                                  30
</TABLE>


<PAGE>


                                     PART I


                             DESCRIPTION OF BUSINESS

        We were incorporated on April 24, 2000. We are a exploration stage
company that is engaged in the acquisition and exploration of mineral
properties. Our initial focus is in the area of the Torngat fields located in
the province of Quebec in Canada. Other than contracting with a third party to
conduct exploration and gather data on our behalf, we have conducted no
operations to date and do not expect to receive any revenues for at least two
years. During these two years we plan to concentrate our efforts on exploration
and data gathering. Because we are an exploration stage company, there is no
assurance that a commercially viable mineral deposit exists on any of our
properties. Further exploration will be required before the economic and legal
feasibility of developing the properties can be determined.

            Acquisition Agreement

        On September 12, 2000, we entered into an Acquisition Agreement with
Messrs. Peter Ferderber and Stanley G. Hawkins, and Tandem Resources Ltd., a
Canadian mineral exploration company of which Mr. Hawkins is the President.
Pursuant to such Agreement, we acquired certain mineral exploration permits
covering an area of approximately 469.05 square kilometers in the Torngat
fields, which are located on the east coast of Ungava Bay, in the northwestern
part of Quebec. The Torngat fields are one of four fields in Quebec that contain
diamondiferous kimberlite formations. The Torngat fields are composed of a
central plateau about 400 meters above sea level, and are broken by steep-sided
gorges and fjords along the coast. The largest of these features, Alluviaq
Fjord, bisects the property covered by the permits. Several dykes in the area
are well exposed sub-vertical features in the Alluviaq Fjord, and display
horizontal and vertical continuity. These traits result from rock being pushed
up from below the surface, into a vertical position against other horizontal
rocks. Geologists usually identify these rock formations as strong targets for
the presence of diamonds.

        The consideration paid under the Acquisition Agreement was 1,000,000
shares of our common stock to each of Messrs. Ferderber and Hawkins, and the
payment of $Cdn35,000 to Mr. Hawkins and $Cdn25,000 to Mr. Ferderber. We also
assigned to Messrs. Ferderber and Hawkins a one per cent (1%) interest in the
"Net Smelter Returns" of the property, one half of which is payable over the
first $Cdn50 million in revenues from the property. (Net Smelter Returns are
determined by the net amount of money received from the sale of ore, or ore
concentrates or other products from a property to a smelter or other ore buyer.)
Once Messrs. Ferderber and Hawkins have received $Cdn10 million from these Net
Smelter Returns, their interest terminates. Tandem Resources Ltd. received an
option to purchase 40% of the mineral rights on the properties. This option is
conditioned on a number of events occurring, which are:

(1)     The expenditure by us of $Cdn5 million on exploration of the property;
(2)     Tandem paying us $Cdn2 million; and
(3)     Tandem and us entering into a joint venture agreement to operate the
        property, within 60 days of a demonstration by us of the expenditure of
        $Cdn5 million on exploration of the property.

        In addition, we will have twenty-one (21) days from the date we notify
Tandem that we have made the $Cdn5 million exploration expenditure, to negotiate
a financing agreement with Tandem to provide Tandem with the $Cdn2 million
required to exercise the option. Should no agreement be reached in such 21-day
period, our right to provide this financing shall expire.

        Based upon an analysis of samples taken from these properties, we
believe that the properties for which we have exploration permits contain
kimberlite. Kimberlite is a type of igneous rock that occasionally contains tiny
to extremely tiny diamonds, and on very rare occasions contains industrial or
gem quality diamonds. Certain samples taken from our properties have contained
micro diamonds.

        Prospecting Geophysics Ltd., a Quebec-based firm of which Mr. Ferderber
is President, has provided us with a

<PAGE>

Progress Report, dated August 29, 2000, which discusses these samples, which
they had collected. Prospecting Geophysics Ltd. has been contracted to conduct
further surveys and exploration on this property.

        Mr. Ferderber is the record owner of the property covered by the
permits, which he has transferred to us. He had originally executed an
agreement, as of June 20, 2000, transferring the right to explore the properties
covered by the permits to us. This June 20, 2000 agreement was subsequently
incorporated into the Acquisition Agreement discussed above. We have received an
opinion of Lavery, de Billy, a firm of barristers and solicitors of Montreal,
Canada, dated July 10, 2000, that Mr. Ferderber is the record owners of the
permits under the Mining Act (Quebec), and that the permits are in good standing
as of June 21, 2000. The opinion further states that at the date of examination,
there were no liens, charges or encumbrances registered against any of the
permits. The opinion disclaimed any physical verification of the location of the
properties covered by the permits, and states that no survey of the area covered
by the permits was conducted.

          The permits expire at dates ranging from October 17, 2004 to March 30,
2005. These permits, once expired, may be renewed for an additional five years
at an annual license fee of $Cdn75 per square kilometer.

            Exploration Program

        We intend, in conjunction with Messrs. Ferderber and Hawkins (and their
affiliated entities) to explore the properties from early-stage exploration
through completion of the exploration phase. Prospecting Geophysics Ltd. will
perform all exploration activities. We will be paying, pursuant to an agreement
with Prospecting Geophysics Ltd., an hourly rate to Mr. Ferderber and his staff
for their services, as well as reimbursement for expenses, including equipment,
transportation, lodging and meals.

        Prospecting Geophysics Ltd. will commission crews of workers who will
gather samples of rock from the properties, and transport the samples to a
facility where they can be tested from properties which tend to indicate the
presence of diamonds. We have established camp sites for the workers at the
location of the properties, in order to decrease the costs of lodging. In
addition, we plan to use commercial supply boats, rather than commissioning
private boats, to transport the rock samples. Because the properties are only
accessible by air, we plan to rent helicopters as well as fixed wing aircraft
known as "beavers" to transport workers and samples to and from the properties.

        Due to extremely cold temperatures and snow accumulation caused by the
inclement weather in the region during the period from, approximately, November
to March, there can be no exploration on the properties covered by the permits
during these months.

        Prospecting Geophysics Ltd. also identifies specific exploration targets
in kimberlite dykes by examining maps of the area, and by using an airborne
magnetometer. From the air, this magnetometer detects magnetic properties in the
rock below. The data so gathered can be analyzed and used to focus the gathering
process on areas of higher magnetism. Some underground sites can be located
using certain geochemistry tests.

        Thus far we have begun early stage exploration activities, and have
gathered samples from one property for analysis. An exploration team of eight
men gathered samples and data at this property. The samples are taken from dykes
or "pipes" containing kimberlite. These samples were analyzed by Lakefield
Research Limited, of Ontario, an independent laboratory, which uses caustic
dissolution to extract the diamonds from the samples. This laboratory issued
reports dated September 26 and September 27, 2000, on two samples, one of which
indicates that out of a 24.65 kilogram sample, two diamonds were found weighing
0.015 carats in the aggregate. The second sample of 30.22 kilograms yielded
eight diamonds, with a total weight of 0.001 carats.

        During the second phase of our exploration stage, we, through
Prospecting Geophysics Ltd., plan to find the extent of the kimberlite dykes
that were located in phase one, and to gather larger mini-bulk and bulk samples.
These next samples are expected to be up to 7,000 pounds. This should enable the
Company to test for larger, and


                                       4
<PAGE>
 potentially more marketable diamonds which may, or may not, exist in the
kimberlite dykes. There is, of course, a substantial risk that we will not find
such diamonds. Prospecting Geophysics Ltd. will, at the same time, be attempting
to locate additional kimberlite dykes and pipes, and sample them as well. The
second stage exploration tasks began in April of 2001, after the weather in
northwestern Quebec allowed for exploration activities. Phase two was suspended
due to inclement weather during the winter months and it is expected to resume
in April 2002.

        Prior to any decision to develop the properties, a diamond deposit must
be assessed to determine the total tonnage of diamond bearing material, the
average grade of the rock, the estimated size distribution of the diamonds in
the deposit, and the average value, per carat, of the diamonds. Gathering this
data usually takes, as noted above, at least two years. At the time, we will
decide whether, and, if so, how, to proceed. We may seek either a joint venture
partner or a senior partner that will undertake the exploration of the
properties. It must be noted that there is a substantial risk that no
commercially viable diamond deposit will be found, and if that is the case, we
are likely to have difficulty finding any partners to undertake further
exploration.

        Additionally, on March 27, 2001, the Gem Trade Laboratory of the
Gemological Institute of America ("G.I.A."), an independent laboratory, issued a
report in which they analyzed "random samples" of numerous transparent pink
crystal fragments that were obtained from the property covered by our permits
known as D.D.I #1 (See map at Appendix A on page 30 of this Annual Report) in
October 2000, by our agent Prospecting Geophysics Ltd. The conclusion of the
report was that the samples that ranged in size from approximately 0.40 to 0.70
MM consisted of natural corundum. Corundum is the hardest mineral after diamond.
The samples obtained from the property covered by our permit were transparent
pink suggesting that they consist of the "ruby" gem. A ruby is a red variety of
the mineral corundum. We expect to continue to collect additional samples of
this mineral during the 2002 exploration season.

        At the present time, we do not hold any interest in a mineral property
that is in production. Our viability and potential success lie in our ability to
successfully explore, exploit and generate revenue from our properties. There
can be no assurance that such revenues will be obtained. The exploration of
mineral deposits involves significant risks over a long period of time, which
even a combination of careful evaluations, experience and knowledge may not
eliminate. It is impossible to ensure that the current or proposed exploration
programs on the exploration permits will be profitable or successful. Our
inability to locate a viable diamond deposit on our properties could result in a
total loss of our business. We believe that the typical cost to locate a diamond
deposit can range from $US 5-10 million.

        Our exploration operations are subject to all of the hazards and risks
normally incident to exploration of this type, any of which could result to
damage to life or property, environmental damage, and possible legal liability
for any or all damages. Our activities may be subject to prolonged disruptions
due to weather conditions surrounding the location of properties over which we
have permits. Difficulties, such as an unusual or unexpected rock formation
encountered by workers but not indicated on a map, or other conditions may be
encountered in the gathering of samples and data, and could delay our
exploration program. While we may obtain insurance against certain risks in such
amounts as we deem adequate, the nature of these risks are such that liabilities
could exceed policy limits or be excluded from coverage. We do not currently
carry insurance to protect against these risks and there is no assurance that we
will obtain such insurance in the future. There are also risks against which we
cannot, or may not elect to, insure. The potential costs which could be
associated with any liabilities not covered by insurance or in excess of
insurance coverage or compliance with applicable laws and regulations may cause
substantial delays and require significant capital outlays, adversely affecting
our final position, future earnings, and/or competitive position.

            Government Regulation and Licensing

        Our operations require licenses and permits from various governmental
authorities. We believe that we presently hold all necessary licenses and
permits required to carry on with our intended activities under applicable laws
and regulations, and we believe that we are complying at the present time in all
material respects with the terms of such licenses and permits. However, our
licenses and permits are subject to changes in regulations and in


                                       5
<PAGE>

various operating circumstances. We may not be able to obtain all necessary
licenses and permits required to carry out exploration activities.

        We are currently subject to the environmental regulations set forth
under the Environmental Act (Quebec), the Mining Act (Quebec) and the Forest Act
(Quebec). We believe that we are in compliance with all of these acts, and
moreover, we believe that the environmental impact of our exploration activities
will be minimal. To the extent that we remove large amounts of rock or soil from
the properties, we will likely have to replace such rock or soil, and remediate
any environmental disruption caused by our activities. It is impossible to
assess with any certainty the cost of such replacement or remediation
activities, or the potential liability that we would face if we were to be found
to have violated one, or more, of these Acts.

            Employees

        We do not have any full time employees at the present time. We have two
part time employees, Mr. Teodosio V. Pangia, and Mr. Thomas Franzone, both of
whom are executive officers. We have entered into a prospecting and survey
agreement with Prospecting Geophysics Ltd. to act as an on-site project manager;
they have four full time employees, and contract with other personnel on an
as-needed basis.

            Competition

        The mineral exploration business is competitive in all of its phases. We
expect to compete with numerous other exploration companies and individuals,
including competitors with greater financial, technical and other resources than
us, for the resources required for exploration. The greater resources of other
entities will likely position these competitors to conduct exploration within a
shorter time frame than we can, giving them a market advantage.

            Currency Fluctuation

        We also have exposure to currency fluctuations, since our properties are
located in Canada, and thus our transactions are largely in Canadian dollars.
Such fluctuations can materially affect our financial position and other results
of operations. References to the "dollar" or "$US" in this Registration
Statement are to United States Dollars, and "Canadian" or "$Cdn" refers to
Canadian dollars. Unless otherwise stated, the translations of $US to $Cdn and
vice versa have been made at the average rate for the year indicated. The
following table sets forth the high and low exchange rate of the Canadian dollar
per US dollar as of the latest praticable date and for each of the last six
months:

<TABLE>
<CAPTION>
PERIOD                   HIGH             LOW
<S>                    <C>              <C>
March 26, 2002         1.5924(1)
February, 2002         1.6094           1.5889
January 2002           1.6125           1.5873
December 2001          1.5966           1.5610
November 2001          1.6034           1.5728
October 2001           1.5887           1.5583
September 2001         1.5785           1.5570
</TABLE>

(1)     Represents the closing rate on March 26, 2002.


                                       6
<PAGE>

                             DESCRIPTION OF PROPERTY

        Please refer to Appendix A to this Annual Report at page 30, which
contains a map of our permit locations.

        We do not own real property, nor do we hold any lease or other real
property interest other than the exploration permits which we discuss above
under the caption "Description of Business." As noted above, we have engaged
Prospecting Geophysics Ltd. as our on-site project manager for our exploration
activities.

        In compliance with Guide 7 of Industry Guides under the Securities Act
of 1933 and the Securities Exchange Act of 1934, the following information is
provided, since we are engaged or to be engaged in significant mining
operations:

        (1) The permits were acquired in the Acquisition Agreement cover 469.05
square kilometers of properties in northwest Quebec, Canada, on the eastern
shore of Ungava Bay. With the exception of the five (5) month period from
November to March in which there is inclement weather in the area surrounding
the properties, there is nothing preventing access to the properties. However,
hazardous weather conditions could prevent us from accessing the properties in
other months as well. The properties are only accessible by air via a helicopter
or by boat. There are no roads that permit direct access to the properties.

        (2) Pursuant to an agreement between us and Peter Ferderber, Peter
Ferderber has transferred to us six (6) permits for the properties. The
properties covered by the permits are indicated on the map presented in Appendix
A by the areas marked D.D.I. Further, pursuant to the Acquisition Agreement, in
consideration for the permits, we have issued 1,000,000 shares of our common
stock to Mr. Ferderber and have paid him $25,000 Canadian, and at Mr.
Ferderber's request, $35,000 Canadian to Stanley G. Hawkins. We have obtained
the opinion of Lavery, de Billy, Barristers and Solicitors of Montreal, Canada
dated July 10, 2000, that Mr. Ferderber was the record owner of the permits
under the Mining Act of Quebec and that the permits were in good standing as of
June 21, 2000.

        (3) To our knowledge, Messrs. Ferderber and Hawkins staked the 469.05
square kilometer property in the Torngat fields in northwest Quebec, Canada, on
the eastern shore of Ungava Bay in 1999, and there were no previous owners,
operators, or operations on the property.

        (4) Although there can be no assurance of successful diamond
development, initial progress reports of the property have indicated that there
are micro diamonds on the property. A 24.65 kilogram sample taken from the
property, has yielded two diamonds weighing 0.015 carats and a 30.22 kilogram
sample has yielded eight diamonds weighing 0.001 carats.

            Geology

        The Torngat Property, where the properties for which we have mineral
permits are located, lies within the Torngat mountain province. The crust in the
province is thickened because two continental plates were pushed, more than a
billion years ago, one on top of the other. The predominant rock type on the
properties are the Tasiuyak Gneiss, a northwest trending belt of gneisses rock.
The gneisses are considered to be altered sedimentary rocks.

        The rocks of the Torngat mountain province strike northwest-southeast
within the Torngat property. Cross-cutting the gneisses, there are a number of
kimberlite dykes. The individual dykes are dark green and generally coarse
grained across most of their width.

        The properties are in a location over an early Precambrian bedrock
segments which is bedrock dating back to the earliest era of geological history,
called an "Archon." An Archon is an immobile segment of the earth's crust
exceeding 1.5 billion years in age. Kimberlite, a form of igneous rock, is
widely regarded as the main source for diamonds, and is reported from postulated
Archon called the "Baltic Shield." Only in the past decade have diamond
explorers recognized that these Baltic Shield rocks are potentially viable for
diamonds.


                                       7
<PAGE>

        THE PROPERTY IS WITHOUT KNOWN RESERVES AND OUR PROPOSED PROGRAM IS
EXPLORATORY IN NATURE. Exploration for diamonds on the properties began because
the formation and layout of the rocks on the properties indicated that some of
the rocks had been pushed up through the earth's crust. This is initially
identified by geologists from the age and shape of the rocks. When these
different or unexpected rock formations appear, geologist then consider the area
surrounding these rocks as strong targets for exploration for diamonds. This is
because, geologists believe, as the rocks are pushing up through the earth's
surface from great depths, the rocks travel through diamond fields located below
the earth's surface and therefore rocks containing diamonds are forced to the
surface.

        Rocks containing these characteristics were identified on the properties
covered by our mineral permits. Once these rocks were identified, we then
conducted a magnetometer survey. The magnetometer is a small electronic device
used by geologists to survey the land for areas of high magnetism. This can be
used in the air or on the ground. This test is conducted because, when the rocks
are being pushed through the earth's surface (as described above), in addition
to bringing rocks containing diamonds, iron from below the Earth's surface is
also forced to the surface. The magnetometer reads the surface of the Earth for
any magnetism created by the iron upon the belief that if a particular property
contains a high concentration of iron that was forced up from below the earth's
surface, the property may also contain diamonds that have been similarly forced
up to the surface.

        An airborne magnetometer survey was conducted over the properties for
which we have mineral permits, and six (6) magnetic dykes were discovered. This
indicated to us that these properties were potentially a source for diamonds. In
addition, samples of rock taken from the properties have yielded small diamonds.

        We have hired Prospecting Geophysics Ltd. to conduct these exploration
procedures. Mr. Peter Ferderber is the President of Prospecting Geophysics Ltd.
Mr. Ferderber has over forty years of experience in mining exploration.
Prospecting Geophysics Ltd. plans to conduct the exploration of the property
which is expected to last for the next two years. The first phase involved
identifying areas on the property from which to take samples and gathering small
samples from the properties for analysis. This analysis to date has demonstrated
the presence of 10 micro diamonds in two samples taken. The second phase
involves determining the extent of any kimberlite dykes that were located in
phase one and to gather mini-bulk and bulk samples. This will enable us to
determine if there are larger and more marketable diamonds on the properties.
The second phase began in April of 2001. Phase two was suspended due to
inclement weather during the winter months and it is expected to resume
operations in April 2002. The following is a breakdown of the estimated budget
for particular aspects of our exploration activities:

<TABLE>
<S>                                                         <C>
Prospecting and geological mapping                          $   190,000.00
Helicopter support                                              225,000.00
Lodging and food                                                110,000.00
Airplane support                                                100,000.00
Mobilization and Demobilization                                  60,000.00
Fuel for helicopter, airplane and camps                          40,000.00
Fuel transport by boat                                            8,000.00
Pick-up truck rental                                             15,000.00
Testing samples for Diamonds                                    150,000.00
Property Taxes (Quebec Dept. of Natural Resources)               60,000.00
Supervision                                                      60,000.00
</TABLE>

        (5) In the Quebec sector of the Torngat belt, roughly fifteen dykes have
been mapped. These dykes occupy fractures oriented at an approximately right
angle to the country rocks, suggesting tensions opened up by later scale
folding. Two of these dykes on an adjacent property have been sampled,
confirming the presence of diamonds. However, to date, no proven reserves have
been established and there can be no assurance that any such reserves will ever
exist.


                                       8
<PAGE>

                                LEGAL PROCEEDINGS

        There are no legal proceedings pending or threatened against us.


               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        During the fourth quarter of calendar year 2001, no matters were
submitted to a vote of the security holders of the Company.


                                       9
<PAGE>

                                    PART II.

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        We eventually plan to list our securities for trading on the OTC
Bulletin Board. An application for trading has been prepared and submitted to
NASD Regulation, Inc. and it is currently pending. To date, there is no trading
market for our securities. Until such time as our shares are traded on a market
or securities exchange our shareholders must offer or sell our common stock at a
price of $.90 per share. Once traded on a market or securities exchange the
offering price of our common stock will be determined by market factors.

        All of our 17,000,000 issued and outstanding shares of common stock are
currently considered "restricted securities" and in the future, may be sold only
in compliance with Rule 144 or in an exempt transaction under the Act unless
registered under the Act.

        As of March 27, 2002 the number of holders of record of common stock was
twenty-two (22).

        We do not anticipate paying any cash dividends on our common stock in
the foreseeable future because we intend to retain our earnings to finance the
expansion of our business. Thereafter, the declaration of dividends will be
determined by the Board of Directors in light of conditions then existing,
including, without limitation, our financial condition, capital requirements and
business condition. We are prohibited from paying cash dividends on the common
stock until any issued and outstanding preferred stock is converted into common
stock. However, there were no shares of preferred stock outstanding as of
December 31, 2001.

        On May 1, 2000, the Company sold 4,850,000 shares of its common stock
for $.001 per share to the following persons in the amount indicated opposite
each person's name:

<TABLE>
<S>                                         <C>
TVP Capital Corp.                            3,475,000
Tom Franzone                                   275,000
Vasilik Kalantzakos                            100,000
Tunku Mudzaffar Bin Tunku Mustapha             250,000
Romeo Dibatista Sr.                            250,000
JJAB, LLC                                      500,000
</TABLE>

        These shares were sold pursuant to Section 4(2) of the Act and were not
issued in connection with any public offering. Teodosio V. Pangia is the sole
shareholder of TVP Capital Corp. Tom Franzone is our Secretary and principal
accounting officer. We issued 150,000 shares of common stock to Bondy & Schloss
LLP, as payment for legal services valued at $3,750. Bondy & Schloss LLP is
legal counsel to the Company.

        On May 20, 2000, pursuant to a private offering, we issued 10,000,000
shares of our common stock to Mr. Louis Lilling for $250,000. Mr. Lilling paid
$25,000 of the purchase price of these shares in cash and the remainder in the
form of a promissory note payable by November 20, 2000. These shares were issued
pursuant to Rule 504 of Regulation D of the Securities Act and were not issued
in connection with any public offering. There was no underwriting commissions in
connection with the private offering. The promissory note was extended for six
months until May 20, 2001. Mr. Lilling has paid the full amount of the
outstanding principal and interest on the promissory note.

        Pursuant to the Acquisition Agreement dated September 12, 2000, we
issued 1,000,000 shares of our common stock to each of Messrs. Ferderber and
Hawkins in consideration for the acquisition of the exploration permits referred
to in "Description of Business," above. These shares were issued pursuant to
Section 4(2) of the Act and were not issued in connection with any public
offering.


                                       10
<PAGE>

        On February 14, 2002, our Registration Statement on Form SB-2, as
amended, (File No. 333-71962) was declared effective by the SEC. We registered
1,835,000 shares of common stock, par value $.001 per share, solely on behalf of
selling shareholders and thus we did not receive any proceeds from the sale of
common stock offered through the Registration Statement. Until such time as our
shares are traded on a market or securities exchange, the selling shareholders
for whom shares were registered on the Registration Statement must offer or sell
our common stock at a price of $.90 per share. Once traded on a market or
securities exchange the offering price of our common stock will be determined by
market factors. The offering will conclude when all of the 1,835,000 shares of
common stock have been sold, the shares no longer need to be registered to be
sold or we decide to terminate the registration of the shares.

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR
                                PLAN OF OPERATION

        The following discussion regarding us and our business and operations
contains forward-looking statements. Such statements consist of any statement
other than a recitation of historical fact, and can be identified by the use of
such forward-looking terminology such as "may," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon, or
comparable terminology. The reader is cautioned that all forward-looking
statements are necessarily speculative, and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward-looking statements.

Summary of Significant Accounting Policies

      Use of estimates:

        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect certain
        reported amounts and disclosures. Accordingly, actual results could
        differ from those estimates.

      Mining costs:

        Exploration and evaluation costs are expensed as incurred. Management's
        decision to develop or mine a property will be based on an assessment of
        the viability of the property and the availability of financing. The
        Company will capitalize mining exploration and other related costs
        attributable to reserves in the event that a definitive feasibility
        study establishes proven and probable reserves. Capitalized mining costs
        will be expensed using the unit of production method and will also be
        subject to an impairment  assessment.

      Impairment of long-lived assets:

        The Company has adopted the provisions of Statement of Financial
        Accounting Standards No. 121, "Accounting for the Impairment of
        Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS
        121"). Under SFAS 121, impairment losses on long-lived assets, such as
        mining claims, are recognized when events or changes in circumstances
        indicate that the undiscounted cash flows estimated to be generated by
        such assets are less than their carrying value and, accordingly, all or
        a portion of such carrying value may not be recoverable. Impairment
        losses are then measured by comparing the fair value of assets to their
        carrying amounts.

      Net earnings (loss) per share:

        The Company presents "basic" earnings (loss) per share and, if
        applicable, "diluted" earnings per share pursuant to the provisions of
        Statement of Financial Accounting Standards No. 128, "Earnings per
        Share". Basic earnings (loss) per share is calculated by dividing net
        income or loss by the weighted average number of common shares
        outstanding during each period. The calculation of diluted earnings per
        share is similar to that of basic earnings per share, except that the
        denominator is increased to include the number of additional common
        shares that would have been outstanding if all potentially dilutive
        common shares, such as those issuable upon the exercise of stock
        options, were issued during the period. The Company did not have any
        potentially dilutive common shares outstanding during the period from
        April 24, 2000 to December 31, 2001.

      Foreign currency translation and transactions:

        Canadian assets and liabilities are translated at current exchange
        rates and expenses are translated at average exchange rates in effect
        during each period. Resulting translation adjustments, if material,
        would be recorded as a separate component of stockholders' deficiency.
        Foreign currency transaction gains and losses, which have not been
        material, are included in results of operations as incurred.

Our Plan of Operation

        We were incorporated in April of 2000, and do not have any significant
operating history or financial results. We have only recently begun our early
stage exploration activities, including gathering samples from one of the
properties for analysis, building an infrastructure and filing Registration
statements on Forms 10-SB and SB-2 as well as periodic filings with the
Securities and Exchange Commission. As a result, for the fiscal year ended
December 31, 2001 and the period from April 24, 2000 (date of inception) to
December 31, 2000 and 2001 we incurred $828,229, $598,532 and $1,426,761 in
exploration costs and $192,961, $115,084 and $308,045 in general and
administrative expenses, respectively. We incurred a net loss of approximately
$1,021,000 or $(.06) per share based on 15,795,418 weighted average shares
outstanding for the fiscal year ended December 31, 2001 compared to
approximately $714,000 or $(.05) per share based on 14,840,637 weighted average
shares outstanding for the period from April 24, 2000 to December 31, 2000. We
did not conduct any operations of a commercial nature during the period from
April 24, 2000 to December 31, 2001. Through December 31, 2001 we have relied on
advances of approximately $568,000 from our principal stockholders, trade
payables of approximately $858,000 (including $758,000 owed to Prospecting
Geophysics Ltd.), and proceeds of $254,850 from the sale of common stock to
support our limited operations. As of December 31, 2001, we had approximately
$300 of cash. We seek additional equity or debt financing of up to $1,500,000
which we plan to use for the second phase of our exploration program to be
conducted through September 30, 2002, as well as working capital purposes. If we
do not get sufficient financing, we may not be able to continue as a going
concern and we may have to curtail or terminate our operations and liquidate our
business (see Note 1 to financial statements).

        Our business plan for the next year will consist of further exploration
on the properties over which we hold the mineral exploration permits as well as
preliminary marketing efforts. We intend to continue retaining Prospecting
Geophysics Ltd. to analyze the results of phase one of our exploration program,
and during phase two, to find the extent of the kimberlite dykes that were
located in phase one and gather larger mini-bulk and bulk samples. These next
samples are expected to be up to 7,000 lbs. Prospecting Geophysics, Ltd. will
attempt to locate additional kimberlite dykes and pipes and sample them as well.
They will attempt to conduct further geochemistry tests to locate underground
dykes which are not visible at the surface and magnetic surveys to trace them.
Additionally, during phase two, we intend to continue to collect and analyze the
transparent pink crystal fragments found on the properties covered by our
permits that consists of natural corundum and which we believe contain rubies.
This phase began approximately April 15, 2001 and was suspended during the
winter months due to inclement weather. This phase is expected to resume in
April 2002.


                                       11
<PAGE>

        After consulting with Prospecting Geophysics Ltd., we estimate that it
will require approximately $1,000,000 to $1,200,000 to conduct our exploration
program through September 30, 2002. This amount will be used to pay for
prospecting and geological mapping, helicopter and airplane support, lodging and
food for workers, pick-up truck rentals, house rental in George River, assays,
property taxes to the Quebec Department of Natural Resources and supervision,
including a salary payable to Mr. Peter Ferderber of $500 per day, plus out of
pocket expenses, for days he attends the site. We plan to raise a minimum of
$1,500,000 through one or more private offerings pursuant to Rule 506 or
Regulation D of through an offshore offering pursuant to Regulation S; however,
nothing in this annual report shall constitute an offer of any securities for
sale. Such shares when sold will not have been registered under the Act and may
not be offered or sold in the United States absent registration or an applicable
exemption from registration requirements. If we are unable to raise this amount,
we will most likely cease all activity related to our exploration program, or at
the very least, proceed on a reduced scale. We have to date relied on a small
number of investors to provide us with financing for the commencement of our
exploration program, including TVP Capital Corp., a principal stockholder.
Amounts owed to these individuals are payable upon demand.

        We do not expect to make any direct expenditures to purchase any
equipment as all equipment necessary will be provided by Prospecting Geophysics
Ltd. pursuant to the Prospecting and Survey Agreement dated November 14, 2000.
However, we will reimburse Prospecting Geophysics, Ltd. for all of its out of
pocket expenses including equipment rental.

        We now employ two individuals on a part time basis, both of whom are
executive officers. We do not expect any significant changes in the number of
employees within the next twelve months.


                           FORWARD LOOKING STATEMENTS

        This Form 10-KSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. All statements
included herein that address activities, events or developments that the
Company expects, believes, estimates, plans, intends, projects or
anticipates will or may occur in the future, are forward-looking statements.
Actual events may differ materially from those anticipated in the forward-
looking statements. Important risks that may cause such a difference include:
general domestic and international economic business conditions, increased
competition in the Company's markets and products. Other factors may
include, availability and terms of capital, and/or increases in operating and
supply costs. Market acceptance of existing and new products, rapid
technological changes, availability of qualified personnel also could be
factors. Changes in the Company's business strategies and development plans
and changes in government regulation could adversely affect the Company.
Although the Company believes that the assumptions underlying the forward-
looking statements contained herein are reasonable, any of the assumptions could
be inaccurate. There can be no assurance that the forward-looking statements
included in this filing will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company that the objectives and expectations of the Company would be
achieved.


                                       12
<PAGE>

                              FINANCIAL STATEMENTS

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)



                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                         PAGE
                                                                         ----
<S>                                                                     <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                 14

BALANCE SHEET
      DECEMBER 31, 2001                                                  15

STATEMENTS OF OPERATIONS
      YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM APRIL 24,
      2000 (DATE OF INCEPTION) TO DECEMBER 31, 2000 AND 2001             16

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
      YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM APRIL 24,
      2000 (DATE OF INCEPTION) TO DECEMBER 31, 2000 AND 2001             17

STATEMENTS OF CASH FLOWS
      YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM APRIL 24,
      2000 (DATE OF INCEPTION) TO DECEMBER 31, 2000                      18

NOTES TO FINANCIAL STATEMENTS                                            19-23
</TABLE>


                                      * * *



                                       13
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
Diamond Discoveries International Corp.


We have audited the accompanying balance sheet of DIAMOND DISCOVERIES
INTERNATIONAL CORP. (An Exploration Stage Company) as of December 31, 2001, and
the related statements of operations, changes in stockholders' deficiency and
cash flows for the year ended December 31, 2001 and the periods from April 24,
2000 (date of inception) to December 31, 2000 and 2001. 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 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 financial statements referred to above present fairly, in
all material respects, the financial position of Diamond Discoveries
International Corp. as of December 31, 2001, and its results of operations and
cash flows for the year ended December 31, 2001 and the periods from April 24,
2000 (date of inception) to December 31, 2000 and 2001, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As further discussed in Note 1 to the
financial statements, the Company had not generated any revenues from its
operations and it had working capital and stockholders' deficiencies as of
December 31, 2001. Such matters raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 1. The accompanying financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.



                                               J.H. Cohn LLP

Roseland, New Jersey
March 22, 2002


                                       14
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                                  BALANCE SHEET
                                DECEMBER 31, 2001



<TABLE>
<S>                                                                   <C>
ASSETS

Current assets - cash                                                  $       341
                                                                       ===========


LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Liabilities:
      Accounts payable:
        Prospecting Geophysics Ltd                                     $   758,451
        Other                                                               99,759
      Advances from stockholders                                           568,337
                                                                       -----------
              Total liabilities                                          1,426,547
                                                                       -----------

Stockholders' deficiency:
     Preferred stock, par value $.001 per share; 20,000,000 shares
         authorized; none issued                                                --
     Common stock, par value $.001 per share; 80,000,000 shares
         authorized; 17,000,000 shares issued and outstanding               17,000
     Additional paid-in capital                                            291,600
     Deficit accumulated during the exploration stage                   (1,734,806)
                                                                       -----------
              Total stockholders' deficiency                            (1,426,206)
                                                                       -----------

              Total                                                    $       341
                                                                       ===========
</TABLE>


See Notes to Financial Statements.


                                       15
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS
                  YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM
        APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2000 AND 2001



<TABLE>
<CAPTION>
                                                                April 24 to December 31,
                                                                -------------------------------
                                                  2001              2000              2001
                                              ------------      ------------      ------------

<S>                                           <C>               <C>               <C>
Revenues                                      $         --      $         --      $         --
                                              ------------      ------------      ------------

Operating expenses:
      Exploration costs - Prospecting
           Geophysics Ltd.                         828,229           598,532         1,426,761
      General and administrative expenses          192,961           115,084           308,045
                                              ------------      ------------      ------------
               Totals                            1,021,190           713,616         1,734,806
                                              ------------      ------------      ------------

Net loss                                      $ (1,021,190)     $   (713,616)     $ (1,734,806)
                                              ============      ============      ============

Basic net loss per common share               $       (.06)     $       (.05)
                                              ============      ============

Basic weighted average common shares
      outstanding                               15,795,418        14,840,637
                                              ============      ============
</TABLE>


See Notes to Financial Statements.


                                       16
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
          YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM APRIL 24, 2000
                (DATE OF INCEPTION) TO DECEMBER 31, 2000 AND 2001


<TABLE>
<CAPTION>


                                                    Preferred Stock                    Common Stock            Additional
                                            --------------------------------    --------------------------       Paid-in
                                                Shares            Amount          Shares          Amount         Capital
                                            --------------    --------------    -----------    -----------    --------------
                                            <S>               <C>               <C>            <C>            <C>
Issuance of shares to founders
     effective as of April 24, 2000                     --    $           --      4,850,000    $     4,850

Issuance of shares as payment
     for legal services                                                             150,000            150    $        3,600

Issuance of shares in connection
     with acquisition of mineral permits                                          2,000,000          2,000            48,000

Subscription for purchase of
     10,000,000 shares                                                           10,000,000         10,000           240,000

Proceeds from issuance of common
     stock

Net loss
                                            --------------    --------------    -----------    -----------    --------------

Balance, December 31, 2000                              --                --     17,000,000         17,000           291,600

Proceeds from issuance of common
     stock

Net loss
                                            --------------    --------------    -----------    -----------    --------------

Balance, December 31, 2001                              --    $           --     17,000,000    $    17,000    $      291,600
                                            ==============    ==============    ===========    ===========    ==============

<CAPTION>

                                               Deficit
                                             Accumulated
                                             During the            Subscriptions Receivable
                                             Exploration       --------------------------------
                                                Stage              Shares             Amount          Total
                                            --------------     --------------    --------------    -----------
                                            <C>                <C>               <C>               <C>
Issuance of shares to founders
     effective as of April 24, 2000                                                                $     4,850

Issuance of shares as payment
     for legal services                                                                                  3,750

Issuance of shares in connection
     with acquisition of mineral permits                                                                50,000

Subscription for purchase of
     10,000,000 shares                                             10,000,000    $     (250,000)

Proceeds from issuance of common
     stock                                                         (1,000,000)           25,000         25,000

Net loss                                    $     (713,616)                                           (713,616)
                                            --------------     --------------    --------------    -----------

Balance, December 31, 2000                        (713,616)         9,000,000          (225,000)      (630,016)

Proceeds from issuance of common
     stock                                                         (9,000,000)          225,000        225,000

Net loss                                        (1,021,190)                                         (1,021,190)
                                            --------------     --------------    --------------    -----------

Balance, December 31, 2001                  $   (1,734,806)                --    $           --    $(1,426,206)
                                            ==============     ==============    ==============    ===========
</TABLE>


See Notes to Financial Statements.




                                       17
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS
                  YEAR ENDED DECEMBER 31, 2001 AND PERIODS FROM
        APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2000 AND 2001



<TABLE>
<CAPTION>
                                                                                   April 24 to December 31,
                                                                                   ----------------------------
                                                                      2001             2000             2001
                                                                  -----------      -----------      -----------
<S>                                                               <C>              <C>              <C>
Operating activities:
      Net loss                                                    $(1,021,190)     $  (713,616)     $(1,734,806)
      Adjustments to reconcile net loss to net
           cash used in operating activities:
           Costs of services paid through issuance
               of common stock                                                           3,750            3,750
           Cost of mineral permits paid through the
               issuance of common stock                                                 50,000           50,000
           Changes in operating assets and liabilities:
               Accrued interest                                        13,800          (13,800)
               Accounts payable                                       470,141          388,069          858,210
                                                                  -----------      -----------      -----------
                    Net cash used in operating activities            (537,249)        (285,597)        (822,846)
                                                                  -----------      -----------      -----------

Financing activities:
      Advances from stockholders, net                                 296,566          271,771          568,337
      Proceeds from issuance of common stock                          225,000           29,850          254,850
                                                                  -----------      -----------      -----------
                    Net cash provided by financing activities         521,566          301,621          823,187
                                                                  -----------      -----------      -----------

Net increase in cash                                                  (15,683)          16,024              341

Cash, beginning of period                                              16,024               --               --
                                                                  -----------      -----------      -----------

Cash, end of period                                               $       341      $    16,024      $       341
                                                                  ===========      ===========      ===========
</TABLE>


See Notes to Financial Statements.


                                       18
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


Note 1 - Business and basis of presentation:

        Diamond Discoveries International Corp. (the "Company") was incorporated
        in the State of Delaware on April 24, 2000. The Company plans to engage
        in activities related to the exploration for mineral resources in
        Canada. It plans to conduct exploration and related activities through
        contracts with third parties.

        As further explained in Note 3, the Company acquired its mineral permits
        for 469.05 square kilometers in the "Torngat Fields" located in the
        Province of Quebec, Canada. The Company intends to develop the permits
        from early stage exploration through completion of the exploration
        phase. Prior to any further exploration decisions, a mineral deposit
        must be appropriately assessed. Gathering this data usually takes at
        least two years. Once the appropriate data has been gathered, management
        will determine whether and how to proceed. The Company recently
        discovered tiny diamonds in samples taken from the property and has
        contracted with Prospecting Geophysics Ltd. ("PGL") to conduct surveys
        and exploration at the property to begin to enable it to determine
        whether it can extract and produce diamonds from this kimberlite (see
        Note 3).

        Other than contracting with PGL to conduct exploration and gather data
        on its behalf, the Company had not conducted any operations or generated
        any revenues as of December 31, 2001. Accordingly, it is considered an
        "exploration stage company" for accounting purposes.

        The accompanying financial statements have been prepared assuming the
        Company will continue as a going concern. However, in addition to not
        generating any revenues, the Company had a working capital and a
        stockholders' deficiency of approximately $1,426,000 as of December 31,
        2001. Management believes that the Company will not generate any
        revenues during the two year period subsequent to December 31, 2001 in
        which it will be gathering and evaluating data related to the permits
        for the Torngat Fields. Management also believes that the Company will
        need total additional financing of approximately $1,500,000 to continue
        to operate as planned during the twelve month period subsequent to
        December 31, 2001. These conditions raise substantial doubt about the
        Company's ability to continue as a going concern.

        Management plans to obtain such financing through private offerings of
        debt and equity securities. However management cannot assure that the
        Company will be able to obtain any or all of the additional financing it
        will need to continue to operate through at least December 31, 2002 or
        that, ultimately, it will be able to generate any profitable commercial
        mining operations. If the Company is unable to obtain the required
        financing, it may have to curtail or terminate its operations and
        liquidate its remaining assets and liabilities.

        The accompanying financial statements do not include any adjustments
        related to the recoverability and classifications of assets or the
        amounts and classification of liabilities that might be necessary should
        the Company be unable to continue its operations as a going concern.


                                       19
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


Note 2 - Summary of significant accounting policies:

      Use of estimates:

        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect certain
        reported amounts and disclosures. Accordingly, actual results could
        differ from those estimates.

      Mining costs:

        Exploration and evaluation costs are expensed as incurred. Management's
        decision to develop or mine a property will be based on an assessment of
        the viability of the property and the availability of financing. The
        Company will capitalize mining exploration and other related costs
        attributable to reserves in the event that a definitive feasibility
        study establishes proven and probable reserves. Capitalized mining costs
        will be expensed using the unit of production method and will also be
        subject to an impairment assessment.

      Concentrations of credit risk:

        The Company maintains its cash in bank deposit accounts, the balances of
        which, at times, may exceed Federal insurance limits. Exposure to credit
        risk is reduced by placing such deposits with major financial
        institutions and monitoring their credit ratings.

      Impairment of long-lived assets:

        The Company has adopted the provisions of Statement of Financial
        Accounting Standards No. 121, "Accounting for the Impairment of
        Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS
        121"). Under SFAS 121, impairment losses on long-lived assets, such as
        mining claims, are recognized when events or changes in circumstances
        indicate that the undiscounted cash flows estimated to be generated by
        such assets are less than their carrying value and, accordingly, all or
        a portion of such carrying value may not be recoverable. Impairment
        losses are then measured by comparing the fair value of assets to their
        carrying amounts.

      Income taxes:

        The Company accounts for income taxes pursuant to the asset and
        liability method which requires deferred income tax assets and
        liabilities to be computed annually for temporary differences between
        the financial statement and tax bases 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 established when necessary to reduce deferred tax assets to the
        amount expected to be realized. The income tax provision or credit is
        the tax payable or refundable for the period plus or minus the change
        during the period in deferred tax assets and liabilities.


                                       20
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


Note 2 - Summary of significant accounting policies (concluded):

      Net earnings (loss) per share:

        The Company presents "basic" earnings (loss) per share and, if
        applicable, "diluted" earnings per share pursuant to the provisions of
        Statement of Financial Accounting Standards No. 128, "Earnings per
        Share". Basic earnings (loss) per share is calculated by dividing net
        income or loss by the weighted average number of common shares
        outstanding during each period. The calculation of diluted earnings per
        share is similar to that of basic earnings per share, except that the
        denominator is increased to include the number of additional common
        shares that would have been outstanding if all potentially dilutive
        common shares, such as those issuable upon the exercise of stock
        options, were issued during the period. The Company did not have any
        potentially dilutive common shares outstanding during the period from
        April 24, 2000 to December 31, 2001.

      Foreign currency translation and transactions:

        Canadian assets and liabilities are translated at current exchange
        rates and expenses are translated at average exchange rates in effect
        during each period. Resulting translation adjustments, if material,
        would be recorded as a separate component of stockholders' deficiency.
        Foreign currency transaction gains and losses, which have not been
        material, are included in results of operations as incurred.


      Recent accounting pronouncements:

        In August 2001, the Financial Accounting Standards Board issued
        Statement of Financial Accounting Standards No. 144, "Accounting for the
        Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144
        addresses financial accounting and reporting for the impairment or
        disposal of long-lived assets. Among other things, SFAS 144 provides
        guidance on the implementation of previous pronouncements related to
        when and how to measure impairment losses and how to account for
        discontinued operations. Management does not believe that the adoption
        of SFAS 144 will have a material impact on the Company's consolidated
        financial position or results of operations.

        The Financial Accounting Standards Board and the Accounting Standards
        Executive Committee of the American Institute of Certified Public
        Accountants had issued certain other accounting pronouncements as of
        December 31, 2001 that will become effective in subsequent periods;
        however, management of the Company does not believe that any of those
        pronouncements would have significantly affected the Company's financial
        accounting measurements or disclosures had they been in effect during
        the period from April 24, 2000 to December 31, 2001, and it does not
        believe that any of those pronouncements will have any significant
        impact on the Company's financial statements at the time they become
        effective.


Note 3 - Permits:

        Pursuant to an agreement consummated on September 12, 2000, the Company
        acquired certain permits in the Torngat Fields from Peter Ferderber and
        S. G. Hawkins, who are key consultants and advisors to the Company, for
        total consideration of $90,540, of which $40,540 ($60,000 Canadian)
        represents the amount paid in cash and $50,000 represents the fair value
        of a total of 2,000,000 shares of the Company's common stock issued to
        Messrs. Ferderber and Hawkins. The exchange of shares for the permits
        was a noncash transaction that is not reflected in the accompanying
        statements of cash flows for the periods from April 24, 2000 to December
        31, 2000 and 2001.


                                       21
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


Note 3 - Permits (concluded):

        In connection with the acquisition of these permits, the Company
        assigned to the sellers a 1% interest in the "net smelter returns" of
        the property, one-half of which is payable over the first $50,000,000
        (Canadian) of revenues produced from the property. Such interest would
        terminate once the sellers receive a total of $10,000,000 (Canadian)
        based on such interest. Net smelter returns are determined by the net
        amount received from the sale to a smelter or other buyer of ore, ore
        concentrates or other products produced from the property.

        Mr. Hawkins owns Tandem Resources, Ltd. ("Tandem"). As part of the
        agreement for the purchase of the permits, the Company granted Tandem an
        option to purchase a 40% interest in a joint venture that would be
        formed between the Company and Tandem to conduct operations related to
        the properties covered by the permits at such time as the Company has
        incurred expenditures related to such operations totaling $5,000,000
        (Canadian). The exercise price for the option will be $2,000,000
        (Canadian). Mr. Ferderber also is the president of PGL (see Note 1). The
        Company has agreed to pay Mr. Ferderber $500 per day for his services,
        plus out of pocket expenses, during the 18 month period subsequent to
        November 20, 2000, but only for the days on which he performs services
        at the Company's site.


Note 4 - Advances from stockholders:

        Advances from stockholders of $568,337 at December 31, 2001 were
        noninterest bearing and due on demand.

        Although management does not believe that there is a practical method
        that can be used to specifically determine the fair value of the
        advances from stockholders because of the relationship of the Company
        and its stockholders, it believes that the advances will be repaid on a
        short-term basis and, accordingly, the carrying value of the advances
        approximated fair value as of December 31, 2001.


Note 5 - Preferred stock:

        As of December 31, 2001, the Company was authorized to issue up to
        20,000,000 shares of preferred stock with a par value of $.001 per
        share. The preferred stock may be issued in one or more series with
        dividend rates, conversion rights, voting rights and other terms and
        preferences to be determined by the Company's Board of Directors,
        subject to certain limitations set forth in the Company's Articles of
        Incorporation. No shares of preferred stock had been issued by the
        Company as of December 31, 2001.


                                       22
<PAGE>

                     DIAMOND DISCOVERIES INTERNATIONAL CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS



Note 6 - Common stock issued for services:

        During the period from April 24, 2000 to December 31, 2000, the Company
        issued 150,000 shares of common stock as payment for legal services.
        Accordingly, general and administrative expenses in the accompanying
        statement of operations, and common stock and additional paid-in capital
        in the accompanying statements of stockholders' deficiency, for the
        periods from September 24, 2000 to December 31, 2000 and 2001 were
        increased to reflect the estimated fair value of the shares of $3,750.


Note 7 - Stock subscription receivable:

        On May 20, 2000, the Company completed the sale of 10,000,000 shares of
        common stock for $250,000, or $.025 per share, through a private
        placement intended to be exempt from registration under the Securities
        Act of 1933. Initially, the buyer paid $25,000 in cash and $225,000
        through the issuance of a 10% promissory note. The exchange of shares
        for a note receivable was a noncash transaction that is not reflected in
        the accompanying statements of cash flows for the periods from September
        24, 2000 to December 31, 2000 and 2001. In addition, the note receivable
        is reflected as a separate component of stockholders' deficiency in the
        accompanying balance sheet. The 10% promissory note was paid on May 20,
        2001.


Note 8 - Income taxes:

        As of December 31, 2001, the Company had net operating loss
        carryforwards of approximately $1,735,000 available to reduce future
        Federal taxable income which will expire in 2021. The Company had no
        other material temporary differences as of that date. Due to the
        uncertainties related to, among other things, the changes in the
        ownership of the Company, which could subject those loss carryforwards
        to substantial annual limitations, and the extent and timing of its
        future taxable income, the Company offset the deferred tax assets of
        approximately $694,000 attributable to the potential benefits from the
        utilization of those net operating loss carryforwards by an equivalent
        valuation allowance as of December 31, 2001.

        The Company had also offset the potential benefits from net operating
        loss carryforwards of approximately $286,000 by an equivalent valuation
        allowance as of December 31, 2000. As a result of the increases in the
        valuation allowance of $40,800 for the year ended December 31, 2001 and
        $286,000 for the period from April 24, 2000 to December 31, 2000, the
        Company did not recognize any credits for income taxes in the
        accompanying statements of operations to offset its pre-tax losses in
        those periods.



                                      * * *



                                       23
<PAGE>

                                    PART III

          DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

            The following Table sets forth certain information regarding the
executive officers and directors of the Company as of March 27, 2002:


<TABLE>
<CAPTION>
NAME                         AGE               COMPANY POSITION
<S>                          <C>            <C>
Teodosio V. Pangia            42                   Chairman/CEO
Thomas Franzone               44             Secretary/Director
Peter Ferderber               73                     Consultant
Stanley G. Hawkins            69                        Advisor
</TABLE>


TEODOSIO V. PANGIA

        Mr. Pangia has been Chairman, CEO and a Director of the Company since
our formation in April 2000. He is the Chairman of TVP Capital Corp., a U.S.
based venture capital company which he founded in April 2000 and which has
provided consulting services to the Company since April 2000. Since July 2000,
Mr. Pangia has been a Director and Chief Executive Officer of Enviro Industrial
Technologies, Inc., a mineral processing company. From June 1997 to present, Mr.
Pangia has been President of Tyler Dylan Corp., an Ontario, Canada based
investment company. Mr. Pangia is the only employee of Tyler Dylan Corp. From
June 1997 to July 1999, Mr. Pangia was a co-founder and consultant of
Environmental Solutions Worldwide, a company with five employees that is
involved in the research and development of new products for the environmental
sector, with an emphasis on catalytic emission control products. From 1995
through 1997, Mr. Pangia was Director and Chief Executive Officer of Ecology
Pure Air International, a Canadian company with five employees engaged in
developing an automobile fuel catalyst. From 1992-1995, Mr. Pangia was a
Director and Chief Executive Officer of EPA Enterprises, a Canadian company with
five employees engaged in developing pre-combustion fuel technology. In 1997, a
petition in bankruptcy was brought against Mr. Pangia in the Ontario Court of
Justice. That petition, and a related order, were dismissed. Mr. Pangia
anticipates spending approximately one-third of his professional time on the
business of the Company. Mr. Pangia appeared before the Ontario Securities
Commission on December 5, 2001 to set a date for a pre-hearing in a matter in
which it has been alleged by the Ontario Securities Commission that during the
period from March 1995 to February 1996 Mr. Pangia traded certain securities in
Canada without being registered to do so and also engaged in a distribution of
securities without filing a preliminary prospectus or prospectus. A pre-hearing
date has been set for April 30, 2002. In addition, Mr. Pangia will appear before
the Ontario Securities Commission on May 6, 2002 to set a hearing date.

THOMAS FRANZONE

        Mr. Franzone is a director and the secretary and principal accounting
officer of our Company. He has been the President of Enviro Industrial
Technologies, Inc., a mineral processing company with two employees, since its
formation in April 2000. From 1998 until he joined Enviro Industrial
Technologies, Inc., he was the President and sole employee of Franzone
Consulting Corp. located in New York City, a business and accounting consultant
company. From 1996 to 1999 Mr. Franzone held the position of controller at
Direct Approach Marketing, a direct marketing company with twenty-two employees.
He came to Direct Approach Marketing after spending a year at Patient Education
Media Time Life Medical, a company that employed seventy people and produced
medical information videos, where he held the position of Accounting Manager.
From November 1989 to 1995 he worked as Controller for Empire Diamond Corp. a
company with ten employees that bought and sold estate jewelry. Mr. Franzone
anticipates spending approximately one-third of his professional time on the
business of the Company.


                                       24
<PAGE>

PETER FERDERBER

        Mr. Ferderber is not an employee of ours but has been included here
because we will rely heavily on his services and expertise. He is a consultant
to the Company. He has been involved in mining exploration for over forty years.
He has been the President of Prospecting Geophysics Ltd., a mining geophysics
company located in Quebec, Canada, since 1955 and was awarded the "Prospector of
the Year," the Prospectors and Developers Association award for Canada and the
Province of Quebec in 1979.

STANLEY G. HAWKINS

        Mr. Hawkins is not an employee of ours but has been included here
because we will rely heavily on his services and expertise. He is an advisor to
the Company in the area of mineral exploration. Since 1995, he has been the
President of Tandem Resources Ltd., a Canadian Company listed on the Montreal
Stock Exchange (TDM-ME), involved in managing mining explorations. Mr. Hawkins
holds a degree in Engineering: Mining from the University of Toronto.


            Conflicts of Interest

        Our management has other financial and business interests to which a
significant amount of time is devoted which may pose conflicts of interest with
regard to allocation of their time and efforts. Teodosio Pangia, our president,
director and CEO is also the sole principal of TVP Capital Corp., a Delaware
corporation and holder of 20.44% of our common stock and beneficially owns
and/or controls, either directly or indirectly, six companies, Altea
Investments, Ltd., Gata Investments, Ltd., Baychester Investments, Ltd., Bekeman
Investments, Ltd., Aester Investment Holdings Limited and S D Investments, Ltd.,
which in the aggregate hold 4,950,000 shares or 29.12% of our shares of common
stock. There can be no assurance that management will resolve all conflicts of
interest in favor of Diamond Discoveries. Failure of management to conduct
Diamond Discoveries' business in its best interest may result in liability of
the management to Diamond Discoveries.

            Section 16(a) Beneficial Ownership Reporting Compliance

            Section 16(a) of the Exchange Act requires the Company's director's
and executive officers, and persons who own more than 10% of the Company's
outstanding common stock, to file with the SEC, initial reports of beneficial
ownership and reports of changes in beneficial ownership of the Company's common
stock and other equity securities of the Company. To the Company's knowledge,
all required reports have been filed for the fiscal year ended December 31,
2001, except that Teodosio V. Pangia is late in filing a report for the
acquisition of 4,950,000 shares by various entities that are beneficially owned
and/or controlled (directly or indirectly) by Mr. Pangia (See Security Ownership
of Certain Beneficial Owners and Management).

                             EXECUTIVE COMPENSATION

        We have not entered into employment agreements with any of our officers
or directors.

        Mr. Pangia and Mr. Franzone, our executive officers, have not yet
received any annual salary compensation for their services. However, the
executive officers will likely receive an annual salary or other compensation in
the future.

        We have issued 3,475,000 shares of common stock, at $.001 per share, to
TVP Capital Corp., of which Mr. Pangia is the sole shareholder. We have also
issued 275,000 shares of common stock, at $.001 per share, to Mr. Franzone.
These shares were issued as founders' shares at par value, and so have not been
recorded as compensation.


                                       25
<PAGE>

               SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                                   MANAGEMENT

        The following table sets forth the name and address of each officer and
director of the Company and each person who owns beneficially more than five
percent of the Common Stock of the Company, and the number of shares owned by
each such person and by all officers and directors as a group:

<TABLE>
<CAPTION>
           NAME AND ADDRESS OF                         AMOUNT AND NATURE OF                APPROXIMATE % OF CLASS(2)
           BENEFICIAL OWNER(1)                              OWNERSHIP
        <S>                                            <C>                                 <C>
        Teodosio V. Pangia                                   8,425,000(3)                             49.56%
        President, CEO and Director

        Thomas Franzone                                        275,000                                  1.6%
        Secretary

        Directors and Officers as a Group                    8,700,000                                51.18%

        TVP Capital Corp.(4)                                 3,475,000                                20.44%

        Stanley G. Hawkins                                   1,000,000(5)                              5.88%
        c/o Tandem Resources, Ltd.
        111 Richmond Street West
        Suite 402
        Toronto, Ontario, Canada
        M5H 2G4

        Peter Ferderber                                      1,000,000(5)                              5.88%
        c/o Prospecting Geophysics, Ltd.
        114 Rue Villeneuve
        Val-D'or, Quebec, Canada
        J9P-3L7

        Louis Lilling                                        1,725,000(6)                             10.15%
        142 Wycoff Way West
        East Brunswick, NJ 08818

        Toscana Group(7)                                     1,000,000                                 5.88%
        76 Cliff Road
        Belle Terre, NY 11777

        Gaye Knowles                                         1,200,000(8)                              7.06%
        Management International Building
        East Bay Street
        P.O.N.-8188 Nassau, The Bahamas
</TABLE>

(1)     Unless otherwise indicated, the beneficial owner's address is the same
        as the Company's principal office.

(2)     Percentages calculated on the basis of the amount of outstanding shares
        plus, for each person, any shares that person has the right to acquire
        within 60 days pursuant to options or other rights.

(3)     Includes an aggregate of 4,950,000 shares held Altea Investments, Ltd.,
        Gata Investments, Ltd., Bekeman Investments, Ltd., SD Investments, Ltd.,
        Baychester Investments Ltd., and Aester Investments Holdings Limited,
        companies beneficially owned and/or controlled (directly or indirectly)
        by Mr. Pangia, and 3,475,000 shares held by TVP Capital Corp. See
        footnote (4) below.

(4)     Teodosio V. Pangia is the sole officer, director and shareholder of TVP
        Capital Corp.

(5)     Shares have been beneficially owned as of September 12, 2000.

(6)     Shares have been beneficially owned as of May 20, 2000.

(7)     William Hayde, the President of Toscana Group is an affiliate of a
        member firm of the National Association of Securities Dealers, Inc.
        These shares have been beneficially owned as of March 19, 2001.

(8)     Includes shares owned by Lynx Enterprises, Inc., Rival Enterprises,
        Inc., and Enviro Technical Products Ltd., companies beneficially owned
        and/or controlled (directly or indirectly) by Mr. Knowles.


                                       26
<PAGE>

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        Teodosio Pangia, our president, director and CEO, is the sole principal
of TVP Capital Corp, a Delaware corporation which owns 3,475,000 shares or
20.44% of our shares of common stock and beneficially owns and/or controls,
either directly or indirectly, six companies, Altea Investments, Ltd., Gata
Investments, Ltd., Baychester Investments, Ltd., Bekeman Investments, Ltd.,
Aester Investments Holdings Limited and S D Investments, Ltd., which in the
aggregate hold 4,950,000 shares or 29.12% of our shares of common stock.

        We have entered into an Acquisition Agreement dated September 12, 2000
with Mr. Ferderber, Mr. Hawkins and Tandem Resources Ltd. The Acquisition
Agreement provides for us to purchase certain mineral exploration permits from
Messrs. Ferderber and Hawkins. Such permits cover 469.05 square kilometers in
the Torngat fields in northwest Quebec, Canada, on the eastern shore of Ungava
Bay. As consideration for the acquisition of these permits, we have issued
1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins
and have paid $35,000 Canadian to Mr. Hawkins and $25,000 Canadian to Mr.
Ferderber.

        In addition, the Acquisition Agreement further provides for an option to
Tandem Resources Ltd., to purchase 40% of the properties covered by the permits
conditioned on (i) the Company expending $5,000,000 Canadian on exploration of
the properties; (ii) Tandem paying us $2,000,000 Canadian and (iii) Tandem
entering into a joint venture agreement with us to operate the properties within
60 days of our demonstrating expenditure of $5,000,000 Canadian on exploration
of the properties. In addition, we will have twenty-one (21) days from the date
we notify Tandem that we have expended $5,000,000 Canadian on exploration of the
properties, to negotiate a financing agreement with Tandem to provide Tandem
with the $2,000,000 Canadian required to exercise the option. Should no
agreement be reached in the twenty-one (21) day period, our right to provide
this financing shall expire. Also, upon the closing of the acquisition, we
assigned to Messrs. Ferderber and Hawkins a one (1%) percent interest in the Net
Smelter Returns of the properties, half of which is payable over the first
$50,000,000 Canadian in revenues from the properties. This interest in the Net
Smelter Returns terminates once Ferderber and Hawkins have received, in the
aggregate, $10,000,000 Canadian.

        In connection with the Acquisition Agreement, Mr. Ferderber has executed
an agreement with us as of June 20, 2000 which transfers mineral rights over all
of the properties to us.

        We have entered into a Prospecting and Survey Agreement with Prospecting
Geophysics Ltd. dated November 20, 2000, whereby Prospecting Geophysics Ltd.
will act as the project manager for the Company's mineral exploration
operations. Peter Ferderber is the President of Prospecting Geophysics Ltd.
Under the agreement, we are to pay for Mr. Ferderber's services at a rate of
$500 per day, on days that he personally attends the properties, in addition to
reimbursing all expenses incurred by Prospecting Geophysics on behalf of the
Company. Mr. Ferderber anticipates attending the properties approximately five
to seven days every month. Prospecting Geophysics is required under the
agreement to conduct prospecting and surveying activities on our behalf. The
agreement has a term of eighteen (18) months with automatic renewal unless
either party gives 30 days' notice of its intent to terminate. During the year
ended December 31, 2001 and the periods from April 24, 2000 (date of inception)
to December 31, 2000 and 2001, the Company incurred exploration costs by
Prospecting Geophysics Ltd. of $828,229, $598,532 and $1,426,761, respectively.
In addition, the Company owed Prospecting Geophysics Ltd. $758,451 at December
31, 2001.



        We believe that the terms of the above transactions are on terms at
least as favorable to us as could have been obtained from arms-length
negotiations with unrelated third parties.


                                       27
<PAGE>

                        EXHIBITS AND REPORTS ON FORM 8-K

        There were no Current Reports on Form 8-K filed by the Registrant during
the fourth quarter of the calendar year ended December 31, 2002.

<TABLE>
<CAPTION>
        EXHIBIT DESCRIPTION OF DOCUMENT
        NUMBER
        <S>     <C>
        3.1     Articles of Incorporation as filed on April 24, 2000(1)

        3.2     Bylaws of Diamond Discoveries International Corp.(1)

        10.1    Acquisition Agreement dated September 12, 2000 between the
                Company and Peter Ferderber, Stanley Hawkins and Tandem
                Resources Ltd.(2)

        10.2    Prospecting and Survey Agreement between Prospecting Geophysics
                Ltd and the Company dated August 14, 2000.(1)

        10.3    Transfer of Mining Rights between Peter Ferderber and the
                Company dated June 20, 2000.(1)

        10.4    Option Agreement between Diamond Discoveries International Corp.
                and Tandem Resources Ltd. dated September 12, 2000.(2)

        10.5    Revised Prospecting and Survey Agreement between Prospecting
                Geophysics Ltd. and the Company dated November 20, 2000.(2)


        99.1    Title opinion of Lavery, de Billy on the Mining Exploration
                Permits.(1)

</TABLE>

        (1)     Previously filed on September 21, 2000 as part of the Company's
                Registration Statement on Form 10-SB, File No. 0-31585.

        (2)     Previously filed on December 1, 2000 as part of the Company's
                Amended Registration Statement on Form 10-SB, File No. 0-31585.


                                       28
<PAGE>

                                   SIGNATURES

        In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Diamond Discoveries International Corp.


By:       /s/ Teodosio V. Pangia
        -----------------------------------------
        Teodosio V. Pangia, CEO

Dated: April 1, 2002


        In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.

By:      /s/ Teodosio V. Pangia
        -----------------------------------------
        Teodosio V. Pangia, CEO and Chairman
        and Director

Dated: April 1, 2002


By:      /s/ Thomas Franzone
        -----------------------------------------
        Thomas Franzone, Secretary, Treasurer and
        Principal Accounting Officer

Dated: April 1, 2002


                                       29
<PAGE>

                                   APPENDIX A

                                     [MAP]