U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 FOR THE  QUARTERLY  PERIOD ENDED MARCH 31, 2003
                                                    --------------

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _______


Commission file number 0-12993
                       -------

                                TELS CORPORATION
                                ----------------
          (Exact name of small business issuer as specified in charter)

              UTAH                                             87-0373840
--------------------------------                               ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1750 Yankee Doodle Road, Suite 202, Eagan, MN                    55121
---------------------------------------------                    -----
(Address of principal executive offices)                       (Zip Code)

                                 (651) 681-8408
                                 --------------
                           (Issuer's telephone number)

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

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

Applicable  only to  issuers  involved  in  bankruptcy  proceedings  during  the
preceding five years

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

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

As of May 13,  2003,  the issuer  had  outstanding  22,692,952  shares of common
stock, par value $0.02.

Transitional Small Business Disclosure Format
(Check one):

Yes        No   X
    -----     -----

<PAGE>

                           FORWARD LOOKING STATEMENTS

         This  report  contains  forward-looking  statements  as  defined in the
Private Securities Litigation Reform Act of 1995. These statements reflect TELS'
views with respect to future  events based upon  information  available to it at
this time. These forward-looking statements are subject to certain uncertainties
and other  factors that could cause  actual  results to differ  materially  from
these statements. Forward-looking statements are typically identified by the use
of  the  words  "believe,"  "may,"  "will,"  "should,"  "expect,"  "anticipate,"
"estimate,"  "project,"  "propose,"  "plan,"  "intend,"  and  similar  words and
expressions. Examples of forward-looking statements are statements that describe
the proposed operation and growth of TELS,  statements with regard to the nature
and extent of  competition  TELS may face in the  future,  and  statements  with
respect  to  future  strategic  plans,  goals  or  objectives.   Forward-looking
statements are contained in this report under "Item 2.  Management's  Discussion
and Analysis or Plan of Operation." The forward-looking  statements are based on
present  circumstances and on TELS' predictions  respecting events that have not
occurred,  that may not occur, or that may occur with different consequences and
timing  than those now  assumed or  anticipated.  Actual  events or results  may
differ  materially from those discussed in the  forward-looking  statements as a
result of various factors,  including the risk factors discussed in TELS' annual
report on Form  10-KSB  for the fiscal  year ended  September  30,  2002.  These
cautionary   statements   are   intended  to  be   applicable   to  all  related
forward-looking   statements   wherever   they  appear  in  this   report.   Any
forward-looking  statements  are made  only as of the  date of this  information
statement and TELS assumes no obligation to update forward-looking statements to
reflect subsequent events or circumstances.

         Part I--Financial Information

Item 1. Financial Statements

         TELS  Corporation  (the "Company" or the "Issuer"),  files herewith its
consolidated  condensed  balance  sheets as of March 31,  2003  (unaudited)  and
September  30, 2002  (audited),  the related  unaudited  consolidated  condensed
statements of  operations  for the three and six months ended March 31, 2003 and
2002, and the related unaudited  consolidated condensed statements of cash flows
for the six months ended March 31, 2003 and 2002. The accompanying  consolidated
condensed  financial  statements do not include all information and notes to the
consolidated   condensed   financial   statements   necessary   for  a  complete
presentation of the financial position,  results of operations and cash flows in
conformity with U.S. generally accepted accounting principles. In the opinion of
the Company's  management,  the accompanying  consolidated  condensed  financial
statements   reflect  all  adjustments,   all  of  which  are  normal  recurring
adjustments,  necessary to fairly present the financial condition of the Company
for  the  interim  periods  presented.   The  consolidated  condensed  financial
statements  included in this report on Form 10-QSB should be read in conjunction
with the  Company's  audited  consolidated  financial  statements  and the notes
thereto  included  in its  annual  report  on Form  10-KSB  for the  year  ended
September 30, 2002.  Operating  results for the quarter ended March 31, 2003 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending September 30, 2003.


                                       2
<PAGE>
                       TELS CORPORATION AND SUBSIDIARY
                     (STRATEGIC FUTURES AND OPTIONS, INC.)
                     Consolidated Condensed Balance Sheets


                                                      March 31,
                                                        2003       September 30,
                                                     (Unaudited)       2002
                                                     -----------   -------------
                      ASSETS
Current assets
    Cash and cash equivalents                        $    21,293    $    10,548
    Commissions receivable                                59,976         68,669
    Receivable from employees                             29,217         57,324
    Related party receivable                                   -         31,776
    Prepaid expenses and other
        current assets                                     6,412              -
                                                     -----------    ------------
      Total current assets                               116,898        168,317

Computer equipment, net of accumulated
   depreciation                                              378            473
                                                     -----------    ------------

                                                     $   117,276    $   168,790
                                                     ===========    ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
    Accounts payable                                 $    30,448    $    58,356
    Accrued liabilities                                   59,688         76,954
    Related party payable                                 16,977         10,380
                                                     -----------    ------------
      Total current liabilities                          107,113        145,690

Shareholders' equity
    Series A convertible preferred stock,
      $1.00 par value; authorized 1,000,000
      shares, no shares issued and outstanding
      (aggregate liquidation preference of $0)                 -              -
    Common stock, $.02 par value; authorized
      50,000,000 shares, issued and outstanding
      22,692,952 shares                                  453,859        453,859
    Accumulated deficit                                 (443,696)      (430,759)
                                                     -----------    ------------
      Total shareholders' equity                          10,163         23,100
                                                     -----------    ------------

                                                     $   117,276    $   168,790
                                                     ===========    ============

   See accompanying notes to the consolidated condensed financial statements.


                                       3
<PAGE>

                         TELS CORPORATION AND SUBSIDIARY
                      (STRATEGIC FUTURES AND OPTIONS, INC.)
           (Unaudited) Consolidated Condensed Statements of Operations
<TABLE>
<CAPTION>
                                                         Three Months Ended                 Six Months Ended
                                                             March 31,                          March 31,
                                                     ---------------------------    -------------------------------
                                                           2003         2002            2003               2002
                                                     ---------------------------    -------------------------------

<S>                                                  <C>            <C>             <C>                    <C>
Commissions earned                                   $    260,706   $     56,421    $    453,011     $       80,802

Operating expenses
    Commissions and fees                                  133,537         30,029         226,772             42,990
    General and adminstrative expenses                    103,651         33,300         180,204             42,839
    Related party management fee expense                   27,737         12,000          58,877             24,000
    Depreciation expense                                       48             79              95                158
                                                     ---------------------------    -------------------------------
                                                          264,973         75,408         465,948            109,987
                                                     ---------------------------    -------------------------------

Loss before income taxes                                   (4,267)       (18,987)        (12,937)           (29,185)

Provision for income taxes                                      -              -               -                  -
                                                     ---------------------------    -------------------------------

         Net loss                                    $     (4,267)  $    (18,987)   $    (12,937)    $      (29,185)
                                                     ===========================    ===============================


Loss per share - basic and diluted                   $          -   $          -    $          -     $            -
                                                     ===========================    ===============================

Weighted average shares - basic and diluted            22,693,000     18,500,000      22,693,000         18,500,000
                                                     ===========================    ===============================

</TABLE>


   See accompanying notes to the consolidated condensed financial statements.


                                       4
<PAGE>

                         TELS CORPORATION AND SUBSIDIARY
                      (STRATEGIC FUTURES AND OPTIONS, INC.)
           (Unaudited) Consolidated Condensed Statement of Cash Flows
<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                             March 31,
                                                                 -------------------------------
                                                                        2003           2002
                                                                 -------------------------------
<S>                                                                 <C>             <C>
Operating activities
    Net income (loss)                                               $    (12,937)   $    (29,185)
    Adjustments to reconcile net income to net cash
       provided by operating activities:
       Depreciation                                                           95             158
       Changes in operating assets and liabilities:
         Commissions receivable                                            8,693          12,044
         Receivable from employees                                        28,107         (12,358)
         Related party receivable                                         31,776               -
         Prepaid expenses                                                 (6,412)              -
         Accounts payable                                                (27,908)         13,122
         Accrued liabilities                                             (17,266)           (165)
         Related party payable                                             6,597          16,480
                                                                    ----------------------------

            Net cash provided by operating activities                     10,745              96
                                                                    ----------------------------

Investing activities                                                           -               -
                                                                    ----------------------------

Financing activities                                                           -               -
                                                                    ----------------------------

Net increase in cash                                                      10,745              96

Cash - beginning of period                                                10,548             248
                                                                    ----------------------------

Cash - end of period                                                $     21,293    $        344
                                                                    ============================


Supplemental disclosure of cash flow information
    Interest paid                                                   $          -    $          -
                                                                    ============================

    Income taxes paid                                               $          -    $          -
                                                                    ============================

</TABLE>

   See accompanying notes to the consolidated condensed financial statements.


                                       5
<PAGE>



                                                 TELS CORPORATION AND SUBSIDIARY
                                           (STRATEGIC FUTURES AND OPTIONS, INC.)

                (Unaudited) Notes to Consolidated Condensed Financial Statements


                                                                       Continued
--------------------------------------------------------------------------------


1.       Formation and Operations of the Company

TELS Corporation ("TELS") - TELS was incorporated under the laws of the State of
Utah in February 1981, to design,  manufacture and sell  telecommunications  and
call accounting products to hotels,  motels and small businesses  throughout the
United  States.  As of June 30,  2002,  TELS  discontinued  all of its  existing
operations.  Effective July 27, 2002, TELS transferred its operations to certain
shareholders of TELS in exchange for their  assumption of TELS' net liabilities.
As a result of TELS'  disposition of its operating  activities,  TELS ceased its
revenue generating activities and became a development stage company.

The Company was a development  stage company until  September 12, 2002,  when it
acquired 100% of the outstanding  common stock of Strategic Futures and Options,
Inc.  ("Strategic").  The transaction was accounted for as a reverse acquisition
using the purchase  method of  accounting,  therefore,  the  historical  results
presented in the consolidated  financial statements are those of Strategic,  the
accounting acquirer,  through September 12, 2002, after which historical results
represent the combined entity.

Strategic was organized  under the laws of the State of Minnesota on January 22,
2001.  Strategic's  primary business  operation  includes  introducing  customer
securities and commodities transactions to E. D. & F. Man Financial, Inc.

2.       Basis of Presentation

The Company's accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with accounting  principles  generally accepted
in the United  States of  America  for  interim  financial  information  and the
instructions  to Form 10-QSB and Item 310 of Regulation SB of the Securities and
Exchange  Commission  (the "SEC").  Accordingly,  these  consolidated  condensed
financial  statements  do  not  include  all  of  the  disclosures  required  by
accounting principles generally accepted in the United States of America. In the
Company's  opinion,   all  adjustments   (consisting  of  normal  and  recurring
adjustments)  considered  necessary for a fair  presentation have been included.
Operating  results  for the three and six months  ended  March 31,  2003 are not
necessarily  indicative  of the results  that may be expected for the year ended
September 30, 2003. The accompanying consolidated condensed financial statements
and the notes thereto should be read in conjunction  with the Company's  audited
consolidated  financial  statements  as of and for the year ended  September 30,
2002 contained in the Company's Form 10-KSB.

3.       Stock-Based Compensation

The Company  accounts for  stock-based  compensation  under the  recognition and
measurement  principles  of APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  and related  Interpretations.  No stock-based employee  compensation
cost is reflected in net income  (loss),  as all options  vested had an exercise
price equal to the market  value of the  underlying  common stock on the date of
grant or the date of  repricing.  No options  were  issued or vested  during the
quarters ended March 31, 2003 and 2002,  therefore,  there would be no effect on
net income and  earnings  per share if the  company  had  applied the fair value
recognition  provisions of FASB Statement No. 123,  Accounting  for  Stock-Based
Compensation, to stock-based employee compensation.


                                       6
<PAGE>

4.       Earnings Per Common Share

The  computation  of basic  earnings  per common  share is based on the weighted
average  number of shares  outstanding  during  each year.  The  computation  of
diluted  earnings per common share is based on the  weighted  average  number of
shares  outstanding  during each year,  plus the common stock  equivalents  that
would arise from the exercise of stock options  outstanding,  using the treasury
stock  method and the average  market  price per share  during the year.  Common
stock equivalents are not included in the calculation of diluted loss per common
share as their effect would be anti-dilutive.

5.       Related Party Transactions

A company  related  through common  ownership  provides  certain  administrative
services to the Company under the terms of a management  agreement dated July 1,
2002 and subsequently amended on September 15, 2002 and March 3, 2003. There was
no written  agreement between the companies for the period ended March 31, 2002.
The total  management  fee expense was $27,737 and $12,000 for the three  months
ended March 31, 2003 and 2002,  respectively.  Total  management fee expense was
$58,877  and  $24,000  for the six months  ended  March 31,  2003 and 2002.  The
related party payable from the  management fee was $10,380 at September 30, 2002
and $6,977 at March 31, 2003.

On January 27, 2003,  Strategic entered into an agreement with Dennis Postma and
Keith Rowland in consideration for finders' and consulting  services provided to
Strategic by such persons in connection with the acquisition of Strategic by the
Company. Under the agreement, in lieu of the registration rights which Strategic
had originally agreed to grant such persons,  Strategic agreed to pay Mr. Postma
a total of $14,000 payable in seven monthly installments of $2,000 each, and Mr.
Rowland agreed to release and relinquish any right to receive compensation.  The
Company has recognized the expense and  corresponding  liability related to this
agreement  as of  December  31,  2002,  since prior to that date the Company had
agreed to pay an undetermined amount and, subsequently, settled with the parties
involved  prior to issuance  of the  Company's  quarterly  report for the period
ended  December 31, 2002.  The related party payable from the management fee was
$10,000 at March 31, 2003.

6.       Commitments and Contingencies

The Company compensates its traders,  including Ronald Wolfbauer,  President and
CEO  of  the  Company,  on  a  commission  basis  with  commissions  being  paid
immediately  following the end of each calendar  month.  Losses  incurred by the
Company as a result of errors in connection with the handling of customer orders
or accounts are charged to the broker responsible for the account and are offset
against his or her  commission  income at the end of the month.  It has been the
business  practice of the Company to allow a broker whose error account  charges
exceed his  commission  income during a particular  calendar month to offset the
shortfall  against future  commission  income.  The Company was recently advised
that this business  practice could, in the case of Ronald  Wolfbauer,  President
and CEO, be  construed  to  constitute  a personal  loan from the Company to Mr.
Wolfbauer in violation of Section 402 of the  Sarbanes-Oxley  Act of 2002.  As a
result,  on  January  14,  2003,  Mr.  Wolfbauer  paid the  Company  the  entire
outstanding  balance of his error account and agreed that in the event his error
account for any future month should  exceed his income for that month,  he would
immediately  pay the difference to the Company.  The balance of Mr.  Wolfbauer's
error  account  was  $18,958  at  September  30,  2002 and  there is no  balance
outstanding at March 31, 2003.

7.       Subsequent Event

Ronald G.  Wolfbauer,  Jr. has served as  President  and CEO of TELS without any
compensation  except  the  commission  income  he  receives  from  Strategic  in
connection  with his  trading  activities.  In April  2003,  as a result  of the
increasing amount of time required to perform his duties, the Company's Board of
Directors  authorized  the payment to Mr.  Wolfbauer of an annual  salary in the
amount of $66,000,  payable in equal monthly  installments of $5,500  commencing
with the month of April 2003.



                                       7
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation

Except for historical  information  contained herein,  the following  discussion
contains forward-looking  statements that involve risks and uncertainties.  Such
forward-looking statements include, but are not limited to, statements regarding
future events and our plans and  expectations.  Our actual  results could differ
materially from those discussed  herein.  Factors that could cause or contribute
to such differences  include,  but are not limited to, those discussed elsewhere
in this Form 10-QSB or incorporated  herein by reference.  See "Forward  Looking
Statements" above.

The  information  appearing  below  relates  to prior  periods.  The  results of
operations,   which  primarily  reflect  general  and  administrative   expenses
associated with continuing  administrationare not necessarily  indicative of the
results that may be expected for any  subsequent  periods.  No  inferences as to
future performance should be drawn.

Plan of Operation
-----------------

We are a registered  introducing  broker with the  Commodities  Futures  Trading
Commission (CFTC) and a member of the National Futures  Association.  We provide
services of introducing  customer  securities and  commodities  transactions  to
E.D.& F. Man  International,  Inc. on behalf of our clients  through the brokers
employed by our company. We currently do not generate any revenue through online
trading  although it is a goal of the company to commence  online trading in the
future.

Our revenues consist primarily of brokerage  commissions.  Brokerage commissions
are generated through customer trades. We have experienced growth in our revenue
since our inception in January 2002 due to (i) the  fluctuations and instability
in the equity  markets,  and (ii) the growth in number of our customer  accounts
and the resulting increase in our trading activities.


                                       8
<PAGE>

Results of Operations
----------------------

Three Months Ended March 31, 2003 vs. Three Months Ended March 31, 2002
-----------------------------------------------------------------------

The following table summarizes our operations for each of the periods  indicated
below.

                                         Three Months            Three Months
                                             Ended                   Ended
                                        March 31, 2003          March 31, 2002
                                        --------------          --------------

Revenues
  Commissions earned                    $      260,706          $       56,421

Operating expenses
  Brokers' commissions and fees                133,537                  30,029
  Employee compensation, taxes and
     benefits                                   37,544                  13,238
  Management fees                               27,737                  12,000
  Professional                                  41,536                       -
  Advertising and printing                         600                  13,583
  Depreciation                                      48                      79
  Other                                         23,971                   6,479
                                        --------------          --------------
        Total operating expenses               264,973                  75,408
                                        --------------          --------------

Loss before income taxes                        (4,267)                (18,987)

(Provision) benefit for income taxes                 -                       -
                                        --------------          --------------

Net loss                                $       (4,267)         $      (18,987)
                                        ==============          ==============


Revenue

Commission revenues increased to $260,706 for the second quarter or three months
ended March 31, 2003 from  $56,421 for the three  months  ended March 31,  2002.
This increase in revenue is primarily  attributable  to the growth in our client
accounts.  In the second quarter of 2003, we hired two  additional  brokers that
will be opening  client  accounts  in the next  quarter.  As we continue to hire
additional brokers and continue our marketing activities, we anticipate that our
client accounts will continue to increase.  However,  the commissions  earned is
also subject to market  volatility  since trading volume depends not only on the
number of client  accounts  but also on the amount of trading  activity in those
accounts  and  trading  activity  tends to be more  active  when the markets are
volatile.

Net loss

Net loss  decreased to $(4,267) for the three months ended March 31, 2003 from a
net loss of ($18,987)  for the three months ended March 31, 2002.  This decrease
was attributable to the increase in customer accounts and the resulting increase
in trading activity.

Operating expenses

Operating  expenses increased to $264,973 or 101.6% of net revenue for the three
months  ended March 31, 2003 from $75,408 or 133.7% of net revenue for the three
months ended March 31, 2002. The decrease as a percentage of sales is related to
the  activity  in and the  growth of the  number  of our  client  accounts.  The
increases in the various operating expense components are discussed below.

                                       9
<PAGE>


Brokers' Commissions

Brokers' commissions increased to $133,537 or 51.2% of net revenue for the three
months  ended March 31, 2003 from  $30,029 or 53.2% of net revenue for the three
months ended March 31, 2002. The decrease as a percentage of sales is the result
of variations in the types of contracts traded and the commissions applicable to
such contracts.

Employee compensation, taxes and benefits

Employee  compensation,  taxes and  benefits  increased to $37,544 for the three
months  ended March 31, 2003 from  $12,373 for the three  months ended March 31,
2002  because we added  personnel  in our  administrative  area.  We believe our
current  administrative  and support  staff is  sufficient to support our office
functions for approximately the next twelve months as we continue to add brokers
to our company.

Management Fees

Management  fees  increased to $27,737 for the three months ended March 31, 2003
from $12,000 for the three months  ended March 31,  2002.  Currently,  we occupy
part  of  a   facility   leased  by   International   Strategic   Assets,   Inc.
(International).  Strategic  was  formed  in  January  2002  as a  wholly  owned
subsidiary  of  International  Strategic  Assets,  Inc. and operated in the same
facility as a cost-savings  measure.  Strategic,  after the  distribution to its
shareholders and the subsequent acquisition by TELS, continues to operate in the
same facility.  As a result, a monthly  management fee is charged by and paid to
International to cover the shared administrative and occupancy expenses. For the
three  months  ended March 31,  2002,  Strategic  paid  International  a monthly
management fee of $4,000 per month.  Currently,  International charges Strategic
$6,977 per month for its share of these expenses under the terms of a management
agreement dated July 1, 2002 and subsequently  amended on September 15, 2002 and
March 3, 2003.  The September 15th  amendment  increased the monthly  payment to
$10,380 per month effective as of August 1, 2002, as a result of International's
hiring of a receptionist who provided  services for both  International  and SFO
and the March 3rd amendment  reduced the management fee to $6,977 as a result of
the  hiring of such  receptionist  as a  full-time  employee  of  Strategic  and
reductions in certain items of office overhead. The management agreement was not
the result of arms' length negotiations,  however, Strategic believes the amount
of the  management  fee is  approximately  equal to one-half of  International's
actual out-of-pocket costs for the facilities and services provided and that the
management fee is fair to Strategic.

Professional

Professional  fees of $41,536  were  incurred in the second  quarter of 2003 for
legal,  consulting  and audit  services  provided  by  various  individuals  and
accounting  firms compared to professional  fees of $0 for the second quarter of
2002. The increase is primarily attributable to legal, accounting and consulting
fees incurred in connection with the issuer's status as a publicly-held company,
the  preparation  of its  audited  financial  statements,  and the filing of its
periodic reports.

                                       10
<PAGE>


Six Months Ended March 31, 2003 vs. Six Months Ended March 31, 2002
-------------------------------------------------------------------

         The following table summarizes our operations for each of the periods
indicated below.

                                          Six Months              Six Months
                                            Ended                   Ended
                                        March 31, 2003          March 31, 2002
                                        --------------          --------------

Revenues
  Commissions earned                    $      453,011          $       80,802

Operating expenses
  Brokers' commissions and fees                226,772                  42,990
  Employee compensation, taxes and
     benefits                                   71,929                  19,405
  Management fees                               58,877                  24,000
  Professional                                  68,924                       -
  Advertising and printing                       1,209                  15,383
  Depreciation                                      95                     158
  Other                                         38,142                   8,051
                                        --------------          --------------
        Total operating expenses               465,948                 109,987
                                        --------------          --------------

Loss before income taxes                       (12,937)                (29,185)

(Provision) benefit for income taxes                 -                       -
                                        --------------          --------------

Net loss                                $      (12,937)         $      (29,185)
                                        ==============          ==============

Revenue

Commission  revenues  increased  to $453,011  for the six months ended March 31,
2003 from  $80,802 for the six months  ended March 31,  2002.  This  increase in
revenue is primarily  attributable to the growth in our client  accounts.  As we
continue to hire additional  brokers and continue our marketing  activities,  we
anticipate  that our client  accounts  will continue to increase.  However,  the
commissions  earned is also subject to market  volatility  since trading  volume
depends  not only on the  number of client  accounts  but also on the  amount of
trading  activity in those accounts and trading activity tends to be more active
when the markets are volatile.

Net loss

Net loss  decreased to $(12,937)  for the six months ended March 31, 2003 from a
net loss of ($29,185) for the six months ended March 31, 2002. This decrease was
attributable to the increase in customer accounts and the resulting  increase in
trading activity but is partially offset by the increase in professional fees.

Operating expenses

Operating  expenses  increased  to $465,948 or 102.9% of net revenue for the six
months  ended March 31, 2003 from  $109,987 or 136.1% of net revenue for the six
months ended March 31, 2002. The decrease as a percentage of sales is related to
the  activity  in and the  growth of the  number  of our  client  accounts.  The
increases in the various operating expense components are discussed below.

                                       11
<PAGE>

Brokers' Commissions

Brokers'  commissions  increased to $226,772 or 50.1% of net revenue for the six
months  ended  March 31,  2003 from  $42,990 or 53.2% of net revenue for the six
months ended March 31, 2002. The decrease as a percentage of sales is the result
of  variations  in the  types  of  contracts  traded  and the  commission  rates
applicable to such contracts.

Employee compensation, taxes and benefits

Employee  compensation,  taxes and  benefits  increased  to $71,929  for the six
months ended March 31, 2003 from $19,405 for the six months ended March 31, 2002
because we added  personnel in our  administrative  area. We believe our current
administrative  and support staff is sufficient to support our office  functions
for  approximately  the next twelve  months as we continue to add brokers to our
company.

Management Fees

Management  fees  increased  to $58,877 for the six months  ended March 31, 2003
from $24,000 for the six months ended March 31, 2002. Currently,  we occupy part
of a facility leased by International  Strategic Assets,  Inc.  (International).
Strategic  was  formed  in  January  2002  as  a  wholly  owned   subsidiary  of
International  Strategic  Assets,  Inc. and  operated in the same  facility as a
cost-savings measure. Strategic, after the distribution to its' shareholders and
the subsequent  acquisition by TELS,  continues to operate in the same facility.
As a result,  a monthly  management fee is charged by and paid to  International
Strategic  Assets,  Inc.  to  cover  the  shared  administrative  and  occupancy
expenses.  For the six months ended March 31, 2002, Strategic paid International
a monthly management fee of $4,000 per month.  Currently,  International charges
Strategic  $6,977 per month for its share of these expenses under the terms of a
management  agreement dated July 1, 2002 and  subsequently  amended on September
15, 2002 and March 3, 2003.  The  September 15 amendment  increased  the monthly
payment  to $10,380  per month  effective  as of August 1, 2002,  as a result of
International's  hiring  of  a  receptionist  who  provides  services  for  both
International  and SFO and the March 3 amendment  reduced the  management fee to
$6,977 as a result of the hiring of such receptionist as a full-time employee of
Strategic and  reductions in certain items of office  overhead.  The  management
agreement was not the result of arms' length  negotiations,  however,  Strategic
believes the amount of the management fee is approximately  equal to one-half of
International's  actual  out-of-pocket  costs for the  facilities  and  services
provided and that the management fee is fair to Strategic.

Professional

Professional  fees of $68,924  were  incurred in the six months  ended March 31,
2003 for legal,  consulting and audit services  provided by various  individuals
and accounting  firms as compared to $0 for the six months ended March 31, 2002.
The increase is primarily attributable to legal,  accounting and consulting fees
incurred in connection with the issuer's status as a publicly-held  company, the
preparation of its audited financial statements,  and the filing of its periodic
reports.

Liquidity and Capital Resources
-------------------------------

Cash and cash  equivalents at March 31, 2003 were $21,293 as compared to $10,548
at September 30, 2002.  Working capital at March 31, 2003 was $9,785 as compared
to $22,627 at September 30, 2002.

Net cash provided by operating  activities  was $10,745 for the six months ended
March 31, 2003 compared to net cash provided by operating  activities of $96 for
the six months  ended March 31,  2002.  The  increase  in cash flow  provided by
operating  activities  was  primarily  the  result  of  collecting   outstanding
receivables.

                                       12
<PAGE>

We believe and intend to fund any internal or external growth  initiatives  from
our  operating  activities.  However,  no  assurances  can be given that we will
realize  sufficient cash flow from operations to fund such growth. If not, or if
our plans change,  or our assumptions  change or prove to be inaccurate,  we may
require  additional  financing  and may seek to raise funds  through  subsequent
equity or debt financings or other sources.  If we need additional  funds,  they
may not be available in adequate  amounts or on acceptable  terms.  If funds are
needed but are not available, our business would be harmed.

We  presently  anticipate  that  we will  only  need  to  make  minimal  capital
expenditures   through  the  fiscal  year  ended   September  30,  2003.   These
expenditures  will  be  primarily  for  the  acquisition  of new  computers  and
accessories as we hire additional brokers or for general replacement.

Other
-----

On January 27, 2003,  Strategic entered into an agreement with Dennis Postma and
Keith Rowland in consideration for finders' and consulting  services provided to
Strategic by such persons in connection with the acquisition of Strategic by the
Company. Under the agreement, in lieu of the registration rights which Strategic
had originally agreed to grant such persons,  Strategic agreed to pay Mr. Postma
a total of $14,000 payable in seven monthly installments of $2,000 each, and Mr.
Rowland agreed to release and relinquish any right to receive compensation.  The
Company has recognized the expense and  corresponding  liability related to this
agreement as of March 31, 2003.

In April 2003, subsequent to the end of the second quarter of 2003, TELS entered
into an agreement  with an investor  relations  firm pursuant to which such firm
agreed to  provide  investor  relations  to TELS for a period of ninety  days in
exchange for the issuance of 40,000 restricted shares of TELS common stock.

Ronald G.  Wolfbauer,  Jr. has served as  President  and CEO of TELS without any
compensation  except  the  commission  income  he  receives  from  Strategic  in
connection  with his  trading  activities.  In April  2003,  as a result  of the
increasing amount of time required to perform his duties, the Company's Board of
Directors  authorized  the payment to Mr.  Wolfbauer of an annual  salary in the
amount of $66,000,  payable in equal monthly  installments of $5,500  commencing
with the month of April 2003.

Item 3. Controls and Procedures

The  Company's  President  and CEO,  who  acts as its  principal  executive  and
financial officer (the "Certifying Officer") is responsible for establishing and
maintaining  disclosure controls and procedures for the Company.  The Certifying
Officer has concluded  (based on his evaluation of these controls and procedures
as of a date  within 90 days of the filing of this  report)  that the design and
operation of the Company's  disclosure  controls and  procedures  (as defined in
Rule 13(a) - 14(c) under the Securities Exchange Act of 1934) are effective.  No
significant  changes were made in the  Company's  internal  controls or in other
factors that could significantly affect those controls subsequent to the date of
the  evaluation,  including any  corrective  actions with regard to  significant
deficiencies and material weaknesses.

         Part II--Other Information

Item 1. Legal Proceedings

The Issuer is not a party to any material pending legal  proceedings and, to the
best  of its  knowledge,  its  properties  are  not  the  subject  of  any  such
proceedings.

                                       13
<PAGE>

Item 2. Changes in Securities
         None

Item 3. Defaults Upon Senior Securities
         Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders
         None.

Item 5. Other Information
         None.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

The following documents are included as exhibits to this report:

Exhibit     SEC Ref.
No.         No.        Title of Document                                Location
--------    ------     -----------------                                --------

 10.1       10         Agreement  dated as of January 27, 2003            This
                       among TELS Corporation, Strategic Futures          Filing
                       and Options, Inc., Dennis D.Postma, and
                       Keith P. Rowland  pertaining to the payment
                       of finders' fees.

 10.2       10         Amendment to Management Agreement between          This
                       International Strategic Assets, Inc. and           Filing
                       Strategic Futures and Options, Inc.
                       Dated as of March 3, 2003

 99.1       99         Certification Pursuant to Section 906 of           This
                       the Sarbanes-Oxley Act of 2002                     Filing


         (b)      Reports on Form 8-K

No reports on Form 8-K were filed during the second  fiscal  quarter ended March
31, 2003.

Signatures

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

                                            TELS Corporation


Date:  May 14, 2003                         By  /s/ Ronald G. Wolfbauer
                                               -------------------------
                                               Ronald G. Wolfbauer, Jr.,
                                               President and CEO
                                               (Principal Executive and
                                               Financial Officer)


                                       14
<PAGE>
                                 CERTIFICATIONS

         I, Ronald G. Wolfbauer, Jr., certify that:

         1. I have  reviewed  this  quarterly  Report  on  Form  10-QSB  of TELS
Corporation;

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

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

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a) Designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report (the "Evaluation Date"); and

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

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

         (a) All significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         (b) Any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 14, 2003                         By  /s/ Ronald G. Wolfbauer
                                               -------------------------
                                               Ronald G. Wolfbauer, Jr.,
                                               President and CEO
                                               (Principal Executive and
                                               Financial Officer)



                                       15