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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

[x]      Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2003

[  ]      Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to ______________.

Commission file number 0-18808

Great Western Land and Recreation, Inc.




(Name of small business issuer as specified in its charter)


|                                                                      |  |                                             
|--------------------------------------------------------------------- |  | --------------------------------------------
|Nevada
(State or other jurisdiction
of incorporation or organization) |  | 13-3530765
(IRS Employer Identification No.)

5115 N. Scottsdale Road, Suite 101
Scottsdale, AZ 85250
(480) 949-6007
(Address and telephone number of principal executive offices)

Indicate by check mark whether the registrant: (1) has 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       [  ]

The number of shares of the registrants Common Stock outstanding at January
31, 2004 was 20,885,399.

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TABLE OF CONTENTS



|                             |                                                             |                                                |  |  |  |  |  | 
|---------------------------- | ----------------------------------------------------------- | ---------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1. Financial Statements                               
|                             |                                                             | CONSOLIDATED BALANCE SHEETS                   
|                             |                                                             | CONSOLIDATED STATEMENTS OF OPERATIONS         
|                             |                                                             | CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
|                             |                                                             | CONSOLIDATED STATEMENTS OF CASH FLOWS         
|                             |                                                             | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|                             | Item 2. Managements Discussion and Analysis               
|                             | Item 3. Controls and Procedures                            
|PART II: OTHER INFORMATION  
|                             | Item 1. Legal Proceedings                                  
|                             | Item 2. Changes in Securities and Use of Proceeds          
|                             | Item 3. Defaults Upon Senior Securities                    
|                             | Item 4. Submission of Matters to a Vote of Security Holders
|                             | Item 5. Other Information                                  
|                             | Item 6. Exhibits and Reports on Form 8-K                   
|SIGNATURES                  
|EXHIBIT 31.1                
|EXHIBIT 31.2                
|EXHIBIT 32.1                
|EXHIBIT 32.2                



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GREAT WESTERN LAND AND RECREATION, INC.

CONTENTS

|           |                                                             |  |      |    | 
|---------- | ----------------------------------------------------------- |  | ---- | -- | 
|           |                                                             |  | PAGE
|           |                                                             |  |     
|Part I     |                                                             |  |      |   
|           | Financial Information                                       |  |      |    | 
|           | Item 1. Financial Statements                                |  |      | 4  | 
|           | Item 2. Managements Discussion and Analysis                |  |      | 14 | 
|           | Item 3. Controls and Procedures                             |  |      | 19 | 
|Part II    |                                                             |  |      |   
|           | Other Information                                           |  |      |    | 
|           | Item 1. Legal Proceedings                                   |  |      | 20 | 
|           | Item 2. Changes in Securities and Use of Proceeds           |  |      | 20 | 
|           | Item 3. Defaults Upon Senior Securities                     |  |      | 20 | 
|           | Item 4. Submission of Matters to a Vote of Security Holders |  |      | 20 | 
|           | Item 5. Other Information                                   |  |      | 20 | 
|           | Item 6. Exhibits and Reports on Form 8-K                    |  |      | 20 | 
|Signatures |                                                             |  | 21   |   

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BUSINESS RISKS AND FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-QSB includes forward-looking statements.
Forward-looking statements are often characterized by the use of words such as
may, believes, plans, will, anticipates, estimates, expects, or
intends or by discussions of strategy, plans or intentions. All
forward-looking statements in this Form 10-QSB are made based on our current
expectations and estimates, which involve risks, uncertainties and other
factors that could cause results to differ materially from those expressed in
forward-looking statements. You are cautioned not to place undue reliance on
any such forward-looking statements. We have no obligation to publicly release
the result of any revisions that may be made to any forward-looking statements
to reflect anticipated or unanticipated events or circumstances occurring after
the date of such statements. Forward-looking statements involve a number of
risks and uncertainties including, but not limited to, general economic
conditions, competitive factors, our ability locate new projects and to finance
the acquisition and development of these projects, our exposure to changes in
interest rates, and the cost of compliance with government regulations.

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PART I FINANCIAL INFORMATION




Item 1.Financial Statements




GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED BALANCE SHEETS

|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |           |           |           | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | ------------ | --------- | ------------- | --------- | --------- | --------- | 
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           | December 31, |           | September 30,
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           | 2003         |           | 2003         
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |              
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           | (unaudited)  |           |               |           |          
|ASSETS                               |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     | Cash and cash equivalents                                                                                                                |                                                                                                                                                                                 | $                          | 250,052   |              |           | $             | 1,100,844 |          
|                                     | Notes receivable                                                                                                                         |                                                                                                                                                                                 |                            | 122,397   |              |           |               | 70,118    |          
|                                     | Land held for development and sale                                                                                                       |                                                                                                                                                                                 |                            | 9,442,043 |              |           |               | 9,321,515 |          
|                                     | Receivable from related entities                                                                                                         |                                                                                                                                                                                 |                            | 45,929    |              |           |               | 68,080    |          
|                                     | Property and equipment, net of accumulated
depreciation of $49,386 and $42,583 at December 31,
2003 and September 30, 2003, respectively |                                                                                                                                                                                 |                            | 231,944   |              |           |               | 201,727   |          
|                                     | Other                                                                                                                                    |                                                                                                                                                                                 |                            | 1,046,647 |              |           |               | 985,046   |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     |                                                                                                                                          | $                                                                                                                                                                               | 11,139,012                 |           |              | $         | 11,747,330    |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     | Liabilities                                                                                                                              |                                                                                                                                                                                 |                            |           |              |           |               |           |          
|                                     |                                                                                                                                          | Notes payable                                                                                                                                                                   |                            | $         | 4,039,312    |           |               | $         | 4,026,588 |          
|                                     |                                                                                                                                          | Subordinated debt                                                                                                                                                               |                            |           | 2,998,909    |           |               |           | 3,319,684 |          
|                                     |                                                                                                                                          | Payable to related entities                                                                                                                                                     |                            |           | 862,184      |           |               |           | 745,427   |          
|                                     |                                                                                                                                          | Accounts payable and other accrued liabilities                                                                                                                                  |                            |           | 560,717      |           |               |           | 620,586   |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 | Total liabilities          |           |              | 8,461,122 |               |           |           | 8,712,285 | 
|                                     | Minority interest                                                                                                                        |                                                                                                                                                                                 |                            | 46,843    |              |           |               | 46,843    |          
|                                     | Stockholders equity                                                                                                                     |                                                                                                                                                                                 |                            |           |              |           |               |           |          
|                                     |                                                                                                                                          | Preferred stock, $0.001 par value; 10,000,000 shares
authorized; 14,380 issued and outstanding;
liquidation value - $719,000                                                    |                            |           | 668,629      |           |               |           | 660,409   |          
|                                     |                                                                                                                                          | Common stock, $0.001 par value; 30,000,000 shares
authorized; 20,885,399 and 20,785,399 shares issued
and outstanding at December 31, 2003 and
September 30, 2003, respectively |                            |           | 20,885       |           |               |           | 20,785    |          
|                                     |                                                                                                                                          | Additional paid-in capital                                                                                                                                                      |                            |           | 2,601,978    |           |               |           | 2,595,298 |          
|                                     |                                                                                                                                          | Accumulated other comprehensive loss                                                                                                                                            |                            |           | (733         | )         |               |           | (733      | )        
|                                     |                                                                                                                                          | Accumulated deficit                                                                                                                                                             |                            |           | (659,712     | )         |               |           | (287,557  | )        
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 | Total stockholders equity |           |              | 2,631,047 |               |           |           | 2,988,202 | 
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          
|                                     |                                                                                                                                          | $                                                                                                                                                                               | 11,139,012                 |           |              | $         | 11,747,330    |          
|                                     |                                                                                                                                          |                                                                                                                                                                                 |                            |           |              |           |               |          

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

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GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

|                                                                                   |                                         |   |                                 |         |      |   |            |          |  
|---------------------------------------------------------------------------------- | --------------------------------------- | - | ------------------------------- | ------- | ---- | - | ---------- | -------- | -
|                                                                                   |                                         |   | Three months ended December 31,
|                                                                                   |                                         |   |                                
|                                                                                   |                                         |   | 2003                            |         | 2002
|                                                                                   |                                         |   |                                 |         |     
|Land and lot sales                                                                 |                                         | $ | 288,876                         |         |      | $ | 1,237,203  |         
|Cost of land and lot sales                                                         |                                         |   | 143,304                         |         |      |   | 490,840    |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|                                                                                   | Gross profit on sales                   |   |                                 | 145,572 |      |   |            | 746,363  |  
|Operating, selling, general and
administrative expense                             |                                         |   | 416,162                         |         |      |   | 569,399    |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|                                                                                   |                                         |   | (270,590                        | )       |      |   | 176,964    |         
|Other income (expense)                                                             |                                         |   |                                 |         |      |   |            |         
|                                                                                   | Interest expense                        |   |                                 | (97,432 | )    |   |            | (116,304 | )
|                                                                                   | Interest income                         |   |                                 | 2,099   |      |   |            | 12,724   |  
|                                                                                   | Gain on settlement of quepasa.com claim |   |                                 |        |      |   |            | 405,750  |  
|                                                                                   | Other income (expense)                  |   |                                 | (6,232  | )    |   |            | 98,738   |  
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|                                                                                   |                                         |   | (101,565                        | )       |      |   | 400,908    |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|Earnings (loss) before minority interest                                           |                                         |   | (372,155                        | )       |      |   | 577,872    |         
|Minority interest                                                                  |                                         |   |                                |         |      |   | (168       | )       
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|Net earnings (loss)                                                                |                                         |   | (372,155                        | )       |      |   | 577,704    |         
|Less: preferred stock dividends applicable to the period                           |                                         |   | (11,815                         | )       |      |   | (11,815    | )       
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|Net earnings (loss) available for common stock                                     |                                         | $ | (383,970                        | )       |      | $ | 565,889    |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|Net
earnings (loss) per common and common equivalent share
Basic and diluted       |                                         | $ | (0.02                           | )       |      | $ | 0.03       |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         
|Weighted
average common and common equivalent shares outstanding
Basic and diluted |                                         |   | 20,852,790                      |         |      |   | 20,785,399 |         
|                                                                                   |                                         |   |                                 |         |      |   |            |         

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

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GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
AND COMPREHENSIVE LOSS
(unaudited)

|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  |             |      |   |  |   |          |   |  |   |          |  
|----------------------------------------------------------------------------------------- |  | --------------- | ------ | ------------ |  | ---------- | ------- | ------- |  | ----------- | ---------- | ------- |  | ------- | ------ | ------------- |  | - | --------- | - |  | ----------- | ---- | - |  | - | -------- | - |  | - | -------- | -
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  | Accumulated |      |   |  |   |          |   |  |  
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  | Other       |      |   |  |   |          |   |  |  
|                                                                                          |  | Preferred Stock |        | Common Stock |  | Additional |         | compre- |  |             |            |         |  | Compre-
|                                                                                          |  |                 |        |              |  | paid-in    |         | hensive |  | Accumulated |            | hensive
|                                                                                          |  | Shares          |        | Amount       |  | Shares     |         | Amount  |  | capital     |            | loss    |  | deficit |        | income (loss)
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |              
|Balance, September 30, 2003                                                               |  |                 | 14,380 |              |  | $          | 660,409 |         |  |             | 20,785,399 |         |  | $       | 20,785 |               |  | $ | 2,595,298 |   |  | $           | (733 | ) |  | $ | (287,557 | ) |  | $ |         |  
|Amortization of discount on
preferred stock                                               |  |                 |       |              |  |            | 8,220   |         |  |             |           |         |  |         |       |               |  |   | (8,220    | ) |  |             |     |   |  |   |         |   |  |   |         |  
|Issuance of common stock in
exchange for minority interest and an option to
purchase land |  |                 |       |              |  |            |        |         |  |             | 100,000    |         |  |         | 100    |               |  |   | 14,900    |   |  |             |     |   |  |   |         |   |  |   |         |  
|Net loss                                                                                  |  |                 |       |              |  |            |        |         |  |             |           |         |  |         |       |               |  |   |          |   |  |             |     |   |  |   | (372,155 | ) |  |   | (372,155 | )
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  |             |      |   |  |   |          |   |  |   |          |  
|Comprehensive loss for the
three months ended
December 31, 2003                           |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  |             |      |   |  |   |          |   |  | $ | (372,155 | )
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  |             |      |   |  |   |          |   |  |   |          |  
|Balance, December 31, 2003                                                                |  |                 | 14,380 |              |  | $          | 668,629 |         |  |             | 20,885,399 |         |  | $       | 20,885 |               |  | $ | 2,601,978 |   |  | $           | (733 | ) |  | $ | (659,712 | ) |  |   |          |  
|                                                                                          |  |                 |        |              |  |            |         |         |  |             |            |         |  |         |        |               |  |   |           |   |  |             |      |   |  |   |          |   |  |   |          |  

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GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |          |          |         |          |  
|------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------------------- | --------------------------------------------------- | ------- | ------------------------------- | -------- | -------- | -------- | ------- | -------- | -
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         | Three months ended December 31,
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         | 2003                            |          | 2002    
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|Cash flows from operating activities                                |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    | Net earnings (loss)                                                                                                   |                                                               | $                                              | (372,155                                            | )       |                                 | $        | 577,704  |         
|                                                                    | Adjustments to reconcile net earnings (loss) to net cash provided
by (used in) operating activities:                  |                                                               |                                                |                                                     |         |                                 |          |          |         
|                                                                    |                                                                                                                       | Depreciation and amortization                                 |                                                |                                                     | 7,155   |                                 |          |          | 5,748    |        
|                                                                    |                                                                                                                       | Bad debt expense                                              |                                                |                                                     |        |                                 |          |          | 32,208   |        
|                                                                    |                                                                                                                       | Accrued interest expense included in debt                     |                                                |                                                     | 115,340 |                                 |          |          | 253,354  |        
|                                                                    |                                                                                                                       | Deferred income taxes                                         |                                                |                                                     |        |                                 |          |          | (12,937  | )      
|                                                                    |                                                                                                                       | Accretion of interest income                                  |                                                |                                                     |        |                                 |          |          | (85,587  | )      
|                                                                    |                                                                                                                       | Collection of notes receivable relating to prior years sales |                                                |                                                     | 795     |                                 |          |          | 372,524  |        
|                                                                    |                                                                                                                       | Uncollected notes receivable from current year sales          |                                                |                                                     | (53,074 | )                               |          |          | (56,513  | )      
|                                                                    |                                                                                                                       | Gain on settlement of quepasa.com claim                       |                                                |                                                     |        |                                 |          |          | (405,750 | )      
|                                                                    |                                                                                                                       | Minority interests in earnings of consolidated subsidiaries   |                                                |                                                     |        |                                 |          |          | 168      |        
|                                                                    |                                                                                                                       | Change in operating assets and liabilities:                   |                                                |                                                     |         |                                 |          |          |          |        
|                                                                    |                                                                                                                       |                                                               | Land held for development and sale             |                                                     |         | (120,528                        | )        |          |          | 160,574 |         
|                                                                    |                                                                                                                       |                                                               | Other assets                                   |                                                     |         | (46,952                         | )        |          |          | 141,201 |         
|                                                                    |                                                                                                                       |                                                               | Accounts payable and other accrued liabilities |                                                     |         | (59,869                         | )        |          |          | (41,791 | )       
|                                                                    |                                                                                                                       |                                                               | Deferred income                                |                                                     |         |                                |          |          |          | (51,037 | )       
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    |                                                                                                                       |                                                               |                                                | Net cash provided by (used in) operating activities |         |                                 | (529,288 | )        |          |         | 889,866  |  
|Cash flows from investing activities                                |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    | (Increase) decrease in receivable from related entities                                                               |                                                               |                                                | 22,151                                              |         |                                 |          | (7,836   | )       
|                                                                    | Purchase of property and equipment                                                                                    |                                                               |                                                | (37,021                                             | )       |                                 |          | (762     | )       
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    |                                                                                                                       |                                                               |                                                | Net cash used in investing activities               |         |                                 | (14,870  | )        |          |         | (8,598   | )
|Cash flows from financing activities                                |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    | Issuance of notes payable                                                                                             |                                                               |                                                | 103,863                                             |         |                                 |          | 95,482   |         
|                                                                    | Payments on notes payable                                                                                             |                                                               |                                                | (148,667                                            | )       |                                 |          | (667,784 | )       
|                                                                    | Increase (decrease) in payable to related entities                                                                    |                                                               |                                                | 116,757                                             |         |                                 |          | (22,162  | )       
|                                                                    | Decrease in subordinated debt                                                                                         |                                                               |                                                | (378,587                                            | )       |                                 |          | (133,253 | )       
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    |                                                                                                                       |                                                               |                                                | Net cash used in financing activities               |         |                                 | (306,634 | )        |          |         | (727,717 | )
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|Net increase (decrease) in cash and cash equivalents                |                                                                                                                       |                                                               | (850,792                                       | )                                                   |         |                                 | 153,551  |         
|Cash and cash equivalents at beginning of period                    |                                                                                                                       |                                                               | 1,100,844                                      |                                                     |         |                                 | 500,818  |         
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|Cash and cash equivalents at end of period                          |                                                                                                                       | $                                                             | 250,052                                        |                                                     |         | $                               | 654,369  |         
|                                                                    |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|Supplemental disclosure of cash flow information:                   |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|Cash paid during the period for interest, net of amount capitalized |                                                                                                                       | $                                                             | 10,599                                         |                                                     |         | $                               | 60,005   |         
|Noncash investing and financing activities                          |                                                                                                                       |                                                               |                                                |                                                     |         |                                 |          |         
|                                                                    | Accrued interest capitalized included in debt                                                                         |                                                               |                                                | 57,528                                              |         |                                 |          | 14,178   |         
|                                                                    | Common stock issued in exchange for 47.5% minority interest in Firebird
Financial, LLC and an option to purchase land |                                                               |                                                | 15,000                                              |         |                                 |          |         |         
|                                                                    | Offset of note payable for quepasa.com claim                                                                          |                                                               |                                                |                                                    |         |                                 |          | 405,750  |         

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

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GREAT WESTERN LAND AND RECREATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE A  BACKGROUND AND BASIS OF PRESENTATION

The accompanying consolidated financial statements as of December 31, 2003 and
September 30, 2003 and for the three months ended December 31, 2003 and 2002
include the accounts of Great Western Land and Recreation, Inc.
(formerly 1st
Realty Investments, Inc.) and its wholly- and majority-owned subsidiaries
(collectively, the Company). Investments in companies that represent 20% to
50% of the ownership interest are accounted for on the equity method.
Investments in companies that represent less than a 20% ownership interest are
accounted for on the cost basis. All material intercompany accounts and
transactions have been eliminated.

The Company is engaged principally in the acquisition, development and sale of
land located in Houston and College Station Texas, Phoenix and Glendale,
Arizona and certain country areas of New Mexico and Arizona. Transactions
include both retail and nonretail land sales, depending upon the progress of
the development and sub-division process.

On July 23, 2002, the Company entered into an Agreement and Plan of Merger (the
Merger Agreement or the Agreement) with Great Western Land and Recreation,
Inc., a Delaware corporation (Great Western Delaware). Under the Merger
Agreement, the Company agreed to undertake a series of transactions the result
of which would be the transfer of control of the Company to Amortibanc
Investments, LC, (Amortibanc), the stockholder of Great Western Delaware, and
the merger of Great Western Delaware into the Company (the Merger). The
Company would be the surviving entity. The transaction also involved the
election of new directors of the Company and the amendment of the Companys
Articles of Incorporation to change its name to Great Western Land and
Recreation, Inc. The Board of Directors of the Company unanimously approved the
Merger Agreement and the other transactions to be undertaken and the holders of
a majority of the outstanding stock of the Company approved the transactions in
writing on July 25, 2002. On July 23, 2002 the stockholder of Great Western
Delaware consented in writing to the Merger Agreement transactions. Under
applicable Nevada law, written consent by the holders of a majority of the
outstanding stock of the Company to the transactions outlined in the Agreement
was sufficient to approve the transactions, without a meeting or vote of all of
the stockholders. This transaction became effective on February 20, 2003.
Immediately following the merger, former 1st Realty stockholders owned
approximately 9% of the Company and Amortibanc owned approximately 91% of the
Company (94% assuming the conversion of the preferred stock into common stock).

The Company expects that the Merger will be treated as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended. If the Merger qualifies as a tax-free reorganization, no gain or
loss will be recognized for income tax purposes by either the Company or Great
Western Delaware as a result of the acquisition. There also should not be any
material tax effects to the existing stockholders of the Company as a result of
the transaction. However, neither the Company nor Great Western Delaware
requested a tax ruling from the Internal Revenue Service with respect to the
transaction. Accordingly, the Company can give no assurance that the
transaction will qualify as a tax-free reorganization. The Company has
accounted for its acquisition of Great Western Delaware as a reverse
acquisition, with Great Western Delaware the acquirer and the Company the
acquiree for reporting purposes. Prior to September 2000,
1st Realty was a
dormant non-operating company. Its operations up to the date of the Merger
were solely the result of the series of transactions it entered into with Great
Western Delaware. As a result, the assets and liabilities of both companies
have been combined at their historical cost. The accompanying financial
statements and notes are presented as if the Merger were consummated on October 1, 2002.

The accompanying unaudited financial information reflects all adjustments,
consisting only of normal recurring adjustments, that are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented. Such financial information should be read in conjunction
with the consolidated financial statements and related notes as of September
30, 2003 included in Form 10-KSB filed with the SEC on December 29, 2003.

The Company maintains its records and prepares its financial statements in
accordance with accounting principles generally accepted in the United States
of America for real estate operations. In preparing financial statements in
conformity with accounting principles generally accepted in the United States
of America, management is responsible for making estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.

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NOTE B  NET EARNINGS (LOSS) PER SHARE

Basic net earnings (loss) per share is computed by dividing net earnings (loss)
less preferred stock dividends applicable to the period by the weighted average
common shares outstanding during the period. The 20,785,399 common shares
issued and outstanding upon the completion of the Merger are assumed to be
outstanding for the three months ended December 31, 2002. Diluted net earnings
(loss) per share is the same as basic earnings (loss) per share because the
convertible preferred stock and the stock options are anti-dilutive and
therefore excluded from the computation.

NOTE C  INVESTMENT IN UNCONSOLIDATED COMPANY

On September 19, 1997, Laguna Investments L.L.C. (Laguna Investments), a
subsidiary of the Company, acquired a 25.52% ownership in Laguna at Arrowhead
Apartments L.L.C. (Laguna), which owns an apartment complex in Phoenix,
Arizona. On December 30, 2002, the Company sold a 7.1% interest in Laguna
Investments to Lafayette Financial Services (Lafayette) for $35,500 in
partial payment of a note payable to Lafayette. Lafayette is 50% owned by the
Chairman of the Companys Board of Directors. On September 29, 2003, the
Company sold an additional 6.37% interest in Laguna Investments to Lafayette
for $31,855, also in partial payment of the note payable to Lafayette. On
September 29, 2003, the Company also sold a 3.0% interest in Laguna Investments
to Torok Partners, LLC for $15,000 in exchange for Torok Partners minority
interest in one of the Companys projects. Torok Partners is controlled by the
Chairman of the Companys Board of Directors. As a result of these
transactions, at December 31, 2003 the Company owns 83.53% of Laguna
Investments, which represents a 21.32% interest in Laguna.

This investment in Laguna is accounted for using the equity method. Under the
equity method, the Companys investment balance approximates the Companys
original cost adjusted for its equity interest in the earnings and losses of
Laguna since the date of acquisition. At December 31, 2003 the Companys
investment balance in Laguna was $-0-. Under the terms of the Laguna at
Arrowhead Apartments L.L.C. operating agreement, Laguna Investments L.L.C. is
subject to additional capital calls in connection with its ownership interest
in Laguna. Laguna Investments L.L.C. was notified of a capital call for
$53,530, which was paid in fiscal 2003. Had Laguna Investments L.L.C. failed to
make the required payment, its ownership interest would have been reduced from
25.52% to 24.14%. As a result of this payment, unrecognized equity losses from
prior periods were recorded in fiscal 2003 to the extent of the capital call.
Unrecognized losses from Laguna as of December 31, 2003 total $213,322.

Summarized unaudited financial information for Laguna is as follows:

|                       |              |   |              |           | 
|---------------------- | ------------ | - | ------------ | --------- | 
|                       |              |   | December 31,
|                       |              |   | 2003        
|                       |              |   |             
|Current assets         |              | $ | 85,406       |          
|Noncurrent assets      |              |   | 8,287,583    |          
|                       |              |   |              |          
|                       | Total assets |   | $            | 8,372,989 | 
|                       |              |   |              |          
|Current liabilities    |              | $ | 142,689      |          
|Noncurrent liabilities |              |   | 9,215,397    |          
|Members capital       |              |   | (985,097     | )        
|                       |              |   |              |          
|                       |              | $ | 8,372,989    |          
|                       |              |   |              |          

|                                                 |  |                            |          |      |  |   |          |  
|------------------------------------------------ |  | -------------------------- | -------- | ---- |  | - | -------- | -
|                                                 |  | For the three months ended
|                                                 |  | December 31,              
|                                                 |  |                           
|                                                 |  | 2003                       |          | 2002
|                                                 |  |                            |          |     
|Revenues                                         |  | $                          | 362,997  |      |  | $ | 369,479  |  
|Net loss from continuing operations and net loss |  |                            | (121,208 | )    |  |   | (148,912 | )

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NOTE D  RELATED ENTITIES

Related entity receivables/payables are as follows:

|                                 |                                                             |   |              |         |               |   |         |         | 
|-------------------------------- | ----------------------------------------------------------- | - | ------------ | ------- | ------------- | - | ------- | ------- | 
|                                 |                                                             |   | December 31, |         | September 30,
|                                 |                                                             |   | 2003         |         | 2003         
|                                 |                                                             |   |              |         |              
|Receivable from related entities |                                                             |   |              |         |               |   |         |        
|                                 | Management Pool, LLC                                        |   | $            | 20,238  |               |   | $       | 43,244  | 
|                                 | Minority investor in Houston Warren Ranch Partners, LLC (1) |   |              | 17,000  |               |   |         | 16,625  | 
|                                 | Other                                                       |   |              | 8,691   |               |   |         | 8,211   | 
|                                 |                                                             |   |              |         |               |   |         |         | 
|                                 |                                                             | $ | 45,929       |         |               | $ | 68,080  |        
|                                 |                                                             |   |              |         |               |   |         |        
|Payable to related entities      |                                                             |   |              |         |               |   |         |        
|                                 | Minority investors in Glendale Condominiums, LLC (2)        |   | $            | 712,184 |               |   | $       | 710,885 | 
|                                 | Lafayette Financial Services (3)                            |   |              |        |               |   |         | 34,542  | 
|                                 | Minority investors in Villa Maria, LLC (4)                  |   |              | 150,000 |               |   |         |        | 
|                                 |                                                             |   |              |         |               |   |         |         | 
|                                 |                                                             | $ | 862,184      |         |               | $ | 745,427 |        
|                                 |                                                             |   |              |         |               |   |         |        



| | (1) |  | The Company has a 55% interest in Houston Warren Ranch Partners, LLC,
with Jessica Star Partners, LLC owning the remaining 45%. Jessica Star
Partners, LLC is 33% owned by the Chairman of the Companys Board of
Directors. The note receivable bears interest at 10%, with principal
and interest due on September 24, 2004.                                                                                                                                                                                                                                                                         
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | The Company has a 70% interest in Glendale Condominiums, LLC. The
land for the project was purchased from an individual and a trust who
own the other 30% of the project. The payable represents the balance
due, including interest at 8% per annum, for this purchase. Principal
and interest are due quarterly from September 2008 through September
2018. The land cost and preliminary development costs for this project
total $2,663,303 and $2,379,178 at December 31, 2003 and September 30,
2003, respectively, and are included in land held for development and
sale in Arizona properties.
|
| | (3) |  | Lafayette Financial Services is 50% owned by the Chairman of the
Companys Board of Directors. This note resulted from the purchase of
certain real estate options by the Company in 1999. The note bears
interest at prime and is payable in semi-annual installments of $15,760
plus interest. The note was paid in full in October 2003.                                                                                                                                                                                                                                                            
|
| | (4) |  | The Company has an 82.5% interest in Villa Maria, LLC, which plans to
construct a townhome project in College Station, Texas. The remaining
17.5% is owned by minority investors, consisting of the three members of
the Companys Board of Directors. The payable represents the balance
due to these investors. Interest on this balance accrues at 10% per
annum, and is payable quarterly, with principal due at the end of the
project. The land for this project is currently under contract.                                                                                                    

NOTE E  DEPOSITS

Effective July 8, 2003, in exchange for a $650,000 note payable, the Company
acquired land in Stafford, Texas for $125,000 and also agreed to become general
partner and to acquire a 34% interest in #22 Stafford Springs LTD (Stafford
Springs) for $525,000. Stafford Springs owns the Summer Park Duplexes, a
168-unit, HUD-financed, manufactured housing duplex rental community in
Stafford, Texas. The $525,000 paid for Stafford Springs has been accounted for
as a deposit pending receipt of final approval of this transaction by HUD, and
is included in Other Assets in the accompanying consolidated balance sheet. As
of December 31, 2003, HUD approval had not yet been received. The Chairman of
the Companys board of directors also owns 33% of Stafford Springs.

NOTE F  SUBORDINATED DEBT

The Companys operations have been partially financed with periodic advances in
prior years from Amortibanc. The advances are subordinate to the Companys bank
financing and bear interest at 8% to 10%. The interest accrued on these
advances has primarily been added to the subordinated debt. Payments on the
debt are made only when cash flow from a land sale, after payment of bank debt,
exceeds the Companys operating cash requirements. This determination is made
by the Companys management. On October 31, 2003, the Company made a payment
of $378,587. The total advances and accrued interest due are $2,998,909 and
$3,319,684 at

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December 31, 2003 and September 30, 2003 respectively.

NOTE G  COMMITMENTS AND CONTINGENCIES

The Company sold notes receivable with repayment terms of up to 15 years, with
recourse upon nonpayment by the debtor of $81,741 and $269,804 during the three
months ended December 31, 2003 and 2002, respectively. The remaining balances
due, with recourse, of all notes sold are $1,230,385 and $1,157,023 as of
December 31, 2003 and September 30, 2003 respectively.

In certain instances, 15% of the note sales proceeds are retained by the
purchaser of the notes as a nonpayment reserve and returned to the Company when
the original land purchasers pay off the note balances. The reserve balance is
$210,988 and $200,330 at December 31, 2003 and September 30, 2003, respectively
and is included in other assets, net of an allowance established for recourse
chargeback of $27,608 at December 31, 2003 and September 30, 2003. When the
Company incurs a chargeback, ownership of the original land sold reverts to the
Company and can be resold to help recover any losses incurred by the Company as
a result of the chargeback. The Company did not receive any chargebacks during
the three month periods ended December 31, 2003 and 2002.

From time to time the Company is involved in a variety of legal matters that
arise in the normal course of business. Based on information currently
available, management does not believe that the ultimate resolution of any such
matters will have a material adverse effect on the Companys financial
condition, results of operations or cash flow.

The Company entered into a five-year employment agreement with its president
during 2001. In the event the Company consummates an acquisition (as defined in
the agreement) during the terms of the agreement, the contract provides for
salary increases and issuance of options to acquire a total of 600,000 common
shares of the surviving corporation at a price not to exceed the fair market
value of such shares on the closing date of the acquisition. The agreement also
provides for severance payments upon termination in the amount of the total
compensation for the remainder of the contract terms and a consulting
arrangement upon retirement of the president.

NOTE H  PREFERRED STOCK

The Company has outstanding 14,380 shares of Series A Cumulative Convertible
Preferred Stock, with a liquidation value of $719,000. The preferred stock is
not redeemable at a fixed or determinable price on a fixed or determinable date
or upon the occurrence of any event that is not solely within the Companys
control. The preferred stock is convertible by the holder at any time into
shares of the Companys common stock at a price equal to the average market
price of the Companys common stock for the thirty business days immediately
preceding the conversion, and is redeemable by the Company at any time after
one year from the date of issuance. Since no public market currently exists
for the Companys common stock, market price is determined by the Board of
Directors. The preferred stock has a cumulative dividend, payable
semi-annually at the following rates:

|                                      |  |             
|------------------------------------- |  | ------------
|First year from the date of issuance  |  | 0% per annum
|Second year from the date of issuance |  | 2% per annum
|Third year from the date of issuance  |  | 4% per annum
|Fourth year from the date of issuance |  | 5% per annum
|Fifth year from the date of issuance  |  | 6% per annum
|Thereafter                            |  | 7% per annum

As the preferred stock has an increasing dividend rate, the preferred stock was
initially recorded at its fair value at the date of its issuance by discounting
the preferred stock using managements estimate of the current market rate for
dividend yields and comparing it to the actual dividend rate of the preferred
stock. This resulted in a discount of $114,071, which is being amortized to
additional paid-in capital over the period of increasing dividend rates of the
preferred stock. At December 31, 2003, dividends in arrears totaled $7,190, or
$0.50 per share.

NOTE I  COMMON STOCK

On October 30, 2003, the Company issued 100,000 shares of common stock in
exchange for the 47.5% minority interest in Firebird Financial, LLC, one of the
Companys subsidiaries, and for an option to purchase 80 acres of land in
Yavapai County, Arizona.

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NOTE J - STOCK OPTION PLAN

The Company has established a 2001 stock option plan and has reserved 3,500,000
shares to be issued under the plan. All employees are eligible to participate
in this plan and participants shall be selected by an Administrative Committee
consisting of not less than three members of the Companys Board of Directors.
The options generally vest over a period of 3 years, however certain options
granted to employees who have been with the Company for over five years vest
immediately. The options expire no more than 10 years from the date of grant.
Upon termination of an option holders employment, all unvested options will
immediately terminate and vested options will generally remain exercisable for
a period of three months after date of termination (one year in case of
disability or death). The options issued in 2002 and 2003 were issued at an
exercise price of $0.15 per share, which approximates the fair market value of
the Companys common stock on the date of issuance. Since no public market
exists for the Companys common stock, fair market value is determined by the
Board of Directors. At December 31, 2003 options for 1,456,250 shares of common
stock were available for issuance under the plan.

The Company accounts for this plan under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employeesand
related Interpretations using the intrinsic value based method. No stock-based
employee compensation cost is reflected in net earnings, as all options granted
under this plan had an exercise price equal to the market value of the
underlying common stock on the date of grant. The following table illustrates
the effect on net earnings 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 for the three
months ended December 31, 2003 and 2002.

|                                                                                                     |                                 |   |                                 |       |      |   |         |      | 
|---------------------------------------------------------------------------------------------------- | ------------------------------- | - | ------------------------------- | ----- | ---- | - | ------- | ---- | 
|                                                                                                     |                                 |   | Three months ended December 31,
|                                                                                                     |                                 |   |                                
|                                                                                                     |                                 |   | 2003                            |       | 2002
|                                                                                                     |                                 |   |                                 |       |     
|Net earnings (loss), as reported                                                                     |                                 | $ | (372,155                        | )     |      | $ | 577,704 |     
|Deduct: Total stock-based employee compensation expense
determined under fair value based method (1) |                                 |   | (2,679                          | )     |      |   | (1,132  | )   
|                                                                                                     |                                 |   |                                 |       |      |   |         |     
|Pro forma net earnings (loss)                                                                        |                                 | $ | (374,834                        | )     |      | $ | 576,572 |     
|                                                                                                     |                                 |   |                                 |       |      |   |         |     
|Net earnings (loss) per share:                                                                       |                                 |   |                                 |       |      |   |         |     
|                                                                                                     | Basic and diluted - as reported |   | $                               | (0.02 | )    |   | $       | 0.03 | 
|                                                                                                     |                                 |   |                                 |       |      |   |         |     
|                                                                                                     | Basic and diluted - pro forma   |   | $                               | (0.02 | )    |   | $       | 0.03 | 
|                                                                                                     |                                 |   |                                 |       |      |   |         |     



|(1) |  | The fair value method amortizes the estimated fair value of the options
at date of grant over the vesting period. The fair value of these options
was estimated at the date of grant assuming a risk-free interest rate of
4.88%, an expected option life of 10 years with no volatility or
dividends. The expected option life is based on all options being
exercised just prior to expiration.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE K SETTLEMENT OF QUEPASA.COM CLAIM

The Company entered into a merger agreement with quepasa.com as of August 6,
2001. In October 2001, in order to induce the Company to amend and extend the
original merger agreement, quepasa.com loaned the Company $500,000 (the
loan). In February 2002, the merger agreement was terminated. The merger
agreement provided for a termination fee of $500,000 as liquidated damages
under certain circumstances. The Company believed that it was entitled to this
termination fee, which would result in the loan being deemed paid in full and
filed a declaratory judgment action against quepasa.com on that issue.
Quepasa.com filed a counterclaim, alleging that it was entitled to the
termination fee and seeking to foreclose on the loan. This lawsuit was settled
in October 2002. Under the terms of the settlement, the Company retained the
termination fee, which resulted in the loan being deemed paid in full, in
exchange for a payment by the Company to quepasa.com of $50,000 and the
transfer to quepasa.com of 642,000 shares of quepasa.com common stock with a
market value of $44,250. The net result was that the Company recognized a gain
on the settlement of the claim against quepasa.com of $405,750 during the three
months ended December 31, 2002.

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NOTE L  RELATED PARTY TRANSACTIONS

In December 2003, the three members of the Companys Board of Directors
invested a total of $150,000 in the form of a subordinated payable in exchange
for a 17.5% minority interest in Villa Maria, LLC. The Company currently owns
the remaining 82.5% of Villa Maria, LLC, however additional minority investors
may be added in the future. Villa Maria, LLC plans to construct Woodland
Court, a planned 43-unit townhome project located in College Station, Texas.
The land for this project is currently under contract, with the purchase
expected to close in February 2004. Interest on the $150,000 balance accrues
at 10% per annum, and is payable quarterly, with principal due at the end of
the project (see Note D).

NOTE M  SUBSEQUENT EVENT

On January 9, 2004, the Companys Board of Directors approved an agreement to
sell the Willow Springs Ranch near Socorro, New Mexico for $125 per acre, or a
total of approximately $5.0 million. Payment will consist of cash, assumption
of debt and a note receivable, with the buyer entitled to a discount of up to
3% of the purchase price in exchange for an early payoff of the note
receivable. The buyer has a 90-day Inspection Period, during which time the
buyer may elect to terminate the agreement if the buyer makes a determination
that the property is not acceptable, for any reason in the buyers sole
discretion. If the buyer makes such a determination, the buyer will be
entitled to a refund of all funds it has placed in escrow.

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Item 2.Managements Discussion and Analysis

The following discussion includes forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from the results
contemplated by these forward-looking statements due to certain factors,
including those discussed below, elsewhere in this Form 10-QSB and in the
Companys other filings with the SEC.

Overview

Great Western Land and Recreation, Inc. (formerly 1st Realty Investments, Inc.)
(we or the Company) is incorporated in the state of Nevada. On July 23,
2002, we entered into an Agreement and Plan of Merger (the Merger Agreement
or the Agreement) with Great Western Land and Recreation, Inc. a Delaware
corporation (Great Western Delaware). Under the Merger Agreement, we agreed
to undertake a series of transactions the result of which was the transfer of
control of the Company to Amortibanc Investments, LC (Amortibanc), the
stockholder of Great Western Delaware, and the merger of Great Western Delaware
into the Company. We were the surviving entity. Immediately following the
merger, former 1st Realty stockholders owned approximately 9% of the Company
and Amortibanc owned approximately 91% of the Company (94% assuming the
conversion of the preferred stock into common stock).

We have accounted for our acquisition of Great Western Delaware as a reverse
acquisition, with Great Western Delaware the acquirer and 1st Realty the
acquiree for reporting purposes. Prior to September 2000, we were a dormant
non-operating company. Our current operations are solely the result of the
series of transactions we entered into with Great Western Delaware. As a
result, the assets and liabilities of both companies have been combined at
their historical cost. The accompanying discussion and analysis is presented
as if the Merger was consummated on October 1, 2002.

We acquire, develop, market, sell and finance residential and recreational
property in the southwestern United States, with over 48,000 acres in various
stages of development. Our properties are located in Arizona, Texas and New
Mexico and consist of a variety of lifestyle choices including townhomes and
condominiums for first-time homebuyers, vacant lots for commercial homebuilders
and ranch lots for those seeking recreational and investment properties. Over
the years, we have developed a number of subdivision projects in the Houston
area, with additional subdivision projects currently in various stages of
development. Subdivided residential lots are marketed principally to builders
seeking to build homes in quality residential settings in the low- to mid-price
range. Our ranch properties are marketed to purchasers seeking a long-term
investment in up-scale vacant ranch land. In addition, we engage in ranching
and agricultural activities on some of our properties until the properties are
either developed or sold. These activities include the planting of tree farms,
the ownership of a modest cattle herd on one of our ranches and the leasing of
another ranch property for cattle grazing. As an additional marketing incentive
to customers for our recreational land, we offer financing on individual
purchases of ranch lots. The majority of these loans are then sold to third
parties.

On January 9, 2004, our Board of Directors approved an agreement to sell the
Willow Springs Ranch near Socorro, New Mexico for $125 per acre, or a total of
approximately $5.0 million. Payment will consist of cash, assumption of debt
and a note receivable, with the buyer entitled to a discount of up to 3% of the
purchase price in exchange for an early payoff of the note receivable. The
buyer has a 90-day Inspection Period, during which time the buyer may elect to
terminate the agreement if the buyer makes a determination that the property is
not acceptable, for any reason in the buyers sole discretion. If the buyer
makes such a determination, the buyer will be entitled to a refund of all funds
it has placed in escrow.

Results of Operations

Three months ended December 31, 2003 (first quarter of fiscal 2004) compared to
the three months ended December 31, 2002 (first quarter of fiscal 2003)

Land and lot sales.Land and lot sales decreased $948,327 or 77% to $288,876 in
the first quarter of fiscal 2004 from $1,237,203 in the first quarter of fiscal
2003. This decrease was the result of decreases in residential lot sales of
$452,982 and a decrease in ranch land sales of $495,345. The decline in
residential lot sales reflects the fact that our current projects in Houston
are nearing completion. The Wheatstone and Wheatstone III subdivisions were
completed and sold out during fiscal 2003. We expect the Coventry subdivision
to be sold out by the end of fiscal 2004. However, we expect Woodland Court, a
planned 43-unit townhome project located in College Station, Texas, and Warren
Ranch, a new residential development in the Houston metro area, to begin
generating revenue in the summer and fall of 2004.

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The decrease in ranch land sales is primarily due to a $400,000 bulk sale that
occurred during the first quarter of fiscal 2003. There were no such bulk
sales in the first quarter of fiscal 2004. During the first quarter of fiscal
2004, approximately 80% of our ranch land sales were generated at the Wagon Bow
Ranch, near Wikieup Arizona, with the remaining 20% coming from the Willow
Springs Ranch, near Socorro, New Mexico. As a result of continued lower than
expected sales at the Willow Springs Ranch, we have decided to sell the entire
ranch and focus our ranch land sales efforts on the Wagon Bow Ranch. As
discussed more fully in Liquidity and Capital Resources below, on January 9,
2004, our Board of Directors approved an agreement to sell the Willow Spring
Ranch for $125 per acre, or a total of approximately $5.0 million. The sale of
the Willow Springs Ranch will allow us to better focus our resources on
improving our marketing programs and the quality of our sales force at the
Wagon Bow Ranch. We believe that these efforts, along with an improvement in
the economy, will lead to increased ranch land sales at the Wagon Bow Ranch.

Our land and lot sales are affected by numerous factors including mortgage
interest rates, demand for new housing starts and the availability of finished
lots within a particular area. Generally, the pace of sales and the price per
lot increase over the life of a project as developments gain popularity and as
contract price escalators become effective.

Cost of land and lot sales.Cost of land and lot sales decreased $347,536, or
71%, to $143,304 in the first quarter of fiscal 2004 from $490,840 in the first
quarter of fiscal 2003. As a percentage of land and lot sales, the cost of land
and lot sales increased to 50% in the first quarter of fiscal 2004 from 40% in
the first quarter of fiscal 2003. This was primarily due to a change in the
mix of residential lot sales (the Wheatstone and Wheatstone III subdivisions,
which were completed and sold out during fiscal 2003, had higher average gross
margins than the Coventry subdivision), and to lower gross margins on ranch
land sales, primarily due to lower margins on sales at the Willow Springs
Ranch.

Operating, selling, general and administrative expenses.Operating, selling,
general and administrative expenses decreased $153,237, or 27%, to $416,162 in
the first quarter of fiscal 2004 from $569,399 in the first quarter of fiscal
2003. The decrease was primarily due to decreases in professional fees of
$81,803, taxes of $34,331, bad debt expense of $32,208 and advertising and
promotion of $9,551, partially offset by a $30,006 increase in salaries and a
$12,759 increase in insurance costs. Professional fees were unusually high in
the first quarter of fiscal 2003 due to activity related to Great Western
Delawares merger with 1st Realty. Taxes decreased due to lower property and
franchise tax liabilities associated with our Houston projects. Bad debt
expense in the first quarter of fiscal 2003 was unusually high due to the
write-off of notes receivable carried by 1st Realty prior to the merger.
Advertising and promotion costs decreased due to changes in our advertising
program from television to print and other types of advertising. We believe
this is a more effective way to reach our target audience. Salaries increased
due to slightly higher staffing levels during the first quarter of fiscal 2004.
The increase in insurance costs was due to higher property and liability
insurance premiums.

Interest expense.Interest expense decreased $18,872 or 16% to $97,432 in the
first quarter of fiscal 2004 from $116,304 in the first quarter of fiscal 2003.
The decrease is due to lower average outstanding balances on our loans due to
the repayment of principal as lots are sold.

Interest income.Interest income decreased $10,625 to $2,099 in the first
quarter of fiscal 2004 from $12,724 in the first quarter of fiscal 2003 due to
lower outstanding balances on notes receivable.

Gain on settlement of quepasa.com claim.We entered into a merger agreement
with quepasa.com as of August 6, 2001. In October 2001, quepasa.com loaned us
$500,000 (the loan). In February 2002, the merger agreement was terminated.
The merger agreement provided for a termination fee of $500,000 as liquidated
damages under certain circumstances. Under the terms of our settlement with
quepasa.com, we retained the termination fee, which resulted in the loan being
deemed paid in full, in exchange for a payment to quepasa.com of $50,000 and
the transfer to quepasa.com of 642,000 shares of quepasa.com common stock with
a market value of $44,250. The net result was that we recognized a gain on the
settlement of the claim against quepasa.com of $405,750 during the first
quarter of fiscal 2003.

Other income (expense).Other expense was $6,232 in the first quarter of
fiscal 2004 compared to other income of $98,738 in the first quarter of fiscal
2003. Other income in the first quarter of fiscal 2003 included a $32,000 gain
on the sale of two notes receivable and a $28,817 gain on the sale of a 7.1%
interest in Laguna Investments L.L.C. to Lafayette Financial Services
(Lafayette) in partial payment of a note payable to Lafayette.

Net earnings (loss).Net loss was $372,155 in the first quarter of fiscal 2004
compared to net earnings of $577,704 the first quarter of fiscal 2003. This
decrease is primarily due to a $600,791 decrease in gross profit due to lower
land sales and a $405,750 decrease in gain on settlement of quepasa.com claim,
partially offset by a $153,237 decrease in operating expenses.

15



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##### Table of Contents



Liquidity and Capital Resources

In this section of the management discussion and analysis segment, we are going
to discuss:



| |  |  | sources and uses of cash, and significant factors that influence both;       
| | - |  | -----------------------------------------------------------------------------
|
| |  |  | our analysis of our cash flows for the first three months of fiscal 2004; and
|
| |  |  | our commitments and contractual obligations.                                 

All of these factors are important to obtain an understanding of our ability to
meet our current obligations, to fund working capital, to finance the
acquisition and development of new projects, or to pay down existing debt.

Sources and uses of cash. We require cash to fund our operating expenses, to
finance the acquisition and development of new projects and to pay debt
service. Our principal sources of liquidity are cash on hand, cash generated
from land and lot sales, cash generated from bulk land sales, collections on
notes receivable, refinancings and funds from external borrowings. We may also
raise additional funding through future equity offerings, subject to market
conditions.

We believe that the key factors that could affect sources of cash include:



| |  |  | factors that affect our results of operations and cash flows,
including reduced demand for land resulting from the recent economic
slowdown, competitive pricing pressures; and          
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | factors that affect our access to bank financing that could impair
our ability to obtain needed financing on acceptable terms to finance
the acquisition and development of new projects.

Analysis of cash flows.Cash flow information for the three months ended
December 31, 2003 and 2002 follows:

|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |          |          |  
|---------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------- | ------------------------------- | -------- | ---- | ------- | -------- | -------- | -
|                                                     |                                                                                                      |                                                     |           | Three months ended December 31,
|                                                     |                                                                                                      |                                                     |           |                                
|                                                     |                                                                                                      |                                                     |           | 2003                            |          | 2002
|                                                     |                                                                                                      |                                                     |           |                                 |          |     
|Cash flows from operating activities                 |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     | Net earnings (loss)                                                                                  |                                                     | $         | (372,155                        | )        |      | $       | 577,704  |         
|                                                     | Adjustments to reconcile net earnings (loss) to net cash
provided by (used in ) operating activities |                                                     |           | 70,216                          |          |      |         | 103,215  |         
|                                                     | Change in assets and liabilities                                                                     |                                                     |           | (227,349                        | )        |      |         | 208,947  |         
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     |                                                                                                      | Net cash provided by (used in) operating activities |           |                                 | (529,288 | )    |         |          | 889,866  |  
|Cash flows from investing activities                 |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     | (Increase) decrease in receivable from related entities                                              |                                                     |           | 22,151                          |          |      |         | (7,836   | )       
|                                                     | Purchase of property and equipment                                                                   |                                                     |           | (37,021                         | )        |      |         | (762     | )       
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     |                                                                                                      | Net cash used in investing activities               |           |                                 | (14,870  | )    |         |          | (8,598   | )
|Cash flows from financing activities                 |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     | Issuance of notes payable                                                                            |                                                     |           | 103,863                         |          |      |         | 95,482   |         
|                                                     | Payments on notes payable                                                                            |                                                     |           | (148,667                        | )        |      |         | (667,784 | )       
|                                                     | Decrease in payable to related entities                                                              |                                                     |           | 116,757                         |          |      |         | (22,162  | )       
|                                                     | Decrease in subordinated debt                                                                        |                                                     |           | (378,587                        | )        |      |         | (133,253 | )       
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         
|                                                     |                                                                                                      | Net cash used in financing activities               |           |                                 | (306,634 | )    |         |          | (727,717 | )
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         
|Net increase (decrease) in cash and cash equivalents |                                                                                                      |                                                     | (850,792  | )                               |          |      | 153,551 |         
|Cash and cash equivalents at beginning of period     |                                                                                                      |                                                     | 1,100,844 |                                 |          |      | 500,818 |         
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         
|Cash and cash equivalents at end of period           |                                                                                                      | $                                                   | 250,052   |                                 |          | $    | 654,369 |         
|                                                     |                                                                                                      |                                                     |           |                                 |          |      |         |         

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##### Table of Contents



Cash flow activity for the three months ended December 31, 2003 (first quarter
of fiscal 2004).As of December 31, 2003, we had cash and cash equivalents of
$250,052, a decrease of $850,792 from the September 30, 2003 balance. This
compares to an increase in cash and cash equivalents of $153,551 in the first
quarter of fiscal 2003.

Cash flow used in operating activities was $529,288 for the first quarter of
fiscal 2004 compared to cash provided by operating activities of $889,866 in
the first quarter of fiscal 2003, a decrease of $1,419,154. Factors causing
decreased cash flows from operating activities in the first quarter of fiscal
2004 as compared to the first quarter of fiscal 2003 include:



| |  |  | A decrease in land and lot sales to $288,876 in the first quarter of
fiscal 2004 from $1,237,203 in the first quarter of fiscal 2003;                                                                                                                                                                                                                                                                     
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Collections of notes receivable of $795 in the first quarter of
fiscal 2004 compared to $372,524 in the first quarter of fiscal 2003.
The fiscal 2003 collections were primarily due to the payoff of a
$351,666 note related to a bulk sale of land in Houston, Texas;                                                                                                                                   
|
| |  |  | Land held for development and sale increased $120,528 in the first
quarter of fiscal 2004 compared to a decrease of $160,574 in the first
quarter of fiscal 2003. The increase in fiscal 2004 is primarily due to
the capitalization of development costs related to our condominium
project in Glendale, Arizona. Construction costs for this project are
being funded primarily through a bank loan; and
|
| |  |  | Other assets increased $46,952 in the first quarter of fiscal 2004
compared to a decrease of $141,201 in the first quarter of fiscal 2003.
The decrease in the first quarter of fiscal 2003 was primarily due to a
$111,782 decrease in interest receivable due to interest payments
received on notes receivable.                                                                                        

These were partially offset by the following factors causing increased cash
flows:



| |  |  | A decrease in cash paid for operating, selling, general and
administrative expense to $468,876 in the first quarter of fiscal 2004
compared to $573,234 in the first quarter of fiscal 2003; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The change in deferred income was $0 during the first quarter of
fiscal 2004 compared to a decrease of $51,037 in the first quarter of
fiscal 2003.                                             

Looking forward, we expect cash flow from operations to remain slow for the
next three to six months, and then to improve over the remainder of the year as
new projects begin to come on-line.

Net cash used in investing activities was $14,870 in the first quarter of
fiscal 2004 compared to $8,598 in the first quarter of fiscal 2003. Receivable
from related entities decreased $22,151 in the first quarter of fiscal 2004
compared to an increase of $7,836 in the first quarter of fiscal 2003. We
purchased $37,021 of property and equipment in the first quarter of fiscal 2004
compared to $762 in the first quarter of fiscal 2003. We are not planning any
significant purchases of property and equipment for the remainder of the fiscal
year.

Net cash used in financing activities was $306,634 in the first quarter of
fiscal 2004 compared to $727,717 in the first quarter of fiscal 2003. During
the first quarter of fiscal 2004, additional borrowings totaled $103,863
compared to $95,482 in the first quarter of fiscal 2003. The borrowings in
fiscal 2004 consisted primarily of draws on a construction loan for the
development of our condominium project in Glendale, Arizona. Construction on
Phase I of the Glendale project is expected to continue through the
December of 2004, with sales beginning in March 2004. Payments on notes payable totaled
$148,667 in the first quarter of fiscal 2004 compared to $667,784 in the first
quarter of fiscal 2003. Principal payments on our notes are made primarily
through the payment of release prices as lots are sold.

Payable to related entities increased $116,757 during the first quarter of
fiscal 2004 compared to a decrease of $22,162 in the first quarter of fiscal
2003. The increase in the first quarter of fiscal 2004 was due because the
three members of our Board of Directors invested $150,000 in the form of a
subordinated note payable in exchange for a 17.5% minority interest in Villa
Maria, LLC. We currently own the remaining 82.5% of Villa Maria, LLC, however
additional minority investors may be added in the future. Villa Maria, LLC
plans to construct Woodland Court, a planned 43-unit townhome project located
in College Station, Texas. The land for this project is currently under
contract, with the purchase expected to close in February 2004. Interest on
the $150,000 balance accrues at 10% per annum, and is payable quarterly, with
principal due at the end of the project.

Subordinated debt decreased $378,587 in the first quarter of fiscal 2004,
compared to a decrease of $133,253 in the first quarter of

17



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##### Table of Contents



fiscal 2003.

Contractual obligations. Our long-term debt includes notes payable of
$4,039,312 and subordinated debt of $2,998,909. Other than two vehicle loans,
all of the notes payable were incurred to finance the development of our real
estate projects. Principal payments on those notes payable are primarily made
as lots are sold, although minimum principal payments are also required on
certain loans. Included in notes payable is a $500,454 loan used to purchase
480 acres of land in the Houston metro area for a new subdivision. This loan
is due in April 2004. It is our intent to refinance this loan with a
development loan for the project. We have received a commitment from a bank for
the development loan, which is expected to close in February. In addition, our
construction loan for a condominium project in Glendale, Arizona requires cash
contributions by the Company each time construction on a new building is
started. As of December 31, 2003, construction on one 8-unit building has been
started. The remaining five buildings in this phase of the project are
expected to begin construction at various dates through the summer of 2004.

Payments on the subordinated debt are made only when cash flow from a land
sale, after payment of bank debt, exceeds our operating cash requirements. This
determination is made by our management. On October 1, 2003, we made a payment
of $378,587. On June 28, 2002, our majority stockholder contributed an
additional $719,000 of capital to the Company through the conversion of
subordinated debt to preferred stock. The preferred stock is convertible into
shares of our common stock, and has a cumulative dividend, payable
semi-annually. The dividend rate is 0% for the first year from the date of
issuance, and escalates each year until it reaches 7% in the sixth year from
the date of issuance.

In the normal course of our business, we have also entered into various
operating leases for equipment and vehicles.

Our primary future cash needs, both in the short term and in the long term will
focus on funding operating expenses, financing the acquisition and development
of new projects and paying debt service. During the first quarter of fiscal
2004, cash generated by land and lot sales was not sufficient to pay our
operating expenses. To meet our cash flow needs during the remainder of fiscal
2004 it will be necessary to supplement the land and lot sales with bulk sales
of ranch property, refinancings to take advantage of the equity that has
accumulated in the land that we own, or sales of one or more of our notes
receivable. Additional borrowings will also be needed to finance our new
projects. On January 9, 2004, our Board of Directors approved an agreement to
sell the Willow Springs Ranch near Socorro, New Mexico for $125 per acre, or a
total of approximately $5.0 million. Payment will consist of cash, assumption
of debt and a note receivable, with the buyer entitled to a discount of up to
3% of the purchase price in exchange for an early payoff of the note
receivable. The buyer has a 90-day Inspection Period, during which time the
buyer may elect to terminate the agreement if the buyer makes a determination
that the property is not acceptable, for any reason in the buyers sole
discretion. If the buyer makes such a determination, the buyer will be
entitled to a refund of all funds it has placed in escrow.

Although there can be no assurances, management believes that cash flow from
operations coupled with existing cash and cash equivalent balances, proceeds
from bulk sales of property or the sale of one or more notes receivable, along
with refinancings and borrowings from banks and other financial institutions will generate
sufficient cash to fund our operating and cash flow needs for the next twelve
months. To the extent that actual results or events differ from our financial
projections, our liquidity may be adversely affected.

We project that our capital expenditures for property and development will be
approximately $10.4 million over the next twelve months, but that only a
portion of that amount will need to be funded internally. The remainder will be
borrowed from banks and other financial institutions. As part of our business
strategy, we continuously review acquisition opportunities and proposals. We
expect to finance any future acquisitions with additional equity and debt
financing, to the extent available on attractive terms.

We hold $122,397 of third party notes receivable from the sale of property.
These notes are secured by the property sold and bear interest at 9.5% per
year. We evaluate the collectibility of these notes based on the payment
history and the value of the collateral, and charge off any uncollectible
balances. As of December 31, 2003, there were no delinquencies on any of these
notes receivable.

18



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##### Table of Contents






Item 3. Controls and Procedures



|(a) |  | We maintain disclosure controls and procedures (as defined in Securities
Exchange Act 1934 Rules 13a-14(c) and 15d-14(c)) that are designed to
ensure that information required to be disclosed in our Exchange Act
reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Principal Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Within 90 days prior to the date of this quarterly report, we carried out an
evaluation, under the supervision and with the participation of management,
including our Chief Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our Chief Executive Officer and Principal
Financial Officer concluded that our disclosure controls and procedures were
effective.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) |  | There have not been any significant changes in our internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation. There were no significant deficiencies or
material weaknesses, and therefore no corrective actions were taken.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

19



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##### Table of Contents






PART II: OTHER INFORMATION




Item 1.Legal Proceedings

We are not a party to any pending legal proceedings other than routine
litigation incidental to our business, and to the best of our knowledge, no
other litigation against us has been threatened.




Item 2.Changes in Securities and Use of Proceeds



| |  | We have not materially modified the instruments defining the rights of our
security holders during the reporting period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On October 30, 2003, we issued 100,000 shares of common stock in exchange for
the 47.5% minority interest in Firebird Financial, LLC, one of our
subsidiaries, and for an option to purchase 80 acres of land in Yavapai
County, Arizona. The common stock was issued pursuant to exemptions
available under Sections 4(2) or 4(6) of the Securities Act of 1933, as
amended (the Act) and has not been registered under the Act or under the
securities laws of any state. These securities are subject to restrictions
on transferability and resale and may not be transferred or resold except as
permitted under the Act and the applicable state securities laws, pursuant to
registration or exemption therefrom.




Item 3.Defaults Upon Senior Securities



| |  | Not Applicable.
| |  | ---------------




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



| |  | Not Applicable
| |  | --------------




Item 5.Other Information



| |  | Not Applicable
| |  | --------------




Item 6.Exhibits and Reports on Form 8-K

(a)  Exhibits

|        |  |                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                      
|No.     |  |                                                                                                                                      
|        |  |                                                                                                                                      
|31.1    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|        |  |                                                                                                                                      
|31.2    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|        |  |                                                                                                                                      
|32.1    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|        |  |                                                                                                                                      
|32.2    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002

(b)  Reports on Form 8-K



| |  | None.
| |  | -----

20



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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.

|                        |  |                                                      |  |                                               
|----------------------- |  | ---------------------------------------------------- |  | ----------------------------------------------
|                        |  | GREAT WESTERN LAND AND RECREATION, INC.
(Registrant)
|                        |  |                                                      |  |                                               
|Date: February 12, 2004 |  | By                                                   |  | /s/ Ron OConnor                              
|                        |  |                                                      |  |                                               
|                        |  |                                                      |  | Ron OConnor, Senior Vice President and Chief 
|                        |  |                                                      |  | Financial Officer (Duly Authorized Officer and
|                        |  |                                                      |  | Principal Financial Officer)                  

21