UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended February 29, 2004


                                   NELX, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                      <C>                                   <C>
======================================== ===================================== =====================================
                Kansas                                 0-21210                              84-0922335
                ------                                 -------                              ----------
---------------------------------------- ------------------------------------- -------------------------------------
    (State or other jurisdiction of            (Commission File Number)         (IRS Employer Identification No.)
            incorporation)
======================================== ===================================== =====================================
</TABLE>

               300 Summers Street, Suite 970, Charleston WV 25301
              -----------------------------------------------------
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (304) 343-8171
                                                           --------------


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

                 120,709,509 common shares as of April 14, 2004



<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                        PART I. - FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS..................................  2

         Consolidated Condensed Balance Sheet as of February 29, 2004
         (unaudited) and May 31, 2003........................................F-1

         Consolidated Condensed Statement of Operations for the Three and
         Nine Months ended February 29, 2004 and May 31, 2003................F-2

         Consolidated Condensed Statement of Cash Flows (unaudited) for the
         Three and Nine Months ended February 29, 2004 and 2003..............F-3

         Notes to Condensed Consolidated Financial Statements (unaudited)....F-4

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS...............................................  3

ITEM 3.  CONTROLS AND PROCEDURES.............................................  7

                          PART II. - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.................................................... 7

ITEM 2.  CHANGES IN SECURITIES................................................ 7

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...................................... 7

ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS................... 7

ITEM 5. OTHER INFORMATION..................................................... 7

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..................................... 7

         SIGNATURES .......................................................... 8



                                       1
<PAGE>





                         PART I-- FINANCIAL INFORMATION

Item 1.           Financial Statements

The following financial statements are included herein in response to Item 1:


                                                                           Page
                                                                           ----

    Financial Statements (Unaudited)
    --------------------------------
    Consolidated Condensed Balance Sheet                                    F-1
    Consolidated Condensed Statement of Operations                          F-2
    Consolidated Condensed Statement of Cash Flows                          F-3
    Notes to Consolidated Condensed Financial Statements                    F-4




















                                       2
<PAGE>
NELX, INC.
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                                  <C>                  <C>
                                                                     February 29, 2004      May 31, 2003
                                                                     -----------------    ----------------
ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                        $            541     $          824
    Receivables                                                                50,071             44,123
    Prepaid and other                                                           6,384             11,262
                                                                     -----------------    ----------------
      Total current assets                                                     56,996             56,209
                                                                     -----------------    ----------------

FURNITURE AND EQUIPMENT,
    net of accumulated depreciation of $86,156 and $82,269, respectively       13,559             16,942
                                                                     -----------------    ----------------

      Total assets                                                   $         70,555     $       73,151
                                                                     =================    ================


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Current maturities of notes payable                              $        628,929     $       48,929
    Current maturities of notes payable - related parties                   1,264,630            642,354
    Accounts payable                                                          279,914            211,258
    Accrued expenses                                                          489,719            378,086
    Accrued interest payable                                                   38,717             53,427
                                                                     -----------------    ----------------
      Total current liabilities                                             2,701,909          1,334,054
                                                                     -----------------    ----------------

LONG-TERM LIABILITIES
    Notes payable, less current maturities                                          -            550,000
    Notes payable, less current maturities - related parties                  150,397            398,719
                                                                     -----------------    ----------------
      Total Long-term liabilites                                              150,397            948,719
                                                                     -----------------    ----------------

STOCKHOLDERS' EQUITY
    Common stock, $.0001 par value par value; 500 million shares
      authorized: 120,709,509 shares issued and outstanding                    12,071             12,071
    Additional paid-in capital                                              1,040,730          1,040,730
    Accumulated deficit                                                    (3,834,552)        (3,262,423)
                                                                     -----------------    ----------------
      Total stockholders' equity                                           (2,781,751)        (2,209,622)
                                                                     -----------------    ----------------

      Total liabilities and stockholders' equity                     $        70,555      $      73,151
                                                                     =================    ================
</TABLE>






                            See accompanying notes.
                                      F-1
<PAGE>
NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                  Three Months Ended February 29,       Nine Months Ended February 29,
                                               ---------------------------------------------------------------------------
                                                     2004               2003               2004                2003
                                               -----------------  -----------------  -----------------   -----------------
<S>                                            <C>                <C>                <C>                 <C>
REVENUE                                        $        73,335    $        77,658    $       244,856     $       252,928
                                               -----------------  -----------------  -----------------   -----------------

EXPENSES
    General and administrative                         187,048            176,801            583,592             507,383
    Business development and financing                       -                  -                  -             105,761
    Mutual fund costs                                   35,207             22,390             96,309              85,193
    Interest                                            47,864             28,646            133,198              87,857
    Depreciation and amortization                        1,331              1,363              3,886               4,090
                                               -----------------  -----------------  -----------------   -----------------

      Total expenses                                   271,450            229,200            816,985             790,284
                                               -----------------  -----------------  -----------------   -----------------

OTHER INCOME                                                 -                  -                  -                   2
                                               -----------------  -----------------  -----------------   -----------------

NET INCOME (LOSS)                              $      (198,115)   $      (151,542)   $      (572,129)    $      (537,354)
                                               =================  =================  =================   =================


BASIC AND DILUTIVE NET INCOME (LOSS) PER SHARE:

    NET INCOME (LOSS) PER SHARE                $             -    $             -    $             -     $             -
                                               =================  =================  =================   =================


    WEIGHTED AVERAGE SHARES OUTSTANDING            120,709,509        120,577,744        120,709,509         120,577,744
                                               =================  =================  =================   =================
</TABLE>


                            See accompanying notes.
                                      F-2

<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)

                                                  Three Months Ended February 29,       Nine Months Ended February 29,
                                               ---------------------------------------------------------------------------
                                                     2004               2003               2004                2003
                                               -----------------  -----------------  -----------------   -----------------
<S>                                               <C>             <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                             $    (198,115)  $       (151,542)  $       (572,129)   $       (537,354)
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities
        Depreciation and amortization                     1,331              1,363              3,886               4,090
        Changes in operating assets and liabilities:
          Receivables                                     4,050            (19,385)            (5,948)            (41,892)
          Prepaid and other current assets                  976              2,110              4,878              (2,472)
          Accounts payable                             (247,616)             5,680             68,656               3,658
          Accrued expenses and other liabilities        123,184             31,352             96,924              94,113
                                               -----------------  -----------------  -----------------   -----------------
Net cash flows from (used ) operating activities       (316,190)          (130,422)          (403,733)           (479,857)
                                               -----------------  -----------------  -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase furniture and equipment                          -                  -               (504)                  -
                                               -----------------  ----------------  -----------------   ------------------
Net cash flows (used ) investing activities                   -                  -               (504)                  -
                                               -----------------  -----------------  -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Proceeds from related party debt                    368,598            152,065            790,375             541,289
    Repayment of related party debt                    (194,300)          (183,473)          (633,421)           (621,838)
    Proceeds from debt obligations                      157,000            162,500            287,000             562,500
    Repayment of debt obligations                       (15,000)                 -            (40,000)             (9,781)
                                               -----------------  -----------------  -----------------   ----------------
Net cash flows (used ) from financing activities        316,298            131,092            403,954             472,170
                                               -----------------  -----------------  -----------------   -----------------

NET INCREASE IN CASH                                        108                670               (283)             (7,687)

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                   433                332                824               8,689
                                               -----------------  -----------------  -----------------   -----------------

CASH AND EQUIVALENTS, END OF PERIOD               $         541   $          1,002   $            541    $          1,002
                                               =================  =================  =================   =================


SUPPLEMENTAL DISCLOSURES:
    Interest paid                                 $      63,624   $         24,405   $        147,908    $         69,451
    Income taxes paid                                         -                  -                  -                   -
</TABLE>

                            See accompanying notes.
                                      F-3

<PAGE>

NELX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note A - Basis of Presentation

The accompanying  unaudited financial statements of NELX, Inc. (the "Company" or
"NELX")  were  prepared  in  accordance  with  generally   accepted   accounting
principles for interim  financial  information and Article 10 of Regulation S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  considered  necessary for a fair
presentation  of the  results of  operations  and  financial  condition  for the
periods presented have been included. Such adjustments are of a normal recurring
nature.  The results of  operations  for the three and nine month  periods ended
February 29, 2004, are not  necessarily  indicative of the results of operations
that can be  expected  for the fiscal  year  ending May 31,  2004.  For  further
information,  refer to the Company's audited financial  statements and footnotes
thereto  included in Item 7. of Form 10-KSB filed by NELX, Inc. on September 12,
2003.

Note B - New Accounting Pronouncements

In December  2002,  the Financial  Accounting  Standards  Board (FASB)  approved
Statement of  Financial  Accounting  Standard  (SFAS) No. 148,  "Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure - an amendment of FASB
Statement  No.  123".  SFAS  No.  148  amends  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation"  to provide  alternative  methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.   In  addition,  SFAS  No.  148  amends  the  disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results. FAS
No. 148 is  effective  for  financial  statements  for fiscal years ending after
December  15,  2002.  The  Company  will  continue  to account  for stock  based
compensation  using  the  methods  detailed  in  its'  stock-based  compensation
accounting policy.

In April 2003,  the FASB approved  SFAS No. 149,  "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities".  SFAS No. 149 is not expected to
apply to the Company's current or planned activities.

In June 2003, the FASB approved SFAS No. 150,  "Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity".  SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. This
Statement is effective for financial  instruments entered into or modified after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after June 15, 2003.  SFAS No. 150 is not expected to have an
effect on the Company's financial position.

Note C - Notes Payable

At February 29, 2004,  related party borrowings  amounted to $1,264,630.  During
the nine month period ended February 29, 2004,  borrowings  from related parties
amounted  to  $790,375  and  repayments  of  principal  on  such  related  party
borrowings  amounted to $633,421.  Included in related party  borrowings for the

                                      F-4
<PAGE>
NELX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note C - Notes Payable, cont'd

three month period ended February 29, 2004, is a note payable  totaling  $50,000
that is due March 31,  2009.  This note is  payable  in twenty  equal  quarterly
installments  beginning March 31, 2004. This note carries a stated interest rate
of 10% per annum and is convertible  into shares of NELX during its term at $.10
(ten cents) per share.  Also included in related party borrowings are notes from
five  related  parties  totaling  $242,000  that are due on  demand.  During the
three-month  period ended February 29, 2004, $25,000 was borrowed by the Company
from an  unrelated  party.  This note is due in October  2004,  carries a stated
interest rate of 10% per annum and is convertible into shares of NELX during its
term at $.10 (ten cents) per share.  Also, an  additional  $132,000 was borrowed
from three unrelated parties. These three notes are due on demand. The resulting
unpaid balance of notes payable to unrelated  parties amounted to $628,929 as of
February 29, 2004.

Note D - Subsequent Events

During  March  2004,  the Company  borrowed a total of  $145,000  from a related
party.  This amount was borrowed  under demand notes  payable  carrying a stated
interest rate of 10% per annum.

Note E - Reclassifications

Certain reclassifications have been made for consistent presentation.















                                      F-5

<PAGE>


Item 2. Management's  Discussion and Analysis Of Financial Condition
        and Results of Operations

Critical Accounting Policies and Estimates
------------------------------------------

The Company  prepares its consolidated  financial  statements in accordance with
accounting principles generally accepted in the United States of America.  These
principles permit choices among  alternatives and require numerous  estimates of
financial  matters.  The Company believes the accounting  principles  chosen are
appropriate  under the  circumstances,  and that the  estimates,  judgments  and
assumptions involved in its financial reporting are reasonable.

Revenue Recognition

Fees for investment  advisory  services are based on an agreed percentage of the
value of client  assets  under  management  and are accrued  based on the market
value of client assets on the accrual date. Commissions for surety bond services
are based on a percentage  of premiums  charged for bonds placed with  insurance
companies,  and are recorded  upon the issuance or effective  date of the bonds.
The  Company  is  not  responsible  for  any  significant   continuing  services
subsequent to the issuance or renewal of bonds.

Allowance for Doubtful Accounts

Management  believes that substantially all accounts receivable are collectible,
and therefore  has not  established  an allowance  for  estimated  uncollectible
accounts.

Use of Estimates

Accounting estimates are based on historical  experience and information that is
available to management about current events and actions the Company may take in
the future.

Long-Lived Assets

When facts and circumstances  indicate that the cost of long-lived assets may be
impaired,  an  evaluation  of the  recoverability  is performed by comparing the
carrying value of the assets to the projected future cash flows. Upon indication
that the  carrying  value of such  assets may not be  recoverable,  the  Company
recognizes an impairment  loss by a charge against current  operations  based on
discounted projected future cash flows.

                                       3

<PAGE>

Contractual Obligations and Commercial Commitments

The Company has $2,043,956 of long-term debt, including current installments and
excluding  fair value  adjustments,  outstanding  at February 29,  2004.  Future
payments required under these and other obligations are as follows:
<TABLE>
<CAPTION>
<S>                                           <C>           <C>        <C>        <C>       <C>       <C>            <C>
--------------------------------------------- ------------- ---------- ---------- --------- --------- -------------- -------------
Certain Contractual Obligations                  Current       2005       2006       2007      2008      Thereafter     Total
--------------------------------------------- ------------- ---------- ---------- --------- --------- -------------- -------------
Long-term debt, including current              1,893,559     48,492     36,327     30,423     8,884          26,271   2,043,956
installments
--------------------------------------------- ------------- ---------- ---------- --------- --------- -------------- -------------
Operating lease commitments                       13,185     10,607      3,995          0         0               0      27,787
--------------------------------------------- ------------- ---------- ---------- --------- --------- -------------- -------------
</TABLE>

Results of Operations for the Three Month Period Ended February 29, 2004
------------------------------------------------------------------------

The Company  experienced a loss for the  three-month  period ended  February 29,
2004 in the amount of  $198,115  as  compared  with a loss of  $151,542  for the
corresponding period ended February 28, 2003.

Revenues  for the  three-month  period  ended  February 23, 2004 were $73,335 as
compared  to $77,658 for the  corresponding  period  ended  February  28,  2003,
representing a 5.6%  decrease.  This decrease is comprised of a 3.6% decrease in
revenues  attributable to the investment  management segment and a 1.9% decrease
in premiums written through the surety segment of the Company's business.

Quarterly  revenues from the investment  management segment were $71,618 for the
three-month period ended February 29, 2004 as compared with $74,437 for the same
period in the previous year, an decrease of $2,819. As investment  advisory fees
are based on the market value of assets under management,  some fluctuation will
occur due to overall  market  conditions,  especially  during periods of extreme
adjustments such as have been recently experienced.  For the most part, however,
such revenues will remain  relatively  constant from quarter to quarter with any
large  fluctuations  being  attributable  to the growth or loss of assets  under
management.

Quarterly  revenues  from the surety  segment  were  $1,719 for the  three-month
period ended February 29, 2004 versus $3,222 for the same period in the previous
year,  a decrease of $1,506.  Revenue for this  segment of the  business is more
"seasonable"  from quarter to quarter,  due merely to the timing of the issuance
or renewal of bonds  placed by the Company.  Due to the nature of surety  bonds,
fluctuations  in revenue  for  comparable  periods  largely  reflect the overall
growth or loss of business.

Operating  expenses  for the  three-month  period  ended  February 29, 2004 were
$271,450 as compared with $229,200 for the comparable  period ended February 28,
2003, an increase of $42,250.  Such increase was  attributable to an increase in
general and  administrative  expense of $10,247 and a $12,817 increase in mutual
fund costs. Interest expense increased by $19,218 during this period.

Jacobs  &  Company  ("Jacobs"),  a  wholly  owned  subsidiary  of  NELX,  is the
investment  advisor to the Jacobs & Company Mutual Fund (the "Fund").  While the
Fund is responsible for its own operating expenses,  Jacobs, as the advisor, has
agreed to limit the Fund's aggregate  annual operating  expenses to 2.00% of the
average net assets.  Under this expense  limitation  agreement,  Jacobs absorbed
approximately  $24,235 of the Fund's  operating  expenses during the three-month
period  ended  February  29,  2004.  As the Fund grows in size (of assets  under
management),  expenses  (in  excess of the 2%  level)  absorbed  by Jacobs  will

                                       4
<PAGE>

decrease  until such time as the Fund  reaches  sufficient  size to support  its
on-going operating costs. In contrast,  as the Fund grows in size, revenues from
investment  advisory  fees  will  increase.  Additionally,   should  the  Fund's
operating  expense ratio fall below the 2.00% level,  the costs  absorbed by the
Company  are  reimbursable  to it for a  period  of up to seven  years.  For the
three-month period ended February 29, 2004, the Fund's investment  advisory fees
amounted to $25,301 as compared  to $28,278  for the  corresponding  three-month
period ended February 28, 2003.

Interest expense for the three-month  period ended February 29, 2004 was $47,864
as compared with $28,646 for the  corresponding  period ended February 28, 2003.
The  increase  in  interest  expense  is  attributable  to the  increase  in the
Company's short and long-term indebtedness incurred to fund ongoing operations.

Results of Operations for the Nine Month Period Ended February 29, 2004
-----------------------------------------------------------------------

For the nine-month  period ended  February 29, 2004,  the Company  experienced a
loss of  $572,129  as compared  with a loss of  $537,354  for the  corresponding
period ended February 28, 2003.

Revenues for the nine-month  period ended February 29, 2004 were $244,856 versus
$252,928 for the  corresponding  period ended  February 28, 2003  representing a
3.2%  decrease.  This  decrease  is  comprised  of a 1.0%  decrease  in revenues
attributable  to  the  investment  management  segment  and a 2.2%  decrease  in
revenues attributable to the surety segment of the business.

Revenues from the investment management segment were $226,530 for the nine-month
period ended  February 29, 2004 as compared with $229,094 for the same period in
the previous year, an decrease of $2,564. As investment  advisory fees are based
on the market value of assets under management,  some fluctuation will occur due
to overall market conditions,  especially during periods of extreme  adjustments
such as have  been  recently  experienced.  For the  most  part,  however,  such
revenues will remain relatively  constant from period to period,  with any large
fluctuations   being  attributable  to  the  growth  or  loss  of  assets  under
management.

Revenues from the surety  segment were $18,326 for the  nine-month  period ended
February  29, 2004 as compared  with $23,833 for the same period in the previous
year,  a decrease  of  $5,507.  Revenue  for this  segment  of the  business  is
typically more "seasonable"  from period to period,  due merely to the timing of
the  issuance or renewal of bonds  placed by the  Company.  Due to the nature of
surety bonds,  fluctuations  in revenue for  comparable  periods would  normally
reflect  the  overall  growth or loss of  business,  but in this case is largely
attributable to a reduction in the commission rate paid by the principal  market
in which the Company places its business.

Operating  expenses  for the  nine-month  period  ended  February  29, 2004 were
$816,985 as compared with $790,284 for the comparable  period ended February 28,
2003,  an  increase of  $26,701.  The  principal  elements  accounting  for this
reduction  are mutual fund direct costs and expenses  which were $96,309 for the
nine-month  period  ended  February  29,  2004,  as  compared to $85,193 for the
comparable period ended February 28, 2003 Acquisition-related expenses decreased
to $-0- for the nine month  period  ended  February  29, 2004 as  compared  with
$105,760 for the  comparable  period ended February 28, 2003. For the nine month
period  ended  February  29,  2004,  general and  administrative  expenses  were
$583,592 as compared with  $507,283 for the  comparable  period,  an increase of
$76,309.

                                       5
<PAGE>

Interest expense for the nine-month  period ended February 29, 2004 was $133,198
as compared with $87,857 for the  corresponding  period ended February 28, 2003.
The  increase  in  interest  expense  is  attributable  to the  increase  in the
Company's short and long-term indebtedness incurred to fund ongoing operations.

Future Direction of Company
---------------------------

The Company is focusing  its efforts on the  expansion  of the ongoing  business
activities  of Jacobs &  Company,  namely  investment  management  and  advisory
services,  and of  the  insurance  (surety)  business  of  NELX's  wholly  owned
subsidiary FS Investments, Inc. (FSI).

Traditional  surety  programs have become  largely  unavailable  to the coal and
other regulated industries. In conjunction with a publicly traded regional bank,
FSI has developed and is now marketing an alternative to surety bonds, involving
the bank's issuance of letters of credit to secure the obligations traditionally
secured  by surety  bonds.  The  letters  of credit  are  themselves  secured by
investment  accounts  holding  shares  of the  Jacobs & Company  Mutual  Fund or
otherwise  managed by Jacobs & Company.  This program is a natural  outgrowth of
the collateralized bonding programs marketed by Triangle Surety Agency and holds
promise for growth of the Company's businesses.

FSI is also reviewing a possible insurance Company acquisition. If financing can
be secured, management believes that the Company will be able to accomplish such
acquisition and, with appropriate regulatory approvals, will be in a position to
promote and distribute  surety products,  including the  collateralized  bonding
programs developed by FSI, to the coal and other regulated  industries.  Such an
acquisition holds a tremendous potential for growth.

Analysis of Liquidity, Capital Resources and Financial Position
---------------------------------------------------------------

Management  remains  optimistic  with  respect  to the  growth of the  Company's
business as described above.  However,  as of February 29, 2004, a deficiency in
working capital exists as the Company's current  liabilities  exceed its current
assets by approximately $2,645,000.

Management has met operating deficits for the three month and nine month periods
ended February 29, 2004 through borrowings,  predominantly from shareholders and
other  related  parties.  During  such nine  month  period,  borrowings  totaled
$1,077,375  ($790,375 from related parties) and repayments of principal  totaled
$673,421  ($633,421  to  related  parties).  During  such  three  month  period,
borrowings  totaled  $525,598  ($368,598 from related parties) and repayments of
principal  totaled  $209,300  ($194,300  to related  parties).  Management  will
attempt to utilize similar debt and non-dilutive  equity financing  alternatives
to sustain  operations.  Whether such  financing will be available as needed and
the ultimate form of such financing is uncertain.

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal course of business.  From  inception to date, the
Company  has  incurred  significant  outstanding  current  obligations  and  has
incurred substantial net losses. This factor,  among others,  raises substantial
doubt as to the Company's ability to continue as a going concern.

                                       6
<PAGE>
ITEM 3. CONTROLS AND PROCEDURES


Evaluation of Internal and Disclosure Controls

The  management of the Company has evaluated the  effectiveness  of the issuer's
disclosure  controls  and  procedures  as of a date  within 90 days prior to the
filing  date of the  report  (evaluation  date)  and  have  concluded  that  the
disclosure  controls and procedures are adequate and effective  based upon their
evaluation  as of the  evaluation  date.  There were no  significant  changes in
internal controls or in other factors that could  significantly  affect internal
controls subsequent to the date of the most recent evaluation of such, including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.

                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings.

     None.


Item 2. Change in Securities

     None.


Item 3. Defaults Upon Senior Securities

     None.


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

     None.


Item 5. Other Information

     None.


Item 6. Exhibits and Reports on Form 8-K.

     31.1 Certification  of Chief  Executive  Officer  and  Principal  Financial
          Officer  pursuant to  Rule13a-146.1  promulgated  under the Securities
          Exchange Act of 1934

     32.1 Certification  pursuant to 18 U.S.C. Section 1950, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002




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<PAGE>




SIGNATURES


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

                                          NELX, Inc.
                                         (Registrant)

Dated:  April 14, 2004                   By:      /s/  John M. Jacobs
                                         ---------------------------------------
                                                       John M. Jacobs
                                                       President















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