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

                                   FORM 10-QSB

     Quarterly  Report  Pursuant  to  Section  13 or 15 (d)  of  the  Securities
     Exchange Act of 1934

                    For the quarter ended September 30, 2000

                        Commission File Number 33-6658-C

                                Pioneer Railcorp
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

              Iowa                                                37-11912
-------------------------------                              -------------------
(State or other jurisdiction of                              (IRS Employer ID #)
 incorporation or organization)

     1318 S. Johanson Rd Peoria, IL                                61607
----------------------------------------                         ----------
(Address of principal executive offices)                         (Zip code)

                   Registrant's telephone number: 309-697-1400

           Securities registered pursuant to Section 12(g) of the Act:

Title of each Class                    Name of each exchange on which registered
-------------------                    -----------------------------------------
Common Stock,Class A                        NASDAQ , Chicago Stock Exchange

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

                                    4,534,277
           ----------------------------------------------------------
           (Shares of Common Stock outstanding on September 30, 2000)
<PAGE>

PIONEER RAILCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
Quarters Ended September 30, 2000 and 1999

UNAUDITED
<TABLE>
<S>
                                                    Three Months   Three Months     Nine Months    Nine Months
                                                        Ended          Ended           Ended           Ended
                                                    Sept. 30, 2000  Sept. 30, 1999  Sept. 30, 2000  Sept. 30 1999
                                                    -------------------------------------------------------------
<S>                                                <C>             <C>             <C>             <C>
Operating revenue ...............................   $  3,841,288    $  3,586,959    $ 11,297,580    $ 10,522,892
                                                    ------------------------------------------------------------
Operating expenses
   Maintenance of way ...........................        358,868         383,836       1,152,489       1,103,073
   Maintenance of equipment .....................        370,982         367,870       1,055,442       1,126,201
   Transportation expense .......................        879,192         742,125       2,490,204       2,355,153
   Administrative expense .......................        952,879         901,638       2,786,036       2,673,975
   Depreciation  & amortization .................        474,445         435,298       1,432,285       1,310,826
                                                    ------------------------------------------------------------
                                                       3,036,366       2,830,767       8,916,456       8,569,228
                                                    ------------------------------------------------------------

Operating income ................................        804,922         756,192       2,381,124       1,953,664
                                                    ------------------------------------------------------------

Other income & expense
   Other (income) expense .......................        (54,941)        (56,922)       (267,281)       (255,208)
   Loss on sale of subsidiary ...................            -0-             -0-             -0-         341,873
   Interest expense, equipment ..................        200,669         165,959         602,052         493,269
   Interest expense, other ......................        189,952         193,541         567,684         564,826
   Net (gain) loss on sale of fixed assets ......        (57,096)          1,107         (54,549)         (1,108)
                                                     -----------------------------------------------------------
                                                         278,584         303,685         847,906       1,143,652
                                                     -----------------------------------------------------------

Income before income taxes ......................        526,338         452,507       1,533,218         810,012

Provision for income taxes ......................        216,600         170,670         602,600         436,170
                                                     -----------------------------------------------------------

Income before minority interest in preferred
   stock dividends of consolidated subsidiaries .    $   309,738    $    281,837    $    930,618    $    373,842
Minority interest in preferred stock dividends of
    consolidated subsidiaries ...................         31,308          31,308          93,924          93,924
                                                     -----------------------------------------------------------

Net income ......................................    $   278,430    $    250,529    $    836,694    $    279,918
                                                     ===========================================================

Basic earnings per common share .................    $      0.06    $       0.05    $       0.18    $       0.06
                                                     ===========================================================
Diluted earnings per common share ...............    $      0.06    $       0.05    $       0.18    $       0.06
                                                     ===========================================================

Cash dividends per common share .................    $    0.0000    $       0.00    $     0.0250    $     0.0225
                                                     ===========================================================
</TABLE>
<PAGE>

PIONEER RAILCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 and December 31, 1999

UNAUDITED
<TABLE>

                                                               September 30     December 31
                                                                   2000            1999
                                                               ----------------------------
<S>                                                           <C>              <C>
ASSETS
Current Assets
   Cash .....................................................  $    915,483     $  2,356,844
   Accounts receivable, less allowance
     for doubtful accounts 2000 $110,645; 1999 $186,998 .....     3,512,422        3,940,029
   Inventories ..............................................       272,278          272,278
   Prepaid expenses .........................................       160,166           91,377
   Income tax refund claims .................................        94,449           94,449
   Deferred taxes ...........................................        91,800           91,800
                                                               ------------     ------------
        Total current assets ................................     5,046,598        6,846,777
                                                               ------------     ------------

Property and Equipment less accumulated
  depreciation 2000 $8,422,422; 1999 $7,242,732 .............    25,737,336       24,159,995
                                                               ------------     ------------
Intangible Assets, less accumulated amortization
  2000 $274,949; 1999 $239,846 ..............................     1,085,924        1,122,489
                                                               ------------     ------------
Other Assets ................................................       450,623          131,503
                                                               ------------     ------------

Total assets ................................................  $ 32,320,481     $ 32,260,764
                                                               ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Accounts payable .........................................  $  2,394,995     $  3,983,617
   Notes payable ............................................             0          810,000
   Income taxes payable .....................................       294,431          561,697
   Current maturities of long-term debt .....................     2,887,754        2,390,042
   Accrued liabilities ......................................       516,314          670,873
                                                               ------------     ------------
        Total current liabilities ...........................     6,093,494        8,416,229
                                                               ------------     ------------

Long-term debt, net of current maturities ...................    14,872,361       13,121,553
                                                               ------------     ------------

Deferred income taxes .......................................     4,505,100        4,505,100
                                                               ------------     ------------

Minority interest in subsidiaries ...........................     1,133,000        1,154,000
                                                               ------------     ------------
Stockholders' Equity

   Common stock .............................................         4,611            4,611
   In Treasury 2000 77,240 shares; 1999 19,000 shares .......           (77)             (19)
                                                               ------------     ------------
   Outstanding 2000 4,534,277; 1999 4,592,217 ...............         4,534            4,592
   Additional paid-in capital ...............................     2,042,042        2,042,042
   Retained earnings ........................................     3,669,950        3,017,248
                                                               ------------     ------------
       Total stockholders' equity ...........................     5,716,526        5,063,882
                                                               ------------     ------------

Total liabilities and equity ................................  $ 32,320,481     $ 32,260,764
                                                               ============     ============
</TABLE>
<PAGE>

PIONEER RAILCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FIRST NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30,1999

UNAUDITED
<TABLE>
                                                                  First Nine Months  First Nine Months
                                                                        2000              1999
                                                                  -----------------  -----------------
<S>                                                                 <C>             <C>
Cash Flows From Operating Activities
Net income ......................................................   $    836,694    $   279,918
Adjustments to reconcile net income to net cash
provided by operating activities:
           Minority interest in preferred stock dividends of
           consolidated subsidiaries .............................        93,924         93,924
           Depreciation ..........................................     1,394,724      1,264,449
           Amortization ..........................................        37,562         46,377
           Increase in cash value life insurance .................       (14,534)       (12,426)
           Loss (gain) on sale of property & equipment ...........       (54,549)        (1,108)
           Loss on sale of subsidiary ............................           -0-        341,872
Change in assets and liabilities, net of effects from
           acquisition of subsidiaries
           (Increase) decrease accounts receivable ...............       427,607       (506,626)
           (Increase) decrease inventories .......................           -0-         32,730
           (Increase) decrease prepaid expenses ..................       (68,789)        92,680
           (Increase) decrease intangible assets .................        (1,435)        (3,758)
           Increase (decrease) accounts payable ..................    (1,588,622)       (12,189)
           (Increase) decrease income tax refund claims ..........           -0-         23,661
           Increase (decrease) income tax payable ................      (267,266)       333,331
           Increase (decrease) accrued liabilities ...............      (154,559)       113,641
                                                                     -----------   ------------
           Net cash provided by operating activities .............       640,757      2,086,476
                                                                     -----------   ------------

Cash Flows From Investing Activities
           Proceeds from sale of property & equipment ............       597,557         10,925
           Purchase of property & equipment, net of property
             and equipment from acquisition of subsidiaries ......    (3,514,646)    (1,496,775)
           Business acquisitions, net of cash acquired ...........       (55,000)    (3,875,000)
                                                                     -----------   ------------
           Net cash (used in) investing activities ...............    (2,972,089)    (5,360,850)
                                                                     -----------   ------------

Cash Flows From Financing Activities
           Proceeds from short-term borrowings ...................     4,101,719      1,852,004
           Proceeds from long-term borrowings ....................     5,504,773      7,421,590
           Issuance of notes receivable ..........................      (265,500)           -0-
           Payments on short-term borrowings .....................    (4,911,719)    (2,051,358)
           Payments on long-term borrowings ......................    (3,256,253)    (3,938,029)
           Payments on notes receivable ..........................        15,914            -0-
           Repurchase of minority interest .......................       (21,000)       (32,000)
           Purchase of common stock for treasury .................       (84,655)           -0-
           Proceeds from warrants and options exercised ..........           -0-          1,040
           Cash dividends paid ...................................      (113,393)      (103,742)
           Payments to minority interest .........................       (79,915)       (79,915)
                                                                     -----------   ------------
           Net cash provided by financing activities .............       889,971      3,069,590
                                                                      ----------   ------------

Net (decrease) in cash ...........................................    (1,441,361)      (204,784)

Cash, beginning of period .......................................      2,356,844        469,476
                                                                     -----------   ------------

Cash, end of period ..............................................   $   915,483    $   264,692
                                                                     ===========   ============
</TABLE>
<PAGE>

SEGMENT INFORMATION

Description of products and services from reportable segments:

Pioneer Railcorp has two reportable segments,  railroad operations and equipment
leasing  operations.  All other  operations are classified as corporate  support
services for purposes of this disclosure.

Measurement of segment profit or loss and segment assets:

The accounting  policies of the segments are the same as those  described in the
summary of significant  accounting policies.  Pioneer Railcorp evaluates segment
profit based on operating income  including  intersegment  revenues,  but before
provision  for income  taxes,  items of other income and  expense,  and minority
interest in preferred stock dividends of consolidated subsidiaries.

Intersegment transactions:

Intersegment transactions are recorded at cost.

Factors management used to identify the reportable segments:

Pioneer  Railcorp's  reportable  segments  consist of a wholly-owned  short line
railroad  subsidiaries  that offer  similar  services  and a railroad  equipment
subsidiary that leases railcars,  locomotives,  and other railroad  equipment to
affiliated  and  unaffiliated  entities.  The  corporate  operations  consist of
support services provided to the operating segments.

                                                  Third Quarter    Third Quarter
                                                       2000             1999
                                                  -------------    -------------

Revenues from external customers
  Railroad operations                               2,976,953         2,938,992
  Equipment leasing operations                        856,613           647,967
  Corporate support services                            7,722                 0
                                                   -----------------------------
     Total revenues from external customers         3,841,288         3,586,959
                                                   =============================

Intersegment revenues
  Railroad operations                                       0                 0
  Equipment leasing operations                         99,600            95,100
  Corporate support services                        1,615,481         1,541,613
                                                    ----------------------------
      Total intersegment revenues                   1,715,081         1,636,713
                                                    ============================

Segment profit
  Railroad operations                               1,314,807         1,363,535
  Equipment leasing operations                        503,966           309,001
  Corporate support services                          701,231           720,369
                                                    ----------------------------
      Total segment profit                          2,520,004         2,392,905

Reconciling items
   Intersegment revenues                           (1,715,081)       (1,636,713)
   Income taxes                                      (216,600)         (170,670)
   Minority interest                                  (31,308)          (31,308)
   Other income(expense), net                        (278,585)         (303,685)
                                                    ----------------------------
   Total consolidated net income                      278,430           250,529
                                                   =============================


<PAGE>

                                                        Nine Months  Nine Months
                                                          Ended         Ended
                                                         9/30/00       9/30/99
                                                        -----------  -----------

Revenues from external customers
   Railroad operations ..............................    8,893,195    8,544,380
   Equipment leasing operations .....................    2,392,812    1,978,512
   Corporate support services .......................       11,573            0
                                                       -------------------------
     Total revenues from external customers .........   11,297,580   10,522,892
                                                       =========================

Intersegment revenues
   Railroad operations ..............................            0            0
   Equipment leasing operations .....................      294,300      293,600
   Corporate support services .......................    4,695,231    4,398,111
                                                       -------------------------
      Total intersegment revenues ...................    4,989,531    4,691,711
                                                       =========================
Segment profit
   Railroad operations ..............................    3,834,876    3,607,539
   Equipment leasing operations .....................    1,355,695    1,001,753
   Corporate support services .......................    2,180,084    2,036,083
                                                        ------------------------
     Total segment profit ...........................    7,370,655    6,645,375

Reconciling items
    Intersegment revenues ...........................   (4,989,531)  (4,691,711)
    Income taxes ....................................     (602,600)    (212,170)
    Minority interest ...............................      (93,924)     (93,924)
    Other income(expense), net ......................     (847,906)  (1,367,652)
                                                       -------------------------

       Total consolidated net income ................      836,694      279,918
                                                       =========================
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PIONEER RAILCORP AND SUBSIDIARIES

NOTE 1.   STATEMENTS

The  accompanying   Consolidated  Statements  of  Income,  Balance  Sheets,  and
Statements of Cash Flows are unaudited. The interim financial statements reflect
all adjustments (consisting only of normal recurring accruals) which are, in the
opinion of  management,  necessary  for a fair  statement of the results for the
interim  periods   presented.   These  interim  statements  should  be  read  in
conjunction with the latest  financial  statements and notes thereto included in
the Company's  latest Annual  Report on Form 10-KSB and  subsequent  Form 10-QSB
filings.  The  results  of  operations  for the  interim  period  should  not be
considered indicative of results to be expected for the full year.

NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include Pioneer Railcorp (Pioneer) and its
wholly-owned  and controlled  subsidiaries  (collectively,  "the Company").  The
Company's  railroad  operations  segment  consists  of  wholly-owned  short line
railroad  subsidiaries  that offer  similar  services and includes the following
wholly-owned  subsidiaries:  West Michigan Railroad Co. (WMI), Michigan Southern
Railroad  Company  (MSO),  Fort Smith Railroad Co. (FSR),  Alabama  Railroad Co.
(ALAB),  Mississippi Central Railroad Co. (MSCI), Alabama & Florida Railway Co.,
Inc. (AF), Decatur Junction Railway Co. (DT),  Vandalia Railroad Company (VRRC),
Minnesota  Central  Railroad  Co.  (MCTA)  (sold May 6, 1999),  Keokuk  Junction
Railway Co. (KJRY),  Shawnee Terminal Railway Company (STR),  Pioneer Industrial
Railway  Co.  (PRY),  The Garden  City  Western  Railway,  Inc.  (GCW),  Indiana
Southwestern  Railway Co. (ISW),  and an inactive  subsidiary  Midwest  Terminal
Railway Company (formerly Rochelle Railroad Co.) (RRCO). The Company's equipment
leasing segment leases railcars,  locomotives,  and other railroad  equipment to
affiliated  and  unaffiliated   entities  and  includes  only  the  wholly-owned
subsidiary  Pioneer  Railroad  Equipment  Co.,  Ltd.  (PREL).  All other Company
operations are  classified as corporate and include the following  wholly- owned
subsidiaries:  Pioneer  Resources,  Inc.  (PRI),  Pioneer Air, Inc.  (PAR),  and
Pioneer Railroad Services, Inc. (PRS). All significant intercompany balances and
transactions have been eliminated in consolidation.

NOTE 3. CONTINGENCIES

Pioneer Railcorp  guaranteed certain long-term debt obligations of the Minnesota
Central  Railroad Co. in  connection  with debt  acquired as part of the initial
asset purchase by the Minnesota  Central Railroad Co. in 1994.  Pioneer Railcorp
remains as a guarantor on one note and could be required to repay the  principal
and accrued interest on the note if it is defaulted upon. The principal  balance
of the note as of December 31, 1999 was approximately $75,000. As of the date of
this Form 10-QSB,  management  is not aware of any  incident  which is likely to
result in a liability that would  materially  affect the Company's  consolidated
financial position or results of operation.

NOTE 4. PURCHASES OF RAILROAD FACILITIES

On April 1, 2000,  the  Company  through  its  wholly-owned  subsidiary  Indiana
Southwestern Railway Co. (ISW) acquired,  in a transaction  accounted for by the
purchase  method  of  accounting,  certain  assets  including  all of  the  rail
facilities owned or leased by the Evansville Terminal Railway Company (EVT). The
line  begins in  Evansville,  Indiana  and is 23 miles in  length.  The  primary
commodities are grain, plastics and rail equipment. The total purchase price was
$564,000 allocated to track assets. There was no goodwill recognized as a result
of this transaction.  Unaudited pro forma consolidated results of operations for
the nine  months  ended  September  30,  2000 and 1999,  as though  the  Indiana
Southwestern Railway Co. had been acquired as of January 1, 1999, follows:

                                                  2000                  1999
                                             -----------------------------------
Railway operating revenue                       $11,332,005          $10,664,810
Net income                                          834,178              264,651
Earnings per common share                               .18                  .06

The Company projects the ISW will initially generate annual revenues of $300,000
and $50,000 of operating income.
<PAGE>


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

This management's  discussion and analysis of financial condition and results of
operations  references  the  Company's  two  operating  segments.  The Company's
railroad  operations  segment  consists  of  wholly-owned  short  line  railroad
subsidiaries  that offer similar  services and the Company's  equipment  leasing
segment leases railcars, locomotives, and other railroad equipment to affiliated
and  unaffiliated  entities.  All other  operations  are classified as corporate
support services for purpose of these discussions.  All information provided for
each  operating  segment is  presented  after  elimination  of all  intersegment
transactions, therefore reflecting its share of consolidated results.

Pioneer Railcorp, an Iowa corporation, is a railroad holding company. As used in
this Form 10-QSB,  unless the context requires otherwise,  the term "Company" or
"PRC" refers to the parent, Pioneer Railcorp and its subsidiaries: West Michigan
Railroad  Co.  (WMI),  Michigan  Southern  Railroad  Company  (MSO),  Fort Smith
Railroad Co. (FSR),  Alabama Railroad Co. (ALAB),  Mississippi  Central Railroad
Co. (MSCI),  Alabama & Florida Railway Co., Inc. (AF),  Decatur Junction Railway
Co. (DT),  Vandalia  Railroad  Company (VRRC),  Minnesota  Central  Railroad Co.
(MCTA) (sold May 6, 1999), Keokuk Junction Railway Co. (KJRY),  Shawnee Terminal
Railway Company (STR),  Pioneer  Industrial  Railway Co. (PRY),  The Garden City
Western Railway,  Inc. (GCW),  Indiana  Southwestern  Railway Co. (ISW), Pioneer
Resources, Inc. (PRI), Pioneer Railroad Equipment Co., Ltd. (PREL), Pioneer Air,
Inc. (PAR),  Pioneer Railroad  Services,  Inc. (PRS) and an inactive  subsidiary
Midwest Terminal Railway Company (formerly Rochelle Railroad Co.) (RRCO).

Summary: Third Quarter 2000 Compared to Third Quarter 1999.

The Company's net income in the third quarter 2000 was $278,400,  an increase of
$27,900 from the third  quarter  1999 which had net income of $250,500.  Revenue
increased by $254,000 or 7% to  $3,841,000  from  $3,587,000  in the same period
last year.  Operating  expense  increased by $205,000 or 7%, to $3,036,000  from
$2,831,000 in the same period last year.  Operating income increased by $49,000,
or 6% to $805,000 from $756,000 in the same period last year.

Operating  income  was  increased  in the third  quarter  2000 by the  Company's
equipment leasing operations by approximately $195,000 in the period,  primarily
from increased  revenue  generated from locomotive leases and an increase in the
utilization  of its railcar  fleet by  non-affiliated  railroads.

The  railroad  operations  had a decrease in  operating  income in the period of
$45,000.  Factors adversely  affecting  railroad  operations  include a $104,000
reduction in operating  income from the Alabama & Florida Railway Co.  resulting
from a service disruption to the line's primary customer due to track conditions
on the portion of the line that is leased by the  Alabama & Florida  Railway Co.
from the Alabama Electric Cooperative, Inc. Negotiations have been in process to
resolve this situtation,  but to date the Alabama & Florida Railway has not been
able to reach a satisfactory  agreement with the Alabama Electric Cooperative to
repair the line.  Initially,  the Alabama & Florida  Railway  believed  that the
situation  would not result in a material  loss of revenue  because the customer
had planned to transload on the Alabama & Florida Railway, however, the customer
changed its plans  abruptly  without  notice once the track was  embargoed.  The
Alabama  &  Florida  continues  to serve the  other  customers  on the line.  In
addition, corporate support services increased operating income by approximately
$100,000 in the period resulting primarily from increased support services.

Revenue:

Revenue increased in the third quarter 2000 by approximately $254,000, or 7%, to
$3,841,000 from $3,587,000 in the same period last year. The railroad operations
increased  revenue by approximately  $41,000 in the period which resulted from a
combination of increased  freight revenue and increased revenue from the storage
of  private  railcars  from  non-affiliated  entities.   Revenue  from  railroad
operations was adversely  affected by Alabama & Florida Railway Co. as described
previously.  In addition,  the Company began operating the Indiana  Southwestern
Railway  Co. on April 1, 2000  which  generated  $60,000 of revenue in the third
quarter  2000.  The  equipment  leasing  operations  had a $209,000  increase in
revenue in the period primarily from increased revenue generated from locomotive
leases and an increase in the utilization of its railcar fleet by non-affiliated
railroads.
<PAGE>

Operating Expense:

Operating  expense  increased  in the third  quarter  2000 by $205,000 or 7%, to
$3,036,000 from $2,831,000 in the prior year. The railroad operations  increased
operating  expense by approximately  $87,000 in the period which resulted from a
variety of factors including increased fuel and other  transportation  expenses.
In the third  quarter 2000 $54,000 of operating  expense  related to the Indiana
Southwestern  which the Company began  operating on April 1, 2000. The equipment
leasing operations increased operating expense approximately $19,000,  primarily
from an increase in depreciation  expense related to the acquisition of railcars
and locomotives.  Corporate  support  services  increased  operating  expense by
approximately  $100,000 in the period resulting primarily from increased support
services.

Maintenance  of way and  structures  expense  (MOW)  decreased  $25,000 or 7% to
$359,000 from $384,000 in the same period last year.  Railroad  operations had a
decrease of $39,000 of MOW and corporate services increased MOW by $14,000.

Maintenance of equipment  expense (MOE) increased $3,000, or 1% to $371,000 from
$368,000 in the same period last year. The equipment  leasing  operations had an
increase  in MOE  of  approximately  $11,000  as a  result  of  increased  costs
associated with maintaining the Company's railcar fleet. The railroad operations
had a decrease in MOE of $27,000.  In addition,  MOE was increased  $19,000 from
corporate support services.

Transportation  expense  (TRAN)  increased  $137,000,  or 18% to  $879,000  from
$742,000 in the same period last year.  Most of the  increased  TRAN expense was
generated by the railroad  operations,  primarily  related to increased fuel and
carhire expenses.

General & administration  expense (ADMIN) increased $51,000 in the third quarter
2000 to $953,000 from $902,000 in the prior year. The railroad operations had an
increase  of  $19,000 in ADMIN  expense in the  period.  The  equipment  leasing
operations decreased ADMIN approximately $35,000 as a result of reduced expenses
related to repositioning the Company's railcar fleet. Corporate expenses related
to corporate  support  expenditures  increased  ADMIN  expense by  approximately
$67,000 in the period.

Depreciation and amortization expense increased $39,000, or 9%, to $474,000 from
$435,000 in the same period last year.  Approximately  $7,000 of the increase is
related to the Indiana  Southwestern  Railway.  The equipment leasing operations
increased  depreciation expense approximately $29,000 related to the acquisition
of railcars and locomotives.

Other Income and Expense Income Statement Line Item Discussion:

In the third quarter 2000 other income and expense  decreased  $2,000 to $55,000
compared to $57,000 in the same period last year. Other income relates primarily
to lease income for the use of railroad property. The Company continues to place
a strong  emphasis on  identifying  and  collecting  revenues from third parties
occupying  Company  property.  In addition  to lease  income,  other  income and
expense includes  revenues  generated from scrap sales, and other  miscellaneous
non-operating  revenues  and  expenses,  primarily  generated  by the  company's
railroad operations.

Interest expense related to equipment  financing  increased $35,000 in the third
quarter  2000 to $201,000  compared to $166,000 in the same period last year.  A
majority of this increase is the result of financing activities  associated with
additional  locomotive  purchases made by the Company in the fourth quarter 1999
and first quarter 2000.  Other interest  expense  decreased  $4,000 in the third
quarter 2000 to $190,000 from $194,000 in the prior year.

In the third quarter 2000 the Company had a gain on fixed asset  dispositions of
approximately  $57,000 compared to an insignificant loss in the same period last
year.  The gain in the third  quarter  2000  primarily  relates to the sale of a
locomotive.
<PAGE>

Summary: First Nine Months 2000 Compared to First Nine Months 1999.

The Company's net income in the first nine months 2000 was $836,700, an increase
of $556,700 from the first nine months 1999 which had net income of $280,000. In
the first nine months  1999,  net income was  affected  by a one-time  charge of
$342,000  relating to the sale of the  Minnesota  Central  Railroad  Co.  stock.
Excluding the MCTA sale transaction from 1999 results,  net income for the first
nine months 1999 would have been  approximately  $622,000.  Revenue increased by
$775,000 or 7% to  $11,298,000  from  $10,523,000  in the same period last year.
Operating  expense increased by $347,000 or 4%, to $8,916,000 from $8,569,000 in
the same period last year. The increase in operating expense includes  increased
fuel  costs  of  approximately  $122,000  as a  result  of the  current  pricing
environment.  Operating  income  increased by $427,000 or 22% to $2,381,000 from
$1,954,000 in the same period last year.

Operating  income was  increased  by  approximately  $227,000  in the first nine
months  2000  by  the  Company's  railroad  operations.  The  equipment  leasing
operations increased operating revenue by approximately  $354,000 in the period,
primarily  from  increased  revenue  generated  from  locomotive  leases  and an
increase in the utilization of its railcar fleet by non-affiliated railroads. In
addition, corporate support services decreased operating income by approximately
$154,000 in the period.

Revenue:

Revenue  increased in the first nine months 2000 by approximately  $775,000,  or
7%, to $11,298,000  from  $10,523,000 in the same period last year. The railroad
operations  increased  revenue by  approximately  $349,000  in the period  which
resulted from an increase in revenues of approximately $723,000 generated by the
railroads  operated  in the first nine months 2000 less a decrease in revenue of
approximately $374,000 as a result of the sale of the Minnesota Central Railroad
on May 6, 1999. The increase of revenue of $723,000 generated from the railroads
operated in the first nine months 2000 resulted from a combination  of increased
freight revenue and increased  revenue from the storage of private railcars from
non-affiliated  entities. The increase in revenue includes $165,000 of increased
revenue  generated by The Garden City Western  Railway,  which the Company began
operating on May 1, 1999. In addition,  the Company began  operating the Indiana
Southwestern Railway Co. on April 1, 2000 which generated $162,000 of revenue in
the first nine months 2000.  The  equipment  leasing  operations  had a $415,000
increase in revenue in the period  resulting  primarily from  increased  revenue
generated from locomotive  leases.  Corporate support services increased revenue
approximately $11,000 in the first nine months 2000, primarily from subscription
revenue from its publication The Short Line.

Operating Expense:

Operating  expense increased in the first nine months 2000 by $347,000 or 4%, to
$8,916,000 from $8,569,000 in the same period last year. The railroad operations
increased  operating  expense by  approximately  $121,000  in the  period  which
resulted from an increase in operating  expense of  approximately  $512,000 from
the  railroads  operated  in the  first  nine  months  2000 less a  decrease  in
operating  expense  of  approximately  $391,000  as a result  of the sale of the
Minnesota  Central Railroad on May 6, 1999. The increase in operating expense of
$512,000 from the railroads operated in the first nine months 2000 resulted from
a variety of  factors  including  increased  track  maintenance,  fuel and other
transportation  expenses.  The increase in operating expense includes  increased
fuel  costs  of  approximately  $122,000  as a  result  of the  current  pricing
environment.  The increase in operating expense includes an increase of $135,000
of  operating  expense for The Garden City  Western  Railway,  which the Company
began operating on May 1, 1999 and an increase of $127,000 of operating  expense
for the Indiana Southwestern which the Company began operating on April 1, 2000.
The equipment  leasing  operations  increased  operating  expense  approximately
$61,000,  primarily  from an increase  in  depreciation  expense  related to the
acquisition  of railcars  and  locomotives  of $116,000  offset by a decrease in
maintenance and freight expenses of  approximately  $55,000.  Corporate  support
services increased operating expense approximately  $165,000,  primarily related
to payroll related expenditures.

Maintenance  of way and  structures  expense  (MOW)  increased  $49,000 or 4% to
$1,152,000 from $1,103,000 in the same period last year.  Railroads  operated in
the first nine months 2000 had an increase of $80,000 in MOW,  primarily related
to increased track material by the railroad operations, $29,000 of increased MOW
expense for The Garden City Western  Railway and $7,000 of increased MOW expense
for the Indiana Southwestern Railway. In addition,  MOW was decreased by $51,000
as a result of the sale of the MCTA.
<PAGE>

Maintenance of equipment  expense (MOE) decreased  $71,000,  or 6% to $1,055,000
from  $1,126,000  in the same  period  last year.  Approximately  $18,000 of the
decrease  related to the equipment  leasing  operations as a result of decreased
costs  associated  with  maintaining  the  Company's  railcar  fleet.  Railroads
operated in the first nine  months  2000 had a decrease  of $44,000 in MOE.  The
Garden City Western Railway and the Indiana Southwestern Railway did not have a
significant  amount of MOE in the period.  In  addition,  MOE was  decreased  by
$27,000 as a result of the sale of the MCTA.

Transportation  expense  (TRAN)  increased  $135,000,  or 6% to $2,490,000  from
$2,355,000  in the same period last year.  Railroads  operated in the first nine
months 2000 had an increase of $375,000 in TRAN,  primarily related to increased
fuel and carhire expenses, $56,000 of increased TRAN expense for The Garden City
Western   Railway  and  $63,000  of  increased  TRAN  expense  for  the  Indiana
Southwestern Railway. In addition, TRAN was decreased by $244,000 as a result of
the sale of the MCTA. The increase in TRAN expense includes increased fuel costs
of approximately $122,000 as a result of the current pricing environment.

General & administration  expense (ADMIN) increased $112,000 or 4% to $2,786,000
from $2,674,000 in the prior year.  Railroads  operated in the first nine months
2000 had an increase of $51,000 in ADMIN expense in the period including $22,000
of increased  ADMIN  expense for The Garden City  Western  Railway and a $34,000
increase in ADMIN  expense for the Indiana  Southwestern  Railway.  In addition,
ADMIN  was  decreased  by  $25,000  as a  result  of the sale of the  MCTA.  The
equipment leasing operations  decreased ADMIN approximately  $61,000 as a result
of reduced  expenses  related to  repositioning  the  Company's  railcar  fleet.
Corporate  expenses related to corporate  support  expenditures  increased ADMIN
expense by approximately $147,000 in the period.

Depreciation and amortization  expense increased $121,000,  or 9%, to $1,432,000
from  $1,311,000  in the same  period  last year.  Approximately  $40,000 of the
increase  is related to The Garden  City & Western  Railway  and  $14,000 of the
increase  is  related  to  the  Indiana   Southwestern   Railway.  In  addition,
depreciation  and  amortization was decreased by $44,000 as a result of the sale
of the MCTA. The equipment leasing  operations  increased  depreciation  expense
approximately $116,000 related to the acquisition of railcars and locomotives.

Other Income and Expense Income Statement Line Item Discussion:

In the first nine months  2000 other  income and  expense  increased  $12,000 to
$267,000  compared to $255,000  in the same period last year.  Other  income and
expense relates primarily to lease income for the use of railroad property.  The
Company  continues  to place a strong  emphasis on  identifying  and  collecting
revenues from third parties  occupying  Company  property.  In addition to lease
income,  other income and expense includes revenues  generated from scrap sales,
and  other  miscellaneous  non-  operating  revenues  and  expenses,   primarily
generated by the Company's railroad operations.

Interest expense related to equipment  financing increased $109,000 in the first
nine months 2000 to $602,000  compared to $493,000 in the same period last year.
A majority of this  increase is the result of  financing  activities  associated
with additional  locomotive  purchases made by the Company in the fourth quarter
1999 and first nine months 2000. Other interest expense  increased $3,000 in the
first nine  months  2000 to $568,000  from  $565,000  in the prior  year.  Other
interest  expense  increases  relate  to  the  Garden  City  &  Western  Railway
acquisition and the Indiana  Southwestern  Railway acquisition and was decreased
by $15,000 as a result of the sale of the MCTA.

In the first nine months 2000 the Company had a gain on fixed asset dispositions
of  approximately  $55,000  compared to an net gain of $1,000 in the same period
last year. The net gain in the first nine months 2000  primarily  relates to the
disposition of 13 railcars and 2 locomotives.

Impact of New Accounting Pronouncements:

The Company is not aware of any recent accounting  standard issued,  but not yet
required to be adopted by the Company,  that would have a material effect on its
financial position or results of operations.
<PAGE>

Liquidity and Capital Resources:

The Company  primarily  uses cash  generated  from  operations  to fund  working
capital  needs and relies on long-term  financing  for  railcars,  new operating
subsidiaries,  and other  significant  capital  expenditures.  The  Company  has
working capital facilities totaling  $1,200,000,  all of which was available for
use at the end of the third quarter 2000. In addition,  the Company believes the
market  value of its railcar  fleet is  significantly  higher then the amount of
debt associated with the railcar fleet. Therefore, the Company believes it could
refinance  or sell part of its  railcar  fleet and  generate up to $1 million in
cash.

On June 23, 2000, the Company entered into a credit agreement with National City
Bank of Michigan/Illinois to provide a $5 million revolving  acquisition line of
credit for railroad  acquisitions at a variable  interest rate of prime plus 1%,
maturing June 10, 2002.  Amounts drawn on the line are amortized  over a 10 year
period.  This  credit  line is  secured  by all non real  estate  assets  of the
Mississippi  Central  Railroad  Co., the Alabama  Railroad  Co., and any company
acquired  using  proceeds  from the  credit  line.  In the second  quarter  2000
$614,000 was borrowed on the line in connection  with the asset  purchase by the
Indiana  Southwestern  Railway Co. The monthly  principal  and interest  payment
currently required to be repaid is $8,300.  There were no new borrowings against
this credit agreement in the third quarter 2000.

On June 23, 2000, the Company entered into a credit agreement with National City
Bank of  Michigan/Illinois  to refinance  the remaining  balance  related to the
acquisition  of The Garden  City  Western  Railway in the amount of  $1,425,000,
previously financed by the Company's's  acquisition line of credit. The note has
a  variable  interest  rate of LIBOR plus 2.25% and  matures  July 1, 2005.  The
interest rate of the note at September 30, 2000 was 8.9%. The monthly  principal
and interest payment currently required to be repaid is $18,000.

On June 23, 2000, the Company entered into a credit agreement with National City
Bank  of  Michigan/Illinois  to  borrow  $2,075,000  for  the  financing  of  29
locomotives  at a variable  interest rate of LIBOR plus 2.25%,  maturing July 1,
2005. The interest rate on this note at September 30, 2000 was 8.9%. The monthly
principal and interest payment currently  required to be repaid is approximately
$33,000.

Long-term  equipment  financing has historically  been readily  available to the
Company for its railcar  acquisition  program.  The Company  believes it will be
able to continue obtaining  long-term equipment financing should the need arise.
The Company's  plans for new debt in the  foreseeable  future is contingent upon
new railroad acquisitions and increased needs and/or opportunities for railcars.

On July 1, 1995, the Company's  stock split and warrant  issuance became payable
to  shareholders.  The 2 for 1 stock split increased the number of shares issued
and  outstanding  from  2,099,142 to  4,198,284.  At the same time  shareholders
became  entitled  to purchase  an  additional  4,198,284  shares  through  stock
warrants  issued by the  Company as  dividends.  One warrant was issued for each
share of common stock held after the split,  entitling  the holder to purchase 1
share of common  stock for $2.00 per share.  The shares  purchased  through  the
exercise of the warrants  must be held for 1 year from date of  purchase.  As of
September  30,  2000,  a total of 67,766  warrants  originally  issued  had been
exercised, and the Company realized $135,532 on the issuance of the warrants.

The  Company  granted  836,000  options  to  certain  employees  under  its 1994
incentive  stock option plan.  As of September 30, 2000,  the remaining  151,759
unexercised  options under this plan have expired and no further  options can be
exercised under this plan.

On June 26,  1996,  the  Company's  shareholders  approved a stock  option  plan
permitting the issuance of 407,000 shares of common stock. Options granted under
the plan are  incentive  based  except for the options  granted to the CEO whose
options  are  non-qualified.  The  options  will be  fully  vested  and  will be
exercisable  as of July 1, 2001. The exercise date can be accelerated if Pioneer
Railcorp common shares reach a closing price of $7.25 per share, or higher,  for
any  consecutive  10-day  period,  as reported in the Wall Street  Journal.  The
options will be exercisable  at prices  ranging from $2.75 to $3.03,  based upon
the trading price on the date of the grant,  in whole or in part within 10 years
from the date of grant. As of September 30, 2000, a total of 215,000 options are
outstanding under this plan.
<PAGE>

Pioneer Railcorp  guaranteed certain long-term debt obligations of the Minnesota
Central  Railroad Co. in  connection  with debt  acquired as part of the initial
asset purchase by the Minnesota  Central Railroad Co. in 1994.  Pioneer Railcorp
remains as a guarantor on one note and could be required to repay the  principal
and accrued interest on the note if it is defaulted upon. The principal  balance
of the note as of December 31, 1999 was approximately $75,000.

In 1999,  Pioneer  Railcorp's  Board of  Directors  authorized  and approved the
repurchase of up to one million shares (1,000,000) of the Company's common stock
and as of September 30, 2000, a total of 77,240 shares had been repurchased at a
cost of $111,132. The Company plans to continue buying back its common stock but
believes  the  repurchase  will  be on a  more  limited  scope  then  previously
anticipated due to capital  requirements and the trading volume of the Company's
stock.

The Company  anticipates that the outcomes  involving  current legal proceedings
will not  materially  affect the Company's  consolidated  financial  position or
results of operation.

The Company  believes its cash flow from  operations  and its available  working
capital  credit  lines,  will be more than  sufficient to meet  liquidity  needs
through at least the next twelve months.

Balance Sheet and Cash Flow Items:

The Company operating activities in the first nine months 2000 generated cash of
$641,000. Net cash generated from operating activities for the first nine months
2000  was  generated  primarily  from  $836,700  of net  income,  $1,437,000  of
depreciation  and  amortization,  and  a  decrease  of  accounts  receivable  of
$428,000.  Net cash was used by operating  activities  for the first nine months
2000 from a decrease in accounts  payable of $1,589,000 a decrease in income tax
payable of $267,000 and a decrease in net cash of $162,700 by changes in various
other operating assets and liabilities.

In the first nine months 2000, the Company purchased approximately $3,514,000 of
fixed  assets and  capital  improvements.  Capital  expenditures  included  $1.6
million for 22 locomotives.  The Company plans to expand it's locomotive leasing
operations and update it's current fleet. In addition, the Company purchased 140
railcars for approximately $1,022,000.  The capital expenditures for locomotives
and railcars were financed with long-term  financing.  Capital  expenditures for
track and leasehold improvements totaled $130,000 in the first nine months 2000.
Fixed asset expenditures of approximately $198,000 relate to equipment purchases
and railcar  betterments.  In addition,  the Company recorded  $564,000 of track
assets purchased by the Indiana Southwestern Railway Co. as discussed further in
"Part 2, Item 5 other information"of this report.

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

In the course of business, the Company experiences crossing accidents,  employee
injuries,  delinquent and/or disputed accounts, and other incidents,  which give
rise to claims  that may result in  litigation.  Management  vigorously  pursues
settlement and release of such claims, but at any one time, some such incidents,
which could  result in lawsuits by and against the Company,  remain  unresolved.
Management believes it has valid claims for, or good defenses to, these actions.
Management considers such claims to be a routine part of the Company's business.

As of the date of this Form  10-QSB,  management  is not  aware of any  incident
which is likely to  result in a  liability  that  would  materially  affect  the
Company's consolidated financial position or results of operation.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters  were  submitted to a vote of security  holders in the third  quarter
2000.

Item 5.   OTHER INFORMATION

On April 6, 2000,  Pioneer  Railcorp's  Board of Directors  declared a $.025 per
common share dividend  payable to  shareholders  of record as of April 30, 2000,
and was  paid May 24,  2000.  The  total  dividend  paid  out was  approximately
$115,000.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

Exhibit # 11 - Statement regarding computation of per share earnings.

Exhibit # 27 - Financial data schedule.

No reports were filed on Form 8-K during the first nine months 2000.
<PAGE>
                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report to be  signed  on it's  behalf by the
undersigned thereunto duly authorized.

                                       PIONEER RAILCORP
                                       (Registrant)




11/07/00                               /S/ Guy L. Brenkman
--------                               -----------------------------------------
DATE                                   GUY L. BRENKMAN
                                       PRESIDENT & CEO

11/07/00                               /S/ J. Michael Carr
--------                               -----------------------------------------
DATE                                   J. MICHAEL CARR
                                       TREASURER & CHIEF FINANCIAL OFFICER