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 March 31, 2002

                        Commission File Number 33-6658-C

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

             Iowa                                                 37-1191206
--------------------------------------------------------------------------------
(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 [ ].

                                    4,528,427
             ------------------------------------------------------
             (Shares of Common Stock outstanding on March 31, 2002)

                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS



                        PIONEER RAILCORP AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                     Quarters Ended March 31, 2002 and 2001
                                    UNAUDITED

                                                           First Quarter
                                                     ---------------------------
                                                        2002            2001
                                                     ---------------------------

Operating revenue ................................   $ 3,705,524    $ 3,510,871
                                                     ---------------------------

Operating expenses
   Maintenance of way ............................       234,979        336,226
   Maintenance of equipment ......................       372,170        395,038
   Transportation expense ........................       669,264        865,343
   Administrative expense ........................     1,014,441      1,002,022
   Depreciation  & amortization ..................       513,082        511,214
                                                     ---------------------------
                                                       2,803,936      3,109,843
                                                     ---------------------------

Operating income .................................       901,588        401,028
                                                     ---------------------------

Other income & expense
   Other (income) expense ........................      (202,478)      (205,123)
   Interest expense, equipment ...................       116,153        182,889
   Interest expense, other .......................       149,120        182,621
   Net (gain) loss on sale of fixed assets .......        11,268           (459)
                                                     ---------------------------
                                                          74,063        159,928
                                                     ---------------------------

Income before income taxes .......................       827,525        241,100

Provision for income taxes .......................       374,000        107,500
                                                     ---------------------------

Income before minority interest in preferred
   stock dividends of consolidated subsidiaries ..   $   453,525    $   133,600
Minority interest in preferred stock dividends of
    consolidated subsidiaries ....................   $    31,308    $    31,308
                                                     ---------------------------

Net income .......................................   $   422,217    $   102,292
                                                     ===========================

Basic earnings per common share ..................   $      0.09    $      0.02
                                                     ===========================

Diluted earnings per common share ................   $      0.09    $      0.02
                                                     ===========================


                                       2
<PAGE>


                        PIONEER RAILCORP AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2002 and DECEMBER 31, 2001
                                    UNAUDITED
<TABLE>
                                                           March 31      December 31
                                                             2002            2001
                                                        ----------------------------
<S>                                                     <C>             <C>
ASSETS
Current Assets
   Cash .............................................   $  1,190,924    $    976,678
   Accounts receivable, less allowance
     for doubtful accounts 2002 $82,582; 2001 $71,981      3,193,860       3,431,008
   Inventories ......................................        220,910         222,257
   Prepaid expenses .................................        141,995         202,787
   Income tax refund claims .........................        132,905         132,905
   Deferred taxes ...................................         80,000          80,000
                                                        ----------------------------
        Total current assets ........................      4,960,594       5,045,635
                                                        ----------------------------
Property and Equipment less accumulated
  depreciation 2002 $10,572,183; 2001 $10,064,187 ...     26,789,497      27,128,209
                                                        ----------------------------

Intangible Assets, less accumulated amortization
  2002 $205,911; 2001 $204,911 ......................      1,038,034       1,039,521
                                                        ----------------------------

Investments, cash value of life insurance ...........        191,120         184,090
                                                        ----------------------------

Total assets ........................................   $ 32,979,245    $ 33,397,455
                                                        ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Accounts payable .................................   $  2,141,738    $  2,914,471
   Notes payable ....................................              0          57,712
   Income taxes payable .............................        351,000               0
   Current maturities of long-term debt .............      4,871,039       4,828,203
   Accrued liabilities ..............................        678,962         775,031
                                                        ----------------------------
        Total current liabilities ...................      8,042,739       8,575,417
                                                        ----------------------------

Long-term debt, net of current maturities ...........     10,499,167      10,820,867
                                                        ----------------------------

Deferred revenue ....................................        870,066         870,066
                                                        ----------------------------

Deferred income taxes ...............................      5,285,000       5,285,000
                                                        ----------------------------

Minority interest in subsidiaries ...................      1,103,000       1,103,000
                                                        ----------------------------
Stockholders' Equity
   Common stock .....................................          4,612           4,612
   In Treasury 2002 84,090 shares; 2001 84,040 ......            (84)            (84)
                                                        ----------------------------
   Outstanding 2002 4,528,427; 2001 4,528,477 .......          4,528           4,528
   Additional paid-in capital .......................      2,044,041       2,044,041
   Retained earnings ................................      5,130,704       4,694,536
                                                        ----------------------------
        Total stockholders' equity ..................      7,179,273       6,743,105
                                                        ----------------------------

Total liabilities and equity ........................   $ 32,979,245    $ 33,397,455
                                                        ============================
</TABLE>

                                       3
<PAGE>


                        PIONEER RAILCORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Quarters Ended March 31, 2002 and 2001
                                    UNAUDITED
<TABLE>
                                                                       First Quarter
                                                                 --------------------------
                                                                     2002          2001
                                                                 --------------------------
<S>                                                              <C>            <C>
Cash Flows From Operating Activities
Net income ...................................................   $   422,217    $   102,292
Adjustments to reconcile net income to net cash
provided by operating activities:
        Minority interest in preferred stock dividends of
          consolidated subsidiaries ..........................        31,308         31,308
        Depreciation .........................................       512,082        498,514
        Amortization .........................................         1,000         12,700
        Increase in cash value life insurance ................        (7,030)        (5,386)
        (Gain) loss on sale of property & equipment ..........        11,268           (459)
Change in assets and liabilities, net of effects from
        acquisition of subsidiaries
        (Increase) decrease accounts receivable ..............       237,148         55,143
        (Increase) decrease inventories ......................         1,347        (24,731)
        (Increase) decrease prepaid expenses .................        60,792        (55,734)
        (Increase) decrease intangible assets ................         2,542           (188)
        Increase (decrease) accounts payable .................      (772,733)       180,351
        (Increase) decrease income tax refund claims .........             0         53,502
        Increase (decrease) income tax payable ...............       351,000         53,400
        Increase (decrease) accrued liabilities ..............       (96,069)       (82,621)
                                                                 --------------------------
        Net cash provided by (used in) operating activities ..       754,872        818,091
                                                                 --------------------------

Cash Flows From Investing Activities
        Proceeds from sale of property & equipment ...........         8,990          5,875
        Purchase of property & equipment .....................      (195,678)    (1,766,657)
                                                                 --------------------------
        Net cash (used in) investing activities ..............      (186,688)    (1,760,782)
                                                                 --------------------------

Cash Flows From Financing Activities
        Proceeds from short-term borrowings ..................       341,000        258,000
        Proceeds from long-term borrowings ...................       256,660      1,678,055
        Payments on short-term borrowings ....................      (398,712)      (258,000)
        Payments on long-term borrowings .....................      (535,524)      (697,085)
        Repurchase of minority interest ......................             0         (3,000)
        Purchase of common stock for treasury ................           (62)        (2,600)
        Preferred stock dividend payments to minority interest       (17,300)       (17,300)
                                                                 --------------------------
        Net cash provided by (used in) financing activities ..      (353,938)       958,070
                                                                 --------------------------

Net increase (decrease) in cash ..............................       214,246         15,379

Cash, beginning of period ....................................       976,678        564,490
                                                                 --------------------------

Cash, end of period ..........................................   $ 1,190,924    $   579,869
                                                                 ==========================
</TABLE>

                                       4
<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  and  are  eliminated  from
consolidated financial results.

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.

                                                           First Quarter
                                                    ----------------------------
                                                       2002             2001
                                                    ----------------------------
Revenues from external customers
   Railroad operations .........................    $ 2,951,530     $ 2,793,403
   Equipment leasing operations ................        750,131         711,522
   Corporate support services ..................          3,863           5,946
                                                    ----------------------------
      Total revenues from external customers ...    $ 3,705,524     $ 3,510,871
                                                    ============================

Intersegment revenues
   Railroad operations .........................    $         0     $         0
   Equipment leasing operations ................         99,600          99,600
   Corporate support services ..................      1,404,399       1,669,675
                                                    ----------------------------
      Total intersegment revenues ..............    $ 1,503,999     $ 1,769,275
                                                    ============================

Segment profit
   Railroad operations .........................    $ 1,319,626     $ 1,002,302
   Equipment leasing operations ................        397,921         343,452
   Corporate support services ..................        688,040         824,549
                                                    ----------------------------
      Total segment profit .....................    $ 2,405,587     $ 2,170,303

Reconciling items
    Intersegment revenues ......................    ($1,503,999)    ($1,769,275)
    Income taxes ...............................       (374,000)       (107,500)
    Minority interest ..........................        (31,308)        (31,308)
    Other income(expense), net .................        (74,063)       (159,928)
                                                    ----------------------------

       Total consolidated net income ...........    $   422,217     $   102,292
                                                    ============================



                                       5
<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),
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), Kendallville Terminal Railway Co.
(KTR) (a spin off  from the  Michigan  Southern  Railroad  Company),  Elkhart  &
Western  Railroad  Co.  (EWR) (a spin off from the  Michigan  Southern  Railroad
Company),  and the Gettysburg & Northern Railroad Co. (GET) (operating effective
2/20/01). 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

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.  Readers
should make reference to Part II, Item 1 of this 10-QSB, regarding contingencies
surrounding a switching  revenue dispute between the Keokuk Junction Railway Co.
and the  Burlington  Northern  Santa Fe Railway for  revenues  generated  by the
Company between March 1, 1999 and May 1, 2001 of approximately $663,000.

NOTE 4. ACCOUNTING PRONOUNCEMENTS

The Company has adopted the provisions of SFAS No. 142 in its first quarterended
March 31, 2002. Under these new rules, goodwill will no longer be amortized, but
will be  subject  to  annual  impairment  testing.  During  the  first  phase of
implementing  SFAS 142, the Company was required to identify its reporting units
and to  determine  the  carrying  value  of each  reporting  unit.  The  Company
concluded  that  the fair  value  of its  reporting  units  containing  goodwill
exceeded  the carrying  value.  As a result,  noimpairment  loss was recorded or
recognized as of March 31, 2002. In accordance with SFAS No. 142, there has been
no amortization of goodwill recorded effective January 1, 2002 which resulted in
an  increase  in pre-tax  income of $8,700.  The  Company is required to perform
additional  impairment  tests on an annual  basis  prior to the  issuance of the
annual financial statements.

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.

                                       6
<PAGE>

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),  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),  Kendallville  Terminal  Railway Co.  (KTR) (a spin off from the Michigan
Southern  Railroad  Company),  Elkhart & Western  Railroad Co. (EWR) (a spin off
from the Michigan Southern Railroad Company), Gettysburg & Northern Railroad Co.
(GET) (operating  effective  2/20/01),  Pioneer Resources,  Inc. (PRI),  Pioneer
Railroad  Equipment  Co.,  Ltd.  (PREL),  Pioneer Air, Inc.  (PAR),  and Pioneer
Railroad Services, Inc. (PRS).

Summary: First Quarter 2002 Compared to First Quarter 2001

The Company's net income in the first quarter 2002 was $422,200,  an increase of
$319,900 from the first  quarter 2001 which had net income of $102,300.  Revenue
increased by $195,000 or 6% to  $3,706,000  from  $3,511,000  in the same period
last year.  Operating  expense  decreased by $306,000 or 10%, to $2,804,000 from
$3,110,000 in the same period last year. Operating income increased by $501,000,
or 125% to $902,000 from $401,000 in the same period last year.

Operating  income  was  increased  in the first  quarter  2002 by the  Company's
railroad operations which had an increase in operating income of $317,000.  This
increase  from the  railroads is the result of a increase in revenue of $158,000
and a decrease in operating expenses of $159,000. Operating income was increased
in the first  quarter 2002 by the  Company's  equipment  leasing  operations  by
approximately $54,000 in the period,  primarily from an increase in revenue from
the utilization of its railcar fleet by non-affiliated  railroads and a decrease
in expenses to maintain  locomotives.  In addition,  corporate  support services
increased  operating  income by  approximately  $130,000 in the period resulting
primarily  from a  reduction  in payroll  for  support  services  related to the
elimination and consolidation of several corporate  positions in the second half
of 2001, and a decrease in health  insurance due to a reduction in actual claims
incurred under the Company's self-funded health plan.

Revenue:

Revenue  increased in the first  quarter 2002 by $195,000,  or 6%, to $3,706,000
from $3,511,000 in the same period last year. The railroad operations  increased
revenue by  approximately  $158,000 in the period.  Included in the  increase is
$140,000 of increased  revenue form the  Gettysburg  and Northern  Railroad Co.,
which the Company began  operating on February 20, 2001, and also a reduction in
revenue of $150,000,  resulting  from  revenues  lost as a result of the sale of
certain  Alabama & Florida  Railway  Co.  trackage in June 2001.  The  equipment
leasing  operations  had a $39,000  increase in revenue in the period  resulting
primarily  from increased  revenue from the  utilization of its railcar fleet by
non-affiliated  railroads.  Corporate services  decreased revenue  approximately
$2,000  in  revenue  in the  quarter  as a result of  subscription  sales to its
publication The Short Line.

Operating Expense:

Operating  expense  decreased  in the first  quarter 2002 by $306,000 or 10%, to
$2,804,000 from $3,110,000 in the prior year. The railroad operations  decreased
operating expense by approximately  $159,000 in the period which resulted from a
variety of factors.  The sale of certain  Alabama & Florida Railway Co. trackage
in June 2001  resulted in reduced  operating  expense of $151,000 in the period.
Also, the Alabama Railroad Co. had a $146,000  decrease of operating  expense in
the  period  resulting  from  decreased  derailment  expenses,  decreased  track
material expenses,  and a reduction in payroll.  In addition,  the railroads had
increased  operating  expense of $61,000 from the Gettysburg & Northern Railroad
Co.  which  the  Company  began  operating  on  February  20,  2001 and also had
increased operating expenses of $64,000 from the Keokuk Junction Railway Co., of
which  $48,000  relates  to legal fees  involving  disputed  switching  revenues
between the Keokuk  Junction  Railway Co. and the BNSF.  The  equipment  leasing
operations  decreased operating expense  approximately  $16,000,  primarily from
reduced  maintenance  expenses associated with its railcar and locomotive fleet,
offset by an increase in  depreciation  expense  related to the  acquisition  of
railcars and locomotives.  In addition,  corporate  support  services  decreased
operating  expense by approximately  $131,000 in the period resulting  primarily
from a reduction in payroll for support  services related to the elimination and
consolidation of several  corporate  positions in the second half of 2001, and a
decrease in health  insurance due to a reduction in actual claims incurred under
the Company's self-funded health plan.

                                       7
<PAGE>

Maintenance of way and structure  expense (MOW) includes all expenses related to
track  maintenance;  including  payroll,  track materials,  signal  maintenance,
vegetation control,  and bridge  maintenance.  Maintenance of way and structures
expense  (MOW)  decreased  $101,000 or 30% to $235,000 from $336,000 in the same
period last year. Railroad operations had a decrease of $66,000 of MOW, of which
$44,000  represented reduced expenses resulting from the sale of certain Alabama
& Florida Railway Co. trackage in June 2001. Corporate services decreased MOW by
$35,000 as a result of a reduction in  corporate  MOW payroll and a reduction in
corporate MOW support service expense.

Maintenance  of equipment  expense (MOE)  includes  expenses  related to railcar
repair expenses for both foreign and Company owned railcars;  including payroll,
car  repair  parts,  processing  fees  for  Company  owned  railcars,  and  also
maintenance to Company owned  vehicles.  Maintenance of equipment  expense (MOE)
decreased $23,000, or 6% to $372,000 from $395,000 in the same period last year.
The equipment leasing operations had a decrease in MOE of approximately  $12,000
as a result of decreased costs associated with maintaining the Company's railcar
fleet.  The  railroad  operations  had  increased  MOE of $15,000 as a result of
increased  payroll  and  material  costs for  repairs to foreign  rail cars.  In
addition,  MOE was decreased $26,000 from corporate support services as a result
in the elimination and consolidation of a corporate employment position.

Transportation  expense  (TRAN)  includes  expenses  related  to train  movement
operations  including  payroll,  locomotive  fuel and supplies  expense,  repair
expenses to Company owned  locomotives,  car hire expense,  derailment  expense,
lading and damage  claims,  switching  services  purchased,  and joint  facility
expenses with other carriers.  Transportation expense (TRAN) decreased $196,000,
or 23% to $669,000  from  $865,000 in the same  period last year.  The  railroad
operations had decreased TRAN of $148,000,  which included a $61,000 decrease in
TRAN resulting from the sale of certain  Alabama & Florida  Railway Co. trackage
in June 2001.  Also,  the Alabama  Railroad  Co. had a $80,000  decrease in TRAN
expense  related  to  decreased  derailment  expenses  and a  decrease  in labor
expenses.  In addition,  the Gettysburg & Northern  Railroad Co.  increased TRAN
$30,000 in the period.  The equipment leasing  operations had a $20,000 decrease
in TRAN as a result of decreased costs associated with maintaining the Company's
locomotive fleet. In addition, TRAN was decreased $28,000 from corporate support
services resulting from reduced usage of the corporate plane and the elimination
of a corporate support services position.

General &  administration  expense  (ADMIN)  includes  includes  general  manger
payroll  expenses,  legal  expenses,  bad  debt  expense  related  to  interline
settlements,  liability insurance,  utilities,  postage and freight, real estate
taxes, dues, licenses and fees, vehicle insurance, freight to move company owned
railcars  and  locomotives,  health and dental  insurance  expense,  audit fees,
printing,  and  corporate  headquarters  support  service  payroll for executive
management,  accounting,  operations,  marketing,  real estate, legal, and other
support staff.  General & administration  expense (ADMIN) increased $12,000,  or
1%, to $1,014,000  from  $1,002,000  in the same period last year.  The railroad
operations  had an  increase  of $45,000 in ADMIN  expense  in the  period.  The
Gettysburg  & Northern  Railroad  Co.  increased  ADMIN  expense  $15,000 in the
period,  while  ADMIN was  reduced  $26,000  as a result of the sale of  certain
Alabama & Florida  Railway Co.  trackage in June 2001.  Railroad  ADMIN was also
increased  $48,000 in the period as a result of legal fees  associated  with the
Keokuk  Junction  Railway  - BNSF  dispute.  The  equipment  leasing  operations
increased   ADMIN  $6,000  as  a  result  of  increased   expenses   related  to
repositioning the Company's railcar fleet.  Corporate support services decreased
ADMIN expense by $39,000 in the period  resulting  primarily from a reduction in
payroll for support  services  related to the elimination and  consolidation  of
several corporate positions in the second half of 2001, and a decrease in health
insurance  due to a reduction  in actual  claims  incurred  under the  Company's
self-funded health plan.

Depreciation and amortization expense increased $2,000 to $513,000 from $511,000
in the same  period  last  year.  The  equipment  leasing  operations  increased
depreciation  expense  approximately  $10,000  related  to  the  acquisition  of
railcars and locomotives.  The railroad operations decreased depreciation $6,000
and corporate support services decreased depreciation $2,000.

Other Income and Expense Income Statement Line Item Discussion:

In the first quarter 2002 other income and expense  decreased $3,000 to $202,000
of income  compared to  $205,000  of income 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.

                                       8
<PAGE>

Interest expense related to equipment  financing  decreased $67,000 in the first
quarter 2002 to $116,000 compared to $183,000 in the same period last year. This
decrease is the result of the early repayment of certain debt with proceeds from
the AF track sale in June 2001 and a reduction  in interest  expense as a result
of refinances in 2001 due to a more favorable  interest rate environment.  Other
interest  expense,  which  primarily  relates to the  financing of the Company's
railroad  operations,  decreased  $34,000 to $149,000 from $183,000 in the prior
year.  This  primarily  relates to the  repayment  of debt  associated  with the
Alabama & Florida Railway Co. trackage sale in June 2001.

In the first  quarter 2002 the Company had a loss from fixed asset  dispositions
of $11,000,  primarily from the  disposition of 2 railcars,  compared to a small
gain on fixed asset dispositions of $500 in the same period last year.

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.

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  $1,100,000,  all of which was available for
use at the end of the first quarter 2002.

The Company has 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%, renewable June 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 all non real  estate  assets of any company
acquired using  proceeds from the credit line. As of March 31, 2002,  $2,664,000
was drawn on the credit line leaving an  available  balance of  $2,336,000.  The
Company will not be renewing this credit  facility when it expires June 23, 2002
and the  Company  is in the  process of  converting  the  outstanding  principal
balance  to a fixed  rate  note  similar  to other  notes  related  to  railroad
financing held by National City Bank. The primary reason the Company has decided
not to renew the facility is that the current commercial lending  environment is
requiring  loan covenants that are stricter than the Company is willing to agree
to. The  Company  still  considers  National  City Bank an  important  source of
acquisition  financing,  and future  acquisition  opportunities,  absent of this
credit  line,  will  require  the bank to review  the  transaction  prior to any
funding decisions.  Previously,  under the terms of the credit line, the Company
did not need bank approval for an acquisition utilizing the credit line.

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
March 31, 2002, a total of 68,766 warrants  originally issued had been exercised
to date and the Company realized $137,532 on the exercise of those warrants.

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 became fully vested and exercisable as of
July 1, 2001. The options are 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 March 31, 2002, a total of 155,000
options are outstanding under this plan.

                                       9
<PAGE>

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. As of March 31, 2002, a total of 84,090 shares had been  repurchased at a
cost of $119,398. 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 cashflow from  operations  and its  available  working
capital  credit  lines,  will be more than  sufficient to meet  liquidity  needs
through at least the next 12 months.

Balance Sheet and Cash Flow Items:

The  Company's  operating  activities  in the first three months 2002  generated
positive cash flow of $755,000.  Net cash from operating activities in the first
three  months 2002 was  generated  from  $422,000 of net  income,  increased  by
$513,000 of depreciation and amortization,  a decrease in accounts receivable of
$237,000, an increase in income tax payable of $351,000,  and an increase in net
cash of $101,000 from changes in various other operating assets and liabilities.
Net cash from  operating  activities  was reduced in the period by a decrease in
accounts payable of $773,000, a decrease in accrued liabilities of $96,000.

In  the  first  three  months  2002,   the  Company  made  $196,000  of  capital
expenditures. Capital

expenditures  included $42,000 for bridge upgrades,  $16,000 for track projects,
and $67,000 for other railroad structures. In addition, the Company made capital
expenditures  of  $26,000  for  railcar  betterments,   $29,000  for  locomotive
betterments,  and the remaining  capital  asset  expenditures  of  approximately
$16,000 relates to miscellaneous equipment purchases.

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.

In a letter dated  November 13, 1998 Keokuk  Junction  Railway  (KJRY)  notified
Burlington  Northern  Santa Fe Railway (BNSF) that it desired to negotiate a new
agreement  for  BNSF's  access to its  Mooar  Line in  Keokuk,  Iowa or the then
current agreement and supplements thereto would be terminated effective March 1,
1999. No new agreement was reached and KJRY put in place an interchange  between
BNSF and KJRY for movement of BNSF cars and  locomotives to the Mooar Line for a
charge of $85 per car. On April 27, 1999 BNSF filed a Petition  for  Declaration
or Prescription of Crossing,  Trackage or Joint use Rights and for Determination
of  Compensation  and Other  Terms in  Finance  Docket  Numbers  33740 and 33740
(Sub-No-1).  In a  decision  dated  June 20,  2001 the STB ruled that BNSF had a
right to cross the KJRY's track to access the Mooar Line. It ordered the parties
to negotiate  compensation  for the  crossing  and if a settlement  could not be
reached then the STB would set the  compensation.  No settlement was reached and
BNSF filed a Petition  to  Establish  Compensation  and Other  Terms on July 23,
2001. In addition to asking the STB to set the compensation for the crossing the
BNSF  also  asked  the STB to  order a  refund  of the  difference  between  the
compensation  set by the STB and the amount paid by BNSF  between  March 1, 1999
and May 1, 2001.  The total amount paid by BNSF between March 1, 1999 and May 1,
2001 is approximately $663,000. Mediation has been conducted but has not reached
a resolution  to this point.  The STB has not ruled on the Petition to Establish
Compensation.  The KJRY has filed a notice  of  appeal of the June 20,  2001 STB
decision  with the United  States  Court of Appeals for the District of Columbia
Circuit.  Management has made no provision for estimated losses  associated with
this matter in the financial  statements as of March 31, 2002 as management  and
internal  legal  council  are  unable  to  determine  what  the  outcome  of the
litigation may be and whether there will be any adverse financial consequences.

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

                                       10
<PAGE>

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

No matters  were  submitted to a vote of security  holders in the first  quarter
2002.

Item 5.   OTHER INFORMATION

On June 11, 2001, the Company's  Alabama & Florida  Railway Co. (AF)  subsidiary
sold a 33 mile segment of its track from Georigiana, AL to Andalusia, AL, to the
Three  Notch  Railroad  Co.  (TNR),  a wholly  owned  subsidiary  of Gulf & Ohio
Railways  in  Knoxville,  TN.  The cash sale price was  $2,500,000  and the sale
generated a pre-tax gain of $1,738,000.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

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

No reports were filed on Form 8-K during the first quarter 2002


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<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)





 05/06/02                        /s/ Guy L. Brenkman
----------                       ------------------------------------------
   DATE                          GUY L. BRENKMAN
                                 PRESIDENT & CEO

 05/06/02                        /s/ J. Michael Carr
----------                       ------------------------------------------
   DATE                          J. MICHAEL CARR
                                 TREASURER & CHIEF
                                 FINANCIAL OFFICER


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