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 June 30, 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 June 30, 2002)


                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

                            PIONEER RAILCORP AND SUBSIDIARIES

                            CONSOLIDATED STATEMENTS OF INCOME
                          Quarters Ended June 30, 2002 and 2001
                                        UNAUDITED
<TABLE>
                                                        Three Months Ended            Six Months Ended
                                                   ----------------------------  ----------------------------
                                                   June 30, 2002  June 30, 2001  June 30, 2002  June 30, 2001
                                                   ----------------------------------------------------------
<S>                                                <C>            <C>            <C>            <C>

Operating revenue ...............................   $ 3,751,538    $ 3,620,638    $ 7,457,062    $ 7,131,510
                                                    --------------------------------------------------------
Operating expenses
   Maintenance of way ...........................       309,435        430,119        544,414        766,345
   Maintenance of equipment .....................       334,757        459,599        706,927        854,637
   Transportation expense .......................       666,333        845,716      1,335,597      1,711,059
   Administrative expense .......................     1,075,271      1,129,886      2,089,712      2,131,908
   Depreciation  & amortization .................       503,722        521,103      1,016,804      1,032,317
                                                    --------------------------------------------------------
                                                      2,889,518      3,386,423      5,693,454      6,496,266
                                                    --------------------------------------------------------

Operating income ................................       862,020        234,215      1,763,608        635,244
                                                    --------------------------------------------------------

Other income & expense

   Other (income) expense .......................       (57,173)        59,988       (259,651)      (145,135)
   Interest expense, equipment ..................       121,414        171,257        237,567        354,146
   Interest expense, other ......................       145,455        205,555        294,575        388,176
   Net (gain) loss on sale of fixed assets ......       (12,049)    (1,920,144)          (781)    (1,920,603)
                                                    --------------------------------------------------------
                                                        197,647     (1,483,344)       271,710     (1,323,416)
                                                    --------------------------------------------------------

Income before income taxes ......................       664,373      1,717,559      1,491,898      1,958,660

Provision for income taxes ......................       295,000        714,500        669,000        822,000
                                                    --------------------------------------------------------
Income before minority interest in preferred
   stock dividends of consolidated subsidiaries .   $   369,373    $ 1,003,059    $   822,898    $ 1,136,660

Minority interest in preferred stock dividends of
    consolidated subsidiaries ...................   $    31,308    $    31,308    $    62,616    $    62,616
                                                    --------------------------------------------------------


Net income ......................................   $   338,065    $   971,751    $   760,282    $ 1,074,044
                                                    ========================================================

Basic earnings per common share .................   $      0.07    $      0.22    $      0.17    $      0.24
                                                    ========================================================

Diluted earnings per common share ...............   $      0.07    $      0.22    $      0.17    $      0.24
                                                    ========================================================

Cash dividends per common share .................   $    0.0000    $    0.0000    $    0.0000    $    0.0000
                                                    ========================================================
</TABLE>
See Notes to Unaudited Consolidated Financial Statements


                                       2
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2002 and DECEMBER 31, 2001
                                    UNAUDITED
<TABLE>
                                                          June 30       December 31
                                                           2002             2001
                                                        ----------------------------
<S>                                                     <C>             <C>
ASSETS
Current Assets
   Cash .............................................   $  1,279,502    $    976,678
   Accounts receivable, less allowance
     for doubtful accounts 2002 $81,705; 2001 $71,981      3,066,356       3,431,008
   Inventories ......................................        223,222         222,257
   Prepaid expenses .................................        367,418         202,787
   Income tax refund claims .........................        132,905         132,905
   Deferred taxes ...................................         80,000          80,000
                                                        ----------------------------
        Total current assets ........................      5,149,403       5,045,635
                                                        ----------------------------

Property and Equipment less accumulated
  depreciation 2002 $11,081,919; 2001 $10,070,520 ...     27,638,011      27,150,300
                                                        ----------------------------
Goodwill, less accumulated amortization
  2002 $198,578; 2001 $198,578 ......................      1,017,430       1,017,430
                                                        ----------------------------

Investments, cash value of life insurance ...........        199,791         184,090
                                                        ----------------------------

Total assets ........................................   $ 34,004,635    $ 33,397,455
                                                        ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Accounts payable .................................   $  2,170,203    $  2,914,471
   Notes payable ....................................        549,353          57,712
   Income taxes payable .............................        444,260               0
   Current maturities of long-term debt .............      4,873,154       4,828,203
   Accrued liabilities ..............................        488,617         775,031
                                                        ----------------------------
        Total current liabilities ...................      8,525,587       8,575,417
                                                        ----------------------------

Long-term debt, net of current maturities ...........      9,938,615      10,820,867
                                                        ----------------------------

Deferred revenue ....................................      1,656,100         870,066
                                                        ----------------------------

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

Minority interest in subsidiaries ...................      1,096,000       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 ................................      5,454,764       4,694,536
                                                        ----------------------------
        Total stockholders' equity ..................      7,503,333       6,743,105
                                                        ----------------------------

Total liabilities and stockholders equity ...........   $ 34,004,635    $ 33,397,455
                                                        ============================
</TABLE>
See Notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  First Six Months Ended June 30, 2002 and 2001
                                    UNAUDITED
<TABLE>
                                                                  First Six Months
                                                              --------------------------
                                                                 2002           2001
                                                              --------------------------
<S>                                                           <C>            <C>
Cash Flows From Operating Activities:
Net income ................................................   $   760,283    $ 1,074,044
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Minority interest in preferred stock dividends of
    consolidated subsidiaries .............................        62,616         62,616
  Depreciation and amortization ...........................     1,016,804      1,032,317
  Increase in cash value life insurance ...................       (15,701)       (10,895)
  (Gain) loss on sale of property & equipment .............          (781)    (1,920,603)
  Change in assets and liabilities, net of effects from
    acquisition of subsidiaries
    (Increase) decrease accounts receivable ...............       364,652        314,538
    (Increase) decrease inventories .......................          (965)        11,289
    (Increase) decrease prepaid expenses ..................      (164,631)       (40,771)
    (Increase) decrease intangible assets .................             0         (2,749)
    Increase (decrease) accounts payable ..................      (744,268)       198,106
    (Increase) decrease income tax refund claims ..........             0         53,502
    Increase (decrease) income tax payable ................       444,260        751,833
    Increase (decrease) deferred revenue ..................       786,034              0
    Increase (decrease) accrued liabilities ...............      (286,414)      (139,253)
                                                              --------------------------
        Net cash provided by (used in) operating activities     2,221,889      1,383,974
                                                              --------------------------

Cash Flows From Investing Activities:
  Proceeds from sale of property & equipment ..............        23,700      2,783,241
  Purchase of property & equipment ........................    (1,527,427)    (2,012,675)
                                                              --------------------------
        Net cash (used in) investing activities ...........    (1,503,727)       770,566
                                                              --------------------------

Cash Flows From Financing Activities:
  Proceeds from short-term borrowings .....................     1,080,354        488,000
  Proceeds from long-term borrowings ......................       256,660      2,948,055
  Payments on short-term borrowings .......................      (588,713)      (488,000)
  Payments on long-term borrowings ........................    (1,093,961)    (4,984,008)
  Repurchase of minority interest .........................        (7,000)        (3,000)
  Purchase of common stock for treasury ...................           (62)        (2,600)
  Preferred stock dividend payments to minority interest ..       (62,616)       (62,616)
                                                              --------------------------
        Net cash provided by (used in) financing activities      (415,338)    (2,104,169)
                                                              --------------------------

Net increase (decrease) in cash ...........................       302,824         50,371

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

Cash, end of period .......................................   $ 1,279,502    $   614,861
                                                              ==========================
</TABLE>
See Notes to Unaudited Consolidated Financial Statements

                                       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  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.

                                                           Second Quarter
                                                       -------------------------
                                                         2002           2001
                                                       -------------------------
Revenues from external customers
   Railroad operations ...........................     2,941,328      2,798,742
   Equipment leasing operations ..................       808,224        815,572
   Corporate support services ....................         1,986          6,324
                                                       ------------------------
      Total revenues from external customers .....     3,751,538      3,620,638
                                                       ========================

Intersegment revenues
   Railroad operations ...........................             0              0
   Equipment leasing operations ..................        99,600         99,600
   Corporate support services ....................     1,530,195      1,867,271
                                                       ------------------------
      Total intersegment revenues ................     1,629,795      1,966,871
                                                       ========================

Segment profit
   Railroad operations ...........................     1,314,167        858,683
   Equipment leasing operations ..................       431,794        376,326
   Corporate support services ....................       745,854        966,077
                                                       ------------------------
      Total segment profit .......................     2,491,815      2,201,086

Reconciling items
    Intersegment revenues ........................    (1,629,795)    (1,966,871)
    Income taxes .................................      (295,000)      (714,500)
    Minority interest ............................       (31,308)       (31,308)
    Other income(expense), net ...................      (197,647)     1,483,344
                                                       ------------------------
       Total consolidated net income .............       338,065        971,751
                                                       ========================


                                       5
<PAGE>

                                                           Six Months Ended
                                                       ------------------------
                                                        6/30/02        6/30/01
                                                       ------------------------
Revenues from external customers
   Railroad operations ...........................     5,892,858      5,592,145
   Equipment leasing operations ..................     1,558,356      1,527,094
   Corporate support services ....................         5,848         12,271
                                                       ------------------------
      Total revenues from external customers .....     7,457,062      7,131,510
                                                       ========================

Intersegment revenues
   Railroad operations ...........................             0              0
   Equipment leasing operations ..................       199,200        199,200
   Corporate support services ....................     2,934,592      3,536,945
                                                       ------------------------
      Total intersegment revenues ................     3,133,792      3,736,145
                                                       ========================

Segment profit
   Railroad operations ...........................     2,633,793      1,903,451
   Equipment leasing operations ..................       829,714        719,777
   Corporate support services ....................     1,433,893      1,748,161
                                                       ------------------------
      Total segment profit .......................     4,897,400      4,371,389

Reconciling items
    Intersegment revenues ........................    (3,133,792)    (3,736,145)
    Income taxes .................................      (669,000)      (822,000)
    Minority interest ............................       (62,616)       (62,616)
    Other income(expense), net ...................      (271,710)     1,323,416
                                                       ------------------------
       Total consolidated net income .............       760,282      1,074,044
                                                       ========================


                                       6
<PAGE>

NOTES TO UNAUDITED 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  periods  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

On January 1, 2002,  the Company  implemented  SFAS No. 142,  Goodwill and Other
Intangible  Assets.  Under the  provisions  of SFAS 142,  goodwill  is no longer
subject to  amortization  over its  estimated  useful life,  but instead will be
subject to at least annual  assessments  for impairment by applying a fair-value
based test. SFAS 142 also requires that an acquired  intangible  asset should be
separately recognized if the benefit of the intangible asset is obtained through
contractual  or other legal  rights,  or if the asset can be sold,  transferred,
licensed, rented or exchanged, regardless of the acquiror's intent to do so. The
Company determined that no transitional  impairment loss was required at January
1, 2002. In the consolidated balance sheet as of June 30, 2002, goodwill totaled
$1,216,000 and accumulated amortization totaled $199,000.

                                       7
<PAGE>

The following  table presents  proforma net income and earnings per share in all
periods presented exclusive of goodwill amortization expense:

                                       Three Months
                                      Ended June 30,
                                   -------------------
                                     2002       2001
                                   -------------------

Reported net Income .............  $338,000   $972,000
Add back goodwill amort .........        --   $  9,000
                                   -------------------
Adjusted net Income .............  $338,000   $981,000
                                   ===================

Basic earnings per share:
Reported net income .............  $    .07   $    .22
Add back goodwill amort .........        --         --   *less than $.01 in 2001
                                   -------------------
Adjusted net Income .............  $    .07   $    .22
                                   ===================

Fully diluted earnings per share:

Reported net income .............   $   .07   $    .22
Add back goodwill amort .........        --         --   *less than $.01 in 2001
                                    ------------------
Adjusted net Income .............   $   .07   $    .22
                                    ==================

                                         Six Months
                                       Ended June 30,
                                    --------------------
                                       2002      2001
                                    --------------------

Reported net income .............   $760,000  $1,075,000
Add back goodwill amort .........         --  $   18,000
                                    --------------------
Adjusted net income .............   $760,000  $1,093,000
                                    ====================

Basic earnings per share:
Reported net income .............   $    .17  $      .24
Add back goodwill amort .........         --          -- *less than $.01 in 2001
                                    --------------------
Adjusted net Income .............   $    .17  $      .24
                                    ====================

Fully diluted earnings per share:
Reported net income .............   $    .17  $      .24
Add back goodwill amort .........         --          -- *less than $.01 in 2001
                                    --------------------
Adjusted net Income .............   $    .17  $      .24
                                    ====================


                                       8
<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),  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: Second Quarter 2002 Compared to Second Quarter 2001.

The Company's net income in the second quarter 2002 was $338,000,  a decrease of
$634,000  from the second  quarter 2001 which had net income of  $972,000.  This
decrease  relates  primarily to the second  quarter 2001 gain on sales from a 34
mile segment of track by the Alabama & Florida Railway Co. and 3 parcels of land
on  the  West  Michigan   Railroad  Co.  These  two  transactions   resulted  in
approximately  $1,055,000  of net income in the  second  quarter  2001.  Revenue
increased by $131,000 or 4% to  $3,752,000  from  $3,621,000  in the same period
last year.  Operating  expense  decreased by $496,000 or 15%, to $2,890,000 from
$3,386,000 in the same period last year. Operating income increased by $628,000,
or 268% to $862,000 from $234,000 in the same period last year.

Operating  income was  increased in the second  quarter 2002 from the  Company's
railroad operations by approximately  $413,000 resulting from increased revenues
of $143,000,  primarily  from  increased  switching  revenues,  and also reduced
expenses of $270,000, resulting from the Company's efforts to control and reduce
operating  costs.  Operating  income was increased in the second quarter 2002 by
the Company's equipment leasing operations by approximately  $55,000,  primarily
from  reduced  expenses  related  to  railcar   maintenance  and  railcar  fleet
relocation.  In addition,  corporate support services increased operating income
by  approximately  $160,000 in the second quarter 2002 resulting  primarily from
decreased  health  insurance  expenses of  approximately  $45,000 and  decreased
payroll resulting from personnel reductions.

Revenue:

Revenue increased in the second quarter 2002 by approximately  $131,000,  or 4%,
to  $3,752,000  from  $3,621,000  in the same  period  last year.  The  railroad
operations  increased  revenue by $143,000  primarily  as a result of  increased
switching  revenue.  The equipment  leasing  operations had a $8,000 decrease in
revenue in the period resulting  primarily from a decrease in revenue  generated
from  locomotive  leases.  Corporate  support service  decreased  revenue $4,000
primarily  relating to revenue  generated from its publication,  The Short Line.
and insignificant  amounts of revenue generated from performing railroad related
services to unaffiliated entities.

Operating Expense:

Operating  expense  decreased in the second  quarter 2002 by $496,000 or 15%, to
$2,890,000 from $3,386,000 in the prior year. The railroad operations  decreased
operating  expense  by  approximately  $270,000  in the  period  which  included
$128,000 of decreased operating expense related to the sale of certain Alabama &
Florida  Railway Co.  trackage in June 2001.  The equipment  leasing  operations
decreased  operating  expense  approximately  $63,000,  primarily  from  reduced
expenses  related  to railcar  maintenance  and  railcar  fleet  relocation.  In
addition,   corporate   support   services   decreased   operating   expense  by
approximately  $163,000 in the period resulting  primarily from decreased health
insurance  expenses of approximately  $100,000 and decreased  payroll  resulting
from personnel reductions.


                                       9
<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  $121,000,  or 28% to $309,000 from $430,000 in the same
period last year. Railroad operations decreased MOW $104,000, of which a $48,000
decrease  relates to the sale of certain  Alabama & Florida Railway Co. trackage
in June 2001.  Corporate  services  decreased  MOW  $17,000 in the period due to
personnel reductions.

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  $125,000,  or 27% to $335,000  from  $460,000 in the same period last
year. The railroad  operations had decreased MOE of $46,000,  primarily relating
to a  reduction  in  expenses  for  material  needed to  generate  revenue  from
authorized  repairs to unaffiliated  railcars while on the Company's rail lines.
The equipment leasing operations had an decrease in MOE of approximately $36,000
as a result of decreased costs associated with maintaining the Company's railcar
fleet. In addition,  MOE was decreased  $43,000 from corporate  support services
resulting from personnel reductions.

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 $180,000,
or 21% to $666,000  from  $846,000 in the same  period last year.  The  railroad
operations  had  decreased  TRAN of  $150,000,  including  a decrease of $37,000
related to the sale of certain  Alabama & Florida  Railway Co.  trackage in June
2001.  The railroad  operations  also had decreased  TRAN costs as a result of a
decrease in derailment expenses and a decrease in carhire expense. The equipment
leasing operations had a decrease in TRAN of approximately $8,000 as a result of
reduced costs  associated with  maintaining the Company's  locomotive  fleet. In
addition,  TRAN was decreased $22,000 from corporate support services  primarily
from reduced costs related to infrequent use of the Company aircraft.

General &  administration  expense  (ADMIN)  includes  includes  general manager
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 and income
tax 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) decreased $55,000,
or 5%, to $1,075,000  from $1,130,000 in the same period last year. The railroad
operations had an increase of $42,000 in ADMIN expense in the period,  primarily
as a result of legal fees  associated  with the Keokuk  Junction  Railway - BNSF
dispute. The equipment leasing operations decreased ADMIN approximately  $19,000
as a result of reduced expenses associated with relocating the Company's railcar
fleet.  Corporate  support  services  decreased  ADMIN expense by  approximately
$78,000  in the period  resulting  primarily  from  decreased  health  insurance
expenses.

Depreciation and amortization expense decreased $17,000, or 3%, to $504,000 from
$521,000 in the same period last year.  Approximately $10,000 of the decrease is
related to the sale of certain  Alabama & Florida  Railway Co.  trackage in June
2001.  The  equipment  leasing   operations   decreased   depreciation   expense
approximately $3,000.

Other Income and Expense Income Statement Line Item Discussion:

In the second  quarter  2002,  other  income and expense  increased  $117,000 to
$57,000 of income  compared to $60,000 of expense in the second quarter 2001. In
the second quarter 2001, the Company recorded  approximately  $79,000 of expense
resulting  from a payment  made as a  guarantor  on an  outstanding  loan of the
Minnesota  Central  Railroad Co.,  which the Company sold in 1999.  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.

                                       10
<PAGE>

Interest expense related to equipment  financing decreased $50,000 in the second
quarter 2002 to $121,000 compared to $171,000 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  $61,000 to $145,000 from $206,000 in the prior
year.

In the second quarter 2002 the Company had a gain from fixed asset  dispositions
of $12,000,  primarily from the disposition of a railcar.  In the second quarter
2001  the  Company  had a  significant  gain  on  fixed  asset  dispositions  of
approximately  $1,921,000.  On June 11, 2001,  the  Company's  Alabama & Florida
Railway Co. (AF)  subsidiary sold a 34 mile segment of its track from Georgiana,
AL to  Andalusia,  AL, to the Three Notch  Railroad  Co.  (TNR),  a wholly owned
subsidiary  of Gulf & Ohio  Railways in  Knoxville,  TN. The sale price was $2.5
million and the pre-tax gain realized was  $1,738,000.  The AF retained 43 miles
of the line and continues operating on the remaining trackage. In addition,  the
West Michigan  Railroad Co. sold 3 small parcels of commercial  development land
to one of its online  patrons for $280,000 and the pre-tax gain  realized on the
sale was $183,000.

Summary: First Six Months 2002 Compared to First Six Months 2001.

The Company's  net income in the first six months 2002 was $760,000,  a decrease
of $314,000  from the first six months 2001 which had net income of  $1,074,000.
This decrease relates  primarily to the second quarter 2001 gain on sales from a
34 mile  segment of track by the Alabama & Florida  Railway Co. and 3 parcels of
land on the West  Michigan  Railroad  Co.  These two  transactions  resulted  in
approximately  $1,055,000  of net income in the first six months  2001.  Revenue
increased by $325,000 or 5% to  $7,457,000  from  $7,132,000  in the same period
last year.  Operating  expense  decreased by $803,000 or 12%, to $5,693,000 from
$6,496,000  in  the  same  period  last  year.  Operating  income  increased  by
$1,129,000, or 178 % to $1,764,000 from $635,000 in the same period last year.

Operating  income was  increased  in the first six months 2002 by the  Company's
railroad  operations by approximately  $730,000 resulting from increased revenue
of $300,000 from increased  switching  revenue and car repair revenue,  and also
reduced expenses of $430,000 resulting from the Company's efforts to control and
reduce operating  costs.  Operating income was increased in the first six months
2002 by the Company's  equipment leasing  operations by approximately  $110,000,
primarily from reduced expenses of approximately  $80,000 related to railcar and
locomotive  maintenance  and railcar fleet  relocation,  and also from increased
revenues of $30,000  generated  by the railcar  fleet.  In  addition,  corporate
support services  increased  operating  income by approximately  $289,000 in the
first six months 2002 primarily from a decrease in health insurance  expenses of
approximately   $100,000  and  decreased   payroll   resulting   from  personnel
reductions.

Revenue:

Revenue increased in the first six months 2002 by approximately  $325,000,  or 5
%, to  $7,457,000  from  $7,132,000  in the same period last year.  The railroad
operations  increased  revenue by $301,000  resulting from  increased  switching
revenue and car repair revenue.  The equipment leasing  operations had a $31,000
increase in revenue in the period resulting from increased  revenue generated by
utilization  of its  railcar  fleet by  unaffiliated  third  parties.  Corporate
support service decreased revenue $7,000 primarily relating to revenue generated
from its publication,  The Short Line. and also insignificant amounts of revenue
generated from performing railroad related services to unaffiliated entities.

Operating Expense:

Operating  expense decreased in the first six months 2002 by $803,000 or 12%, to
$5,693,000 from $6,496,000 in the prior year. The railroad operations  decreased
operating  expense  by  approximately  $430,000  in the  period  which  included
$280,000 of decreased operating expense related to the sale of certain Alabama &
Florida  Railway Co.  trackage in June 2001.  The equipment  leasing  operations
decreased  operating  expense  approximately  $78,000,  primarily  from  reduced
expenses  related to railcar  and  locomotive  maintenance,  and  railcar  fleet
relocation. In addition,  corporate support services decreased operating expense
by  approximately  $295,000  in the period  primarily  from a decrease in health
insurance  expenses of approximately  $100,000 and decreased  payroll  resulting
from personnel reductions.

                                       11
<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  $222,000 or 29%, to $544,000 from $766,000 in the same
period last year.  Railroad  operations had decreased MOW of $170,000,  of which
$92,000 relates to the sale of certain Alabama & Florida Railway Co. trackage in
June 2001. Corporate services decreased MOW $52,000 in the period as a result of
personnel reductions.

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  $148,000,  or 17% to $707,000  from  $855,000 in the same period last
year.  The railroad  operations  had decreased MOE of $31,000,  primarily from a
reduction in expenses for material  needed to generate  revenue from  authorized
repairs  to  unaffiliated  railcars  while  on the  Company's  rail  lines.  The
equipment leasing operations had a decrease in MOE of approximately $45,000 as a
result of decreased  costs  associated with  maintaining  the Company's  railcar
fleet. In addition, MOE was decreased $72,000 from corporate support services as
a result of personnel reductions.

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 $375,000,
or 22% to $1,336,000  from $1,711,000 in the same period last year. The railroad
operations  had a decrease in TRAN of $297,000,  including a decrease of $97,000
related to the sale of certain  Alabama & Florida  Railway Co.  trackage in June
2001.  The railroad  operations  also had decreased TRAN costs from decreased in
derailment  expenses  and  decreased  carhire  expense.  The  equipment  leasing
operations  had a  decrease  in TRAN of  approximately  $28,000  as a result  of
decreased costs associated with maintaining the Company's  locomotive  fleet. In
addition,  TRAN was decreased $50,000 from corporate support services,  of which
$26,000  relates  to reduced  costs  related to  infrequent  use of the  Company
aircraft and $24,000 relates to reduction in personnel.

General &  administration  expense  (ADMIN)  includes  includes  general manager
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 and income
tax 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) decreased $42,000,
or 2%, to $2,090,000  from $2,132,000 in the same period last year. The railroad
operations had increased  ADMIN of $87,000 in the period,  primarily as a result
of legal fees associated with the Keokuk  Junction  Railway - BNSF dispute.  The
equipment leasing operations  decreased ADMIN approximately  $13,000 as a result
of reduced  expenses  associated  with  relocating the Company's  railcar fleet.
Corporate support services decreased ADMIN expense by approximately  $116,000 in
the period resulting  primarily from decreased  health insurance  expenses and a
reduction in personnel.

Depreciation and amortization  expense decreased  $15,000,  or 2%, to $1,017,000
from  $1,032,000  in the same  period  last year.  A decrease  of  approximately
$25,000 is related to the sale of certain Alabama & Florida Railway Co. trackage
in June 2001. The equipment leasing operations  increased  depreciation  expense
approximately $8,000.

Other Income and Expense Income Statement Line Item Discussion:

In the first six months  2002 other  income and  expense  increased  $115,000 to
$260,000  of income in the period  compared  to  $145,000  of income in the same
period  last  year.  In  the  first  six  months  2001,  the  Company   recorded
approximately $79,000 of expense resulting from a payment made as a guarantor on
an  outstanding  loan of the Minnesota  Central  Railroad Co., which the Company
sold in 1999.  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.

                                       12
<PAGE>

Interest expense related to equipment  financing decreased $116,000 in the first
six months 2002 to  $238,000  compared to $354,000 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 $93,000 to $295,000 from $388,000 in
the prior year.

In  the  first  six  months  2002  the  Company  had a  gain  from  fixed  asset
dispositions  of less than $1,000,  primarily  from the  disposition  of several
railcars.  In the first six months 2001 the Company  had a  significant  gain on
fixed asset  dispositions  of  approximately  $1,921,000.  On June 11, 2001, the
Company's  Alabama & Florida  Railway Co. (AF) subsidiary sold a 34 mile segment
of its track from  Georgiana,  AL to Andalusia,  AL, to the Three Notch Railroad
Co. (TNR), a wholly owned  subsidiary of Gulf & Ohio Railways in Knoxville,  TN.
The sale price was $2.5  million and the pre-tax gain  realized was  $1,738,000.
The AF retained 43 miles of the line and  continues  operating on the  remaining
trackage.  In addition,  the West Michigan  Railroad Co. sold 3 small parcels of
commercial  development  land to one of its online  patrons for $280,000 and the
pre-tax gain realized on the sale was $183,000.

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 second 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%. This  agreement was
originally due to mature on June 23, 2002, but has been extended until September
10, 2002 while the Company and the bank complete the conversion of the note to a
long term fixed rate  agreement.  The primary reason the Company has decided not
to renew the credit 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 and approve 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.
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 June 30, 2002,  $2,635,000
was drawn on the credit line leaving an available balance of $2,365,000.

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
June 30, 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 June 30, 2002, a total of 155,000
options are outstanding under this plan.

                                       13
<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 June 30, 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 limited 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  adversely  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 six  months  2002  generated
positive cash flow of  $2,225,000.  Net cash from  operating  activities for the
first six months 2002 was generated  from  $760,000 of net income,  increased by
$1,017,000 of depreciation and amortization,  a decrease in accounts  receivable
of $365,000,  an increase in income tax payable of $444,000,  and an increase in
deferred  revenue of  $786,000,  and an  increase  in net cash of  $48,000  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 $744,000,  a decrease in accrued liabilities of $286,000,  and an increase in
prepaid expenses of $165,000.

In the first six months 2002, the Company recorded  approximately  $1,530,000 of
fixed  assets  and  capital   improvements   which   included  the  purchase  of
approximately  48  railcars  at  a  cost  of  $193,000  and  the  purchase  of 3
locomotives at a cost of $195,000.  The railcars and  locomotive  purchases were
financed using the Company's  working capital line of credit and refinanced with
a long-term fixed rate financing agreement in July 2002. The Company capitalized
approximately  $848,000 of track structure additions and improvements  including
$786,000  for upgrades to the GET track to handle heavy loads for a power plant.
The GET track upgrades were paid for by the power plant and recorded as deferred
revenue on the Company's  balance sheet. This deferred revenue will be amortized
to income at a rate equal to  depreciation  expense and  therefore  will have no
effect on net  income in future  periods.  Other  capital  expenditures  in 2002
include $199,000 capitalized for buildings and structures, including $99,000 for
construction of a new engine house on the GCW,  replacing the previous  building
which was  destroyed by a tornado in 2001.  Other capital  expenditures  include
approximately  $70,000 for railcar and locomotive  betterments and approximately
$25,000 on various vehicles and equipment. Unless otherwise noted above, capital
expenditures were funded with working capital.

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.

                                       14
<PAGE>

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  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.  In a decision dated June 14, 2002,  the D.C.  Circuit Court of Appeals
vacated the STB decision dated June 20, 2001.  KJRY and the BNSF again discussed
resolving the Mooar Line situation but no agreement could be reached. BNSF again
began  interchanging cars to KJRY on July 1, 2002 for delivery to the Mooar Line
at a rate of $85 per car.  KJRY  will  exclude  from  income  switching  revenue
charged  beginning  July 1, 2002,  related to BNSF Mooar Line  traffic  and will
escrow the  switching  revenue as deferred  revenue in the balance sheet pending
final  resolution  of this  matter.  On July 1,  2002,  BNSF  filed at the STB a
Petition for Issuance of a Certificate of Public  Convenience  and Necessity and
Declaration  of Crossing  Rights in Finance  Docket No. 33740.  KJRY will file a
reply to that petition.  Management does not believe the BNSF is entitled to any
refund for  switching  revenue BNSF paid for services  between March 1, 1999 and
May 1, 2001,  and in  addition,  management  believes the Company is entitled to
compensation  for BNSF traffic on the KJRY between May 1, 2001 and June 30, 2002
that was not recorded by the Company pending final resolution of this matter.

As of June 30,  2002,  management  and  internal  legal  counsel  are  unable to
determine  what the outcome of the  litigation  may be and whether there will be
any adverse or favorable financial consequences.

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

The  Annual  Meeting  of the  Shareholders  was  held  on June  26,  2002 at the
Company's  headquarters  in  Peoria,  Illinois.  All five  seats on the Board of
Directors were up for election at this meeting.  Directors Guy L.  Brenkman,  J.
Michael Carr,  Orvel L. Cox, J. William Sharpe,  and John S. Fulton were elected
for a one year term.

The vote totals for the Directors were as follows:

    Proposal                                       Votes For      Votes Withheld
--------------------------------------------------------------------------------

Nomination of Guy L. Brenkman
to the Board of Directors                          3,556,407          252,839

Nomination of Orvel L. Cox
to the Board of Directors                          3,602,679          206,567

Nomination of J. William Sharpe
to the Board of Directors                          3,515,599          293,647

Nomination of John S. Fulton
to the Board of Directors                          3,561,899          247,347

Nomination of J. Michael Carr
to the Board of Directors                          3,554,979          254,267

In addition to the election of the Board of Directors, shareholders ratified the
appointment of McGladrey & Pullen,  LLP,  Certified Public  Accountants,  as the
Company's  independent  public  accountants  for the coming year with  3,629,131
votes for and 163,452 votes against.

                                       15
<PAGE>

Item 5.   OTHER INFORMATION

On July 2, 2002,  the  Company's  newly  elected  director,  J. William  Sharpe,
resigned from the Board for personal  reasons.  On August 1, 2002,  the Board of
Directors  appointed Clifton T. Lopez to replace Mr. Sharpe.  Mr. Lopez lives in
Creve Coeur,  MO and currently  works as a consultant.  Previously Mr. Lopez has
over 30 years  experience in  accounting,  finance and  strategic  planning with
Monsanto  Company in St. Louis,  Mo. Mr. Lopez will serve on the Company's audit
committee.

On June 11, 2001, the Company's  Alabama & Florida  Railway Co. (AF)  subsidiary
sold a 34 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. In addition, in the Second Quarter 2001,
the West Michigan  Railroad Co. sold 3 small  parcels of commercial  development
land to one of its online  patrons for $280,000 and the pre-tax gain realized on
the sale was $183,000.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

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

Exhibit # 20.1  Notice of Annual  Meeting  and Proxy  Statement  used to solicit
votes for the Annual Meeting of Shareholders, held June 26, 2002.

Exhibit # 20.2 Form of Ballot used at the Annual Meeting on June 26, 2002.

Exhibit # 20.3 Annual  Report for 2001 sent to  shareholders  with the Notice of
Annual Meeting and Proxy Statement.

Exhibit # 99 - Certification

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

                                   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)


08/08/02                                        /s/ Guy L. Brenkman
--------                                        --------------------------------
  DATE                                          GUY L. BRENKMAN
                                                PRESIDENT & CEO


08/08/02                                        /s/ J. Michael Carr
--------                                        --------------------------------
  DATE                                          J. MICHAEL CARR
                                                TREASURER & CHIEF
                                                FINANCIAL OFFICER



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