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, 2000

                        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  [   ]

                                    4,535,377
              -----------------------------------------------------
              (Shares of Common Stock outstanding on June 30, 2000)



<PAGE>





PIONEER RAILCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
Quarters Ended June 30, 2000 and 1999

UNAUDITED
<TABLE>
                                                             Three Months                  Three Months
                                                            Ended June 30,                Ended June 30,
                                                      --------------------------    --------------------------
                                                          2000          1999            2000           1999
                                                      --------------------------    --------------------------
<S>                                                   <C>            <C>            <C>            <C>
Operating revenue .................................   $ 3,850,570    $ 3,493,955    $ 7,456,292    $ 6,935,933
                                                      --------------------------    --------------------------

Operating expenses
   Maintenance of way .............................       432,487        383,052        793,621        719,237
   Maintenance of equipment .......................       351,501        387,481        684,460        758,332
   Transportation expense .........................       784,721        730,197      1,611,012      1,613,028
   Administrative expense .........................       960,223        954,244      1,832,484      1,772,456
   Depreciation  & amortization ...................       489,861        453,560        958,513        875,409
                                                      --------------------------    --------------------------
                                                        3,018,793      2,908,534      5,880,090      5,738,462
                                                      --------------------------    --------------------------

Operating income ..................................       831,777        585,421      1,576,202      1,197,471
                                                      --------------------------    --------------------------

Other income & expense
   Other (income) expense .........................       (58,361)       (63,162)      (212,340)      (198,286)
   Loss on sale of subsidiary .....................           -0-        341,872            -0-        341,872
   Interest expense, equipment ....................       207,059        162,403        401,383        327,309
   Interest expense, other ........................       194,619        187,162        377,732        371,285
   Net (gain) loss on sale of fixed assets ........        88,033           (335)         2,547         (2,215)
                                                      --------------------------    --------------------------
                                                          431,350        627,940        569,322        839,965
                                                      --------------------------    --------------------------

Income (loss) before income taxes .................       400,427        (42,519)     1,006,880        357,506

Provision for income taxes ........................       151,200        112,701        386,000        265,501
                                                      --------------------------    --------------------------

Income (loss) before minority interest in preferred
   stock dividends of consolidated subsidiaries ...   $   249,227    ($  155,220)   $   620,880    $    92,005

Minority interest in preferred stock dividends of
    consolidated subsidiaries .....................   $    31,308    $    31,308    $    62,615    $    62,615
                                                      --------------------------    --------------------------


Net income (loss) .................................   $   217,919    ($  186,528)   $   558,265    $    29,390
                                                      ==========================    ==========================

Basic earnings per common share ...................   $      0.05    ($     0.04)   $      0.12    $      0.01
                                                      ==========================    =========================

Diluted earnings per common share .................   $      0.05    ($     0.04)   $      0.12    $      0.01
                                                      ==========================    ==========================

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


PIONEER RAILCORP AND SUBSIDIARIES

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

UNAUDITED
<TABLE>
                                                             June 30,    December 31,
                                                               2000          1999
                                                          ----------------------------
<S>                                                       <C>            <C>
ASSETS
Current Assets
   Cash ...............................................   $  1,090,769    $  2,356,844
   Accounts receivable, less allowance
     for doubtful accounts 2000 $147,460; 1999 $186,998      3,516,545       3,940,029
   Inventories ........................................        272,278         272,278
   Prepaid expenses ...................................        157,030          91,377
   Income tax refund claims ...........................         94,449          94,449
   Deferred taxes .....................................         91,800          91,800
                                                          ----------------------------
        Total current assets ..........................      5,222,871       6,846,777
                                                          ----------------------------

Property and Equipment less accumulated
  depreciation 2000 $8,089,104; 1999 $7,242,732 .......     25,988,168      24,159,995
                                                          ----------------------------

Intangible Assets, less accumulated amortization
  2000 $263,248; 1999 $239,846 ........................      1,098,113       1,122,489
                                                          ----------------------------

Other Assets ..........................................        359,044         131,503
                                                          ----------------------------

Total assets ..........................................   $ 32,668,196    $ 32,260,764
                                                          ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Accounts payable ...................................   $  2,322,286    $  3,983,617
   Notes payable ......................................              0         810,000
   Income taxes payable ...............................        190,246         561,697
   Current maturities of long-term debt ...............      2,744,815       2,390,042
   Accrued liabilities ................................        646,481         670,873

                                                          ----------------------------
        Total current liabilities .....................      5,903,828       8,416,229
                                                          ----------------------------

Long-term debt, net of current maturities .............     15,697,036      13,121,553
                                                          ----------------------------

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

Minority interest in subsidiaries .....................      1,138,000       1,154,000
                                                          ----------------------------

Stockholders' Equity
   Common stock .......................................          4,611           4,611
   In Treasury 2000 75,840 shares; 1999 19,000 shares .            (76)            (19)
                                                          ----------------------------
   Outstanding 2000 4,535,377; 1999 4,592,217 .........          4,535           4,592
   Additional paid-in capital .........................      2,042,042       2,042,042
   Retained earnings ..................................      3,377,655       3,017,248

                                                          ----------------------------
        Total stockholders' equity ....................      5,424,232       5,063,882
                                                          ----------------------------

Total liabilities and equity ..........................   $ 32,668,196    $ 32,260,764
                                                          ============================
</TABLE>
<PAGE>



PIONEER RAILCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FIRST SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30,1999

UNAUDITED
<TABLE>
                                                                      First Six Months
                                                                 --------------------------
                                                                     2000          1999
                                                                 --------------------------
<S>                                                              <C>            <C>
Cash Flows From Operating Activities:
Net income ...................................................   $   558,265    $    29,390
Adjustments to reconcile net income to net cash
  provided by operating activities:
           Minority interest in preferred stock dividends of
             consolidated subsidiaries .......................        62,615         62,615
           Depreciation ......................................       934,105        839,620
           Amortization ......................................        24,527         35,789
           Increase in cash value life insurance .............        (9,148)        (8,258)
           Loss (gain) on sale of property & equipment .......         2,547         (2,215)
           Loss on sale of subsidiary ........................           -0-        341,872
Change in assets and liabilities, net of effects from
  acquisition of subsidiaries:
           (Increase) decrease accounts receivable ...........       423,484       (258,152)
           (Increase) decrease inventories ...................           -0-         32,168
           (Increase) decrease prepaid expenses ..............       (65,654)        59,739
           (Increase) decrease intangible assets .............          (600)        (4,283)
           Increase (decrease) accounts payable ..............    (1,661,331)       126,963
           (Increase) decrease income tax refund claims ......           -0-         23,661
           Increase (decrease) income tax payable ............      (371,451)       210,954
           Increase (decrease) accrued liabilities ...........       (24,392)        99,411
                                                                 --------------------------
           Net cash provided by (used in) operating activities      (127,033)     1,589,274
                                                                 --------------------------

Cash Flows From Investing Activities:
           Proceeds from sale of property & equipment ........       130,257         10,925
           Purchase of property & equipment, net of property
           and equipment from acquisition of subsidiaries ....    (2,894,654)    (1,206,913)
           Business acquisitions, net of cash acquired .......       (55,000)    (3,875,000)
                                                                 --------------------------
           Net cash (used in) investing activities ...........    (2,819,397)    (5,070,988)
                                                                 --------------------------

Cash Flows From Financing Activities:
           Proceeds from short-term borrowings ...............     3,961,719      1,013,472
           Proceeds from long-term borrowings ................     5,504,773      7,273,650
           Issuance from notes receivable ....................      (170,500)
           Payments on short-term borrowings .................    (4,771,719)    (1,321,358)
           Payments on long-term borrowings ..................    (2,574,517)    (3,390,059)
           Payments on notes receivable ......................         7,107
           Repurchase of minority interest ...................       (16,000)       (13,000)
           Purchase of common stock for treasury .............       (82,605)           -0-
           Proceeds from warrants and options exercised ......           -0-             40
           Cash dividends paid ...............................      (115,288)      (103,742)
           Payments to minority interest .....................       (62,615)       (62,615)
                                                                 --------------------------
           Net cash provided by financing activities .........     1,680,355      3,396,388
                                                                 --------------------------

Net increase (decrease) in cash ..............................    (1,266,075)       (85,326)

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

Cash, end of period ..........................................   $ 1,090,769    $   384,150
                                                                 ==========================
</TABLE>
<PAGE>


SEGMENT INFORMATION

Description of products and services from reportable segments:

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

Measurement of segment profit or loss and segment assets:

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

Intersegment transactions:

Intersegment transactions are recorded at cost.

Factors management used to identify the reportable segments:

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

                                                                                                    Second Quarter
                                                                                                ------------------------
                                                                                                  2000           1999
                                                                                                ------------------------
<S>                                                                                             <C>           <C>
Revenues from external customers
   Railroad operations ......................................................................    3,068,945     2,816,860
   Equipment leasing operations .............................................................      777,864       677,095
   Corporate support services ...............................................................        3,761             0
                                                                                                ------------------------
      Total revenues from external customers ................................................    3,850,570     3,493,955
                                                                                                ========================

Intersegment revenues
   Railroad operations ......................................................................            0             0
   Equipment leasing operations .............................................................       99,600        98,400
   Corporate support services ...............................................................    1,567,796     1,578,853
                                                                                                ------------------------
      Total intersegment revenues ...........................................................    1,667,396     1,677,253
                                                                                                ========================

Segment profit
   Railroad operations ......................................................................    1,338,192     1,189,681
   Equipment leasing operations .............................................................      430,335       337,902
   Corporate support services ...............................................................      730,646       735,091
                                                                                                ------------------------
      Total segment profit ..................................................................    2,499,173     2,262,674

Reconciling items
    Intersegment revenues ...................................................................   (1,667,396)   (1,677,253)
    Income taxes ............................................................................     (151,200)      111,300
    Minority interest .......................................................................      (31,308)      (31,308)
    Other income(expense), net ..............................................................     (431,350)     (851,941)
                                                                                                ------------------------
       Total consolidated net income (loss) .................................................      217,919      (186,528)
                                                                                                ========================
</TABLE>
<PAGE>



<TABLE>


                                                                                                        Six Months
                                                                                                      Ended June 30,
                                                                                                ------------------------
                                                                                                   2000          1999
                                                                                                ------------------------
<S>                                                                                             <C>            <C>
Revenues from external customers
   Railroad operations ......................................................................    5,916,242     5,609,389
   Equipment leasing operations .............................................................    1,536,199     1,326,544
   Corporate support services ...............................................................        3,851             0
                                                                                                ------------------------
      Total revenues from external customers ................................................    7,456,292     6,935,933
                                                                                                ========================

Intersegment revenues
   Railroad operations ......................................................................            0             0
   Equipment leasing operations .............................................................      194,700       202,500
   Corporate support services ...............................................................    3,079,750     2,856,499
                                                                                                ------------------------
      Total intersegment revenues ...........................................................    3,274,450     3,058,999
                                                                                                ========================

Segment profit
   Railroad operations ......................................................................    2,520,069     2,247,003
   Equipment leasing operations .............................................................      851,730       693,751
   Corporate support services ...............................................................    1,478,853     1,315,716
                                                                                                ------------------------
      Total segment profit ..................................................................    4,850,652     4,256,470

Reconciling items
    Intersegment revenues ...................................................................   (3,274,450)   (3,058,999)
    Income taxes ............................................................................     (386,000)      (41,500)
    Minority interest .......................................................................      (62,615)      (62,615)
    Other income(expense), net ..............................................................     (569,322)   (1,063,966)
                                                                                                ------------------------
       Total consolidated net income ........................................................      558,265        29,390
                                                                                                ========================
</TABLE>
<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PIONEER RAILCORP AND SUBSIDIARIES



NOTE 1.   STATEMENTS

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

NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

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

NOTE 3.  CONTINGENCIES

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

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

NOTE 4.  PURCHASES OF RAILROAD FACILITIES

On April 1, 2000,  the  Company  through  its  wholly-owned  subsidiary  Indiana
Southwestern Railway Co. (ISW) acquired,  in a transaction  accounted for by the
purchase  method  of  accounting,  certain  assets  including  all of  the  rail
facilities owned or leased by the Evansville Terminal Railway Company (EVT). The
total  purchase  price was  $564,000  allocated  to track  assets.  There was no
goodwill recognized as a result of this transaction.

Unaudited pro forma consolidated  results of operations for the six months ended
June 30, 2000 and 1999, as though the Indiana  Southwestern Railway Co. had been
acquired as of January 1, 1999, follows:

                                               2000              1999
                                            ----------------------------

Railway operating revenue                   $7,490,717        $7,039,629
Net income                                     555,748            18,007
Earnings per common share                          .12               .00

<PAGE>



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



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

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

Summary: Second Quarter 2000 Compared to Second Quarter 1999.

The Company's net income in the second  quarter 2000 was $218,000 an increase of
$405,000 from the second  quarter 1999 which had a net loss of $187,000.  In the
second  quarter 1999, net income was affected by a one-time  charge  relating to
the sale of the Minnesota  Central Railroad Co. stock in the amount of $342,000.
Therefore,  excluding  the MCTA sale  transaction,  net  income  for the  second
quarter  1999 would  have been  approximately  $155,000.  Revenue  increased  by
$357,000  or 10% to  $3,851,000  from  $3,494,000  in the same period last year.
Operating  expense increased by $110,000 or 3%, to $3,019,000 from $2,909,000 in
the same period last year.  Operating  income  increased by $247,000,  or 42% to
$832,000  from  $585,000  in the same  period  last year.  Operating  income was
increased in the second quarter 2000 by the Company's railroad  operations which
increased  operating  income  by  approximately  $149,000  in  the  period.  The
equipment leasing operations increased operating income by approximately $92,000
in the period, primarily from increased revenue generated from locomotive leases
and an  increase  in the  utilization  of its  railcar  fleet by  non-affiliated
railroads. In addition, corporate support services increased operating income by
approximately $6,000 in the period.

Revenue:

Revenue increased in the second quarter 2000 by approximately  $357,000, or 10%,
to  $3,851,000  from  $3,494,000  in the same  period  last year.  The  railroad
operations  increased  revenue by  approximately  $253,000  in the period  which
resulted from an increase in revenues of approximately $335,000 generated by the
railroads  operated  in the second  quarter  2000 less a decrease  in revenue of
approximately  $82,000 as a result of the sale of the Minnesota Central Railroad
on May 6, 1999. The increased  revenue of $335,000  generated from the railroads
operated in the second  quarter 2000 resulted  from a  combination  of increased
freight revenue and increased  revenue from the storage of private railcars from
non-affiliated  entities.  The increase in revenue  includes  $71,000 of revenue
generated by The Garden City Western Railway,  which the Company began operating
on  May  1,  1999.  In  addition,   the  Company  began  operating  the  Indiana
Southwestern Railway Co. on April 1, 2000 which generated $102,000 of revenue in
the  second  quarter  2000.  The  equipment  leasing  operations  had a $101,000
increase in revenue in the period  resulting  from increased  revenue  generated
from locomotive leases.
<PAGE>


Operating Expense:

Operating  expense  increased  in the second  quarter 2000 by $110,000 or 3%, to
$3,019,000 from $2,909,000 in the prior year. The railroad operations  increased
operating expense by approximately $105,000 in the period which resulted from an
increase in  operating  expense of  approximately  $202,000  from the  railroads
operated  in the second  quarter  2000 less a decrease in  operating  expense of
approximately  $97,000 as a result of the sale of the Minnesota Central Railroad
on May 6, 1999. The increase in operating expense of $202,000 from the railroads
operated in the second quarter 2000 resulted from a variety of factors including
increased  track  maintenance,  fuel  and  other  transportation  expenses.  The
increase in operating  expense  includes  $34,000 of  operating  expense for The
Garden City Western  Railway,  which the Company began  operating on May 1, 1999
and $73,000 of operating expense for the Indiana  Southwestern which the Company
began  operating on April 1, 2000. The equipment  leasing  operations  increased
operating  expense   approximately   $9,000,   primarily  from  an  increase  in
depreciation  expense  related to the acquisition of railcars and locomotives of
$46,000   offset  by  a  decrease  in  maintenance   and  freight   expenses  of
approximately  $37,000.  Corporate support services decreased  operating expense
approximately $6,000.

Maintenance  of way and  structures  expense (MOW)  increased  $49,000 or 13% to
$432,000 from $383,000 in the same period last year.  Railroads  operated in the
second  quarter  2000 had an  increase of $60,000 in MOW,  primarily  related to
increased track material by the railroad operations,  $13,000 of MOW expense for
The Garden  City  Western  Railway  and $5,000 of MOW  expense  for the  Indiana
Southwestern  Railway. In addition,  MOW was decreased by $12,000 as a result of
the sale of the MCTA.

Maintenance of equipment expense (MOE) decreased $35,000, or 9% to $352,000 from
$387,000  in the same period last year.  Approximately  $20,000 of the  decrease
related to the  equipment  leasing  operations  as a result of  decreased  costs
associated with maintaining the Company's railcar fleet.  Railroads  operated in
the second quarter 2000 had a decrease of $7,000 in MOE. The Garden City Western
Railway and the Indiana  Southwestern  Railway did not have a significant amount
of MOE in the period.  In addition,  MOE was  decreased by $5,000 as a result of
the sale of the MCTA.

Transportation expense (TRAN) increased $55,000, or 8% to $785,000 from $730,000
in the same period last year.  Most of the increased  TRAN expense was generated
by the railroad operations. Railroads operated in the second quarter 2000 had an
increase of $129,000 in TRAN,  primarily  related to increased  fuel and carhire
expenses,  $11,000 of TRAN  expense  for The Garden  City  Western  Railway  and
$30,000 of TRAN expense for the Indiana Southwestern Railway. In addition,  TRAN
was decreased by $59,000 as a result of the sale of the MCTA.

General & administration  expense (ADMIN) increased $6,000 in the second quarter
2000 to $960,000  from  $954,000 in the prior  year.  Railroads  operated in the
second  quarter  2000 had an increase of $17,000 in ADMIN  expense in the period
including  $21,000  ADMIN  expense  for the  Indiana  Southwestern  Railway.  In
addition, ADMIN was decreased by $9,000 as a result of the sale of the MCTA. The
equipment leasing operations  decreased ADMIN approximately  $25,000 as a result
of reduced  expenses  related to  repositioning  the  Company's  railcar  fleet.
Corporate  expenses related to corporate  support  expenditures  increased ADMIN
expense by approximately $23,000 in the period.

Depreciation and amortization expense increased $36,000, or 8%, to $490,000 from
$454,000 in the same period last year.  Approximately $11,000 of the increase is
related to The Garden  City & Western  Railway  and  $7,000 of the  increase  is
related to the Indiana  Southwestern  Railway.  In  addition,  depreciation  and
amortization  was decreased by $11,000 as a result of the sale of the MCTA.  The
equipment  leasing  operations  increased   depreciation  expense  approximately
$46,000 related to the acquisition of railcars and locomotives.

Other Income and Expense Income Statement Line Item Discussion:

In the second quarter 2000 other income and expense  decreased $5,000 to $58,000
compared  to $63,000 in the same  period  last year.  Other  income and  expense
relates primarily to lease income for the use of railroad property.  The Company
continues to place a strong emphasis on identifying and collecting revenues from
third parties  occupying Company  property.  In addition to lease income,  other
income and expense  includes  revenues  generated  from scrap  sales,  and other
miscellaneous  non-operating  revenues and expenses,  primarily generated by the
company's railroad operations.

Interest expense related to equipment  financing increased $45,000 in the second
quarter  2000 to $207,000  compared to $162,000 in the same period last year.  A
majority of this increase is the result of financing activities  associated with
additional  locomotive  purchases made by the Company in the fourth quarter 1999
and first quarter 2000.  Other interest  expense  increased $8,000 in the second
quarter 2000 to $195,000 from $187,000 in the prior year. Other interest expense
increases  relate to the  Garden  City &  Western  Railway  acquisition  and the
Indiana Southwestern Railway acquisition.
<PAGE>


In  the  second  quarter  2000  the  Company  had  a net  loss  on  fixed  asset
dispositions of approximately  $88,000 compared to an insignificant  net gain in
the same period last year.  The net loss in the second  quarter  2000  primarily
relates to the disposition of railcars.

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

The  Company's  net income in the first six months 2000 was $558,000 an increase
of $529,000  from the first six months 1999 which had net income of $29,000.  In
the first six months 1999, net income was affected by a one-time charge relating
to the  sale of the  Minnesota  Central  Railroad  Co.  stock in the  amount  of
$342,000.  Therefore,  excluding the MCTA sale  transaction,  net income for the
first six months 1999 would have been approximately $371,000.  Revenue increased
by $520,000 or 7.5% to $7,456,000  from $6,936,000 in the same period last year.
Operating  expense increased by $142,000 or 2%, to $5,880,000 from $5,738,000 in
the same period last year.  Operating  income  increased by $379,000,  or 32% to
$1,576,000 from $1,197,000 in the same period last year.

Operating  income was  increased  in the first six months 2000 by the  Company's
railroad operations which increased  operating income by approximately  $273,000
in the period.  The equipment leasing operations  increased  operating income by
approximately $167,000 in the period, primarily from increased revenue generated
from  locomotive  leases and an increase in the utilization of its railcar fleet
by non-affiliated  railroads. In addition,  corporate support services decreased
operating income by approximately $61,000 in the period.

Revenue:

Revenue  increased in the first six months 2000 by  approximately  $520,000,  or
7.5%, to $7,456,000  from  $6,936,000 in the same period last year. The railroad
operations  increased  revenue by  approximately  $308,000  in the period  which
resulted from an increase in revenues of approximately $681,000 generated by the
railroads  operated  in the first six months  2000 less a decrease in revenue of
approximately $374,000 as a result of the sale of the Minnesota Central Railroad
on May 6, 1999. The increase of revenue of $681,000 generated from the railroads
operated in the first six months 2000 resulted  from a combination  of increased
freight revenue and increased  revenue from the storage of private railcars from
non-affiliated  entities. The increase in revenue includes $219,000 of increased
revenue  generated by The Garden City Western  Railway,  which the Company began
operating on May 1, 1999. In addition,  the Company began  operating the Indiana
Southwestern Railway Co. on April 1, 2000 which generated $102,000 of revenue in
the first six months  2000.  The  equipment  leasing  operations  had a $234,000
increase in revenue in the period  resulting  primarily from  increased  revenue
generated from locomotive leases.

Operating Expense:

Operating  expense  increased in the first six months 2000 by $142,000 or 2%, to
$5,880,000 from $5,738,000 in the prior year. The railroad operations  increased
operating expense by approximately  $35,000 in the period which resulted from an
increase in  operating  expense of  approximately  $426,000  from the  railroads
operated in the first six months 2000 less a decrease  in  operating  expense of
approximately $391,000 as a result of the sale of the Minnesota Central Railroad
on May 6, 1999. The increase in operating expense of $426,000 from the railroads
operated  in the first six  months  2000  resulted  from a  variety  of  factors
including increased track maintenance,  fuel and other transportation  expenses.
The increase in operating expense includes $129,000 of operating expense for The
Garden City Western  Railway,  which the Company began  operating on May 1, 1999
and $73,000 of operating expense for the Indiana  Southwestern which the Company
began  operating on April 1, 2000. The equipment  leasing  operations  increased
operating  expense  approximately   $43,000,   primarily  from  an  increase  in
depreciation  expense  related to the acquisition of railcars and locomotives of
$87,000   offset  by  a  decrease  in  maintenance   and  freight   expenses  of
approximately  $44,000.  Corporate support services increased  operating expense
approximately $64,000, primarily related to payroll related expenditures.

Maintenance  of way and  structures  expense (MOW)  increased  $75,000 or 10% to
$794,000 from $719,000 in the same period last year.  Railroads  operated in the
first six months 2000 had an increase of $119,000 in MOW,  primarily  related to
increased track material by the railroad operations,  $35,000 of MOW expense for
The Garden  City  Western  Railway  and $5,000 of MOW  expense  for the  Indiana
Southwestern  Railway. In addition,  MOW was decreased by $51,000 as a result of
the sale of the MCTA.

Maintenance of equipment  expense (MOE)  decreased  $74,000,  or 10% to $684,000
from  $758,000  in the same  period  last  year.  Approximately  $30,000  of the
decrease  related to the equipment  leasing  operations as a result of decreased
costs  associated  with  maintaining  the  Company's  railcar  fleet.  Railroads
operated  in the first six  months  2000 had a decrease  of $18,000 in MOE.  The
Garden City Western Railway and the Indiana  Southwestern Railway did not have a
significant  amount of MOE in the period.  In  addition,  MOE was  decreased  by
$27,000 as a result of the sale of the MCTA.
<PAGE>


Transportation  expense (TRAN)  decreased  slightly,  approximately  $2,000,  to
$1,611,000 from $1,613,000 in the same period last year.  Railroads  operated in
the first six months 2000 had an increase of $251,000 in TRAN, primarily related
to increased fuel and carhire  expenses,  $36,000 of TRAN expense for The Garden
City Western  Railway and $30,000 of TRAN  expense for the Indiana  Southwestern
Railway. In addition,  TRAN was decreased by $244,000 as a result of the sale of
the MCTA.

General &  administration  expense  (ADMIN)  increased  $60,000 in the first six
months 2000 to $1,832,000 from $1,772,000 in the prior year.  Railroads operated
in the first six months 2000 had an increase of $34,000 in ADMIN  expense in the
period including a $20,000 ADMIN expense for The Garden City Western Railway and
a $21,000 ADMIN expense for the Indiana Southwestern Railway. In addition, ADMIN
was  decreased  by  $25,000 as a result of the sale of the MCTA.  The  equipment
leasing operations decreased ADMIN approximately  $26,000 as a result of reduced
expenses  related  to  repositioning  the  Company's  railcar  fleet.  Corporate
expenses related to corporate  support  expenditures  increased ADMIN expense by
approximately $75,000 in the period.

Depreciation and amortization  expense  increased  $84,000,  or 10%, to $959,000
from  $875,000  in the same  period  last  year.  Approximately  $39,000  of the
increase  is  related  to The Garden  City & Western  Railway  and $7,000 of the
increase  is  related  to  the  Indiana   Southwestern   Railway.  In  addition,
depreciation  and  amortization was decreased by $44,000 as a result of the sale
of the MCTA. The equipment leasing  operations  increased  depreciation  expense
approximately $87,000 related to the acquisition of railcars and locomotives.

Other Income and Expense Income Statement Line Item Discussion:

In the first six months  2000  other  income and  expense  increased  $14,000 to
$212,000  compared to $198,000  in the same period last year.  Other  income and
expense relates primarily to lease income for the use of railroad property.  The
Company  continues  to place a strong  emphasis on  identifying  and  collecting
revenues from third parties  occupying  Company  property.  In addition to lease
income,  other income and expense includes revenues  generated from scrap sales,
and other miscellaneous non-operating revenues and expenses, primarily generated
by the company's railroad operations.

Interest expense related to equipment  financing  increased $74,000 in the first
six months 2000 to $401,000 compared to $327,000 in the same period last year. A
majority of this increase is the result of financing activities  associated with
additional  locomotive  purchases made by the Company in the fourth quarter 1999
and first six months 2000. Other interest expense  increased $7,000 in the first
six months 2000 to $378,000  from  $371,000  in the prior year.  Other  interest
expense  increases  relate to the Garden City & Western Railway  acquisition and
the Indiana  Southwestern  Railway acquisition and was decreased by $15,000 as a
result of the sale of the MCTA.

In the  first  six  months  2000  the  Company  had a net  loss on  fixed  asset
dispositions  of  approximately  $3,000  compared to a net gain of $2,000 in the
same  period  last  year.  The net loss in the first six months  2000  primarily
relates to the  disposition  of  railcars at a loss of $90,000 and the sale of a
locomotive at a gain of $87,000.

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  $1,200,000,  all of which was available for
use at the end of the second quarter 2000. In addition, the Company believes the
market  value of its railcar  fleet is  significantly  higher then the amount of
debt associated with the railcar fleet. Therefore, the Company believes it could
refinance  or sell part of its  railcar  fleet and  generate up to $1 million in
cash.

On June 23, 2000, the Company entered into a credit agreement with National City
Bank of Michigan/Illinois to provide a $5 million revolving  acquisition line of
credit for railroad  acquisitions at a variable  interest rate of prime plus 1%,
maturing June 10, 2002.  Amounts drawn on the line are amortized  over a 10 year
period.  This  credit  line is  secured  by all non real  estate  assets  of the
Mississippi  Central  Railroad  Co., the Alabama  Railroad  Co., and any company
acquired  using  proceeds  from the  credit  line.  In the second  quarter  2000
$614,000 was borrowed on the line in connection  with the asset  purchase by the
Indiana  Southwestern  Railway Co. The monthly  principal  and interest  payment
currently required to be repaid is $8,300.
<PAGE>


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

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, 2000, a total of 67,766 warrants  originally issued had been exercised,
and the Company realized $135,532 on the issuance of the warrants.

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

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

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

In 1999,  Pioneer  Railcorp's  Board of  Directors  authorized  and approved the
repurchase of up to one million  shares  (1,000,0000)  of the  Company's  common
stock and as of June 30, 2000, a total of 75,840 shares had been  repurchased at
a cost of $109,083.  The Company plans to continue  buying back its common stock
but believes the  repurchase  will be on a more  limited  scope then  previously
anticipated due to capital  requirements and the trading volume of the Company's
stock.

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

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

Balance Sheet and Cash Flow Items:

The Company operating  activities in the first six months 2000 resulted in a net
use of cash of $345,000. Net cash used in operating activities for the first six
months 2000 resulted from $558,000 of net income,  $959,000 of depreciation  and
amortization,  a decrease  in  accounts  payable of  $1,661,000,  a decrease  of
accounts receivable of $423,000 a decrease in income tax payable of $371,000 and
a decrease in net cash of $253,000 by changes in various other operating  assets
and liabilities.

In the first six months 2000, the Company purchased approximately  $2,900,000 of
fixed  assets and  capital  improvements.  Capital  expenditures  included  $1.6
million for 22 locomotives.  The Company plans to expand it's locomotive leasing
operations  and update  it's  current  fleet.  The  locomotives  were  initially
financed  with a short term note with National City Bank and converted to a long
term note on June 23, 2000. In addition,  the Company purchased 100 railcars for
approximately  $826,000.  This  transaction  was  initially  paid  by  cash  and
refinanced with a long term note on May 31, 2000. Capital expenditures for track
and leasehold  improvements totaled $105,000 in the first six months 2000. Fixed
asset expenditures of approximately  $125,000 relate to equipment  purchases and
railcar betterments.  In addition, the Company recorded $584,000 of track assets
purchased by the Indiana  Southwestern Railway Co. as discussed further in "Part
2, Item 5 other information"of this report.
<PAGE>


PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

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

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

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

The  Annual  Meeting  of the  Shareholders  was  held  on June  20,  2000 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, Timothy F. Shea, and John S. Fulton were re-elected
for a one year term.

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.

The vote  totals  for the  matters  voted  upon at the  Annual  Meeting  were as
follows:

                                                                         Votes
    Proposal                                 Votes For  Votes Against  Abstained
--------------------------------------------------------------------------------

Nomination of Guy L. Brenkman
to the Board of Directors                    3,555,676     204,760       40,666

Nomination of Orvel L. Cox
to the Board of Directors                    3,559,236     122,670       40,666

Nomination of Timothy F.Shea
to the Board of Directors                    3,512,036     225,850       40,666

Nomination of John S. Fulton
to the Board of Directors                    3,556,236     183,150       40,666

Nomination of J. Michael Carr
to the Board of Directors                    3,515,236     167,070       40,666

Ratification of McGladrey & Pullen, LLP
as Independent Auditor                       3,575,222     139,400        7,050

Item 5.   OTHER INFORMATION

On April 1, 2000,  the  Company  through  its  wholly-owned  subsidiary  Indiana
Southwestern Railway Co. (ISW) acquired,  in a transaction  accounted for by the
purchase  method  of  accounting,  certain  assets  including  all of  the  rail
facilities owned or leased by the Evansville  Terminal Railway Company (EVT) and
began  operations  immediately.  The total purchase price was $564,000 for track
assets and $55,000 for  approximately 15 % of EVT common and preferred stock and
was funded with the Company's acquisition line of credit. Included in the amount
funded by the line of credit is  $320,000  to pay off the debt of 4  locomotives
that were traded as part of the  purchase  agreement,  and  $238,000 to purchase
promissory notes and mortgages related to the assets purchased.  The line begins
in Evansville,  Indiana and is 23 miles in length.  The primary  commodities are
grain, plastics and rail equipment.  The Company projects the ISW will initially
generate annual revenues of $300,000 and $50,000 of operating income.

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

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

Exhibit # 11 - Statement re 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 20, 2000.

Exhibit # 20.2 Form of Ballot used at the Annual Meeting on June 20, 2000.

Exhibit # 20.3 Annual  Report for 1999 sent to  shareholders  with the Notice of
Annual Meeting and Proxy Statement. Exhibit # 27 - Financial data schedule.

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


SIGNATURES

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

PIONEER RAILCORP
(Registrant)


       8/04/00                               /s/ Guy L. Brenkman
       -------                               -----------------------------------
        DATE                                 GUY L. BRENKMAN
                                             PRESIDENT & CEO




      8/04/00                                /s/ J. Michael Carr
      -------                                -----------------------------------
       DATE                                  J. MICHAEL CARR
                                             TREASURER & CHIEF FINANCIAL OFFICER