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

                                   FORM 10-QSB

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

                      For the quarter ended March 31, 2005

                        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

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 [ ].

                                    4,498,482
             ------------------------------------------------------
             (Shares of Common Stock outstanding on March 31, 2005)


                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS



                        PIONEER RAILCORP AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                     Quarters Ended March 31, 2005 and 2004

                                    UNAUDITED

<TABLE>
                                                            First Quarter
                                                     --------------------------
                                                        2005            2004
                                                     --------------------------
<S>                                                  <C>            <C>
Operating revenue ................................   $ 4,420,000    $ 4,116,000
                                                     --------------------------

Operating expenses
  Maintenance of way .............................       339,000        393,000
  Maintenance of equipment .......................       458,000        387,000
  Transportation expense .........................       993,000      1,031,000
  Administrative expense .........................     1,362,000      1,028,000
  Depreciation  & amortization ...................       577,000        553,000
  Net (gain) loss on sale of property & equipment        (26,000)        10,000
                                                     --------------------------
                                                       3,703,000      3,402,000
                                                     --------------------------

Operating income .................................       717,000        714,000
                                                     --------------------------

Other income & expense
  Other (income) expense .........................      (261,000)      (275,000)
  Interest expense ...............................       206,000        202,000
                                                     --------------------------
                                                         (55,000)       (73,000)
                                                     --------------------------

Income before income taxes .......................       772,000        787,000

Provision for income taxes .......................       324,000        331,000
                                                     --------------------------

Income before minority interest in preferred
  stock dividends of consolidated subsidiaries ...   $   448,000    $   456,000

Minority interest in preferred stock dividends of
  consolidated subsidiaries ......................        23,000         23,000
                                                     --------------------------


Net income .......................................   $   425,000    $   433,000
                                                     ==========================

Basic earnings per common share ..................   $      0.09    $      0.10
                                                     ==========================

Diluted earnings per common share ................   $      0.07    $      0.08
                                                     ==========================

Cash dividends per common share ..................   $        --    $        --
                                                     ==========================
</TABLE>
See notes to unaudited consolidated financial statements

                                       2
<PAGE>


                        PIONEER RAILCORP AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2005 and DECEMBER 31, 2004

                                    UNAUDITED



                                                       March 31,    December 31,
                                                         2005           2004
                                                      --------------------------
ASSETS
Current Assets
  Cash .............................................   $ 1,865,000   $   958,000
  Accounts receivable, less allowance
    for doubtful accounts 2005 and 2004 $109,000 ...     3,482,000     3,732,000
  Inventories ......................................       368,000       370,000
  Prepaid expenses .................................       258,000       299,000
  Income tax refund claims .........................       238,000       242,000
                                                       -------------------------
        Total current assets .......................     6,211,000     5,601,000

Investments, cash value of life insurance ..........       289,000       280,000

Property and equipment, less accumulated
  depreciation 2005 $16,383,000; 2004 $15,807,000 ..    29,257,000    25,309,000

Other assets .......................................         4,000         4,000

Goodwill ...........................................     1,017,000     1,017,000
                                                       -------------------------

Total assets .......................................   $36,778,000   $32,211,000
                                                       =========================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Current maturities of long-term debt .............   $ 2,423,000   $ 1,478,000
  Notes payable ....................................       250,000       146,000
  Accounts payable .................................     2,936,000     2,469,000
  Income taxes payable .............................       124,000            --
  Deferred income taxes ............................        46,000        46,000
  Accrued liabilities ..............................       587,000       968,000
                                                       -------------------------
        Total current liabilities ..................     6,366,000     5,107,000
                                                       -------------------------

Long-term debt, net of current maturities ..........    10,891,000     8,080,000
                                                       -------------------------

Deferred revenue ...................................     1,670,000     1,702,000
                                                       -------------------------

Deferred income taxes ..............................     6,475,000     6,396,000
                                                       -------------------------

Minority interest in subsidiaries ..................       736,000       736,000
                                                       -------------------------

Stockholders' Equity
  Common stock :
  Issued 2005 4,636,347; 2004 4,634,917
  In Treasury 2005 137,865 shares; 2004 137,665
  Outstanding 2005 4,498,482; 2004 4,497,252 .......         5,000         5,000
  Additional paid-in capital .......................     2,057,000     2,054,000
  Retained earnings ................................     8,578,000     8,131,000
                                                       -------------------------
        Total stockholders' equity .................    10,640,000    10,190,000
                                                       -------------------------

Total liabilities and stockholders' equity .........   $36,778,000   $32,211,000
                                                       =========================

See notes to unaudited consolidated financial statements

                                       3
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Three Months Ended March 31, 2005 and 2004

                                    UNAUDITED
<TABLE>
                                                                      First Quarter
                                                              ----------------------------
                                                                   2005           2004
                                                              ----------------------------
<S>                                                           <C>             <C>
Cash Flows From Operating Activities
Net income ................................................   $    425,000    $    433,000
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Minority interest in preferred stock dividends of
    consolidated subsidiaries .............................         23,000          23,000
  Depreciation and amortization ...........................        577,000         553,000
  Increase in cash value life insurance ...................         (9,000)         (8,000)
  (Gain) loss on sale of property & equipment .............        (26,000)         10,000
  Deferred taxes ..........................................         79,000          66,000
Change in assets and liabilities
  (Increase) decrease accounts receivable .................        250,000         109,000
  (Increase) decrease inventories .........................          2,000          (6,000)
  (Increase) decrease prepaid expenses ....................         41,000          51,000
  Increase (decrease) accounts payable ....................        467,000        (140,000)
  (Increase) decrease income tax refund claims ............          4,000          55,000
  Increase (decrease) income tax payable ..................        124,000         205,000
  Increase (decrease) deferred revenue ....................        (32,000)        (16,000)
  Increase (decrease) accrued liabilities .................       (381,000)       (238,000)
                                                              ----------------------------
        Net cash provided by operating activities .........      1,544,000       1,097,000
                                                              ----------------------------

Cash Flows From Investing Activities
  Proceeds from sale of property & equipment ..............         26,000          65,000
  Purchase of property & equipment ........................     (4,525,000)       (148,000)
                                                              ----------------------------
        Net cash (used in) investing activities ...........     (4,499,000)        (83,000)
                                                              ----------------------------

Cash Flows From Financing Activities
  Proceeds from short-term borrowings .....................        176,000               0
  Proceeds from long-term borrowings ......................     11,133,000               0
  Payments on short-term borrowings .......................        (72,000)        (73,000)
  Payments on long-term borrowings ........................     (7,377,000)       (720,000)
  Purchase of common stock for treasury ...................         (1,000)
  Proceeds from warrants exercised ........................          3,000          14,000
                                                              ----------------------------
        Net cash provided by (used in) financing activities      3,862,000        (779,000)
                                                              ----------------------------

Net increase in cash ......................................        907,000         235,000

Cash, beginning of period .................................        958,000       1,199,000
                                                              ----------------------------
Cash, end of period .......................................   $  1,865,000    $  1,434,000
                                                              ============================

Supplemental Disclosures of Cash Flow Information
  Cash payments for:
    Interest ..............................................   $    237,000    $    202,000
                                                              ============================
    Income taxes ..........................................   $    127,000    $     46,000
                                                              ============================
</TABLE>
See notes to unaudited consolidated financial statements

                                       4
<PAGE>

This Form 10-QSB contains certain  "forward-looking"  statements as such term is
defined in The Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management.  When used in this report,  the words  "anticipate,"
"believe,"  "estimate,"  "expect,"  and "intend" and words or phrases of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current  risks,   uncertainties  and  assumptions  related  to  certain  factors
including, without limitation, competitive factors, general economic conditions,
customer relations,  relationships with vendors,  the interest rate environment,
governmental  regulation and supervision,  seasonality,  distribution  networks,
product introductions and acceptance,  technological change, changes in industry
practices,  one-time  events  and other  factors  described  herein and in other
filings made by the Company with the Securities and Exchange  Commission.  Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize,  or should  any  underlying  assumptions  prove  incorrect,  actual
results  may  vary  materially  from  those  described  herein  as  anticipated,
believed,  estimated,  expected,  or  intended.  The Company  does not intend to
update these forward-looking statements.

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.   SUMMARY OF 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), Elkhart & Western Railroad Co. (EWR),  Gettysburg & Northern Railroad Co.
(GET),  Pioneer  Resources,  Inc. (PRI),  Pioneer  Railroad  Equipment Co., Ltd.
(PREL), Pioneer Air, Inc. (PAR), and Pioneer Railroad Services,  Inc. (PRS). 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 Air, Inc. (PAR), and Pioneer Railroad Services, Inc.
(PRS).  All  significant   intercompany  balances  and  transactions  have  been
eliminated in consolidation.

For a complete description of our significant accounting policies, see Note 1 to
our Consolidated Financial Statements in our 2004 Form 10-KSB.

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.

NOTE 4. ACCOUNTING PRONOUNCEMENTS

FASB Statement No. 153, Exchange of Nonmonetary  Assets,  was issued in December
2004.  This  Statement  addresses the  measurement  of exchanges of  nonmonetary
assets and eliminates the exception from fair value  measurement for nonmonetary
exchanges of similar  productive  assets and  replaces it with an exception  for
exchanges  that do not have  commercial  substance.  A nonmonetary  exchange has
commercial  substance  if the future  cash flows of the entity are  expected  to
change  significantly  as a result of the exchange.  This Statement is effective
for periods  beginning  after June 15,  2005.  The  Company  does not expect the
application of Statement  No.153 to have a material  effect on the  accompanying
financial statements.

                                       5
<PAGE>

In December 2004, the Financial  Accounting  Standards Board ("FASB")  published
FASB Statement No. 123 (revised  2004),  "Share-Based  Payment" ("FAS 123(R)" or
the  "Statement").  FAS 123(R) requires that the  compensation  cost relating to
share-based payment transactions, including grants of employee stock options, be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability  instruments  issued.  FAS 123(R) covers a wide
range  of  share-based   compensation   arrangements  including  stock  options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. FAS 123(R) is a replacement of FASB Statement No.
123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees,  and its related interpretive guidance
(APB 25).

The effect of the Statement  will be to require  entities to measure the cost of
employee services received in exchange for stock options based on the grant-date
fair value of the award,  and to recognize the cost over the period the employee
is required to provide  services for the award.  FAS 123(R) permits  entities to
use any  option-pricing  model  that  meets  the  fair  value  objective  in the
Statement.

The  Company  will be required  to apply FAS 123(R) as of the  beginning  of its
first interim period that begins after December 15, 2005, which will be the year
ending December 31, 2006.

FAS 123(R) allows two methods for determining the effects of the transition: the
modified prospective  transition method and the modified retrospective method of
transition.  Under the modified  prospective  transition method, an entity would
use the fair value based  accounting  method for all  employee  awards  granted,
modified,  or  settled  after the  effective  date.  As of the  effective  date,
compensation cost related to the nonvested  portion of awards  outstanding as of
that  date  would be based  on the  grant-date  fair  value of those  awards  as
calculated  under the  original  provisions  of Statement  No. 123;  that is, an
entity would not remeasure the  grant-date  fair value  estimate of the unvested
portion of awards  granted prior to the effective  date. An entity will have the
further  option to either apply the Statement to only the quarters in the period
of adoption and  subsequent  periods,  or apply the Statement to all quarters in
the  fiscal  year of  adoption.  Under  the  modified  retrospective  method  of
transition, an entity would revise its previously issued financial statements to
recognize  employee  compensation cost for prior periods presented in accordance
with the original provisions of Statement No. 123.

The Company has not yet  completed its study of the  transition  methods or made
any decisions  about how it will adopt FAS 123(R).  The impact of this Statement
on the Company in fiscal 2006 and beyond will depend upon various factors, among
them being our future compensation  strategy including whether or not additional
stock options will be awarded in the future.

NOTE 5. 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.

                                       6
<PAGE>

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.


                                                    First Quarter  First Quarter
                                                        2005            2004
                                                    ----------------------------
Revenues from external customers
  Railroad operations ............................   $ 3,705,000    $ 3,346,000
  Equipment leasing operations ...................       711,000        766,000
  Corporate support services .....................         4,000          4,000
                                                     --------------------------
        Total revenues from external customers ...   $ 4,420,000    $ 4,116,000
                                                     ==========================


Intersegment revenues
  Railroad operations ............................   $         0    $         0
  Equipment leasing operations ...................        90,000         99,000
  Corporate support services .....................     1,642,000      1,388,000
                                                     --------------------------
        Total intersegment revenues ..............   $ 1,732,000    $ 1,487,000
                                                     ==========================

Segment profit
  Railroad operations ............................   $ 1,514,000    $ 1,183,000
  Equipment leasing operations ...................       327,000        376,000
  Corporate support services .....................       608,000        642,000
                                                     --------------------------
        Total segment profit .....................     2,449,000      2,201,000

Reconciling items
  Intersegment revenues ..........................    (1,732,000)    (1,487,000)
  Income taxes ...................................      (324,000)      (331,000)
  Minority interest ..............................       (23,000)       (23,000)
  Other income (expense), net ....................        55,000         73,000
                                                     --------------------------

       Total consolidated net income .............   $   425,000    $   433,000
                                                     ==========================

Note 6. EARNINGS PER COMMON SHARE

Following is information about the computation of the earnings per share (EPS)
data for the quarters ended March 31, 2005 and 2004:
<TABLE>

                                                      Income        Shares       Per-Share
                                                    (Numerator)  (Denominator)    Amount
                                                    --------------------------------------
                                                     For the Quarter Ended March 31, 2005
                                                    --------------------------------------
<S>                                                  <C>         <C>             <C>
Basic EPS
Income available to common stockholders ...........  $ 425,000     4,497,786     $   0.09
                                                                                 ========

Effect of Dilutive Securities .....................         --     1,447,115        -0.02
                                                     ------------------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions ......................  $ 425,000     5,944,901     $   0.07
                                                     ====================================

                                                     For the Quarter Ended March 31, 2004
                                                    --------------------------------------
Basic EPS
Income available to common stockholders ...........  $ 433,000     4,485,775     $   0.10
                                                                                 ========

Effect of Diluted Securities ......................         --       731,292        -0.02
                                                     ------------------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions ......................  $ 433,000     5,217,067     $   0.08
                                                     ====================================
</TABLE>

                                       7
<PAGE>

NOTE 7. CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of contingent  assets and liabilities at the dates of
the financial statements and the reported amounts of revenue and expenses during
the reporting periods.  The financial statement  components or accounts that are
subject to  significant  estimation  are reserves for  litigation,  casualty and
environmental matters, accounts receivable,  deferred income taxes and property,
plant and equipment.

In accordance with Statement of Financial Accounting Standards,  or SFAS, No. 5,
"Accounting for  Contingencies," an accrual for a loss contingency  (litigation,
casualty and  environmental  matters) is established  if  information  available
prior to the issuance of the financial  statements indicates that it is probable
that a  liability  has been  incurred  or an  asset  has  been  impaired.  These
estimates have been developed in consultation  with outside counsel handling our
defense in these  matters and are based upon an analysis of  potential  results,
assuming a  combination  of litigation  and  settlement  strategies.  Subsequent
changes to those  estimates  are  reflected in our  statements  of income in the
period of the change.  Management  believes  that it has  adequate  insurance to
cover most of the likely loss  contingency  situations,  and most accruals for a
loss  contingency  would  be  no  more  than  the  Company's  maximum  insurance
self-retention  of $50,000 per  occurrence.  To date all losses on such  matters
have been within management's expectations.

Provisions are made for estimated uncollectible accounts receivable.  An account
receivable is considered to be past due if any portion of the receivable balance
is outstanding  for more than 90 days.  Management  determines the allowance for
doubtful accounts by regularly  evaluating  individual customer  receivables and
considering  a  customer's  financial  condition,  credit  history,  and current
economic   conditions.   Accounts   receivables  are  written  off  when  deemed
uncollectible.  Recoveries  of  trade  receivables  previously  written  off are
recorded when received. To date, losses on accounts receivable have been minimal
in  relation  to  the  volume  of  sales  and  have  been  within   management's
expectations.

Deferred  taxes  are  recognized  based on  differences  between  the  financial
statement  carrying  amounts  and the tax bases of assets  and  liabilities.  We
regularly review our deferred tax assets for recoverability. Deferred tax assets
are reduced by a valuation  allowance when, in the opinion of management,  it is
more likely than not that some  portion or all of the  deferred  tax assets will
not be realized based on projected  future taxable income,  a material change in
the  actual  effective  tax rates or time  period  within  which the  underlying
temporary  differences become taxable or deductible,  and the expected timing of
the reversals of existing  temporary  differences.  If we are unable to generate
sufficient  future  taxable income to utilize  deferred tax assets,  we would be
required to  establish a valuation  allowance  against a portion of our deferred
tax assets,  resulting  in an increase in our future  effective  tax rate with a
coinciding adverse impact on earnings. To date the Company has not had to record
a valuation  allowance  for deferred  tax assets  previously  recognized  on its
balance sheet,  nor does it expect to record such an allowance  through at least
December 31, 2004.

Net property,  plant and equipment comprised 80% of our total assets as of March
31, 2005. These assets are stated at cost, less accumulated depreciation. We use
the  straight-line   method  of  depreciation  over  estimated  lives  generally
applicable to the railroad industry.  Expenditures that increase asset values or
extend useful lives are  capitalized.  Repair and maintenance  expenditures  are
charged to operating expense when the work is performed.  We periodically review
the carrying value of our long-lived assets for impairment. This review is based
upon  our  projections  of  anticipated  future  cash  flows.  If the sum of the
expected future cash flows  (undiscounted  and without interest charges) is less
than the carrying amount of the asset, the Company would recognize an impairment
loss measured by the amount by which the carrying value of the asset exceeds the
fair value of the asset.  The  estimate of fair value shall be based on the best
information available in the circumstances.  While we believe that our estimates
of future cash flows are reasonable,  different  assumptions regarding such cash
flows could materially  affect our evaluations.  No impairment has been recorded
on fixed assets during the three months ended March 31, 2005.

For a complete description of our significant accounting policies, see Note 1 to
our Consolidated Financial Statements in our 2004 Form 10-KSB.

                                       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 purposes 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), Elkhart & Western Railroad Co.
(EWR), Gettysburg & Northern Railroad Co. (GET), Pioneer Resources,  Inc. (PRI),
Pioneer  Railroad  Equipment  Co., Ltd.  (PREL),  Pioneer Air, Inc.  (PAR),  and
Pioneer Railroad Services, Inc. (PRS)

Overview:

The Company operates in two business segments,  railroad operations and railroad
equipment  leasing.  Railroad  operations  are provided by the Company's  wholly
owned short line railroad  subsidiaries.  PRC's rail system is primarily devoted
to carrying  freight.  The railroad  subsidiaries  generate revenue from several
activities,  with the primary source referred to as switching revenue. Switching
revenue is the amount the Company receives for handling and delivering a load of
freight via railcar to and from its online  customers.  The railroad  operations
also generate revenue through repair of foreign  railcars  (railcars owned by an
unrelated entity) used to carry freight on the Company's railroads. In addition,
the  railroad  operations  earn  revenue  from  demurrage,  a charge  to  online
customers  for  holding  a  foreign  railcar  for an  excessive  number of days.
Generally,  demurrage  revenues  will be  partially  offset by  carhire  expense
(charges to the Company's railroad  operations for using a foreign railcar).  In
addition to revenues generated from online customers, the Company also generates
revenue  from the  storage of  private  railcars  (railcars  that are owned by a
non-railroad  company). In addition, the railroad operations generate revenue by
performing contract services,  primarily track construction and maintenance, for
customers and governmental  agencies.  Finally, the Company,  through its wholly
owned railroad  subsidiary  Gettysburg & Northern Railroad Co. generates revenue
from a tourist passenger train in Gettysburg, PA.

The Company's revenue from its railroad  operations could be affected by several
events.  In most  instances,  several  railroads  take part in the  delivery  of
freight to and from the Company's customers.  Each railroad will set its revenue
requirement for handling the freight.  If the total revenue  requirement for all
railroads involved is not competitive with other  transportation  options, it is
likely the freight will not move by rail.  In addition,  the  Company's  current
customers make changes in the origin of their raw materials and  destination for
their finished products that could positively or negatively affect rail traffic.
In  addition,  a  significant  portion  of the  Company's  freight is carried in
railcars  supplied by the  nation's  largest  railroads,  referred to as Class 1
railroads.  The Class 1 railroads  ability to continue to supply  railcars is an
important  factor  in  generating  revenues.  The  Company's  equipment  leasing
operations  own  a  large  railcar  fleet,   which  helps  to  minimize  adverse
consequences from a limited railcar supply. The Company continually searches for
railcars to purchase that will provide its customers with a reliable car supply.

                                       9
<PAGE>

The equipment leasing operations  generate revenue from carhire revenue (charges
non-affiliated  railroads  pay the Company for using its  railcars)  and revenue
from locomotive leases to unaffiliated  entities.  The Company's railcars have a
limited useful life,  generally 40 to 50 years from the year they were built. In
future  years,  as the  Company's  railcars  reach their useful life limit,  the
Company  will need to replace  the  railcars to  maintain  its  current  carhire
revenue levels. Any significant purchase of railcars will require long term debt
financing.  When the Company's  railcars reach the end of their useful life, the
Company  could still use some of the railcars on its own  railroads  for captive
grain loads or generate  income from the scrap value of the  railcars,  which is
currently  about  $5,000  per  car.  Below  is a  chart  illustrating  the  life
expectancy of the Company's railcar fleet as of December 31, 2004:

Expiration Year    Box   Cov Hop   Gond    Flat   Hopper   Total     % of Fleet
--------------------------------------------------------------------------------

     2005           14      57       3      38       1       113        8.94%
     2006           72     137       6                       215       17.01%
     2007            2      99                       2       103        8.15%
     2008           21       5       5               2        33        2.61%
     2009           38     154       5                       197       15.59%
     2010            9       6       4                        19        1.50%
     2011           88      50                       1       139       11.00%
     2012          162      17       4               2       185       14.63%
     2013           94      88      55      19       4       260       20.57%
--------------------------------------------------------------------------------
     Totals        500     613      82      57      12      1264      100.00%

The Company also seeks to encourage  development on or near, and utilization of,
the real estate right of way of its operating railroads by potential shippers as
a source of additional revenue and also generates revenue by granting to various
entities,  such  as  utilities,   pipeline  and  communications   companies  and
non-industrial  tenants, the right to occupy its railroad right of way and other
real estate property.

The  Company's  primary  outflow  of cash  pertains  to  employee  wages,  track
materials, repair expenses to railcars and locomotives,  fuel, car hire expense,
liability insurance, health insurance, and debt repayments. The Company uses the
following categories to group expenses in the financial statements:

     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 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.

     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.

     General &  administration  expense (ADMIN) 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 fees, printing,  and corporate headquarters support service
     payroll for executive management,  accounting,  operations, marketing, real
     estate, legal, and other support staff.

Summary:  First Quarter 2005 Compared to First  Quarter 2004  Financial  Results
discussion:

The  Company's  net income in the first  quarter 2005 was $425,000 a decrease of
$8,000 or 2% compared to $433,000 net income in the first quarter 2004.  Revenue
increased  in the first  quarter  2005 by  $304,000  or 7%, to  $4,420,000  from
$4,116,000 in the first quarter 2004.  Operating  expense increased in the first
quarter  2005 by  $301,000 or 9%, to  $3,703,000  from  $3,402,000  in the first
quarter 2004.  Operating income increased in the first quarter 2005 by $3,000 or
less than 1%, to $717,000 from $714,000 in the first quarter 2004.

                                       10
<PAGE>

Revenue increased in the first quarter 2005 by $304,000 or 7% to $4,420,000 from
$4,116,000 in the prior year. The railroad operations generated total revenue of
$3,705,000 in the first quarter 2005, an increase of $359,000  (11%) compared to
revenue  of  $3,346,000  in the first  quarter  2004.  The  railroad  operations
increased  demurrage revenue by $261,000 to $593,000 compared to $332,000 in the
same period last year. The railroad  operations also had an increase in contract
service  revenue of $101,000 to  $176,000  from  $75,000 in the same period last
year resulting from of track projects for unaffiliated  entities. As the economy
continues to improve,  the  Company's  railroad  operations  have  experienced a
decrease in revenue from the storage of railcars for non-affiliated companies as
such companies find utilization for their railcars in an improving  economy.  In
the first  quarter 2005 revenue  from car storage  decreased  $42,000 to $77,000
compared to $119,000 in the first quarter 2004. The equipment leasing operations
generated  total  revenue of $711,000 in the first  quarter  2005, a decrease of
$55,000  (7%)  compared  to  $766,000 in the first  quarter  2004.  In the first
quarter 2005 revenue from the  equipment  leasing  operations  included  carhire
revenue of  $435,000,  a decrease of $178,000  (29%) from  $613,000 in the first
quarter 2004, and unaffiliated lease income of $267,000, an increase of $115,000
(75%) from $152,000 in the first quarter 2004.  The decrease in carhire  revenue
in the quarter  primarily  relates to the  underutilization  of a portion of the
Company's   railcar  fleet,  and  also  results  in  railcars  being  leased  to
unaffiliated entities which generated the increase in unaffiliated lease income.
Corporate  services did not have  significant  revenues in either first  quarter
2005 or 2004.

Operating  expenses  increased  in the first  quarter 2005 by $301,000 or 9%, to
$3,703,000  from  $3,402,000  in the first  quarter  2004.  The majority of this
increase in operating expenses resulted from increased  administration  expenses
of  $334,000  in the first  quarter  2005.  The  railroad  operations  increased
administration  expenses $70,000  primarily  relating to legal fees for employee
injury  claims.  The  equipment  leasing  operations  increased   administration
expenses  $35,000  primarily  related to freight  charges for  relocation of the
Company's  railcar and locomotive fleet.  Corporate  support services  increased
administration  expenses  $229,000  primarily  related to  $83,000 of  increased
medical  claims by the Company's  self-funded  health plan,  $35,000  related to
additional support personnel, and professional fees of $91,000 primarily related
to the Company's  actions to "go private" as detailed in the Company's  Form 8-K
and  8-K/A  filed  September  21,  2004 and  September  23,  2004  (as  amended)
respectively,  and as is  more  fully  described  in  Part  II,  Item 5 -  Other
Information  in this  Form  10-QSB.  The  railroad  operations  generated  total
operating  expenses of $2,192,000 in the first quarter 2005, a $20,000  increase
(1%) from $2,172,000 in the first quarter 2004. The equipment leasing operations
generated  operating  expenses of $473,000 in the first  quarter  2005, a $5,000
decrease  (1%)  from  $478,000  in the first  quarter  2004.  Corporate  support
services  generated  operating expense of $1,038,000 in the first quarter 2005 a
$286,000 increase (38%) from $752,000 in the first quarter 2004.

Operating  income increased in the first quarter 2005 by $3,000 or less than 1%,
to $717,000 from $714,000 in 2004. The railroad  operations  generated operating
income of $1,513,000 in the first quarter 2005, a $339,000  increase  (29%) from
$1,174,000 in the first quarter 2004. The equipment leasing operations generated
operating income of $238,000 in the first quarter 2005, a $50,000 decrease (17%)
from $288,000 in the first  quarter 2004.  Corporate  support  services  reduced
operating  income  $1,034,000  in the first  quarter  2005,  compared to reduced
operating  income in the first  quarter  2004 of  $748,000.  This  represents  a
$286,000  decrease in the first quarter 2005 operating  income (38%) compared to
the first quarter 2004.

First Quarter 2005 Operations by Business Segment
-------------------------------------------------

                          Railroad     Equipment      Corporate
                         Operations     Leasing       Services         Total
                         -------------------------------------------------------

Revenue ...............  $3,705,000   $   711,000    $     4,000    $ 4,420,000

Expenses:
Mow ...................  $  319,000   $         0    $    20,000    $   339,000
Moe ...................  $  242,000   $   110,000    $   106,000    $   458,000
Tran ..................  $  909,000   $    30,000    $    54,000    $   993,000
Admin .................  $  467,000   $    49,000    $   846,000    $ 1,362,000
(Gain)/Loss Sale of P&E  $        0   $   (26,000)   $         0    ($   26,000)
Dep/Amort .............  $  255,000   $   310,000    $    12,000    $   577,000
                         -------------------------------------------------------
Operating Expense .....  $2,192,000   $   473,000    $ 1,038,000    $ 3,703,000

Operating Income ......  $1,513,000   $   238,000    ($1,034,000)   $   717,000

                                       11
<PAGE>

First Quarter 2004 Operations by Business Segment
-------------------------------------------------

                               Railroad     Equipment   Corporate
                              Operations     Leasing    Services         Total
                              --------------------------------------------------

Revenue ...................   $3,346,000   $  766,000   $    4,000    $4,116,000

Expenses:
Mow .......................   $  375,000   $        0   $   18,000    $  393,000
Moe .......................   $  211,000   $  102,000   $   74,000    $  387,000
Tran ......................   $  967,000   $   36,000   $   28,000    $1,031,000
Admin .....................   $  397,000   $   14,000   $  617,000    $1,028,000
(Gain)/Loss Sale of P&E ...   $   10,000   $        0   $        0    $   10,000
Dep/Amort .................   $  212,000   $  326,000   $   15,000    $  553,000
                              --------------------------------------------------
Operating Expense .........   $2,172,000   $  478,000   $  752,000    $3,402,000

Operating Income ..........   $1,174,000   $  288,000   ($ 748,000)   $  714,000

First Quarter 2005-2004 Variances by Business Segments
------------------------------------------------------
Increase (decrease)

                                Railroad     Equipment   Corporate
                               Operations     Leasing    Services       Total
                               -------------------------------------------------

Revenue ....................   $ 359,000    $ (55,000)   $       0    $ 304,000

Expenses:
Mow ........................   $ (56,000)   $       0    $   2,000    $ (54,000)
Moe ........................   $  31,000    $   8,000    $  32,000    $  71,000
Tran .......................   $ (58,000)   $  (6,000)   $  26,000    $ (38,000)
Admin ......................   $  70,000    $  35,000    $ 229,000    $ 334,000
(Gain)/Loss Sale of P&E ....   $ (10,000)   $ (26,000)   $       0    $ (36,000)
Dep/Amort ..................   $  43,000    $ (16,000)   $  (3,000)   $  24,000
                               ------------------------------------------------
Operating Expense ..........   $  20,000    $  (5,000)   $ 286,000    $ 301,000

Operating Income ...........   $ 339,000    $ (50,000)   $(286,000)   $   3,000

Other Income and Expense Income Statement Line Item Discussions:

Interest  expense  increased  $4,000 (2%) in the first  quarter 2005 to $206,000
compared to $202,000  in the first  quarter  2004.  In the first  quarter  2005,
$261,000  of other  income was earned by the  Company,  compared  to $275,000 of
other income in the first quarter 2004, primarily from lease income generated by
the Company's railroad  operations from the granting of easements and leases for
the use of railroad right of way property.

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. See Note 4 for further discussions.

Liquidity and Capital Resources:

The Company  primarily  uses cash  generated  from  operations  to fund  working
capital  needs and relies on long-term  financing  for the purchase of railcars,
new operating  subsidiaries,  and other significant  capital  expenditures.  The
Company has working capital facilities  totaling  $2,000,000 of which $1,824,000
was available for use at the end of the first quarter 2005. The Company's credit
agreements with National City Bank contain various  restrictive  loan covenants.
As of March 31, 2005, the Company believes it is in compliance with all of these
covenants.

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 to obtain 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.

                                       12
<PAGE>

On October  28, 2004 the  Company's  feeder  line  application  on file with the
Surface  Transportation Board (STB) to acquire the assets of the west end of the
Toledo Peoria and Western Railway (TPW) was granted.  The Company  completed the
acquisition  on  February  11,  2005 at the STB  determined  purchase  price  of
$4,165,742.  This  acquisition  was financed  with proceeds from a National City
Bank  credit  facility  of up to $16  million.  National  City Bank  granted the
Company the $16 million  credit  facility on January 19,  2005,  the proceeds of
which are to be utilized (1) to finance the aforementioned TPW acquisition,  (2)
to refinance  approximately  $7 million of  outstanding  debt with National City
Bank  and (3) to  finance  the  Company's  proposed  $5  million  going  private
transaction expected to occur in 2005, which is more fully described in Part II,
Item 5 - Other  Information  in this Form 10-QSB below.  The $16 million  credit
facility  provides for interest at the LIBOR interest rate plus a spread ranging
from 200 basis points to 275 basis points  depending upon the Company's ratio of
debt to earnings before interest,  taxes,  depreciation and amortization expense
(EBITDA).  The debt is to be amortized over seven years with a five-year balloon
payment.  The debt is collateralized by a security interest in all of the assets
of each of Pioneer Railcorp's subsidiary railways, a pledge of the stock of each
such  company,  and a  guaranty  from each of the  Company's  subsidiaries.  The
Company  entered into an interest rate swap agreement with National City Bank in
conjunction  with the $16 million credit facility.  The swap agreement,  with an
effective date of April 1, 2005,  exchanges the variable LIBOR interest rate for
a fixed  interest  rate of 4.30%  until  maturity  of the  note on May 1,  2010,
resulting in a current  effective  interest rate of 7.05% (4.30% fixed rate plus
275 basis point performance-based spread as of March 31, 2005).

In addition to the $16 million credit facility, the Company secured a $2 million
line-of-credit  from  National  City Bank on January 19,  2005,  to replace it's
existing $1.1 million  line-of-credit.  The line-of-credit bears interest at the
Bank's prime rate with interest  payments due monthly  through January 2007. The
line-of-credit  matures  on January  19,  2007,  at which  time all  outstanding
borrowings would be due. The line-of-credit is collateralized in the same manner
as the $16 million credit facility.

On July 1, 1995, the Company's  stock split and warrant  issuance became payable
to  shareholders.  The 2 for 1 stock split increased the number of shares issued
and  outstanding  from  2,099,142 to  4,198,284.  At the same time  shareholders
became  entitled  to purchase  an  additional  4,198,284  shares  through  stock
warrants  issued by the  Company as  dividends.  One warrant was issued for each
share of common stock held after the split,  entitling  the holder to purchase 1
share of common  stock for $2.00 per share.  The shares  purchased  through  the
exercise of the warrants  must be held for 1 year from date of  purchase.  As of
March 31, 2005, a total of 92,394 warrants originally issued had been exercised,
and the Company realized $184,788 from the exercise of the 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 $2.75,  the trading price on the
date of the grant,  in whole or in part  within 10 years from the date of grant.
As of March 31,  2005,  a total of 150,000  options are  outstanding  under this
plan.

In 1999,  Pioneer  Railcorp's  Board of  Directors  authorized  and approved the
repurchase  of up to one  million  (1,000,000)  shares of the  Company's  common
stock. As of March 31, 2005, a total of 137,865 shares had been repurchased at a
cost of $209,155.

The Company  generally  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 12 months.

Balance Sheet and Cash Flow Items:

The Company  generated net cash from  operating  activities of $1,544,000 in the
first quarter 2005  compared to $1,097,000  net cash  generated  from  operating
activities in the first quarter 2004. Net cash from operating  activities in the
first  quarter  2005  was  provided  by  $425,000  of net  income,  $577,000  of
depreciation and amortization,  an increase in deferred income taxes of $79,000,
a decrease in accounts receivable of $250,000, an increase in income tax payable
of  $124,000,  an increase in accounts  payable of  $467,000,  and $70,000  from
changes in various other operating assets and liabilities.  Net cash was used in
operating  activities  in the first  quarter  2005 from a  decrease  in  accrued
liabilities of $381,000, a gain on sale of property and equipment of $26,000 and
$41,000 from changes in various other operating assets and liabilities.

                                       13
<PAGE>

The first quarter 2005 decrease in accounts  receivable is primarily  related to
the  collection of freight  receivables  and unearned  lease income  recorded at
December  31,  2004.   The  majority  of  the  accounts   payable   increase  of
approximately   $467,000  also  relates  to  freight  activity.   As  previously
discussed,  several  railroads are usually involved in the process of delivering
freight.  The Company  collects the total revenue for all railroads  involved in
the delivery of freight in a majority of its shipments.  When the Company issues
an invoice for freight, a receivable is created for the total freight charge and
the  Company  records its share of the  revenue,  and records the amount due the
other railroads as a current payable. The amounts payable to other railroads are
settled monthly.  Depending on the mix of freight handled by the Company,  there
could be significant  variances in accounts  receivable and accounts  payable in
comparable periods. Under normal operating conditions, these changes do not have
a  material  impact  on  liquidity  or the  Company's  ability  to meet its cash
requirements.  The  decrease in accrued  liabilities  in the first  quarter 2005
primarily  resulted  from the  realization  of  unearned  revenues  recorded  at
December 31, 2004 and the payment of December 31, 2004 accrued expenses.

Cash  flow  used for  investing  activities  primarily  relates  to the  Company
purchasing and capitalizing approximately $4,526,000 of fixed assets and capital
improvements  in the first  quarter 2005 offset by $26,000 of proceeds  from the
sale of property and  equipment.  Included in the 2005 capital  additions is the
purchase  of the rail  assets  of the west end of the TPW which  included  track
structures  valued at  $4,027,000  and land  valued at  $139,000.  In  addition,
$155,000 was capitalized for bridge  rehabilitation and $125,000 was capitalized
for track structure  additions and improvements.  Other capital  expenditures in
the first  quarter  2005  include  $17,000  for the  purchase  of two  railcars,
approximately  $40,000 for railcar and  locomotive  betterments,  and $23,000 of
various  equipment and other items. All of the capital  expenditures were funded
with working  capital with the  exception  of the TPW asset  purchase  which was
financed with long term debt as described previously in this report.

Cash flow from  financing  activities  primarily  relates to the  borrowing  and
repayment of debt and certain treasury stock and stock warrant transactions. New
short-term  borrowings  of  $176,000  in the first  quarter  2005  relate to the
refinancing of the Company's  National City Bank notes.  Proceeds from long-term
borrowings of $11,133,000  include $4.2 million  related to the Financing of the
purchase of the railroad assets of the west-end of the TPW, $6.8 million for the
refinancing  of other  National City Bank notes,  and $133,000  related to state
financing  for railroad  track  rehabilitation  projects.  Payments of long-term
borrowings  include $6.8 million for the refinancing of other National City Bank
notes and $577,000 for amortizing  principal repayments on other long-term debt.
In  the  first  quarter  2005,   approximately  1,500  warrants  were  exercised
generating cash of $3,000.

The Company  anticipates  additional cash  requirements in 2005 will approximate
$200,000 as a result of the reversal of deferred taxes.

Item 3. CONTROLS AND PROCEDURES

As of the end of the period  covered by this  report,  the Company  conducted an
evaluation,  under the supervision and with the  participation  of the principal
executive officer and principal financial officer,  of the Company's  disclosure
controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation,
the principal  executive officer and principal  financial officer concluded that
the Company's  disclosure  controls and  procedures are effective to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.  There was no change in the Company's internal control over financial
reporting  during the Company's most recently  completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

                                       14
<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.

                                       15
<PAGE>

Item 2. CHANGES IN  SECURITIES  AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
        SECURITIES

The  following  table  presents  for the  periods  indicated  a  summary  of the
purchases  made by or on  behalf of  Pioneer  Railcorp  of shares of its  common
stock.


                                                       Total          Maximum
                                                     Number of       Number of
                                                       Shares         Shares
                                                     Purchased       That May
                                                     as Part of       Yet be
                         Total                       Publicly        Purchased
                        Number of       Average      Announced       Under the
                         Shares    Price Paid per    Plans or        Plans or
                        Purchased        Share        Programs      Programs (1)
--------------------------------------------------------------------------------

January 1 - 31, 2005       200      $        2.85         200
February 1 - 28, 2005        -                  -           -
March 1 - 31, 2005           -                  -           -
--------------------------------------------------------------------------------
Total                      200      $        2.85         200         862,135

(1)  Pioneer  Railcorp's  Board of Directors  approved a stock  purchase plan on
     December 14, 1999 for the  repurchase  of up to 1,000,000  shares of common
     stock. This repurchase plan has no expiration date.

Item 3. DEFAULTS UPON SENIOR SECURITIES

There are no defaults upon senior debt securities as of March 31, 2005.

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

No Matters  were  submitted to a vote of security  holders in the first  quarter
2005.

Item 5. OTHER INFORMATION

On September 20, 2004, the Company's Board of Directors  unanimously  approved a
going  private  transaction  designed to  repurchase  outstanding  shares of the
Company's Class A common stock (common stock).  The Board of Directors  believes
the costs of being a publicly  traded  company  are no longer  justified  by the
benefits.  This  proposed  transaction  would  effectively  reduce the number of
shareholders  to less  than  300,  thereby  terminating  the need for  continued
registration of the Company's stock with the Securities and Exchange  Commission
(SEC) and thus  privatizing  ownership of the Company.  Each shareholder of less
than 2,000 shares would receive an independently determined fair market value of
$2.85 per share for each  outstanding  share of common  stock  that the  Company
would  acquire  under the  proposed  transaction.  It is expected  the number of
shareholders will be reduced from approximately  1,680 to approximately 150 as a
result of the proposed transaction. Furthermore, all warrant holders on the date
of the transaction would receive $.85 per warrant,  said amount being determined
as the  $2.85  fair  market  value  less the  warrant  exercise  price of $2.00.
Shareholders owning 2,000 or more shares will continue to own their shares.

The proposed  transaction  is subject to SEC and  shareholder  approval,  and if
completed,  would allow the Company to terminate the  registration of its common
stock with the SEC. The Company has discontinued the trading of its common stock
on the NASDAQ  SmallCap  Market and the Chicago  Stock  Exchange  and  currently
trades on the Pink Sheets.  Costs associated with this proposed  transaction are
approximately  $5 million and would be funded  with $5 million of proceeds  from
the $16 million National City Bank credit  facility.  Details of the transaction
may be found in Pioneer  Railcorp's  Preliminary  Proxy  Statement that has been
filed with the SEC on November 9, 2004 and subsequent  amendments  dated January
11, 2005,  March 1, 2005, and April 28, 2005.  Pioneer Railcorp plans to mail to
each  shareholder  a  proxy  statement  about  the  proposed  transaction,   and
shareholders  are advised to read the proxy statement  carefully when it becomes
available because it will contain  important  information about the transaction,
the persons  soliciting  proxies,  and their  interests in the  transaction  and
related  matters.  Shareholders  may obtain free  copies of the proxy  statement
(when  available)  and other  documents  filed by Pioneer  Railcorp at the SEC's
website or from the Company.

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Item 6. EXHIBITS

Exhibit # 31.1 - Certification by the Chief Executive Officer.
Exhibit # 31.2 - Certification by the Chief Financial Officer.
Exhibit # 32.1 - Certification under 18 U.S.C. Section 1350, as adopted pursuant
                 to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       17
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SIGNATURES

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


PIONEER RAILCORP
(Registrant)


                                                        /s/ Guy L. Brenkman
5/12/05                                                 ------------------------
 DATE                                                   GUY L. BRENKMAN, CEO



                                                        /s/ J. Michael Carr
5/12/05                                                 ------------------------
 DATE                                                   J. MICHAEL CARR
                                                        PRESIDENT, TREASURER &
                                                        CHIEF FINANCIAL OFFICER

                                       18=