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, 2003

                        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.

Indicate by checkmark whether the Registrant is an accelerated filer (as defined
by Rule 12b-2 of the Exchange Act). YES [   ]  NO [ X ]

                                    4,490,512
              -----------------------------------------------------
              (Shares of Common Stock outstanding on June 30, 2003)

                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS



                        PIONEER RAILCORP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              Quarters and Six Months Ended June 30, 2003 and 2002
                                    UNAUDITED

<TABLE>
                                                   Three Months   Three Months    Six Months     Six Months
                                                       Ended          Ended          Ended         Ended
                                                   June 30, 2003  June 30, 2002  June 30, 2003  June 30, 2002
                                                   ----------------------------------------------------------
<S>                                                 <C>            <C>            <C>            <C>
Operating revenue ...............................   $ 3,827,353    $ 3,751,538    $ 7,724,005    $ 7,457,062
                                                    --------------------------------------------------------
Operating expenses
   Maintenance of way ...........................       315,794        309,435        619,947        544,414
   Maintenance of equipment .....................       374,936        334,757        730,175        706,927
   Transportation expense .......................       729,651        666,333      1,584,805      1,335,597
   Administrative expense .......................     1,051,069      1,075,271      2,066,566      2,089,712
   Depreciation  & amortization .................       546,117        503,722      1,089,667      1,016,804
                                                    --------------------------------------------------------
                                                      3,017,567      2,889,518      6,091,160      5,693,454
                                                    --------------------------------------------------------

Operating income ................................       809,786        862,020      1,632,845      1,763,608
                                                    --------------------------------------------------------
Other income & expense
   Other (income) expense .......................       (56,112)       (57,173)      (255,495)      (259,651)
   Interest expense, equipment ..................        99,096        121,414        211,151        237,567
   Interest expense, other ......................       131,864        145,455        262,801        294,575
   Net (gain) loss on sale of fixed assets ......         6,188        (12,049)            33           (781)
                                                    --------------------------------------------------------
                                                        181,036        197,647        218,490        271,710
                                                    --------------------------------------------------------

Income before income taxes ......................       628,750        664,373      1,414,355      1,491,898

Provision for income taxes ......................       264,000        295,000        594,000        669,000
                                                    --------------------------------------------------------

Income before minority interest in preferred
   stock dividends of consolidated subsidiaries .   $   364,750    $   369,373    $   820,355    $   822,898

Minority interest in preferred stock dividends of
    consolidated subsidiaries ...................   $    22,659    $    31,308    $    45,318    $    62,616
                                                    --------------------------------------------------------

Net income ......................................   $   342,091    $   338,065    $   775,037    $   760,282
                                                    ========================================================

Basic earnings per common share .................   $      0.08    $      0.07    $      0.17    $      0.17
                                                    ========================================================

Diluted earnings per common share ...............   $      0.08    $      0.07    $      0.17    $      0.17
                                                    ========================================================

Cash dividends per common share .................   $    0.0000    $    0.0000    $    0.0000    $    0.0000
                                                    ========================================================
</TABLE>
See notes to unaudited consolidated financial statements

                                       2
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2003 and DECEMBER 31, 2002
                                    UNAUDITED
<TABLE>
                                                          June 30,      December 31,
                                                            2003            2002
                                                        ----------------------------
<S>                                                     <C>             <C>
ASSETS
Current Assets
   Cash .............................................   $    854,191    $  1,148,461
   Accounts receivable, less allowance
     for doubtful accounts 2003 $20,783; 2002 $27,481      3,172,879       3,041,573
   Inventories ......................................        305,835         287,763
   Prepaid expenses .................................        192,890         214,606
   Income tax refund claims .........................        333,041         337,419
   Deferred taxes ...................................         12,000          12,000
                                                        ----------------------------
        Total current assets ........................      4,870,836       5,041,822

Investments, cash value of life insurance ...........        230,693         214,627

Property and Equipment less accumulated
  depreciation 2003 $13,133,271; 2002 $12,066,096 ...     27,453,448      27,793,573

Other assets ........................................        448,693         161,833

Goodwill ............................................      1,017,430       1,017,430
                                                        ----------------------------

Total assets ........................................   $ 34,021,100    $ 34,229,285
                                                        ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Current maturities of long-term debt .............   $  2,781,111    $  2,716,801
   Notes payable ....................................              0          91,816
   Accounts payable .................................      2,293,218       2,346,751
   Income tax payable ...............................        229,975               0
   Accrued liabilities ..............................        595,838         950,968
                                                        ----------------------------
        Total current liabilities ...................      5,900,142       6,106,336
                                                        ----------------------------

Long-term debt, net of current maturities ...........     10,649,095      11,911,244
                                                        ----------------------------

Deferred revenue ....................................      2,270,511       2,027,811
                                                        ----------------------------

Deferred income taxes ...............................      5,920,025       5,637,000
                                                        ----------------------------

Minority interest in subsidiaries ...................        743,000         751,000
                                                        ----------------------------

Stockholders' Equity
   Common stock .....................................          4,612           4,612
   In Treasury 2003 122,005 shares; 2002 99,005 .....           (122)            (99)
                                                        ----------------------------
   Outstanding 2003 4,490,512; 2002 4,513,512 .......          4,490           4,513
   Additional paid-in capital .......................      2,009,441       2,009,441
   Retained earnings ................................      6,524,396       5,781,940
                                                        ----------------------------
        Total stockholders' equity ..................      8,538,327       7,795,894
                                                        ----------------------------

Total liabilities and stockholders' equity ..........   $ 34,021,100    $ 34,229,285
                                                        ============================
</TABLE>
See notes to unaudited consolidated financial statements

                                       3
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  First Six Months Ended June 30, 2003 and 2002
                                    UNAUDITED
<TABLE>
                                                                 First Six Months
                                                                2003          2002
                                                            --------------------------
<S>                                                         <C>            <C>
Cash Flows From Operating Activities:
  Net income ............................................   $   775,037    $   760,282
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Minority interest in preferred stock dividends of
      consolidated subsidiaries .........................        45,318         62,616
    Depreciation and amortization .......................     1,089,667      1,016,804
    Increase in cash value life insurance ...............       (16,066)       (15,701)
    (Gain) loss on sale of property & equipment .........            33           (781)
    Deferred taxes ......................................       283,025              0
    Change in assets and liabilities, net of effects from
      acquisition of subsidiaries
      (Increase) decrease accounts receivable ...........      (131,306)       364,652
      (Increase) decrease inventories ...................       (18,072)          (965)
      (Increase) decrease prepaid expenses ..............        21,716       (164,631)
      (Increase) decrease other assets ..................      (288,858)             0
      Increase (decrease) accounts payable ..............       (53,533)      (744,268)
      (Increase) decrease income tax refund claims ......         4,378              0
      Increase (decrease) income tax payable ............       229,975        444,260
      Increase (decrease) deferred revenue ..............       242,700        786,034
      Increase (decrease) accrued liabilities ...........      (355,130)      (286,414)
                                                            --------------------------
         Net cash provided by operating activities ......     1,828,884      2,221,888
                                                            --------------------------

Cash Flows From Investing Activities:
  Proceeds from sale of property & equipment ............        94,379         23,700
  Purchase of property & equipment ......................      (841,950)    (1,527,426)
                                                            --------------------------
         Net cash (used in) investing activities ........      (747,571)    (1,503,726)
                                                            --------------------------

Cash Flows From Financing Activities:
  Proceeds from short-term borrowings ...................             0      1,080,354
  Proceeds from long-term borrowings ....................     1,232,082        256,660
  Payments on short-term borrowings .....................       (91,816)      (588,713)
  Payments on long-term borrowings ......................    (2,429,921)    (1,093,961)
  Repurchase of minority interest .......................        (8,000)        (7,000)
  Purchase of common stock for treasury .................       (32,610)           (62)
  Preferred stock dividend payments to minority interest        (45,318)       (62,616)
                                                            --------------------------
         Net cash (used in) financing activities ........    (1,375,583)      (415,338)
                                                            --------------------------

Net increase (decrease) in cash .........................      (294,270)       302,824
Cash, beginning of period ...............................     1,148,461        976,678
                                                            --------------------------

Cash, end of period .....................................   $   854,191    $ 1,279,502
                                                            =========================
</TABLE>
See notes to unaudited consolidated financial statements

                                       4
<PAGE>

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
PIONEER RAILCORP AND SUBSIDIARIES



NOTE 1.   STATEMENTS

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

NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include Pioneer Railcorp (Pioneer) and its
wholly-owned  and controlled  subsidiaries  (collectively,  "the Company").  The
Company's  railroad  operations  segment  consists  of  wholly-owned  short line
railroad  subsidiaries  that offer  similar  services and includes the following
wholly-owned  subsidiaries:  West Michigan Railroad Co. (WMI), Michigan Southern
Railroad  Company  (MSO),  Fort Smith Railroad Co. (FSR),  Alabama  Railroad Co.
(ALAB),  Mississippi Central Railroad Co. (MSCI), Alabama & Florida Railway Co.,
Inc. (AF), Decatur Junction Railway Co. (DT),  Vandalia Railroad Company (VRRC),
Keokuk  Junction  Railway Co. (KJRY),  Shawnee  Terminal  Railway Company (STR),
Pioneer  Industrial  Railway Co. (PRY),  The Garden City Western  Railway,  Inc.
(GCW), Indiana Southwestern Railway Co. (ISW), Kendallville Terminal Railway Co.
(KTR), 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  Resources,  Inc. (PRI),  Pioneer Air, Inc.
(PAR), and Pioneer Railroad Services,  Inc. (PRS). All significant  intercompany
balances and transactions have been eliminated in consolidation.

Stock  options and  warrants:  The  Company's  accounting  for stock options and
warrants is in  accordance  with APB Opinion No. 25 and related  interpretations
which  generally  requires  that the  amount of  compensation  cost that must be
recognized,  if any, is the quoted market price of the stock at the  measurement
date,  less the amount  the  grantee is  required  to pay to acquire  the stock.
Alternatively,  SFAS 123 employs  fair value  based  measurement  and  generally
results in the recognition of compensation for all awards of stock to employees.
SFAS 123 does not  require an entity to adopt  those  provisions,  but,  rather,
permits  continued  application  of APB 25. While the Company has elected not to
adopt the fair value  recognition and measurement  provisions of SFAS 123, it is
required to make certain disclosures pursuant to SFAS 123.

Had  compensation  cost for the stock-based  compensation  plans been determined
based on the grant date fair  values of awards  (the  method  described  in FASB
Statement No. 123) reported net income, and earnings per common share would have
been reduced to the pro forma amounts shown below.
<TABLE>
                                                                            Quarter Ended
                                                                  ----------------------------------
                                                                  June 30, 2003        June 30, 2002
                                                                  ----------------------------------
<S>                                                               <C>                  <C>
Net income:
  As reported ..................................................    $  342,091           $  338,065
  Deduct: Stock based compensation expense determined
    under fair value based method for all awards, net of
    tax effect .................................................            --                   --
  Proforma .....................................................    $  342,091           $  338,065
                                                                    ===============================

Basic earnings per common share:
  As reported ..................................................    $     .08            $      .07
  Proforma .....................................................    $     .08            $      .07

Diluted earnings per common share:
  As reported ..................................................    $     .08            $      .07
  Proforma .....................................................    $     .08            $      .07
</TABLE>

                                       5
<PAGE>

<TABLE>
                                                                           Six Months Ended
                                                                  ----------------------------------
                                                                  June 30, 2003        June 30, 2002
                                                                  ----------------------------------
<S>                                                               <C>                  <C>
Net income:
  As reported ..................................................    $  775,037           $  760,282
  Deduct: Stock based compensation expense determined
    under fair value based method for all awards, net of
    tax effect .................................................            --                   --
                                                                    -------------------------------
  Proforma .....................................................    $  775,037           $  760,282
                                                                    ===============================

Basic earnings per common share:
  As reported ..................................................    $      .17           $      .17
  Proforma .....................................................    $      .17           $      .17

Diluted earnings per common share:
  As reported ..................................................    $      .17           $      .17
  Proforma .....................................................    $      .17           $      .17
</TABLE>

NOTE 3. CONTINGENCIES

As of the date of this Form  10-QSB,  management  is not  aware of any  incident
which is likely to  result in a  liability  that  would  materially  affect  the
Company's  consolidated  financial  position  or results of  operation.  Readers
should make reference to Part II, Item 1 of this 10-QSB, regarding contingencies
surrounding a switching  revenue dispute between the Keokuk Junction Railway Co.
and the  Burlington  Northern  Santa Fe Railway for  revenues  generated  by the
Company between March 1, 1999 and May 1, 2001 of approximately $660,000.

NOTE 4. ACCOUNTING PRONOUNCEMENTS

In August  2001,  the FASB  issued  Statement  No.  143,  "Accounting  for Asset
Retirement  Obligations." FASB No. 143 amends FASB No. 19, "Financial Accounting
and  Reporting  by Oil and Gas  Producing  Companies."  It  addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible,  long-lived  assets and the associated asset retirement  costs, and is
effective for financial  statements issued for fiscal years beginning after June
15,  2002.  The  adoption  of SFAS 143 did not  have a  material  impact  on the
Company's June 30, 2003 consolidated financial statements and is not expected to
have  a  material  impact  on  the  Company's  future   consolidated   financial
statements.

In January 2003, FASB Interpretation No. 46, "Consolidation of Variable Interest
Entities" (FASB Interpretation No. 46), was issued. It clarifies the application
of Accounting Research Bulletin No. 51, "Consolidated  Financial Statements," to
certain  entities  in which  the  equity  investors  do not  have a  controlling
financial interest or do not have sufficient equity at risk. FASB Interpretation
No. 46 is effective on January 31, 2003, for entities  acquired after such date.
The effective  date for entities  acquired on or before January 31, 2003 is July
1, 2003.  The Company has not  completed  its full  assessment of the effects of
FASB  Interpretation  No. 46,  however its  adoption  is not  expected to have a
material impact upon the Company's future consolidated financial statements.

In May 2003,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial Accounting Standards (SFAS) No. 150, "Accounting for Certain Financial
Instruments  with  Characteristics  of both  Liabilities  and Equity."  SFAS 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a  liability.  SFAS 150 is  effective  for  financial  instruments  issued or
modified after May 31, 2003, and effective for periods  beginning after December
31, 2003 for all other  instruments.  Management  does not  anticipate  that the
adoption  of this  statement  will have any  effect on the  Company's  financial
statements.


                                       6
<PAGE>

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.

Factors management used to identify the reportable segments:

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

                                                           Second Quarter
                                                     ---------------------------
                                                         2003            2002
                                                     ---------------------------
Revenues from external customers
   Railroad operations ...........................   $ 3,089,434    $ 2,941,328
   Equipment leasing operations ..................       735,223        808,224
   Corporate support services ....................         2,696          1,986
                                                     --------------------------
      Total revenues from external customers .....     3,827,353    $ 3,751,538
                                                     ==========================

Intersegment revenues
   Railroad operations ...........................   $         0    $         0
   Equipment leasing operations ..................        99,600         99,600
   Corporate support services ....................     1,610,660      1,530,195
                                                     --------------------------
      Total intersegment revenues ................   $ 1,710,260    $ 1,629,795
                                                     ==========================

Segment profit
   Railroad operations ...........................   $ 1,361,360    $ 1,314,167
   Equipment leasing operations ..................       326,296        431,794
   Corporate support services ....................       832,390        745,854
                                                     --------------------------
      Total segment profit .......................     2,520,046      2,491,815

Reconciling items
    Intersegment revenues ........................    (1,710,260)    (1,629,795)
    Income taxes .................................      (264,000)      (295,000)
    Minority interest ............................       (22,659)       (31,308)
    Other income(expense), net ...................      (181,036)      (197,647)
                                                     -------------------------
       Total consolidated net income .............   $   342,091    $   338,065
                                                     ==========================

                                       7
<PAGE>

                                                           First Six Months
                                                         2003            2002
                                                     ---------------------------
Revenues from external customers
   Railroad operations ...........................   $ 6,095,875    $ 5,892,858
   Equipment leasing operations ..................     1,620,198      1,558,356
   Corporate support services ....................         7,932          5,848
                                                     --------------------------
      Total revenues from external customers .....   $ 7,724,005    $ 7,457,062
                                                     ==========================

Intersegment revenues
   Railroad operations ...........................   $         0    $         0
   Equipment leasing operations ..................       199,200        199,200
   Corporate support services ....................     3,016,690      2,934,592
                                                     --------------------------
      Total intersegment revenues ................   $ 3,215,890    $ 3,133,792
                                                     ==========================

Segment profit
   Railroad operations ...........................   $ 2,522,040    $ 2,633,793
   Equipment leasing operations ..................       826,843        829,714
   Corporate support services ....................     1,499,852      1,433,893
                                                     --------------------------
      Total segment profit .......................     4,848,735      4,897,400

Reconciling items
    Intersegment revenues ........................    (3,215,890)    (3,133,792)
    Income taxes .................................      (594,000)      (669,000)
    Minority interest ............................       (45,318)       (62,616)
    Other income(expense), net ...................      (218,490)      (271,710)
                                                     --------------------------
       Total consolidated net income .............   $   775,037    $   760,282
                                                     ==========================

Note 6. EARNINGS PER COMMON SHARE

Following is  information  about the  computation of the earnings per share(EPS)
data for the quarters ended June 30, 2003 and 2002:
<TABLE>
                                                       For the Quarter Ended June 30, 2003
                                                     ---------------------------------------
                                                       Income         Shares       Per-Share
                                                     (Numerator)   (Denominator)     Amount
                                                     ---------------------------------------
<S>                                                  <C>            <C>            <C>
Basic EPS

Income available to common stockholders ...........   $ 342,091      4,491,348      $   0.08
                                                                                    ========
Effect of Diluted Securities
Employee stock options ............................          --            --
                                                      --------------------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions ......................   $ 342,091     4,491,348       $   0.08
                                                      ======================================


                                                       For the Quarter Ended June 30, 2002
                                                     ---------------------------------------
                                                       Income         Shares       Per-Share
                                                     (Numerator)   (Denominator)     Amount
                                                     ---------------------------------------
<S>                                                  <C>            <C>            <C>
Basic EPS
Income available to common stockholders ...........   $ 338,065     4,528,427       $   0.07
                                                                                    ========
Effect of Diluted Securities
Employee stock options ............................          --            --
                                                      --------------------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions ......................   $ 338,065     4,528,427       $   0.07
                                                      ======================================
</TABLE>

                                       8
<PAGE>

Following is  information  about the  computation of the earnings per share(EPS)
data for the six months ended June 30, 2003 and 2002:
<TABLE>
                                                      For the Six Months Ended June 30, 2003
                                                     ---------------------------------------
                                                       Income         Shares       Per-Share
                                                     (Numerator)   (Denominator)     Amount
                                                     ---------------------------------------
<S>                                                  <C>            <C>            <C>
Basic EPS

Income available to common stockholders ..........   $ 775,037      4,500,206      $   0.17
                                                                                   ========
Effect of Diluted Securities
Employee stock options ...........................          --             --
                                                     ------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions .....................   $ 775,037      4,500,206      $   0.17
                                                                                   ========


                                                     For the Six Months Ended June 30, 2003
                                                     ---------------------------------------
                                                       Income         Shares       Per-Share
                                                     (Numerator)   (Denominator)     Amount
                                                     ---------------------------------------
<S>                                                  <C>            <C>            <C>
Basic EPS
Income available to common stockholders ...........  $ 760,282      4,528,470      $   0.17
                                                                                   ========
Effect of Diluted Securities
Employee stock options ............................         --             --
                                                     --------------------------------------
Diluted EPS
Income available to common stockholders
    plus assumed conversions ......................  $ 760,282      4,528,470      $   0.17
                                                     ======================================
</TABLE>

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

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

Pioneer Railcorp, an Iowa corporation, is a railroad holding company. As used in
this Form 10-QSB,  unless the context requires otherwise,  the term "Company" or
"PRC" refers to the parent, Pioneer Railcorp and its subsidiaries: West Michigan
Railroad  Co.  (WMI),  Michigan  Southern  Railroad  Company  (MSO),  Fort Smith
Railroad Co. (FSR),  Alabama Railroad Co. (ALAB),  Mississippi  Central Railroad
Co. (MSCI),  Alabama & Florida Railway Co., Inc. (AF),  Decatur Junction Railway
Co. (DT), Vandalia Railroad Company (VRRC),  Keokuk Junction Railway Co. (KJRY),
Shawnee Terminal Railway Company (STR),  Pioneer  Industrial  Railway Co. (PRY),
The Garden City Western Railway,  Inc. (GCW),  Indiana  Southwestern Railway Co.
(ISW),  Kendallville  Terminal Railway Co. (KTR), 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)

                                       9
<PAGE>

Summary: Second Quarter 2003 Compared to Second Quarter 2002

The Company's net income in the second quarter 2003 was $342,000, an increase of
$4,000 from the second  quarter 2002 which had net income of  $338,000.  Revenue
increased by $75,000 or 2% to $3,827,000 from $3,752,000 in the same period last
year.  Operating  expense  increased  by  $128,000  or 4%,  to  $3,018,000  from
$2,890,000 in the same period last year.  Operating income decreased by $52,000,
or 6% to $810,000 from $862,000 in the same period last year.

The  decrease  in  operating  income of $52,000 in the second  quarter  2003 was
primarily  due to the  Company's  equipment  leasing  operations.  The equipment
leasing  operations had a $105,000 decrease in operating income resulting from a
$73,000 decrease related to the utilization of its railcar and locomotive fleet,
increased  maintenance  expense of $21,000 and other operating expense increases
of $11,000.  The railroad  operations  increased operating income $47,000 in the
quarter  from  increased  revenue  of  $148,000  offset by  increased  operating
expenses of $101,000, as further discussed below. In addition, corporate support
services increased operating income by approximately $6,000 in the period.

Revenue:

Revenue  increased in the second  quarter 2003 by $75,000,  or 2%, to $3,827,000
from  $3,752,000  in the same period  last year.  Railroad  operations  generate
operating  revenue  for the  Company  by  hauling  freight,  performing  railcar
repairs,  storing railcars, and performing  miscellaneous contract services. The
railroad  operations  increased revenue by approximately  $148,000 in the period
resulting  primarily  from increased  freight  revenues.  The equipment  leasing
operations  had a $73,000  decrease  in  revenue in the  period  resulting  from
decreased  revenue from the  utilization of its railcar and locomotive  fleet by
non-affiliated railroads.

Operating Expense:

Operating  expense  increased  in the second  quarter 2003 by $128,000 or 4%, to
$3,018,000 from $2,890,000 in the prior year. The railroad operations  increased
operating  expense  by  approximately  $101,000  in the  period  primarily  from
increased  maintenance of equipment  expense and also  increased  transportation
expense as further discussed below. The equipment leasing  operations  increased
operating expense  approximately  $32,000,  primarily from increased maintenance
expenses  associated  with its railcar and  locomotive  fleet and also increased
depreciation expense.  Corporate support services decreased operating expense by
approximately $5,000 in the period.

Maintenance of way and structure  expense (MOW) includes all expenses related to
track  maintenance;  including  payroll,  track materials,  signal  maintenance,
vegetation control,  and bridge  maintenance.  Maintenance of way and structures
expense (MOW) had a slight increase of $7,000,  or 2%, to $316,000 from $309,000
in the same period last year,  most of which was  attributable  to the  railroad
operations.

Maintenance  of equipment  expense (MOE)  includes  expenses  related to railcar
repair expenses for both foreign and Company owned railcars;  including payroll,
car  repair  parts,  processing  fees  for  Company  owned  railcars,  and  also
maintenance to Company owned  vehicles.  Maintenance of equipment  expense (MOE)
increased  $40,000,  or 12%, to $375,000  from  $335,000 in the same period last
year. The equipment  leasing  operations had an increase in MOE of approximately
$5,000  associated with  maintaining the Company's  railcar fleet.  The railroad
operations  had  increased  MOE of $18,000 as a result of increased  payroll and
material costs for repairs to foreign rail cars. In addition,  MOE was increased
$17,000 from  corporate  support  services as a result of increased  payroll for
mechanical support services for the Company's equipment and also to unaffiliated
entities who have entered into full service locomotive leases with the Company.

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 (the cost for use of a
non-affiliated railcar), derailment expense, lading and damage claims, switching
services   purchased,   and  joint  facility   expenses  with  other   carriers.
Transportation  expense  (TRAN)  increased  $64,000,  or 10%, to  $730,000  from
$666,000 in the same period last year.  The railroad  operations  had  increased
TRAN of $47,000 mostly related to increased wages and some increases in fuel and
carhire.  The equipment  leasing  operations had a $14,000 increase in TRAN as a
result of increased costs associated with  maintaining the Company's  locomotive
fleet. In addition, TRAN was increased $3,000 from corporate support services.

                                       10
<PAGE>

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.
General & administration expense (ADMIN) decreased $24,000, or 2%, to $1,051,000
from  $1,075,000  in the same period last year.  The railroad  operations  had a
slight  increase of only $1,000 in ADMIN  expense in the period.  The  equipment
leasing  operations  slightly  decreased  ADMIN  $3,000 as a result of decreased
expenses related to repositioning the Company's railcar fleet. Corporate support
services  decreased ADMIN expense by $22,000 in the period  resulting  primarily
from  reductions  from  decreased  payroll for support  services,  a decrease in
professional services fees, and a decrease in health insurance costs.

Depreciation and amortization expense increased $42,000, or 8%, to $546,000 from
$504,000  in the  same  period  last  year.  The  equipment  leasing  operations
increased  depreciation expense approximately $16,000 related to the acquisition
of railcars and  locomotives.  The railroad  operations  increased  depreciation
$30,000,  resulting  primarily from 2002 track  improvements to the Gettysburg &
Northern Railroad Co. Corporate support services decreased depreciation $4,000.

Other Income and Expense Income Statement Line Item Discussion:

In the second quarter 2003 other income and expense  decreased $1,000, or 2%, to
$56,000 of income  compared  to $57,000 of income in the same  period last year.
Other income relates primarily to lease income for the use of railroad property.
The Company  continues to place a strong  emphasis on identifying and collecting
revenues from third parties  occupying  Company  property.  In addition to lease
income,  other income and expense includes revenues  generated from scrap sales,
and other miscellaneous non-operating revenues and expenses, primarily generated
by the Company's railroad operations.

Interest expense related to equipment  financing  decreased $22,000,  or 18%, in
the second quarter 2003 to $99,000  compared to $121,000 in the same period last
year. Other interest  expense,  which primarily  relates to the financing of the
Company's  railroad  operations,  decreased  $13,000,  or 10%, to $132,000  from
$145,000 in the prior year.  These  decreases  are the result of the pay down of
principal on outstanding financing agreements.

In the second quarter 2003 the Company had a loss from fixed asset  dispositions
of $6,000,  primarily from the  disposition of several  railcars,  compared to a
gain on fixed  asset  dispositions  of  $12,000  in the same  period  last year,
resulting in a net decrease of $18,000 when comparing periods.

Summary: First Six Months 2003 Compared to First Six Months 2002

The Company's net income in the first six months 2003 was $775,000,  an increase
of  $15,000  from the first six months  2002  which had net income of  $760,000.
Revenue  increased by $267,000 or 4% to $7,724,000  from  $7,457,000 in the same
period last year.  Operating  expense increased by $398,000 or 7%, to $6,091,000
from  $5,693,000  in the same period last year.  Operating  income  decreased by
$131,000, or 7% to $1,633,000 from $1,764,000 in the same period last year.

Operating income from the Company's  railroad  operations  decreased $112,000 in
the first six  months  2003  primarily  due to the first  quarter  results.  The
decrease from the railroads is a result of increased  revenue of $203,000 offset
by  increased   operating   expenses  of  $315,000,   primarily  from  increased
maintenance of way expense and increased  transportation  expense. The equipment
leasing  operations  had a slight  decrease in  operating  income of $3,000.  In
addition, corporate support services decreased operating income by approximately
$16,000 in the period  resulting  primarily  from a $69,000  increase  in health
costs related to claims  incurred under the Company's  self-funded  health plan,
which offset other administrative  expense reductions from decreased payroll for
support services.

                                       11
<PAGE>

Revenue:

Revenue increased in the first six months 2003 by $267,000, or 4%, to $7,724,000
from  $7,457,000  in the same period  last year.  Railroad  operations  generate
operating  revenue  for the  Company  by  hauling  freight,  performing  railcar
repairs,  storing railcars, and performing  miscellaneous contract services. The
railroad  operations  increased revenue by approximately  $203,000 in the period
resulting  primarily  from increased  freight  revenues.  The equipment  leasing
operations  had a $61,000  increase  in  revenue in the  period  resulting  from
increased  revenue of $89,000 from the utilization of its railcar and locomotive
fleet by non-affiliated railroads offset by a decrease in revenue from equipment
leases to  non-affiliated  entities of $21,000  and a decrease in  miscellaneous
contract  service  billing of $7,000.  Corporate  support  services had a slight
increase in revenue of $3,000 in the period.

Operating Expense:

Operating expense increased in the first six months 2003 by $398,000,  or 7%, to
$6,091,000 from $5,693,000 in the prior year. The railroad operations  increased
operating  expense  by  approximately  $315,000  in the  period  primarily  from
increased maintenance of way expense and increased  transportation  expense. The
equipment leasing operations increased operating expense approximately  $64,000,
primarily from increased  maintenance  expenses  associated with its railcar and
locomotive  fleet and also increased  depreciation  expense.  Corporate  support
services  increased  operating  expense by  approximately  $19,000 in the period
primarily  from a $69,000  increase in health costs  related to claims  incurred
under the Company's  self-funded health plan, which offset other  administrative
expense reductions from decreased payroll for support services.

Maintenance of way and structure  expense (MOW) includes all expenses related to
track  maintenance;  including  payroll,  track materials,  signal  maintenance,
vegetation control,  and bridge  maintenance.  Maintenance of way and structures
expense  (MOW) had increased  $76,000,  or 14%, to $620,000 from $544,000 in the
same  period  last  year,  most  of  which  was  attributable  to  the  railroad
operations.

Maintenance  of equipment  expense (MOE)  includes  expenses  related to railcar
repair expenses for both foreign and Company owned railcars;  including payroll,
car  repair  parts,  processing  fees  for  Company  owned  railcars,  and  also
maintenance to Company owned  vehicles.  Maintenance of equipment  expense (MOE)
increased  $23,000,  or 3%, to  $730,000  from  $707,000 in the same period last
year. The equipment  leasing  operations had an increase in MOE of approximately
$11,000  associated with  maintaining the Company's  railcar fleet. The railroad
operations  had  increased  MOE of $5,000 as a result of  increased  payroll and
material costs for repairs to foreign rail cars. In addition,  MOE was increased
$7,000 from  corporate  support  services as a result of  increased  payroll for
mechanical support services for the Company's equipment and also to unaffiliated
entities who have entered into full service locomotive leases with the Company.

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 (the cost for use of a
non-affiliated railcar), derailment expense, lading and damage claims, switching
services   purchased,   and  joint  facility   expenses  with  other   carriers.
Transportation  expense (TRAN)  increased  $249,000,  or 19%, to $1,585,000 from
$1,336,000 in the same period last year.  The railroad  operations had increased
TRAN of  $211,000  mostly  related to  increased  fuel and  carhire  costs.  The
equipment  leasing  operations  had a  $42,000  increase  in TRAN as a result of
increased costs associated with maintaining the Company's  locomotive  fleet. In
addition,  TRAN was decreased $4,000 from corporate  support services  resulting
from reduced usage of the corporate plane.

                                       12
<PAGE>

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.
General & administration expense (ADMIN) decreased $23,000, or 1%, to $2,067,000
from  $2,090,000  in the same period last year.  The railroad  operations  had a
decrease  of  $34,000 in ADMIN  expense in the  period.  The  equipment  leasing
operations  had  decreased  ADMIN of $10,000 as a result of  decreased  expenses
related to repositioning the Company's railcar fleet. Corporate support services
increased  ADMIN  expense by $21,000 in the period  resulting  primarily  from a
$69,000  increase in health costs related to claims incurred under the Company's
self-funded  health plan, which offset other  administrative  expense reductions
from decreased payroll for support services.

Depreciation and amortization  expense increased  $73,000,  or 7%, to $1,090,000
from $1,017,000 in the same period last year. The equipment  leasing  operations
increased  depreciation expense approximately $21,000 related to the acquisition
of railcars and  locomotives.  The railroad  operations  increased  depreciation
$57,000,  resulting  primarily from 2002 track  improvements to the Gettysburg &
Northern Railroad Co. Corporate support services decreased depreciation $5,000.

Other Income and Expense Income Statement Line Item Discussion:

In the first six months 2003 other income and expense  decreased  $4,000, or 2%,
to  $255,000  of income  compared  to $259,000 of income in the same period last
year.  Other  income  relates  primarily to lease income for the use of railroad
property.  The Company  continues to place a strong  emphasis on identifying and
collecting  revenues from third parties occupying Company property.  In addition
to lease income, other income and expense includes revenues generated from scrap
sales, and other miscellaneous  non-operating  revenues and expenses,  primarily
generated by the Company's railroad operations.

Interest expense related to equipment  financing  decreased $27,000,  or 11%, in
the first six months  2003 to  $211,000  compared to $238,000 in the same period
last year. Other interest  expense,  which primarily relates to the financing of
the Company's railroad  operations,  decreased $32,000, or 11%, to $263,000 from
$295,000 in the prior year.  These  decreases  are the result of the pay down of
principal on outstanding financing agreements.

In both the first six months 2003 and 2002 the Company  had an  immaterial  gain
and loss from fixed asset dispositions.

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  railcars,  new operating
subsidiaries,  and other  significant  capital  expenditures.  The  Company  has
working capital facilities totaling  $1,100,000,  all of which was available for
use at the end of the second quarter 2003.

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.

                                       13
<PAGE>

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, 2003, a total of 68,766 warrants  originally  issued had been exercised
to date and the Company realized $137,532 on the exercise of those warrants.

On June 26,  1996,  the  Company's  shareholders  approved a stock  option  plan
permitting the issuance of 407,000 shares of common stock. Options granted under
the plan are  incentive  based  except for the options  granted to the CEO whose
options are non-qualified. The options became fully vested and exercisable as of
July 1, 2001. The options are exercisable at prices ranging from $2.75 to $3.03,
based  upon the  trading  price on the  date of the  grant,  in whole or in part
within 10 years from the date of grant.  As of June 30, 2003, a total of 155,000
options are outstanding under this plan.

In 1999,  Pioneer  Railcorp's  Board of  Directors  authorized  and approved the
repurchase  of up to one million  shares  (1,000,000)  of the  Company's  common
stock. As of June 30, 2003, a total of 122,050 shares had been  repurchased at a
cost of $174,338. 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 the  capital  requirements  and the  trading  volume  of the
Company's stock.

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.  However,  with  respect  to the  Company's
trackage  rights  dispute with a Class I railroad  discussed in Part II, Item 1,
the  Company's  management  has  made  no  provision  for any  estimated  losses
associated  with respect to $660,000 of fees charged from March 1999 through May
2001 as it is not  possible  to  ascertain  the  outcome of this  matter.  It is
possible  however,  that an  unfavorable  outcome could have a material  adverse
effect on the Company's financial position and results of operations.

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's  operating  activities  in the first six  months  2003  generated
positive cash flow of  $1,829,000,  compared to positive cash flow of $2,222,000
in 2002.  Net cash from  operating  activities for the first six months 2003 was
generated from $775,000 of net income,  increased by $1,090,000 of  depreciation
and  amortization,  an increase in deferred  taxes of  $283,000,  an increase in
deferred revenue of $243,000, and an increase in income tax payable of $230,000.
Net cash from  operating  activities  was reduced in the period by a decrease in
accounts payable of $54,000, an increase in accounts  receivable of $131,000,  a
decrease  in accrued  liabilities  of  $355,000,  and a decrease  in net cash of
$252,000 from changes in various other operating assets and liabilities

In  the  first  six  months  2003,   the  Company   purchased  and   capitalized
approximately  $842,000 of fixed assets and capital improvements,  including the
purchase of 14 used locomotives for $590,000 and approximately  $64,000 of track
structure additions and improvements. Other capital expenditures in 2003 include
approximately  $72,000  for  railcar  and  locomotive  betterments,  $39,000 for
utility trucks and a backhoe, $42,000 for bridge upgrades and $35,000 of various
or equipment items. The capital  expenditures  were funded with working capital,
and the  Company  plans  to  obtain  long  term  fixed  rate  financing  for the
locomotive purchase to replenish working capital of $590,000.

Item 4. 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 Companys  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.

The Company is presently involved in litigation surrounding trackage rights with
a Class I railroad regarding fees charged between March 1999 and May 2001 by the
Company  for the Class I  carrier's  access  to and  usage of a  segment  of the
Company's  tracks as a means of gaining access to certain  trackage owned by the
Class I railroad.  The Surface Transportation Board (STB), in a decision in June
2001,  ruled  that the  Class I  railroad  could  have  access  to and cross the
Company's  tracks  in  order to get to the  branch  line  owned  by the  Class I
railroad. The STB did not set compensation or other terms and conditions as part
of its decision and ordered the two parties to negotiate  terms and  conditions,
and ordered  that if no  agreement  could be reached,  that the STB would make a
ruling.  From March 1999  through  May 2001,  the  Company  charged  the Class I
railroad approximately $660,000 for access to the Company's track. From May 2001
through June,  2002,  the Company did not charge the Class I railroad for access
to the segment of the Company's track in question. In June 2002, the Washington,
D.C.  Circuit Court of Appeals  vacated the June 2001 STB  decision.  On July 1,
2002,  the Class I filed another  petition with the STB  requesting the Board to
again  grant it the right to use the  Company's  tracks  and to set the terms of
compensation,  asserting  different  grounds  than  that set  forth in the STB's
original June 22, 2001 order that was vacated by the court. Since that time, the
Company  and the  Class I  railroad  have been in  discussions  to  resolve  the
trackage  rights  dispute,  but no  agreement  has  yet  been  reached.  Per the
Company's agreement,  the Class I railroad commenced  utilization of the segment
of the Company's  track on July 1, 2002 and currently  pays the Company $125 per
car for traffic on the segment of the track in question. The Company has charged
$435,442 since July 1, 2002. By agreement of the two parties, these current fees
are being  accounted for as deferred  revenue on the balance sheet pending final
resolution  of the matter.  On May 9, 2003,  the STB voted in an open hearing to
again grant the Class I railroad  trackage rights over the Company's  tracks. No
written decision was issued,  but one is expected shortly.  In its vote, the STB
did not  address  the issue of past  compensation  but  directed  the parties to
negotiate over the  appropriate per car charge for the future use by the Class I
of the trackage  rights.  The Company  believes mutual progress is being made in
the negotiations with the Class I railroad;  nonetheless, the Company intends to
continue  to  vigorously  defend  itself in this matter and  appealed  the STB's
decision.  As of June 30, 2003,  it is not  possible to  ascertain  the ultimate
financial impact, if any, upon the Company. Management has made no provision for
any  estimated  losses  associated  with this matter.  In the event that the STB
makes an unfavorable  ruling against the Company with respect to the $660,000 of
fees charged from March 1999 through May 2001, it is possible, however, that the
outcome could have a material adverse effect on the Company's financial position
and results of operations.

As of August 8, 2003,  management and legal counsel are unable to determine what
the outcome of the  litigation  may be and whether  there will be any adverse or
favorable financial consequences.

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

The  Annual  Meeting  of the  Shareholders  was  held  on June  26,  2003 at the
Company's  headquarters  in  Peoria,  Illinois.  All five  seats on the Board of
Directors were up for election at this meeting.  Directors Guy L.  Brenkman,  J.
Michael Carr, Orvel L. Cox, J. Clifton T. Lopez, and John S. Fulton were elected
for a one year term.

                                       15
<PAGE>

The vote totals for the Directors were as follows:

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

Nomination of Guy L. Brenkman
to the Board of Directors ....................       3,479,105        302,549

Nomination of Orvel L. Cox
to the Board of Directors ....................       3,727,134         54,520

Nomination of Clifton T. Lopez
to the Board of Directors ....................       3,697,201         84,453

Nomination of John S. Fulton
to the Board of Directors ....................       3,716,905         64,749

Nomination of J. Michael Carr
to the Board of Directors ....................       3,506,134        275,520

In addition to the election of the Board of Directors, shareholders ratified the
appointment of McGladrey & Pullen,  LLP,  Certified Public  Accountants,  as the
Company's  independent  public  accountants  for the coming year with  3,559,584
votes for and 241,974 votes against.

Item 5.   OTHER INFORMATION

None.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

Exhibit # 20 Proxy  Statement  used to solicit  votes for the Annual  Meeting of
Shareholders,  held  June 26,  2003  and  2003  Annual  Report  to  Stockholders
(incorporated  by  reference on form DEF 14A filed May 12,  2003.)  Exhibit 99 -
Certification

No reports were filed on Form 8-K during the first six months 2003.

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<PAGE>

SIGNATURES

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

PIONEER RAILCORP
(Registrant)





08/08/03                                             /s/ Guy L. Brenkman
--------                                             ---------------------------
  DATE                                               GUY L. BRENKMAN
                                                     PRESIDENT & CEO

08/08/03                                             /s/ J. Michael Carr
--------                                             ---------------------------
  DATE                                               J. MICHAEL CARR
                                                     TREASURER & CHIEF
                                                     FINANCIAL OFFICER


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