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, 2001

                        Commission File Number 33-6658-C

                                Pioneer Railcorp

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

              Iowa                                                37-1191206
-------------------------------                              -------------------
(State or other jurisdiction of                              (IRS Employer ID #)
 incorporation or organization)

     1318 S. Johanson Rd Peoria, IL                                 61607
----------------------------------------                          ----------
(Address of principal executive offices)                          (Zip code)

                   Registrant's telephone number: 309-697-1400

           Securities registered pursuant to Section 12(g) of the Act:

Title of each  Class                 Name of each  exchange  on which registered
---------------------                -------------------------------------------
Common Stock, Class A                      NASDAQ, Chicago Stock Exchange

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES X NO.

                                    4,529,077

             ------------------------------------------------------
             (Shares of Common Stock outstanding on March 31, 2001)
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS



                        PIONEER RAILCORP AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                     Quarters Ended March 31, 2001 and 2000

                                    UNAUDITED

                                                    First Quarter  First Quarter
                                                        2001           2000
                                                     ---------------------------

Operating revenue ................................   $ 3,510,871    $ 3,605,722
                                                     ---------------------------
Operating expenses

   Maintenance of way ............................       336,226        361,135
   Maintenance of equipment ......................       395,038        332,959
   Transportation expense ........................       865,343        826,291
   Administrative expense ........................     1,002,022        872,262
   Depreciation  & amortization ..................       511,214        468,652
                                                     ---------------------------
                                                       3,109,843      2,861,299
                                                     ---------------------------

Operating income .................................       401,028        744,423
                                                     ---------------------------
Other income & expense

   Other (income) expense ........................      (205,123)      (153,979)
   Interest expense, equipment ...................       182,889        194,324
   Interest expense, other .......................       182,621        183,113
   Net (gain) loss on sale of fixed assets .......          (459)       (85,486)
                                                     ---------------------------
                                                         159,928        137,972
                                                     ---------------------------

Income before income taxes .......................       241,100        606,451
Provision for income taxes .......................       107,500        234,800
                                                     ---------------------------
Income before minority interest in preferred
   stock dividends of consolidated subsidiaries ..   $   133,600    $   371,651
Minority interest in preferred stock dividends of
    consolidated subsidiaries ....................        31,308         31,308
                                                     ---------------------------
Net income .......................................   $   102,292    $   340,343
                                                     ===========================

Basic earnings per common share ..................   $      0.02    $      0.08
                                                     ===========================

Diluted earnings per common share ................   $      0.02    $      0.08
                                                     ===========================
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                      MARCH 31, 2001 and DECEMBER 31, 2000

                                    UNAUDITED

<TABLE>

                                                            March 31      December 31
                                                              2001           2000
                                                          ----------------------------
<S>                                                       <C>             <C>
ASSETS
Current Assets
   Cash ...............................................   $    579,869    $    564,490
   Accounts receivable, less allowance
     for doubtful accounts 2001 $121,474; 2000 $120,099      3,632,595       3,687,738
   Inventories ........................................        261,822         237,091
   Prepaid expenses ...................................        152,091          96,357
   Income tax refund claims ...........................        153,413         206,915
   Deferred taxes .....................................         59,800          59,800
                                                          ----------------------------
        Total current assets ..........................      4,839,590       4,852,391
                                                          ----------------------------

Property and Equipment less accumulated
  depreciation 2001 $9,397,672; 2000 $8,909,343 .......     26,714,186      25,451,459
                                                          ----------------------------

Intangible Assets, less accumulated amortization
  2001 $301,685; 2000 $288,984 ........................      1,078,982       1,091,403
                                                          ----------------------------

Investments, cash value of life insurance .............        162,088         156,702
                                                          ----------------------------

Total assets ..........................................   $ 32,794,846    $ 31,551,955
                                                          ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

   Accounts payable ...................................   $  2,488,014    $  2,307,663
   Income taxes payable ...............................         57,499           4,099
   Current maturities of long-term debt ...............      3,147,724       2,953,155
   Accrued liabilities ................................        561,122         643,743
                                                          ----------------------------
        Total current liabilities .....................      6,254,359       5,908,660
                                                          ----------------------------

Long-term debt, net of current maturities .............     14,890,083      14,103,682
                                                          ----------------------------

Deferred income taxes .................................      4,825,200       4,825,200
                                                          ----------------------------

Minority interest in subsidiaries .....................      1,103,000       1,106,000
                                                          ----------------------------

Stockholders' Equity
   Common stock .......................................          4,612           4,612
   In Treasury 2001 83,440 shares; 2000 81,240 ........            (83)            (81)
                                                          ----------------------------
   Outstanding 2001 4,529,077; 2000 4,531,277 .........          4,529           4,531
   Additional paid-in capital .........................      2,044,041       2,044,041
   Retained earnings ..................................      3,673,634       3,559,841
                                                          ----------------------------
        Total stockholders' equity ....................      5,722,204       5,608,413
                                                          ----------------------------
Total liabilities and equity ..........................   $ 32,794,846    $ 31,551,955
                                                          ============================
</TABLE>
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Quarters Ended March 31, 2001 and 2000

                                    UNAUDITED

<TABLE>

                                                                 First Quarter First Quarter
                                                                     2001          2000
                                                                 --------------------------
<S>                                                              <C>            <C>
Cash Flows From Operating Activities
Net income ...................................................   $   102,292    $   340,343
Adjustments to reconcile net income to net cash
provided by operating activities:
        Minority interest in preferred stock dividends of
          consolidated subsidiaries ..........................        31,308         31,308
        Depreciation .........................................       498,514        458,148
        Amortization .........................................        12,700         10,504
        Increase in cash value life insurance ................        (5,386)        (4,168)
        (Gain) on sale of property & equipment ...............          (459)       (84,586)
Change in assets and liabilities, net of effects from
        acquisition of subsidiaries
        (Increase) decrease accounts receivable ..............        55,143        137,099
        (Increase) decrease inventories ......................       (24,731)             0
        (Increase) decrease prepaid expenses .................       (55,734)       (17,292)
        (Increase) decrease intangible assets ................          (188)           754
        Increase (decrease) accounts payable .................       180,351       (957,998)
        (Increase) decrease income tax refund claims .........        53,502              0
        Increase (decrease) income tax payable ...............        53,400       (292,650)
        Increase (decrease) accrued liabilities ..............       (82,621)       (21,265)
                                                                 --------------------------
        Net cash provided (used in) operating activities .....       818,091       (399,803)
                                                                 --------------------------

Cash Flows From Investing Activities
        Proceeds from sale of property & equipment ...........         5,875            400
        Purchase of property & equipment .....................    (1,766,657)    (2,569,289)
                                                                 --------------------------
        Net cash (used in) investing activities ..............    (1,760,782)    (2,568,889)
                                                                 --------------------------

Cash Flows From Financing Activities
        Proceeds from short-term borrowings ..................       258,000      3,640,840
        Proceeds from long-term borrowings ...................     1,678,055              0
        Payments on short-term borrowings ....................      (258,000)    (1,280,840)
        Payments on long-term borrowings .....................      (697,085)      (577,391)
        Repurchase of minority interest ......................        (3,000)       (16,000)
        Purchase of common stock for treasury ................        (2,600)       (82,605)
        Preferred stock dividend payments to minority interest       (17,300)       (17,300)
                                                                 --------------------------
        Net cash provided by financing activities ............       958,070      1,666,704
                                                                 --------------------------

Net increase (decrease) in cash ..............................        15,379     (1,301,988)

Cash, beginning of period ....................................       564,490      2,356,844
                                                                 --------------------------
Cash, end of period ..........................................   $   579,869    $ 1,054,856
                                                                 ==========================
</TABLE>
<PAGE>

SEGMENT INFORMATION

Description of products and services from reportable segments:

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

Measurement of segment profit or loss and segment assets:

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

Intersegment transactions:

Intersegment transactions are recorded at cost.

Factors management used to identify the reportable segments:

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

                                                   First Quarter  First Quarter
                                                       2001            2000
                                                   -----------------------------
Revenues from external customers
   Railroad operations .........................    $ 2,793,403     $ 2,847,298
   Equipment leasing operations ................        711,522         758,334
   Corporate support services ..................          5,946              90
                                                    ---------------------------
      Total revenues from external customers ...    $ 3,510,871     $ 3,605,722
                                                    ===========================

Intersegment revenues
   Railroad operations .........................    $         0     $         0
   Equipment leasing operations ................         99,600          95,100
   Corporate support services ..................      1,669,675       1,511,954
                                                    ---------------------------
      Total intersegment revenues ..............    $ 1,769,275     $ 1,607,054
                                                    ===========================

Segment profit
   Railroad operations .........................    $ 1,002,302     $ 1,181,876
   Equipment leasing operations ................        343,452         421,394
   Corporate support services ..................        824,549         748,207
                                                    ---------------------------
      Total segment profit .....................    $ 2,170,303     $ 2,351,477

Reconciling items
    Intersegment revenues ......................     (1,769,275)     (1,607,054)
    Income taxes ...............................       (107,500)       (234,800)
    Minority interest ..........................        (31,308)        (31,308)
    Other income(expense), net .................       (159,928)       (137,972)
                                                    ---------------------------
       Total consolidated net income ...........    $   102,292     $   340,343
                                                    ===========================
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PIONEER RAILCORP AND SUBSIDIARIES

NOTE 1.   STATEMENTS

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

NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include Pioneer Railcorp (Pioneer) and its
wholly-owned  and controlled  subsidiaries  (collectively,  "the Company").  The
Company's  railroad  operations  segment  consists  of  wholly-owned  short line
railroad  subsidiaries  that offer  similar  services and includes the following
wholly-owned  subsidiaries:  West Michigan Railroad Co. (WMI), Michigan Southern
Railroad  Company  (MSO),  Fort Smith Railroad Co. (FSR),  Alabama  Railroad Co.
(ALAB),  Mississippi Central Railroad Co. (MSCI), Alabama & Florida Railway Co.,
Inc. (AF), Decatur Junction Railway Co. (DT),  Vandalia Railroad Company (VRRC),
Keokuk  Junction  Railway Co. (KJRY),  Shawnee  Terminal  Railway Company (STR),
Pioneer  Industrial  Railway Co. (PRY),  The Garden City Western  Railway,  Inc.
(GCW), Indiana Southwestern Railway Co. (ISW), Kendallville Terminal Railway Co.
(KTR)  (a  spin  off  from  the  Michigan  Southern  Railroad  Company)  and the
Gettysburg & Northern  Railroad Co. (GET)  (operating  effective  2/20/01).  The
Company's  equipment  leasing segment leases  railcars,  locomotives,  and other
railroad equipment to affiliated and unaffiliated entities and includes only the
wholly-owned  subsidiary  Pioneer Railroad Equipment Co., Ltd. (PREL). All other
Company  operations  are  classified  as  corporate  and include  the  following
wholly-owned  subsidiaries:  Pioneer  Resources,  Inc. (PRI),  Pioneer Air, Inc.
(PAR), and Pioneer Railroad Services,  Inc. (PRS). All significant  intercompany
balances and transactions have been eliminated in consolidation.

NOTE 3. CONTINGENCIES

The Company is  contingently  liable as a guarantor on an outstanding  loan. The
$76,000 loan is the primary  responsibility  of the Minnesota  Central  Railroad
Co.,  which the Company sold in 1999:  however,  the Company had  guaranteed the
debt prior to the sale of the Minnesota Central Railroad Co.

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

NOTE 4. PURCHASES OF RAILROAD FACILITIES

On February 20, 2001, the Company through its wholly-owned subsidiary Gettysburg
& Northern  Railroad Co. (GET) acquired,  in a transaction  accounted for by the
purchase  method of  accounting,  the railroad  assets of the former  Gettysburg
Railway,  Inc.  (GBRY) and the Gettysburg  Scenic Railway  (GSRX),  from various
corporate entities owned by John H. Marino of Manassas, Virginia. The line is 25
miles in length  running from  Gettysburg,  PA to Mount Holly  Springs,  PA. The
primary  commodities  are canned goods,  pulpboard and scrap paper. In addition,
the GET will generate  revenues  from a scenic  passanger  operation.  The total
purchase price was $1,604,700.  There was no goodwill  recognized as a result of
this  transaction.  The Company projects the GET will initially  generate annual
revenues of $800,000 and $400,000 of operating income.

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.
<PAGE>

Pioneer Railcorp, an Iowa corporation, is a railroad holding company. As used in
this Form 10-QSB,  unless the context requires otherwise,  the term "Company" or
"PRC" refers to the parent, Pioneer Railcorp and its subsidiaries: West Michigan
Railroad  Co.  (WMI),  Michigan  Southern  Railroad  Company  (MSO),  Fort Smith
Railroad Co. (FSR),  Alabama Railroad Co. (ALAB),  Mississippi  Central Railroad
Co. (MSCI),  Alabama & Florida Railway Co., Inc. (AF),  Decatur Junction Railway
Co. (DT), Vandalia Railroad Company (VRRC),  Keokuk Junction Railway Co. (KJRY),
Shawnee Terminal Railway Company (STR),  Pioneer  Industrial  Railway Co. (PRY),
The Garden City Western Railway,  Inc. (GCW),  Indiana  Southwestern Railway Co.
(ISW),  Kendallville  Terminal  Railway Co.  (KTR) (a spin off from the Michigan
Southern Railroad Company),  Gettysburg & Northern Railroad Co. (GET) (operating
effective  2/20/01) Pioneer  Resources,  Inc. (PRI),  Pioneer Railroad Equipment
Co., Ltd. (PREL),  Pioneer Air, Inc. (PAR), and Pioneer Railroad Services,  Inc.
(PRS).

Summary: First Quarter 2001 Compared to First Quarter 2000.

The Company's  net income in the first quarter 2001 was $102,300,  a decrease of
$238,000 from the first  quarter 2000 which had net income of $340,300.  Revenue
decreased by $95,000 or 2.6% to  $3,511,000  from  $3,606,000 in the same period
last year.  Operating  expense  increased by $249,000 or 9%, to $3,110,000  from
$2,861,000 in the same period last year. Operating income decreased by $343,000,
or 46% to $401,000 from $744,000 in the same period last year.

Operating  income  was  decreased  in the first  quarter  2001 by the  Company's
equipment leasing operations by approximately  $82,000 in the period,  primarily
from a $120,000 decrease in revenue from the utilization of its railcar fleet by
non-affiliated  railroads.  This  decrease  was offset by an increase in revenue
generated  from  locomotive  leases of  $72,000  in the  quarter.  The  railroad
operations  had a decrease in operating  income in the period of $180,000.  This
reduction  is the result of a decrease  in  revenue  of $54,000  from  decreased
carloads handled,  which the Company attributes to the current economic climate,
and an  increase  in  operating  expenses of  $126,000  from the  railroads.  In
addition, corporate support services decreased operating income by approximately
$83,000  in the period  resulting  primarily  from  increased  health  insurance
expenses and increased  payroll for support  services  needed as a result of the
growth of the company's equipment and railroad properties.

Revenue:

Revenue decreased in the first quarter 2001 by approximately  $95,000,  or 2.6%,
to  $3,511,000  from  $3,606,000  in the same  period  last year.  The  railroad
operations  decreased  revenue by approximately  $54,000 in the period which the
Company  attributes to the current economic  climate.  The Indiana  Southwestern
Railway  Co.,  which the  Company  did not  operate in the first  quarter  2000,
increased  revenues  $43,000 in the  quarter.  In  addition,  the Company  began
operating  the  Gettysburg  & Northern  Railroad  Co. on February 20, 2001 which
generated  $42,000 of revenue in the first quarter 2001.  The equipment  leasing
operations  had a $47,000  decrease  in revenue in the period  resulting  from a
$120,000  decrease  in revenue  from the  utilization  of its  railcar  fleet by
non-affiliated  railroads,  offset by an  increase  in  revenue  generated  from
locomotive  leases of  $72,000  in the  quarter.  Corporate  services  generated
approximately $6,000 in revenue in the quarter as a result of subscription sales
to its publication The Short Line.

Operating Expense:

Operating  expense  increased  in the first  quarter  2001 by $249,000 or 9%, to
$3,110,000 from $2,861,000 in the prior year. The railroad operations  increased
operating expense by approximately  $125,000 in the period which resulted from a
variety  of  factors  including  increased   administrative  expenses  from  new
operating  properties  (ISW,GET) and outside  legal fees  relating  primarily to
matters before the Surface Transportation Board (STB). In the first quarter 2001
$42,000 of  operating  expense  related to the  Indiana  Southwestern  which the
Company  began  operating  on April 1, 2000 and  $46,000  of  operating  expense
related to the  Gettysburg  & Northern  Railroad  Co.  which the  Company  began
operating on February 20,  2001.  The  equipment  leasing  operations  increased
operating  expense  approximately   $35,000,   primarily  from  an  increase  in
depreciation expense related to the acquisition of railcars and locomotives.  In
addition,   corporate   support   services   increased   operating   expense  by
approximately  $88,000 in the period  resulting  primarily from increased health
insurance expenses and increased payroll for support services needed as a result
of the growth of the Company's equipment and railroad properties.

Maintenance  of way and  structures  expense  (MOW)  decreased  $25,000 or 7% to
$336,000 from $361,000 in the same period last year.  Railroad  operations had a
decrease of $35,000 of MOW and corporate services increased MOW by $10,000.
<PAGE>

Maintenance of equipment  expense (MOE)  increased  $62,000,  or 19% to $395,000
from $333,000 in the same period last year. The equipment leasing operations had
an  increase  in MOE of  approximately  $15,000 as a result of  increased  costs
associated with maintaining the Company's railcar fleet. The railroad operations
had  increased  MOE of $30,000,  of which  $10,000  relates to the  Gettysburg &
Northern  Railroad Co. In addition,  MOE was  increased  $17,000 from  corporate
support services.

Transportation expense (TRAN) increased $39,000, or 5% to $865,000 from $826,000
in the same period last year. The equipment  leasing  operations had an increase
in TRAN of approximately  $25,000 as a result of increased costs associated with
maintaining  the  Company's   locomotive  fleet.  The  railroad  operations  had
increased  TRAN of $25,000,  including  an  increase of $16,000  relating to the
Gettysburg  &  Northern  Railroad  Co.  and  $17,000  relating  to  the  Indiana
Southwestern Railway Co. In addition,  TRAN was decreased $10,000 from corporate
support services.

General  &  administration  expense  (ADMIN)  increased  $130,000,  or  15%,  to
$1,002,000  from $872,000 in the same period last year. The railroad  operations
had an increase  of $91,000 in ADMIN  expense in the period.  The  Gettysburg  &
Northern  Railroad Co.  increased  ADMIN  expense  $13,000 in the period and the
Indiana  Southwestern Railway Co. increased ADMIN $15,000 in the period. Most of
the remaining increase in ADMIN from the Railroads relates to outside legal fees
for  various  matters.   The  equipment  leasing   operations   decreased  ADMIN
approximately  $33,000 as a result of reduced  expenses related to repositioning
the Company's railcar fleet.  Corporate support services increased ADMIN expense
by approximately $72,000 in the period resulting primarily from increased health
insurance expenses and increased payroll for support services needed as a result
of the growth of the Company's equipment and railroad properties.

Depreciation and amortization expense increased $42,000, or 9%, to $511,000 from
$469,000 in the same period last year.  Approximately  $8,000 of the increase is
related to the Indiana  Southwestern Railway and approximately $6,000 is related
to the  Gettysburg & Northern  Railroad  Co. The  equipment  leasing  operations
increased  depreciation expense approximately $28,000 related to the acquisition
of railcars and locomotives.

Other Income and Expense Income Statement Line Item Discussion:

In the first quarter 2001 other income and expense increased $51,000 to $205,000
of income  compared to  $154,000  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 $11,000 in the first
quarter 2001 to $183,000 compared to $194,000 in the same period last year. This
decrease is the result of reduction of principal  balances  related to equipment
financing in the absence of  additional  financing  activities.  Other  interest
expense,  which  primarily  relates to the financing of the  Company's  railroad
operations, remained constant when compared to the prior year at $183,0000.

In the  first  quarter  2001  the  Company  had a  small  gain  on  fixed  asset
dispositions  of  approximately  $500 compared to a significant  gain on sale of
fixed assets in the same period last year of $85,000.

Impact of New Accounting Pronouncements:

The Company is not aware of any recent accounting  standard issued,  but not yet
required to be adopted by the Company,  that would have a material effect on its
financial position or results of operations.

Liquidity and Capital Resources:

The Company  primarily  uses cash  generated  from  operations  to fund  working
capital  needs and relies on long-term  financing  for  railcars,  new operating
subsidiaries,  and other  significant  capital  expenditures.  The  Company  has
working capital facilities totaling  $1,100,000,  all of which was available for
use at the end of the first quarter 2001.
<PAGE>

On June 23, 2000, the Company entered into a credit agreement with National City
Bank of Michigan/Illinois to provide a $5 million revolving  acquisition line of
credit for railroad  acquisitions at a variable  interest rate of prime plus 1%,
renewable every 2 years.  Amounts drawn on the line are amortized over a 10 year
period.  This  credit  line is  secured  by all non real  estate  assets  of the
Mississippi  Central  Railroad  Co.,  the Alabama  Railroad Co. and all non real
estate assets of any company  acquired  using  proceeds from the credit line. In
the first quarter 2001,  $1,604,700 was borrowed on the line in connection  with
the asset  purchase  by the  Gettysburg  & Northern  Railroad  Co.  The  monthly
principal and interest payment currently required to be repaid on the Gettysburg
& Northern Railroad Co. financing is $20,800. In addition, monthly principal and
interest of $8,300 is currently  being repaid on the credit line for the funding
of the Indiana  Southwestern  Railway Co. As of March 31, 2001,  $2,272,000  was
drawn on the credit line leaving an available balance of $2,728,000.

Long-term  equipment  financing has historically  been readily  available to the
Company for its railcar  acquisition  program.  The Company  believes it will be
able to continue obtaining  long-term equipment financing should the need arise.
The Company's  plans for new debt in the  foreseeable  future is contingent upon
new railroad acquisitions and increased needs and/or opportunities for railcars.

On July 1, 1995, the Company's  stock split and warrant  issuance became payable
to  shareholders.  The 2 for 1 stock split increased the number of shares issued
and  outstanding  from  2,099,142 to  4,198,284.  At the same time  shareholders
became  entitled  to purchase  an  additional  4,198,284  shares  through  stock
warrants  issued by the  Company as  dividends.  One warrant was issued for each
share of common stock held after the split,  entitling  the holder to purchase 1
share of common  stock for $2.00 per share.  The shares  purchased  through  the
exercise of the warrants  must be held for 1 year from date of  purchase.  As of
March 31, 2001, a total of 68,766 warrants  originally issued had been exercised
to date since the warrants  issuance,  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  will be  fully  vested  and  will be
exercisable  as of July 1, 2001. The exercise date can be accelerated if Pioneer
Railcorp common shares reach a closing price of $7.25 per share, or higher,  for
any  consecutive  10-day  period,  as reported in the Wall Street  Journal.  The
options will be exercisable  at prices  ranging from $2.75 to $3.03,  based upon
the trading price on the date of the grant,  in whole or in part within 10 years
from the date of grant.  As of March 31,  2001,  a total of 215,000  options are
outstanding under this plan.

The Company is  contingently  liable as a guarantor on an outstanding  loan. The
$76,000 loan is the primary  responsibility  of the Minnesota  Central  Railroad
Co.,  which the Company sold in 1999:  however,  the Company had  guaranteed the
debt prior to the sale of the Minnesota Central Railroad Co.

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
and as of March 31, 2001,  a total of 83,440  shares had been  repurchased  at a
cost of $118,733. The Company plans to continue buying back its common stock but
believes  the  repurchase  will  be on a  more  limited  scope  then  previously
anticipated due to capital  requirements and the trading volume of the Company's
stock.

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

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

Balance Sheet and Cash Flow Items:

The Company  operating  activities in the first quarter 2001  generated  cash of
$818,000.  Net cash generated  from  operating  activities for the first quarter
2001  was  generated  primarily  from  $102,000  of  net  income,   $511,000  of
depreciation and a increase in accounts payable of $180,000.

In the first quarter 2001,  the Company  purchased  approximately  $1,767,000 of
fixed  assets and  capital  improvements.  Capital  expenditures  included  $1.6
million for the railroad assets of the former  Gettysburg  Railway,  Inc. (GBRY)
and the  Gettysburg  Scenic Railway  (GSRX) by Pioneer  Railcorp's  wholly-owned
subsidiary  Gettysburg  &  Northern  Railroad  Co.  Preliminary  allocations  of
Gettysburg & Northern Railroad Co. asset purchase include approximately $984,000
for track structures, $308,000 for land, $143,000 for buildings and $170,000 for
equipment.  In addition,  the Company  purchased 2 locomotives for approximately
$110,000 of which $78,000 was financed by the Company's acquisition credit line.
The  majority of the  remaining  capital  asset  expenditures  of  approximately
$52,000 relate to equipment purchases and railcar betterments.
<PAGE>

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

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

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

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

No matters  were  submitted to a vote of security  holders in the first  quarter
2001.

Item 5.   OTHER INFORMATION

On  February  1,  2001,  the  Company  separated  1.1 miles of track  located in
Kendallville, Indiana from its Michigan Southern Railroad Company subsidiary and
is operating as a  wholly-owned  subsidiary of Pioneer  Railcorp  under the name
Kendallville  Terminal Railway Co. (KTR). This was done to simplify  interchange
with the Norfolk Southern,  the connecting carrier,  and to enhance marketing of
the railroad by creating a local identity of the rail line.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

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

No reports were filed on Form 8-K during the first three months 2001.

SIGNATURES

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

PIONEER RAILCORP
(Registrant)





       05/08/01                  /s/ Guy L. Brenkman
       --------                  -----------------------------------------------
         DATE                    GUY L. BRENKMAN
                                 PRESIDENT & CEO

       05/08/01                  /s/ J. Michael Carr
       --------                  -----------------------------------------------
         DATE                    J. MICHAEL CARR
                                 TREASURER & CHIEF FINANCIAL OFFICER