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

                                   ----------

                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   for the fiscal year ended December 31, 2000

                                       OR
       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

      For the transition period from ________________ to ______________

                         Commission File Number 0-27944

                         DME INTERACTIVE HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                          98-0157860
(State or other jurisdiction of                          (Employer I.D. No.)
incorporation or organization)

        519 E. Palisades Ave, Englewood Cliffs, NJ         07632
         (Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code:            (201) 569-1813
Securities registered pursuant to Section 12(b) of the Act:     None
Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value
                    Redeemable Common Stock Purchase Warrant

                                ----------------

                                (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-KSB is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or any amendment to this
Form 10-K. { }

     The aggregate market value of the Common Stock, par value $.001 per share,
held by non-affiliates based upon the average of the high and low sale prices as
reported by the OTC Bulletin Board on May 15, 2001 was $2,166,773. As of May 15,
2001 there were 27,084,666 shares of Common Stock, par value $.001 per share,
outstanding.

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                                     PART I


ITEM 1.  BUSINESS

     This Form 10-KSB contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. All statements,
other than statements of historical fact, regarding our financial position,
potential, business strategy, plans and objectives for future operations are
"forward looking statements" These statements are commonly identified by the use
of such terms and phrases as "intends", "expects", "anticipates", "estimates",
"seeks" and "believes". You are urged to note the description of our plans and
objectives for future operations, assumptions underlying these plans and
objectives and other forward-looking statements included in "Business" and
"Management's Discussion And Analysis" of this Form 10-KSB. These descriptions
and statements are based on management's current expectations. Our actual
results may differ significantly from the results discussed in these
forward-looking statements as a result of certain factors, including those set
forth in the "Risk Factors" section attached hereto as an Exhibit and elsewhere
in this Form 10-KSB.

OVERVIEW

     DME Interactive Holdings, Inc. was founded in 1996. Our mission is to
provide affordable technology and internet access to consumers, school systems,
organizations, and government agencies. We have entered into an agreement with
America Online, Inc. and CompuServe Interactive Services, Inc. for the
development of an urban branded Internet service provider that will feature our
PLACES OF COLOR online resource community.

     Although Internet use in the urban minority market lags behind America as a
whole, it is growing. We are actively trying to promote the growth of Internet
use among businesses and consumers in the African-American and Latino markets
("urban minority market").

     In February 2000, we formed a strategic partnership with America Online,
Inc. and its wholly owned subsidiary CompuServe Interactive Services, Inc. This
alliance will enable the official launch of an urban branded Internet service
provider hosted by AOL/CompuServe and featuring the PLACES OF COLOR online
resource community. AOL, through CompuServe, will provide all interactive
services, including email, instant messaging, chat rooms and news briefs as well
as "back end" services for PLACES OF COLOR, including customer service, billing,
dial up access numbers, and web site hosting and other technical infrastructure.
We will provide relevant content and be responsible for all marketing and
advertising for PLACES OF COLOR. We will receive a portion of the subscriber fee
from AOL and derive revenue from the advertising and affiliate relationships
with content providers and e-commerce partners.

     We believe PLACES OF COLOR will be attractive to businesses as an
advertising and commerce medium because it will provide a means for reaching the
urban minority markets that we believe traditional marketing and distribution
have been unable to access in an effective manner, if at all. We are actively
seeking to establish relationships with content providers and other companies to
whom the urban minority market may be attractive. We expect PLACES OF COLOR to
be completed in July 2001.


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<PAGE>

     We have a social mission to hasten and promote computer and Internet usage
by the urban minority market. Historically, the cost of the equipment and a
perception of irrelevance have been the primary causes of the digital divide.
(The Pew Internet & American Life Project survey for November - December 2000
reported that only 38% of the nation's households earning less than $30,000 have
Internet access.) Our PLACES OF COLOR business model addresses both facets of
this problem with a package of bundled solutions that are not only affordable
but also relevant for the urban markets. Our members can buy a certified
pre-owned branded PC (including monitor and software), email services, customer
support, warranty and free Internet access for a minimum price of $289.

     In fulfilling our mission, we seek to assist non-profit and governmental
organizations in promoting the use of the Internet in minority communities and
actively encourage other businesses to assist us in this goal. We believe that
the strategic relationship with AOL and the launch of "Places of Color, Powered
by CompuServe" are important steps in starting to bridge the digital divide. We
are seeking to enter into other strategic relationships so we, along with other
parties, can promote computer ownership, computer literacy and technology
training in the urban minority market. We believe that increased Internet usage
in those communities will increase the potential base of customers for our
clients and prospective clients, which, in turn, will increase the number of
clients seeking our services.

The Urban Minority Internet Market

     To date, the urban minority market has lagged behind the rest of the United
States in computer and Internet use. While the ownership of personal computers
has grown significantly for minority groups since 1994, African Americans and
Latinos still lag far behind the national average. According to the 1999 U.S.
Department of Commerce National Telecommunications and Information
Administration report, Falling Through the Net: Defining the Digital Divide,
46.6% of White households own a computer, more than twice the rate of African
American (23.2%) or Latinos (25.5%) households. A gap persists even at incomes
greater than $75,000, where 76% of white households own personal computers as
compared to 64% for African-Americans. According to the same study conducted by
the Department of Commerce similar disparities exist in regard to Internet
access.

     The purchasing power of the urban minority market is growing. The Selig
Center for Economic Growth projects that the nation's African American buying
power has risen from $308 billion in 1990 to a projected $572 billion in 2001,
up by 85.7% in eleven years, a compound annual rate of growth of 5.3%. This rate
of growth outpaces the United States as a whole, which experienced an aggregate
growth of 56.7%. The Selig Center predicts that African American buying power
will grow more than two-and-one-half times as fast as inflation. In 2001, the
national share of total buying contributed by African Americans is expected to
be 8.2%, up from 7.4% in 1990. We believe that substantially above-average
growth in African American buying power creates tremendous opportunities for
businesses that concentrate on such markets. Furthermore, according to the
National Council of La Raza, the buying power of the total Latino population was
estimated at $452 billion in 2001, an increase of 66.0% since 1990. The Latino
share of total national buying power is predicted to increase to 5.9% of the
nation's total for 2001 from 5.0% in 1990, according to projections by the Selig
Center for Economic Growth. Furthermore, the number of Latino-owned businesses
is rising dramatically.

     A large part of the urban minority market is young and rapidly growing. The
number of African Americans aged 14-17 and 18-24 has projected to have increased
16% and 15%, respectively between 1996 and 2000. According to the US Census
Bureau, Latino youth aged 16-24 will grow over three times as fast as the
overall population in that age group between 2000 and 2005. Latino teens
currently make up 13.6% (4.3 million) of all teens and will become the largest
minority teen group by 2000, comprising 16% of all teens. American Demographics
(May 1999) cites the nation"s nearly 30 million teens spending over $140 billion
in 1998, with Latinos contributing $20 billion (14%) of the expenditure outlay.
Because advertisers often deem young people to be more receptive to advertising,
these


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statistics suggest that companies should be willing to increase spending on
advertising to the urban minority market.

     We compete with other companies that bundle compter products, Internet
access and customer service in a single offering pursuant to a specific
multi-year plan, such as PeoplePC, Directweb, Gobi, and Myturn.com. PLACES OF
COLOR's competitive advantage is its unique access and brand recognition within
the leadership of the African American and Lation American urban communities
nationwide, enhanced by it's PLACES OF COLOR start page and its competitive
price point.

OUR ONLINE RESOURCE COMMUNITY

Industry Background

     An important factor in the widespread adoption of the Internet has been the
emergence of a network of servers and information available called the World
Wide Web. Portals, such as America Online, Excite, the Go Network, Lycos, MSN,
Yahoo! and others have established themselves as leading pathways and search
engines to a broad variety of information and entertainment. These companies are
augmenting their portals with subject specific linked destinations, which are
becoming one of the fastest growing segments of the Internet. These vertical
portals are using brand awareness driven by high quality topical content and
significant market resources to establish themselves as destinations for highly
concentrated groups of users.

     In addition, online communities have emerged, allowing users with similar
interests to engage in interactive activities. These online communities have
grown in importance as the growth of the Internet and the proliferation of Web
sites have made it difficult for Internet users, content providers and
businesses with a common interest to reach and interact with one another. Until
recently, use of the Internet consisted mainly of users seeking one way, static
information on topics of interest to them. Technologies have recently been
developed which allow users greater flexibility to create and personalize
content, communicate with users having similar interests and engage in other
"interactivities." Online communities allow users with a particular interest or
background to find news and information as well as links to other web sites
pertaining to many of their interests through one central web site. We believe
that online communities are particularly relevant to the urban minority market
because web sites devoted to some of the interests of this community are
underrepresented among the many web pages available through a common search
engine.

     We believe that few content providers have made any effort to develop Web
sites and portals targeted to minorities, and that even fewer understand the
cultural demands and interests of the urban market. We are not aware of any
Internet service provider that has created a "portal strategy" that is a
successful point of entry to cyberspace for minority online users. We believe
that a market for such a portal strategy, particularly if combined with an
online resource community devoted to similar interests, exists.

     Although it currently represents only a small portion of advertising
spending, businesses continue to use the Internet as an effective means of
targeting and marketing to consumers. We believe that advertisers have
recognized that Internet-based advertising allows advertisers to present
messages to specific, targeted audiences, and to enable users to interact with
advertising information being presented to them. Internet advertising allows
advertisers to measure the exact number of users that have viewed the page; and
which information can be verified by independent auditing companies. Advertisers
can also measure the effectiveness of advertising in generating click-throughs,
which is the number of times the user requests additional information via a link
included in the advertisement. We believe that software and processes are being
developed that will allow for greater measurement of the effectiveness of web
based advertising, which we further believe will increase the amount of
advertising on web sites targeting specific demographic groups.


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<PAGE>

Our OnLine Resource Community

     PLACES OF COLOR will be an online resource community that will serve as a
convergence community or platform for Internet users from the urban minority
market and other people of color. PLACES OF COLOR will bring together a wide
array of content and services of interest to the urban minority market. Through
links, PLACES OF COLOR will allow its users to find and connect with existing
ethnic sites and will also feature content produced exclusively for PLACES OF
COLOR by our strategic partners. Content and services will include education,
banking and stock trading, e-commerce, career resources, e-mail, community
services, entertainment, travel, religion and music, all tailored to the tastes,
trends and interests of the urban minority market. PLACES OF COLOR will also
provide e-mail and homepage services to its business and individual customers.
We intend to market PLACES OF COLOR so that it will become a hip place for
members of the urban minority to maintain their web sites and e-mail addresses.

     PLACES OF COLOR will be available through the "Places of Color, Powered by
CompuServe" online service. Under our agreement with CompuServe, we are also
required to make all aspects of PLACES OF COLOR available to other members of
America Online or CompuServe online services. PLACES OF COLOR will also be
available to Internet users who use other access providers. However, we are
currently considering charging such users a membership fee for access to some or
all of the PLACES OF COLOR features. Alternatively, we may require a password,
but would provide a password to any Internet user who filled out our
questionnaire. This would allow us to generate the additional user traffic of a
free web site yet also keep track of demographic and other information for our
advertisers and strategic partners. Additionally, we are seeking strategic
partners who will make PLACES OF COLOR available to broadband and wireless
communication networks.

     We expect PLACES OF COLOR and "Places of Color, Powered by CompuServe" to
be operating by July 2001.

Content Strategy

     We anticipate employing the following strategies to develop and promote
PLACES OF COLOR.

     Provide an Attractive Advertising Site.

     We believe our ability to target specific users, the interactive nature of
our Web site and the demographic characteristics of our users will be attractive
to those consumer brand firms that advertise on the Internet. By identifying
users interested in a particular topic or who have a common background, and
employing software and strategies that will allow us to collect demographic
information, we believe we can deliver advertising in a highly targeted manner,
thereby commanding higher advertising rates.

     Enable High Value E-commerce Offerings.

     We intend to enable e-commerce transactions offered by third parties. Our
strategy involves permitting merchants, manufacturers and service providers
access to a highly targeted community of consumers through our Web site and
within our channels through our portal affiliates. Although we do not intend to
provide products or services, we will provide links to the Web sites of third
parties that provide these products or services. Some of these third parties may
enter into preferred provider arrangements with us and pay us either a
transaction fee for sales attributable to users from our Web site or an anchor
tenant rental fee. Anchor tenant fees are annual fees paid by online merchants
in exchange for a prominent link to their on-line stores. We believe that
contextual merchandising of e-commerce transactions will attract users to our
Web site and promote user loyalty.

     Create an Attractive, Entertaining Web Site.

     We intend to create attractive, entertaining web sites that appeal to


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our target markets. We believe that our digital communication experience will
enable us to create web sites to create web sites that are relevant, interesting
and engaging to that market. We believe that the wide array of information
already available on the World Wide Web (which can be linked to our site) will
allow us to accumulate, store and distribute a wide array of information to
users of PLACES OF COLOR in a more cost efficient manner than traditional media
sources.

     Provide a Sense of Community

     We intend to develop a sense of community and interaction through the
PLACES OF COLOR web platform whose model aggregates relevant online resource and
destinations for audiences of color. The integrity of the content will initially
appeal to the target segments of African Americans and Latinos. We believe this
will lead to a sense of loyalty that will increase the use of our site as well
as the products and services offered or promoted through this platform. We
predict that much like Hip-Hop, the web culture created by PLACES OF COLOR will,
become a significant community interest for general market segments as well.

Marketing and Sales

     We intend to promote our Web sites through the Internet and traditional
media outlets. We believe that we can advertise efficiently by targeting media
outlets popular among the urban minority markets. Furthermore, we believe that
we will be able to obtain a significant amount of advertising through barter
arrangements and strategic relationships. For example, we may obtain advertising
space in a magazine targeting African-Americans in exchange for including an
advertisement for that magazine on the PLACES OF COLOR web site.

OTHER

Strategic Relationships

     We have entered into a strategic relationship with the CompuServe
Interactive Services, Inc. subsidiary of America Online, Inc., and we intend to
continue entering into strategic relationships with a limited number of leading
Internet hardware, software and content companies. We believe these
relationships, which are generally non-exclusive and will require us to share
our revenue with certain partners, will enable us to build premier web sites
while limiting our expenditures for infrastructure and content. Additionally, we
believe that certain strategic relationships that provide us access to leading
edge-technology may enhance our digital communication solutions business by
enabling us to deliver clients more effective solutions with greater efficiency.
For our pre-owned branded PCs the Company has partnered with Intellesale.com,
Inc., one of the largest distributors in the United States.

     Presently, we are seeking to enter into strategic relationships to assist
in the development and operation of PLACES OF COLOR. We believe these business
alliances can mutually increase traffic and memberships. For example, we will
create hyperlinks to complementary Web sites and Web sites of our content
providers and, in exchange, such Web sites will feature hyperlinks to our Web
sites. Pursuant to an agreement with CompuServe, we must make reasonable efforts
to ensure that these links keep the user within the PLACES OF COLOR online
resource community. Therefore, most of our links to other web sites will be
framed which means that the user has access to the other web site in a large
section of the screen, but he or she remains on the PLACES OF COLOR web site.

     In the event that we are unable to develop additional strategic
relationships, or one of our existing relationships is discontinued, either in
connection with termination of an agreement or otherwise, our business, results
of operations and financial condition may be materially adversely affected.


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<PAGE>

     America Online / Compuserve

     On February 2, 2000, we entered into an agreement with the CompuServe
Interactive Service, Inc. ("CompuServe") subsidiary of America Online, Inc.
("AOL") for the marketing and development of a CompuServe "Customized Service"
built around the PLACES OF COLOR web site. America Online, Inc. is the largest
Internet service provider in the world. Its CompuServe subsidiary operates a
separate Internet service provider that provides exclusive content and other
services, such as instant messaging, as well as World Wide Web access. The
Customized Service is a version of the CompuServe service whose look and feel
are being developed in conjunction with DME Interactive. The Customized Service
shall be marketed under the name "Places of Color Online, powered by
CompuServe."

     Pursuant to the February 2, 2000 agreement, CompuServe will provide
interactive services, including e-mail, instant messaging, and chat rooms, news
briefs, dial up access numbers, and other technical and non-technical
infrastructure and back-office services for the "Places of Color, Powered by
CompuServe" online service. Compuserve will also provide hosting services and
other technical and support services for the PLACES OF COLOR online resource
community. CompuServe will charge a service fee from the customers of PLACES OF
COLOR online service, initially planned to be $19.95 per month. CompuServe will
pay us a predetermined amount monthly for each customer of the Places of Color
online service.

     In connection with the strategic agreement with CompuServe, we agreed to
issue America Online, Inc. 1,250,000 shares of our common stock for an aggregate
purchase price of $1,250. Additionally, America Online was granted a warrant to
purchase 4,000,000 shares of our common stock at a purchase price of $8.563 per
share. However, the warrant will only become exercisable if, at the end of the
18 month term, we negotiate an extension of the Strategic Agreement with
CompuServe or enter into a substantially similar agreement. The 18 month period
will commence at the POC/CompuServe launch which is estimated for July 2001. We
also entered into an Investor Rights Agreement granting America Online
registration rights with respect to the common stock it acquired or will acquire
through exercise of the warrant.

Employees

     As of April 20, 2001, we employed 12 full time employees, including two
executives, three operations managers, three sales and marketing personnel, one
business development personnel, and three administrative staff.

     Our continuing success will depend, in large part, on our ability to
attract, motivate and retain highly qualified employees. Competition for such
personnel is intense, and we may not be able to retain our senior management or
other key personnel in the future.

     Our employees are not represented by any union and, except for senior
management and certain other employees, are retained on an at will basis. We
consider our relations with its employees to be satisfactory.

ITEM 2.  PROPERTIES

     Our principal administrative facility is located in approximately 2,500
square feet of office space in Englewood Cliffs, New Jersey, through an
affiliate entity under a non-cancelable operating lease, which expires in
September, 2001. Over the term, the minimum lease payments will total $31,500.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is involved in various claims arising in the ordinary course of
business including: one pending creditor action pertaining to past due accounts
payable claims totaling approximately $195,544; (see Item 13, Note 8 of Notes to
Financial Statements - Related Party Transactions) the Receiver of Autokraft


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Limited and ACL(1996) Limited, both in Administrative Receivership in the United
Kingdom have asserted a claim against us for monies allegedly due under (i) a
guarantee agreement and (ii) a variation agreement executed by us pursuant to
which the loan allegedly guaranteed was restructured. The amount claimed to be
due is British pounds 281,107 plus interest. The obligations arise out of the
purchase by a former subsidiary of ours, when we were Pride Automotive Group,
Inc. ("PAG"), of certain assets of the claimants. We are currently investigating
the claim; however, we believe that the existence of the liability for the claim
constitutes a breach of the representations and warranties made to Digital Mafia
in the agreement pursuant to which it was acquired in the re-capitalization.
Therefore, we have asserted a claim for demnification against Pride (now known
as Mason Hill Holdings, Inc.), the then parent of PAG, who, in the exchange
agreement for the acquisition, joined in the foregoing representations and
agreed to indemnify Digital Mafia in connection with any breach of those
representations. If it is determined that we are liable to the Receiver, we
intend to vigorously assert our rights against Pride.

Principal amounts claimed pertaining to creditor's actions are reflected as
payables within the liabilities section of the Company's financial statements.

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

     None.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock trades on the OTC Electronic Bulletin Board under the
symbol "DGMF." The OTC Electronic Bulletin Board has a limited and sporadic
trading market and does not constitute an "established trading market." Our
common stock had been traded on the Nasdaq SmallCap Stock Market until we were
delisted in March, 1999. The range of high and low bid prices for our common
stock for each quarter during the period from January 1, 1998 through March 31,
2001 is set forth below.

Common Stock Price Ranges(1)(2)

                                  High        Low
12/1/97 - 2/28/98                $3.50       $2.88
3/1/98 - 5/31/98                 $4.50       $3.44
6/1/98 - 8/31/98                 $3.88       $3.88
9/1/98 - 11/30/98                $3.44       $2.00
12/1/98 - 2/19/99                $3.50       $2.88
6/24/99 - 6/30/99                $2.50       $1.50
7/1/99 - 9/30/99                 $3.75       $0.40
10/1/99 - 12/31/99               $7.75       $0.28
1/1/00 - 3/31/00                 $6.38       $3.69
4/1/00 - 6/30/00                 $5.03       $1.13
7/1/00 - 9/30/00                 $2.16       $0.63
10/1/00 - 12/31/00               $1.03       $0.22
1/1/01 - 3/31/00                 $0.27       $0.05

(1)   This table reflects the range of high and low bid prices for DME's common
      stock during the indicated periods, as published by the OTC Bulletin
      Board. The quotations merely reflect the prices at which transactions were
      proposed, and do not necessarily represent actual transactions. Prices do
      not include retail markup, markdown or commissions.

(2)   In February 1999, upon announcement of the proposed acquisition of Digital
      Mafia, LLC, the Nasdaq SmallCap Stock Market halted trading of our common
      stock until the completion and public announcement of the transaction in
      June 1999.


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<PAGE>

     There were approximately 149 record holders of our common stock as of March
31, 2001. We estimate there are approximately 250 beneficial owners of our
common stock.

     We currently intend to retain future earnings, if any, to fund the
development and growth of our business and therefore do not anticipate paying
cash dividends within the foreseeable future. Any future payment of dividends
will be determined by our Board of Directors and will depend on our financial
condition, results of operations and other factors deemed relevant by the Board
of Directors.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the consolidated financial statements and related notes included elsewhere in
this Form 10-KSB. This discussion contains forward-looking statements based on
current expectations, which involve risks and uncertainties. These statements
are commonly identified by the use of such terms and phrases as "intends",
"expects", "anticipates", "estimates", "seeks" and "believes". Actual results
and the timing of certain events could differ materially from the
forward-looking statements as a result of a number of factors. Factors that
could cause or contribute to such differences include those discussed in "Risk
Factors," as well as those discussed elsewhere herein.

OVERVIEW

Organization and Business

     Pride Automotive Group ("Pride") was incorporated in 1995 in the State of
Delaware as a "C" Corporation. On June 18, 1999, Pride changed its name to DME
Interactive Holdings, Inc. ("DME" or "Company") following a reverse merger
(re-capitalization) with Digital Mafia Entertainment, LLC. ("Digital Mafia"), a
New Jersey Limited Liability Company (the "Transaction"). The re-capitalization
occurred pursuant to the Exchange of Common Stock Agreement dated March 30, 1999
(as amended). In connection with the re-capitalization, Pride exchanged
14,800,000 shares of its Common Stock (representing approximately 64% of the
outstanding shares after the exchange) for all of the membership interests of
Digital Mafia. In addition, Pride sold all of its interest in its two operating
subsidiaries to Pride, Inc., its parent and owner of more than 50% of its
outstanding common stock prior to the transaction, for $1.00 each. As a result,
Digital Mafia became a wholly owned subsidiary of Pride. For accounting
purposes, the exchange was treated as a re-capitalization, as if Digital Mafia
acquired Pride.

     Therefore, Digital Mafia, LLC is deemed to be our predecessor and all
financial information included in this Form 10-KSB prior to June 18, 1999 is
that of Digital Mafia, LLC.

     In third quarter of 2000, DME made a strategic decision to preserve its
capital resources and to focus its efforts on the completion and expansion of
PLACES OF COLOR. DME is formerly an interactive services company that had
historically provided corporate internet strategy and development services and
advertising services primarily to clients seeking to reach the urban
African-American and Latino markets. Consistent with the new strategic
direction, the Company has not taken on any new business for its interactive
services division and terminated the Fan4Life project.

     On October 12, 2000 the Company launched PLACES OF COLOR Inc., an on-line
resource community. PLACES OF COLOR, incorporated in the state of Delaware on
January 12, 2000, is a wholly owned subsidiary of DME.

     PLACES OF COLOR has a social mission to hasten and promote computer and
Internet usage by the urban minority market. Historically, the cost of the
equipment and a perception of irrelevance have been the primary causes of the
digital divide. Our PLACES OF COLOR business model addresses both facets of this


                                       9
<PAGE>

problem with a package of bundled solutions that are not only affordable but
also relevant for the urban markets. Our members can buy a certified pre-owned
branded PC (including monitor and software), email services, customer support,
warranty and free Internet access for a minimum price of $289.

     In fulfilling our mission, we seek to assist non-profit and governmental
organizations in promoting the use of the Internet in minority communities and
actively encourage other businesses to assist us in this goal. We believe that
the strategic relationship with AOL and the launch of "Places of Color, Powered
by CompuServe" are important steps in starting to bridge the digital divide. We
are seeking to enter into other strategic relationships so we, along with other
parties, can promote computer ownership, computer literacy and technology
training in the urban minority market. We believe that increased Internet usage
in those communities will increase the potential base of customers for our
clients and prospective clients, which, in turn, will increase the number of
clients seeking our services.

Revenue Recognition

     The Company's revenues for year 2000 were derived principally from the
interactive services business. We bill for time-and-materials arrangements,
fixed-price contracts or maintenance agreements. For the year ended December 31,
2000, we used primarily a combination of fixed-price and time-and-materials
arrangements with our clients.

     We bill and recognize revenues from time-and-materials projects on the
basis of costs incurred in the period. We use a standardized estimation and work
plan development process to determine the requirements and estimated price for
each project. This process takes into account the type and overall complexity of
the project, the anticipated number of personnel of various skill sets needed
and their associated billing rates, and the estimated duration of and risks
associated with the project. Management personnel familiar with the production
process evaluate and price all project proposals.

     We recognize revenues from fixed-price projects using the
percentage-of-completion method based on the ratio of costs incurred to the
total estimated project costs. Fees are billed to the client over the course of
the project. We estimate the price for fixed-price projects using the same
methodology as time-and-materials projects. All fixed-price proposals must first
be approved by a member of our senior management team. Provisions for estimated
losses on contracts are made during the period in which such losses become
probable and can be reasonably estimated. To date, such losses have not been
significant.

     We bill and recognize revenues from maintenance agreements on a monthly
basis while the agreement is in effect. Maintenance fees currently represent a
small percentage of our overall revenues.

     Our revenues and earnings from our interactive services business have been
affected by a number of factors, including:

     -    the amount of business developed from existing relationships;

     -    our ability to meet the changing needs of the marketplace;

     -    employee retention;

     -    billing rates;

     -    our ability to deliver complex projects on time; and

     -    efficient utilization of our employees.

     The Company also earns revenues from PLACES OF COLOR through electronic
commerce transactions or checks or money orders. Revenues are recognized in the
month in which the service is performed, provided that no significant Company
obligations remain and collection if the resulting receivable is probable.

     Our expenses include direct salaries and costs, selling, general and
administrative and depreciation. Direct salaries and costs includes salaries,
benefits and incentive compensation of billable employees and other direct costs
associated with revenue generation. Sales and marketing expenses include


                                       10
<PAGE>

promotion and new business generation expenses. General and administrative
expenses include benefits costs of management, rent and human resources costs.
Professional fees include accounting, legal and consulting costs. Depreciation
expenses primarily include depreciation of technology equipment and furniture
and fixtures. Personnel compensation and facilities costs represent a high
percentage of our operating expenses and are relatively fixed in advance of each
quarter. Expenses related to PLACES OF COLOR were expensed to operations for the
year ended December 31, 2000. In 2001, we expect such expenses to decrease
significantly as we outsource or strategically partner to minimize personnel and
operational cost.

     As a strategic response to changes in the competitive environment, we may
from time to time make certain pricing, service, technology or marketing
decisions or business or technology acquisitions that could have a material
adverse effect on our business, results of operations and financial condition.
DME may also experience seasonality in its business in the future, resulting in
diminished revenues as a consequence of decreased demand for PLACES OF COLOR
during summer and year-end vacation and holiday periods.

RESULTS OF OPERATIONS

COMPARISON OF FISCAL YEAR ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999

GROSS REVENUES. In 2000, gross revenues were $677,314 as compared to $556,071 in
1999. In 2000, the revenue from the interactive service business was $603,517 an
8.5% increase from 1999, and from PLACES OF COLOR was $73,797. The majority of
the year 2000 interactive services revenue occurred during the first nine months
of the year and the increase was attributable to several factors, including an
increase in the number of clients served, sales of additional projects to
existing clients and additional service offerings. In the third quarter of year
2000 the Company made a strategic decision to not take on any more interactive
service contracts and predominantly focus on launching PLACES OF COLOR in the
fourth quarter of year 2000.

TOTAL EXPENSES. In 2000, total expenses were $4,366,312 as compared to
$1,401,407 in 1999. The increase of $2,964,905 was primarily due to an increase
in salaries and employee benefits, professional fees, consulting services and
software to build the necessary infrastructure for the anticipated expansion of
PLACES OF COLOR. In particular, salaries and employee benefits were $1,976,910
in 2000 as compared to $511,049 in 1999. The increase of $1,465,861, was the
result of hiring additional salaried employees to support our expected internal
growth and expanded service offerings. Since the fourth quarter of 2000,
approximately 85% of the salaried positions have been terminated.

NET LOSS. As a result of the foregoing, in 2000, we had a net loss of $3,629,950
as compared to a net loss of $845,336 in 1999.

LIQUIDITY

     At December 31, 2000, the Company had $18,153 of cash and cash equivalents
compared to $171,996 at December 31, 1999.

     Net cash used in operating activities was $2,294,466 for 2000 compared to
$798,505 used during 1999. In 2000, net cash used in operating activities was
primarily attributable to our net loss that resulted primarily from establishing
the necessary infrastructure for the development and expansion of PLACES OF
COLOR. During the comparable period of 1999, net cash used in operating
activities was primarily attributable to our net loss that resulted primarily
from establishing our interactive service business.

     Net cash used in investing activities was $567,706 for 2000 compared to
$45,596 used during 1999. The use of cash for investing activities in 2000 and
1999 was attributable to the acquisition of property and equipment.

     Net cash provided in financing activities was $2,705,329 for 2000


                                       11
<PAGE>

compared to $1,015,468 provided by financing activities during 1999. The cash
provided for financing activities during 2000 was primarily the result of
proceeds from the private placement of common stock and notes payable
transactions.

     Current cash on hand and cash generated from operations in 2000 was
insufficient to fund our business at our current levels and is not sufficient to
properly allow us to develop PLACES OF COLOR. Therefore, we are pursing external
financing. We cannot assure you that such additional capital will be available
when needed on terms acceptable to us, if at all. The inability to obtain such
financing, would adversely affect our ability to continue business operations.

LIQUIDITY AND CAPITAL RESOURCES

     We have substantial liquidity and capital resource requirements, but
limited sources of liquidity and capital resources. We have generated net losses
and negative cash flows from our inception and anticipate that we will
experience substantial and increasing net losses and negative cash flows for at
least year 2001. As we implement our strategy and seek to take advantage of our
market opportunity, we anticipate that our liquidity and capital resource
requirements will increase significantly.

     From our inception to date, we have relied principally upon equity and debt
investments and accounts receivables to support the development of our
businesses. We are exploring strategic alliances, significant equity investments
in the Company or a merger or the sale of the Company or significant portions of
its business.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY
         DATA

     The financial statements are included in this Form 10-KSB at pages F-1
through F-16.


                                       12

<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE

     There have been no disagreements concerning any matter of accounting
principle or financial statement disclosure between the Company and its
independent auditors.

                                    Part III

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

     Our directors are elected by the shareholders to serve until the next
annual meeting of shareholders and until their successors are elected and
qualified, or until their earlier death, retirement, resignation or removal. Our
officers hold office at the discretion of the Board of Directors.

     The Board of Directors and executive officers of DME and their respective
ages as of April 20, 2001 are set forth in the table below. Also provided is a
brief description of the business experience of each director and


                                       13
<PAGE>

executive officer and the key personnel during the past five years and an
indication of directorships (if any) held by each director in other companies
subject to the reporting requirements under the Federal securities laws.

         Name           Age                    Position
         ----           ---                    --------

    Darien Dash         29               Chairman, Director and Chief
                                         Executive Officer

    Sandi Thomas        41               Director

    Andre H. McKoy      36               Executive Vice-President - Chief
                                         Financial Officer Administration

Business Experience

     Darien Dash has served as our Chairman and Chief Executive Officer since
June 1999. He founded our predecessor, Digital Mafia LLC, in 1996 and served as
its President until its acquisition by DME Interactive. From 1993 until 1995,
Mr. Dash was the Eastern Region Marketing and Sales Director of Digital Music
Express (DMX), a division of International Cablecasting Technologies. Prior to
working at DMX, Mr. Dash worked as a marketing consultant for a number of
Fortune 500 companies, designing new media marketing and promotion plans for
their existing content. Mr. Dash received a B.A. in Political Science and
Leadership from the University of Southern California in 1993.

     Sandi Thomas has been a director of DME Interactive since June 1999. Since
1997, Ms. Thomas has been the Chief Operating Officer of MSBET, which is jointly
owned by Microsoft Corporation and Black Entertainment Television Holdings Inc.
From 1995 to 1997, Ms. Thomas was a business development manager for MSBET
focusing on the acquisition and development of online-programming from
entertainment media companies. Prior to joining MSBET, Ms. Thomas was group
product manager for Microsoft Works and has also held positions at Apple
Computer Inc., Lotus Development and IBM. Ms. Thomas earned dual BA degrees from
Stanford University in Political Science and African/African-American studies.

     Andre H. McKoy joined the company in August 1999 and has served as our
Chief Financial Officer. Prior to joining the Company, Mr. McKoy held various
corporate finance positions ranging from asset securitization to highly
leveraged financings with Citicorp, a unit of Citigroup, including Vice
President, Global Project Finance, from 1997 to 1999, Vice President, Global
Banks Industry group, from 1995 to 1997, and Assistant Vice President,
Commercial Real Estate Securitization group, from 1992 to 1995. Mr. McKoy
received a B.M.E. in Mechanical Engineering from Pratt Institute in 1986 and a
M.B.A. in Finance and Corporate Strategy from the University of Michigan, Ann
Arbor in 1992.

Effective September 2000, Thomas O'Rourke resigned from the Company and the
Board. Effective in February 2001, Kathleen McQuaid Packard resigned from the
Company.

Section 16(a) Beneficial Ownership Reporting Compliance

     Ownership of and transactions in our stock by our executive officers and
directors and owners of 10% or more of our outstanding Common Stock are required
to be reported to the Securities and Exchange Commission pursuant to Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
During the fiscal year ended December 31, 2000, all reports required to be filed
pursuant to Section 16(a) of the Exchange Act were filed in a timely manner.


                                       14
<PAGE>

Item 10. EXECUTIVE COMPENSATION

Directors' Compensation

     Directors receive no cash compensation in consideration for their serving
on the Board of Directors.

Compensation Committee

     Presently, we do not have a compensation committee. Compensation of
executive officers is determined by the board of directors. We intend to form a
compensation committee during the 2001 fiscal year but have not yet determined
who will serve on that committee.

Summary Compensation Table

     The following table provides a summary of cash and non-cash compensation
for each of the last three fiscal years ended December 31, 2000, 1999 and 1998
earned by the Chief Executive Officer.

<TABLE>
<CAPTION>
                                                                            Long Term
               Annual Compensation                                        Compensation
               -------------------                                        ------------
Name and                                                                   Securities
Principal                                              Other Annual        Underlying          All Other
Position          Year     Salary ($)   Bonus ($)  Compensation ($)(1)   Options/SARs(#)    Compensation ($)
--------          ----     ----------   ---------  -------------------   ---------------    ----------------
<S>               <C>        <C>           <C>            <C>                  <C>                <C>
Darien Dash ....  2000       63,796        0                                   0                  0
C.E.O.            1999       49,720        0
                  1998       20,000        0
</TABLE>

-------------

(1) Excludes perquisites and other personal benefits which in the aggregate do
not exceed 10% of 2000 annual salary and bonus.

(2) This information is derived from the books and records of DME Interactive
and its accounting predecessor, Digital Mafia, LLC. No information pertaining to
the executive officers of our legal predecessor, Pride Automotive Group, Inc.,
has been included.


                                       15
<PAGE>

Option Grants in Last Fiscal Year

     DME Interactive granted its employees options to acquire 4,630,750 shares
of its Common Stock in 2000. The following table contains information concerning
the grant of stock options to the Named Executive Officers during the fiscal
year ended December 31, 2000:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                                   Individual Grants
-------------------------------------------------------------------------------------
                      Number of      % of Total
                      Securities     Options
                      Underlying     Granted to     Exercise or
                      Options        Employees in   Base Price         Expiration
Name                  Granted (#)    Fiscal Year    ($/Share)             Date
--------------------- -------------- -------------- ------------ -------------------
<S>                   <C>                <C>            <C>        <C>
Darien Dash           2,400,000          51.8%          2.81       September 1, 2010
                        750,000          16.2%          4.00       September 1, 2010
                        750,000          16.2%          5.00       September 1, 2010
--------------------- -------------- -------------- ------------ -------------------
Andre H. McKoy          250,000                        0.625         August 1, 2009
                        500,000          10.8%          1.25       September 1, 2010
 --------------------- -------------- -------------- ------------ ------------------
</TABLE>

Description of 2000 Stock Option Plan

     The DME Interactive Holdings, Inc. Stock Option Plan of 2000 ("2000 Plan")
is intended to serve as an equity incentive program for management, qualified
employees, non-employee members of the Board of Directors, and independent
advisors or consultants. The 2000 Plan became effective on February 29, 2000
upon adoption by the Board of Directors. The 2000 Plan has not been ratified by
shareholders but will be submitted for shareholder approval at our 2000 annual
meeting. Options to acquire up to 3,000,000 shares of Common Stock may be
granted under the 2000 Plan. The following is a summary of the principal
features of the 2000 Plan.

     Options granted under the 2000 Plan may be Incentive Stock Options ("ISOs")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, or nonqualified stock options. However, in order to qualify as ISOs,
DME Interactive's shareholders must approve the 2000 Plan. If any outstanding
option expires or is terminated for any reason, the shares of common stock
allocable to the unexercised portion of that option may again be subject to an
option to the same optionee or to a different person eligible under this Plan.

     The 2000 Plan is to be administered a committee of two or more members of
the Board of Directors (the "Committee"). The Committee has the sole authority
to prescribe the form, content and status of options to be granted, select the
eligible recipients, determine the timing of option grants, determine the number
of shares subject to each grant, the exercise price, vesting schedule, and term
for which any option will remain outstanding; provided, however, that the
exercise price for any option granted may not be less than the fair market value
per share of the common stock at the date of grant. The Committee has the
authority to determine the terms and restrictions on all option awards granted
under the 2000 Plan, and in general, to construe and interpret any provision of
the 2000 Plan. Currently, entire board is acting as the Committee. Upon
formation of a Compensation Committee, that committee will administer the 2000
Plan.

     The exercise price of options to be granted pursuant to the 2000 Plan shall
not be less than the fair market value of DME's common stock on the date of the
grant. The exercise price for outstanding option grants under the 2000 Plan may
be paid in cash or, upon approval of the plan administrators, in shares of
common stock valued at fair market value on the exercise date, having shares
withheld from the amount of shares of common stock to be received by the
optionee, by delivery of an irrevocable subscription agreement obligating the
optionee to take and pay for the shares of common stock to be purchased within
one year of the date of such exercise, through a same-day cashless exercise
program or a reduction in the amount of any Company liability to the


                                       16
<PAGE>

optionee, or by such other consideration and method of payment for the issuance
of shares to the extent permitted by applicable laws.

     Under the 2000 Plan, no stock option can be granted for a period longer
than ten years. Unless extended by the 2000 Plan administrators until a date not
later than the expiration date of the option, the right to exercise an option
terminates ninety days after the termination of an optionee's employment,
contractual or director relationship with DME Interactive. If the optionee dies
or is disabled, the option will remain exercisable for a period of one year
after the termination of employment or relationship with DME Interactive.

     The vesting schedule for options is to be set by the 2000 Plan
administrators, provided that vesting may accelerated upon a change in control
of DME Interactive.

Option Exercises and Fiscal Year-End Values

     There were no options exercised by employees of DME Interactive in the last
fiscal year.


Employment and Termination Agreements

     In March 2000, DME entered into an employment agreement with Darien Dash to
serve as Chief Executive Officer. Mr. Dash is to be paid an annual base salary
of $160,000 plus a discretionary bonus and salary increases. The initial term of
his employment expires on March 2, 2003, provided that such term is extended by
an additional year on each anniversary of the date of the agreement unless
either party provides the other at least 90 days written notice. Mr. Dash may
terminate employment at any time upon 120 days notice. Mr. Dash also may
terminate employment, among other reasons, (i) if he is no longer elected to
DME's board of directors or as its Chief Executive Officer or (ii) within one
year of a change of control of DME. If Mr. Dash terminates employment for such
reasons, or if DME terminates Mr. Dash other than for cause, DME is required to
pay Mr. Dash a severance package consisting primarily of (i) one year's then
current salary and (ii) five times Mr. Dash's prior year's bonus (including
stock based compensation).

     DME has entered into an employment agreement with Andre H. McKoy to serve
as DME's Executive Vice President and Chief Financial Officer. Mr. Mckoy is paid
a minimum annual base salary of $125,000, effective in March 2000, plus a
discretionary bonus and salary increases. The agreement also provides for the
grant of options to acquire 250,000 shares of DME common stock . The initial
term of his employment expires on July 31, 2001, provided that the agreement can
be terminated by either party upon 30 days notice.

     Each of these employment agreements contain provisions prohibiting the
employee to directly or indirectly engage in business conduct competitive with
DME for the term of their agreement and for a period of one year after it
terminates.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information concerning stock
ownership of each person who is the beneficial owner of five percent or more of
the Company's outstanding Common Stock, each of the current directors, each of
the Named Executive Officers and all directors and executive officers as a group
as of February 29, 2000. Except as otherwise noted, each person has sole voting
and investment power with respect to the shares shown as beneficially owned.


                                       17
<PAGE>

                                                            Percentage of
Name (1)                       Number of Shares             Share Ownership (2)
--------                       ----------------             -------------------

Darien Dash (3)                   13,500,000                    49.2%

Andre H. McKoy                       750,000 (4)                 2.7%

Sandi Thomas                               0                      *

All officer and directors
as a group                        14,250,000                    51.5%
(3 people)

-------------

     (1)  Unless otherwise noted, the address of such persons is care of DME
          Interactive, 39 Broadway, New York, New York 10006

     (2)  Except to the extent such shares are included in this table as noted
          in footnotes 4, this calculation excludes the effects on total
          outstanding shares which would result from exercise of stock purchase
          options or Warrants.

     (3)  Includes the following shares for which Mr. Dash holds an irrevocable
          voting proxy (i) 1,582,000 shares owned by the Tortoise Group, LLC,
          (ii) 444,000 shares owned by Mr. Dash's mother, Linda Holmes, (iii)
          296,000 owned by Mr. Dash's wife and (iv) a total of 296,000 shares
          owned by Mr. Dash's minor children.

     (4)  Consists of 750,000 shares to be issued upon exercise of outstanding
          options, which 250,000 shares are currently exercisable.

Item 12. CERTAIN RELATIONSHIPS AND RELATED
         TRANSACTIONS

     On June 18, 1999, pursuant to an Agreement Concerning the Exchange of
Common Stock dated March 30, 1999 as amended ("Agreement"), we exchanged
14,800,000 shares of our Common Stock for all of the membership interests of
Digital Mafia Entertainment, LLC ("Digital Mafia"). Darien Dash, the principal
member of Digital Mafia received 11,840,000 of DME Interactive Common Stock.
Additionally, Mr Dash's family members received a total of 1,036,000 shares for
which he has voting control and a right of first refusal to purchase such shares
if the holder determines to sell them. Additionally, the Tortoise Group, LLC, a
financial consulting firm controlled by Thomas O'Rourke, received 1,924,000
shares of common stock for services rendered in connection with the reverse
merger. Mr. O'Rourke was not affiliated with DME at the time of the transaction.

     In connection with the foregoing, all of our directors resigned and Darien
Dash and Sandi Thomas were elected to fill the vacancies. Additionally, the then
existing officers all resigned and Mr. Dash became our Chairman and Chief
Executive Officer. At that time we changed our name from Pride Automotive Group,
Inc. to DME Interactive Holdings, Inc.

     On June 18, 1999, simultaneously with the acquisition of Digital Mafia, we
sold all of our interest in the Pride Automotive Group, Inc. subsidiaries for
$1.00 to Pride, Inc. At that time, Pride, Inc. owned in excess of 50% of our
common stock. Prior to that time, those subsidiaries, which were engaged in the
business of leasing and selling automobiles.

Item 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1)  Financial Statements

     The Consolidated Financial Statements of DME Interactive Holdings, Inc.


                                       18
<PAGE>

of December 31, 2000 and December 1999, and the related consolidated statements
of operations, changes in shareholders' deficit and cash flows for the years
ended December 31, 2000 and 1999 are included in item 7 above and are located in
this report commencing on page F-1.

(a)(2)  Exhibits

     The following exhibits are incorporated herein by reference or are filed
with this report. Exhibits filed with this report have been indicated with a **.
The documents noted with "XX" were filed with DME's Form 8-K filed on February
24, 2000.

3.1      Articles of Incorporation

3.2      Certificate of Amendment to Articles of Incorporation

3.3      Certificate of Amendment to Articles of Incorporation

3.4      Bylaws

4.1      Warrant Agreement dated as of April 26, 1996 with respect to DME
         Interactive Holdings, Inc.'s Redeemable Common Stock Purchase Warrants

10.1xx   Strategic Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc., Places of Color, Inc., America Online,
         Inc., CompuServe Interactive Services, Inc. [Portions of this
         agreement, as noted therein, have been omitted pursuant to a request
         for confidential treatment pursuant to Rule 24b-2 of the Securities and
         Exchange Act of 1934.]

10.2xx   Subscription Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc. and America Online, Inc.

10.3xx   Warrant to Purchase 4,000,000 Shares of Common Stock of DME Interactive
         Holdings, Inc., Issued February 2, 2000 to America Online, Inc.

10.4xx   Investor Rights Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc., America Online, Inc. and Darien Dash

10.5     Employment Agreement between DME Interactive Holdings, Inc. and Darien
         Dash.

10.6     Employment Agreement between DME Interactive Holdings, Inc. and Andre
         H. Mckoy dated as of August 1, 1999

10.7     Employment Agreement between DME Interactive Holdings, Inc. and
         Kathleen McQuaid dated as of September 1, 1999

10.8     DME Interactive Holdings, Inc. Stock Option Plan of 2000

10.9     Form of non-plan Employee Stock Option Plan

10.10    Warrants to purchase 500,000 shares of DME Interactive Holding Inc.'s
         Common Stock, dated January 5, 2000

10.11    Registration Rights Agreement between DME Interactive Holding Inc.'s
         and Janssen Partners, Inc. dated January 5, 2000

10.12    Registration Rights Agreement between DME Interactive Holdins, Inc. and
         certain private placement investors dated January 5, 2000.

21.1     Subsidiaries of the registrant

23.1**   Consent of Mitchell & Titus, LLP

99.1**   Risk Factors

(b)      Reports on Form 8-K

     No reports were filed on Form 8-K in DME Interactive's fiscal fourth
quarter. However, a Form 8-K/A was filed as noted below:


Item  #   Description
Date
--------------------------------------------------------------------------------

7         An amendment to the Form 8-K filed on June 25, 1999 was filed
9/7/99    for purposes of including the financial statements of Digital Mafia,
          LLC, which was acquired by DME Interactive on June 18, 1999.


                                       19
<PAGE>

                                    SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                 DME INTERACTIVE HOLDINGS,
                                   INC.


Dated: May 18,  2001             By: /s/ Darien Dash
                                     -------------------------
                                      Darien Dash, Chief Executive
                                      Officer and Chairman of the Board

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature                               Title                                     Date
---------                               -----                                     ----
<S>                                     <C>                                   <C>
/s/ Darien Dash                         Chairman and Chief                    May 18, 2001
------------------------------          Executive Officer (principal
Darien Dash                             executive officer)

                                        Director                              May 18, 2001
---------------------------
Sandi Thomas

/s/ Andre H. McKoy                      Executive Vice President              May 18, 2001
------------------------------          (principal accounting officer)
Andre H. McKoy
</TABLE>


                                       20
<PAGE>

                                  EXHIBIT INDEX

3.1      Articles of Incorporation

3.4      Certificate of Amendment to Articles of Incorporation

3.5      Certificate of Amendment to Articles of Incorporation

3.4      Bylaws

4.1      Warrant Agreement dated as of April 26, 1996 with respect to DME
         Interactive Holdings, Inc.'s Redeemable Common Stock Purchase Warrants

10.1xx   Strategic Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc., Places of Color, Inc., America Online,
         Inc., CompuServe Interactive Services, Inc. [Portions of this
         agreement, as noted therein, have been omitted pursuant to a request
         for confidential treatment pursuant to Rule 24b-2 of the Securities and
         Exchange Act of 1934.]

10.2xx   Subscription Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc. and America Online, Inc.

10.3xx   Warrant to Purchase 4,000,000 Shares of Common Stock of DME Interactive
         Holdings, Inc., Issued February 2, 2000 to America Online, Inc.

10.4xx   Investor Rights Agreement dated as of February 2, 2000 between DME
         Interactive Holdings, Inc., America Online, Inc. and Darien Dash

10.5**   Employment Agreement between DME Interactive Holdings, Inc. and Darien
         Dash

10.6**   Employment Agreement between DME Interactive Holdings, Inc. and Andre
         H. Mckoy dated as of August 1, 1999

10.7**   Employment Agreement between DME Interactive Holdings, Inc. and
         Kathleen McQuaid dated as of September 1, 1999

10.8**   DME Interactive Holdings, Inc. Stock Option Plan of 2000

10.9**   Form of non-plan Employee Stock Option Plan

10.10**  Warrants to purchase 500,000 shares of DME Interactive Holding Inc.'s
         Common Stock, dated January 5, 2000

10.11**  Registration Rights Agreement between DME Interactive Holding Inc.'s
         and Janssen Partners, Inc. dated January 5, 2000

10.12**  Registration Rights Agreement between DME Interactive Holdings, Inc.
         and certain private placement investors dated January 5, 2000

21.1**   Subsidiaries of the registrant

23.1**   Consent of Mitchell & Titus, LLP

99.1**   Risk Factors


                                       21
<PAGE>

                 DME INTERACTIVE HOLDINGS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITOR'S REPORT

           FOR THE YEARS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999

                 DME Interactive Holdings, Inc. And Subsidiaries


                                TABLE OF CONTENTS

                                                                         PAGE

Independent auditor's report                                              F-1

Consolidated balance sheets                                               F-2

Consolidated statements of operations                                     F-3

Consolidated statements of changes in shareholders' deficit               F-4

Consolidated statements of cash flows                                     F-5

Notes to consolidated financial statements                               F-6-13


                                       22
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders of
DME Interactive Holdings, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of DME Interactive
Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2000 and 1999
and the related consolidated statements of operations and comprehensive income,
changes in shareholders' deficit and cash flows for the years ended December 31,
2000, and 1999. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DME Interactive
Holdings, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and cash flows for the years ended December 31,
2000, and 1999 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and has a net stockholders' deficiency that raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 9. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

New York, New York

May 17, 2001


                                      F-1

<PAGE>

                 DME Interactive Holdings, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                  December 31,

<TABLE>
<CAPTION>
                            ASSETS


                                                         2000           1999
                                                         -----          -----
<S>                                                  <C>             <C>
 CURRENT ASSETS:

 Cash and cash equivalents                           $     18,153    $   171,996
 Accounts receivable, net                                  89,071        116,168
 Prepaid expenses                                          15,710         28,661
                                                     ------------    -----------

 Total current assets                                     122,934        316,825

 Security deposits                                        173,428        167,257
 Property and equipment, net                              531,535         62,980
                                                     ------------    -----------

 Total assets                                        $    827,897    $   547,062
                                                     ============    ===========

             LIABILITIES AND SHAREHOLDERS' DEFICIT

 CURRENT LIABILITIES:
 Accounts payable and accrued expenses                  1,563,096        460,695
 Due to affiliated company                                  1,352          1,297
 Note payable to employees                                 41,000         41,000
 Loans from shareholders, net                           1,020,462         50,000
 Note payables                                            550,000             --
                                                     ------------    -----------

 Total current liabilities                              3,175,910        552,992

 Notes payable                                             36,805         86,805
 Loans from shareholder                                        --        158,906
 Advances/Unearned revenue                                 10,000             --
                                                     ------------    -----------

 Total liabilities                                      3,222,715        798,703
                                                     ------------    -----------

 Commitments (Note 10)

 Common stock, par value $0.001; 60,000,000 shares
 authorized; 27,464,666 and 23,714,666 issued and
 outstanding as of December 31, 2000 and 1999,
 respectively                                              27,465         23,715
 Additional paid-in capital                            25,644,003        980,980
 Accumulated deficit                                   (4,886,286)    (1,256,336)
Less deferred strategic agreement expenses            (23,180,000)            --
                                                     ------------    -----------

 Total shareholders' deficit                           (2,394,818)      (251,641)
                                                     ------------    -----------

 Total liabilities and shareholders' deficit         $    827,897    $   547,062
                                                     ============    ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-2

<PAGE>


                 DME Interactive Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        For the years ended December 31,

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

GROSS REVENUES
Interactive Services                             $    603,517      $    549,336
Places of Color                                        73,797      $         --
                                                 ------------      ------------
   Total gross revenues                               677,314           549,336

COST OF OPERATIONS
Cost of goods sold                                     81,518                --
Salaries and employee benefits                      1,976,910           511,049
Project expense                                       183,324            84,912
Consulting services                                   139,695            72,553
                                                 ------------      ------------

   Total cost of operations                         2,381,447           668,520
                                                 ------------      ------------

(LOSS) FROM OPERATIONS                             (1,704,133)         (119,184)

GENERAL AND ADMINISTRATIVE
  EXPENSES                                          1,976,678           719,952
                                                 ------------      ------------
LOSS BEFORE OTHER INCOME (EXPENSES)                (3,680,811)         (839,136)
                                                 ------------      ------------
OTHER INCOME (EXPENSES)
Rental Income                                          55,000                --
Interest income                                         4,048             6,735
Interest expense                                       (8,187)          (12,935)
                                                 ------------      ------------
                                                       50,861            (6,200)
                                                 ------------      ------------
NET LOSS                                         $ (3,629,950)     $   (845,336)
                                                 ============      ============
NET LOSS PER SHARE:
Basic                                            $      (0.14)     $      (0.04)
                                                 ============      ============
Diluted                                          $      (0.08)     $      (0.03)
                                                 ============      ============

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:

Basic                                              25,982,250        23,364,403
                                                 ------------      ------------

Diluted                                            48,421,000        27,469,403
                                                 ------------      ------------

          See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>


                 DME Interactive Holdings, Inc. and Subsidiaries
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                      Additional                    Deferred           Total
                                   Common Stock        Paid-in      Accumulated     Strategic      Shareholders'
                                 Number      Amount    Capital        Deficit        Expense          Deficit
                               ---------    -------   -----------   -----------    ------------    -------------
<S>                            <C>          <C>       <C>           <C>            <C>             <C>
Balance - January 1, 1999              --        --            --      (411,000)             --        (411,000)
                               ----------   -------   -----------   -----------    ------------    ------------

Common shares issued           23,714,666    23,715       980,980            --              --       1,004,695

Net loss                               --        --            --      (845,336)             --        (845,336)
                               ----------   -------   -----------   -----------    ------------    ------------

Balance, December 31, 1999     23,714,666   $23,715   $   980,980   $(1,256,336)             --    $   (251,641)

Common shares issued to         1,250,000     1,250            --            --              --           1,250
strategic agreement

Stock issuance for strategic
agreement                              --        --    11,210,000            --              --      11,210,000

Strategic agreement deferred
expense recognition                    --        --            --            --     (11,210,000)    (11,210,000)

Warrants issuance for
strategic agreement                    --        --    11,970,000            --     (11,970,000)             --

Common Shares issued            2,500,000     2,500     1,483,023            --              --       1,485,523

Net loss                               --        --            --   $(3,629,950)             --    $ (3,629,950)

Balance, December 31, 2000     33,264,666   $27,465   $25,644,003   $(4,886,286)   $(23,180,000)   $ (2,394,818)
                               ==========   =======   ===========   ===========    ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>

                 DME Interactive Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the years ended December 31,

<TABLE>
<CAPTION>
                                                        2000           1999
                                                    ------------   ------------
<S>                                                 <C>            <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:

Net loss                                            $(3,629,950)   $  (845,336)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation                                             99,151         13,093
(Increase) decrease in accounts receivable               27,097       (105,571)
(Increase) in prepaid expenses                           12,951        (28,661)
(Increase) in security deposits                          (6,171)      (167,257)
Increase (decrease) in due to
affiliated company                                           55             --
Increase (decrease) in accounts payable               1,102,401        373,423
Decrease in advances/unearned revenue                   100,000        (38,196)
                                                    -----------    -----------

Net cash used in operating activities                (2,294,466)      (798,505)
                                                    -----------    -----------

INVESTING ACTIVITIES
Purchases of property and equipment                    (567,706)       (45,596)
                                                    -----------    -----------

Net cash used in investing activities                  (567,706)       (45,596)
                                                    -----------    -----------

FINANCING ACTIVITIES
Proceeds from notes payable and shareholder loans       600,000        404,275
Payments on notes payable and shareholder loans         (80,000)      (393,502)
Proceeds from issue of shares - gross                 2,410,000      1,111,095
Payments of capital lease obligation                    (81,903)            --
Cost of issuing shares                                 (139,768)      (106,400)
                                                    -----------    -----------

Net cash provided by financing activities             2,708,329      1,015,468
                                                    -----------    -----------

Net increase (decrease) in cash
and cash equivalents                                   (153,843)       171,367

CASH AND CASH EQUIVALENTS:
Beginning of period/year                                171,996            629
                                                    -----------    -----------

End of period/year                                  $    18,153    $   171,996
                                                    ===========    ===========

Supplemental disclosure of
cash flow information:
Cash paid for interest                              $     8,187    $     1,325
                                                    ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5

<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Organization and Business

          Pride Automotive Group ("Pride") was incorporated in 1995 in the State
          of Delaware as a "C" Corporation. On June 18, 1999, Pride changed its
          name to DME Interactive Holdings, Inc. ("DME or Company") following a
          reverse merger (re-capitalization) with Digital Mafia Entertainment,
          LLC. ("Digital Mafia"), a New Jersey Limited Liability Company (the
          "Transaction"). The re-capitalization occurred pursuant to the
          Exchange of Common Stock agreement dated March 30, 1999 (as amended).
          In connection with the re-capitalization, Pride exchanged 14,800,000
          shares of its Common Stock (representing approximately 64% of the
          outstanding shares after the exchange) for all of the membership
          interests of Digital Mafia. In addition, Pride sold all of its
          interest in its two operating subsidiaries to Pride, Inc., its parent
          and owner of more than 50% of its outstanding common stock prior to
          the transaction, for $1.00 each. As a result, Digital Mafia became a
          wholly owned subsidiary of Pride. For accounting purposes, the
          exchange was treated as a re-capitalization, as if Digital Mafia
          acquired Pride.

          Places of Color, incorporated in the state of Delaware on January 12,
          2000, is a wholly owned subsidiary of DME.

          Places of Color is a social mission to hasten and promote computer and
          Internet usage by the urban minority market. Historically, the cost of
          the equipment and a perception of irrelevance have been the primary
          causes of the digital divide. Our Places of Color business model
          addresses both facets of this problem with a package of bundled
          solutions that are not only affordable but also relevant for the urban
          markets. Our members can buy a certified pre-owned branded PC
          (including monitor and software), email services, customer support,
          warranty and free Internet access for a minimum price of $289.

          During 2000, DME made a strategic decision to preserve its capital
          resources and to focus its efforts on the completion and expansion of
          Places of Color. DME is formerly an interactive services (sometimes
          called advanced technology) company that had historically provided
          corporate internet strategy and development services and advertising
          services primarily to clients seeking to reach the urban
          African-American and Latino markets ("urban markets"). Consistent with
          the new strategic direction, the Company has not taken on any new
          business for its interactive services division and terminated the
          Fan4Life project.

          On October 12, 2000 the Company launched an on-line resource
          community, Places of Color Inc. ("Places of Color").

          On February 2, 2000, DME and Places of Color entered into a "strategic
          agreement" with CompuServe Interactive Service, Inc. (" Compuserve"),
          a subsidiary of America Online, Inc. ("AOL"), an internet service
          provider("ISP"). The agreement expires 18 months after the launch date
          and requires the ISP to provide hosting and other technical and
          support services for a website customized service for internet users
          from the urban market. The Places of Color/Compuserve launch date is
          expected to commence in July of 2001. Places of Color will receive a
          stated percentage of the monthly subscription fees received by the
          ISP. DME has issued 1,250,000 common shares to the ISP. In addition to
          the shares, DME

                                       F-6

<PAGE>

          DME Interactive Holdings, Inc. And Subsidiaries
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
        (Continued)

          has issued a warrant for 4,000,000 additional shares to the ISP at a
          purchase price of $8.563 per share. The warrant only becomes
          exercisable if, at the end of the eighteen-month term, the parties
          negotiate an extension of the strategic agreement or if the parties
          entered into a substantially similar agreement. On May 24, 2000, DME
          notified AOL that DME had unilaterally decreased the exercise price to
          $3.00, and waived all conditions to exercise, which changes were
          effective through July 22, 2000. AOL did not exercise any part of the
          warrant by July 22, 2000 and the warrant is now exercisable on its
          original terms.

          Principles of Consolidation

          The accompanying consolidated financial statements include the
          accounts of DME and its wholly owned subsidiaries, Digital Mafia, DME
          39 Broadway Corporation and ("DME 39") and Places of Color. All
          material intercompany transactions and balances have been eliminated
          in consolidation.

          Basis of Presentation

          Digital Mafia is deemed to be the predecessor company and all
          financial information prior to June 18, 1999 is that of Digital Mafia.

          Fixed Assets

          Fixed assets are recorded at cost and are depreciated on the
          straight-line basis over the estimated useful lives of the assets.

          Use of Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amount of assets and liabilities and disclosures of contingent assets
          and liabilities at the date of the consolidated financial statements
          and the reported amounts of revenues and expenses during the reported
          period. Actual results could differ from those estimates.

          Statement of Cash Flows

          For financial statement purposes, cash in demand deposit accounts and
          money market accounts with maturities of ninety days or less are
          considered to be cash equivalents.

          Non Cash Transactions

          During the years ended December 31, 2000 and 1999, DME issued
          approximately 1,000,000 and 120,000 common shares with a total market
          value of approximately $250,000 and $120,000, respectively, to
          certain employees, consultants and investors in lieu of wages and for
          services performed for DME or in connection with certain loans
          obtained. DME did not receive cash for any of the shares issued.

          Allowance for Doubtful Accounts

          The Company establishes an allowance for uncollectible


                                       F-7

<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
        (Continued)


          accounts receivable based on historical collection experience and
          management's evaluation of collectibility of outstanding accounts
          receivable. Accounts receivable is shown net of allowance for doubtful
          accounts in the accompanying consolidated financial statements. The
          allowance for uncollectible accounts receivable as of December 31,
          2000, and December 31, 1999 was $87,179 and $50,030, respectively.

          Revenue Recognition

          The Company recognizes project revenues based on the percentage of
          completion method. Maintenance revenue is recognized on a monthly
          basis while the relevant maintenance agreement is in effect, and the
          Company has performed the agreed-upon maintenance services. For the
          year ended December 31, 2000, revenues include sales of pre-owned
          computers.

          Reclassification

          Certain reclassifications have been made to the prior period's
          financial statements in order to conform them to the classifications
          used for the current year.

NOTE 2. INCOME TAXES:

          DME uses the asset and liability method of accounting for income
          taxes. At December 31, 2000, and December 31, 1999, deferred tax asset
          is the result of operating losses. As of December 31, 2000 and
          December 31, 1999, a 100% valuation allowance was provided against the
          deferred tax asset.

          The gross amounts of deferred tax assets was as follows:

                             December 31, 2000     December 31, 1999
                             -----------------     -----------------
          Gross amount          $ 1,451,980           $ 335,164
          Valuation allowance    (1,451,980)           (335,164)
                                -----------           ---------
                                $        --           $      --
                                ===========           =========

          DME has operating loss carryforwards available at December 31, 2000
          and December 31, 1999 of $4,467,859 and $837,909, respectively that
          may be applied against future taxable income. The loss carryforwards
          expire in year 2018.

NOTE 3. PROPERTY AND EQUIPMENT, NET:

          Property and equipment, net is comprised of the following:


                                       F-8

<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                    Estimated      December 31,   December 31,
                                    Useful Life        2000           1999
                                    -----------        ----           ----

          Office equipment               5          $ 312,312       $74,952
          Furniture and fixtures         5            104,064         6,490
          Software                       3            237,400         4,628
                                                    ---------       -------
                                                      653,776        86,070
          Accumulated  depreciation                  (122,241)      (23,090)
                                                    ---------       -------

                                                    $ 531,535       $62,980
                                                    =========       =======


          Depreciation expense for the year ended December 31, 2000 and 1999 was
          $99,151 and $13,093, respectively.

NOTE 4. NOTES PAYABLE:

          At December 31, 1999, DME had two notes payable in the amounts of
          $50,000 and $36,805 outstanding. The $50,000 note bears interest at a
          rate of 9% per annum and matures on March 21, 2001. The $36,805 note
          bears interest at a rate of 9% per annum and has no stated maturity
          date. Both loans were still outstanding as of December 31, 2000. The
          Company is currently in negotiations to extend the maturity date.

          On June 19, 2000, and July 5, 2000, the Company borrowed $200,000 and
          $300,000, pursuant to promissory notes. The maturity date of both
          notes is June 16, 2001 and bear interest at the annual rate of 10%. In
          connection with a $500,000 loan made by an affiliate of a NASD
          licensed broker-dealer and a proposed private placement by such
          broker-dealer (the "Proposed Private Placement"), the Company was to
          issue 6,000,000 shares of the Company Common Stock to the affiliate.
          Disagreements arose between the affiliate, the broker-dealer and the
          Company regarding the compensation for services in connection with the
          Proposed Private Placement, including whether the affiliate was
          entitled to the shares. As a result, the Company has not issued the
          shares and the affiliate has asserted a claim therefore. The Company
          is currently negotiating with the broker-dealer to resolve the
          compensation disagreement for the Proposed Private Placement.

NOTE 5. STOCKHOLDERS' EQUITY:

          Authorized Common and Preferred Shares

          On April 7, 2000, DME applied for and obtained an amended and restated
          Certificate of Incorporation creating a new class of two million
          preferred shares and increasing the Company's authorized common shares
          to sixty million.

          Equity Financing:

          In January 2000, the Company issued 500,000 shares of Common Stock at
          par value and 500,000 warrants at a $2.00 strike price, and 500,000
          shares at $2.00 per share in a private placement to satisfy our
          working capital requirements. Gross proceeds totaled $1,000,000.

          On May 31, 2000, the Company borrowed $100,000 pursuant to a
          promissory note. The holder has agreed to convert the note, which
          became due on September 30, 2000 into 300,000 common shares.


                                       F-9
<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          In October 2000, the Company issued 200,000 shares of Common Stock at
          par value and 250,000 warrants at a $2.00 strike price in a private
          placement. Gross proceeds totaled $100,000.

          In October 2000, the Company issued 400,000 shares of Common Stock at
          par value and 400,000 warrants at a $0.60 strike price in a private
          placement to satisfy our working capital requirements. Gross proceeds
          totaled $200,000.

          Employee Stock Options

          DME has an incentive stock option plan (the "2000 Plan") for
          employees. On May 8, 2000, the Board of Directors increased the
          maximum shares of common stock that may be issued under the 2000 Plan
          to 12,000,000 from 3,000,000. The option price, number of shares and
          grant date are determined at the discretion of the Board of Directors.
          Options granted under the 2000 Plan are exercisable at dates
          determined by the Board of Directors. If an employee is terminated,
          all unexercised options expire automatically. An employee has ninety
          days from the date of voluntary termination to exercise options to the
          extent such options were exercisable at the time of termination. As of
          December 31, 2000, no employee compensation expenses were incurred nor
          were any options exercised. As of December 31, 2000, 4,630,750 options
          had been granted to ten employees.

          At December 31, 1999, the Company had a non-incentive stock optio plan
          (the "1999 Plan") under which a maximum of 3,000,000 shares of common
          stock could be issued to employees and non-employees. As of December
          31, 2000, a total of 1,064,500 options had been granted to eight
          employees of the Company under the 1999 Plan.


                                      F-10

<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. STOCKHOLDERS' EQUITY: (Continued)

          Below is a summary of option activity for the period ended December
          31, 2000, and 1999:

<TABLE>
<CAPTION>
                                                                                        Weighted
                                                        Options                         Average
                                                       Available          Number        Exercise
                                                       For Grant        of Options       Price
                                                       ---------        ----------       -----
                 <S>                                  <C>               <C>           <C>
                  Balance, December 31, 1998                  --                --    $       --
                    Granted                                   --         1,210,000          1.79
                    Exercised                                 --                --            --
                                                      ----------        ----------    ----------
                  Balances, December 31, 1999                 --         1,210,000          1.79
                    Granted                                   --         4,630,750          3.11
                    Exercised                                 --                --            --
                     Forfeited                                --           145,500          0.97
                                                      ----------        ----------    ----------
                  Balances, December 31, 2000                 --         5,695,250    $     2.90
                                                      ==========        ==========    ==========
</TABLE>

          The average remaining contractual life of options outstanding as of
          December 31, 2000 and December 31, 1999 was 1.78 years and 1.60 years,
          respectively.

          The actual fair market value of common shares as of the date of grant
          were equal to or below the exercise price of the stock options.
          Accordingly, the Company did not incur any


                                      F-11
<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          compensation expense as of December 31, 2000 and December 31, 1999.

          Pro forma information regarding net loss and loss per share is
          required by SFAS No. 123, "Accounting for Stock-Based Compensation"
          ("SFAS 123"), and has been determined as if the Company had accounted
          for its employee stock options under the fair value method of that
          statement. The fair value for these options was estimated at the date
          of grant using a Black-Scholes option pricing model with the following
          weighted average assumptions for December 31, 2000 and December 31,
          1999.

                                                  December 31,     December 31,
                                                      2000             1999
                                                      ----             ----

          Risk-free interest rate                     6.65%         5.85-6.65%
          Dividend yield                                --                 --
          Volatility factor                          0.680              0.680
          Weighted average expected life            5 years           5 years

          The Black-Scholes option valuation model was developed for use in
          estimating the fair value of traded options which have no vesting
          restrictions and are fully transferable. In addition, option valuation
          models require the input of highly subjective assumptions including
          the expected stock price volatility. Because the Company's employee
          stock options have characteristics significantly different from those
          of traded options, and because changes in the subjective input
          assumptions can materially affect the fair value estimate, in
          management's opinion, the existing models do not necessarily

NOTE 5. STOCKHOLDERS' EQUITY: (Continued)

          provide a reliable single measure of the fair value of its employee
          stock options.

          Had SFAS 123 been applied, the Company's pro forma net loss and loss
          per share would be as follows:

                                           December 31,     December 31,
                                               2000             1999
                                               ----             ----

          Net loss - as reported         $   (3,629,950)   $    (845,336)
          Net loss - pro forma           $   (3,629,950)   $  (5,428,504)
          Loss per share - as reported   $        (0.14)   $       (0.04)
          Loss per share - pro forma     $        (0.14)   $       (0.03)
          Weighted average fair value
            of options granted during
            the year                     $        2.904    $        3.78

          Senior Management Incentive Plan

          At December 31, 2000 and 1999, the Company had 300,000 warrants
          outstanding in connection with a Senior Management Incentive Plan.

          Strategic Agreement

          In February 2000, the Company entered into a strategic agreement with
          Compuserve, a subsidiary of AOL. In connection with this agreement the
          Company issued 1,250,000 shares of the Company's


                                      F-12
<PAGE>


                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          Common Stock to AOL valued at $11,210,000, based upon the trading
          price of the stock on the issuance date. In addition the Company also
          issued 4,000,000 options with an exercise price of $8.563 that are
          exercisable at the end of the term of the strategic agreement. The
          value of the warrants on the issuance date was $11,970,000 using the
          Black-Scholes Option-Pricing Model.

          Warrants

          As of December 31, 2000, DME had 2,595,000 redeemable purchase
          warrants outstanding. The warrants expiration date and strike price
          has been modified. Each warrant allows the holder to purchase one
          share of the Company's common stock at a price of $3.00. DME may
          redeem the warrants at anytime upon 30 days' written notice at a price
          of $0.05 per warrant subject to certain conditions. Holders may
          exercise their warrants any time prior to April 23, 2003. In addition,
          DME has 10,520,000 redeemable warrants exercisable at various prices
          ranging from $0.15 to $8.583 outstanding as of December 31, 2000. The
          warrants expire at various periods ranging from December 2001 to
          October 2002.

NOTE 6. NET LOSS PER COMMON SHARE:

          The following table presents the calculation of basic and diluted net
          loss per common share required under SFAS 128:


                                               Year            Year
                                              Ended            Ended
                                            December 31,    December 31,
                                               2000            1999
                                               ----            ----

          Net loss                         ($ 3,629,950)   ($   845,336)
                                           ============    ============

          Weighted average shares -
            basic                            25,982,250      23,364,403

          Effect of dilutive securities:
          Warrants and employee
             stock options                   22,438,750       4,105,000
                                           ------------    ------------

          Weighted average shares -
            diluted                          48,421,000      27,469,403
                                           ------------    ------------

          Net loss per common
             share - basic                 ($      0.14)   ($     0.036)
                                           ------------    ------------

          Net loss per share - diluted     ($      0.08)   ($     0.031)
                                           ------------    ------------

NOTE 7. RELATED PARTY TRANSACTIONS:

          Due to Affiliated Company

          Digital Mafia shares office space with an affiliated company. Certain
          administrative expenses incurred by Digital Mafia are paid by the
          affiliated company. The amount payable to the affiliated company as of
          December 31, 2000 and December 31, 1999 was $1,352 and $1,297,
          respectively.

          Note Payable to Employee

          DME also issued a $41,000 note payable to an employee pursuant to an
          asset purchase agreement executed on September 1, 1999. There is no


                                      F-13
<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          stated interest rate. In February 2001, the note was forgiven by the
          employee.

          Loans from Shareholders

          On May 31, 2000, the Company borrowed $100,000 from a shareholder,
          pursuant to a promissory note. The note has an interest rate of 10%
          and matures on June 15, 2001. The Company repaid $80,000 of the note
          in July 2000.

          As of December 31, 2000, the Company owes its principal shareholder a
          total of $920,462, pursuant to promissory notes. As presently
          modified, $770,000 of the notes has an interest rate of 10% and
          $167,887 of the notes has an interest rate of 9%. Each note matures on
          December 31, 2001. The Company is currently in negotiations to convert
          a majority of the principal shareholders notes into the Company's
          common stock .

          In August 2000, the Company borrowed $50,000 from an employee,
          pursuant to a promissory note. The Company issued in connection with
          the note 100,000 shares of the Company's Common Stock. The note has an
          interest rate of 10% and matures on July 31, 2001.

          In December 2000, the Company borrowed $30,000 from an employee,
          pursuant to two promissory notes. The note has an interest rate of 13%
          and matures on July 31, 2001.

NOTE 8. COMMITMENTS AND CONTINGENCIES:

          Consulting Agreement

          Effective April 16, 2001, the Company entered into a one year
          agreement with Tribe Communications, Inc. ("TCI") whereby the Company
          will be provided with services ranging from capital formation,
          financial public relations, retail support, audio webcasting, mergers
          and acquisitions, strategic partnering and such other matters as
          requested. This agreement may be extended by mutual written agreement
          of the parties. This agreement is cancelable quarterly so long as
          written notice is given 30 days prior to termination. As consideration
          for the services provided, the Company will be issuing 750,000 shares
          of the Company's common stock as the initial payment. Upon completion
          of the first webcast, the Company will issue 675,000 of unregistered
          shares with piggy-back registration rights. Due the first day of
          months four and seven, 675,000 unregistered shares with piggy-back
          registration rights. This totals to 2,775,00 shares of the Company's
          common stock. The Company will pay TCI a 5% finder's fee for a direct
          investment made by a third party investor either introduced to the
          Company by TCI or which contacted the Company as a result of TCI's
          efforts. As consideration for the services provided the Company shall
          pay and after a minimum capital investment is made into the Company,
          the Company shall pay a monthly fee of $6,750.

          On October 12, 2000, the Company entered into a six month consulting
          agreement with The Sabatier Group, Inc. ("Sabatier"), whereby the
          Company will be provided with debt financing, equity funding,
          strategic partners, such other matters as requested. As of May 2001,
          the agreement has not been extended. Per the agreement, Sabatier will
          be entitled to 5% of the cash fee for any financing raised or
          initiated by Sabatier for 30 months after the termination of this
          agreement. Sabatier will be entitled to 5% cash fee based on the gross
          revenues derived from all strategic partnership contracts initiated by
          Sabatier for 30 months after the termination of this agreement.
          Sabatier will be entitled to 5% of the capital stock for any financing
          obtained as a result of Sabatier's effort 30 months after the
          termination of this


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<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          agreement. To date, no financing or strategic partnerships agreements
          have been consummated for the Company on behalf of Sabatier.

          On September 23, 1999, DME 39 entered into two non-cancelable office
          space rental lease agreements with a real estate company. The
          agreements became effective in March 2000 and expires in July 2010.

          DME signed an absolute and unconditional deed guaranteeing the full,
          prompt and complete performance of all of the terms, covenants and
          conditions of the lease agreements entered into by DME 39. The
          guaranty expires if, at any time, DME and/or DME 39 pays the landlord
          base rent equal to $450,000 or more under the above leases.

          In March 2001, DME 39 signed a release form to terminate the lease
          agreements. As a condition of the agreement, the landlord has retained
          the DME security deposit of $167,257. The landlord has not requested
          any other financial obligations.

          DME has a non-cancelable office space rental lease agreement which
          expires on September 30, 2001. DME shares the office space with an
          affiliated company and allocates a certain portion of the rental costs
          and expenses to the affiliated company (See Note 7).

          Future minimum lease payments under the lease agreements are as
          follows:

          For the Year Ending December 31,
          --------------------------------
                             2000                    $       212,980
                             2001                             93,850
                                                     ---------------

                                 Total               $       306,830
                                                     ===============

          Total rent expense under all operating leases amounted to $173,251,
          and $28,000 for the year ended December 31, 2000 and 1999,
          respectively.

          Litigation

          The Receiver of Autokraft Limited and ACL(1996) Limited, both in
          Administrative Receivership in the United Kingdom have asserted a
          claim against us for monies allegedly due under (i) a guarantee
          agreement and (ii) a variation agreement executed by us pursuant to
          which the loan allegedly guaranteed was restructured. The amount
          claimed to be due is British pounds 281,107 plus interest. The
          obligations arise out of the purchase by a former subsidiary of ours,
          when we were Pride Automotive Group, Inc. ("PAG"), of certain assets
          of the claimants. We are currently investigating the claim; however,
          we believe that the existence of the liability for the claim
          constitutes a breach of the representations and warranties made to
          Digital Mafia in the agreement pursuant to which it was acquired in
          the re-capitalization. Therefore, we have asserted a claim for
          demnification against Pride (now known as Mason Hill Holdings, Inc.),
          the then parent of PAG, who, in the exchange agreement for the
          acquisition, joined in the foregoing representations and agreed to
          indemnify Digital Mafia in connection with any breach of those
          representations. If it is determined that we are liable to the
          Receiver, we intend to vigorously assert our rights against Pride.


                                      F-15
<PAGE>

                 DME Interactive Holdings, Inc. And Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.  GOING CONCERN:

          The accompanying financial statements have been prepared assuming the
          Company will continue as a going concern. A number of factors,
          including the Company's history of significant losses, negative
          working capital, and accumulated deficit raise substantial doubts
          about the Company's ability to continue as a going concern. As of
          December 31, 2000, the Company incurred a net loss of $3,629,950 and
          $845,336 for the years ended December 31, 2000 and 1999, respectively.

          In this regard, management is proposing to raise any necessary
          additional funds not provided by its planned operations through
          additional sales of its equity securities and loans.

          The ability of DME to continue as a going concern is dependent on the
          success of management's plan and their ability to raise additional
          capital. The consolidated financial statements do not include any
          adjustments that might be necessary if DME is unable to continue as a
          going concern.


                                      F-14