UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

|X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the quarterly period ended September 30, 2003.

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from ___________________ to __________________

                         Commission file number: 0-26525

                              BREDA TELEPHONE CORP.
        (Exact name of small business issuer as specified in its charter)

                    Iowa                                    42-0895882
       (State or other jurisdiction                       (I.R.S. Employer
     of incorporation or organization)                   Identification No.)

                  112 E. Main, P.O. Box 190, Breda, Iowa 51436
                    (Address of principal executive offices)

                                 (712) 673-2311
                          (Issuer's telephone number)

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 31,741 shares of common stock,
no par value, at September 30, 2003.

      Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                            September 30,       December 31,
                                                                 2003              2002
                                                             (Unaudited)          (Audited)
                                                            -------------      -------------
<S>                                                         <C>                <C>
                           ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                 $   1,107,354      $   1,032,734
  Temporary investments                                           141,528            459,059
  Accounts receivable                                             645,444            835,667
  Current portion of note receivable                              144,000            116,000
  Interest receivable                                              57,682             68,053
  Prepaid income taxes                                            157,685                 --
  Inventories                                                      99,686             91,114
  Other                                                            18,823             85,025
                                                            -------------      -------------
                                                                2,372,202          2,687,652
                                                            -------------      -------------

OTHER NONCURRENT ASSETS
  Long-term investments                                         3,718,913          3,136,576
  Other investments:
    Investments in unconsolidated affiliates at equity          3,846,447          3,454,159
    Long-term investments at cost                                 853,581            807,564
  Goodwill                                                        896,812            896,812
  Intangibles                                                       1,556              1,556
  Note receivable                                                 287,881            512,792
                                                            -------------      -------------
                                                                9,605,190          8,809,459
                                                            -------------      -------------

PROPERTY AND EQUIPMENT                                          5,307,346          5,190,176
                                                            -------------      -------------

      TOTAL ASSETS                                          $  17,284,738      $  16,687,287
                                                            =============      =============
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                       2
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  September 30,     December 31,
                                                                       2003             2002
                                                                   (Unaudited)       (Audited)
                                                                  -------------    -------------
<S>                                                               <C>              <C>
                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Current portion of long-term debt                              $     141,825    $     134,981
   Accounts payable                                                     200,264          262,544
   Accrued taxes                                                         97,499          167,079
   Other                                                                126,096          174,534
                                                                  -------------    -------------
                                                                        565,684          739,138
                                                                  -------------    -------------

LONG-TERM DEBT, less current portion                                  1,670,403        1,777,644
                                                                  -------------    -------------

DEFERRED CREDITS                                                        501,228          105,534
                                                                  -------------    -------------

STOCKHOLDERS' EQUITY
   Common stock - no par value, 5,000,000 shares authorized,
       31,741 and 33,000 shares issued and outstanding
      at $303 and $280 stated value, respectively                     9,617,523        9,240,000
   Retained earnings                                                  4,929,900        4,824,971
                                                                  -------------    -------------
                                                                     14,547,423       14,064,971
                                                                  -------------    -------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $  17,284,738    $  16,687,287
                                                                  =============    =============
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                       3
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         For the Three and Nine Months Ended September 30, 2003 and 2002

<TABLE>
<CAPTION>
                                            For the Three Months Ended           For the Nine Months Ended
                                               2003              2002              2003             2002
                                           -----------       -----------       -----------       -----------
<S>                                        <C>               <C>               <C>               <C>
OPERATING REVENUES                         $ 1,576,678       $ 1,443,988       $ 4,784,677       $ 4,257,712
                                           -----------       -----------       -----------       -----------

OPERATING EXPENSES
  Cost of services                             628,321           544,040         1,948,683         1,633,857
  Depreciation and amortization                256,143           260,996           761,300           775,502
  Selling, general and administration          426,930           390,813         1,349,445         1,326,013
                                           -----------       -----------       -----------       -----------
                                             1,311,394         1,195,849         4,059,428         3,735,372
                                           -----------       -----------       -----------       -----------

OPERATING INCOME                               265,284           248,139           725,249           522,340
                                           -----------       -----------       -----------       -----------

OTHER INCOME (EXPENSES)
  Interest and dividend income                  50,003            55,931           165,764           180,805
  Interest expense                             (33,925)          (36,352)         (103,609)         (110,843)
  Income from equity investments               313,763           354,072           720,687           882,513
  Other, net                                    16,591            (3,374)           10,530           (11,937)
                                           -----------       -----------       -----------       -----------
                                               346,432           370,277           793,372           940,538
                                           -----------       -----------       -----------       -----------

INCOME BEFORE INCOME TAXES                     611,716           618,416         1,518,621         1,462,878
                                           -----------       -----------       -----------       -----------

INCOME TAXES                                   216,196           276,658           560,580           589,598
                                           -----------       -----------       -----------       -----------

INCOME BEFORE CUMULATIVE EFFECT
  OF ACCOUNTING CHANGE                         395,520           341,758           958,041           873,280
                                           -----------       -----------       -----------       -----------

CUMULATIVE EFFECT OF ACCOUNTING
  CHANGE, NET OF TAX                                --                --                --           (70,768)
                                           -----------       -----------       -----------       -----------

NET INCOME                                 $   395,520       $   341,758       $   958,041       $   802,512
                                           ===========       ===========       ===========       ===========

NET INCOME PER COMMON SHARE
  BEFORE CUMULATIVE EFFECT
  OF ACCOUNTING CHANGE                     $     12.42       $     10.20       $     29.55       $     25.48

CUMULATIVE EFFECT OF
  ACCOUNTING CHANGE, NET
  OF TAX                                            --                --                --             (2.07)
                                           -----------       -----------       -----------       -----------

NET INCOME PER COMMON SHARE                $     12.42       $     10.20       $     29.55       $     23.41
                                           ===========       ===========       ===========       ===========
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                       4
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                         Common Stock                   Retained
                                                    Shares            Amount            Earnings             Total
                                                   --------        ------------       ------------       ------------
<S>                                                  <C>           <C>                <C>                <C>
Balance at December 31, 2001 (Audited)               35,025        $  9,036,450       $  4,475,000       $ 13,511,450

  Comprehensive Income:
    Net income                                                                           1,218,421          1,218,421

  Dividends paid                                                                          (104,214)          (104,214)

  Common stock redeemed, net                         (2,025)           (560,686)                             (560,686)

  Stated value stock adjustment                                         764,236           (764,236)
                                                   --------        ------------       ------------       ------------

Balance at December 31, 2002 (Audited)               33,000           9,240,000          4,824,971         14,064,971

  Comprehensive Income:
    Net income                                                                             958,041            958,041

Dividends paid                                                                             (98,436)           (98,436)

  Common stock redeemed, net                         (1,259)           (377,153)                             (377,153)

Stated value stock adjustment                                           754,676           (754,676)
                                                   --------        ------------       ------------       ------------

Balance at September 30, 2003 (Unaudited)            31,741        $  9,617,523       $  4,929,900       $ 14,547,423
                                                   ========        ============       ============       ============
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                       5
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                  2003              2002
                                                                              -----------       -----------
<S>                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                 $   958,041       $   802,512
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                                               761,300           775,502
      Amortization of investment tax credits                                       (7,327)           (7,327)
      Deferred income taxes                                                       350,684            69,143
      Cumulative effect of accounting change                                           --           119,945
      Note receivable discount                                                    (11,088)          (13,191)
      Equity income in unconsolidated affiliates, net of distributions
        received of $328,899 and $120,349 in 2003 and 2002, respectively         (391,788)         (757,164)
      Changes in operating assets and liabilities:
        (Increase) decrease in assets                                             100,539            79,824
      Increase (decrease) in liabilities                                         (180,298)           (1,691)
                                                                              -----------       -----------
Net cash provided by operating activities                                       1,580,063         1,067,553
                                                                              -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                          (878,470)         (637,804)
   Cost of removing plant, net of salvage                                              --             3,553
   Purchase of investments                                                     (1,014,648)         (882,978)
   Proceeds from the sale of investments                                          749,842           539,645
   Proceeds from note receivable                                                  208,000                --
   Purchase of other investments                                                     (500)               --
   Sale of other investments                                                        6,319             7,333
                                                                              -----------       -----------
      Net cash used in investing activities                                      (929,457)         (970,251)
                                                                              -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Dividends paid                                                                 (98,436)         (104,214)
   Common stock redeemed                                                         (377,153)         (444,766)
   Repayment of long-term debt                                                   (100,397)          (93,989)
                                                                              -----------       -----------
      Net cash used in financing activities                                      (575,986)         (642,969)
                                                                              -----------       -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                               74,620          (545,667)
                                                                              -----------       -----------

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                1,032,734         1,797,415
                                                                              -----------       -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                    $ 1,107,354       $ 1,251,748
                                                                              ===========       ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Cash paid during the period for:
     Interest                                                                 $   103,609       $   110,843
     Income taxes                                                             $   406,500       $   415,678
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                       6
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

            In the opinion of management, the accompanying condensed
            consolidated financial statements contain all adjustments
            (consisting of only normal recurring items) necessary to present
            fairly the financial position as of September 30, 2003 and December
            31, 2002 and the results of operations and changes in cash flows for
            the three and nine months ended September 30, 2003 and 2002.

            Certain information and footnote disclosures normally included in
            annual financial statements prepared in accordance with accounting
            principles generally accepted in the United States of America have
            been condensed or omitted. It is suggested that these financial
            statements be read in conjunction with the financial statements and
            notes thereto included in the Company's December 31, 2002 audited
            financial statements. The results of operations for the period
            ending September 30, 2003 are not necessarily indicative of the
            operating results of the entire year.

            Certain reclassifications have been made to the 2002 financial
            statements to conform with the 2003 presentations.

NOTE 2.     OPERATING SEGMENTS

            The Company organizes its business into three reportable segments:
            local exchange carrier (LEC) services, broadcast services and
            internet service provider (ISP) services. The LEC services segment
            provides telephone, data services and other services to customers in
            local exchanges. The broadcast services segment provides cable
            television services to customers in Iowa and Nebraska. The ISP
            services segment provides internet access to customers within the
            local exchanges and the surrounding areas.

            The Company's reportable business segments are strategic business
            units that offer different products and services. Each reportable
            segment is managed separately primarily because of different
            products, services and regulatory environments. LEC segments have
            been aggregated because of their similar characteristics.

            The segments' accounting policies are the same as those described in
            the summary of significant accounting policies.

<TABLE>
<CAPTION>
                                            Local                           Internet
                                           Exchange                         Service
                                           Carrier        Broadcast         Provider         Other              Total
                                         -----------      ----------       ----------       --------         -----------
<S>                                      <C>             <C>              <C>              <C>              <C>
             Nine months ended
             September 30, 2003
      Revenues
            External customers           $ 3,623,015      $  684,853       $  476,809       $       --       $ 4,784,677
            Intersegment
              Segment profit (loss)        1,173,865        (115,296)        (100,528)              --           958,041

             Nine months ended
             September 30, 2002
      Revenues
            External customers           $ 2,967,734      $  733,075       $  556,903       $       --       $ 4,257,712
            Intersegment
              Segment profit (loss)          959,774        (146,116)          (8,389)          (2,757)          802,512
</TABLE>


                                       7
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.     OPERATING SEGMENTS, (Continued)

<TABLE>
<CAPTION>
                                            Local                            Internet
                                          Exchange                           Service
                                           Carrier         Broadcast         Provider            Other              Total
                                         -----------      -----------       -----------       -----------       -----------
<S>                                      <C>              <C>               <C>               <C>               <C>
             Three months ended
             September 30, 2003

      Revenues
           External customers            $ 1,201,435      $   218,510       $   156,733       $        --       $ 1,576,678
           Intersegment
             Segment profit (loss)           468,620          (31,286)          (41,814)               --           395,520

             Three months ended
             September 30, 2002

      Revenues
           External customers            $ 1,014,457      $   244,643       $   184,888       $        --       $ 1,443,988
           Intersegment
             Segment profit (loss)           363,355          (19,196)           (2,582)              181           341,758

<CAPTION>
           Reconciliation of
           Segment Information                   Three months ended                Nine months ended
                                           September 30,    September 30,     September 30,     September 30,
                                                2003            2002              2003              2002
                                           -------------    -------------     -------------     -------------
<S>                                         <C>              <C>               <C>               <C>
      REVENUES:
        Total revenues and sales
          for reportable Segments           $ 1,576,678      $ 1,443,988       $ 4,784,677       $ 4,257,712
           Other revenues                            --               --                --                --
        Elimination of intersegment
          Revenues                                   --               --                --                --
                                            -----------      -----------       -----------       -----------
            Consolidated Revenues           $ 1,576,678      $ 1,443,988       $ 4,784,677       $ 4,257,712
                                            ===========      ===========       ===========       ===========

      PROFIT:
        Total profit for reportable
          Segments                          $   395,520      $   341,577       $   958,041       $   805,269
        Other profit (loss)                          --              181                --            (2,757)
                                            -----------      -----------       -----------       -----------
               Net Income                   $   395,520      $   341,758       $   958,041       $   802,512
                                            ===========      ===========       ===========       ===========
</TABLE>


                                       8
<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.     NET INCOME PER COMMON STOCK

            Net income per common share for the three and nine months ended
            September 30, 2003 and 2002 was computed by dividing the weighted
            average number of shares of common stock outstanding into the net
            income. The weighted average number of shares of common stock
            outstanding for the three and nine months ended September 30, 2003
            and 2002 are 31,841 and 33,493, and 32,421, and 34,278,
            respectively.

NOTE 4.     STOCK VALUE ADJUSTMENT

            During May 2002, the board of directors authorized a $22 increase in
            the stated value of each share of common stock from $258 to $280.
            There were 34,738 shares outstanding at the time of the value
            adjustment, which reduced retained earnings by $764,236.

            During May 2003, the board of directors authorized a $23 increase in
            the stated value of each share of common stock from $280 to $303.
            There were 32,812 shares outstanding at the time of the value
            adjustment, which reduced retained earnings by $754,676.

               [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                       9
<PAGE>

Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations.

            Breda organizes its business into three reportable segments. Those
            segments are local exchange carrier services, broadcast services,
            and Internet service provider services.

            The local exchange carrier services segment provides telephone, data
            services, and other services to customers in the local exchanges
            served by Breda. Breda also began to offer local exchange carrier
            services in the Carroll, Iowa market area in October, 2003, through
            BTC, Inc. Breda also provides long distance services to its
            customers in the local exchanges and in the Carroll, Iowa market
            area through BTC, Inc. The broadcast services segment provides cable
            television services to customers in a total of eighteen towns in
            Iowa and one town in Nebraska. The Internet service provider
            services segment provides Internet access to customers in the local
            exchanges and the surrounding areas and in the Carroll, Iowa market
            area through BTC, Inc.

            The subsidiaries of Breda and the segments in which they operate are
            as follows:

                  Local Exchange Carrier
                           Prairie Telephone Co., Inc.
                           Westside Independent Telephone Company
                           BTC, Inc. (BTC, Inc. began providing local exchange
                           carrier services in October, 2003. Prior to that
                           time, BTC, Inc. provided long distance services.)

                  Broadcast Services
                           Tele-Services, Ltd.

                  Internet Service Provider
                           BTC, Inc.

            BTC, Inc. is a subsidiary of Prairie Telephone.

            Breda and its subsidiaries all conduct business under the names
            "W.I.N." or "Western Iowa Networks".

            The following table reflects, on a consolidated basis for Breda and
            its subsidiaries, the approximate percentage of Breda's and its
            subsidiaries' aggregate revenue which was derived from the three
            segments described above and from investments as of the close of,
            respectively, the third quarter of 2002 and the third quarter of
            2003:


                                       10
<PAGE>

                                                     January-        January-
                                                     September       September
                                                     2002            2003

                 Local Exchange Carrier(1)           69.7%            75.7%
                 Broadcast(2)                        17.2%            14.3%
                 Internet Service Provider(3)        13.1%            10.0%
                                                    -----            -----
                            Total                   100.0%           100.0%

      (1)   This segment includes (i) flat monthly fees charged to subscribers
            by Breda, Prairie Telephone and Westside Independent for basic local
            telephone services, (ii) universal services funding amounts and
            access charges payable by long distance carriers for intrastate and
            interstate exchange services provided to those long distance
            carriers, (iii) fees from long distance providers for billing and
            collection services for long distance calls made by subscribers,
            (iv) per minute rates and calling plans rates for long distance
            services, and (v) monthly cellular commissions, advertising fees,
            and miscellaneous revenues.

      (2)   This segment includes monthly fees charged for basic and premium
            cable services.

      (3)   This segment includes monthly fees charged for Internet services.

      Nine-months ended September 30, 2003 Compared to Nine-months ended
      September 30, 2002

      Net Income

      Consolidated net income for the nine-month period ended September 30, 2003
      was $958,041, which was a $155,529, or 19.4%, increase when compared to
      the $802,512 of consolidated net income for the nine-month period ended
      September 30, 2002.

      The $155,529 increase in net income resulted from the following four
      factors:

            1)    Consolidated operating income, which is Operating Revenues
                  less Operating Expenses, generated from the local exchange
                  carrier services segment, the broadcast services segment, and
                  the Internet service provider segment increased $202,909, or
                  38.8%, for the nine-month period ended September 30, 2003,
                  when compared to the nine-month period ended September 30,
                  2002.

            2)    Other income (expense), which includes such items as interest
                  and dividend income, income from equity investments, interest
                  expense, and gains (losses) on the sale of investments and
                  property, decreased $147,166, or


                                       11
<PAGE>

                  15.6%, for the nine-month period ended September 30, 2003,
                  when compared to the nine-month period ended September 30,
                  2002.

            3)    Income taxes decreased $29,018, or 4.9%, for the nine-month
                  period ended September 30, 2003, when compared to the
                  nine-month period ended September 30, 2002.

            4)    The cumulative effect of an accounting change, net of tax, of
                  $70,768 during the nine-month period ended September 30, 2002,
                  reflects an impairment of goodwill from the implementation of
                  Statement of Financial Accounting Standard 142 on January 1,
                  2002. There were no accounting changes during the nine-month
                  period ended September 30, 2003.

      Operating Revenues

      There was an increase in total operating revenues for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002, of $526,965, or 12.4%. The segments making up
      total operating revenues and their contributions to the $526,965 increase
      between the two periods are as follows: local exchange carrier services -
      $655,279; broadcast services - ($48,220); and Internet services -
      ($80,094).

      Local Exchange Carrier Services - $655,279

      Local exchange carrier services revenue accounted for 75.7% of the
      operating revenue in the nine-month period ended September 30, 2003. The
      components of, and their contributions to, the $655,279 increase in local
      exchange carrier services revenue for the nine-months ended September 30,
      2003, when compared to the nine-months ended September 30, 2002, are as
      follows: local network services - ($56); network access services -
      $95,278; long distance services - $321; billing and collection services -
      ($9,475); cellular services - $447,437; and miscellaneous - $121,774.

      Local network services revenue was nearly identical for the nine-month
      periods ended, respectively, September 30, 2003 and September 30, 2002,
      with a 0.013% decrease during the nine-month period ended September 30,
      2003, when compared to the same nine-month period in 2002. Network access
      services revenue, however, increased $95,278, or 5.4%, during the
      nine-month period ended September 30, 2003 when compared to the same
      nine-month period in 2002. The network access revenue increase is volume
      related, and Breda has not experienced an adverse effect from the
      implementation in 2002 of different methodologies for the support payment
      funding regulated by the FCC. Breda, Prairie Telephone and Westside
      Independent wrote off access revenue in 2002 that became uncollectible
      when WorldCom and Global Crossing filed for bankruptcy protection, which
      lowered the access revenues for the nine-month period ended September 30,
      2002, when compared to the nine-month period ended September 30, 2003.
      Breda has had lower access revenue in both 2002 and 2003 because Qwest no
      longer pays access revenue for traffic originating with a


                                       12
<PAGE>

      wireless carrier that uses Qwest to deliver the traffic back to a number
      served by local exchange carriers, such as Breda, Prairie Telephone, and
      Westside Independent, who participate in the use of the switching and
      network facilities offered by Iowa Network Services. Access charges
      constitute a substantial part of Breda's, Prairie Telephone's and Westside
      Independent's revenues, and a material risk to them arises from the
      regulation of access charge rates by the FCC. Breda anticipates continuing
      pressure for the lowering of state and federal access charge rates, and
      future reductions in access charge rates are likely.

      Breda's long distance services customer base continues to grow and Breda
      believes that long distance services should be a growth area for Breda in
      2004 as Breda continues to market this service as both a stand-alone
      service and as part of a package with other services, such as Internet.
      Breda anticipates growth particularly in the local exchange area of
      Carroll, Iowa, which is served through BTC, Inc. As noted above, BTC, Inc.
      began offering local exchange carrier services in the Carroll, Iowa market
      area in October 2003. The nine-month period ended September 30, 2003,
      reflected a 0.4% increase in long distance services revenues when compared
      to the nine-month period ended September 30, 2002.

      Breda expanded its cellular retail location in Carroll, Iowa by taking
      over the management of a U.S. Cellular kiosk located in the Wal-Mart store
      in Carroll, Iowa, on August 1, 2002. The $447,437, or 83.2%, increase in
      cellular services revenue for the nine-month period ended September 30,
      2003, when compared to the nine-month period ended September 30, 2002,
      reflects the increased sales generated through Breda's two Carroll, Iowa
      locations and the increased sales generated through the efforts of outside
      sales staff, who travel and make direct contact with potential customers.

      Miscellaneous revenue increased $121,774, or 97.3%, for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002. Four items made up most of this increase for the
      nine-month period ended September 30, 2003. The first item was the
      performance of fiber installation contractual work for an outside
      corporation, which generated $50,000 in miscellaneous revenue, before
      materials, equipment and labor costs. The second item was the receipt of a
      Qwest refund on co-location expenditures of approximately $28,229. Breda
      also performed boring and related services for neighboring telephone
      companies which generated almost $15,000 in miscellaneous revenue. Breda
      received $21,250 through an Iowa Jobs Training Program for its partnership
      with the Des Moines Area Community College in a multi-year educational
      training program for its employees. The project was approved by the Iowa
      Department of Economic Development.

      Broadcast Services ($48,220)

      Broadcast services revenue decreased $48,220, or 6.6%, for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002. Breda's subsidiary, Tele-Services, Ltd.,
      continues to face competition from


                                       13
<PAGE>

      satellite providers that can now include local channels in their package
      offerings. Tele-Services experienced a 6.3% decrease in its customer base
      when comparing the nine-month period ended September 30, 2003, to the
      nine-month period ended September 30, 2002. Another factor faced by
      Tele-Services is the declining population base in the small rural
      communities served by Tele-Services, which adversely affects
      Tele-Services' current and prospective customer base.

      Internet Services ($80,094)

      Internet services revenue decreased $80,094, or 14.4%, for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002. The decrease is directly attributable to the
      17.2% decrease in BTC, Inc.'s Internet service customer base when
      comparing the two nine-month periods. The decrease in BTC, Inc.'s customer
      base is the result of the intense competition by multiple Internet service
      suppliers in the Carroll, Iowa, market area. Breda began bundling Internet
      services with long distance services and lowered its pricing for Internet
      services in 2001 in response to competitive pressures. Breda has continued
      those programs in 2002 and 2003. The programs have, however, resulted in
      reduced Internet services revenue in both 2002 and 2003 given the lower
      pricing by Breda for Internet services under those programs. Breda hopes
      that the October, 2003 start-up of BTC, Inc.'s local exchange carrier
      services in the Carroll, Iowa area will result in new Internet customers
      because BTC, Inc. will offer bundled services packages that include
      Internet, as well as local telephone and other communication services.

      Operating Expenses

      There was an increase in total operating expenses of $324,056, or 8.7%,
      for the nine-month period ended September 30, 2003, when compared to the
      nine-month period ended September 30, 2002. The components making up
      operating expenses are as follows: cost of services, depreciation and
      amortization, and selling, general and administration expenditures.

      Cost of services increased $314,826, or 19.3%, for the nine-month period
      ended September 30, 2003, when compared to the nine-month period ended
      September 30, 2002. Most of the increase in cost of services was caused by
      increased cellular services costs of $291,326. Breda's cellular services
      revenue increased $447,437, or 83.2%, for the nine-month period ended
      September 30, 2003, when compared to the nine-month period ended September
      30, 2002. Cellular service costs increased 81.4%, however, as part of
      providing those increased services during the nine-month period ended
      September 30, 2003.

      Most of the remaining increase in cost of services for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002, was the result of costs incurred in preparing
      and moving Breda's and BTC, Inc.'s Carroll, Iowa operations to a new
      building in Carroll, Iowa, and operating costs for BTC, Inc. during the
      final testing processes for the start-up of BTC, Inc.'s local


                                       14
<PAGE>

      exchange carrier services. There were no corresponding expenses for the
      nine-month period ended September 30, 2002.

      Depreciation and amortization expense decreased $14,202, or 1.8%, for the
      nine-month period ended September 30, 2003, when compared to the
      nine-month period ended September 30, 2002. The decrease is attributable
      to the fact that some of Breda's assets have reached their maximum
      depreciable life, so even though the assets are still in use, there is no
      further depreciation expense that can be taken on the assets. Breda has
      expended funds for facilities and equipment for BTC, Inc.'s operations,
      but those assets were not operational as of September 30, 2003.
      Accordingly, no depreciation was taken on those assets until they were put
      into use in October, 2003.

      Selling, general and administration expenses increased $23,432, or 1.8%,
      for the nine-month period ended September 30, 2003, when compared to the
      same nine-month period in 2002. The increase was mainly the result of
      consulting fees generated in connection with the start-up of BTC, Inc.'s
      local exchange carrier services.

      Operating Income

      The net result of the operating revenue and operating expenses was an
      increase of $202,909, or 38.8%, in operating income for the nine-month
      period ended September 30, 2003, when compared to the same nine-month
      period in 2002.

      Other Income (Expense)

      Other income (expense) decreased $147,166, or 15.6%, during the nine-month
      period ended September 30, 2003, when compared to the same nine-month
      period in 2002. The decrease was mainly attributable to two items. The
      first item is interest and dividend income, which decreased $15,041, or
      8.3%, when comparing the nine-month period ended September 30, 2003, to
      the nine-month period ended September 30, 2002. The decrease in interest
      and dividend income was mainly due to lower interest income rates
      available on investments during the nine-month period ended September 30,
      2003, as compared to the rates available during the nine-month period
      ended September 30, 2002. The second item is income from equity
      investments, which decreased $161,826, or 18.3%, during the nine-month
      period ended September 30, 2003, when compared to the same nine-month
      period in 2002. The income from equity investments reported on Breda's
      financial statements is Breda's pro-rata share of the net income or net
      loss of each equity investment, based on Breda's percentage of ownership
      in each equity investment. The decrease in equity investments reported on
      Breda's income statement for the nine-month period ended September 30,
      2003, is a reflection of the net increases and decreases in the net
      operating income of Breda's equity investments. Most of Breda's equity
      investments are in cellular partnerships, which have been under market
      pressure from carriers such as AT&T, Sprint and Verizon, to renegotiate
      their roaming contract. The new roaming contracts have been negotiated at
      lower rates. As a result, the cellular investments making up Breda's
      equity investments are receiving less roaming revenue, even though the
      number of customers and the minutes of use have


                                       15
<PAGE>

      increased. Breda anticipates that these downward marketing pressures on
      roaming rates will continue in the foreseeable future.

      Income Before Income Taxes

      Income before income taxes increased $55,743, or 3.8%, for the nine-month
      period ended September 30, 2003, when compared to the nine-month period
      ended September 30, 2002. The $55,743 increase was the result of the
      $202,909 increase in operating income and the $147,166 decrease in other
      income (expense).

      Net Income

      Income before income taxes increased $55,743, but Breda had dividend and
      interest income which received preferential tax treatment under the
      Internal Revenue Code, resulting in a $29,018, or 4.9%, decrease in income
      taxes for the nine-month period ended September 30, 2003, when compared to
      the nine-month period ended September 30, 2002. The effective tax rate in
      2003 was 36.9%, versus 40.3% in 2002. The effective tax rate differs from
      the U.S. statutory rate due to state income taxes, and the proportion of
      investments with state tax exemptions.

      The cumulative effect of an accounting change, net of tax, of $70,768
      during the nine-month period ended September 30, 2002, reflects an
      impairment of goodwill, for which there was no corresponding entry during
      the nine-month period ended September 30, 2003. The Financial Accounting
      Standards Board issued Financial Accounting Statement No. 142 in August
      2001 relating to the treatment of goodwill, and those new accounting
      principles were incorporated into Breda's financial statement beginning
      January 1, 2002. Under those accounting principles, Breda is no longer
      able to expense over a fifteen-year period the portion of the Westside
      purchase price which had been allocated to goodwill. The goodwill is now
      reviewed for impairment, that is, written down and expensed against
      earnings, only in the periods in which the recorded value of goodwill is
      more than its fair value. Financial Accounting Statement No. 142 requires
      that Breda recognize an impairment loss when the carrying amount of
      goodwill is greater than its implied fair value. These tests have been
      applied to the goodwill and intangible assets of Breda and its
      subsidiaries, and the net-of-tax, impairment expense at January 1, 2002
      was Breda's estimate of the expense to offset earnings for the carrying
      amount of the Westside purchase goodwill attributable to broadcast
      services which was in excess of the fair value of that asset based on
      discounted cash flow valuation upon implementation of SFAS 142.

      Net income increased $155,529, or 19.4%, for the nine-month period ended
      September 30, 2003, when compared to the same period in 2002.


                                       16
<PAGE>

      Liquidity and Capital Resources at Twelve-months ended December 31, 2002

      Cash Flows

      Cash flows from operations were a steady source of funds for Breda in
      2002. Cash provided from operations was $1,650,381 in 2002. The cash flows
      from operations in 2002 were primarily attributable to a positive net
      income of $1,218,421, plus the addition of non-cash expenses of $1,070,569
      from depreciation and amortization, which were then offset by $721,247
      (net of cash distributions received of $197,264) of non-cash, equity
      income in unconsolidated affiliates.

      Cash used in investing activities was $1,623,797 in 2002, and capital
      expenditures relating to ongoing business were $754,895 in 2002. A new
      corporate office building was constructed in 2002 at a cost, including
      furnishings and fixtures, of $480,000. Capital used in investing
      activities in 2002 included an additional $248,273 investment in Alpine
      Communications L.C., the issuance of a $160,000 note to the purchaser of
      the prior corporate office building which was sold on contract on October
      1, 2001, and the purchase of investments with excess cash during the
      normal course of operations.

      Cash used in financing activities was $791,265 in 2002. Breda used cash in
      2002 to repay $126,365 of borrowings from the Rural Telephone Finance
      Cooperative, to redeem common stock for $560,686, and to pay dividends of
      $104,214. Breda funds the redemption of its stock from cash flows from
      operations. Breda redeemed 2,025 shares during 2002, for an aggregate
      amount of $560,686.

      Working Capital

      Working capital was $1,948,514 as of December 31, 2002, compared to
      working capital of $2,664,323 as of December 31, 2001. The ratio of
      current assets to current liabilities was 3.6 to 1.0 as of December 31,
      2002, as compared to 5.3 to 1.0 as of December 31, 2001.

      Breda had a $601,941 decrease in current assets during the twelve-month
      period ended December 31, 2002, when compared to the twelve-months ended
      December 31, 2001. The decrease in current assets was mainly attributable
      to a $941,791 decrease in cash and temporary investments and a $299,289
      increase in accounts receivable, resulting in a corresponding increase in
      long-term investments. Customer accounts receivable as of December 31,
      2002 were comparable to customer accounts receivable as of December 31,
      2001. The $299,289 increase in accounts receivable was mainly attributable
      to National Exchange Carrier Association pooling receivables, unpaid
      access charges due from slow paying carriers, estimated post bankruptcy
      payments from Global Crossing and WorldCom, and unpaid access payments
      from Qwest for October, November and December 2002, while Qwest was making
      an in-house billing software conversion. The Qwest software conversion
      involved billing functions being reviewed and processed at new locations,
      so carrier invoices sent to the prior billing locations were


                                       17
<PAGE>

      not processed until the local telephone companies resubmitted their
      invoices to the new processing center. The Qwest receivables were paid
      during the three-month period ended March 31, 2003.

      During September 2001, Tele-Services entered into a contract with Toyne,
      Inc. to sell its corporate building for $200,000. Tele-Services received a
      cash deposit of $20,000 at the time of the contract, and another $20,000
      at the time of possession on October 1, 2002. The $160,000 remaining on
      this contract was shown in the financials as $140,000 in long-term note
      receivables and $20,000 in short-term note receivables. The remaining
      contract amount of $160,000 was, however, paid in full on February 14,
      2003.

      Current liabilities increased $113,868 as of the end of the twelve-month
      period ended December 31, 2002, when compared to the end of the same
      period in 2001. Accounts payable and accruals increased $62,869. The
      increase was attributable mainly to a 24-month over earnings National
      Exchange Carrier Association accrual of approximately $82,200, and a
      $35,000 co-location invoice from Qwest, which was received at year-end for
      work performed prior to year-end.

      Common stock had a net increase of $203,550 during the twelve-month period
      ended December 31, 2002, when compared to the twelve months ended December
      31, 2001. The increase resulted primarily from two items. One item was the
      $22 per share increase in outstanding shares value which was announced at
      the annual shareholders meeting which was held on May 21, 2002, and the
      other was a decrease in the number of outstanding shares through the
      redemption of 2,025 shares of common stock by Breda during the
      twelve-month period ended December 31, 2002. The increase in retained
      earnings during the twelve-month period ended December 31, 2002, when
      compared to the twelve months ended December 31, 2001, was the net effect
      of the stated value stock adjustment of $764,236, the dividends paid in
      2002 of $104,214, and the year-to-date net income as of December 31, 2002.

      Liquidity and Capital Resources at Nine-months ended September 30, 2003

      Cash Flows

      Cash provided from operations for the nine-month periods ended September
      30, 2003, and September 30, 2002, was, respectively, $1,580,063 and
      $1,067,553. The cash flows from operations for the nine-month period ended
      September 30, 2003, were primarily attributable to a positive net income
      of $958,041, plus the addition of non-cash expenses of $1,093,569 from
      depreciation, amortization, deferred income taxes, note receivable
      discount, and amortization of investment tax credits, which were then
      offset by $391,788 (net of cash distributions received of $328,899) of
      non-cash, equity income in unconsolidated affiliates. The decrease in
      assets and liabilities of $79,759 was also subtracted from net income. The
      cash flows from operations for the nine-month period ended September 30,
      2002, were primarily attributable to a positive net income of $802,512,
      plus the addition of non-cash expenses of $824,127 from


                                       18
<PAGE>

      depreciation, amortization, note receivable discount, and deferred income
      taxes, the addition of $119,945 from the cumulative effect of an
      accounting change, plus the net effect of a decrease in operating assets
      and a decrease in operating liabilities of $78,133, less the $757,164 of
      non-cash equity income in unconsolidated affiliates.

      Cash used in investing activities was $929,457 for the nine-month period
      ended September 30, 2003, and $970,251 for the nine-month period ended
      September 30, 2002. Capital expenditures relating to ongoing business were
      $878,470 for the nine-month period ended September 30, 2003, and $637,804
      for the nine-month period ended September 30, 2002. A new corporate office
      building was constructed in 2002 at a cost, including furnishings and
      fixtures, of $480,000. A building was purchased for the relocation of
      Breda's and BTC, Inc.'s Carroll, Iowa services and operations for $246,000
      in January 2003, which is reflected in the increased capital expenditures
      for the nine-month period ended September 30, 2003, when compared to the
      nine-month period ended September 30, 2002. As noted previously, Breda
      received $160,000 in February 2003, as an early payoff of a building
      contract note receivable. Breda expects remaining capital expenditures in
      2003 to be at similar levels to those made in 2002. Capital used in
      investing activities in 2002 included an additional $248,273 investment in
      Alpine Communications L.C.

      Cash used in financing activities was $575,986 for the nine-month period
      ended September 30, 2003, and $642,969 for the nine-month period ended
      September 30, 2002. Breda used cash during the nine-month period ended
      September 30, 2003 to repay $100,397 of borrowings from the RTFC, and to
      redeem common stock for $377,153. Breda used cash during the nine-month
      period ended September 30, 2002 to repay $93,989 of long-term debt, and to
      redeem common stock for $444,766. Breda funds the redemption of its stock
      from cash flows from operations.

      Working Capital

      Working capital was $1,806,518 as of September 30, 2003, compared to
      working capital of $1,948,514 as of December 31, 2002. The ratio of
      current assets to current liabilities was 4.2 to 1.0 as of September 30,
      2003, and 3.6 to 1.0 as of December 31, 2002.

      Breda had a $315,450 decrease in current assets during the nine-month
      period ended September 30, 2003, when compared to the year ended December
      31, 2002. The decrease in current assets was mainly attributable to a
      $242,911 decrease in cash and temporary investments and a $190,223
      decrease in accounts receivable. Customer accounts receivable as of
      September 30, 2003 were comparable to customer accounts receivable as of
      December 31, 2002. The $190,223 decrease in accounts receivable was mainly
      attributable to the partial receipt of NECA pooling receivables, the
      receipt of some of the unpaid access charges due from slow paying
      carriers, and receipt of access payments from Qwest for October, November
      and December 2002.


                                       19
<PAGE>

      Noncurrent assets, which mainly consist of longer-term investments,
      increased $795,731 during the nine-month period ended September 30, 2003,
      when compared to the year ended December 31, 2002. Long term investments
      increased $582,337 during the nine-month period ended September 30, 2003,
      when compared to the year ended December 31, 2002. On May 2, 2001, Prairie
      Telephone entered into a contractual agreement to advance $500,000 to
      Desktop Media, L.L.C. This note is shown net of unamortized discounts of
      $68,119 and $31,208 at, respectively, September 30, 2003 and December 31,
      2002. $287,881 is included in long-term note receivables, and $144,000 is
      included in short-term note receivables as of September 30, 2003.
      Investments in unconsolidated affiliates at equity increased $392,288 for
      the nine-month period ended September 30, 2003, when compared to the year
      ended December 31, 2002. The increase represents Breda's pro rata share of
      the net income or net loss of each equity investment, based on Breda's
      percentage of ownership in each equity investment during the nine-month
      period ended September 30, 2003.

      Tele-Services entered into a five-year contract with Toyne, Inc. during
      September 2001 for Tele-Services to sell its corporate building to Toyne,
      Inc. for $200,000. Tele-Services received a cash payment on October 1,
      2002, and the remaining balance of $160,000 was shown as $140,000 in
      long-term note receivables and $20,000 in short-term note receivables on
      Breda's balance sheet as of December 31, 2002. As noted previously, the
      remaining contract amount of $160,000 was paid in full on February 14,
      2003.

      Current liabilities decreased $173,454 for the nine-month period ended
      September 30, 2003, when compared to the year ended December 31, 2002.
      Accounts payable decreased $62,280. A $3.00 per share dividend, for an
      aggregate amount of $98,436, was declared by Breda's Board of Directors to
      shareholders of record on March 10, 2003, and the dividend was paid on
      April 1, 2003. Accrued taxes decreased $69,580 for the nine-month period
      ended September 30, 2003, when compared to the year ended December 31,
      2002.

      Common stock had a net increase of $377,523 during the nine-month period
      ended September 30, 2003, when compared to the year ended December 31,
      2002. The increase resulted from the decrease in the number of outstanding
      shares through the redemption of 1,259 shares of common stock at a
      redemption price of $377,153, and the restatement of the outstanding
      shares of stock on May 20, 2003 to a per share price of $303, or a total
      adjustment of $754,676. The prior redemption value had been $280 per
      share. The increase of $104,929 in retained earnings during the nine-month
      period ended September 30, 2003, when compared to the year ended December
      31, 2002, is the net effect of the $98,436 in dividends paid on April 1,
      2003, the year-to-date net income as of September 30, 2003 of $958,041,
      and the $754,676 stated value stock adjustment for the outstanding shares
      on May 20, 2003.

      Breda anticipates that Breda's operational, investing and financing
      activities during the remainder of 2003 will be similar to 2002, and will
      be funded internally through operations and temporary investments.


                                       20
<PAGE>

      Three-months ended September 30, 2003 Compared to Three-months ended
      September 30, 2002

      Net Income

      Consolidated net income for the three-month period ended September 30,
      2003 was $395,520, which was a $53,762, or 15.7%, increase when compared
      to the $341,758 of consolidated net income for the three-month period
      ended September 30, 2002.

      The $53,762 increase in net income resulted from the following three
      factors:

            1)    Consolidated operating income, which is Operating Revenues
                  less Operating Expenses, generated from the local exchange
                  carrier services segment, the broadcast services segment, and
                  the Internet service provider segment increased $17,145, or
                  6.9%, for the three-month period ended September 30, 2003,
                  when compared to the three-month period ended September 30,
                  2002.

            2)    Other income (expense), which includes such items as interest
                  and dividend income, income from equity investments, interest
                  expense, and gains (losses) on the sale of investments and
                  property, decreased $23,845, or 6.4%, for the three-month
                  period ended September 30, 2003, when compared to the
                  three-month period ended September 30, 2002.

            3)    Income taxes decreased $60,462, or 21.9%, for the three-month
                  period ended September 30, 2003, when compared to the
                  three-month period ended September 30, 2002.

      Operating Revenues

      There was an increase in total operating revenues for the three-month
      period ended September 30, 2003, when compared to the three-month period
      ended September 30, 2002, of $132,690, or 9.2%. The segments making up
      total operating revenues and their contributions to the $132,690 increase
      between the two periods are as follows: local exchange carrier services -
      $186,978; broadcast services - ($26,133); and Internet services -
      ($28,155).

      Local Exchange Carrier Services - $186,978

      Local exchange carrier services revenue accounted for 76.2% of the
      operating revenue in the three-month period ended September 30, 2003. The
      components of, and their contributions to, the $186,978 increase in local
      exchange carrier services revenue for the three-months ended September 30,
      2003, when compared to the three-months ended September 30, 2002 are as
      follows: local network services - $770; network access services - $78,911;
      long distance services - ($3,542); billing and collection services -
      ($1,483); cellular services -$81,040; and miscellaneous - $31,282.


                                       21
<PAGE>

      Local network services revenue was nearly identical for the three-month
      periods ended, respectively, September 30, 2003 and September 30, 2002,
      with a 0.5% increase during the three month period ended September 30,
      2003, when compared to the same three month period in 2002. Network access
      services revenue increased $78,911, or ___%, for the three month period
      ended September 30, 2003, when compared to the three month period ended
      September 30, 2002. The access revenue increase is volume related, and
      Breda has not experienced an adverse effect from the implementation in
      2002 of different methodologies for the support payment funding regulated
      by the FCC. Breda has, however, had lower access revenue in both 2002 and
      2003 because Qwest no longer pays access revenue for traffic originating
      with a wireless carrier that uses Qwest to deliver the traffic back to a
      number served by local exchange carriers, such as Breda, Prairie
      Telephone, and Westside Independent, who participate in the use of the
      switching and network facilities offered by Iowa Network Services. Access
      charges constitute a substantial part of Breda's, Prairie Telephone's and
      Westside Independent's revenues, and a material risk to them arises from
      the regulation of access charge rates by the FCC. Breda anticipates
      continuing pressure for the lowering of state and federal access charge
      rates, and future reductions in access charge rates are likely.

      Breda's long distance services customer base continues to grow, but Breda
      experienced a $3,542 decrease in revenue for that service during the
      three-month period ended September 30, 2003, when compared to the
      three-month period ended September 30, 2002. Breda continues to market
      this service as both a stand-alone service and as part of a package with
      other services, such as Internet. Breda anticipates growth in its long
      distance services over the next two years as it attempts to expand all of
      its services, including telephone service, in the Carroll, Iowa market
      area through BTC, Inc.

      Breda expanded its cellular retail location in Carroll, Iowa by taking
      over the management of a U.S. Cellular kiosk located in the Wal-Mart store
      in Carroll, Iowa, on August 1, 2002. The $81,040, or 35.8%, increase in
      cellular services revenue for the three-month period ended September 30,
      2003, when compared to the three-month period September 30, 2002, reflects
      the increased sales generated through Breda's two Carroll, Iowa locations
      and the increased sales generated through the efforts of outside sales
      staff, who travel and make direct contact with potential customers. There
      were only two months of corresponding cellular services revenue from the
      Wal-Mart location for the three-month period ended September 30, 2002,
      since the Wal-Mart kiosk was opened under Breda's management on August 1,
      2002.

      Miscellaneous revenue increased $31,282, or 74.8%, for the three-month
      period ended September 30, 2003, when compared to the three-month period
      ended September 30, 2002. The increase was mainly the result of a $21,250
      Iowa Job Partnership Training Program receipt received by Breda for its
      partnership with the Des Moines Area Community College in a multi-year
      education and training program for its employees.


                                       22
<PAGE>

      Broadcast Services ($26,133)

      Broadcast services revenue decreased $26,133, or 10.7%, for the
      three-month period ended September 30, 2003, when compared to the
      three-month period ended September 30, 2002. Breda's subsidiary,
      Tele-Services, Ltd., continues to face competition from satellite
      providers that can now include local channels in their package offerings,
      and Tele-Services continued to experience a decline in its customer base
      when comparing the three-month period ended September 30, 2003, to the
      three-month period ended September 30, 2002. Another factor faced by
      Tele-Services is the declining population base in the small rural
      communities served by Tele-Services, which adversely affects
      Tele-Services' current and prospective customer base.

      Internet Services ($28,155)

      Internet services revenue decreased $28,155, or 15.2%, for the three-month
      period ended September 30, 2003, when compared to the three-month period
      ended September 30, 2002. The decrease is directly attributable to the
      decrease in BTC Inc.'s Internet service customer base, which decrease is
      the result of the intense competition by multiple Internet service
      suppliers in the Carroll, Iowa, market area. Breda began bundling Internet
      services with long distance services and lowered its pricing for Internet
      services in 2001 in response to competitive pressures. Breda has continued
      those programs in 2002 and 2003. The programs have, however, resulted in
      reduced Internet services revenue in both 2002 and 2003 given the lower
      pricing by Breda for Internet services under those programs. Breda hopes
      that the October, 2003 start-up of BTC, Inc.'s local exchange carrier
      services in the Carroll, Iowa, market area will result in new Internet
      customers because BTC, Inc. will offer bundled services packages that
      include Internet, as well as local telephone and other communication
      services.

      Operating Expenses

      There was an increase in total operating expenses of $115,545, or 9.7%,
      for the three-month period ended September 30, 2003, when compared to the
      three-month period ended September 30, 2002. The components making up
      operating expenses are as follows: cost of services, depreciation and
      amortization, and selling, general and administration expenditures.

      Cost of services increased $84,281, or 15.5%, for the three-month period
      ended September 30, 2003, when compared to the three-month period ended
      September 30, 2002. Most of the increase in cost of services was caused by
      increased cellular services costs of $58,230. Breda's cellular services
      revenue increased $81,040, or 35.8%, for the three-month period ended
      September 30, 2003, when compared to the three-month period ended
      September 30, 2002. Cellular service costs increased 43.3%, however, as
      part of providing those increased services during the three-month period
      ended September 30, 2003. Plant operations increased $73,303, or 45.7%,
      for the three-month period ended September 30, 2003, when compared to the
      three-month period ended


                                       23
<PAGE>

      September 30, 2002. The increase resulted from increased repair and
      maintenance projects on Tele-Services' cable TV operations, and the
      additional provisioning, transmission power expense, and labor and
      materials to prepare buildings, equipment, and facilities for the start up
      of BTC, Inc.'s local exchange carrier services in the third quarter of
      2003. There was also a decrease of approximately $43,351 in Internet
      provision costs, which reduced cost of services expense.

      Depreciation and amortization expense decreased $4,853, or 1.9%, for the
      three-month period ended September 30, 2003, when compared to the
      three-month period ended September 30, 2002. The decrease is attributable
      to the fact that some of Breda's assets have reached their maximum
      depreciable life, so even though the assets are still in use, there is no
      further depreciation expense that can be taken on the assets. Breda has
      expended funds for facilities and equipment for BTC, Inc.'s operations,
      but those assets were not operational as of September 30, 2003, and no
      depreciation could be taken on those assets until they were put into use
      in October, 2003.

      Selling, general and administration expenses increased $36,117, or 9.2%,
      for the three-month period ended September 30, 2003, when compared to the
      same three-month period in 2002. The increase was the result of labor
      costs and training costs to add additional staff in preparation for the
      roll-out of Internet, long distance, and local telephone service in the
      Carroll, Iowa market through BTC, Inc. in early third quarter 2003.
      Consulting fees related to the start-up of BTC, Inc.'s local exchange
      carrier services also increased during the three-month period ended
      September 30, 2003, when compared to the same three-month period in 2002.

      Operating Income

      The net result of the operating revenue and operating expenses was an
      increase of $17,145, or 6.9%, in operating income for the three-month
      period ended September 30, 2003, when compared to the same three-month
      period in 2002.

      Other Income (Expense)

      Other income (expense) decreased $23,845, or 6.4%, during the three-month
      period ended September 30, 2003, when compared to the same three-month
      period in 2002. The decrease was mainly attributable to income from equity
      investments, which decreased $40,309, or 11.4%, during the three-month
      period ended September 30, 2003, when compared to the same three-month
      period in 2002. The income from equity investments reported on Breda's
      financial statements is Breda's pro-rata share of the net income or net
      loss of each equity investment, based on Breda's percentage of ownership
      in each equity investment. The decrease in equity investments reported on
      Breda's income statement for the three-month period ended September 30,
      2003, is a reflection of the net increases and decreases in the net
      operating income of Breda's equity investments. Other miscellaneous
      expense increased $19,965 during the three-month period ended September
      30, 2003, when compared to the same three-month period in 2002, and
      resulted from the netting of cellular management fees revenue with


                                       24
<PAGE>

      the corresponding expense for the direct management services provided by
      Breda's management staff. The increase in miscellaneous income also
      included the receipt of $9,060, which represented Breda's pro-rata share
      of a right-of-first refusal settlement from Air Touch arising from one of
      Breda's cellular investments.

      Income Before Income Taxes

      Income before income taxes increased $6,700, or 1.1%, for the three-month
      period ended September 30, 2003, when compared to the three-month period
      ended September 30, 2002. The $6,700 increase was the result of the
      $17,145 increase in operating income and the $23,845 decrease in other
      income (expense).

      Net Income

      Income taxes decreased $60,462, or 21.9%, for the three-month period ended
      September 30, 2003, when compared to the same period in 2002. Income
      before income taxes decreased $6,700 for the three-month period ended
      September 30, 2003, when compared to the same three-month period in 2002.
      One factor that can affect Breda's income tax rate is the taxability of
      dividend and interest income received on its investments. The effective
      tax rate for the three-month period ended September 30, 2003, was 35.3%,
      versus 44.7% for the three-month period ended September 30, 2002. The
      effective tax rate differs from the U.S. statutory rate primarily due to
      state income taxes, and the proportion of investments with state tax
      exemptions.

      Net income increased $53,762, or 15.7%, for the three-month period ended
      September 30, 2003, when compared to the same period in 2002.

      Other Activities and Issues

      Breda received notification from the FBI on April 15, 2003, that the FBI
      would grant Breda, Prairie Telephone and Westside Independent an extension
      until June 30, 2004 for certain of their deployment schedules under the
      Communications Assistance For Law Enforcement Act. The FCC decides whether
      or not to grant any such extension. At the time of this filing, no further
      correspondence had been received from the FCC, but Breda contemplates that
      the FCC will approve the FBI's determination. BTC, Inc. receives its
      switching services from Breda, and is covered under the deployment
      schedule extension for Breda's switch.

      The FCC's October 11, 2001 order on the Multi-Association Group plan
      regarding access charge rate reform and deregulation for non-price cap,
      incumbent local exchange carriers became effective for Breda, Prairie
      Telephone, and Westside Independent on July 1, 2002. Breda continues to
      believe that the FCC's order on the plan will not have any materially
      adverse effects on Breda's or its subsidiaries' revenues during the
      remainder of 2003.


                                       25
<PAGE>

      One source of consolidated revenue is generated from Tele-Services' cable
      business. Tele-Services' operating revenues arise primarily from monthly
      fees for basic and premium cable services provided to its cable
      subscribers. Tele-Services' main competition is from satellite dish
      providers. The FCC now allows satellite dish providers to provide local
      channels, which has had an adverse effect on Tele-Services, given that its
      ability to provide local channels was, in the past, one reason subscribers
      might choose Tele-Services' cable services over a satellite dish. Other
      rulings and decisions by the FCC are possible, and may provide satellite
      dish providers, or other providers as changes in the telecommunications
      and cable industry occur, with equal or greater advantages than
      Tele-Services can offer to its subscribers, which could obviously have an
      adverse effect on Tele-Services' business. Changes in the
      telecommunications and cable industry are continually occurring, and
      technological advances may provide Tele-Services subscribers with other
      options. For example, Iowa Network Services is offering cable services in
      Iowa over existing telephone lines, and it is estimated that up to 70
      independent telephone companies in mostly rural Iowa will be able to offer
      cable television programming over their telephone lines by 2005. This
      option, and others which might arise through other changes or advancements
      in technology, could have material adverse effects on Tele-Services in the
      future. Tele-Services is also faced with a declining population base in
      its service areas, which results in a lower potential customer base for
      Tele-Services. Tele-Services is also faced with the need to upgrade its
      plant, equipment and cables in order to add more channel lineups so that
      it can stay competitive and continue to be able to obtain programming
      licenses.

      Tele-Services is continuing to work with an engineering firm to review its
      systems and to work on consolidating its head-end equipment with the goal
      being that the equipment will then be able to serve two or more
      communities, instead of just one community as is currently the case, and
      to lower maintenance costs for that equipment. There has not, however,
      been any economically feasible option identified from these reviews up to
      this point. Tele-Services is also evaluating the option of upgrading some
      of its cable TV systems and installing additional equipment and
      electronics in order to be able to provide more channel line-up options to
      its subscribers and to also possibly offer Internet access services over a
      cable modem. The cost of upgrades in 2003, and of any continuing or
      further head-end equipment consolidation, is estimated to be less than
      $300,000.

      Breda expanded its core business of providing local telephone services by
      beginning to offer those services in the Carroll, Iowa market area in
      October of 2003 through BTC, Inc. Prior to that time, BTC, Inc. only
      offered long distance services and Internet services in the Carroll, Iowa
      market area.

      Breda, Prairie Telephone, Westside Independent and BTC, Inc. continue to
      face ever-increasing competition in providing dial-up and high-speed
      Internet access. For example, Breda has been experiencing price-point
      competition for Internet services from Iowa Telecom in three communities
      since the late fourth quarter 2000. Breda had been the sole provider of
      Internet services in those communities until that time. Iowa


                                       26
<PAGE>

      Telecom purchased the telephone exchanges for those communities in 1999
      and began operating them on June 1, 2000. In late 2000, Iowa Telecom
      expanded the services offered in those communities to include Internet
      services and at a lower price than was offered by Breda. As a result,
      Breda has lost Internet customers in the three communities. BTC, Inc. is
      experiencing intense pricing and free services competition in providing
      Internet access in its Carroll, Iowa market. There are at least five
      competitors in this relatively small market area, and BTC, Inc. has
      experienced a 24.9% decline in its dial-up customer base in this market
      since September 30, 2002.

      Breda is pursuing additional marketing approaches to attempt to retain and
      increase its Internet customer base, but Breda believes there will be
      continuing competitive pressures to lower dial-up rates and to provide
      higher speed Internet access.

      One step that Breda had taken to lower Breda's underlying Internet costs
      was through Prairie Telephone's acquisition in October of 2001 of a 10%
      ownership interest in Desktop Media, L.L.C. Desktop Media, L.L.C. provided
      Internet service provider support services to Prairie Telephone from
      approximately November 1, 2001 through March 4, 2003, at which time Breda
      moved its end user help-desk technical support to eCi Technical Support
      Solutions. Prairie Telephone, however, retained its 10% ownership interest
      in Desktop Media, L.L.C. Breda's desire to further lower its underlying
      Internet costs in order to compete at a lower price point for Internet
      services was a critical factor in the move to eCi. Two other factors were
      Breda's desire to offer its Internet customers 24-hour a day, 7-day a week
      end user help-desk technical support, and to be able to brand these
      services under its own name for customer service continuity.

      Breda also reduced its pricing of Internet services and bundled Internet
      services with its long distance services in August, 2001 in order to
      attempt to compete at a lower price point for Internet services. Breda's
      reduction of its pricing has led to a decrease in Breda's overall revenue
      from Internet service fees. In order to attempt to provide a more
      competitively priced, high speed Internet service, BTC, Inc. completed the
      process of installing equipment in the Qwest central office in July of
      2002 that allows BTC, Inc. to use a product that Qwest offers called line
      sharing. Breda has also prepared other bundled service packages which
      include Internet services, and those packages began to be offered by BTC,
      Inc. in October, 2003.

      Although Breda expects the overall potential customer base for Internet
      access to continue to increase, it is becoming more difficult to predict
      what increases, if any, Breda or its subsidiaries might experience in
      their Internet customer base given the increasingly competitive pressures
      in this area. It is also possible that Breda and its subsidiaries might
      continue to experience declines in their Internet customer base. Also, as
      noted above, competitive pressures regarding pricing may lead to little or
      no growth, or even declines, in Internet service revenues, even if Breda
      is successful in increasing its Internet customer base.


                                       27
<PAGE>

      BTC, Inc. was the successful bidder at an auction on December 23, 2002,
      for a commercial building located in Carroll, Iowa. Breda and BTC, Inc.
      moved their Carroll, Iowa operations from their former location to this
      new location on October 4, 2003. The new building has approximately 4,450
      square feet, which is over two times the space of the former location in
      Carroll. As indicated, the new building allowed BTC, Inc. and Breda to
      consolidate their operations in the Carroll, Iowa market, and will also
      afford Breda the opportunity to expand its service offerings from the new
      Carroll location.

      Breda continues to anticipate that it may need to enter into a new agency
      agreement with U.S. Cellular some time in 2003. Breda continues to be
      hopeful, based on its past negotiations with U.S. Cellular, that any new
      agreement will, at worst, have a neutral impact on Breda's cellular
      commissions revenue.

      Breda, Prairie Telephone and Westside Independent continue to face
      competition in the sale and lease of telephone, cellular and related
      equipment because there are numerous competitors who sell and lease that
      equipment.

      The cellular ventures in which Breda, Prairie Telephone and Westside
      Independent have invested continue to face ever increasing and changing
      competition in providing cellular services and equipment from the various
      competitors offering cellular and personal communication services.

      As noted previously, Breda anticipates continuing pressure for the
      lowering of state and federal access charge rates. For example, concerns
      have been raised by the Iowa Legislature as well as the Iowa Utility Board
      regarding intra-state access rates, and whether alternative intrastate
      inter-carrier compensation mechanisms should be investigated. A joint task
      force comprised of representatives from the Iowa Telecom Association and
      the Rural Iowa Independent Telephone Association has been formed to
      compile data from the local telephone companies, such as Breda, in order
      to document not only the justification of the present intra-state access
      rates received by local telephone companies, but also to look at other
      revenue alternatives. Two industry consulting firms will also be working
      with this joint task force. As of the date of this filing, the task force
      was continuing to investigate and study these issues.

      Breda does not believe that any increase in intra-state access rates will
      be recommended by the task force and that, at best, intra-state access
      rates will stay the same. It is also possible, however, that intra-state
      access rates will be lowered, and if that occurs, it will have a negative
      impact on Breda's operating income. Breda does not believe, however, that
      it is possible to predict at this time whether intra-state access rates
      will be lowered, or if intrastate access rates are lowered, the amount of
      the decrease in those rates. It is therefore uncertain at this time
      whether this issue will result in an adverse effect on Breda's operating
      income.

      Another industry issue that could have future, significant ramifications
      for Breda and its subsidiaries is local number portability requirements.
      Presently, carriers such as


                                       28
<PAGE>

      Breda, must make number portability available within six months of a
      request from another carrier if they are a wireline carrier and located in
      one of the largest 100 Metropolitan Statistical Areas. Breda is able to
      meet this requirement.

      The FCC has, however, also mandated that all wireless carriers in the top
      100 Metropolitan Service Areas must implement wireless local number
      portability by November 24, 2003, and that all networks must also
      accommodate wireless-wireline local number portability. The cellular
      industry has been unsuccessful to date in court appeals and in FCC actions
      in seeking to delay the implementation of wireless local number
      portability. National telecom associations have asked the FCC to clarify
      that a wireless service provider must have an interconnection agreement in
      place with the local telephone company before requesting local number
      portability and that a number cannot be ported outside of a rural
      carrier's rate center. The FCC has yet to rule on those requests, and it
      is not clear whether local exchange carriers will be required to port
      numbers in those circumstances.

      Breda is unable to determine at this time the potential number of requests
      Breda might receive for wireless local number portability or otherwise
      what impact the FCC's mandate will have on Breda's customer base, but
      Breda is continuing to work with others in the industry to determine its
      responsibilities regarding this issue and the potential effects on Breda.
      Breda has already received requests for local number portability from
      wireless carriers in Breda's wireless service areas, but given that the
      regulatory requirements surrounding this issue are not yet resolved, Breda
      believes that these requests are not valid requests and has responded
      accordingly.

      Qwest has begun minute-of-use studies with the twenty companies in Iowa
      which have the highest number of intrastate minutes being billed to Qwest.
      Breda is one of those twenty companies. Based on preliminary discussions
      and research with Qwest and INS (which submits minutes of use information
      to Breda for billing purposes), it has been preliminarily determined that
      Qwest has not routed some of its traffic according to the Local Exchange
      Routing Guide because Qwest has routed some of its traffic to Breda's
      switch that should, instead, have been routed to a cellular switch. If it
      is determined to route that traffic in the future to cellular switches,
      Breda estimates that it will lose intrastate access revenue from Qwest in
      future years of approximately $200,000 per year. Breda is not currently
      aware of any plans to make any retroactive adjustments to Breda's
      intrastate access revenues from Qwest based upon the results of the Qwest
      study.

      Breda's primary ongoing capital investment activity will currently
      continue to be additions to property, plant and equipment. Breda's capital
      requirements to start up BTC, Inc.'s local exchange carrier services in
      Carroll, Iowa is estimated to be less than $300,000 and, to date, has been
      funded internally. Breda has incurred renovation costs for the building
      BTC, Inc. purchased in Carroll, Iowa, but those costs have not been
      material. Capital expenditures for 2002 were $754,895, and are currently
      expected to be approximately $877,350 in 2003.


                                       29
<PAGE>

      Breda believes that its present cash position along with its anticipated
      normal operating revenues will generate sufficient working capital for
      Breda and its subsidiaries to meet their current operating needs and
      maintain historical fixed asset addition levels.

      Cautionary Statement on Forward Looking Statements

      This item and other items in this quarterly report are or contain forward
      looking statements that involve and are subject to various risks,
      uncertainties and assumptions. Forward looking statements include, but are
      not limited to, statements with respect to financial results and
      condition, anticipated future trends in business, revenues or net income,
      projections concerning operations and cash flow, business and growth and
      acquisition opportunities and strategies, management's plans and
      intentions for the future, competitive position, and other forecasts,
      projections and statements of expectation. Words such as "expects,"
      "estimates," "plans," "will," "anticipates," "contemplates," "forecasts,"
      "predicts," "projects," "prospects," "possible," "hopeful," "intends,"
      "believes," "seeks," "should," "thinks," "objectives" and other similar
      expressions or variations thereof identify forward looking statements.
      Forward looking statements are made based on numerous and varied
      estimates, projections, views, beliefs and assumptions made or existing at
      the time of such statements and are not guarantees of future results or
      performance. Breda disclaims any obligation to update or revise any
      forward looking statements based on the occurrence of future events, the
      receipt of new information, or otherwise.

      Actual future performance, outcomes and results may differ materially from
      those expressed in forward looking statements as a result of numerous and
      varied factors, risks and uncertainties, some that are known and some that
      are not, and nearly all of which are beyond the control of Breda and its
      management. It is not possible to predict or identify all such factors,
      risks and uncertainties, but some of the factors, risks and uncertainties
      affecting forward looking statements include, but are not limited to, the
      following:

            o     adverse changes by the Federal Communications Commission or
                  other regulatory authorities to the access charge rates that
                  can be charged by Breda and its subsidiaries to long distance
                  carriers or to the rules and other requirements regarding
                  access charge rates or access charges, whether instituted by
                  the applicable regulatory authorities or at the request or by
                  reason of court or other actions taken by long distance
                  carriers or other interested persons;

            o     technological advances in the telecommunications, cable and
                  related industries, which are always occurring and at an ever
                  increasing rate, and any one or more of which may replace or
                  otherwise adversely affect in a material way the existing
                  technologies utilized by Breda and its subsidiaries;


                                       30
<PAGE>

            o     changes in employee relations, including the loss of a key
                  employee or employees;

            o     industry conditions and occurrences, including bankruptcies
                  and insolvencies of long distance carriers (such as Global
                  Crossing and Worldcom), and consolidations in the
                  telecommunications, cable and related industries, which may
                  result in competitors which are larger and better financed and
                  with greater geographic reach, allowing them to compete more
                  effectively;

            o     economic conditions at the national, regional and local
                  levels, which are always somewhat uncertain given that so many
                  different factors and occurrences affect the economy;

            o     political conditions at the international, national, regional
                  and local levels, including threats and/or acts of terrorism
                  or war;

            o     the general emotions and psychology of the economy, the
                  markets and consumers, which can at times be totally unrelated
                  to actual economic or market conditions or other more tangible
                  factors;

            o     litigation;

            o     inaccurate assumptions or predictions by management;

            o     the ability to enter into and maintain agreements which are
                  necessary to provide services, and on favorable terms;

            o     ever increasing costs and expenses which are necessary to
                  Breda's and its subsidiaries' businesses but which are outside
                  of Breda's control, such as health and other insurance costs;

            o     acts or omissions of existing and/or new competitors and other
                  third parties, including offering lower prices or new or
                  substitute products or services and their use of new marketing
                  strategies and approaches or new third parties entering into
                  Breda's or its subsidiaries' marketing or service areas;

            o     the risks associated with technological requirements,
                  technology substitution and changes and other technological
                  developments;

            o     changes in or more governmental laws, rules, regulations or
                  policies;

            o     reductions in or other changes to governmental programs
                  assisting or affecting the telecommunications, cable and
                  related industries, and in particular programs which aid
                  providers of those services to rural areas;


                                       31
<PAGE>

            o     the availability and cost of financing, and on favorable
                  terms, and the consequences of increased leverage; and

            o     the effects of ever increasing and ever changing competition
                  and relationships with other carriers and other parties,
                  including competition or relationships which require Breda or
                  its subsidiaries to develop new pricing for services such as
                  interexchange access charges and wireless access charges or
                  new marketing strategies or new product offerings, and the
                  related risk that Breda or its subsidiaries will not be able
                  to respond on a timely or profitable basis to competitive
                  changes and pressures.

            This section should also be read in conjunction with the financial
            statements and related notes included in Item 1 of Part I of this
            quarterly report.

Item 3.     Controls and Procedures.

            The principal executive officer and the principal financial officer
            of Breda have evaluated the effectiveness of Breda's disclosure
            controls and procedures as of the end of the period covered by this
            quarterly report, and they have concluded that the disclosure
            controls and procedures have been effective for the purposes for
            which they are intended.

            No change in Breda's internal control over financial reporting
            occurred during the period covered by this quarterly report that has
            materially affected, or is reasonably likely to materially affect,
            Breda's internal control over financial reporting.

                           PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.

            As of the date of this quarterly report, Breda was not aware of any
            pending legal proceeding to which Breda was a party or to which any
            of Breda's property was subject, other than for any routine
            litigation, if any, that was incidental to its business. As of the
            date of this quarterly report, Breda was not aware that any
            governmental authority was contemplating any proceeding against
            Breda or any of its property.

Item 2.     Changes in Securities.

            No material modifications, limitations or qualifications of the type
            required to be reported under this Item occurred with respect to
            Breda's shares of common stock during the period of July 1, 2003
            through September 30, 2003.


                                       32
<PAGE>

            Breda did not issue any shares of its common stock during the period
            of July 1, 2003 through September 30, 2003. As discussed in Item 5
            below, Breda did redeem some shares of its common stock during the
            period of July 1, 2003 through September 30, 2003.

Item 3.     Defaults Upon Senior Securities.

            There was no material default or any material arrearage or
            delinquency by Breda of the type required to be reported under this
            Item during the period of July 1, 2003 through September 30, 2003.

Item 4.     Submission of Matters to a Vote of Security Holders.

            No matters were submitted to a vote of the shareholders of Breda
            during the period of July 1, 2003 through September 30, 2003.

Item 5.     Other Information.

            During the period of July 1, 2003 through September 30, 2003, Breda
            redeemed 352 shares of its common stock from seven different
            shareholders at $303.00 per share, for a total amount of $106,656.
            The $303.00 per share redemption price was the per share redemption
            price that was announced by the board of directors at, and which
            became effective at, the May 20, 2003 annual meeting of the
            shareholders of Breda.

            There was one transfer of shares of Breda's common stock during the
            period of July 1, 2003 through September 30, 2003 with respect to
            which Breda did not exercise its right of first refusal to purchase
            those shares. The transfer involved an aggregate of two shares of
            Breda's common stock and one shareholder.

Item 6.     Exhibits and Reports on Form 8-K.

            (a)   A list of the exhibits included as part of this quarterly
                  report is set forth in the Exhibit Index which immediately
                  precedes such exhibits and is incorporated herein by this
                  reference.

            (b)   Breda did not file any reports on Form 8-K during the period
                  of July 1, 2003 through September 30, 2003.

               [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                       33
<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      BREDA TELEPHONE CORP.


Date: November 13, 2003.              By: /s/ Robert Boeckman
                                          --------------------------------------
                                          Robert Boeckman, Chief Operations
                                          Officer and Co-Chief Executive Officer


Date: November 13, 2003.              By:  /s/ Jane Morlok
                                           -------------------------------------
                                           Jane Morlok, Chief Financial Officer
                                           and Co-Chief Executive officer


                                       34
<PAGE>

                                  EXHIBIT INDEX
                             Exhibits to Form 10-QSB
                      Three Months Ended September 30, 2003
                              BREDA TELEPHONE CORP.

Description of Exhibit                                                     Page
                                                                           ----

3.    Articles of Incorporation and Bylaws

      (a)   Amended and Restated Articles of Incorporation of
            Breda Telephone Corp. (Filed as Exhibit 3.1 to
            Breda's Registration Statement on Form 10-SB, and
            incorporated herein by this reference.)

      (b)   Amended and Restated Bylaws of Breda Telephone Corp.
            (Filed as Exhibit 3.2 to Amendment No. 1 to Breda's
            Registration Statement on Form 10-SB, and
            incorporated herein by this reference.)

10.   Material Contracts

      10.1  Employment Agreement dated July 1, 2003 between Breda
            and Robert Boeckman. (Filed as Exhibit 10.1 to
            Breda's Form 10-QSB for the quarterly period ended
            June 30, 2003 and filed August 12, 2003, and
            incorporated herein by this reference.)

      10.2  Employment Agreement dated July 1, 2003 between Breda
            and Jane Morlok. (Filed as Exhibit 10.2 to Breda's
            Form 10-QSB for the quarterly period ended June 30,
            2003 and filed August 12, 2003, and incorporated
            herein by this reference.)

*31.  Rule 13a-14(a)/15d-14(a) Certifications

      31.1  Rule 13a-14(a) Certification of Chief Operations                E-1
            Officer and Co-Chief Executive Officer

      31.2  Rule 13a-14(a) Certification of Chief Financial                 E-2
            Officer and Co-Chief Executive Officer

<PAGE>

*32.  Section 1350 Certifications

      32.1  Section 1350 Certification of Chief Operations                  E-3
            Officer and Co-Chief Executive Officer.

      32.2  Section 1350 Certification of Chief Financial Officer           E-4
            and Co-Chief Executive Officer.

*Included with this filing.