Re:  Breda Telephone Corp.
     CIK No.  0001084448
     Report on Form 10-QSB for Period
     Ended 3/31/01
     SEC File No. 0-26525

Ladies and Gentlemen:

     On behalf of Breda Telephone  Corp.,  and as part of this  transmission for
electronic  filing in accordance  with  Regulation  S-T, filed herewith is Breda
Telephone Corp.'s quarterly report on Form 10-QSB for the period ended March 31,
2001.

     Please address any inquiries  concerning  this filing to the undersigned at
515-283-3146.  Written  correspondence  should be directed to the undersigned at
the Nyemaster Law Firm,  700 Walnut,  Suite 1600,  Des Moines,  Iowa 50309.  Our
e-mail   address  and   facsimile   number  for  written   correspondence   are,
respectively, whs@nyemaster.com and 515-283-3108.

     Thank you.

                                           Respectfully,



                                           /s/Wade H. Schut
                                           ------------------------
                                           Wade H. Schut

cc:      Breda Telephone Corp.



<PAGE>





                                  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 March 31, 2001.

[ ]  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                (IRS Employer  Identification No.)
of incorporation or organization)

                  103 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: 37,029 shares of common stock,
no par value, at March 31, 2001.

     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
                              FINANCIAL STATEMENTS
                              For the Three Months
                          Ended March 31, 2001 and 2000
                      and the Year Ended December 31, 2000



<PAGE>

                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                March 31,         December 31,
                                                                                  2001                2000
                                                                               (Unaudited)         (Audited)
                                                                            ------------------  -----------------
                                  ASSETS

CURRENT ASSETS
<S>                                                                          <C>                     <C>
     Cash and cash equivalents                                               $ 2,000,079             $ 1,104,577
     Temporary investments                                                       468,602                 269,840
     Accounts receivable                                                         525,585                 703,468
     Interest receivable                                                          51,092                  50,800
     Prepaid income taxes                                                        174,889                 336,465
     Inventories                                                                 142,024                  92,058
     Other                                                                        80,307                   5,383
                                                                             -----------             -----------
                                                                               3,442,578               2,562,591
                                                                             -----------             -----------


OTHER NONCURRENT ASSETS
     Long-term investments                                                     2,759,910               2,888,500
     Other investments                                                         2,491,415               2,806,107
     Intangibles, net of accumulated amortization                              1,085,297               1,107,625
     Deferred income taxes                                                       129,448                 113,595
                                                                             -----------             -----------
                                                                               6,466,070               6,915,827
                                                                             -----------             -----------


PROPERTY AND EQUIPMENT                                                         5,968,937               6,176,434
                                                                             -----------             -----------




     TOTAL ASSETS                                                            $15,877,585             $15,654,852
                                                                             ===========             ===========
</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>
                                                                                                  March 31,         December 31,
                                                                                                   2001                2000
                                                                                                (Unaudited)          (Audited)
                                                                                                ------------       --------------
     LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                                                               <C>               <C>
CURRENT LIABILITIES
   Current portion of long-term debt                                                              $   118,300       $   118,300
   Accounts payable                                                                                   412,836           364,232
   Dividends payable                                                                                  111,087                --
   Accrued taxes                                                                                      103,116           134,611
   Other                                                                                              191,749           170,670
                                                                                                  -----------       -----------

                                                                                                      937,088           787,813
                                                                                                  -----------       -----------


LONG-TERM DEBT, less current portion                                                                2,010,143         2,038,990
                                                                                                  -----------       -----------


STOCKHOLDERS' EQUITY
   Common stock - no par value, 5,000,000 shares authorized, 37,029 and 37,241
     shares issued and outstanding
     at $235 stated value, respectively                                                             8,701,815         8,751,635
   Retained earnings                                                                                4,228,539         4,076,414
                                                                                                  -----------       -----------
                                                                                                   12,930,354        12,828,049
                                                                                                  -----------       -----------






     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $15,877,585       $15,654,852
                                                                                                  ===========       ===========
</TABLE>

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



                                       3
<PAGE>


                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               For the Three Months Ended March 31, 2001 and 2000


                                               2001           2000
                                           -----------    -----------
OPERATING REVENUES                         $ 1,569,437    $ 1,363,260
                                           -----------    -----------

OPERATING EXPENSES
     Cost of services                          598,372        513,569
     Depreciation and amortization             278,658        259,751
     Selling, general and administration       537,417        456,829
                                           -----------    -----------
                                             1,414,447      1,230,149
                                           -----------    -----------

OPERATING INCOME                               154,990        133,111
                                           -----------    -----------

OTHER INCOME (EXPENSES)
     Interest and dividend income               51,246         71,725
     Interest expense                          (39,640)      (130,791)
     Income from cellular investments          194,687             --
     Income from Alpine investment              44,209         23,508
     Other, net                                  3,444         (4,990)
                                           -----------    -----------
                                               253,946        (40,548)
                                           -----------    -----------

INCOME BEFORE INCOME TAXES                     408,936         92,563
                                           -----------    -----------

INCOME TAXES                                   145,724         11,029
                                           -----------    -----------

NET INCOME                                 $   263,212    $    81,534
                                           ===========    ===========

NET INCOME PER COMMON SHARE                $      7.11    $      2.16
                                           ===========    ===========


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, 1999                           37,682         $ 5,614,618        $ 3,440,131         $ 9,054,749

  Comprehensive Income:
  Net income                                                                               3,989,981           3,989,981

  Dividends paid                                                                            (113,046)           (113,046)

  Common stock redeemed, net                             (441)           (103,635)                              (103,635)

  Stated value stock adjustment                                         3,240,652         (3,240,652)
                                             -----------------   -----------------  -----------------  ------------------

Balance at December 31, 2000                           37,241           8,751,635          4,076,414          12,828,049

  Comprehensive Income:
  Net income                                                                                 263,212             263,212

Dividends declared                                                                          (111,087)           (111,087)

  Common stock redeemed, net                             (212)            (49,820)                               (49,820)
                                             -----------------   -----------------  -----------------  ------------------

Balance at March 31, 2001                              37,029         $ 8,701,815        $ 4,228,539        $ 12,930,354
                                             =================   =================  =================  ==================

</TABLE>


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



                                       5
<PAGE>


                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2001 and 2000


<TABLE>
<CAPTION>

                                                                                     2001               2000
                                                                             -----------------  ------------------

<S>                                                                             <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                                    $   263,212          $  81,534
Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                                                    278,658            259,751
   Amortization of investment tax credits                                            (2,443)            (2,443)
   Deferred income taxes                                                            (13,410)           (20,247)
   Changes in operating assets and liabilities:
   (Increase) decrease in assets                                                    214,277             91,533
   Increase (decrease) in liabilities                                                38,188             35,049
                                                                                -----------          ---------
Net cash provided by operating activities                                           778,482            445,177
                                                                                -----------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                             (48,833)          (160,310)
   Purchase of investments                                                          (83,040)           (89,347)
   Proceeds from the sale of investments                                             12,868             11,653
   Decrease in other investments                                                    314,692             46,907
                                                                                -----------          ---------
   Net cash provided by (used in) investing activities                              195,687           (191,097)
                                                                                -----------          ---------

   CASH FLOWS FROM FINANCING ACTIVITIES
      Common stock redeemed                                                         (49,820)              --
      Repayment of long-term debt                                                   (28,847)          (148,961)
                                                                                -----------          ---------
         Net cash used in financing activities                                      (78,667)          (148,961)
                                                                                -----------          ---------


NET INCREASE IN CASH AND CASH EQUIVALENTS                                           895,502            105,119
                                                                                -----------          ---------


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  1,104,577            411,341
                                                                                -----------          ---------


CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $ 2,000,079          $ 516,460
                                                                                ===========          =========

SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during the period for:
      Interest                                                                  $    39,640          $ 130,791
      Income taxes                                                              $        --          $      --

</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  unaudited  condensed
        consolidated financial statements contain all adjustments (consisting of
        only normal  recurring  items) necessary to present fairly the financial
        position as of March 31, 2001 and  December  31, 2000 and the results of
        operations  and changes in cash flows for the three  months  ended March
        31, 2001 and 2000.

        Certain information and footnote disclosures normally included in annual
        financial  statements  prepared in accordance  with  generally  accepted
        accounting  principles  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,  2000  audited   financial
        statements.  The results of  operations  for the period ending March 31,
        2001 are not  necessarily  indicative  of the  operating  results of the
        entire year.

        Certain   reclassifications   have  been  made  to  the  2000  financial
        statements to confirm with the 2001 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 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  provide  internet  access to customers
        within the local exchanges and the surrounding  areas.  The Company also
        has telemarketing  services that do not meet the quantitative  threshold
        for a reportable segment.

        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 operations have been aggregated because of
        their similar characteristics.

     The segment's  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>
  Three months ended
    March 31, 2001
    --------------

Revenues
      External customers                           $1,046,780        $ 252,681         $ 189,179         $ 80,797         $1,569,437
      Intersegment                                         --               --                --               --                 --
Segment profit (loss)                                 305,368          (26,816)          (13,090)          (2,250)           263,212

  Three months ended
    March 31, 2000
    --------------

Revenues
      External customers                           $  899,501        $ 265,349         $ 144,609         $ 53,801         $1,363,260
      Intersegment                                         --               --                --               --                 --
Segment profit (loss)                                 130,233          (15,916)          (14,915)         (17,868)            81,534

</TABLE>


                                       7
<PAGE>


                           BREDA TELEPHONE CORPORATION
                                AND SUBSIDIARIES
                                   BREDA, IOWA

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.  OPERATING SEGMENTS, (Continued)



<TABLE>
<CAPTION>

           Reconciliation of Segment Information

                                                                               Three months ended
                                                                         March 31,               March 31,
                                                                           2001                    2000
                                                                    -----------------        -----------------
<S>                                                                   <C>                        <C>
REVENUES:
     Total revenues for reportable segments                           $ 1,488,640                $ 1,309,459
     Other revenues                                                        80,797                     53,801
     Elimination of intersegment revenues                                      --                         --
                                                                      -----------                -----------
         Consolidated Revenues                                        $ 1,569,437                $ 1,363,260
                                                                      ===========                ===========

PROFIT:
     Total profit for reportable segments                             $   265,462                $    99,402
     Other profit (loss)                                                   (2,250)                   (17,868)
     Non-operating segment                                                     --                         --
     Minority interest                                                         --                         --
                                                                      -----------                -----------
         Net Income                                                   $   263,212                $    81,534
                                                                      ===========                ===========
</TABLE>


NOTE 3. NET INCOME PER COMMON STOCK

        Net income per common  share for March 31, 2001 and 2000 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 months ended March 31, 2001
        and 2000 are 37,029 and 37,722, respectively.

NOTE 4. STOCK VALUE ADJUSTMENT

        In May 2000,  the board of  directors  authorized  a $31 increase in the
        stated value of each share of common stock from $149 to $180. There were
        37,682 shares  outstanding  at the time of the value  adjustment,  which
        reduced retained earnings by $1,168,142.

        During June 2000,  the board of directors  authorized an additional  $55
        increase in the stated  value of each share of common stock from $180 to
        $235.  There were  37,682  shares  outstanding  at the time of the value
        adjustment, which reduced retained earnings by $2,072,510.



                                       8
<PAGE>




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


        Three-months  Ended March 31, 2001 Compared to Three-months  Ended March
        31, 2000.

        There was an increase in total  operating  revenues for the  three-month
        period ended March 31, 2001,  when  compared to the same period in 2000,
        of $206,177,  or 15.1%.  The segments making up total operating  revenue
        are: local  exchange  carrier  services,  broadcast  services,  Internet
        services and other services revenue.


        Local exchange carrier services revenue  increased  $147,279,  or 16.4%,
        for the  three-month  period ended March 31, 2001,  when compared to the
        three-month period ended March 31, 2000. Local exchange carrier services
        revenue  includes  local  network  services,  network  access  services,
        billing and collection services and miscellaneous revenue. These revenue
        components are discussed below.

        Local  network  services  revenue  increased  $8,050,  or 5.9%,  for the
        three-month  period  ended  March 31,  2001,  when  compared to the same
        three-month period in 2000. This increase resulted from a small increase
        in the overall customer base.

        Network  access  services  revenue  increased  $67,920,  or 12.1%,  when
        comparing  the   three-month   period  ended  March  31,  2001,  to  the
        three-month  period ended March 31, 2000.  This increase was due in part
        to more lines generating  ongoing SS7 connectivity  revenues and also to
        ongoing NECA pool revenues. Telemarketing revenues also increased, which
        in  turn  increased  access  charge  revenues  for  Breda.

        Billing and collection  services  revenue is a function of the amount of
        billing and collection services provided by Breda to other carriers such
        as AT&T. Breda's revenues from billing and collection services decreased
        $9,656, or 37.1%, for the three-month  period ended March 31, 2001, when
        compared to the three-month period ended March 31, 2000.

        A  significant  component  of the  increase  in local  exchange  carrier
        services revenue was an increase of $81,075,  or 46.7%, in miscellaneous
        revenue when comparing the three-month period ended March 31, 2001, with
        the   three-month   period  ended  March  31,  2000.   The  increase  in
        miscellaneous   revenue  resulted   primarily  from  increased  cellular
        services  commissions.  Breda opened a retail outlet in Carroll, Iowa in
        early  April  of 2000,  which  has  significantly  expanded  its  market
        penetration  in the cellular  services  arena.  There was no  comparable
        revenue stream from that outlet for the  three-month  period ended March
        31, 2000 given that the outlet was not opened until April of 2000.

        Broadcast  services revenue decreased  $12,668,  or 4.8%, when comparing
        the three-month  period ended March 31, 2001, to the three-month  period
        ended March 31, 2000.  This decrease was directly  attributable  to a 3%
        decrease  in the  customer  base


                                       9


<PAGE>


        when comparing the two three-month periods.  Breda believes the decrease
        in the broadcast  services  customer base is attributable to competition
        from satellite dish providers.

        There was an increase in Internet  services  revenue for the three-month
        period ended March 31, 2001,  when  compared to the same period in 2000,
        of  $44,460,  or 30.7%.  This  increase  was due to an  increase  in the
        customer base of an additional 398 Internet lines when comparing the two
        three-month  periods.  There  was  also an  increase  in the  associated
        expenditures  to  provide  those  services  to the  additional  Internet
        customers,  however,  so the  overall  result  was a less than  positive
        impact on net operating  revenue.  It will also be difficult to continue
        to have future significant  increases in the Internet customer base. For
        example,  Breda  has  been  experiencing   price-point  competition  for
        Internet  services  from Iowa  Telecom in three  communities  since late
        fourth  quarter  2000.  Breda  had been the sole  provider  of  Internet
        services in those  communities  until that time. Iowa 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 is  offered  by Breda.  Breda has lost  Internet
        customers in those three  communities,  but Breda is  investigating  and
        continues  to explore  re-engineering  options and other  help-desk  and
        underlying  Internet  service provider options that would reduce Breda's
        costs in order to allow  Breda to  compete  at a lower  price  point for
        Internet services.  For example,  as is discussed below in this section,
        Prairie  Telephone  Company,  Inc.  has  recently  purchased  an  equity
        interest  in an Internet  service  provider in order to attempt to lower
        Breda's and its subsidiaries' underlying Internet costs.

        Telemarketing  services  revenue is reported as other services  revenue.
        Telemarketing   services  revenue  increased  $26,996,  or  50.2%,  when
        comparing  the period ended March 31, 2001,  to the same period in 2000.
        The increase is attributable to the rise in the volume of  telemarketing
        calls  made by  Pacific  Junction  Telemarketing  Center,  Inc.  Pacific
        Junction has been and is  continuing  to seek  supplemental  programs to
        augment the telemarketing leads provided by Results Telemarketing,  Inc.
        and is also evaluating  other  alternatives to nation-wide  licensing of
        its  telemarketing  service  representatives.   Pacific  Junction  is  a
        wholly-owned  subsidiary of Prairie Telephone Company, Inc., and Prairie
        Telephone Company, Inc. is a wholly-owned subsidiary of Breda.

        There was an increase in total operating expenses of $184,298, or 15.0%,
        for the  three-month  period ended March 31, 2001,  when compared to the
        three-month  period ended March 31, 2000.  All of the  components of the
        operating  expenses  increased during the three-month period ended March
        31, 2001, when compared to the same three month period in 2000.


                                       10
<PAGE>


        Cost  of  services  expenses  increased  $84,803,   or  16.5%,  for  the
        three-month   period  ended  March  31,  2001,   when  compared  to  the
        three-month period ended March 31, 2000. The cost of services components
        are  plant   specific   operations,   plant   non-specific   operations,
        programming, and Internet costs. Those components are explained below.

        There was a $36,139,  or 10.1%,  increase in plant  specific  operations
        expense when comparing the  three-month  period ended March 31, 2001, to
        the  three-month   period  ended  March  31,  2000.  This  increase  was
        attributable to increased  cellular  operating expense for such items as
        inventory,  personnel  costs and other  expense to support the increased
        cellular services activities at Breda's retail outlet in Carroll,  Iowa.
        There were no  corresponding  expenditures  for the  three-month  period
        ended March 31,  2000,  because the retail  outlet was not opened  until
        April 2000.

        Plant nonspecific  operations expense increased  $14,706,  or 68.9%, for
        the  three-month  period  ended  March 31,  2001,  when  compared to the
        three-month  period  ended  March  31,  2000.  The  increase  is  mainly
        accounted for by rate increases in utilities and postage.

        There was a $9,506, or 13.1%,  increase in programming expense for cable
        TV services when comparing the three-month  period ended March 31, 2001,
        with the  three-month  period ended March 31, 2000. The increase was the
        result of programming fee increases.

        Because of its growth,  Internet revenue and expense are now reported as
        a separate segment.  Internet costs increased by $24,452,  or 39.6%, for
        the  three-month  period  ended  March 31,  2001,  when  compared to the
        three-month  time period ended March 31, 2000. This increase is directly
        attributable to the additional costs of providing  Internet  services to
        the increased  customer base. These costs include  additional  rental of
        fiber lines,  help desk and customer  services fees from the  underlying
        Internet  service  provider,  and  internal  costs to  provide  customer
        service and billing service to the additional customers.

        Depreciation and amortization  expense increased  $18,907,  or 7.3%, for
        the  three-month  period ended March 31, 2001, when compared to the same
        period in 2000. This increase reflects  increased  depreciation rates on
        depreciable  equipment associated with new technology services,  and the
        proportionate  net overall  depreciation  of capital  improvements  made
        during the year 2000.

        Selling,  general and  administrative  expenses  increased  $80,588,  or
        17.6%, for the three-month period ended March 31, 2001, when compared to
        the same period in 2000.  Some of the  components  which  contributed to
        that increase are discussed in the remainder of this paragraph. Customer
        operations expense increased $22,714, or 12.2%, when comparing these two
        three-month  time periods,  and mainly resulted



                                       11
<PAGE>

        from increased labor and benefit costs. Breda received a 12.96% increase
        in its health  plan  premiums  for the year 2001.  Corporate  operations
        expense increased $51,793, or 21.9%, during the three-month period ended
        March 31, 2001 when compared to the  three-month  period ended March 31,
        2000.  The increase  was not  attributable  to any one item,  but rather
        resulted  primarily  from  increased  staff  time  coded to  accounting,
        finance and administration, increased expenditures for national meetings
        and educational  seminars attended by board members and management,  and
        from legal, accounting and consulting services. The latter services were
        related  mainly  to  preparation  of  the  end  of  the  year  reporting
        requirements for the SEC. General taxes paid by Breda increased  $6,081,
        or 18.1%, for the three-month period ended March 31, 2001, when compared
        to the  three-month  period  ended March 31,  2000,  and  resulted  from
        increased  tax rates  levied by the taxing  authorities  in the  various
        counties.

        The net result of the operating  services revenue and operating expenses
        was  a  $21,879,  or  16.4%,   increase  in  operating  income  for  the
        three-month  period  ended  March 31,  2001,  when  compared to the same
        three-month period a year ago.

        Other  income  (expense)  increased  $294,494,  or  726.3%,  during  the
        three-month  period  ended  March 31,  2001,  when  compared to the same
        three-month  period in 2000.  Interest  and  dividend  income  decreased
        $20,479,  or 28.6%, for the period ended March 31, 2001 when compared to
        the three-month period ended March 31, 2000.  Interest expense decreased
        by $91,151,  or 69.7%,  when comparing those same  three-month  periods.
        While the decrease in interest and dividend  income also decreased other
        income,  the  decrease in  interest  expense  indirectly  resulted in an
        increase in other  income.  Both the  decrease in interest  and dividend
        income and the  decrease in interest  expense  were the result of Breda,
        Prairie  Telephone  Company,  Inc. and  Tele-Services,  Ltd. paying back
        $4,999,052 in long term debt to the Rural Telephone Finance  Cooperative
        during the twelve month period ended December 31, 2000. Investments were
        redeemed to pay approximately  $2,100,000 of this $4,999,052 debt, which
        resulted in less investment  revenue being generated for the three-month
        period ended March 31, 2001,  when  compared to the  three-month  period
        ended March 31, 2000.

        Income from cellular investments increased $194,687, or 100%, during the
        three-month  period  ended  March 31,  2001,  when  compared to the same
        three-month  period  in  2000.  There  were no  distributions  by any of
        Breda's cellular  investments  during the three-month period ended March
        31, 2000, as compared to the  distributions by three of Breda's cellular
        investments,  totaling $194,687 in the aggregate, during the three-month
        period ended March 31, 2001.  Income from Breda's  investment  in Alpine
        Communications, L.C. increased $20,701, or 88.1%, during the three-month
        period  ended March 31,  2001,  when  compared  to the same  three-month
        period  in  2000.  Other  miscellaneous  income  increased  $8,434  when
        comparing the  three-month  periods ended March 31, 2001,  and March 31,
        2000.


                                       12
<PAGE>


        Income taxes increased  $134,695 for the three-month  period ended March
        31,  2001,  when  compared  to the same  period  in 2000.  The  increase
        resulted  primarily from the income taxes  associated  with the $294,494
        increase in other income (expense).

        Net income increased  $181,678,  or 222.8%,  for the three-month  period
        ended March 31,  2001,  when  compared to the same period in 2000.  This
        increase was primarily  attributable to the net increase in other income
        (expense) after income taxes.

        Liquidity and Capital Resources at Year Ended December 2000.

        Breda's net working  capital was a positive  $1,774,778  at December 31,
        2000,  which was an increase of  $889,136  in net working  capital  from
        year-end  1999.  The positive  working  capital at year-end 2000 was due
        mainly to three  factors.  Two of those  factors were that cash and cash
        equivalents  increased  $693,236,  and temporary  investments  increased
        $175,030  during the  twelve-month  period ended  December 31, 2000. The
        third factor was that the current portion of long-term debt decreased by
        $490,112.  These net working capital changes resulted primarily from the
        receipt  of  $5,226,034  in  cash  from  the  sale of the  Central  Iowa
        Cellular,  Inc.  stock in May  2000,  and the  subsequent  payoff of the
        variable  rate  (8.05% - 8.4% at  December  31,  2000) long term debt of
        $4,695,968 to the Rural Telephone Finance  Cooperative on June 30, 2000,
        September 30, 2000, and October 16, 2000. Other expenses associated with
        the  payoff  of the RTFC  variable  rate  debt  were  interest  costs of
        $54,289,  and  prepayment  penalties of $17,262.  Long term  investments
        totaling  $2,100,000  were  liquidated  and  used for the  payment  of a
        portion of this long-term  debt.  The Central Iowa Cellular,  Inc. stock
        sale proceeds  were also used to make federal  estimated tax payments of
        $2,435,069 during the year ended December 31, 2000.

        The other current assets category decreased by $72,144 at year-end 2000,
        and  resulted  from a  difference  in timing of the  payment of employee
        benefits  premiums for health,  life/AD&D,  and retirement for the first
        quarter of 2000.

        Long term  investments  decreased by $1,529,121  during the twelve month
        period ended December 31, 2000. As noted previously,  $2,100,000 in long
        term  investments was redeemed to pay off variable rate debt owed to the
        Rural  Telephone  Finance   Cooperative.   The  difference  between  the
        $2,100,000 and the $1,529,121 decrease in long-term investments resulted
        from additional long-term investments made by Breda.

        Accounts payable  increased by $124,445 at year-end December 2000. While
        there were  increased  cellular  inventory  payables  at  year-end  2000
        because of the holiday season demand for cell phones, the overall change
        is due to timing differences in the payment of invoices.


                                       13
<PAGE>


        The  long-term  debt  decrease of  $4,508,940 is the result of scheduled
        quarterly principal payments being paid in 2000 as well as the payoff of
        long term debt as noted above.

        Liquidity and Capital Resources at Three-months Ended March 31, 2001.

        Breda  had  an  increase  of  $879,987  in  current  assets  during  the
        three-month period ended March 31, 2001, when compared to the year ended
        December 31, 2000.  This resulted from an $895,502  increase in cash and
        cash equivalents which were held pending the probable  investment during
        the  first  quarter  of  2001  in  an  internet  service  provider.  The
        investment occurred in May, 2001 and is discussed below in this section.
        There were increases in temporary  investments,  inventories,  and other
        current assets of, respectively,  $198,762,  $49,966 and $74,924.  Those
        increases  were  offset,  however,  by a $177,883  decrease  in accounts
        receivable and a $161,576 decrease in prepaid taxes.

        Noncurrent  assets,  which consist  mainly of  longer-term  investments,
        decreased  $449,757 during the  three-months  ended March 31, 2001, when
        compared  to year-end  December  31,  2000.  One of the reasons for this
        decrease  was that in  connection  with the  payoff and pay down of long
        term debt by Breda,  Prairie Telephone Company,  Inc. and Tele-Services,
        Ltd. to the Rural  Telephone  Finance  Cooperative,  the Rural Telephone
        Finance  Cooperative  reimbursed Breda and its subsidiaries for $310,692
        in Subordinated  Capital  Certificates in the first quarter of 2001. The
        remainder  of the decrease was caused by  amortization  of  intangibles,
        deferred income taxes, and other changes in long-term investments.

        Breda's  net  working  capital  was  $2,505,490  at March 31,  2001,  as
        compared to  $1,774,778 at December 31, 2000.  The $730,712  increase in
        working  capital  between the two time periods  resulted mainly from the
        increased  cash and temporary  investments  held by Breda.  The payables
        increase  between the two time periods  resulted  primarily from Breda's
        declaration  of an aggregate  dividend of $111,087 on March 12, 2001, to
        shareholders  of record on March 12, 2001.  The dividend will be paid to
        the shareholders on or before Breda's annual meeting on May 16, 2001.

        Other Activities.

        Breda's  primary  ongoing  capital  investment  activity will  currently
        continue to be additions to property,  plant and equipment. For example,
        Breda continues to make  investments in  state-of-the-art  technology in
        order to try to offer  subscribers  the best possible  service.  Capital
        expenditures  for 2000 were  approximately  $726,922,  and are currently
        expected to be approximately $777,151 in 2001.



                                       14
<PAGE>


        As of March 31,  2001,  Breda had  approximately  $2,128,443  on its one
        outstanding  loan  with the Rural  Telephone  Finance  Cooperative.  The
        interest rate on the loan was fixed on July 17, 1998, at 7.35%. The loan
        has a fifteen  year term that  matures  in  September,  2013.  Breda and
        Prairie Telephone Company, Inc. also have lines of credit available from
        the Rural Telephone Finance Cooperative in the amounts of, respectively,
        $1,500,000  and $500,000.  Those lines of credit will expire on December
        1, 2005 and November 30, 2005. No amounts were outstanding  under either
        of those lines of credit on March 31, 2001.

        Breda is  continuing  to  evaluate  the access  charge  rate  reform and
        deregulation  plan for non-price cap,  incumbent local exchange carriers
        which was submitted to the FCC by the Multi-Association Group in October
        of 2000.  Non-price cap,  incumbent local exchange carriers include most
        of the small and mid-sized local exchange  carriers that serve rural and
        insular areas in the U.S.,  such as Breda,  Prairie  Telephone  Company,
        Inc. and Westside  Independent  Telephone  Company.  The plan would take
        effect on July 1, 2001, but the FCC must approve of the plan so there is
        no guaranty that the plan, or any modified  version of the plan, will be
        effective  by that  date.  Breda  believes  that the plan  could  have a
        negative  impact on revenues.  The plan is  discussed in Breda's  annual
        report on Form 10-KSB for the year ended December 31, 2000.

        Breda has an agency  agreement with U.S.  Cellular which allows Breda to
        sell  cellular  phones and related  packages  to the  public,  and Breda
        receives  commissions on those sales.  U.S.  Cellular has notified Breda
        that the agreement will, however, be terminated  effective May 31, 2001.
        U.S.  Cellular  has  proposed  a new  agreement,  but Breda has  serious
        concerns about that agreement, including the fact that the new agreement
        would pay lower commissions to Breda. Breda is attempting to negotiate a
        more  favorable  agreement,  but  there is no  assurance  Breda  will be
        successful  in its  negotiations.  If  Breda  is  unsuccessful,  the new
        agreement will have a negative  impact on Breda's  cellular  commissions
        revenue.

        Breda also plans to continue to consider  expanding its core business of
        providing  telephone services by looking at any opportunities  which may
        arise to acquire  additional  telephone lines.  There are no assurances,
        however,  that  any  such  opportunities  will  arise  or that  any such
        opportunities will fit into Breda's strategic plan.

        Breda,   Prairie  Telephone  Company,   Inc.  and  Westside  Independent
        Telephone  Company  currently  have no  definite  plans to  provide  any
        material  additional  or improved  services to their  subscribers.  This
        determination  may change quickly,  however,  given the rapidly changing
        technology in the telecommunications and cable industries.  For example,
        as discussed in Breda's  annual report on Form 10-KSB for the year ended
        December  31,  2000,  it is  possible  that Breda or  Prairie  Telephone
        Company,  Inc. may,  either  directly or through one of the companies in
        which they


                                       15
<PAGE>


        have  invested,  begin to offer personal  communication  services in the
        next one to three years. The area of personal communication services is,
        however,  an uncertain  area,  and there is no  assurance  that Breda or
        Prairie  Telephone  Company,  Inc. or any of the  entities in which they
        have  invested  will ever offer any personal  communication  services or
        that any offering of any such  services  will be successful or otherwise
        profitable.

        There are no current plans to expand the cable services areas of, or the
        cable services provided by, Tele-Services,  Ltd. Tele-Services, Ltd. is,
        however,  working 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. It
        is hoped  that this  consolidation  will  reduce  Tele-Services,  Ltd.'s
        maintenance   costs  for  that  equipment.   Tele-Services,   Ltd.  also
        anticipates  that  it  will  continue  to need  to  upgrade  its  plant,
        equipment  and cables in order to add more  channel  line-ups so that it
        can stay  competitive  and  continue  to be able to  obtain  programming
        licenses.  The  costs of those  upgrades  in 2001,  and of any  head-end
        consolidations, are estimated to be less than $100,000.

        Breda  and its  subsidiaries  have and will  continue  to incur  capital
        expenditures  in connection with upgrading  their  telephone,  cable and
        other  equipment and systems.  For example,  Breda will be upgrading its
        financial  system  software  in the third  quarter of 2001,  and will be
        converting  the  financial  software  utilized by  Westside  Independent
        Telephone  Company  in either  the  fourth  quarter of 2001 or the first
        quarter of 2002.  The cost of those upgrades and  conversions  will not,
        however, be material to Breda.

        On May 2, 2001,  Prairie Telephone  Company,  Inc., along with two other
        telephone  companies,  signed  various  agreements  with Desktop  Media,
        L.L.C. ("Desktop Media"). Desktop Media is a Minnesota limited liability
        company.  Under those agreements,  Prairie Telephone  Company,  Inc. has
        become a 10% equity owner of Desktop Media.

        Desktop Media  provides both dial-up and high-speed  Internet  access in
        south central Minnesota.  Desktop Media is a full-scale Internet Service
        Provider,  which also sells  computer  hardware  and  related  services.
        Desktop Media has filed to provide  traditional  telephone services as a
        competitive  local exchange  carrier.  Desktop Media's overall  business
        plan is based upon Desktop Media  providing data local exchange  carrier
        services.  Desktop  Media  will  contract  to provide  Internet  Service
        Provider support  services to Prairie  Telephone  Company,  Inc. and the
        other two telephone companies who have invested in Desktop Media.

        Under the  agreements,  Prairie  Telephone  Company,  Inc.  has advanced
        Desktop  Media  $500,000  under a promissory  note dated May 2, 2001. No
        interest or principal payments are required during the first year of the
        promissory  note.  In the second year of the  promissory  note,  Desktop
        Media will be required to pay interest only, which


                                       16
<PAGE>


        will  include all interest  deferred  during the first year and interest
        accruing  during  the  second  year.  On the first day of the 25th month
        following May 2, 2001, a principal payment of $12,000 plus interest will
        be due by Desktop Media, with a similar installment payment to be due on
        the first day of each month  thereafter  until the entire  principal and
        interest  accruing  under  the  promissory  note has been  paid in full.
        Desktop  Media  has  the  option  of  prepaying  all or any  part of the
        principal balance, or accrued interest, at any time without penalty.

        The promissory note has been guaranteed by the manager of Desktop Media.
        The manager of Desktop Media has also  guaranteed  the loans made by the
        other two telephone  companies who have invested in Desktop Media. There
        is also a management agreement between the manager and Desktop Media.

        There is no assurance  that Desktop Media will perform  according to its
        business  plan,  and  there  is  therefore  no  assurance  that  Prairie
        Telephone Company, Inc. will ever receive any debt repayments or returns
        or other value from its investment in Desktop Media.  As discussed above
        in this  quarterly  report,  one of the  intended  purposes  of  Prairie
        Telephone Company,  Inc.'s  relationship with Desktop Media is to try to
        lower Breda's and its subsidiaries' costs of providing Internet services
        in order to allow Breda to compete at a lower  price point for  Internet
        services.

        Breda's  board of  directors  declared a dividend  at the March 12, 2001
        meeting of the board of  directors.  The  dividend  was in the amount of
        $3.00 per share,  for an  aggregate  dividend of  $111,087,  and will be
        payable on or before the 2001 annual meeting of the  shareholders  which
        is scheduled to be held on May 16, 2001. The dividend was only the third
        dividend declared by Breda since Breda was incorporated in 1964.

        Breda is continuing to negotiate new employment  agreements  with Robert
        Boeckman and Jane Morlok.  No break in service is anticipated for either
        Mr. Boeckman or Ms. Morlok.

        Breda  believes  that the funds  from the sale of its  direct  broadcast
        satellite  operation  in  January  of  1999,  and the  sale  of  Prairie
        Telephone Company, Inc.'s shares of stock in Central Iowa Cellular, Inc.
        in May 2000, 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  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 anticipated future trends
        in revenues and net income,  projections  concerning


                                       17
<PAGE>


        operations  and  cash  flow,   growth  and  acquisition   opportunities,
        management's  plans and  intentions  for the future,  and other  similar
        forecasts  and  statements  of  expectation.  Words  such as  "expects,"
        "estimates,"   "plans,"   "anticipates,"   "contemplates,"   "predicts,"
        "intends,"  "believes,"  "seeks," "should,"  "thinks,"  "objectives" and
        other similar expressions or variations thereof are intended to identify
        forward looking statements. Forward looking statements made by Breda and
        its management are based on 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 risks, uncertainties and assumptions,  nearly all of
        which are beyond the  control  of Breda and its  management.  The risks,
        uncertainties  and  assumptions  affecting  forward  looking  statements
        include, but are not limited to:

        o       the possible adverse effects to Breda and its subsidiaries which
                may arise under the regulations  which will be promulgated under
                the   Telecommunications   Act  of  1996,   including  increased
                competition;

        o       adverse changes by the Federal Communications  Commission to the
                access  charge  rates  that  can be  charged  by  Breda  and its
                subsidiaries to long distance carriers;

        o       technological  advances  in  the  telecommunications  and  cable
                industries which may replace or otherwise  adversely affect in a
                material way the existing technologies utilized by Breda and its
                subsidiaries;

        o       employee relations;

        o       management's business strategies;

        o       general industry  conditions,  including  consolidations  in the
                telecommunications and cable industries;

        o       general economic conditions at the national,  regional and local
                levels;

        o       acts or omissions of competitors and other third parties;

        o       changes in or more governmental regulations and policies;

        o       reductions  in  or  other  changes  to   governmental   programs
                assisting  or


                                       18
<PAGE>


                affecting the  telecommunications  and cable industries,  and in
                particular  programs  which aid  providers of those  services to
                rural areas; and

        o       continued availability of financing, and on favorable terms.

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


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

        Breda  currently is not aware of any pending  legal  proceeding to which
        Breda is a party or to which any of Breda's  property is subject,  other
        than  routine  litigation  that is  incidental  to its  business.  Breda
        currently is not aware that any governmental  authority is contemplating
        any proceeding against Breda or any of its property.

Item 2. Changes in Securities.

        No material modifications, limitations or qualifications were made to or
        placed  upon the terms of  Breda's  shares of common  stock  during  the
        period of January 1, 2001 through March 31, 2001.

        Breda did not issue any shares of its common  stock during the period of
        January 1, 2001 through March 31, 2001.

Item 3. Defaults Upon Senior Securities.

        There  has  been  no  material  default  or any  material  arrearage  or
        delinquency  by Breda of the type  required  to be  reported  under this
        Item.

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 January 1, 2001 through March 31, 2001.

Item 5. Other Information.

        During the quarter  ended March 31, 2001,  Breda  redeemed 212 shares of
        its common  stock from one  shareholder  at $235 per share,  for a total
        amount of $49,820.  The $235 per share price was the  redemption  amount
        which was established by the


                                       19
<PAGE>




        board of  directors  of Breda on June 12,  2000.  The board of directors
        contemplates  announcing a new redemption  price of $258 per share to be
        effective  at  or  around  the  May  16,  2001  annual  meeting  of  the
        shareholders.

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
                January 1, 2001 through March 31, 2001.


                                       20


<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:   May 11, 2001.                           By: /s/ Dean Schettler
                                                    ----------------------------
                                                    Dean Schettler, President



Date:   May 11, 2001.                            By:/s/ Scott Bailey
                                                    ---------------------------
                                                    Scott Bailey, Treasurer




<PAGE>



                                  EXHIBIT INDEX
                             Exhibits to Form 10-QSB
                        Three Months Ended March 31, 2001
                              BREDA TELEPHONE CORP.


Description of Exhibit                                              Page Number

2.   Plan  of  Acquisition,   Disposition,   Reorganization,
     Arrangement, Liquidation or Succession

     (a)  Stock  Purchase  Agreement  dated May 22, 1998, by
          and  between   Arthur   Zerwas  and  Mary  Zerwas,
          Westside Independent  Telephone Company, and Breda
          Telephone Corporation, along with the Amendment to
          the Stock Purchase  Agreement  dated May 22, 1998.
          (Filed  as  Exhibit  2.1 to  Breda's  Registration
          Statement on Form 10-SB, and  incorporated  herein
          by this reference.)

     (b)  Stock  Purchase  Agreement  dated May 22, 1998, by
          and between  Arthur  Zerwas and Mary  Zerwas,  and
          Breda   Tele-Services,   Ltd.,   along   with  the
          Amendment to the Stock  Purchase  Agreement  dated
          May 22,  1998.  (Filed as  Exhibit  2.2 to Breda's
          Registration   Statement   on  Form   10-SB,   and
          incorporated herein by this reference.)

     (c)  Asset Purchase Agreement dated October 6, 1998, by
          and  between  NewPath  Communications,   L.C.  and
          Tele-Services,  Ltd.  (Filed  as  Exhibit  2.3  to
          Breda's Registration  Statement on Form 10-SB, and
          incorporated herein by this reference.)

     (d)  Asset Purchase Agreement by and between Golden Sky
          Systems,  Inc.  and  Breda  Telephone  Corporation
          dated as of  November  30,  1998,  along  with the
          Amendment of Asset Purchase  Agreement dated as of
          January 11, 1999. (Filed as Exhibit 2.4 to Breda's
          Registration   Statement   on  Form   10-SB,   and
          incorporated herein by this reference.)

     (e)  Stock Purchase  Agreement dated March 29, 2000, by
          and  among  AirTouch  Iowa,   LLC,   Central  Iowa
          Cellular,  Inc., Prairie Telephone Company,  Inc.,
          Panora  Tele-communications,  Inc.,  Walnut  Creek
          Communications, Inc.,


<PAGE>


          Minburn   Telephone   Company,    and   Interstate
          Enterprises, Ltd. (Filed as Exhibit 2.1 to Breda's
          Form 8-K dated  March  29,2000 and filed April 12,
          2000, and incorporated herein by this reference.)

     (f)  Des Moines Tower  Proceeds  Agreement  dated as of
          March  29,  2000,  by  and  among   AirTouch  Com-
          munications,   Inc.,  Panora   Telecommunications,
          Inc., Walnut Creek  Communications,  Inc., Minburn
          Telephone Company,  Interstate  Enterprises,  Ltd.
          and Prairie  Telephone  Company,  Inc., along with
          Exhibits A and B thereto. (Filed as Exhibit 2.2 to
          Breda's  Form 8-K dated  March 29,  2000 and filed
          April 12, 2000,  and  incorporated  herein by this
          reference.)

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

     (a)  Employment   Agreement  effective  April  1,  2000
          between  Breda  and  Robert  Boeckman.  (Filed  as
          Exhibit  10.1  to  Breda's  Form  10-QSB  for  the
          quarterly   period  ended  March  31,  2000,   and
          incorporated herein by this reference.)

     (b)  Employment   Agreement  effective  April  1,  2000
          between  Breda and Jane Morlok.  (Filed as Exhibit
          10.2 to  Breda's  Form  10-QSB  for the  quarterly
          period  ended  March 31,  2000,  and  incorporated
          herein by this reference.)


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