<PAGE>

================================================================================

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

                                   FORM 10-Q


          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                 For the Quarterly Period Ended March 31, 2001

                                 OR

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


                       Commission File Number: 000-27743
                            PAC-WEST TELECOMM, INC.
            (Exact name of registrant as specified in its charter)


                CALIFORNIA                            68-0383568
         (State or other jurisdiction of          (I.R.S. Employer
         incorporation or organization)           Identification No.)


          1776 W. MARCH LANE, SUITE 250                 95207
          STOCKTON, CALIFORNIA                        (Zip Code)
          (Address of principal executive offices)

                                (209) 926-3300
             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X] No [___]

As of April 30, 2001, the Company had an aggregate of 36,020,613 shares of
common stock issued and outstanding.

================================================================================

<PAGE>

                            PAC-WEST TELECOMM, INC.

                               Table of Contents


                                                                        PAGE
                                                                        ----
PART I                          FINANCIAL INFORMATION

  Item 1. Financial Statements
          Condensed Consolidated Balance Sheets (Unaudited) -
            March 31, 2001 and December 31, 2000.......................   1
          Condensed Consolidated Statements of Operations and
            Comprehensive Income (Unaudited) - Three month
             periods ended March 31, 2001 and 2000.....................   2
          Condensed Consolidated Statements of Cash Flows
             (Unaudited) - Three month periods ended
             March 31, 2001 and 2000...................................   3
          Notes to Unaudited Condensed Consolidated
            Financial Statements.......................................   4

  Item 2. Management's Discussion and Analysis of Financial Condition
            and Results of Operations..................................  12

  Item 3. Quantitative and Qualitative Disclosures About Market Risks..  18

PART II                         OTHER INFORMATION

  Item 1. Legal Proceedings............................................  19
  Item 6. Exhibits and Reports on Form 8-K.............................  19


SIGNATURES.............................................................  20


<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                            PAC-WEST TELECOMM, INC.

               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                         MARCH 31,        DECEMBER 31,
                                                                            2001             2000
                                                                         ---------        ------------
<S>                                                                      <C>              <C>
                                ASSETS
Current Assets:
    Cash & cash equivalents                                               $ 29,672,000     $ 56,675,000
    Short-term investments                                                  50,440,000       43,904,000
    Trade accounts receivable, net of allowances of $2,477,000 at
       March 31, 2001 and $3,003,000 at December 31, 2000.                  22,432,000       19,106,000
    Accounts receivable from related parties                                    27,000           34,000
    Income taxes receivable                                                    296,000        2,257,000
    Inventories                                                              3,750,000        4,272,000
    Prepaid expenses and other current assets                                4,431,000        3,482,000
    Deferred financing costs, net                                              853,000          853,000
    Deferred tax assets                                                      3,189,000        2,475,000
                                                                          ------------     ------------
                  Total current assets                                     115,090,000      133,058,000

Property and equipment, net                                                215,279,000      201,514,000
Costs in excess of net assets of acquired businesses, net                   17,925,000       18,756,000
Other assets, net                                                            7,148,000        7,464,000
                                                                          ------------     ------------
                  Total assets                                            $355,442,000     $360,792,000
                                                                          ============     ============
                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current portion of notes payable                                     $      5,000     $     16,000
     Current obligations under capital leases                                7,758,000        5,852,000
     Accounts payable                                                       16,110,000       18,681,000
     Accrued payroll and related expenses                                    3,154,000        3,872,000
     Accrued interest on Senior Notes                                        3,375,000        8,437,000
     Other accrued liabilities                                               6,168,000        6,028,000
     Fiber IRU liability                                                    17,240,000       17,240,000
                                                                          ------------     ------------
                  Total current liabilities                                 53,810,000       60,126,000

Senior Notes                                                               150,000,000      150,000,000
Capital leases, less current portion                                        15,516,000       15,459,000
Deferred revenues, less current portion                                        719,000          735,000
Deferred income taxes                                                       15,458,000       14,715,000
                                                                          ------------     ------------
                  Total liabilities                                        235,503,000      241,035,000
                                                                          ------------     ------------
Commitments and Contingencies

Stockholders' Equity:
     Common stock, $0.001 par value; 100,000,000 shares authorized;
        36,020,613 and 35,948,549 shares issued and outstanding
        at March 31, 2001 and December 31, 2000, respectively                   36,000           36,000
     Additional paid-in capital                                            183,756,000      183,568,000
     Notes receivable from stockholders                                       (200,000)        (200,000)
     Retained deficit                                                      (63,763,000)     (63,280,000)
     Accumulated other comprehensive income                                    700,000          277,000
     Deferred stock compensation                                              (590,000)        (644,000)
                                                                          ------------     ------------
                  Total stockholders' equity                               119,939,000      119,757,000
                                                                          ------------     ------------
                   Total liabilities and stockholders' equity             $355,442,000     $360,792,000
                                                                          ============     ============
</TABLE>

        See notes to these condensed consolidated financial statements.

                                       1
<PAGE>

                            PAC-WEST TELECOMM, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     AND COMPREHENSIVE INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                   THREE MONTH PERIOD ENDED
                                                                                          -----------------------------------------
                                                                                          MARCH 31, 2001             MARCH 31, 2000
                                                                                          --------------             --------------
<S>                                                                                       <C>                        <C>
Revenues                                                                                    $40,061,000                $30,391,000
                                                                                            -----------                -----------
Costs and Expenses:
   Cost of sales and operating                                                               12,616,000                  9,880,000
   Selling, general and administrative                                                       17,219,000                 10,194,000
   Depreciation and amortization                                                              7,276,000                  4,129,000
                                                                                            -----------                -----------
                 Total costs and expenses                                                    37,111,000                 24,203,000
                                                                                            -----------                -----------
                 Income from operations                                                       2,950,000                  6,188,000

Other Expense (Income):
   Interest expense                                                                           4,711,000                  4,647,000
   Interest income                                                                           (1,316,000)                (2,306,000)
   Other expense (income)                                                                        11,000                     (8,000)
                                                                                            -----------                -----------
                 Total other expense, net                                                     3,406,000                  2,333,000
                                                                                            -----------                -----------
                 Income (loss) before provision for income taxes and cumulative
                    effect of change in accounting principle                                   (456,000)                 3,855,000

Provision for Income Taxes                                                                       29,000                  1,710,000
                                                                                            -----------                -----------
                 Income (loss) before cumulative effect of change in accounting principle      (485,000)                 2,145,000

Cumulative effect of change in accounting principle, net of income tax benefit of $943,000            -                 (1,415,000)
                                                                                            -----------                -----------
                 Net income (loss) applicable to common stockholders                        $ (485,000)                $   730,000
                                                                                            ===========                ===========
Income (loss) per share before cumulative effect of change in accounting principle:
                 Basic                                                                      $     (0.01)               $      0.06
                 Diluted                                                                    $     (0.01)               $      0.06

Loss per share from cumulative effect of change in accounting principle:
                 Basic                                                                      $         -                $     (0.04)
                 Diluted                                                                    $         -                $     (0.04)

Net income (loss) per share:
                 Basic                                                                      $     (0.01)               $      0.02
                 Diluted                                                                    $     (0.01)               $      0.02

Basic weighted average shares outstanding                                                    36,001,304                 35,575,092
Diluted weighted average shares outstanding                                                  36,001,304                 37,543,674


Comprehensive Income (loss):
   Net income (loss)                                                                        $  (485,000)               $   730,000
   Other comprehensive income (loss) from net
      unrealized investment gains and (losses)                                                  423,000                   (219,000)
                                                                                            -----------                -----------
                 Comprehensive income (loss)                                                $   (62,000)               $   511,000
                                                                                            ===========                ===========
</TABLE>

        See notes to these condensed consolidated financial statements.

                                       2
<PAGE>

                            PAC-WEST TELECOMM, INC.

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             THREE MONTH PERIOD ENDED
                                                                                      -------------------------------------
                                                                                      MARCH 31, 2001         MARCH 31, 2000
                                                                                      --------------         --------------
<S>                                                                                   <C>                    <C>
Operating Activities:
   Income (loss) before cumulative effect of change in accounting principle             $   (485,000)          $  2,145,000
   Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
        Depreciation and amortization                                                      7,276,000              4,129,000
        Amortization of deferred financing costs                                             213,000                213,000
        Amortization of deferred stock compensation                                           54,000                 66,000
        Interest earned on restricted cash                                                         -                (38,000)
        Provision for doubtful accounts                                                      322,000                 75,000
        Allowance for doubtful accounts                                                     (848,000)                     -
        Net loss on disposal of property                                                      11,000                      -
        Deferred income tax provision                                                         29,000                627,000
        Changes in operating assets and liabilities, net of acquisitions:
          Accounts receivable                                                             (2,793,000)              (864,000)
          Income taxes receivable                                                          1,961,000                      -
          Inventories                                                                        522,000             (1,688,000)
          Prepaid expenses and other current assets                                         (949,000)              (614,000)
          Other assets                                                                        38,000               (419,000)
          Accounts payable and accrued liabilities                                        (3,164,000)            (2,461,000)
          Accrued interest on Senior Notes                                                (5,062,000)            (5,060,000)
          Income taxes payable                                                                     -              1,084,000
                                                                                        ------------           ------------
                  Net cash used by operating activities                                   (2,875,000)            (2,805,000)
                                                                                        ------------           ------------
 Investing Activities:
    Purchase of property and equipment                                                   (18,187,000)           (11,610,000)
    Proceeds from disposal of property and equipment                                           3,000                      -
    (Purchase) redemption of investments, net                                             (6,113,000)             7,823,000
    Costs of acquisitions, net of cash received                                               (8,000)            (9,351,000)
                                                                                        ------------           ------------
                  Net cash used in investing activities                                  (24,305,000)           (13,138,000)
                                                                                        ------------           ------------
 Financing Activities:
    Proceeds from stock option exercises                                                     188,000                      -
    Proceeds from repayment of note receivable from officer                                        -                 33,000
    Payments for deferred financing costs                                                          -                 (2,000)
    Principal payments on notes payable                                                      (11,000)               (28,000)
                                                                                        ------------           ------------
                  Net cash provided by financing activities                                  177,000                  3,000
                                                                                        ------------           ------------
                  Net decrease in cash and cash equivalents                              (27,003,000)           (15,940,000)

 Cash and Cash Equivalents:
    Beginning of period                                                                   56,675,000             82,688,000
                                                                                        ------------           ------------
    End of period                                                                       $ 29,672,000           $ 66,748,000
                                                                                        ============           ============
</TABLE>

        See notes to these condensed consolidated financial statements.

                                       3
<PAGE>

                            PAC-WEST TELECOMM, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

1.  BASIS OF PRESENTATION:

  These accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements.  In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary for a fair
presentation for the periods indicated, have been included.  Operating results
for the three month period ended March 31, 2001 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2001.  The
condensed consolidated balance sheet at December 31, 2000 has been derived from
the audited consolidated balance sheet at that date, but does not include all of
the information and notes required by generally accepted accounting principles
for complete financial statements.  These unaudited interim condensed
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and the notes thereto of Pac-West Telecomm,
Inc. (the Company) as of and for the year ended December 31, 2000 included in
the Company's Annual Report on Form 10-K.

  These unaudited condensed consolidated financial statements include the
results of operations of Napa Valley Telecom (Napa Telecom), Installnet, Inc.
and two other related companies (collectively referred to as Installnet), BTC
Corp. (Baron Telecommunications) and Communication Specialists, Inc. (CSI) since
their acquisitions in January, February, September and November 2000,
respectively (see Note 2).


2.  ORGANIZATION:

  Pac-West Telecomm, Inc. is a rapidly-growing provider of integrated
communications services in the western United States. Our customers include
Internet service providers (ISPs), small and medium-sized businesses and
enhanced communications service providers, many of which are communications
intensive users.

  In January 2000, the Company acquired the customer base and certain other
assets of Napa Telecom, a switched-based, long distance telecommunications
company, headquartered in Napa Valley, California. In February 2000, the Company
acquired all of the outstanding stock of Installnet, which is headquartered in
Southern California. Installnet was primarily in the business of selling and
installing telecommunications equipment.   In September 2000, the Company
acquired the customer base and certain other assets of Baron Telecommunications,
which was headquartered in Seattle, Washington.  Baron Telecommunications
provided telecommunications equipment to small and medium-sized businesses in
Seattle and surrounding areas.  Effective November 1, 2000, the Company acquired
the businesses and assets of CSI, a telecommunications company located near Salt
Lake City, Utah, which also was primarily in the business of selling and
installing telecommunications equipment.  These acquisitions are being accounted
for using the purchase method of accounting.


3.  REVENUE RECOGNITION:

  In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101 (SAB 101) "Revenue Recognition in Financial
Statements".  SAB 101 provides guidance on applying generally accepted
accounting principles to revenue recognition in financial statements, and became
effective for the Company during the fourth quarter of 2000, retroactive to
January 1, 2000.  In accordance with SAB 101, the Company recognizes revenue
when there is persuasive evidence of an arrangement, delivery of the product or
performance of the service has occurred, the selling price is fixed or
determinable and collectibility is reasonably assured.  The Company's adoption
of SAB 101 changed the timing of when revenue is recognized for non-refundable
up-front payments received for installation services.  Historically, these
<PAGE>

amounts had been recognized in the period received.  Under the revised revenue
recognition policy, these payments, and related costs up to the amount of
revenues, are recognized as revenue and expense ratably over the term of the
service contracts, generally 24 to 36 months.  Any costs in excess of recognized
revenues are expensed in the current period.

  The cumulative effect of this accounting change was $1,415,000, net of income
tax benefit of $943,000, and was taken as a charge to the first quarter of 2000.
The accounting change did not have a material effect on quarterly revenue and
quarterly earnings during 2000, however, upon adoption of SAB 101 in the fourth
quarter of 2000, the Company restated its results for the first three quarters
of the year ended December 31, 2000 as reflected in Note 12 of the notes to the
Company's consolidated financial statements for the year ended December 31, 2000
included in the Annual Report on Form 10-K for the year ended December 31, 2000.

  Revenues from the sale of telecommunications products are recognized upon
installation, or if no installation is required, upon shipment.  Revenues from
service access agreements are recognized as the service is provided, except for
reciprocal compensation generated by calls placed to ISPs connected through the
Company's network.  The right of competitive local exchange carriers (CLECs),
such as the Company, to receive this type of compensation is the subject of
numerous regulatory and legal challenges (see Note 16).  Until this issue is
ultimately resolved, the Company will continue to recognize reciprocal
compensation as revenue when received in cash or when collectibility is
reasonably assured.


4.  SHORT-TERM INVESTMENTS:

  All investments with an original maturity of greater than three months from
the date of acquisition are accounted for in accordance with Financial
Accounting Standards Board (FASB) Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The Company determines the
appropriate classification at the time of purchase. All investments as of March
31, 2001 and December 31, 2000 were classified as available-for-sale and
appropriately carried at fair value. Realized gains and losses are included in
interest income in the accompanying statements of operations.  Differences
between cost and fair value are recorded as accumulated other comprehensive
income as a separate component of stockholders' equity.  At March 31, 2001 and
December 31, 2000, unrealized gains on investments of $700,000 and $277,000,
respectively, are recorded as accumulated other comprehensive income.


5.  PROPERTY AND EQUIPMENT:

  Property and equipment includes network and other communications equipment,
equipment under capital leases, office furniture, business software and computer
equipment, vehicles, leasehold improvements and projects-in-progress.  These
assets are stated at cost, which includes direct costs and capitalized interest,
and are depreciated once placed in service using the straight-line method.
Capitalized interest of $570,000 and  $658,000 was recorded during the three
month periods ended March 31, 2001 and 2000, respectively.  Depreciation expense
of $6,371,000 and $3,467,000 was recorded during the three month periods ended
March 31, 2001 and 2000, respectively.  Repair and maintenance costs are
expensed as incurred.
<PAGE>

  Property and equipment as of March 31, 2001 and December 31, 2000 consist of
the following:

<TABLE>
<CAPTION>

                                                                   MARCH 31,                 DECEMBER 31,
                                                                     2001                       2000
                                                                --------------              ----------------
<S>                                                             <C>                         <C>
Network and other communications
  equipment.............................................          $115,254,000                  $114,325,000

Equipment under capital leases..........................            23,273,000                    21,311,000
Office furniture........................................             2,167,000                     2,046,000

Business software and computer
  equipment.............................................            20,131,000                    19,586,000
Vehicles................................................             2,073,000                     2,053,000
Leasehold improvements.................................             23,997,000                    23,971,000
Projects-in-progress....................................            65,530,000                    49,065,000
                                                                --------------              ----------------
                                                                   252,425,000                   232,357,000
Less: accumulated depreciation and
  amortization........................................              37,146,000                    30,843,000
                                                                --------------              ----------------
Property and equipment, net...........................            $215,279,000                  $201,514,000
                                                                ==============              ================
</TABLE>


6.  OTHER ASSETS:

   As of March 31, 2001 and December 31, 2000, other assets consist of the
following:

<TABLE>
<CAPTION>

                                                                    MARCH 31,                DECEMBER 31,
                                                                      2001                      2000
                                                                 ------------              --------------
<S>                                                               <C>                       <C>
Deferred financing costs................................          $4,595,000                $4,808,000
Acquisition of lease rights.............................           1,188,000                 1,254,000
Long-term portion of deferred installation costs........             511,000                   516,000
Long-term portion of prepaid expenses and deposits.                  749,000                   781,000
Employee receivable.....................................             105,000                   105,000
                                                                 ------------              --------------
                                                                  $7,148,000                $7,464,000
                                                                 ============              ==============
</TABLE>

   Deferred financing costs primarily consist of capitalized amounts for
underwriter fees, professional fees and other expenses related to the issuance
and subsequent registration of the $150,000,000 Senior Notes.  These deferred
financing costs are being amortized on a straight-line basis (which approximates
the effective interest method) over the estimated 10-year term of the notes
beginning January 29, 1999. Amortization of deferred financing costs for both of
the three month periods ended March 31, 2001 and 2000 was $213,000 and is
included within interest expense in the accompanying statements of operations.

   During 1999, the Company purchased lease rights for additional space in its
Los Angeles facility.  This amount is included as acquisition of lease rights in
other assets and is being amortized on a straight-line basis over the life of
the lease, which is 69 months.
<PAGE>

7.  OTHER ACCRUED LIABILITIES:

  At March 31, 2001 and December 31, 2000, other accrued liabilities consist of
  the following:

<TABLE>
<CAPTION>

                                                                   MARCH 31,               DECEMBER 31,
                                                                     2001                     2000
                                                               -----------------         ---------------

<S>                                                            <C>                       <C>
Taxes payable, collected from customers...................       $   67,000                  $  582,000
Acquisition holdbacks.....................................          772,000                   1,060,000
Accrued warranty and maintenance..........................          411,000                     402,000
Accrued rent..............................................          557,000                     350,000
Deferred revenue..........................................        1,608,000                   1,819,000
Other.....................................................        2,753,000                   1,815,000
                                                                -----------                 -----------
                                                                 $6,168,000                  $6,028,000
                                                                ===========                 ===========
</TABLE>


8.  INCOME TAXES:

  The Company's effective income tax rates for the three month periods ended
March 31, 2001 and 2000 reflect the applicable federal and state statutory
income tax rates along with the tax impact of the non-deductibility of certain
acquisition related amortization.  For the three month period ended March 31,
2001, the non-deductibility of certain acquisition related amortization
generated income tax expense for the quarter ended March 31, 2001.  As the
Company had a pretax loss for this period, the Company's effective income tax
rate for the quarter ended March 31, 2001 is not meaningful.  The Company's
effective income tax rate for the three month period ended March 31, 2000 was
44%.


9.  OTHER COMPREHENSIVE INCOME:

  In September 1997, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS 130
establishes the disclosure requirements for comprehensive income (loss) and its
components within the financial statements.  For the three month periods ended
March 31, 2001 and 2000, there was $423,000 and $(219,000), respectively, of
other comprehensive income (loss) pertaining to the net unrealized investment
gains (losses).


10. OTHER RECENT PRONOUNCEMENTS:

  FASB issued SFAS No. 133 (SFAS 133), "Accounting for Derivative Instruments
and for Hedging Activities," and SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of FASB
Statement No. 133" (SFAS 138), in June 1998 and June 2000, respectively. As
amended, SFAS 133 establishes accounting and reporting standards for derivative
instruments and hedging activities including recognizing all derivatives as
either assets or liabilities in the financial statements at fair value and is
effective January 1, 2001. The adoption of SFAS 133 did not impact the Company's
financial statements as the Company does not invest in derivatives or
participate in hedging activities.

  In March 2000, the FASB issued Financial Accounting Standards Board
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation - an Interpretation of APB No. 25" (FIN 44). FIN 44 became
effective July 1, 2000.  FIN 44 clarifies the application of Accounting
Principles Board Opinion No. 25 for certain issues, specifically, (a) the
definition of an employee, (b) the criteria for determining whether a plan
qualifies as a compensatory plan, (c) the accounting consequence of various
modifications to the terms of a previous fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. The Company has adopted the provisions of FIN 44 with no material
effect on its results of operations or financial position.
<PAGE>

11. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS:

  The Company has a three-year senior credit facility expiring June 15, 2002
that provides for maximum borrowings of $40.0 million to finance working
capital, the cost of the Company's planned capital expansion and other corporate
transactions.  This facility is secured by substantially all of the Company's
assets. Borrowings under this senior credit facility will bear interest, at the
Company's option, at (1) the Base Rate (as defined in our senior credit
facility) or (2) the LIBOR Rate (as defined) plus between 2.25% and 3.5%. As of
March 31, 2001 and December 31, 2000, there were no amounts outstanding under
this facility.  As of March 31, 2001 the borrowing rate would have been 7.33%.

  In 2000 and 2001, the Company secured a lease facility of up to $40.0 million
to be used exclusively for the acquisition of networking products and services
manufactured by Cisco Systems, Inc.  Equipment financed under this facility will
be leased for a term of 36 months at which time the Company may purchase the
equipment at fair market value.  Purchases under this facility will be accounted
for as a capital lease.  As of March 31, 2001 the Company purchased
approximately $23.3 million of equipment under this facility.  Upon acceptance
of the networking products the Company will pay recurring monthly lease payments
over a term of three years.  No payments have been made as of March 31, 2001.
Payments will commence in the second quarter of 2001.


12. PURCHASE COMMITMENTS:

  In 1999, the Company began implementing new billing and operations support
systems.  Total estimated costs for these systems aggregate approximately $15
million, of which approximately $13.4 million of the total cost has been
incurred through March 31, 2001, and $1.6 million is expected to be incurred
during the balance of 2001. The majority of the $13.4 million incurred as of
March 31, 2001 is included in business software and computer equipment (see Note
5).

  In 1999, the Company also began implementing a new enterprise and financial
software system.  Total estimated costs for this system are $5 million, of which
approximately $3.4 million has been incurred, most of which is recorded in
business software and computer equipment as of March 31, 2001 (see Note 5).

  On June 30, 2000, the Company entered into an Indefeasible Right of Use (IRU)
agreement with Qwest Communications to acquire dedicated fiber optics circuits
of OC-48 capacity connecting major metropolitan areas in California.  The IRU
agreement is for a term of 20 years and includes one dollar purchase options at
the end of the term.  The total cost of the IRU is approximately $23.0 million
of which $5.8 million was paid on July 28, 2000 and the balance is payable on
June 30, 2001.  The purchase price of approximately $23.0 million is included in
projects-in-progress and $17.2 million is classified in Fiber IRU liability in
the accompanying condensed consolidated balance sheets as of March 31, 2001 and
December 31, 2000.


13. STOCKHOLDERS' EQUITY:

  Stock Options

  An aggregate of 5,375,500 shares of common stock have been reserved for option
grants under the Company's 1999 Stock Incentive Plan, the 1998 Griffin and
Bryson Non-Qualified Stock Incentive Plan and the 2000 Napa Valley Non-Qualified
Stock Incentive Plan.  During the three month period ended March 31, 2001,
options to purchase 222,050 shares of common stock were granted, options to
purchase 170,263 shares of common stock were canceled and options to purchase
27,275 shares of common stock were exercised.
<PAGE>

  The following table summarizes information about the Company's stock options
outstanding as of March 31, 2001:

<TABLE>
<CAPTION>
                          OPTIONS OUTSTANDING                                    OPTIONS EXERCISABLE
------------------------------------------------------------------------    ------------------------------
                                     WEIGHTED AVERAGE                           NUMBER         WEIGHTED
   RANGE OF      NUMBER OUTSTANDING  CONTRACTUAL LIFE   WEIGHTED AVERAGE    EXERCISABLE AT     AVERAGE
EXERCISE PRICE   AT MARCH 31, 2001   REMAINING (YEARS)  EXERCISE PRICE      MARCH 31, 2001  EXERCISE PRICE
--------------   ------------------  -----------------  ----------------    --------------  --------------
<S>              <C>                 <C>                <C>                 <C>             <C>
  $0.48-4.28         2,556,164              8.4             $ 2.50             988,552          $ 1.18
  $6.25-35.00        1,394,173              9.0              17.52             361,994           15.52
  $0.48-35.00        ---------                                                ---------
                     3,950,337              8.6             $ 7.80            1,350,546         $ 5.03
                     =========                                                =========
</TABLE>


14. INCOME (LOSS) PER SHARE:

  Income (loss) per share has been calculated under SFAS No. 128, "Earnings per
Share" (SFAS 128).  SFAS 128 requires companies to compute income (loss) per
share under two methods, basic and diluted.  Basic net income (loss) per share
is calculated by dividing net income (loss) by the weighted average shares of
common stock outstanding during the period.  Diluted net income (loss) per share
information considers the effect of dilutive securities such as stock options
and other securities convertible into common stock on an if-converted basis.
For the three month period ended March 31, 2001, dilutive securities were
antidilutive, as they decreased the loss for this period.  Accordingly, options
to purchase 1,287,515 shares were excluded from the diluted net income (loss)
per share calculation for this period. Basic and diluted net income (loss) per
share for the three month periods ended March 31, 2001 and 2000 has been
determined as follows:

<TABLE>
<CAPTION>
                                                                        FOR THE THREE MONTH PERIOD ENDED
                                                                                 MARCH 31, 2001
                                                    ---------------------------------------------------------------------
                                                            INCOME                     SHARES                  PER-SHARE
                                                          (NUMERATOR)               (DENOMINATOR)               AMOUNT
                                                    -------------------       ---------------------       ---------------
<S>                                                 <C>                       <C>                         <C>
Basic net income (loss) per share:
Net income (loss) available
 to common stockholders                                   $(485,000)                 36,001,304                $(0.01)
                                                          =========                  ==========                ======
Effect of dilutive Securities:
 Stock options                                                                               --
                                                                                     ----------
Net income (loss) per share:
Net income (loss) available to common
 stockholders                                             $(485,000)                 36,001,304                $(0.01)
                                                          =========                  ==========                ======
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                        FOR THE THREE MONTH PERIOD ENDED
                                                                                 MARCH 31, 2000
                                                    ---------------------------------------------------------------------
                                                            INCOME                     SHARES                PER-SHARE
                                                          (NUMERATOR)               (DENOMINATOR)              AMOUNT
                                                    -------------------       ---------------------       ---------------
<S>                                                    <C>                       <C>                         <C>
Basic net income per share:
Net income available to common
 stockholders before cumulative effect of
 change in accounting principle                             $ 2,145,000                  35,575,092                $ 0.06

Cumulative effect of change in accounting
 principle, net of income tax benefit
                                                             (1,415,000)                 35,575,092                 (0.04)
                                                            ------------                                          -------

Net income available to common stockholders
                                                            $   730,000                  35,575,092                $ 0.02
                                                            ===========                  ==========               =======

Effect of Dilutive Securities:
 Stock options                                                                            1,968,582
                                                                                         ----------

Diluted net income per share:

Income available to common stockholders and
 dilutive stock options (treasury stock
 method) before cumulative effect of change
 in accounting principle                                    $ 2,145,000                  37,543,674                $ 0.06

Cumulative effect of change in accounting
 principle, net of income tax benefit                        (1,415,000)                 37,543,674                 (0.04)
                                                            -----------                                           -------

Net income available to common stockholders
 and dilutive stock options                                 $   730,000                  37,543,674                $ 0.02
                                                            ===========                  ==========               =======
</TABLE>


16. RECIPROCAL COMPENSATION AND LEGAL PROCEEDINGS:

  The Company has established interconnection agreements with certain Incumbent
Local Exchange Carriers (ILECs). The Telecommunications Act of 1996 requires
ILECs to enter into interconnection agreements with CLECs , such as the Company
and other competitors, and requires state Public Utilities Commissions (PUCs) to
arbitrate such agreements.

  The interconnection agreements outline, among other items, compensation
arrangements for calls originating or terminating in the other party's switching
equipment, payment terms, and level of services.

  Various ILECs have alleged, and are continuing to allege, that internet
traffic calls made to an ISP are not local calls, and as such are not covered by
the interconnection agreements.

  The Company is a party to various legal proceedings, including the Pacific
Bell and California Public Utilities Commission (CPUC) and the Nevada Bell and
Public Utilities Commission of Nevada proceedings, relating to reciprocal
compensation payment and other interconnection agreement issues.

  In February 1999 the Federal Communications Commission (FCC) issued a
Declaratory Ruling on the issue of reciprocal compensation for calls bound to
ISPs. The FCC ruled that the calls are jurisdictionally interstate calls. The
FCC, however, determined that this issue did not resolve the question of whether
<PAGE>

reciprocal compensation is owed. The FCC noted a number of factors that would
allow the state PUCs to leave their decisions requiring the payment of
compensation undisturbed.  In March 2000, the Declaratory Ruling was vacated by
the United States Court of Appeals for the District of Columbia Circuit for lack
of reasoned decision making, and remanded to the FCC for further consideration.

  Further, in February 2000 the CPUC commenced a separate generic proceeding to
develop its policy regarding reciprocal compensation.  Similarly, in the latter
part of 2000, the Colorado and Utah Commissions commenced investigations into
intercarrier compensation issues.

  On April 27, 2001, the FCC released its Order on Remand regarding intercarrier
compensation for ISP-bound traffic.  The FCC asserted exclusive jurisdiction
over ISP-bound traffic and established a new interim intercarrier compensation
regime for ISP-bound traffic with capped rates above a fixed traffic exchange
ratio.  Traffic in excess of a ratio of 3:1 (terminating minutes to originating
minutes) is presumed to be ISP-bound traffic, and is to be compensated at rates
that decrease from $.0015 to $.0007, or the applicable state-approved rate if
lower, over two years.  Traffic below the 3:1 threshold is to be compensated at
the rates in existing interconnection agreements.  Traffic above the 3:1 ratio
is also subject to a growth ceiling using First Quarter 2000 traffic data as the
baseline.  Traffic in excess of the growth ceiling is subject to "bill and
keep," an arrangement in which the originating carrier pays nothing to the
terminating carrier to complete calls.  In addition, when a competitive carrier
begins to provide service in a state it has not previously served, all traffic
in excess of the 3:1 ratio is subject to bill-and-keep arrangements.  In
exchange for this reduction in reciprocal compensation obligations to CLECs, the
ILECs must offer to exchange all local traffic, including ISP-bound traffic, at
the federal capped rates. It is not possible to estimate the full impact of
these rules at this time because the federal regime does not alter existing
contracts except to the extent that they incorporate changes of federal law, and
because adoption of the federal regime is within the discretion of the ILEC
exchanging traffic with a particular CLEC.

  The Company cannot predict the impact of the FCC's ruling on existing state
decisions or the outcome of pending appeals or on additional cases in this
matter. Given the uncertainty concerning the final outcome of the PUC
proceedings, the possibility of future extended appeals or additional
litigation, and the impact of any appeal of the FCC decision, the Company
continues to record the revenue associated with reciprocal compensation billings
to ILECs only when received in cash or when collectibility is reasonably
assured.

17. SEGMENT REPORTING:

  The Company has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131).  SFAS 131 establishes standards
in which public companies disclose certain information about operating segments
in the company's financial reports.  As an integrated telecommunications
provider, the Company has one reportable operating segment.  While the Company's
chief decision-maker monitors the revenue streams of various services,
operations are managed and financial performance is evaluated based upon the
delivery of multiple services over common networks and facilities.  This allows
the Company to leverage its costs in an effort to maximize return.  As a result,
there are many shared expenses generated by the various revenue streams.
Because management believes that any allocation of the expenses to multiple
revenue streams would be impractical and arbitrary, management does not
currently make such allocations internally.  The chief decision-maker does,
however, monitor revenue streams at a more detailed level than those depicted in
the Company's consolidated financial statements.  The following table presents
consolidated revenues by service type:

<TABLE>
<CAPTION>

                                                                MARCH 31,                DECEMBER 31,
                                                                  2001                       2000
                                                           -------------------------------------------

<S>                                                           <C>                         <C>
Local services..........................................       $30,547,000                 $22,459,000
Long distance service...................................         3,636,000                   3,924,000
Dedicated transport services ...........................         2,347,000                   1,677,000
Product and services....................................         3,003,000                   1,759,000
Other...................................................           528,000                     572,000
                                                               -----------                 -----------
                                                               $40,061,000                 $30,391,000
                                                               ===========                 ===========
</TABLE>
<PAGE>

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


  Except for the historical information contained herein, this report contains
forward-looking statements, subject to uncertainties and risks, and as a result,
our actual results may differ materially from those discussed here.  These
uncertainties and risks include among others, the successful execution of our
expansion activities into new geographic markets on a timely and cost-effective
basis; the pace at which new competitors enter our existing and planned markets;
competitive responses of the Incumbent Local Exchange Carriers; execution of
interconnection agreements with Incumbent Local Exchange Carriers on terms
satisfactory to us; maintenance of our supply agreements for transmission
facilities; continued acceptance of our services by new and existing customers;
the outcome of legal and regulatory proceedings regarding reciprocal
compensation for Internet-related calls and certain of  our product offerings;
the ability to attract and retain talented employees; the effective management
of our working capital including investments, accounts receivables and
inventory;  replacements or upgrades of our technology and equipment that
becomes obsolete; management of administrative, technical or operational issues
presented by our acquisitions and expansions; prevention of interruption of
services from system failures or power outages;  and our ability to successfully
access markets, install switching electronics, and obtain the use of leased
fiber transport facilities and any required governmental authorizations,
franchises and permits, all in a timely manner, at reasonable costs and on
satisfactory term and conditions, as well as regulatory, legislative and
judicial developments that could cause actual results to differ materially from
the future results indicated, expressed, or implied, in such forward-looking
statements. These and other factors are discussed in our Prospectus, dated
November 3, 1999, and in our Annual Report on Form 10-K for the year ended
December 31, 2000, as filed with the Securities and Exchange Commission (SEC).

OVERVIEW

  Pac-West Telecomm, Inc. is a rapidly-growing provider of integrated
communications services in the western United States. Our customers include
Internet service providers (ISPs), small and medium-sized businesses and
enhanced communications service providers, many of which are communications
intensive users. Our predecessor, also known as Pac-West Telecomm, Inc., began
selling office phone systems in 1980 and reselling long distance service to
small and medium-sized businesses and residential customers in 1982. Beginning
in 1986, our predecessor began offering paging and telephone answering services
to its customers. Effective September 30, 1996, our predecessor transferred its
telephone and answering service divisions to us. Prior to September 30, 1996, we
did not conduct any operations and, since that time, we have disposed of the
answering service division and have focused our business strategy on operating
as a provider of integrated communications services.

  In January 2000, the Company acquired the customer base and certain other
assets of Napa Valley Telecom (Napa Telecom), a switch based, long distance
telecommunications company, which was headquartered in Napa Valley, California.
In February 2000, the Company acquired all of the outstanding stock of
Installnet, Inc. and two related companies (collectively, Installnet), which is
headquartered in Southern California.  Installnet was primarily engaged in the
business of selling, installing and maintaining telecommunications equipment.
In September 2000, the Company acquired the customer base and certain other
assets of BTC Corp (Baron Telecommunications), which was headquartered in
Seattle, Washington.  Baron Telecommunications provided telecommunications
equipment to small and medium-sized businesses in Seattle and surrounding areas.
Effective November 1, 2000, the Company acquired the customer base and assets of
Communication Specialists, Inc. (CSI), a telecommunications company located near
Salt Lake City, Utah, which also was primarily in the business of selling and
installing telecommunications equipment.

  For the three month periods ended March 31, 2001 and March 31, 2000,
recognizing compensation from other communications companies for completing
their customers' calls only to the extent such compensation was actually
received in cash or when collectibility was reasonably assured, we had net
revenues of approximately $40.1 million and $30.4 million, respectively, and
EBITDA (earnings before interest, net,
<PAGE>

income taxes, depreciation and amortization, income or loss on asset
dispositions, and cumulative effect of change in accounting principle) of
approximately $10.2 million and $10.3 million, respectively.

  As of March 31, 2001, we had 229,171 lines in service, an 84% increase from
March 31, 2000. For the quarter ended March 31, 2001 our minutes of use were 6.6
billion, an increase of 22% over the first quarter of 2000.

FACTORS AFFECTING OPERATIONS:

  Revenues. We derive our revenues from monthly recurring charges, usage
charges, amortization of initial non-recurring charges and telephone equipment
sales and service. Monthly recurring charges include the fees paid by customers
for lines in service and additional features on those lines, as well as
equipment collocation services. Usage charges consist of fees paid by end users
for each call made, fees paid by incumbent local exchange carriers as reciprocal
compensation for completion of their customers' calls through Pac-West, and
access charges paid by carriers for long distance traffic terminated by Pac-
West. Initial non-recurring charges are paid by end users, if applicable, for
the initiation of our service. Initial non-recurring charges include payments
received for installation services. In December 1999, the SEC issued Staff
Accounting Bulletin No. 101 (SAB 101) "Revenue Recognition in Financial
Statements". SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition in financial statements, and became effective
for the Company during the fourth quarter of 2000, retroactive to January 1,
2000. The Company's adoption of SAB 101 changed the timing of when revenue is
recognized for non-refundable up-front payments received for installation
services. Historically, these amounts have been recognized in the period
received. Under the revised revenue recognition policy, these payments, and
related costs up to the amount of revenues, are recognized as revenue and
expense ratably over the term of the service contracts, generally 24 to 36
months. Any costs in excess of recognized revenues are expensed in the current
period.

  A substantial portion of our revenues is derived from reciprocal compensation
paid by incumbent local exchange carriers with which we have interconnection
agreements. Reciprocal compensation revenues increased significantly in recent
fiscal quarters as a result of increasing inbound call volume from our Internet
service providers' customers and other customers. For the quarters ended March
31, 2001 and 2000, recorded reciprocal compensation accounted for approximately
42% and 47%, respectively, of our revenues.

  As recently as fiscal year 1999, two incumbent local exchange carriers with
which we have interconnection agreements, Pacific Bell and GTE, refused to pay
that portion of reciprocal compensation due under their interconnection
agreements that they estimated was the result of inbound calls terminating to
ISPs. These incumbent local exchange carriers contended that such ISP calls are
not local calls within the meaning of their respective interconnection
agreements and claimed that no reciprocal compensation was therefore payable.
While these incumbent local exchange carriers have been paying us the full
amount of our reciprocal compensation billings since the latter half of 1999,
some of these payments may be subject to a reservation of rights to appeal,
contest or seek subsequent reimbursement of amounts previously paid by them for
reciprocal compensation.

  We expect that reciprocal compensation will continue to represent a
significant portion of our revenues in the future. We are currently negotiating
and implementing new interconnection agreements and the terms of the related
reciprocal compensation. The per minute reciprocal compensation rate we receive
from Pacific Bell under our current agreement is significantly lower than it was
under our previous agreement. Based on current market conditions, we expect the
per minute reciprocal compensation rate will continue to decline from historic
rates under interconnection agreements in the future.

  Further, as discussed in Note 16 to the accompanying unaudited condensed
consolidated financial statements, on April 27, 2001, the FCC released its Order
on Remand regarding intercarrier compensation for ISP bound traffic.  The FCC
asserted exclusive jurisdiction over ISP-bound traffic and established a new
interim intercarrier compensation regime for ISP-bound traffic with capped rates
above a fixed traffic exchange ratio. To the extent that the federal regime
applies to the Company and is adopted by incumbent local exchange carriers
exchanging traffic with the Company, reciprocal compensation or intercarrier
compensation rates will continue
<PAGE>

to decline for the foreseeable future. It is currently not possible to estimate
the impact of the April 27, 2001 FCC regime at this time, however, as issued,
and if adopted by incumbent local exchange carriers, the impact of the regime on
the Company's future reciprocal compensation rates would be significant.

  Operating Costs.  Operating costs are comprised primarily of leased transport
charges, usage charges for long distance and intrastate calls and, to a lesser
extent, reciprocal compensation related to calls that originate with a Pac-West
customer and terminate on the network of an incumbent local exchange carrier or
other competitive local exchange carrier.  Our leased transport charges are the
lease payments we incur for the transmission facilities used to connect our
customers to our switches and to connect to the incumbent local exchange carrier
and other competitive local exchange carrier networks.  Our strategy of leasing
rather than building our own transport facilities results in our operating costs
being a significant component of total costs.

  Selling, General and Administrative Expenses.  Our selling, general and
administrative expenses include network development, administration and
maintenance costs, selling and marketing, customer service, information
technology, billing, corporate administration and personnel.

QUARTERLY OPERATING AND STATISTICAL DATA:

  The following tables summarize the results of operations as a percentage of
revenues for the three month periods ended March 31, 2001 and 2000. The
following data should be read in conjunction with the unaudited Condensed
Consolidated Financial Statements and notes thereto included elsewhere in this
report:

<TABLE>
<CAPTION>
                                                                                  THREE MONTH PERIOD ENDED
                                                                                          MARCH 31,
                                                                                 --------------------------
                                                                                  2001                2000
                                                                                        (UNAUDITED)
<S>                                                                              <C>                  <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:

Revenue......................................................................    100.0%              100.0%

Costs of sales and operating costs...........................................     31.5%               32.5%

Selling, general and administrative expenses.................................     43.0%               33.5%
Depreciation and amortization expenses.......................................     18.2%               13.6%
Income from operations.......................................................      7.4%               20.4%
Net income (loss)............................................................     (1.2)%               2.4%

</TABLE>
<PAGE>

  The following table sets forth unaudited statistical data for each of the
specified quarters of 2000 and 2001. The statistical data for any quarter is not
necessarily indicative of results for any future period.

                                              QUARTER ENDED (UNAUDITED)
<TABLE>
<CAPTION>

                                                                 2000                                            2001
                                         ------------------------------------------------------------------------------------------
                                             MAR. 31            JUN. 30            SEPT. 30             DEC. 31          MAR. 31
                                         --------------     ---------------     --------------       --------------    ------------
<S>                                       <C>                <C>                 <C>                <C>                <C>
Ports equipped........................      460,800             518,400            576,000             672,000        672,000

Lines sold to date....................      135,143             164,800            181,045             198,980        240,393

Lines in service to date..............      124,340             151,957            169,050             185,524        229,171

Estimated data lines (% of installed            72%                 77%                75%                 83%           75%
  lines)..............................
Lines on switch % ....................          94%                 96%                94%                 93%           92%

Internet service provider and
  enhanced communications
  service provider customer lines
  collocated..........................          84%                 88%                76%                 80%           81%

Quarterly minutes of use switched
  (in millions).......................        5,387               5,653              6,140               6,487          6,583

Metropolitan statistical areas
 served...............................           26                  27                 27                  29             30
Capital expenditures (in thousands)...     $ 11,610            $ 43,518           $ 16,292            $ 42,228       $ 20,149
Employees (consolidated)..............          482                 551                629                 693            689

</TABLE>


THREE MONTH PERIOD ENDED MARCH 31, 2001 COMPARED TO THREE MONTH PERIOD ENDED
MARCH 31, 2000:

  Consolidated revenues for the three month period ended March 31, 2001
increased $9.7 million to $40.1 million from $30.4 million for the same period
ended in 2000.  The increase in revenues is primarily attributed to an increase
of $2.7 million in paid local interconnection revenues, an increase of $0.9
million in switched access charges, an increase of $4.3 million and $1.0 million
in recurring charges and installation charges billed directly to wholesale
markets and business customers, respectively, a decrease of $0.2 million in
local and long distance usage revenues, an increase of $0.7 million in dedicated
transport revenues and $1.2 million in product and service revenues from
Installnet, which we acquired in February 2000.

  In 2000, we increased the capacity of our switching facilities in Los Angeles,
Oakland and Stockton and completed new switching facilities in, or near,
Phoenix, Arizona, Denver, Colorado and Salt Lake City, Utah. As a result of
additional switching facilities, increased utilization of expanded switch
capacities and acquisitions completed during 2000, our revenues for the three
month period ended March 31, 2001 increased 32% from the same period ended in
2000.  Additionally, we increased the number of access lines to small and
medium-sized businesses to 56,600 as of March 31, 2001, an increase of 98% from
the same period ended in 2000.  The Company attributes this growth to the
increased size of its sales force and continued strong demand from customers for
bundled communications services.

  The total number of access lines in service increased 84% to 229,171 as of
March 31, 2001 from 124,340 as of March 31, 2000.  Billable minutes of use were
6.6 billion in the first three months of 2001, up 22% from 5.4 billion in the
first three months of 2000.

  The number of inbound local calls and the minutes subject to reciprocal
compensation revenues in accordance with interconnection agreements increased
15% and 20% for the first three months of 2001 over the first three months of
2000, respectively. The effect of these increases in inbound local calls and
minutes resulted in a $2.7 million, or 19%, increase in paid interconnection
revenues for the period ended March 31, 2001 over the corresponding period in
2000. Additionally, revenues from switched access charges increased $0.9
million, or 100%, from the same period ended in 2000.
<PAGE>

  Direct billings to wholesale markets increased during the three month period
ended March 31, 2001 by $4.3 million, or 76%, from the same period in 2000.
Lines in service to this market increased to 172,600 lines in service at March
31, 2001 from 95,700 lines at March 31, 2000, an increase of 80%.

  Direct billings to small and medium-sized business customers increased
significantly to 56,600 lines in service at March 31, 2001 from 28,600 lines in
service at March 31, 2000, an increase of 98%.

  Outbound local and long distance revenues, including 800, 888, and 877 numbers
and travel card calls, decreased $0.2 million during the three month period
ended March 31, 2001 from the same period ended in 2000.  Although total minutes
billed to customers increased between periods, the average rate per minute
charged to customers declined as the mix between local and long distance calls
made by our customers changed during these periods.  The Company is making
concerted marketing efforts to sell local service to small and medium-sized
businesses.  Most of the calls placed by these customers are local. As rates
charged by the Company for a local call are significantly less than rates
charged for a long distance call, the average rate per minute charged between
periods declined as a result of the change in the mix of our customer base.
During the three month period ended March 31, 2001, 44% of minutes billed to
customers were charges for local minutes compared to 24% in the same period
ended 2000.

  Our consolidated operating costs for the three month period ended March 31,
2001 increased $2.7 million, to $12.6 million from $9.9 million for the
corresponding period in 2000.  The increase in operating costs was primarily due
to an increase in network operations associated with a higher level of
telecommunications activity.  In addition, we continued to make significant
investments in our network infrastructure during 2000 and the first three months
of 2001 to accommodate future growth of our communications services.

  Our consolidated selling, general and administrative expenses for the three
month period ended March 31, 2001 increased $7.0 million to $17.2 million from
$10.2 million for the corresponding period in 2000. As expected, we incurred
significant selling and marketing costs in connection with our efforts to expand
our operations and establish ourselves in markets before switches become
operational and generate revenue. The increase in selling, general and
administrative expenses was primarily due to the addition of 18 employees in
Pac-West's sales and marketing departments; 59 additional network employees; 50
additional service technicians; 27 additional customer service representatives;
and 53 additional employees in other administration and information technology
functions. The total number of Pac-West employees increased from 482 at March
31, 2000 to 689 at March 31, 2001. In addition, selling, general and
administrative expenses for the quarter ended March 31, 2001 include
approximately $0.3 million of provision for doubtful accounts, an increase of
$0.2 million from the same quarter ended 2000. Additional amounts of
approximately $0.5 million of customer receivables were written-off during the
first quarter of 2001 and charged to the accounts receivable allowance. These
amounts were specifically provided for in the Company's accounts receivable
allowance at December 31, 2000. Selling, general and administrative expenses
were 43% and 34% of revenues for the three month periods ended March 31, 2001
and 2000, respectively.

  Our consolidated depreciation and amortization expense for the three month
period ended March 31, 2001 increased $3.1 million to $7.3 million from $4.1
million for the same period in 2000.  Depreciation and amortization as a
percentage of revenues increased to 18% for the quarter ended March 31, 2001
from 14% from the same period ended 2000.  The increase in depreciation and
amortization expense is primarily due to additional depreciation expense
incurred on purchases of equipment between periods.  During the twelve month
period ended March 31, 2001 the Company purchased an additional $99.2 million of
property and equipment, excluding $23.0 million of dedicated fiber optics
circuits purchased in June 2000, which we have not started depreciating as they
have not yet been placed in service.

  Our consolidated interest expense for the three month periods ended March 31,
2001 and 2000 was $4.7 million and $4.6 million, respectively.  Interest expense
over these two periods is primarily related to the $150 million senior notes
issued on January 29, 1999, including amortization of related deferred financing
costs associated with the offering over a period of ten years.  Interest expense
is net of amounts capitalized of $0.6 million and $0.7 million for the three
months ended March 31, 2001 and 2000, respectively.

  The Company's effective income tax rates for the three month periods ended
March 31, 2001 and 2000 reflect the applicable federal and state statutory
income tax rates along with the tax impact of the non-deductibility of certain
acquisition related amortization and deferred stock compensation.   For the
three month period ended March 31, 2001, the Company's effective income tax rate
is not meaningful as the Company had a pretax loss for the period.  The
Company's effective income tax rate for the three month period ended March 31,
2000 was 44%.
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES:

  Net cash used by operating activities was $2.9 million for the three month
period ended March 31, 2001 compared to $2.8 million for the same period ended
in 2000.  Income (loss) before cumulative effect of change in accounting
principle plus depreciation and amortization was more than offset during these
two periods by the semi-annual interest payment made on the senior notes in
February 2001 and 2000 and other working capital requirements.

  Net cash used in investing activities was $24.3 million for the three month
period ended March 31, 2001 compared to $13.1 million for the same period ended
in 2000.  During the three month period ended March 31, 2001, the Company
invested $18.2 million, excluding $2.0 million of equipment being financed under
a capital lease, in new switching and related equipment as compared to $11.6
million during the same period ended in 2000.   Additionally, during the three
month period ended March 31, 2001 the Company purchased $6.1 million, net of
short-term investments.  During the three month period ended March 31, 2000, the
Company redeemed short-term investments so that it could pay $9.4
million to acquire Napa Telecom and Installnet.

   Net cash provided by financing activities was $0.2 million for the three
month period ended March 31, 2001 compared to $3,000 for the same period ended
in 2000.  Net cash provided during the three month period ended March 31, 2001
was primarily attributable to proceeds from the exercise of stock options.

  The local telecommunications services business is capital intensive.  Our
operations have required, and will continue to require, substantial capital
investment for the design, acquisition, construction and implementation of our
network.  Capital expenditures, including amounts financed under capital leases,
were $20.2 million for the first three months of 2001, and $113.6 million for
the year ended December 31, 2000.  Our business plan, as currently contemplated,
anticipates additional capital expenditures, excluding acquisitions, of
approximately $45 million during the balance of 2001.  The actual cost of our
planned expansion will depend on a variety of factors, including the cost of the
development of our network in each of our new markets, the extent of competition
and pricing of the telecommunications services in such markets and the
acceptance of our services.  Accordingly, our actual capital requirements may
exceed, or fall below, the amounts described above.

  Our senior credit facility provides for maximum borrowings of $40.0 million
for working capital and other general corporate purposes, and bears interest, at
our option, at: (1) the Base Rate, as defined in our senior credit facility; or
(2) the LIBOR rate, as defined in our senior credit facility plus between 2.25%
and 3.5%. As of March 31, 2001, there were no amounts outstanding under this
facility and the borrowing rate would have been approximately 7.33%. Any
borrowings under our senior credit facility will be secured by substantially all
of our assets. Our senior credit facility has a three year term expiring June
2002.

   In  2000 and 2001, the Company secured a lease facility of up to $40.0
million to be used exclusively for the acquisition of networking equipment and
related services manufactured by Cisco Systems, Inc.  As of March 31, 2001, the
Company has purchased approximately $23.3 million of equipment under this
facility, which is being accounted for as a capital lease.

   Our principal sources of funds for the balance of 2001 are anticipated to be
obtained from current cash and short-term investment balances, cash flows from
operating activities, and if necessary, borrowings under the senior credit
facility.  We believe that these funds will provide us with sufficient liquidity
and capital resources for us to fund our business plan for at least the next
twelve months.  No assurance can be given, however, that this will be the case.
The foregoing statements do not take into account additional acquisitions which,
if made, are expected to be funded through a combination of cash and equity.
Depending upon our rate of growth and profitability, and/or if we pursue any
significant acquisitions, we may require additional equity or debt financing to
meet our working capital requirements or capital equipment needs.  There can be
no assurance that additional financing will be available when required or, if
available, will be on terms satisfactory to us.
<PAGE>

  Our senior credit facility and the senior notes indenture contain financial
and other covenants that restrict, among other things, our ability to incur
additional indebtedness, incur liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of substantially all
of our assets.  Such limitations could limit corporate and operating activities,
including our ability to respond to market conditions, to provide for
unanticipated capital investments or to take advantage of business
opportunities.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

   The SEC's rule related to market risk disclosure requires that we describe
and quantify our potential losses from market risk sensitive instruments
attributable to reasonably possible market changes. Market risk sensitive
instruments include all financial or commodity instruments and other financial
instruments that are sensitive to future changes in interest rates, currency
exchange rates, commodity prices or other market factors. We are not exposed to
market risks from changes in foreign currency exchange rates or commodity
prices. We do not hold derivative financial instruments nor do we hold
securities for trading or speculative purposes. At March 31, 2001 we had $150
million of fixed rate notes outstanding, and consequently we currently have no
risk exposure associated with increasing interest rates on our debt.  In
addition, we have a line of credit which may, at our option, have a variable
interest rate tied to LIBOR; however there were no amounts outstanding at March
31, 2001. We are however exposed to changes in interest rates on our investments
in cash equivalents and short-term investments. Substantially all of our
investments in cash equivalents and short-term investments are in money market
funds that hold short-term investment grade commercial paper, treasury bills or
other U.S. government obligations. Currently this reduces our exposure to long-
term interest rate changes. We do not use interest rate derivative instruments
to manage our exposure to interest rate changes. A hypothetical 100 basis point
decline in short-term interest rates would reduce the annualized earnings on our
$80.1 million of cash equivalents and short-term investments at March 31, 2001
by approximately $0.8 million.

<PAGE>

                                    PART II
                               OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     See Note 16 to the unaudited Condensed Consolidated Financial Statements
included elsewhere in this Form 10-Q and "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Factors Affecting Operations--
Revenues" for a description of certain legal proceedings involving the Company.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibit

     There are no exhibits being filed at this time in connection with Item 601
     of Regulation S-K.

(b)  Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the quarter ended
     March 31, 2001.



NOTE:  ITEMS 2, 3, 4 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
<PAGE>

                                  SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on May 14, 2001.




                                  PAC-WEST TELECOMM, INC.

                                  /s/ Richard E. Bryson
                                  _____________________________
                                  Richard E. Bryson
                                  Chief Financial Officer
                                  (Principal Financial Officer)



                                  /s/ Dennis V. Meyer
                                  ______________________________
                                  Dennis V. Meyer
                                  Vice President-Finance
                                  (Principal Accounting Officer)