SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                 FORM 10-KSB

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

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

                For the fiscal year ended: December 31, 2000

                      Commission File Number: 000-27931

                        DESERT HEALTH PRODUCTS, INC.
            (Exact name of registrant as specified in our charter)

Arizona                                                86-0699108
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

8221 E Evans Rd
Scottsdale, Arizona                                    85260
(Address of principal executive offices)               (Zip Code)

      Registrant's telephone number including area code: (480) 951-1941

         Securities registered pursuant to Section 12(b) of the Act:
                                    None

         Securities registered pursuant to Section 12(g) of the Act:
                       Common Stock, $0.001 par value
                              (Title of Class)

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

     Indicate  by  check mark if disclosure of delinquent filers pursuant  to
Item  405  of  Regulation  S-K  is not contained  herein,  and  will  not  be
contained,  to  the  best of registrant's knowledge, in definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-K.  [     ]

     The  number of shares of Common Stock, $0.001 par value, outstanding  on
March 1, 2001, was 8,192,971 shares, held by approximately 326 stockholders.

<PAGE>

                        DESERT HEALTH PRODUCTS, INC.
                         FOR THE FISCAL PERIOD ENDED
                              December 31, 2000

                               Index to Report
                               on Form 10-KSB


PART I                                                                  Page

Item 1.  Business                                                       2-19
Item 2.  Properties                                                       19
Item 3.  Legal Proceedings                                                20
Item 4.  Submission of Matters to a Vote of Security Holders              20

PART II

Item 5.  Market for Registrant's Common Equity and
         Related Stockholder Matters                                      20
Item 6.  Management's Discussion and Analysis of Financial Condition
          and Results of  Operation                                       21
Item 7.  Financial Statements and Supplementary Data                      23
Item 8.  Changes in and Disagreements With Accountants on Accounting and
          Financial Disclosure                                            23

PART III

Item 9.  Directors and Executive Officers of the Registrant            24-26
Item 10. Executive Compensation                                        26-27
Item 11. Security Ownership of Certain Beneficial Owners
         and Management                                                   28
Item 12. Certain Relationships and Related Transactions                28-29

PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports
         on Form 8-K                                                   29-30

Signatures                                                                31


<PAGE>

     This  form 10-KSB contains forward-looking statements within the meaning
of   the  federal  securities  laws.  These  forward-looking  statements  are
necessarily based on certain assumptions and are subject to significant risks
and uncertainties. These forward-looking statements are based on management's
expectations  as of the date hereof, and the Company does not  undertake  any
responsibility to update any of these statements in the future. Actual future
performance  and results could differ from that contained in or suggested  by
these  forward-looking statements as a result of factors set  forth  in  this
Form  10-KSB (including those sections hereof incorporated by reference  from
other filings with the Securities and Exchange Commission), in particular  as
set forth in the "Management's Discussion and Analysis" under Item 6.

     In  this form 10-KSB references to "Desert Health", "The Company", "we",
"us", and "our" refer to Desert Health Products, Inc.

PART I

ITEM 1.   BUSINESS

Overview

     Desert  Health  Products, Inc., an Arizona corporation  was  formed  in
1991. Desert Health is engaged in the manufacturing, packaging and sale  and
distribution  of  branded  and  store brand  (private  label)  vitamins  and
nutritional  supplements. Desert Health is focusing its development  efforts
on  certain  plants and plant extracts that are widely used  throughout  the
world to enhance health and well being, and to assist in the treatment of  a
variety of diseases and physical conditions.

     Desert  Health markets over 100 different products, which are  packaged
under various labels and bottle counts. They are sold in Vitamin and Mineral
combinations,   Chinese  Herbal  Products,  Specialty  Supplements,   Weight
Management  Products,  Herbal/Botanical  Products,  FemAid  Product  Support
Systems,  Ayurvedic  Products, Skin Care Products, Pet  Care  Products,  and
Water   Purification  Products,  with  varying  potency  levels  in  tablets
(including  chewable and gelatin encapsulated capsules  ("soft  gels").  The
Company has traditionally outsourced its raw materials manufacturing,  while
maintaining  a  portion of the bottle filling aspects  in  its  facility  in
Scottsdale, Arizona.

     On  January 26, 2000, pursuant to an Acquisition Agreement and Plan  of
Merger  entered  into  by  and  between Desert Health  and  Intercontinental
Capital  Fund,  Inc.,  (Intercontinental) a Nevada corporation,  (a  company
subject to the reporting requirements of the Securities and Exchange Act  of
1934) all of the outstanding shares of common stock of Intercontinental were
exchanged  for  400,000  shares of 144 restricted  common  stock  of  Desert
Health,  in a transaction in which Desert Health was the successor and  took
on the reporting requirements of Intercontinental Capital Fund, Inc.

     In  December  2000, Desert Health spun off its Royal  Phoenix  line  of
products, which product line the Company had decided not to pursue. Pursuant
to  the  terms  of the agreement, each shareholder of Desert  Health  is  to

<PAGE>

receive 10 shares of common stock in Royal Phoenix. Royal Phoenix has become
a separate entity from Desert Health, subject to a Royalty and Manufacturing
Agreement.

Subsequent Events

     Subsequent to December 31, 2000 the Company entered into two agreements,
one  of  which  gives  the Company exclusive distributing  rights  worldwide,
except for the U.S., its territories and Canada, for certain health products.
For  these  rights, the Company will pay $50,000 and 100,000  shares  of  its
common stock. Additionally, the Company sold 10% of the above agreement to  a
company  in  Holland. As consideration for the purchase, the Holland  company
will  invest $250,000 to be used to assist in the initial financing  for  the
international  sales  and marketing efforts of Dr. Harris'  Original  Perfect
Feet.  To  date, the Company has received $90,000 towards the fulfillment  of
the  purchase price.  The Holland company will receive varying royalties from
$1.25  to  $2.00 per set from all sales of Dr. Harris' Original Perfect  Feet
for a term of 10 years.

     In  March  2001 the Company established an office in Beijing, China  for
the sale and distribution of Desert Health Products.

Products and Product Development

     Desert Health offers a comprehensive assortment of vitamin, mineral  and
nutritional supplement products, which include calcium and potassium, as well
as  various  herbs  such  as  St. John's Wort and Saw  Palmetto  and  various
multivitamin  combinations, in addition to products formulated  with  Chinese
herbs.  Desert  Health,  with its contract packaging companies,  can  deliver
millions  of  tablets  per  day. These fully automated  packaging  lines  are
capable of packaging in excess of 100,000 bottles per shift, per day.  Desert
Health  has  confidentiality  agreements with its  manufacturers  to  protect
Desert Health's proprietary formulas.

     Desert  Health's products are marketed under its customers' store brands
(private label) as well as under the Company's own brands.

     Desert Health introduces new products and reformulates existing products
on  an  ongoing basis in response to consumer trends and emerging  scientific
evidence.  Product  concepts  are  generally  developed  by  Desert  Health's
management,  key employees and consultants. Desert Health also  develops  and
formulates new products based on customers' requests and responds to  changes
in existing product brands by reformulating existing products and redesigning
packaging.

     New Products:

*    Hangover ControlT - By taking two capsules before alcohol intake and two
  capsules  at  bedtime one can wake up the next morning without the  typical
  symptoms of over-indulgence. All Natural.

<PAGE>

*     Dr.  Harris' Original Diabetic FeetT - a 100% natural formulation  that
  consists  of  two separate application phases. The first phase  includes  a
  potent  antibacterial  agent.  It  also contains  an  incredibly  effective
  exfoliant. The second phase contains a local circulatory stimulant as well as
  a moisturizer that will maintain the skin moisture content for 12 to 24 hours
  after a single application. By constantly lowering the bacterial count on the
  surface of the feet, the probability of a severe infection is significantly
  reduced.  With the application of exfoliant once or twice daily,  excessive
  buildup of dead cells on the soles of the feet will be gradually diminished.
  The mild circulatory stimulation will help reverse the damaging effects  of
  reduced  blood  flow, maintaining a healthier status for  the  tissue.  The
  moisturization of the tissues restores the elasticity and flexibility of the
  tissue, preventing the drying and cracking that can be a major problem  for
  sufferers  of  diabetes. Dr. Harris' Original Perfect  FeetT  products  are
  suggested  to be a vital part of a daily diabetic care regimen,  since  the
  physical  factors  that  produce the complications will  not  significantly
  change.

*     Hepatitis  C  -  A unique blend of Chinese herbs formulated  by  Master
  Herbalist,  Dr. Henry Han. Studies have shown a remarkable 72%  healing  in
  Hepatitis B and C patients taking this all-natural product.

*     Prostate  - Another product formulated by Master Herbalist,  Dr.  Henry
  Han. Many using this blend of Chinese herbs have experienced a reduction in
  PSA count with no side effects being reported.

*     Natural  Hair RestorerT - This natural product helps stop  common  hair
  loss in older people and will encourage new hair growth. Formulated by  Dr.
  Dennis Harris.

*     Snore  ReliefT  - Formulated by Dr. Dennis Harris, Snore  Relief  is  a
  unique  combination  of  all natural herbs and  enzymes  that  help  reduce
  disturbing snoring. The patented fast and effective anti-snore product with
  no side effects. Eighty-six percent of users have reported good to excellent
  results when taking this formulation.\

*     Allergy ReliefT - formulated by Dr. Dennis Harris this allergy  formula
  is  a  unique combination of all natural herbs and enzymes that gently work
  together to assist in symptomatic relief of allergies and sinusitis.

*     Dong  Quai/Damiana - A combination of two herbs used for  irregular  or
  difficult  menses by women, and also used for increased vitality, activity,
  well-being and for increased libido.

*     Happy NeckT - Happy Neck is activated by inflating a unique, innovative
  air chamber and represents a health-protecting product based on the principle
  of  `traction' for relief of cervical pain. Happy Neck is a system that  is
  comfortable and safe with a simple method of application - an ideal companion
  for patients with problems involving the cervical vertebrae.

<PAGE>

*    New Skin Care Line - The Company has developed a new skin care line
using state-of-the-art suspended minerals. The products are Body Lotion,
Facial Cleanser, Facial Spray, Facial Moisturizer, Liquid Lift/Mask and
toner.

*     DHEA - The most abundant hormone found in the bloodstream and known  to
  have anti-aging properties. Research has shown that DHEA has many functions
  in the body pertaining to health and longevity. Among other things, it helps
  to  generate  the  sex  hormones estrogen and testosterone,  increases  the
  percentage  of  muscle mass and increases the percentage of  body  fat  and
  stimulates bone deposition.

*     MSM - MSM is a naturally occurring organic form of dietary sulfur.  MSM
  helps  fortify connective tissues and maintain healthy joints. It may  help
  reduce inflammation, scavenges for free radicals, helps regulate elimination
  and may have anti-parasitic action.

Vitamins

*    Antioxidant - The Company's antioxidant is formulated to achieve optimum
  results and is designed to work synergistically with our multi-vitamin  and
  multi-mineral tablets. Antioxidants neutralize free radicals that can cause
  damage to cells, impairing the immune system.

*     Multi  Vitamin  Tablets - Our multi vitamin tablets are synergistically
  blended to give maximum benefits.

Minerals

*     Multi  Mineral  Tablets - Desert Health Products,  Inc.  multi  mineral
  tablets contain a complete balance of easy-to-absorb minerals.

*     Chromium  Picolinate - Chromium Picolinate is a mineral that  helps  to
  increase lean body mass, lower blood cholesterol levels, increase endurance,
  and regulate blood sugar. It enhances metabolism and promotes permanent fat
  loss.

*     Colloidal Minerals - Colloidal Minerals Premium Blend provides over  70
  major and trace minerals in a natural concentrate that is easy to absorb.

*    Selenium PlusT - Selenium is an essential trace element in humans.

*     Super  Minerals w/Aloe VeraT - Super Minerals w/Aloe Vera provides  the
  benefit  of easily absorbed minerals and the health promoting qualities  of
  Aloe Vera.

Chinese Herbal Products by Master Herbalist Dr. Henry Han

In 2000, Desert Health Products, Inc. introduced six unique products based on
classic  Chinese formulas originally developed through 3000 years of  medical

<PAGE>

practice  as well as current clinical and laboratory studies. These  products
embody  Chinese medicines basic philosophy of balance, integrating prevention
and  treatment  of  illness while enhancing well being and quality  of  life.
These  products were individually formulated by master herbalist,  Dr.  Henry
Han,  who  drew  from over 20 years of clinical experience  and  research  to
design formulas to be agreeable to the typical body type of westerners.

*     Restoring Essence IT  - This product is formulated for the treatment of
  weakness  and  fatigue,  or  to  enhance vitality  and  energy  in  healthy
  individuals.

*    Restoring Essence II T - This product is formulated for the treatment of
  premature  and/or  accelerated  aging, or for  promoting  youthfulness  and
  retarding the aging process in healthy individuals.

In  1980,  a  team  of Chinese medical experts specializing in  aging-related
  illnesses  from  Longhua  Hospital of Shanghai  University  of  Traditional
  Chinese  Medicine  analyzed thousands of ancient herbal formulas  that  had
  been  developed over a 1,400 year period between the Sui and Qin  Dynasties
  (circa  500 A.D. to 1900). The researchers identified 124 classic  formulas
  which  claimed  anti-aging or promoting longevity. About a  dozen  formulas
  were eventually selected and then integrated into a single formula. It  was
  named   `Restoring  Essence'  and  put  through  extensive   clinical   and
  laboratory testing. The results were published, since 1983, in a series  of
  reports  in numerous medical journals involving over two thousand patients.
  The  studies concluded that the formula has remarkable therapeutic  effects
  on  a  wide range of symptoms associated with aging: weakness and  fatigue,
  degenerative  change  in spine and joints, dizziness  or  light-headedness,
  frequent urination or weakened urinary control, insomnia, etc. It can  also
  significantly  improve  the  body's  cellular  immune  functions,  increase
  muscle  strength, delay the occurrence of osteoporosis, and counteract  the
  original  hypertension. Laboratory studies also confirmed that the  formula
  markedly  extends  the life span of lab mice and silk  worms,  aids  body's
  ability  to  repair  DNA  damage and slows down  the  degeneration  of  sex
  organs, thymus, lung and liver cells due to aging.

*     Liquijade  ElixirT  - This product is formulated  to  treat  heartburn,
  indigestion and epigastric pain due to gastric reflux, superficial gastritis,
  peptic ulcer and hiatal hernia.

*     Qi  Bars  -  The  bars are formulated with 100 percent  natural  herbal
  ingredients,  with  no  added  sugar,  starch,  food  coloring,  artificial
  preservatives or yeast.

*     Herpes  CalmT - This product is formulated to control the  outbreak  of
  herpes simplex through strengthening of the immune system and suppressing the
  herpes simplex virus. Herpes Calm can significantly reduce the frequency and
  intensity of symptoms.

*     Flu and Cold ClearT - This formula is most effective in alleviating the
  discomforts of the flu and common cold when taken at the onset of  symptoms
  and  resolve  infections  swiftly at their early stage.  It  also  provides
  protection against potential infection during flu season when exposed to risk
  factors  such  as infected individuals and closed environments  (airplanes,
  offices and school yards.)

<PAGE>

Dr.  Henry Han is a consultant and an advisor to Desert Health Products, Inc.
and  is  the agent in charge of the Company's new office facility in Beijing,
China.  This  office  will  enable the Company to  supply  to  its  worldwide
customer  base  the  finest  in  Chinese herbs,  standardized  to  Dr.  Han's
requirements.

Specialty Supplements

We  use  current  scientific  research to  create  our  innovative  specialty
supplements.  We  search worldwide to find the naturally derived  ingredients
utilized  to  formulate  these powerful products. All  of  these  supplements
contain  targeted  nutrition, to provide safe and effective natural  remedies
for common ailments.

*     AlcotrolT  - Kudzu extract, the main ingredient in Alcotrol,  has  been
  used widely in China and Japan to treat alcoholism.

*     AsthmaCalmT  -  The  combination  of natural  ingredients  can  aid  in
  desensitizing a person to allergies.

*     Brain  BoostT - The product incorporates Phosphatidyl Serine and Ginkgo
  Biloba and other items that enable people to cope with today's fast pace.

*     Desert  BoostT - Bee pollen, (the caviar of the plant world), Propolis,
  Royal Jelly and Aloe Vera increase energy and immune systems.

*     Enhanced Performance IIT - The low levels of testosterone in  many  men
  today can be enhanced with this product.

*    EnercoffeeT - This product, using whole bean coffee, can vitalize energy
  levels.

*     Euro FiberT - Euro Fiber wafers help fill the need for fiber in today's
  diet.

*     Ginkgo Biloba - Ginkgo Biloba has been used in Oriental medicine  since
  ancient times for brain function.

*     Glucosamine  Complex  -  Glucosamine with Boswellinr  can  aid  in  the
  construction of connective tissue and help suppress pain in joints.

*     Liver  p.s.  TabletsT  - This product helps support  liver  health  and
  promote detoxification.

*     Lyco/MenT  -  This supplement is designed with a synergistic  blend  of
  selected phytonutrients, which include tomato extract and saw palmetto that
  have been shown to support prostate health.

<PAGE>

*     Migrasafe-NT - This supplement contains the herb Feverfew. Studies show
  this herb can lower the incidence of migraine headache.

*     OsteoDense PlusT - Ipriflavone has shown clinically to support increase
  in bone mineral density. Osteoporosis is a decrease of bone density.

*     Pain  & Joint Support Cream - Two of the ingredients in this product  -
  Boswellinr and Capsaicin - are known to lower pain and increase circulation.

*    Shark Cartilage - This is a non-toxic product from 100% shark cartilage.
  Research shows this product may increase mobility and reduce pain.

*     Time-Released  Melatonin - As we grow older the body produces  less  of
  this needed substance.  Desert Health's Time-Released Melatonin can aid  in
  sleep and better health.

Weight Management Products

In response to the obesity epidemic in the United States and elsewhere in the
world,  the  Company  has  created a line of products  to  assist  in  weight
reduction  and  management.  Our  weight loss  products  incorporate  natural
ingredients,  which  help  to  reduce appetite,  accelerate  the  metabolism,
diminish  carbohydrate cravings, and encourage fat loss, so permanent  weight
loss may be achieved.

*     Weight Loss-NT - This formula incorporates Ayurvedic herbs and minerals
  to help control carbohydrate cravings.

*     NaturaLeanT  -  By reducing unhealthy fat intake you can  build  better
  health and longevity. This product can target the damaging fats.

*     NiteLean  PlusT  - This product is designed to be effective  in  losing
  weight while you sleep.

*     ThermoburnT  - Regular use of Thermoburn combined with a balanced  diet
  enables you to lose body fat comfortably.

*     Fat  InhibitorT - Fat Inhibitor helps reduce the amount of fat the body
  absorbs from food.

Herbal/Botanical Products

Desert  Health Products, Inc. herbs and other botanical products are  created
from  premium raw materials. We utilize only botanical ingredients cultivated
from reputable growers with strict quality standards. Our formulas blend  the
traditional  wisdom of cultures across the globe, and modern science.  Desert
Health  uses only natural ingredients that have clinically validated  healing
properties.

<PAGE>

*     Aloe  Vera  Juice - Desert Health offers cold processed aloe  juice  in
  various flavors and aloe gel for internal and external use. Aloe properties
  are noted for improved digestion, burn treatment, pain and many other uses.

*     Bee  Pollen - Bee pollen is a natural food rich in vitamins,  minerals,
  trace elements, fatty acids and hormones, and contains all 22 ingredients the
  body is made of. Desert Health's is the finest grade available from the high
  desert.

*     Cat's  Claw - Cat's Claw has a long history of traditional use  by  the
  Ashaninka and Campa Indians. Dr. Brent Davis refers to Cats's Claw as  "the
  opener of the way" for its ability to cleanse the entire intestinal tract.

*     Grape  Seed  Complex  -  Proanthocyanidin  (PCO)  is  a  natural  plant
  bioflavonoid and is one the most potent antioxidants available. Grape  Seed
  Complex yields a 95 percent concentration of  PCO.

*     Noni  - This product grows primarily throughout the South Pacific.  The
  fruit has been known to stimulate the immune system.

*     Pau d'arco - Pau d'arco is a powerful antibiotic and aids in control of
  various allergies.

*     Propolis  -  This product is gathered by the honeybee and is  the  main
  factor in the sterilization of the beehive. There are many beneficial effects
  of this natural product.

*     Royal  Jelly  - This is the food of the Queen Bee which gives  her  the
  required longevity. It is highly concentrated in amino acids, fatty acids and
  vitamins.

*     Saw  Palmetto  -  An  extract from the oil of the  Saw  Palmetto  berry
  demonstrates a remarkable ability to reduce the prostate. Nearly 60 percent
  of men between ages 40 and 60 have an enlarged prostate gland.

*     St.  John's Wort - Recent studies show this product is effective as  an
  anti-depressant and an overall mood elevator.

FemAID Products Support Systems

Designed  for  and  by women, femAID is a comprehensive nutritional  program,
formulated  for  women of all ages, but especially for women  suffering  from
PMS, perimenopause and menopause. Today, a growing number of women are asking
for more natural products and approaches whenever possible. Although there is
not  a lack of products available there is a lack of guidance and support  in
terms of how much, when, and in what combinations supplements should be taken
in order to be truly beneficial.

The  femAID line has taken out the guesswork for the consumer by recommending
a  distinct combination of natural products for each hormonal phase women  go
through.

<PAGE>

The  femAID  line is a combination of nutritional supplements, phyto  (plant)
hormones  and  herbs,  designed  by  a certified  nurse  practitioner  and  a
registered  dietitian  to help women maintain optimal  health  and  alleviate
uncomfortable symptoms resulting from hormonal and nutritional imbalance.

*    Women's Basic Formula I - An optimal formula of premium vitamins, herbs,
  chelated minerals, antioxidants, amino acids and digestive enzymes to support
  women through their cycle.

*     Women's  Basic Formula II - A combination of beta-carotene, B vitamins,
  vitamin E, magnesium and iron which works in conjunction with Women's Basic
  Formula I to minimize PMS discomforts.

*     Bone  Support  -  This formula contains a highly  assimilable  form  of
  calcium,  microcrystalline, hydroxyapatite concentrate  (MCHC)  a  compound
  comprised  of calcium, phosphorous, trace minerals, and a protein  complex.
  MCHC contains the same nutrient profile as that found in bone.

*     Amino  Acid  Complex - Easy-to-absorb free form amino  acids  serve  as
  building blocks of protein, and are an integral part of every system of the
  body.    This  complex  supports  the  body's  ability  to  make  hormones,
  neurotransmitters and enhances immune function and energy.

*     Essential  Fatty Acid Support - This supplement is derived from  borage
  oil,  the richest form of gamma linoleic acid (GLA). Essential fatty  acids
  (EFA's)  are  necessary or producing hormones, regulating cholesterol,  and
  enhancing the body's ability to burn fat. Many women are deficient in EFA's
  due  to chronic dieting and the consumption of processed/damaged fats (i.e.
  margarine and hydrogenated fats).

*     Phytoestrogen  Support  -  Gentle plant estrogens  derived  from  black
  cohosh,  dong quai, red clover and gamma oryzanol (a phytosterol from  rice
  bran  oil)  provide  a  comprehensive herbal formula to  naturally  balance
  estrogen  levels, which helps to relieve the symptoms of perimenopause  and
  menopause.

*     Essential  Pro  Cream  -  This rebalancing formula  contains  wild  yam
  extract, vitamin E, aloe vera and progesterone, which are beneficial for the
  improvement of the skin and body.

*     Vitality  Support  -  This  is an herbal/amino  acid  combination  that
  includes tyrosine, an amino acid which directly enhances dopamine production
  which increases energy and alertness.

*     Calm Support - This is an herbal/amino acid combination containing  St.
  John's  Wort  and 5-HTP (5-hydroxytryptophan) the precursor  to  the  brain
  chemical serotonin. Additionally this formula contains the herbs kava kava,
  hops,  burdock  root, fennel, vervain and motherwort for extra  nutritional
  support to soothe the body.

<PAGE>

*     Sleep Support - This gentle formula contains the herbs valerian,  hops,
  passion  flower, skullcap, wild lettuce, chamomile and vervain  to  promote
  tranquillity and overall relaxation.

*     Essential Passion - This formula is a unique blend of herbs  and  plant
  extracts  that  boost sexual desire and promote overall health  and  vigor.
  Essential  Passion contains two Ayurvedic herbs - Tribulus  terrestris  and
  curuminoids - as well as Avena sativa, Damiana and zinc.

*      Essential   Feminine  Moisture  -  This  soothing   cream   containing
  phytoestrogens, vitamin E and vitamin A helps mid-life women restore natural
  vaginal moisture. Non-petroleum based cream, unscented and flavorless.

Ayurvedic Products

For  over  5000 years, a health system referred to as Ayurveda, meaning  `the
science  of  life',  has  been practiced in India.  This  system  of  natural
medicine  uses  a  holistic  approach to  healing  using  specialized  herbal
formulas  to balance the body. Desert Health Products, Inc. Ayurvedic  herbal
formulas  blend  the  traditional  ancient wisdom  with  the  finest  current
scientific research and manufacturing methods.

*      Antioxidant  Formula  -  Curcuminoid  C3  Complex  and  other  Natural
  Antioxidants

*    Ashwagandha Root Extract - Ayurvedic Adaptogen and Energizer for Stress

*    Bacopin and Ginkgo Complex - Supports Normal Memory Function and Reduces
  Absentmindedness

*      Bio-Q-10  -  Helps  support  Cardiovascular  Function  and  a  Healthy
  Circulatory System

*    Bio-Selenium - Supports the Body's Defense System

*    Bioperine - Supports Efficient Nutrient Absorption

*     Boswellin  and  Curcuminoids  -  Supports  Normal  Joint  Function  and
  Lubrication

*    Citrinc Forte - Support for Weight Loss Programs

*    Curcuminoids - Natural antioxidants from turmeric

*    DGL Plus GingerT - Helps maintain a healthy digestive system

*     Glucosamine  Plus Boswellin Blend - Supports normal joint function  and
  lubrication

<PAGE>

*    Gugulipidc Plus Hawthorne Complex - Supports cardiovascular function and
  healthy circulation

*    Gugulipid Plus Lactospore - Helps maintain healthy cholesterol levels.

*     Gymnema  & Alpha-Lipoic Complex - Supports maintenance of normal  blood
  sugar levels

*    Lactospore Chewables - Helps maintain healthy intestinal flora

*    Lactospore Probiotic - Helps promote healthy intestinal flora

*    Picrolivc Boswellinc Blend - Supports a healthy respiratory system

*    Premium Evening Primrose - Supports a healthy respiratory system

*    Slim & Healthy - Citrin and Chromium for Weight Loss Programs

Skin Care Products

*     Intensive  Mag  C GelT - Intensive Mag C Gel is a powerful  antioxidant
  which aids in cellular repair.

*     Micellular Facial Cleanser - This product exfoliates, cleanses,  treats
  and refines the skin.

*     Alpha  Hydroxy Gel - This product balances the pH, prevents  irritation
  and reduces acidic acid.

*     Macroemulsion  Moisturizer  - This product  moisturizes,  balances  the
  skin's water barrier properties, and protects against environmental damage.

Pet Care Products

Desert Health Products, Inc. has researched and developed a complete line  of
Pet  Care products for good nutrition and grooming. The philosophy behind our
pet  care  line is to provide for the health and well being of the animal  by
using  natural raw materials with no negative side effects. The products  are
formulated  using  such  materials  as  Aloe  Vera,  active  essential  oils,
efficacious herbs, natural emollients and other natural ingredients. Of these
agents Aloe Vera is a key ingredient for the health and beauty of the animal.
Only  100% natural liquid Aloe Vera is used in these products. The Aloe  Vera
is  carefully cold processed in liquid form to preserve the efficacy  of  the
fresh product.

*    Heat Lotion - Heat Lotion contains a large percentage of aloe vera along
  with methyl salicylate that helps to relieve strains and sprains.

<PAGE>

*    Shampoo with Parasite Control - Works well on animals allergic to flies
and parasites. It helps balance skin pH and is mild to the skin.

*     Shampoo  w/Bluing  - This product is concentrated, safe,  and  aids  in
  relief of minor irritations. It takes out yellows, grays and greens, removes
  dirt, oil, perspiration, and reduces matting without drying or irritating the
  skin.

*     Aloe Coat Conditioner - This product applies natural emollients to  the
  animal's coat leaving the coat and skin soft and shiny.

*     Vet  Cream  -  This product contains 80% pure aloe. This natural  cream
  helps to alleviate the dry and chapped condition and promotes hair growth.

*     Hoof  and  Nail Conditioner and Rebuilder - This cream treats  animal's
  hooves  with  natural protein and lubricants in a base of aloe  vera  which
  promotes  healthy growth and enhances healing. Many grooms  also  use  this
  product effectively on their nails.

*     Spray  Bandage  - The Spray Bandage applies aloe vera directly  to  the
  sound  forming a light protective barrier over the area keeping  the  wound
  clean  and  insect free. This formula is water-resistant but can be  easily
  removed with soap and water.

*     Aloe Vera Gel - This highly concentrated product provides soothing  and
  healing to the affected area. Use is effective for sunburns and abrasions on
  humans and animals.

*     Pet Deodorizer and Conditioner - This product rids animals of odors  by
  using nuetronic control. The result is fresh odor and soft coat.

*     Pet  wellT - This supplement contains honeybee pollen and amino  acids,
  along  with fiber, vitamins and minerals for a balance of essential  needs.
  This product was designed to meet the nutritional needs of pets of all ages,
  sizes,  and  physical conditions. It helps to maintain proper body  weight,
  energy and metabolism.

Water Purification

Desert  Health  Products,  Inc. provides ten above and  below  counter  water
purification systems along with support documents and replacement parts.

Benefits and Features:
*    Cost effective

*    Controls bacterial growth

*    Easily installed

*    Low maintenance

<PAGE>

*    Compact designs

*    Multi purpose

*    Simple

*    Limited one year warranty

*    Great tasting water

Manufacturing and Packaging

      Desert Health leases its facility located in Scottsdale, Arizona.  This
facility is equipped with "bottling," "cartoning," and shipping ability.

Marketing and Distribution Strategies

      In contrast with nationally advertised brand manufacturers, which focus
primarily on the consumer, Desert Health's strategy is to build relationships
with  distributors and retail operations, primarily in Europe and Asia. Since
the cost to a distributor or retailer of Desert Health's branded products and
the  retailer's  private  label products are generally  lower  than  that  of
advertised  brand products, the product itself is retailed at a  lower  price
than the advertised brand products.

Global Sales

      Desert Health intends to capitalize on the global opportunities created
by  the  increasing  worldwide recognition of the benefits  of  vitamins  and
nutritional   supplements   and   the   perception   that   "American   made"
pharmaceutical   products  are  the  safest  and  highest  quality   products
available.  During  the past few years, Desert Health has  developed  various
export  markets and established relationships with distributors in the Middle
East  (primarily  Egypt), Europe, and Asia. Recently Desert Health  announced
the opening of its new facility in Beijing, China.

     Through  the  support  of the U.S. Department of  Commerce  in  numerous
countries  and direct on-site trade shows in the US and internationally,  the
Company  has signed contracts for sales and marketing in Europe,  the  Middle
East  and  Asia with more soon to be signed.  The Company's complete  product
lines  and  services are presented at all the shows including  unique  herbal
products formulated by Master Herbalist, Dr. Henry Han, formulations  by  Dr.
Glenn  Miller and specialized products formulated by Dr. Dennis  Harris.  New
leads  and inquiries continue to be received weekly from international  trade
shows attended in the past three years.

     In  August  2000  Desert  Health entered  into  a  5  year  distribution
agreement  with  Silmarc  Pharma  s.r.l in  Italy.   Desert  Health  received
approval  from  Italy's  Ministry of Health for a  number  of  the  Company's
nutritional  products, including Grape Seed, Glucosamine Complex,  Beepollen,
OsteoDense Plus and Hawaiian Noni.

<PAGE>

     Desert  Health's newly established Beijing China office registration  is
completed. Selected items from the Company's product lines are in process  of
being registered for sales in China. The launching of the Company's aloe vera
drinks  will  be in March 2001 with interest already being shown  by  one  of
China's top aloe distributing companies.

     Desert  Health's  agreement  in principal with  Everfill.com  to  market
pharmaceutical  items  in the Business-to-Business and  Business-to  Customer
fields  did  not  result  in  a final agreement  and  has  not  produced  the
anticipated  results. Therefore, the Company has entered  into  an  agreement
with   technical  specialist,  Mr.  Nicholas  Simak,  to  oversee   supplying
pharmaceutical  products  such  as  lidocaine.  Also,  Mr.  Simak   will   be
instrumental  in  packaging these products for groups in both  the  U.S.  and
international marketplace.

     The Company has increased its line of products. The Company has obtained
exclusive  rights  for Dr. Harris' Original Perfect FeetT, a  unique  product
that  shows  remarkable results for persons with diabetes. Additionally,  the
Company  has the international rights for Dr. Harris' Original Snore  ReliefT
and Dr. Harris' Original Allergy ReliefT products.

Industry Overview

     The  worldwide  market for natural dietary supplements  is  substantial.
According  to  NUTRITION BUSINESS JOURNAL, approximately 30  Billion  dollars
were  spent in the United States for non-prescription, plant-derived  dietary
supplements, with sales, according to the BOSTON GLOBE, having increased over
20% annually in the last few years. In addition, according to THE WALL STREET
JOURNAL   EUROPE,  approximately  $18  billion  was  spent  in   Europe   for
prescription  and  over-the-counter multi-molecule,  plant-derived  products.
Asia,  according to the U.S. Department of Commerce, is one  of  the  fastest
growing  markets  for  natural and herbal products with U.S.  produced  items
increasing in acceptance.

Source and Availability of Raw Materials

      The  principal  raw  materials used in the  manufacturing  process  are
natural  ingredients  purchased from manufacturers primarily  in  the  United
States,  with certain materials imported from other countries. Desert  Health
purchases  its  raw  materials from numerous sources.  Although  one  of  the
Company's suppliers individually accounted for approximately 45% of the total
purchases  in  1999  and  2000,  Desert Health believes  that  the  materials
purchased from this supplier are readily available from numerous sources  and
that the loss of this supplier would not adversely affect its operations.  No
other  supplier  accounts for more than 10% of Desert Health's  raw  material
purchases.

Quality Control

      Tablets and capsules are purchased from manufacturing operations  which
include  modern  quality  control laboratories and testing  facilities.  When
products  are ready for bottling, automated equipment counts the  tablets  or
capsules,  inserts them into bottles, applies a cap which includes a  tamper-

<PAGE>

resistant  inner  seal,  affixes a label and adds  a  tamper-resistant  outer
safety  seal.  All  of this is done according to Good Manufacturing  Practice
regulations (GMP) for dietary supplements.

Major Customers

      Desert  Health's  active  customer base approaches  30  customers.  The
Company's largest customer accounted for 38% of sales during fiscal 2000.  In
1999,  the  Company's largest customer accounted for 62% of  sales.  If  this
customer, or any of the Company's other major customers substantially  reduce
their volume of purchases from Desert Health, results of operations could  be
materially adversely affected.

Competition

      The  market  for vitamins and other nutritional supplements  is  highly
competitive in all of the Company's channels of distribution. The marketplace
for  private label business is extremely price sensitive with service levels,
quality,  innovative  packaging,  marketing  and  promotional  programs   and
uniqueness of products being the key factors influencing competitiveness.

      Desert Health believes that there are also numerous companies competing
for  nutritional product lines in its geographical markets. As most companies
are privately held, the Company is unable to precisely assess the size of its
competitors or where it stands with respect to sales volume in brands.  Since
Desert  Health  has recently begun generating revenues, most competitors  are
substantially larger than Desert Health and have greater financial resources.
Desert  Health  derives a competitive benefit of having spent  several  years
establishing import rights into various countries in Europe and Asia.

International Sales

      Sales  of  the Company's products outside of North America  represented
approximately 78%, 95%, and 99% of the Company's sales in fiscal 2000,  1999,
and  1998,  respectively. The Company expects that international  sales  will
continue to represent a significant portion of its sales. International sales
and operations may be subject to risks such as the imposition of governmental
controls, export license requirements, restrictions on the export of critical
ingredients,  currency  exchange fluctuations,  generally  longer  receivable
collection  periods,  political instability, trade restrictions,  changes  in
tariffs,  difficulties  in  staffing and managing  international  operations,
potential   insolvency  of  international  distributors  and  difficulty   in
collecting accounts receivable. There can be no assurance that these  factors
will  not have an adverse effect on the Company's future international  sales
and, consequently, on the Company's business, operating results and financial
condition.

Government Regulation

     The  processing, formulation, packaging, labeling and advertising of the
Company's products are subject to regulation by one or more federal agencies,
including the FDA, the Federal Trade Commission, the Consumer Product  Safety
Commission, the United States Department of Agriculture and the United States

<PAGE>

Environmental  Protection  Agency. These activities  are  also  regulated  by
various  agencies of the states, localities, and countries  in  which  Desert
Health's products are sold. In addition, the Company manufactures and markets
certain of its products in compliance with the guidelines promulgated by  the
United  States  Pharmacopoeia Convention, Inc. ("USP")  and  other  voluntary
standard organizations.

     The  Dietary Supplemental Health and Education Act ("DSHEA")  recognizes
the  importance  of  good  nutrition and the  availability  of  safe  dietary
supplements  in preventive health care. DSHEA amends the Federal  Food,  Drug
and  Cosmetic  Act  by defining dietary supplements, which include  vitamins,
minerals,  nutritional  supplements and herbs, as a  new  category  of  food,
separate from conventional food. Under DSHEA, the FDA is generally prohibited
from  regulating  such  dietary supplements as food additives  or  drugs.  It
requires  the FDA to regulate dietary supplements so as to guarantee consumer
access  to  beneficial  dietary  supplements, allowing  truthful  and  proven
claims. Generally, dietary ingredients that were on the market before October
15,  1994 may be sold without FDA pre-approval and without notifying the FDA.
However,  new  dietary  ingredients (those not used  in  dietary  supplements
marketed before October 15, 1994) require premarket submission to the FDA  of
evidence of a history of their safe use, or other evidence establishing  that
they  are reasonably expected to be safe. There can be no assurance that  the
FDA  will  accept the evidence of safety for any new dietary ingredient  that
the  Company may decide to use, and the FDA's refusal to accept such evidence
could  result  in  regulation of such dietary ingredients as food  additives,
requiring  the  FDA  pre-approval  based on newly  conducted,  costly  safety
testing.  Also,  while DSHEA authorizes the use of statements of  nutritional
support  in  the labeling of dietary supplements, the FDA is required  to  be
notified of such statements, and there can be no assurance that the FDA  will
not  consider particular labeling statements used by the Company to  be  drug
claims   rather   than   acceptable  statements   of   nutritional   support,
necessitating  approval of a costly new drug application,  or  relabeling  to
delete such statements.

     DSHEA  also authorizes the FDA to promulgate good manufacturing practice
regulations  ("GMP")  for dietary supplements, which  would  require  special
quality controls for the manufacture, packaging, storage and distribution  of
supplements.  The  Company  believes  that  its  facilities  and   those   of
independent  third  party manufacturers have completed  significant  facility
renovations that should allow the Company to comply with the new regulations.
DSHEA  further  authorizes  the FDA to promulgate regulations  governing  the
labeling of dietary supplements, including claims for supplements pursuant to
recommendations  made  by the Presidential Commission on  Dietary  Supplement
Labels.  Such rules, which were issued on September 23, 1997, entail specific
requirements  relative to the labeling of the Company's dietary  supplements.
The  rules  require  additional  record  keeping  and  claim  substantiation,
reformulation,  or  discontinuance of certain products, which  could  have  a
material expense to the Company.

     The  Company's products which are sold in Canada are further subject  to
Canadian government regulation under that country's Food and Drug Act and the
regulations  thereunder  (the  "Canadian  Act"),  which  includes  regulatory
approvals of applicable products through a drug identification number ("DIN")
and  general  proprietary  number ("GP") by Health  Canada.  The  loss  of  a

<PAGE>

particular DIN or GP would adversely affect the Company's ability to continue
to  sell the particular product to which the DIN or GP was assigned. Material
non-compliance with the provisions of the Canadian Act may result in the loss
of  a  DIN  or  GP or the seizure and forfeiture of the particular  products,
which are sold in non-compliance with the Canadian Act.

     In  addition,  the  Company cannot predict whether  new  legislation  or
regulations governing the Company's activities will be enacted by legislative
bodies  or  promulgated by agencies regulating the Company's  activities,  or
what  the  effect  of any such legislation or regulations  on  the  Company's
business would be.

Trademarks

     Desert  Health owns trademarks registered with the United States  Patent
and  Trademark  Office and with agencies in certain other major jurisdictions
of  the  world for its Desert Health, Fem Aid, LaVraie, RPI, PsoriClear,  and
Enhanced  Performance  II  brands. Federally  registered  trademarks  have  a
perpetual  life,  as  long as they are renewed on a  timely  basis  and  used
properly  as  trademarks,  subject to the rights of  third  parties  to  seek
cancellation  of  the marks. Desert Health believes that its  registered  and
unregistered trademarks and other proprietary rights are valuable assets  and
believes  they  have   significant value in the marketing  of  its  products.
Desert Health vigorously protects its trademarks against infringement.

Research and Development

     Desert  Health does not conduct primary research for the development  of
new  ingredients. Instead, Desert Health's research efforts  are  focused  on
developing  new  products in response to market trends and consumer  demands.
Desert  Health's staff also continually reformulates existing  Desert  Health
products  in  response to changes in nationally advertised brand formulas  in
order to maintain product comparability.

     Desert  Health believes that flexibility and innovation with respect  to
new  products are crucial factors in competing for market share in the  field
of nutritional supplements. By monitoring market trends and by avoiding short-
lived  "fad"  items,  the Company is able to anticipate significant  consumer
demand  for certain types of products. The Company develops high-quality  new
products  on an ongoing basis, capitalizing on the emerging science  relative
to  nutritional products, as well as shifts in consumer demand.  Thus,  while
the  introduction  of  new  products  does  not  entail  the  expenditure  of
significant  funds  by  the  Company for  scientific  research  and  for  the
development  of  ingredients, considerable time and  effort  are  devoted  to
market research activities, product formulation and  packaging.

Product Liability

      Desert  Health, like other manufacturers and distributors  of  products
that  are  ingested, faces an inherent risk of exposure to product  liability
claims.  Accordingly,  Desert  Health maintains product  liability  insurance
coverage  and  requires  each  of its suppliers to  carry  product  liability
insurance  covering the Company. While management believes that its insurance
coverage is adequate, there can be no assurance that any judgment against the
Company  will  not  exceed  liability coverage. A judgment  significantly  in
excess  of  the  amount of insurance coverage would have a  material  adverse
effect on the Company.

<PAGE>

Employees


      As  of  December  31,  2000, we had 6 full  time  employees.  The  six
employees  are located at our headquarters in Scottsdale.  As of  March  31,
2001  the Company added an additional 2 employees located in Desert Health's
offices  in  Beijing,  China.  None of our  employees  are  subject  to  any
collective bargaining agreement.

      Our  proposed  personnel  structure can be  divided  into  three  broad
categories:   management  and  professional,  administrative,   and   project
personnel.  As  in  most small companies, the divisions between  these  three
categories  are  somewhat indistinct, as employees  are  engaged  in  various
functions as projects and work load demands.

     We  are dependent upon the services of Johnny Shannon, Chairman of  the
Company  and President.  Our future success also depends on our  ability  to
attract  and  retain  other qualified personnel, for  which  competition  is
intense.  The  loss  of Mr. Shannon or our inability to attract  and  retain
other qualified employees could have a material adverse effect on us.

Additional Information

     We  are  subject  to  the informational requirements of  the  Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith,  will
file  reports,  proxy statements and other information with  the  Commission.
Such  reports,  proxy statements and other information may  be  inspected  at
public  reference facilities of the Commission at Judiciary Plaza, 450  Fifth
Street N.W., Washington D.C. 20549; Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; 7 World Trade Center, New  York,
New  York, 10048; and 5670 Wilshire Boulevard, Los Angeles, California 90036.
Copies of such material can be obtained from the Public Reference Section  of
the  Commission  at Judiciary Plaza, 450 Fifth Street N.W., Washington,  D.C.
20549  at  prescribed  rates. For further information, the  SEC  maintains  a
website  that contains reports, proxy and information statements,  and  other
information   regarding  reporting  companies  at  (http://www.sec.gov).   In
addition,  information  can  be  obtained  from  the  Company's  website   at
www.deserthealth.com

ITEM 2.   PROPERTIES

     The Company's main offices are located at 8221 E. Evans Rd., Scottsdale,
Arizona  and its telephone number is (480) 951-1941, Fax No. (480)  661-7163,
Email  address:  info@deserthealth.com, Web site : www.deserthealth.com.  The
facility  is  a leased 11,000 square foot facility utilized in the  following
manner:  a)  administrative offices, b) filling, packaging and  bottling,  c)
storage,  and d) shipping and receiving. These headquarters are adequate  for
marketing  efforts domestically and internationally. The Company  anticipates
it  may require additional space in the future, but anticipates no difficulty
in  obtaining  such space in its immediate vicinity at favorable  rates.  The
Company  pays rent at the rate of $9,129.26 per month. We have an  additional
office  in  Beijing, China in the Dongcheng District. We pay $631  per  month
lease payment for our Beijing office.

<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

     There are no pending material legal proceedings to which the Company  or
any of its properties is subject.

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

     No  matter  was  submitted to a vote of security  holders,  through  the
solicitation of proxies or otherwise, during the fourth quarter of our fiscal
year ended December 31, 2000.

PART II

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

     Our  Common  Stock  is traded in the over-the-counter securities  market
through  the  National Association of Securities Dealers Automated  Quotation
Bulletin  Board  System, under the symbol "DHPI".  The following  table  sets
forth  the quarterly high and low bid prices for our Common Stock as reported
by  the  OTC:BB.   The quotations reflect inter-dealer prices, without retail
mark-up,  markdown  or commission, and may not necessarily  represent  actual
transactions.
<TABLE>

                              Average Low               Average High
<S>                         <C>                        <C>
August 2000                      $0.75                      $1.88
September 2000                   $0.75                      $1.50
October 2000                     $0.50                      $1.03
November 2000                    $0.59                      $1.00
December 2000                    $0.38                      $1.06
January 2001                     $0.66                      $1.34
February 2001                    $0.53                      $1.02
</TABLE>
     As  of  March  1,  2001, we had approximately 326  stockholders  of  the
8,192,971 shares outstanding.

     We have never declared or paid dividends on our Common Stock.  We intend
to  follow  a policy of retaining earnings, if any, to finance the growth  of
the  business  and  do  not  anticipate paying  any  cash  dividends  in  the
foreseeable future.  The declaration and payment of future dividends  on  the
Common  Stock  will be at the sole discretion of the Board of  Directors  and
will   depend   on   our  profitability  and  financial  condition,   capital
requirements,  statutory and contractual restrictions, future  prospects  and
other factors deemed relevant.

<PAGE>

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

     The following discussion and analysis should be read in conjunction with
our  Financial Statements and the notes thereto appearing elsewhere  in  this
document.

RISK FACTORS AND CAUTIONARY STATEMENTS

      This  report contains forward-looking statements within the meaning  of
Section  27A of the Securities Act of 1933 and Section 21E of the  Securities
Exchange Act of 1934. Actual results and events could differ materially  from
those  projected, anticipated, or implicit, in the forward-looking statements
as a result of the risk factors set forth below and elsewhere in this report.

      With  the exception of historical matters, the matters discussed herein
are  forward looking statements that involve risks and uncertainties. Forward
looking  statements  include, but are not limited to,  statements  concerning
anticipated  trends in revenues and net income, the date of  introduction  or
completion  of our products, projections concerning operations and  available
cash  flow.  Our  actual  results could differ materially  from  the  results
discussed in such forward-looking statements. The following discussion of our
financial  condition and results of operations should be read in  conjunction
with  our  financial  statements  and the  related  notes  thereto  appearing
elsewhere herein.

Overview

Our auditor's report reflects the fact that without realization of additional
capital, it would be unlikely for us to continue as a going concern.

     As  a  result of our deficiency in working capital at December 31,  2000
and  other  factors, our auditors have included a paragraph in  their  report
regarding substantial doubt about our ability to continue as a going concern.

     Desert  Health  Products, Inc., an Arizona corporation (the  "Company")
was formed in 1991. Desert Health is engaged in the manufacturing, packaging
and  sale  and  distribution  of branded and  store  brand  (private  label)
vitamins   and   nutritional  supplements.  The  Company  is  focusing   its
development  efforts on certain plants and plant extracts  that  are  widely
used throughout the United States and Europe to assist in the treatment of a
variety of diseases and physical conditions.

     Desert  Health Products, Inc.'s efforts in the fourth quarter  continued
to  center on aggressively expanding its abilities to penetrate the  European
and  Asian marketplaces. As part of this expansion, the Company completed the
process  of  establishing  an office and distribution  facility  in  Beijing,
China.  The Company is currently working to establish a distribution facility
in  Holland. The Company continued its development and expansion program  via
on-site  shows and education programs for specific countries.   In  September
2000,  Thor  Lindvaag  and Dr. Dennis Harris, presented  seminars  throughout
Europe introducing Dr. Harris' Original Snore Formula to the foreign market.

<PAGE>

Results of Operations

     Period from January 1, 2000 to December 31, 2000

     Revenues. Revenues for the year ended December 31, 2000 were $217,905, a
decrease  of  $35,966 or 14% from $253,871 for the year  ended  December  31,
1999.  This  decrease  was principally attributable to our  largest  customer
reducing  purchases in 2000.  Desert Health concentrated substantial  efforts
on  the  Everfill.com  relationship; however, this effort  generated  minimal
results,  thus costing revenues in other potential revenue generating  areas.
The  Company  continued  its  efforts in 2000  in  establishing  distribution
outlets in Europe and Asia.

      General  and  Administrative.  General and  administrative,  legal  and
consulting  expenses  for the year ended December 31,  2000  were  $1,464,056
which was an increase over the $640,515 for the year ended December 31, 1999.
This increase was primarily the result of increased expenses related to:  (i)
going  public,  and  (ii) common stock issued in lieu  of  cash  payments  to
employees and consultants. Amortization for the year ended December 31,  2000
was  $481,699, which was an increase of $469,225 over $12,474  for  the  year
ended  December  31, 1999. This increase in amortization was  the  result  of
amortizing  the cost incurred in acquiring the reporting company  into  which
the  Company  completed its 12g-3 merger, thus allowing Desert Health  to  be
publicly traded.

      Net loss for the Company was $1,468,195 for the year ended December 31,
2000  as  compared  to net loss of $588,086 for the year ended  December  31,
1999.  This  increase  was  the  result of increasing  activity  and  related
additional expenses discussed above associated with going public.

Liquidity and Capital Resources

      As  indicated  in  the  Company's financial statements  attached,  the
Company's  gross  revenue was not sufficient to meet its operating  expenses
for  the year ended December 31, 2000. In addition, as of December 31, 2000,
the  Company's current liabilities exceeded its current assets by  $123,668.
Those  factors  create  an uncertainty regarding the  Company's  ability  to
continue  as  a going concern. Management believes agreements  entered  into
subsequent  to  year end December 31, 2000, will provide  the  Company  with
additional cash and liquidity to sustain operations.

     The  receipt  of funds to the Company from Private Placement  Offerings
and  loans  obtained through private sources are anticipated to  offset  the
near term cash requirements of the Company. Since inception, the Company has
financed  its  cash  flow requirements through debt financing,  issuance  of
common  stock  for  cash  and services, and minimal cash  balances.  As  the
Company  continues  its marketing activities in Europe  and  China,  it  may
continue  to  experience  net negative cash flows from  operations,  pending
receipt  of  sales  revenues,  and will be  required  to  obtain  additional
financing  to  fund  operations  through common  stock  offerings  and  bank

<PAGE>

borrowings to the extent necessary to provide its working capital.  Although
cash  expenses  relating  to  the Company being public  will  continue,  the
significant  expenditures incurred by the Company in 2000 for going  public,
approximately 33% of the Company expenses, are not recurring expenses.

     Over  the  next  twelve  months, the Company intends  to  increase  its
revenues  by releasing new products under development to its target markets.
However,  the Company will continue to increase the number of its employees,
and  expand  its facilities where necessary to meet product development  and
completion  deadlines.  The  Company  believes  that  existing  capital  and
anticipated  funds  from  operations  will  not  be  sufficient  to  sustain
operations  and  planned expansion in the next twelve months.  Consequently,
the  Company  will be required to seek additional capital in the  future  to
fund  growth  and expansion through additional equity or debt  financing  or
credit  facilities. Considering the state of market conditions, no assurance
can  be made that such financing would be available, and if available it may
take  either the form of debt or equity. The down turn in the capital market
will  substantially  impact  the Company's ability  to  sell  securities  in
planned amounts and in turn its ability to meet its capital requirement.  In
either  case,  the financing could have a negative impact on  the  financial
condition of the Company and its Shareholders.

Costs Associated with Year 2000 Problem

      The Company has incurred minimal expenses associated with the Year 2000
Problem.   The Company's computer equipment was of recent vintage,  and  thus
unaffected  by  the  Year  2000  Problem. Further,  there  were  no  vendors,
manufacturers, or distributors known to the Company that suffered  Year  2000
Problems.

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See  Index  to  Financial Statements and Financial  Statement  Schedules
appearing on page F-1 through F-10 of this Form 10-KSB

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

     No Changes to Report

<PAGE>

PART III

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE WITH
          SECTION 16(a) OF THE EXCHANGE ACT.

     The following table sets forth the names, positions with the Company and
ages  of the executive officers and directors of the Company. Directors  will
be  elected at the Company's annual meeting of shareholders and serve for one
year  or until their successors are elected and qualify. Officers are elected
by  the Board and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.
<TABLE>
        Name            Age                       Title
<S>                    <C>   <C>
Johnny Shannon          64   Chief Executive Officer, Chairman, President,
                             and Director
Georgia Aadland         63   Secretary/Treasurer and Director
Thor Lindvaag           53   Director, Sr. Vice President of International
                             Marketing
Lawrence G. Olson       59   Director
William T. Walker Jr.   68   Director
</TABLE>
Duties, Responsibilities and Experience

Johnny  Shannon has been President and a Director of the Company  since  1996.
From  1991  -  1996  Mr. Shannon was at various times a  Director  of  Baywood
International, Inc., a publicly traded corporation and was a major shareholder
in that corporation.

Georgia Aadland. has been Secretary/Treasurer of the Company since 1997 and  a
Director of the Company from 1991 to 1996 and from 1998 to present.  From 1991
-  1996  Ms. Aadland was a director, corporate secretary, office manager,  and
Vice President of Operations of Baywood International, Inc.

Thor  Lindvaag. Director and Senior Vice President of International  Marketing
of  the Company since 1996. 1991 - 1996, Mr. Lindvaag was President of Trim  &
Fit  International;  1988  -  1991 was Managing  Director  of  Arizona  Health
Holding.

Lawrence  G.  Olson,  Director of the Company, is  currently  an  officer  and
director  of  Olson Precast of Arizona, Inc. Mr. Olson has been a director  of
several  public  companies, including the Phoenix  National  Bank.  Mr.  Olson
graduated  from  the  School  of Engineering at  the  University  of  Southern
California in 1959.

William  T.  Walker,  Jr. Director of the Company, has  over  forty  years  of
experience in the capital markets industry.  Mr. Walker has been a  member  of
the  board  of the Securities Industry Association, Chairman of the California
District  Securities  Industry  Association, Governor  of  the  Pacific  Stock
Exchange,  President  of the Bond Club of Los Angeles, and  a  member  of  the
American Stock Exchange Advisory Committee.  Mr. Walker graduated from  Culver
Military  Academy and attended Stanford University and served  in  the  United
States Air Force.

<PAGE>

LIMITATION OF LIABILITY OF DIRECTORS

The  By-laws of the Company provide as follows: "Except as hereinafter stated
otherwise, the Corporation shall indemnify all of its officers and directors,
past, present and future, against any and all expenses incurred by them,  and
each of them including but not limited to legal fees, judgments and penalties
which may be incurred, rendered or levied in any legal action brought against
any  or all of them for or on account of any act or omission alleged to  have
been  committed while acting within the scope of their duties as Officers  or
Directors of this Corporation."

BOARD OF DIRECTORS COMMITTEES AND COMPENSATION

Compensation Committee Interlocks and Insider Participation

     The  Board of Directors does not have a Compensation Committee.   Johnny
Shannon,  President and Chairman, oversaw the compensation of  our  executive
officers.

Board of Director's Report on Executive Compensation

     General.   As  noted  above,  our Board of Directors  does  not  have  a
Compensation  Committee  and,  accordingly,  during  the  fiscal  year  ended
December  31,  2000,  the  Board  of  Directors,  through  the  Chairman  and
President, reviewed and approved the compensation of our executive officers.

     Loans. From time to time our Board of Directors may approve loans to our
officers  and employees. The amounts and timing of these loans are  based  on
our  financial position at the time of grant and made at the sole  discretion
of  the  Board of Directors.  In fiscal 2000, our Board of Directors  granted
three  loans  with  principal amounts totaling $251,198.26 to  our  officers,
directors and employees. These loans are demand notes and bear interest at  a
rate of 8.5% per annum.

     Overall   Policy;   Significant  Factors.   During  fiscal   2000,   the
compensation  decisions  made by the Board of Directors  in  respect  to  our
executive officers were influenced by two major factors.  First, our start-up
nature  brings  with  it  all of the normal capital requirements  to  sustain
growth, therefore certain stock compensation was granted in lieu of salaries,
commissions  and for services rendered.  This practice may be  extended  into
the  future on a case by case basis and accordingly filed with the Securities
and  Exchange  Commission.   Finally,  as  we  continue  to  mature,  certain
additions  to  the executive staff will be required.  As we are  required  to
seek  talent  in outside market, we will be required to provide a competitive
compensation package.

     As  overall  policy, however, the Board continues to believe that  long-
term compensation tied to the creation of stockholder value should constitute
a  significant  component of the compensation to be earned by  our  executive
officers.   In  this  respect, it will be the Board's policy  to  attempt  to
restrain  base  cash compensation (subject to competitive  pressures),  while
providing  the  incentive  for Management to increase  stockholder  value  by
providing  such officers with significant numbers of market-price stock  that
will  not confer value upon the officers unless and until the Company's share
price  rises.   The  Board  of  Directors expects  that  stock  options  will
constitute  a significant component of the compensation package  provided  to
executive officers.

<PAGE>

     The  Board  believes that cash bonuses are, at times, appropriate  based
upon  the  performance  of the Company's business compared  to  our  internal
expectations and general business conditions.

           Section 16(a) Beneficial Ownership Reporting Compliance

           Section  16(a) of the Securities Exchange Act of 1934, as  amended
(the   "Exchange  Act"),  requires  Desert  Health  executive  officers   and
directors, and persons who beneficially own more than ten percent  of  Desert
Health's  common stock, to file initial reports of ownership and  reports  of
changes  in ownership with the SEC. Executive officers, directors and greater
than ten percent beneficial owners are required by SEC regulations to furnish
Desert Health with copies of all Section 16(a) forms they file. Based upon  a
review  of  the copies of such forms furnished to Desert Health  and  written
representations  from Desert Health executive officers and directors,  Desert
Health  believes that during fiscal 2000 all forms 3 and 4 were  filed  on  a
timely basis for Desert Health executive officers and directors.  Form 5  for
Mr. Shannon was filed late.

ITEM 10.  EXECUTIVE COMPENSATION

The  following  table sets forth the compensation of the Company's  executive
officers and directors during each of the fiscal years since inception of the
Company. The remuneration described in the table does not include the cost to
the  Company of benefits furnished to the named executive officers, including
premiums  for health insurance and other benefits provided to such individual
that  are  extended in connection with the conduct of the Company's business.
The  value of such benefits cannot be precisely determined, but the executive
officers  named  below did not receive other compensation in  excess  of  the
lesser  of  $50,000 or 10% of such officer's cash compensation  exclusive  of
loans footnoted herein.
<PAGE>
<TABLE>
Summary Compensation Table

                                                              Long Term
                             Annual Compensation             Compensation
 Name and Principal                        Other Annual  Restricted
      Position         Year  Salary  Bonus Compensation     Stock    Options
<S>                   <C>    <C>    <C>    <C>           <C>        <C>
Johnny Shannon (1)     2000    0       0        $112,777      0         0
CEO, Chairman,
President and
Director
                       1999    0       0               0   50,000       0
                       1998    0       0               0     -0-        0

Georgia Aadland        2000    0       0         $38,500      0         0
Secretary/ Treasurer
                       1999    0       0         $28,000   80,400       0
                       1998    0       0          $5,450      0         0

Thor Lindvaag (2)      2000    0       0         $56,894      0         0
Director, Vice
President of
International
Marketing
                       1999    0       0               0   50,000       0
                       1998    0       0       $2,307.69      0         0

Lawrence G. Olson      2000    0       0               0      0         0
Director
                       1999    0       0               0   50,000       0
                       1998    0       0               0      0         0

Ray Quadt (3)          2000    0       0               0      0         0
Previous Director
                       1999    0       0               0   50,000       0
                       1998    0       0               0      0         0

William T. Walker,Jr   2000    0       0          $5,000   25,000       0
Director
                       1999    0       0               0   25,000       0
                       1998    0       0               0      0         0
</TABLE>
(1)  A  loan  at below market interest was received by Johnny Shannon in  the
     sum  of  244,998.26 for year ended December 31, 2000,  and  the  sum  of
     $208,507.75 for the year ended December 31, 1999.
(2)  A loan at below market interest was received by Thor Lindvaag in the sum
of $3,000 for year ended December 31, 2000, and the sum of $24,760.30 for the
year ended December 31, 1999.
(3)  Mr. Quadt resigned from the Board of Directors in 2000 for health
reasons.

Compensation of Directors

   All  directors will be reimbursed for expenses incurred in attending Board
   or committee meetings.

<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners.

      The  following table sets forth certain information as of December  31,
2000  with  respect to the beneficial ownership of common stock by  (i)  each
person  who  to the knowledge of the Company, beneficially owned or  had  the
right  to  acquire more than 10% of the Outstanding common stock,  (ii)  each
director of the Company and (iii) all executive offices and directors of  the
Company as a group.
<TABLE>

       Name of Beneficial Owner (1)             Number         Percent
                                              of Shares     Of Class (2)
<S>                                          <C>           <C>
Johnny Shannon (4)                                  50,000              1%
JDS Investments LP (3)                           3,843,950             48%
Georgia Aadland                                    230,400              3%
Thor Lindvaag                                      200,000              2%
Lawrence G. Olson                                  102,500              1%
William T. Walker, Jr.                              50,000              0%
                                             -------------  --------------
All Directors & Officers as a Group              4,476,850             55%
                                             -------------  --------------
(1)  As  used in this table, "beneficial ownership" means the sole or  shared
    power to vote, or to direct the voting of, a security, or the sole or shared
     investment power with respect to a security (i.e., the power to dispose of,
     or to direct the disposition of, a security).  In addition, for purposes of
     this  table,  a  person is deemed, as of any date, to  have  "beneficial
     ownership" of any security that such person has the right to acquire within
     60 days after such date.
(2)  Figures are rounded to the nearest percentage. Less than 1% is reflected
     as 0%.
(3)  Shares controlled by Johnny Shannon President of the Company.
(4)  JS Holds 1,000,000 shares of Preferred stock with 10:1 preferential
     voting rights.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Director/Officer Contract Labor: Three Officers and Directors of Desert
Health received compensation as contract labor in lieu of salary. In 1998 and
1999,  Mr. Shannon did not receive either salary or compensation as  contract
labor.  In  2000,  Mr. Shannon received $112,777.01. Thor  Lindvaag  did  not
receive  either  salary or compensation as contract labor in  1998  or  1999;
however,  Mr. Lindvaag received $56,893.99 in 2000. Georgia Aadland  received
compensation  as  contract  labor of $5,450 in 1998,  $28,000  in  1999,  and
$38,550 in 2000.

      Loans:  Two  of  the Officers and Directors of Desert Health  received,
collectively,  a  total  of  $247,998.26  in  loans  at  8.5%  in  2000,  and
$233,268.05 in loans at 8.5% in 1999.

<PAGE>

     Insider   Relationships:   Jonathan  Gotcher,  Vice   President/Internet
Development  and  Marketing, is the grandson of our Chairman  and  President,
Johnny Shannon. In fiscal 2000, our Board of Directors granted Mr. Gotcher  a
$3,200 loan bearing interest at 8.5% per annum.

     Affiliate  Company: The Company is affiliated with another  corporation,
Royal  Products,  to  whom  the  Company sells product,  advances  money  for
operating expenses and subleases the Company's facilities on a month-to-month
basis.  These  two  companies  have  a common  majority  shareholder,  Johnny
Shannon.  For the years ended December 31, 2000 and 1999, a total  of  $9,857
and $12,086, respectively, have been advanced to the related entity.

     On January 25, 2000, Desert Health entered into an agreement with Johnny
Shannon, Chairman of Desert Health, wherein Shannon received 1,000,000 shares
of  preferred stock of Desert Health with 10:1 voting rights, in exchange for
all   of   Mr.  Shannons'  interest  in  copyrights,  trademarks  and   other
intellectual  property rights pertaining to nutritional  products  and  herbs
relating to Desert Health's business.

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

(a)  Documents filed as part of this Report

     1.   Financial Statements:

     A.   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

          1.   Independent Auditors  Report                        F-1
          2.   Financial Statements:
                    Balance Sheet                                  F-2
                    Statement of Operation                         F-3
                    Statement of Changes in Stockholders'          F-4
                    Statement of Cash Flows                        F-5
                    Notes to Consolidated Financial StatementsF-6 - F-10

     All  schedules  are  omitted  because they are  not  applicable  or  the
required  information  is shown in the consolidated financial  statements  or
notes thereto.

     2.   During the fiscal year 2000, the Company filed the following 8-Ks.
               8-K filed December 6, 2000
               8-K filed October 31, 2000
               8-K filed July 6, 2000
               8-K Filed March 15, 2000
               8-K filed February 10, 2000

     3.   Subsequent  to  the end of the fiscal year, the Company  filed  the
          following reports on Form 8-K
               None

<PAGE>

     4.   Exhibits

Exhibit                               Description
Number
(1)          N/A
(2)*         Acquisition Agreement and Plan of Merger with Intercontinental
                    Capital Fund, Inc. (Incorporated by reference)
(3)(i)       Articles of Incorporation
             (a)   Articles  of  Incorporation for Desert Health  Products,
                    Inc.
             (b)   Amended  Articles  of Incorporation  for  Desert  Health
                    Products, Inc.
(3)(ii)      Bylaws
             (a)   Bylaws of Desert Health Products, Inc.
(4)          Instruments defining the rights of security holders:
(4)(i)       (a)   Articles  of  Incorporation for Desert Health  Products,
                    Inc.
             (b)   Amended  Articles  of Incorporation  for  Desert  Health
                    Products, Inc.
             (c)   Bylaws of Desert Health Products, Inc.
(5)          N/A
(8)          N/A
(9)          N/A
(10)         Material Contracts
             (a)** Separation  and  Distribution Agreement  between  Desert
                    Health  Products, Inc. and Royal Phoenix. (Incorporated
                    by reference)
             (b)   Product  Marketing  and Distribution  Agreement  between
                    Desert Health Products, Inc. and GH Associates, Inc.
             (c)   Agreement regarding Dr. Harris's Original Diabetic  Feet
                    Formula
             (d)   Exclusive  Distribution Agreement between Desert  Health
                    Products, Inc. and Silmarc Pharma s.r.l in Italy.
             (e)   Product  Marketing  and Distribution  Agreement  between
                    Desert Health Products, Inc. and Snore Formula Inc.
             (f)   Modification   of   Contract   between   Desert   Health
                    Products, Inc. and Snore Formula Inc.
(11)         N/A
(13)         N/A
(15)         N/A
(16)         N/A
(17)         N/A
(18)         N/A
(19)         N/A
(20)         N/A
(21)         N/A
(22)         N/A
(23)         Consent of Desert Health's Auditor
(24)         N/A
(25)         N/A
(26)         N/A
(99)         Cautionary Statement Regarding Forward Looking Statements
*    Filed in an 8-K on March 15, 2000
**   Filed in an 8-K on October 31, 2000

<PAGE>

                                 SIGNATURES

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

DESERT HEALTH PRODUCTS, INC.            DATED: March 31, 2001



By:/s/ Johnny Shannon
     Johnny Shannon
     President


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

Signature                     Title                         Date

/s/ Johnny Shannon            President                March 31, 2001
Johnny Shannon

/s/ Georgia Aadland           Secretary/Treasurer      March 31, 2001
Georgia Aadland

/s/ Thor Lindvaag             Director                 March 31, 2001
Thor Lindvaag

/s/ Lawrence Olson            Director                 March 31, 2001
Lawrence G. Olson

/s/ William Walker            Director                 March 31, 2001
William T. Walker, Jr.
<PAGE>


                        Independent Auditor's Report



Board of Directors and Stockholders
Desert Health Products, Inc.


I  have  audited  the accompanying balance sheets of Desert Health  Products,
Inc.  as  of  December  31,  2000 and 1999, and  the  related  statements  of
operations, changes in stockholders' equity and cash flows for the years then
ended.  These  financial statements are the responsibility of  the  Company's
management.  My  responsibility is to express an opinion on  these  financial
statements based on my audit.

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

In  my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Desert Health Products, Inc.
as  of December 31, 2000 and 1999, and the results of its operations and  its
cash  flows  for  the years then ended in conformity with generally  accepted
accounting principles.

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



James E. Raftery, CPA, PC

February 18, 2001
Mesa, Arizona
<PAGE>

</TABLE>
<TABLE>
                        DESERT HEALTH PRODUCTS, INC.
                               BALANCE SHEETS
                                December 31,

                                              2000              1999
                                  ASSETS
<S>                                        <C>               <C>
Current Assets
Cash                                        $    86,212          $ 124,603
Accounts receivable                                  22             26,630
Note(s) receivable                              635,904            360,577
Interest receivable                              45,000
Inventory                                       140,205            131,462
Prepaid expenses                                    734             25,000
                                            -----------       ------------
Total Current Assets                            908,077            668,272

Property and Equipment, net                      72,087             70,700

Other Assets
Cash                                             10,000                  -
Investments                                           -             11,177
Intangibles, net                              1,581,825            390,125
Deposits                                         10,000             10,000
                                          -------------      -------------
                                              1,601,825            411,302
                                          -------------       ------------
                                          $   2,581,989      $   1,150,274
                                          =============      =============
                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable                            $   203,317         $  127,059
Deferred revenue                                 90,201         $        -
Advances                                              -              1,000
Interest payable                                 46,506             11,309
Loans payable                                   691,922            272,193
                                           ------------      -------------
Total Current Liabilities                     1,031,946            411,561


Stockholders' Equity                          1,550,043            738,713
                                          -------------      -------------
                                          $   2,581,989      $   1,150,274
                                          =============      =============
</TABLE>

             See accompanying notes to the financial statements
<PAGE>

<TABLE>
                         DESERT HEALTH PRODUCTS, INC
              STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                          Years Ended December 31,

                                              2000             1999
<S>                                       <C>               <C>
Revenue                                    $    217,905      $    253,871

Cost of sales                                   154,377           183,351
                                         --------------      ------------
Gross Profit                                     63,528            70,520

Operating Expenses                            1,464,056           640,515
                                          -------------      ------------
Loss from operations                        (1,400,528)         (569,995)

Other income (expense)
Interest expense                               (48,814)          (20,221)
Interest income                                  45,416             2,025
Loan inducement fees                           (64,969)                 -
Miscellaneous income                                700               105
                                          -------------      ------------
                                               (67,667)          (18,091)
                                          -------------       -----------
Net Loss before provision for income
taxes                                       (1,468,195)         (588,086)

Provision for income taxes
Deferred tax benefit (expense)                        -          (31,926)
                                          -------------       -----------
Net Loss                                    (1,468,195)         (620,012)

Beginning accumulated deficit                 (822,431)         (202,419)
                                         --------------       -----------
Ending accumulated deficit                $ (2,290,626)      $  (822,431)
                                          =============       ===========
Earnings per common share                  $    (0.182)      $    (0.095)
                                          =============      ============
</TABLE>

             See accompanying notes to the financial statements
<PAGE>

<TABLE>
                        DESERT HEALTH PRODUCTS, INC.
                     STATEMENTS OF STOCKHOLDERS' EQUITY
                          Years ended December 31,

                                  Common Stock         Preferred Stock
                                    Par Value             Par Value
                                Shares   $.001 sh     Shares    $.001 sh
<S>                           <C>        <C>         <C>        <C>
Balances, December 31, 1998   4,309,900     $ 4,310     5,000          $ 5

Common shares issued in 1999
to:
Officers for expenses           900,000         900         -            -
Employees for services          100,000         100         -            -
Consultants for services        848,000         848     5,000            5
Others for cash                 764,621         764   365,000          365
Shareholder stock                     -           -         -            -
subscription receivable               -           -         -            -
Net loss for year ended
December 31, 1999                     -           -         -            -
                              ---------      ------ ---------    ---------
                                      -
Balances,  December 31, 1999  6,922,521       6,922   375,000          375

Common shares issued in 2000
to:
Acquisition of intangibles      169,467         170   899,000          899
Fees                            475,012         475         -            -
Cash                            500,000         500         -            -
Shareholder stock                     -           -         -            -
subscription receivable               -           -         -            -
Net loss for year ended               -           -
December 31, 2000                                           -            -
                              ---------     ------- ---------     --------
Balances, December 31, 2000   8,067,971     $ 8,068 1,274,000       $1,274
                              =========     ======= =========    =========
</TABLE>
<PAGE>

<TABLE>

                        DESERT HEALTH PRODUCTS, INC.
                     STATEMENTS OF STOCKHOLDERS' EQUITY
                          Years ended December 31,
                                 (CONTINUED)
                      Additional      Stock      Accumulated     Total
                       paid-in     subscription    Deficit
                       Capital      receivable
<S>                   <C>          <C>           <C>          <C>
Balances, December
31, 1998                $274,282              -    $(202,419)     $76,178

Common shares issued
in 1999 to:
Officers for                   -              -             -         900
expenses
Employees for                  -              -             -         100
services
Consultants for
services                   4,995              -             -       5,848
Others for cash        1,275,570              -             -   1,276,699
Shareholder stock              -              -             -           -
subscription                   -        (1,000)             -     (1,000)
receivable
Net loss for year                                                       -
ended
December 31, 1999              -              -     (620,012)   (620,012)
                       ---------     ----------   -----------  ----------
Balances,  December
31,  1999              1,554,847        (1,000)     (822,431)    $738,713

Common shares issued
in 2000 to:
Acquisition of
intangibles            1,075,469
Fees                     475,012              -             -       5,848
Cash                     500,000              -             -     500,500
Shareholder stock              -              -             -           -
subscription                   -        227,000             -     227,000
receivable
Net loss for year
ended                                                                   -
December 31, 2000              -              -   (1,468,195) (1,468,195)
                      ----------       --------    ----------  ----------
Balances,  December
31,  2000             $3,605,328       $226,000  $(2,290,626)  $1,550,043
                      ==========      =========   ===========  ==========
</TABLE>
             See accompanying notes to the financial statements
<PAGE>

<TABLE>

                        DESERT HEALTH PRODUCTS, INC.
                           STATEMENTS OF CASH FLOWS
                          Years Ended December 31,

                                                  2000           1999
<S>                                           <C>              <C>
Cash Flows from Operating Activities
Cash received from customers                    $  334,714      $  227,241
Interest income                                     45,416           2,025
Miscellaneous income                                   700             105
Cash paid to suppliers and employees           (1,039,302)       (804,947)
Loan inducement fees                              (64,969)               -
Interest expense                                  (48,814)         (8,912)
                                              ------------       ---------
Net Cash Provided (Used) in Operating
Activities                                       (772,255)       (584,488)

Cash Flows from Investing Activities
Purchase of furniture and equipment               (14,649)        (72,781)
Purchase of intangibles                        (1,665,414)       (257,391)
Increase in notes receivable                     (275,327)       (289,547)
Purchase of marketable securities                        -        (11,177)
                                              ------------      ----------
Net Cash Provided by Investing Activities      (1,955,390)       (630,896)

Cash Flows from Financing Activities
Issuance of common and preferred stock               2,044       1,231,797
Increase in stock subscription receivable          227,000               -
Increase in additional paid in capital           2,050,481               -
Increase in loans                                  419,729          90,005
                                              ------------      ----------
Net Cash Provided (Used) by Financing
Activities                                       2,699,254       1,321,802

Net Increase (Decrease) in Cash and Cash
Equivalents                                       (28,391)         106,418

Beginning Cash and Cash Equivalents                124,603          18,185
                                              ------------      ----------
Ending Cash and Cash Equivalents                 $  96,212      $  124,603
                                              ============      ==========
</TABLE>

             See accompanying notes to the financial statements
<PAGE>
<TABLE>

<S>                                              <C>             <C>
  Reconciliation of Changes in Net Operations to
  Net Cash Used
        by Operating Activities:
   Loss from operations                           $(1,468,195)    $(620,012)
   Adjustments to reconcile change in loss from
  operations to
   net cash provided (used) by operating
  activities:
   Depreciation                                        13,262         4,353
   Amortization                                       483,891        12,474
   (Increase) decrease in operating assets
   Accounts receivable                                 26,608      (26,630)
   Inventory                                          (8,743)      (12,165)
   Interest receivable                               (45,000)             -
   Deferred tax benefit                                     -        31,926
   Prepaid expense                                     24,266      (25,000)
   Increase (decrease) in operating liabilities
   Accounts payable                                    76,258             -
   Deferred revenue                                    90,201             -
   Interest payable                                    35,197        50,566
                                                   ----------     ---------
        Net Cash Provided (Used) by Operating
  Activities                                       $(772,255)    $(584,488)
                                                  ===========    ==========

   Non-cash transactions
     Issuance of stock for investment                      $-       $50,800
     Issuance of stock for intangibles             $1,550,481            $-
</TABLE>
<PAGE>


                        DESERT HEALTH PRODUCTS, INC.
                        NOTES TO FINANCIAL STATEMENTS
                              December 31, 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This  summary  of significant accounting policies of Desert Health  Products,
Inc.  (the  Company)  is presented to assist in understanding  the  Company's
financial statements.  The financial statements and notes are representations
of  the  Company's  management who is responsible  for  their  integrity  and
objectivity.   These  accounting  policies  conform  to  generally   accepted
accounting  principals and have been consistently applied in the  preparation
of the financial statements.

Nature of Operations

The  Company  was incorporated in the state of Arizona on July  21,  1991  to
develop dietary supplement products from natural plant extracts.  The Company
is focusing its development efforts on certain plants and plant extracts that
are  widely  used throughout the United States, Europe and Asia  to  treat  a
variety  of  diseases  and physical conditions.  The Company  identifies  and
quantifies the properties within plant resources that are believed to provide
therapeutic or other health benefits and to produce dietary supplements.

On  February 9, 2000 the Company acquired Intercontinental Capital Fund, Inc.
(ICP)  in a reverse acquisition merger. ICP is a reporting public shell  with
no  material assets or liabilities and no operations.   This acquisition  has
given the Company the ability to access capital funding.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-
term  debt securities purchased with maturity of three months or less  to  be
cash equivalents.

Inventories

Inventories consist primarily of health food supplements and vitamin products
and are stated at the lower of cost (first-in, first-out) or market value.

Depreciation

Depreciation  is  computed by using the straight-line  method  for  financial
reporting  purposes  and  the accelerated cost recovery  method  for  federal
income  tax purposes.  Depreciation expense for financial reporting  purposes
was  $13,262  and  $4,353 for the years ended December  31,  2000  and  1999,
respectively.

Intangible Assets

Intangible  assets  consist  of  costs of  developing  web  site,  trademark,
registrations  and  other general intangibles and are being  amortized  at  a
straight-line rate of three to five years.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the
financial  statements and consist of taxes currently due plus deferred  taxes
related  primarily  to differences between the bases of  certain  assets  and
liabilities  for  financial and tax reporting.  The deferred taxes  represent
the future tax return consequences of those differences, which will either be
taxable when the assets and liabilities are recovered or settled.

<PAGE>

                        DESERT HEALTH PRODUCTS, INC.
                        NOTES TO FINANCIAL STATEMENTS
                              December 31, 2000

Use of Estimates

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

NOTE B - NOTES RECEIVABLE
<TABLE>
                                                2000          1999
<S>                                            <C>          <C>
  Notes  receivable to various  individuals.
  Interest was imputed at the rate of 8.5%.
                                               $ 635,904     $ 360,577
</TABLE>
NOTE C - PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Expenditures for maintenance  and
repairs  are  charged  against  operations.  Renewals  and  betterments  that
materially extend the life of the assets are capitalized.

Property and equipment are summarized by major classifications as follows:
<TABLE>
                                                2000          1999
<S>                                           <C>            <C>
  Equipment, 3-7 year life                     $  90,292      $ 75,643
  Less: Accumulated Depreciation                (18,205)       (4,943)

                                                $ 72,087     $  70,700
</TABLE>

NOTE D -LONG TERM DEBT

Long-term notes payable consists of the following: at December 31,
<TABLE>
                                                2000          1999
<S>                                           <C>        <C>
  Demand    notes   payable    to    various
  individuals bearing interest rates  of  8%
  to  15%  secured by major  assets  of  the
  Company and personally guaranteed  by  the
  major  shareholder of the Corporation.   A
  note  to  the  bank  for  $5,154  is  also
  secured  by  a certificate of  deposit  of
  $10,000.  Due and payable on demand.
                                              $  691,922    $  272,193
</TABLE>
<PAGE>

                        DESERT HEALTH PRODUCTS. INC.
                        NOTES TO FINANCIAL STATEMENTS
                              December 31, 2000

NOTE E - INCOME TAXES

The  Company  has loss carryforwards totaling $2,206,647 that may  be  offset
against future taxable income.  If not used, the carryforwards will expire as
follows:

               2016                   $       3,377
               2017                          86,270
               2018                          17,000
               2019                         600,000
               2020                       1,500,000
                    Total                $2,206,647

Taxable  losses for the years ending December 31, 2000 and 1999 are estimated
to  be  $1,500,000 and $600,000, respectively.  Ordinarily, the Company would
record  an  extraordinary item in each year, representing  the  deferred  tax
benefit  that  could  be realized when those tax losses are  applied  against
future  taxable income.  We estimate the extraordinary item would be $600,000
and  $235,000  for the years ended December 31, 2000 and 1999,  respectively.
However, the deferred tax benefit would only be realized in future years with
taxable  income.   Any  future tax benefit that might be  realized  has  been
offset  by  a  100% allowance due to the uncertainty regarding the  Company's
ability to continue as a going concern.

NOTE F  - STOCKHOLDER'S EQUITY

The Company is affiliated with another corporation to whom they sell product,
advance  money for operating expenses and sublease their operating facilities
on  a  month-to-month  basis.  These two companies  have  a  common  majority
shareholder.   For  the years ended December 31, 2000 and 1999,  a  total  of
$9,857 and $12,086, respectively, have been advanced to the related entity.

NOTE G - CONCENTRATIONS

For the years ended December 31, 2000 and 1999, a significant volume of sales
were  concentrated with three and one vendor(s), respectively.  Of the  total
revenue for the year, 55% and 63% or $119,218 and $144,095 was received  from
those sources.

NOTE H - GOING CONCERN

As  indicated  in the accompanying financial statements, the Company's  gross
revenue  is not sufficient to meet its operating expenses for the year  ended
December  31,  2000.   Additionally, as of that date  the  Company's  current
liabilities exceeded its current assets by $123,668.  Those factors create an
uncertainty  regarding the Company's ability to continue as a going  concern.
Management  of  the Company has developed the following plan  to  reduce  its
liabilities and increase its gross revenues.

Management believes the agreements entered into as described in Note  I  will
bring  liquidity and profitability to the Company in the coming  year.   They
believe rights to this product, and other products they are negotiating  for,
will  bring  significant  volume  and  profitability.   They  also  feel  the
marketing  rights and potential royalties should be extremely profitable  for
several years.

<PAGE>

                        DESERT HEALTH PRODUCTS. INC.
                        NOTES TO FINANCIAL STATEMENTS
                              December 31, 2000

NOTE H - GOING CONCERN (continued)

The  ability of the Company to continue as a going concern is dependent  upon
the  aforementioned  ability  to  raise  additional  outside  capital  and/or
significantly  increase  its  market share to  achieve  profitability.    The
financial  statements do not include any adjustments that might be  necessary
if the Company is unable to continue as a going concern.

NOTE I - SUBSEQUENT EVENTS

     Subsequent to December 31, 2000 the Company entered into two agreements,
one  of  which  gives  the Company exclusive distributing  rights  worldwide,
except for the U.S., its territories and Canada, for certain health products.
For  these  rights, the Company will pay $50,000 and 100,000  shares  of  its
common stock. Additionally, the Company sold 10% of the above agreement to  a
company  in  Holland. As consideration for the purchase, the Holland  company
will  invest $250,000 to be used to assist in the initial financing  for  the
international  sales  and marketing efforts of Dr. Harris'  Original  Perfect
Feet.  To  date, the Company has received $90,000 towards the fulfillment  of
the  purchase price.  The Holland company will receive varying royalties from
$1.25  to  $2.00 per set from all sales of Dr. Harris' Original Perfect  Feet
for a term of 10 years.

     In  March  2001 the Company established an office in Beijing, China  for
the sale and distribution of Desert Health Products.

NOTE J - COMMITMENTS

The  Company  conducts  its operations from facilities  under  a  three  year
noncancelable  operating lease expiring January 31, 2003.  The  following  is
the future minimum rental payments as of December 31, 2000:

          Year Ending
          December 31,                  Amount
               2001                $    109,285
               2002                     112,837
               2003                       9,403

                                   $    231,525