<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    --------

                                  FORM 10-KSB
                                   (Mark One)

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

For the fiscal year ended             December 31, 2000     .
                             -------------------------------

                                       OR

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

For the transition period from __________ to __________ .

                      Commission file number     000-28131
                                            --------------------

                            INTERALLIED GROUP, INC.
                 (Name of Small Business Issuer in Its Charter)

            Nevada                                       14-1775226
---------------------------------               -------------------------------
(State or Other Jurisdiction of                        (I.R.S. Employer
Incorporation or Organization)                        Identification No.)


         1 Jacqueline Street
                Suite 102
          New Windsor, New York                               12553
-------------------------------------                 ------------------------
 (Address of Principal Executive Offices)                  (Zip Code)

                                 (914) 534-4909
      -------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

       Title of Each Class            Name of Each Exchange on Which Registered
----------------------------------    -----------------------------------------

        Not Applicable                           Not Applicable

         Securities registered under Section 12(g) of the Exchange Act:

                    Common Stock, par value $0.01 per share

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days.
Yes       X          No _______
    -------------

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not

                                       -1-

<PAGE>



contained in this form, and no disclosure will 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-KSB. |X|

         Issuer had no revenues for its most recent fiscal year.

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant as of April 12, 2001, based on the
average of the closing bid and asked prices for such shares on such date, was
approximately $7,097,958.

         The number of shares outstanding of each of the issuer's classes of
common equity, as of April 12, 2001 was 1,815,537.


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


                      DOCUMENTS INCORPORATED BY REFERENCE

    See Item 13 of this report. The Exhibit Index, Part IV, Item 13, is located
at page 13 of this Form 10-KSB.



===============================================================================
                                     PART I

Item 1.    Description of Business.

         History

         Currently, Interallied Group, Inc. (the "Company") has no active
operations. The Company has primarily been engaged in the acquisition of entire
businesses, divisions of businesses, or the assets of businesses that the
Company's management identified as having significant potential for business
success.

         During the first part of 2000, the Company was engaged in establishing
and marketing a gourmet meal home delivery program, through its subsidiary,
Dining Experience, Inc. ("Dining Experience"). Dining Experience, which was
formed in December 1998, is a development stage venture acquired by the Company
in March 1999 through a stock acquisition. The business concept, called a
"gourmet meal-of-the-month" was designed to provide fresh, gourmet meals
directly to customers' homes by overnight courier. By the third quarter of 2000,
after further analysis, the Company determined that it was necessary to abandon
the plan before having initiated any actual customer operations.


         The Company was engaged in establishing and operating franchised
restaurants from 1996 until January 1999, when the Company sold its 51% interest
in a joint venture, which was formed as a limited liability company to operate


                                      -2-

<PAGE>


a "Place for Ribs" restaurant under a franchise agreement in Buffalo, New York.
This entity was under the name, Interallied Restaurant Group of Buffalo, LLC.
The Company sold its interest in the joint venture effective as of December 28,
1999 to the holder of a minority interest in the venture for $161,449, plus a
percentage of profits of the restaurant, if any, through the end of 2003, not to
exceed $68,051. Of the $161,499, $100,000 was paid to the Company in cash and
the balance of $61,449 was paid by a note due in 16 monthly installments of
$4,062 each, commencing February 1, 1999. On October 18, 2000, the Company
surrendered its remaining 25% interest in Interallied Restaurant Group of
Rochester, LLC, the owner of another Damon franchise restaurant located in
Rochester, New York, which had been acquired in 1997. These restaurants had
never generated significant income and have operated at a loss.

         The Company was initially organized in Nevada on May 27, 1975, under
the name European American Leasing Corporation. In November 1993, the Company
acquired Sunnyland Tours, Inc., a corporation organized to engage in the
restaurant business, through a reverse acquisition. At that time, the Company
changed its name to Interallied Restaurant Group, Inc. In January 1999, the
Company adopted its current name, Interallied Group, Inc.

         The Company is located at 1 Jacqueline Street, Suite 102, New Windsor,
New York 12553. As used in this report, each of the terms "Company,"
"Interallied" and "we" includes the Company and its subsidiaries.

Future Plans

         The Company is presently exploring other strategic options, including
the potential sale of the Company.


Employees

         The Company has one paid employee.


Item 2.   Description of Property.

         The Company's executive offices are located at 1 Jacqueline Street,
Suite 102, New Windsor, New York 12553, where it leases approximately 750 square
feet. The lease for these premises is currently on a month-to-month basis and
may be terminated by the Company upon proper notice. The annual base rental for
this space is approximately $10,000.




                                      -3-

<PAGE>



Item 3.   Legal Proceedings.

There are no legal proceedings involving the Company.

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

There were no matters submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 2000.

                                    PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.

         Market Information. The Company's Common Stock is quoted on the OTC
Bulletin Board under the symbol "ILRG." Set forth below are the high and low
closing bid quotations for our common stock for each quarter during the last two
fiscal years, as reflected on the electronic bulletin board. This information is
believed to be accurate, but is not guaranteed. The quotations listed below
represent prices between dealers and do not include retail mark-up, mark-down or
commission, and there can be no assurance that they represent actual
transactions.

         Fiscal Years Ended December 31, 2000 and December 31, 1999

         Quarter/Fiscal Year        High            Low
         -------------------        ----            ----

          1st     2000              5.50            5.00
          2nd     2000              5.625           5.00
          3rd     2000              5.875           5.125
          4th     2000              7.00            6.00
          1st     1999              -               -
          2nd     1999              -               -
          3rd     1999              5.0625          5.00
          4th     1999              5.50            5.00

         Recent Sales of Unregistered Securities.

         On June 12, 2000, the Company issued 154,240 shares of its common stock
to an investor in consideration of cancellation of indebtedness. The Company
believes the issuance of these shares is exempt from the registration requests
of the Securities Act of 1933 pursuant to section 4(2) thereof.

         Dividends. The Company has never paid cash dividends on its common
stock. The Company does not anticipate paying cash dividends because it intends
to retain net income, if any, to be used as working capital for the development

                                      -4-

<PAGE>



of its business. Any decision as to payment of cash dividends is solely in the
discretion of the Company's board of directors and will depend on various
factors, including the Company's results of operations and financial condition
and the availability of other sources of capital for the continued development
and expansion of the Company's business.

         Security Holders. As of April 6, 2001, there were approximately 189
holders of record of the Company's common stock. There are no shares of the
Company's preferred stock currently outstanding.

         Transfer Agent. The transfer agent for the Company's common stock is
Jersey Transfer Trust Company, located at 201 Bloomfield Avenue, Veronia, New
Jersey 07044. The telephone number of our transfer agent is: (973) 239-2712.


Item 6.   Management's Discussion and Analysis or Plan of Operation.

Plan of Operation

         At present, the Company does not have any active operations. During the
year 2001, the Company will continue to explore other possibilities, including
the potential sale of the Company.


         Year Ended December 30, 2000 Compared to the Year Ended December 31,
1999

         The Company had no revenues for the years 2000 and 1999.

         During 2000, the Company's general, administrative and operating
expenses were $124,361 compared to $225,110 in 1999. Most of the expenses in
2000 were incurred in connection with start-up activities of Dining Experience.
The expenses in 2000 also included non-cash expenses of $66,716 for amortization
of acquisition costs for Dining Experience and an impairment loss of $133,432.
In 2000, the Company had a non-recurring gain of $68,051 representing additional
amounts paid in connection with the sale in 1998 of its joint venture interest
in Interallied of Buffalo, LLC. The Company had a net loss of $151,990 in 2000
compared to $116,039 in 1999. The 2000 loss was attributable to the absence of
revenue in 2000, start-up costs incurred in connection with the business of
Dining Experience, and amortization of the acquisition costs for Dining
Experience.

         On October 18, 2000, the Company surrendered its remaining 25% interest
in Interallied Restaurant Group of Rochester, LLC, the owner of another Damon
franchise restaurant located in Rochester, New York, which had been acquired in
1997.


                                      -5-

<PAGE>



Liquidity

         The Company has not been able to pay its obligations in the normal
course of business and the Company's financial statements included herein are
subject to a going concern condition. The Company must receive additional
capital to continue its existence.

         The Company has historically experienced negative cash flow from
operations, and has covered cash flow short falls through advances made by
certain shareholders and sales of common stock.

         For information concerning the Company's results of operations for the
last two fiscal years, see the Company's financial statements for those years
and the notes to those statements contained elsewhere in this report.

Item 7.   Financial Statements.

         See pages F-1 through F-11 attached hereto for copies of the audited
financial statements of the Company for the years ended December 31, 2000 and
December 31, 1999, which on page ___ is a list of such financial statements.

Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure.

None.


                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons

         Set forth below is information concerning the Company's directors and
executive officers:


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

  Ira Keeperman             48        President, Chief Executive
                                      Officer and Director

  Patrice Croghan           39        Secretary/Treasurer, Director

  Maureen Sirull            43        Vice President


         IRA KEEPERMAN has served as the Company's President and Director since
1994. Mr. Keeperman was responsible for the development of the two franchise
restaurants operated under the name Damon's Place for Ribs and in which the
Company has had an ownership interest. Mr. Keeperman has been the President of
Keep Food Brokers, a food brokerage company, for more than the last five years.
Mr. Keeperman is currently responsible for implementation and oversight of the
Company's sales and marketing strategies.


                                      -6-

<PAGE>



         PATRICE CROGHAN has served as Secretary/Treasurer and a Director of the
Company since 1994. Ms. Croghan's responsibilities include oversight of the
financial and accounting areas for the Company along with marketing research and
survey analysis.

         MAUREEN SIRULL joined the Company in 1995. Ms. Sirull was appointed
Vice President of the Company in September, 1998, a position in which she still
serves. She has also served as a Director of the Company since September, 1998.
Prior to joining the Company, Ms. Sirull was employed for over ten years as a
legal assistant. In this capacity her duties included training of staff,
interviewing clients and overseeing all aspects of cases, including preparation
for trial.

         There are no audit, compensation or other committees of the board of
directors.

         Compliance with Section 16(a) of the Exchange Act. Forms 3, 4 and 5
have not yet been filed by any officer, director or beneficial owner of more
than 10 percent of our common stock. Interallied had no securities registered
under the Exchange Act prior to its last fiscal year and therefore no such
reporting person was required to file reports under Section 16(a) of the
Exchange Act in prior years. All reports for officers and directors will be
filed as soon as possible. Interallied will likewise encourage beneficial owners
of more than 10% of Interallied's common stock to file their reports shortly.

Item 10.   Executive Compensation.

         The following table sets forth information concerning compensation paid
or accrued by the Company or its subsidiaries for services rendered during the
2000, 1999, and 1998 to our chief executive officer. No other executive
officer's compensation exceeded $100,000 during either of these fiscal years.

                           Summary Compensation Table

Name and Principal Position                Year            Salary
----------------------------               ----            ------

Ira Keeperman, Chief Executive Officer      2000           $   0
                                            1999           $   0
                                            1998           $   0


                                      -7-

<PAGE>



Item 11.   Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain information as of April 12, 2001
with respect to beneficial ownership of the Company's common stock by each
person whom we know to own 5% or more of our outstanding shares; each of our
directors; and all officers and directors of the Company as a group. Each such
owner of common stock has sole voting and investment power for all shares listed
below, except as otherwise indicated:

Name and Address               Amount and Nature of        Percent of
of Beneficial Owner            Beneficial Ownership          Class
-------------------            ---------------------       ---------

Joseph Columbo                       350,000(1)                  19.3%(1)
John Patten                          139,240                      7.6%
Rhonda Rabetsky                      106,018                      5.8%
Ira Keeperman                         45,000                      2.5%
Maureen Sirull                          -0-                       --
Patrice Croghan                       45,000                      2.5%

All officers and directors
as a group (3 persons)(2)             90,000                     45.0%
                                      ------                     -----

-------------
(1)  Does not include shares owned by Mr. Columbo's spouse or on entity in
     which his spouse has an interest. Mr. Columbo disclaims beneficial
     ownership of such shares.

Item 12.   Certain Relationships and Related Transactions

         In March 1999, the Company issued 500,000 shares of its common stock to
the three former owners of Dining Experience in exchange for all of its issued
and outstanding shares. The Company believes that the issuance of such shares is
exempt from the registration requirements pursuant to Section 4(2) of the
Securities Act. Of these shares, 300,000 were issued to Joseph Columbo and
150,000 shares were issued to Rhonda Rabetsky, each of whom thereby became an
affiliate of the Company. See "Security Ownership of Certain Beneficial Owners
and Management."

         A corporation owned by the spouse of or an affiliate of the Company is
the lessor of the Company's offices pursuant to a lease which is presently on a
month-to-month basis with a base annual rent of approximately $10,000.

                                      -8-

<PAGE>



Item 13.   Exhibits and Reports

(a)      Exhibits to this report are as follows:

Exhibit No.    Description of Document

 3.1(a)        Articles of Incorporation

 3.1(b)        Amendments to Articles of
               Incorporation

 3.2           By-laws

10.1           Agreement dated October 18, 2000
               Between the Company and Interallied Group of Rochester LLC for
               the surrender of joint venture interest in Interallied Group
               of Rochester LLC

21             Subsidiaries of the registrant.


(b)      Reports on Form 8-K.

         The Company did not file any reports on Form 8-K during the last
quarter of 2000.



                                      -9-

<PAGE>



                                   SIGNATURES


         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.


Dated:   April 16, 2001

                                        INTERALLIED GROUP, INC.


                                        By:     /s/ Ira Keeperman
                                             -------------------------
                                             Ira Keeperman, President,
                                             Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following person on behalf of the registrant and in the capacities and on
the dates indicated.



<TABLE>
<CAPTION>
Signature                      Title                                   Date
---------                      -----                                   ----
<S>                            <C>                                     <C>


 /s/ Ira Keeperman             President, Chief Executive Officer      April 16, 2001
---------------------------
Ira Keeperman                  Financial and Accounting Officer


 /s/ Patrice Croghan           Secretary/Treasurer                     April 16, 2001
---------------------------
Patrice Croghan


 /s/ Maureen Sirull            Vice President                          April 16, 2001
---------------------------
Maureen Sirull
</TABLE>

                                      -10-


<PAGE>

                                            DRAFT SUBJECT TO REVIEW AND REVISION



















                                                                             F-1
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheet
December 31, 2000

ASSETS
Current assets:
   Cash                                                             $     1,260
   Advances to employees                                                  1,000
                                                                    -----------

       Total current assets                                               2,260

Fixed assets, net                                                         9,970
Intangible asset, net (Note G)
                                                                    -----------

                                                                    $    12,230
                                                                    ===========

LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
   Accounts payable                                                 $     7,104
   Accrued expense                                                       20,471
   Deferred income                                                       12,670
   Notes payable and accrued interest (Note E)                          119,055
                                                                    -----------

       Total current liabilities                                        159,300
                                                                    -----------

Capital deficiency:
   Preferred stock; $.001 par value; 5,000,000 shares authorized;
     no shares issued
   Common stock; $.01 par value; 20,000,000 shares authorized;
     1,815,537 shares issued and outstanding                             18,155
   Additional paid-in capital                                         1,310,180
   Stock subscription receivable                                        (11,643)
   Deficit                                                           (1,463,762)
                                                                    -----------

                                                                       (147,070)
                                                                    -----------

                                                                    $    12,230
                                                                    ===========



See notes to financial statements                                           F-2
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

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

General, administrative and other operating expenses  $   124,361   $   225,110
Amortization of intangible asset                           66,716        66,717
Write-off of impaired intangibles                         133,432
                                                      -----------   -----------

Loss before other income (expense)                       (324,509)     (291,827)
                                                      -----------   -----------

Other income (expense):
   Gain on sale of subsidiary                              68,051       176,880
   Interest income                                            966         4,183
   Interest expense                                        (7,691)       (5,275)
                                                      -----------   -----------

                                                           61,326       175,788
                                                      -----------   -----------
Net loss                                              $  (263,183)  $  (116,039)
                                                      ===========   ===========

Net loss per share - basic and diluted                  $(.14)        $(.07)
                                                        ======        =====

Weighted average shares outstanding                     1,815,537     1,568,430
                                                        =========     =========



See notes to financial statements                                           F-3
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                                               Total
                                                                                            Stockholders'
                                   Common Stock       Additional                  Stock         Equity
                                   ------------        Paid-in                 Subscription    (Capital
                                Shares      Amount     Capital      Deficit     Receivable   Deficiency)
                               ---------   ---------  ----------  -----------  ------------ -------------
<S>                             <C>        <C>        <C>         <C>           <C>            <C>
Balance at January 1, 1999      1,161,297  $  11,613  $1,035,874  $(1,084,540)  $  (10,341)    $ (47,394)
Stock issued for acquisition
   of subsidiary                 500,000       5,000     245,000                                 250,000
Accrued interest                                                                      (650)         (650)
Issuance of common stock in
   connection with repayment
   of loans and accrued
   interest                      154,240       1,542      29,306                                  30,848
Net loss for the period                                              (116,039)                  (116,039)
                               ---------   ---------  ----------  -----------   ----------    ----------

Balance at December 31, 1999   1,815,537      18,155   1,310,180   (1,200,579)     (10,991)      116,765
Accrued interest                                                                      (652)         (652)
Net loss for the period                                              (263,183)                  (263,183)
                               ---------   ---------  ----------  -----------   ----------    ----------

Balance at December 31, 2000    1,815,537  $  18,155  $1,310,180  $(1,463,762)  $  (11,643)    $(147,070)
                               ==========  =========  ==========  ===========   ==========     =========
</TABLE>



See notes to financial statements                                           F-4
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                       Year Ended
                                                                                      December 31,
                                                                                 ------------------------
                                                                                    2000         1999
                                                                                 ----------   -----------
<S>                                                                              <C>          <C>
Cash flows from operating activities:
   Net loss                                                                      $ (263,183)  $ (116,039)
   Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                   73,064       70,894
     Gain on sale of subsidiary                                                     (68,051)    (176,880)
     Write-off of impaired intangibles                                              133,432
     Changes in:
       Other receivables                                                               (652)      29,864
       Accounts payable and accrued expenses                                         17,944      (10,258)
                                                                                 ----------   -----------

         Net cash used in operating activities                                     (107,446)    (202,419)
                                                                                 ----------   ----------

Cash flows from investing activities:
   Purchase of fixed assets                                                                       (2,214)
   Proceeds from sale of subsidiary                                                  84,031      145,469
   Net cash acquired in connection with acquisition of subsidiary                                 14,559
                                                                                 ----------   ----------

         Net cash provided by investing activities                                   84,031      157,814
                                                                                 ----------   ----------

Cash flows from financing activities:
   Advances from stockholders                                                        22,606       38,393
                                                                                 ----------   ----------

         Net cash provided by financing activities                                   22,606       38,393
                                                                                 ----------   ----------

Net (decrease) in cash                                                                 (809)      (6,212)
Cash, beginning of period                                                             2,069        8,281
                                                                                 ----------   ----------

Cash, end of period                                                              $    1,260   $    2,069
                                                                                 ==========   ==========


Supplemental disclosures of noncash activities:
   Issuance of stock for acquisition of subsidiary                                            $  250,000
   Issuance of stock in repayment of stockholder loans                                        $   30,848
   Note received in connection with sale of subsidiary                                        $   61,449
</TABLE>



See notes to financial statements                                           F-5
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000


NOTE A - GENERAL

Interallied Group, Inc. (the "Company"), which changed its name from Interallied
Restaurant Group, Inc. on January 12, 1999, is a holding company. The Company
owned a 51% interest in a franchised restaurant which was sold in January 1999,
(see Note C). The Company held a 25% interest in a second franchised restaurant
which was acquired in 1997 (see Note D) and was disposed of September 2000.
During March 1999, the Company acquired Dining Experience, Inc., a development
stage marketing company (see Note G).

The accompanying financial statements have been prepared on a going-concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. At December 31, 2000, the Company
had a working capital deficiency of $157,040 and a capital deficiency of
$35,877. For the years ended December 31, 2000 and 1999, the Company incurred
net losses of $263,183 and $116,039, respectively.

The Company has been heavily reliant on financial support from stockholders to
assist in meeting its cash flow needs. Management plans to continue, and expects
to ultimately complete, the Company's development of Dining Experience, Inc. as
a viable business concept. Additionally, management is seeking additional
sources of capital, including the sale of the Company and anticipates
controlling costs at levels sufficient to complete development activities, and
ultimately to achieve sales volumes that are sufficient to support the Company's
cost structure.

The Company's continuation as a going concern is dependent on its ability to
complete the development of Dining Experience, Inc. discussed in the preceding
paragraph and ultimately to attain profitable operations. However, no assurance
can be given as to whether the Company will be able to achieve these objectives.
These factors, among others raise substantial doubt about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern for a reasonable
period of time.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]   Principles of consolidation:

      The consolidated financial statements include the accounts of the Company
      and its wholly owned subsidiary, Dining Experience, Inc. (from the date of
      its acquisition in March 1999). Significant intercompany transactions have
      been eliminated in consolidation. Through September 2000, the Company had
      a 25% interest in Interallied Restaurant Group of Rochester, LLC which is
      accounted for under the equity method.

[2]   Per share data:

      Net loss per share is computed based on the weighted average number of
      shares of common stock outstanding during each period.

[3]   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 amounts reported in the financial statements
      and accompanying notes. Actual results could differ from those estimates.

[4]   Reclassifications

      Certain reclassifications have been made to the 1999 Financial Statements
      in order to conform to the current year presentation.


                                                                             F-6
<PAGE>



INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 2000


NOTE C - SALE OF SUBSIDIARY

During January 1999, effective as of December 27, 1998, the Company sold at a
gain of $176,880 its 51% interest in Interallied of Buffalo to one of the
minority stockholders. Interallied of Buffalo operated a "Damons the Place for
Ribs", restaurant in the Buffalo, New York area under a franchise agreement. The
sales price was $161,449 of which $100,000 was paid in cash on January 15, 1999,
and $61,449 was paid by an 8% note due in 16 monthly installments of $4,062. In
addition, the sales agreement provides for additional consideration not to
exceed $68,051 due over the next five years through 2003 based upon the profits
of Interallied of Buffalo. The balance of the note, and additional consideration
of $68,051, was repaid during 2000.


NOTE D - INVESTMENT IN AFFILIATE

In 1997, the Company invested $82,500 for a 25% interest in Interallied of
Rochester, LLC ("Rochester") which was formed in 1997 to build and operate under
a franchise agreement a "Damons the Place for Ribs" restaurant. The restaurant
commenced operations in December 1997. The Company accounted for its investment
under the equity method and reflected losses since the date of its acquisition.
The Company's share of Rochester's losses in excess of its investment in
Rochester, have not been reflected in the accompanying financial statements as
the Company had not guaranteed obligations of Rochester and was not otherwise
committed to provide financial support to Rochester. In September 2000, the
Company surrendered its share of ownership in Rochester in return for release
from any obligations or liabilities which may have otherwise been asserted.


NOTE E - NOTES AND ADVANCES PAYABLE - STOCKHOLDERS

On June 30, 1995, the Company issued a promissory note in connection with a
$88,000 loan from a stockholder. Such note bore interest at 5.75% per annum. The
balance of the note and accrued interest totaled $105,848 at November 20, 1998,
at which time a substantial portion of the note was repaid through the issuance
of common stock valued at $75,000. In August 1999, the holder of the note agreed
to accept 154,240 shares (see Note I) of common stock in payment of the balance
of the note and the accrued interest.

Upon the acquisition of Dining Experience (see Note G), the Company assumed
liabilities of $50,000 to stockholders of the Company bearing interest at 6.5%.
An additional $25,000 was received from stockholders of the Company, also
bearing interest at 6.5%. The maturity of such notes has expired and by
agreement with the note holders, the notes are due on demand. The balance of the
notes and accrued interest at December 31, 2000 totaled $84,034. Interest
expense related to these notes totaled $5,247 and $3,787 during the years ended
December 31, 2000 and 1999.

During the year ended December 31, 2000, the Company received advances from
stockholders totaling $22,606 which bore interest at 6.5%. Such amounts are due
on demand. The balance of the advances and accrued interest at December 31, 2000
totaled $35,021. Interest expense in related to advances from stockholders
totaled $2,434 and $1,488 during the years ended December 31, 2000 and 1999,
respectively.


NOTE F - INCOME TAXES

Income taxes consist of taxes currently due plus deferred taxes related to net
operating loss carryforwards and to differences between the financial statement
and tax bases of assets and liabilities. Deferred tax assets and liabilities
represent the future tax return consequences of these temporary differences,
which will either be taxable or deductible when the assets and liabilities are
recovered or settled.



                                                                             F-7
<PAGE>


INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 2000


NOTE F - INCOME TAXES (CONTINUED)

A reconciliation of the income tax benefit computed at the federal statutory tax
rate to income tax benefit of zero computed for financial accounting purposes is
as follows:

                                                                  Year Ended
                                                                 December 31,
                                                               ----------------
                                                                2000     1999
                                                               ------   ------
       Federal tax benefit at statutory income tax rate          (34)%    (34)%
       Increases (reductions) resulting from:
          State and local income tax benefit,
            net of federal  effect                                (6)      (6)
          Increase in valuation allowance                         40       40
                                                               -----    -----

       Income tax benefit reflected in financial statements        0%       0%
                                                               =====    =====

The net deferred tax asset is comprised of the following:

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

       Net operating loss carryforward                           $ 447,000
       Valuation allowance                                        (447,000)
                                                                 ---------

       Net deferred tax asset                                    $       0
                                                                 =========

As of December 31, 2000, the Company had a net operating loss carryforward of
approximately $1,117,000, which expires from 2011 through 2020. The Company has
provided a valuation allowance offsetting the deferred tax asset since
management could not determine that it was more likely than not that the
deferred tax asset would be realized in the future. The valuation allowance
increased by $88,000 and $46,000 for the years ended December 31, 2000 and 1999,
respectively. The Company's ability to utilize its NOL carryforward for federal
income tax purposes in the future may be limited by the provisions of Section
382 of the Internal Revenue Code regarding certain changes in ownership.


NOTE G - ACQUISITION OF SUBSIDIARY

During March 1999, the Company acquired all of the outstanding stock of Dining
Experience, Inc. in return for the issuance of 500,000 shares of the Company's
common stock valued at $250,000. Dining Experience, Inc., which was formed in
December 1998, has developed a marketing concept for its products which involve
sales through a network of independent participants in a multi-level marketing
program. As its original product and concept, it has developed a gourmet
meal-of-the-month program delivered fresh to the purchaser's home via overnight
carrier. The Company has been unsuccessful in implementing its multi-level
marketing program and as a result, during the fourth quarter of 2000 has
recorded a write-off of the remaining unamortized intangible of $133,432. As
Dining Experience, Inc. is in the development stage, the transaction has been
accounted for as the acquisition of assets, the principal asset being an
intangible valued at $266,865 which is being amortized on a straight-line basis
over thirty-six months. Amortization for the year ended December 31, 2000 and
1999 totaled $66,716 and $66,717, respectively.



                                                                             F-8
<PAGE>


                                               DRAFT SUBJECT REVIEW AND REVISION

INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 2000


NOTE H - LEASE - RELATED PARTY

During January 1999, the Company entered into a month-to-month operating lease
for office space at a monthly rental of $850 from a company owned by the wife of
a party who became a significant stockholder of the Company during March 1999.


NOTE I - PRIOR PERIOD ADJUSTMENT

During August 1999, the holder of a note agreed to accept payment of the
outstanding balance of the note and accrued interest in the form of common stock
of the Company. The Company estimated the number of shares to be issued as
61,696. Upon issuing the shares, the number of shares to be issued was 154,240.
Such difference in amount is solely the result of a calculation error.
Correction of such error has been reflected in the 1999 statement of
stockholders' equity and resulted in an increase in common stock of $925 and a
decrease in additional paid-in capital of $925.



                                                                             F-9