U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

    For the quarterly period ended September 30, 2003


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

    For the transition period from             to

    Commission File No.  0-32331

                              SURETY HOLDINGS CORP.
              -----------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

                 Delaware                                       52-2229054
   ----------------------------------                        -------------------
   State of other jurisdiction of                            (IRS Employer
   incorporation or organization                             Identification No.)

                               4400 Route 9 South
                           Freehold, New Jersey 07728
              ----------------------------------------------------
                    (Address of Principal Executive Offices)

   Registrant's telephone number including area code          732-409-0113
                                                              ------------

   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 the past 90 days.

   (1)   YES   X           NO                  (2)   YES   X        NO
        -----            ------                     -----         ------

   State the number of shares outstanding of each of the Registrant's classes of
   common equity, as of the latest applicable date:

                         6,753,000 - - November 11, 2003


<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                                      INDEX



<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                             <C>
Part I - Financial Information

          Item 1 - Condensed Consolidated Financial Statements

               Balance Sheet as of September 30, 2003                                               2

               Statements of Income for the nine and three months
                  ended September 30, 2003 and 2002                                                 3

               Statements of Cash Flows for nine months ended September 30, 2003 and 2002         4-5

               Notes to the Financial Statements                                                 6-11

          Item 2 - Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                                                  12-21

          Item 3 - Evaluation of Disclosure Controls and Procedures                                22

Part II - Other Information

          Item 1 - Legal Proceedings                                                               22

          Item 2 - Change in Securities                                                            22

          Item 3 - Defaults Upon Senior Securities                                                 22

          Item 4 - Submission of Matters to a Vote of Security Holders                             22

          Item 5 - Other Information                                                               22

          Item 6 - Exhibits and Reports on Form 8-K                                                22

          SIGNATURE                                                                                23

          EXHIBIT INDEX                                                                            24
</TABLE>





<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)

                                     ASSETS

CURRENT ASSETS
   Cash                                                           $  11,049,000
   Real estate held for sale, current                                 3,161,000
   Other current assets                                                 620,000
   Notes receivable, officer, current                                    13,000
                                                                  -------------
        Total current assets                                         14,843,000

NOTES RECEIVABLE, less current maturities                             2,871,000

NOTE RECEIVABLE, officer, less current maturity                         544,000

REAL ESTATE HELD FOR SALE                                            28,548,000

NOTES RECEIVABLE AND ACCRUED INTEREST,
      MARINE FOREST RESORT, INC., net of an approximate
      $11 million allowance for loan losses                                  --

REAL ESTATE DEVELOPMENT COSTS                                        42,933,000

PROPERTY AND EQUIPMENT, net of accumulated depreciation
  and amortization of approximately $2 million                        2,493,000

DEFERRED TAX ASSET                                                    4,559,000

OTHER ASSETS                                                          2,084,000
                                                                  -------------
                                                                  $  98,875,000
                                                                  =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Notes payable, current maturity                                $      36,000
   Accounts payable                                                     325,000
   Accrued expenses and other current liabilities                       172,000
                                                                  -------------
        Total current liabilities                                       533,000
                                                                  -------------

LONG-TERM LIABILITIES
   Notes payable, less current maturity                                 373,000
   Obligations pursuant to notes receivable
     financing, less current maturity                                   451,000
                                                                  -------------
        Total long-term liabilities                                     824,000
                                                                  -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, $.001 par value,
     200,000,000 shares authorized,
     6,753,000 shares issued and
     outstanding                                                          7,000
   Capital in excess of par value                                   101,709,000
   Accumulated deficit                                               (4,198,000)
                                                                  -------------
        Total stockholders' equity                                   97,518,000
                                                                  -------------
                                                                  $  98,875,000
                                                                  =============



SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                       2
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
            NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                      NINE MONTHS ENDED SEPTEMBER 30,          THREE MONTHS ENDED SEPTEMBER 30,
                                          2003               2002                   2003              2002
                                      -----------        -----------            -----------        -----------
<S>                                   <C>                <C>                    <C>                <C>
REVENUES                              $ 8,641,000        $ 3,386,000            $ 1,671,000        $ 1,593,000

COST OF REVENUES                        2,976,000          1,254,000                589,000            605,000
                                      -----------        -----------            -----------        -----------

GROSS PROFIT                            5,665,000          2,132,000              1,082,000            988,000

GENERAL AND ADMINISTRATIVE
 EXPENSES                               1,892,000          1,215,000                754,000            440,000
                                      -----------        -----------            -----------        -----------

INCOME FROM OPERATIONS                  3,773,000            917,000                328,000            548,000
                                      -----------        -----------            -----------        -----------

OTHER INCOME (EXPENSE)
  Interest income                         206,000            240,000                 97,000            103,000
  Interest expense                        (18,000)          (106,000)                (5,000)            (8,000)
                                      -----------        -----------            -----------        -----------
                                          188,000            134,000                 92,000             95,000
                                      -----------        -----------            -----------        -----------

INCOME BEFORE INCOME TAXES              3,961,000          1,051,000                420,000            643,000

INCOME TAXES                           (1,522,000)          (411,000)              (204,000)          (246,000)
                                      -----------        -----------            -----------        -----------

NET INCOME                            $ 2,439,000        $   640,000            $   216,000        $   397,000
                                      ===========        ===========            ===========        ===========

NET INCOME PER COMMON
 SHARE, basic and diluted             $      0.36        $      0.09            $      0.03        $      0.06
                                      ===========        ===========            ===========        ===========

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING, basic and diluted         6,750,000          6,738,000              6,753,000          6,738,000
                                      ===========        ===========            ===========        ===========
</TABLE>





SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                       3
<PAGE>


                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      2003                  2002
                                                                 ------------           ------------
<S>                                                              <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                    $  2,439,000           $    640,000
   Adjustments to reconcile net income
    to net cash used in operating activities:
      Depreciation and amortization                                   107,000                112,000
      Deferred income taxes                                             6,000                  8,000
      Gain on sales of property                                    (6,288,000)            (2,148,000)
      Loss on disposition of property                                                         12,000
      Loss on sale of notes receivable                                                        75,000
      Stock compensation charge                                        31,000
      Increase (decrease) in cash attributable
       to changes in operating assets and liabilities:
        Other current assets                                         (263,000)               (22,000)
        Other assets                                                 (335,000)            (1,190,000)
        Accounts payable                                             (373,000)               (19,000)
        Accrued expenses and other
         current liabilities                                           54,000                416,000
                                                                 ------------           ------------
NET CASH USED IN OPERATING ACTIVITIES                              (4,622,000)            (2,116,000)
                                                                 ------------           ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment                                (18,000)              (105,000)
   Proceeds from sales of property                                  6,331,000              2,686,000
   Real estate development expenditures                              (639,000)              (754,000)
   Proceeds from repayments of notes receivable                       267,000                819,000
   Proceeds from repayments of note receivable, officer                10,000                  5,000
                                                                 ------------           ------------
NET CASH PROVIDED BY INVESTING ACTIVITIES                           5,951,000              2,651,000
                                                                 ------------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Principal payments on notes payable                                (26,000)               (22,000)
   Repayments of notes payable, president                                                   (375,000)
                                                                 ------------           ------------
NET CASH USED IN FINANCING ACTIVITIES                                 (26,000)              (397,000)
                                                                 ------------           ------------

NET INCREASE IN CASH                                                1,303,000                138,000

CASH
   Beginning of period                                              9,746,000              9,908,000
                                                                 ------------           ------------
   End of period                                                 $ 11,049,000           $ 10,046,000
                                                                 ============           ============
</TABLE>





SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                       4
<PAGE>


                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                      2003                  2002
                                                                 ------------           ------------
<S>                                                              <C>                    <C>

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION,
 cash paid during the period for:
  Interest                                                       $     18,000           $     24,000
                                                                 ============           ============

  Income taxes                                                   $  1,713,000           $         --
                                                                 ============           ============


SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:

Issuance of note receivable to officer upon sale of property
 and improvements                                                $         --           $    575,000
                                                                 ============           ============

Issuance of notes receivable upon sale of property               $  1,658,000           $         --
                                                                 ============           ============
</TABLE>













SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                       5
<PAGE>


                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   NATURE OF OPERATIONS

Surety   Holdings   Corp.   ("Surety")   and   its   wholly-owned   subsidiaries
(collectively,  the  "Company")  are primarily  engaged in the  development of a
property on 642 acres of land in the North Kohala  district of Hawaii  Island in
the state of  Hawaii.  This  development,  referred  to as the  Kohala  Preserve
development project was initially slated to be a hotel,  18-hole golf course and
resort homes. However, the Company is exploring other avenues of development for
the 642 acres most notably, an all-inclusive fractional interest club community.

The  current  operations  of the  Company  include  the  sale of its  non-Kohala
Preserve development project real estate and other ancillary activities,  all of
which are not deemed to be the future of the Company's business.

In January 2003,  the Company  acquired the assets of  Millennium  International
Sports &  Entertainment,  LLC  ("Millennium"),  which  consisted  of sports  and
entertainment  memorabilia (see Item 7, CONSOLIDATED FINANCIAL STATEMENTS - NOTE
13, in the Company's  Annual  Report on Form 10-KSB for the year ended  December
31, 2002 for further  detail).  However,  since revenues related to the sales of
the memorabilia  were below certain  thresholds  specified in the Asset Purchase
Agreement,  the Company notified Millennium of its election to rescind the Asset
Purchase Agreement, pursuant to the terms of agreement.

2.   UNAUDITED STATEMENTS, INCOME PER COMMON SHARE AND NEW ACCOUNTING
     PRONOUNCEMENTS

UNAUDITED STATEMENTS

The accompanying  condensed consolidated financial statements of Surety Holdings
Corp. and Subsidiaries as of September 30, 2003 and for the nine and three-month
periods  ended  September  30,  2003 and  2002 are  unaudited  and  reflect  all
adjustments of a normal and recurring  nature to present fairly the consolidated
financial  position,  results  of  operations  and cash  flows  for the  interim
periods.  These unaudited condensed  consolidated financial statements have been
prepared by the Company  pursuant to  instructions  to Form 10-QSB.  Pursuant to
such  instructions,  certain  financial  information  and  footnote  disclosures
normally included in such financial statements have been omitted.

These unaudited condensed  consolidated  financial  statements should be read in
conjunction  with  the  consolidated  audited  financial  statements  and  notes
thereto,   together  with  management's  discussion  and  analysis  or  plan  of
operations,  contained in the Company's Annual Report on the Form 10-KSB for the
year  ended  December  31,  2002.  The  results of  operations  for the nine and
three-month  periods ended September 30, 2003 are not necessarily  indicative of
the results that may occur for the year ending December 31, 2003.

INCOME PER COMMON SHARE

The Company complies with Statement of Financial  Accounting  Standards ("SFAS")
No. 128,  "Earnings  Per Share" which  requires dual  presentation  of basic and
diluted  earnings per share.  Basic earnings per share excludes  dilution and is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average  common shares  outstanding for the year.  Diluted earnings per
share  reflects the  potential  dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity.  Since the Company has no securities or other  contracts to issue common
stock,  basic  and  diluted  net  income  per  common  share  for the  nine  and
three-month periods ended September 30, 2003 and 2002 were the same.


                                       6
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


2.   UNAUDITED STATEMENTS, INCOME PER COMMON SHARE AND NEW ACCOUNTING
     PRONOUNCEMENTS (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 requires  certain  variable  interest  entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the equity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 15, 2003. The Company has no arrangements that would be subject to
this interpretation.

In April 2003,  the FASB issued SFAS  No.149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  the  accounting  for  derivative   instruments,   including   certain
derivative  instruments embedded in other contracts,  and for hedging activities
under  SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
Activities."  SFAS No. 149 is generally  effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30,  2003.  The adoption of SFAS No. 149 on July 1, 2003,  as  required,  had no
impact on the Company's condensed consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of Both Liabilities and Equity".  SFAS No. 150
establishes  standards for  classifying  and measuring as  liabilities,  certain
financial   instruments   that  embody   obligations  of  the  issuer  and  have
characteristics  of both  liabilities and equity.  The adoption of SFAS No. 150,
effective for all financial  instruments  entered into or modified after May 31,
2003,  will not have a material effect on the Company's  condensed  consolidated
financial statements.

3.   REAL ESTATE DEVELOPMENT COSTS

At  September  30,  2003,  real  estate  development  costs,  attributed  to the
Company's Kohala Preserve development project, consist of the following:


Land and land acquisition costs         $ 28,975,000
Planning and studies                       2,572,000
Engineering and architectural                565,000
Infrastructure                             6,711,000
Professional and consulting fees           2,490,000
Other                                      1,620,000
                                        ------------
                                        $ 42,933,000
                                        ============

4.   STOCKHOLDERS' EQUITY

In January 2003,  the Company issued 15,000 shares of its common stock valued at
$31,000 pursuant to employment contracts.



                                       7
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


5.   COMMITMENTS AND CONTINGENCIES

The prior  approvals  obtained for the Kohala Preserve  development  project are
conditional;  that is,  each  approval  is  subject  to  various  conditions  of
approval.  Certain  of these  conditions  of  approval  contain  time  limits or
financial  compliance  requirements,  which if not met, may ultimately result in
legislative and/or administrative actions to void or revoke the prior approvals.
The effect of such adverse  actions would be to return the land  entitlements to
the former  zoning,  or more  appropriate  zoning as determined by the County of
Hawaii.  The  Company  believes  that it has  continued  to  maintain  the prior
approvals  through  compliance  with all applicable  conditions.  In the future,
however,  the Company may not be able to maintain compliance with all applicable
conditions.

The  Company has entered  into  various  consulting  agreements  for  investment
banking, project development and other services. Generally, these agreements are
on a project by project basis requiring payments as services are performed.

The Company is involved in certain legal actions that arose in the normal course
of business. In the opinion of the Company's management, the resolution of these
matters will not have a material  adverse effect on the  consolidated  financial
position, results of operations or cash flows of the Company

7.   RELATED PARTY TRANSACTIONS

MARINE FOREST RESORT, INC. ("MARINE FOREST")

Pursuant to  uncollateralized  promissory  notes,  the Company  advanced  Marine
Forest, a related Japanese corporation that controls  approximately 400 acres of
land in Okinawa, Japan, $9.75 million. The notes bear interest at the U.S. prime
rate, at date of issuance,  plus one percent.  Under their original  terms,  the
notes  were due six  months  after  date of  issuance.  However,  the notes were
extended an  additional  six months and  subsequently  extended to December  31,
2002, as a concession to Marine Forest to advance  Marine  Forest's  development
projects.  Marine Forest's current  development  plans are based upon a recently
completed  study  prepared by a consultant for the Kohala  Preserve  development
plan. The Company believes that Marine Forest may sell its development  projects
based on the aforementioned study and repay the notes and interest thereafter.

As of September 30, 2003, the notes remain outstanding.  Further, since issuance
of the notes, no interest has been paid to the Company. Accordingly,  during the
years ended  December 31, 2002 and 2001, in light of the  speculative  nature of
Marine Forest's  development projects among other reasons and in accordance with
its compliance with the  requirements  of SFAS No. 114, the Company  recorded an
impairment charge of approximately $3.8 million and $7.2 million,  respectively,
including  approximately $1.3 million of aggregate accrued interest  receivable.
During the year ended  December  31,  2002,  the Company  discontinued  accruing
interest income on the notes in light of its impairment charge.

NOTE RECEIVABLE, OFFICER

In April 2002,  an officer of the Company  purchased  property and  improvements
thereon for $575,000.  The officer entered into a 30-year note agreement,  which
requires  monthly  payments of principal  and interest  through  2032.  The note
receivable  bears  interest at the rate of 2.66%.  At September  30,  2003,  the
balance on this note receivable was approximately $557,000.


                                       8
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.   SEGMENT REPORTING

As  discussed  in Note 1, the  Company's  primary  business  focus is the Kohala
Preserve  development project.  Nonetheless,  the Company complies with SFAS No.
131 "Disclosures about Segments of an Enterprise and Related Information", which
provides information about the Company's current business activities. Management
has divided the Company into the following segments:  real estate sales, rental,
cattle sales and other. Transactions between segments are not common and are not
material to the segment  information.  Some business  activities  that cannot be
classified in the aforementioned segments are shown under "corporate".

Operating results, by segment, for the nine and three months ended September 30,
2003 and 2002 are as follows (in thousands):


                      NINE MONTHS ENDED SEPTEMBER 30, 2003

<TABLE>
<CAPTION>
                                          Real Estate    Rental     Cattle
                                            Sales       Activity     Sales       Other    Corporate    Total
                                          --------------------------------------------------------------------
<S>                                       <C>           <C>         <C>        <C>        <C>         <C>
Revenues                                  $  7,989      $    194    $    248   $    210   $     --    $  8,641
Cost of revenues                             2,548            91         180        157                  2,976
                                          --------------------------------------------------------------------
Segment profit                               5,441           103          68         53                  5,665
General and administrative expenses                                                         (1,892)     (1,892)
Interest income, net                                                                           188         188
Income taxes                                                                                (1,522)     (1,522)
                                          --------------------------------------------------------------------

Net income (loss)                         $  5,441      $    103    $     68   $     53   $ (3,226)   $  2,439
                                          ====================================================================

Total assets                              $ 37,046      $    126    $    141   $    330   $ 61,232    $ 98,875
                                          ====================================================================

Capital expenditures                      $     --      $     --    $      6   $     --   $    651    $    657
                                          ====================================================================

Depreciation and amortization             $     --      $      3    $     13   $     43   $     48    $    107
                                          ====================================================================
</TABLE>



                                       9
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.   SEGMENT REPORTING (CONTINUED)

                      NINE MONTHS ENDED SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                            Real Estate      Rental       Cattle
                                               Sales        Activity       Sales        Other       Corporate       Total
                                            -------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>          <C>           <C>           <C>
    Revenues                                  $  2,686      $    221      $    259     $    220      $     --      $  3,386
    Cost of revenues                               849            86           156          163                       1,254
                                            -------------------------------------------------------------------------------
    Segment profit                               1,837           135           103           57                       2,132
    General and administrative expenses                                                                (1,215)       (1,215)
    Interest income, net                                                                                  134           134
    Income taxes                                                                                         (411)         (411)
                                            -------------------------------------------------------------------------------

    Net income (loss)                         $  1,837      $    135      $    103     $     57      $ (1,492)     $    640
                                            ===============================================================================

    Total assets                              $ 40,219      $     63      $    101     $    585      $ 57,676      $ 98,644
                                            ===============================================================================

    Capital expenditures                      $     --      $     --      $      9     $     63      $    787      $    859
                                            ===============================================================================

    Depreciation and amortization             $     --      $      3      $     13     $     50      $     46      $    112
                                            ===============================================================================
</TABLE>





                     THREE MONTHS ENDED SEPTEMBER 30, 2003

<TABLE>
<CAPTION>
                                            Real Estate      Rental       Cattle
                                               Sales        Activity       Sales        Other       Corporate       Total
                                            -------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>          <C>           <C>           <C>

    Revenues                                  $  1,428      $     53      $    101     $     89      $     --      $  1,671
    Cost of revenues                               446            30            67           46                         589
                                            -------------------------------------------------------------------------------
    Segment profit                                 982            23            34           43                       1,082
    General and administrative expenses                                                                  (754)         (754)
    Interest income, net                                                                                   92            92
    Income taxes                                                                                         (204)         (204)
                                            -------------------------------------------------------------------------------

    Net income (loss)                         $    982      $     23      $     34     $     43      $   (866)     $    216
                                            ===============================================================================

    Capital expenditures                      $     --      $     --      $     --     $     --      $    214      $    214
                                            ===============================================================================

    Depreciation and amortization             $     --      $      1      $      4     $     14      $     17      $     36
                                            ===============================================================================
</TABLE>




                                       10
<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.   SEGMENT REPORTING (CONTINUED)



                     THREE MONTHS ENDED SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                            Real Estate      Rental       Cattle
                                               Sales        Activity       Sales        Other       Corporate       Total
                                            -------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>          <C>           <C>           <C>

    Revenues                                  $  1,368      $     61      $     69     $     95      $     --      $  1,593
    Cost of revenues                               465            29            67           44                         605
                                            -------------------------------------------------------------------------------
    Segment profit                                 903            32             2           51                         988
    General and administrative expenses                                                                  (440)         (440)
    Interest income, net                                                                                   95            95
    Income taxes                                                                                         (246)         (246)
                                            -------------------------------------------------------------------------------

    Net income (loss)                         $    903      $     32      $      2     $     51      $   (591)     $    397
                                            ===============================================================================

    Capital expenditures                      $     --      $     --      $      5     $     12      $    639      $    656
                                            ===============================================================================

    Depreciation and amortization             $     --      $      1      $      5     $     19      $     14      $     39
                                            ===============================================================================
</TABLE>





                                       11
<PAGE>


Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

NOTE ON FORWARD LOOKING INFORMATION

This Form 10-QSB  contains  forward-looking  statements.  For this purpose,  any
statements  contained in this Form 10-QSB that are not  statements of historical
fact may be  deemed  to be  forward-looking  statements.  Without  limiting  the
foregoing,  words  such as "may",  "will",  "expect",  "believe",  "anticipate",
"estimates", or "continue" or comparable terminology or the negative thereof are
intended to identify  certain  forward-looking  statements.  These statements by
their  nature  involve  substantial  risks  and  uncertainties,  both  known and
unknown,  and actual  results  may  differ  materially  from any future  results
expressed or implied by such forward-looking  statements. The Company undertakes
no  obligation  to  publicly  update or revise  any  forward-looking  statements
whether as a result of new information, future events or otherwise.

OVERVIEW

Surety  Holdings Corp. (the  "Company"),  through its  wholly-owned  subsidiary,
Surety Kohala Corporation  ("Surety  Kohala"),  is pursuing the development of a
property on 642 acres of land in the North Kohala  district of Hawaii  Island in
the state of  Hawaii.  This  development,  referred  to as the  Kohala  Preserve
development project (formerly known as the Mahukona  development  project),  was
initially slated to be a hotel,  18-hole golf course and resort homes.  However,
the  Company is  exploring  other  joint  venture  partners  and /or  avenues of
development for the 642 acres. (see KOHALA PRESERVE DEVELOPMENT in Liquidity and
Capital Resources).

The Company  maintains an  investment  in Marine Forest  Resort,  Inc.  ("Marine
Forest"), a related Japanese  corporation that controls  approximately 400 acres
of land in Okinawa,  Japan (see MARINE FOREST in Liquidity and Capital Resources
for discussion of Impairment Charge).

The current operations of the Company (discussed in Results of Operations on the
following pages) include the sale of its non-Kohala Preserve development project
real estate and other ancillary  activities,  many of which are not deemed to be
the future of the Company's business.

In January 2003,  the Company  acquired the assets of  Millennium  International
Sports &  Entertainment,  LLC,  which  consisted  of  sports  and  entertainment
memorabilia.  Subsequently,  the  Company  is  finalizing  with  Millennium  its
election  to rescind on the Asset  Purchase  Agreement  as a result of  revenues
relating to the  memorabilia  being below  certain  specified  thresholds in the
agreement. (See MILLENNIUM in Liquidity and Capital Resources).

                                       12
<PAGE>

CRITICAL ACCOUNTING POLICIES

The Company has  identified  the following  critical  accounting  policies which
effect the Company's  consolidated financial statements as of September 30, 2003
and for the nine and three months ended September 30, 2003 and 2002:

REAL ESTATE HELD FOR SALE AND DEVELOPMENT COSTS (INCLUDING IMPAIRMENT)

Real estate  held for sale is stated at the lower of cost or market.  All direct
and indirect costs relating to the Company's development project are capitalized
in accordance with Statement of Financial  Accounting  Standards ("SFAS") No. 67
"Accounting  for Costs and Initial Rental  Operations of Real Estate  Projects".
Such standard  requires costs associated with the  acquisition,  development and
construction of real estate and real  estate-related  projects to be capitalized
as part of that  project.  The  realization  of these costs is predicated on the
ability  of the  Company  to  successfully  open  and  operate  the  development
property.

The Company reviews its real estate held for sale, real estate development costs
and long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable. To
determine  the  recoverability  of these  assets,  the Company  employs  various
methods  to assess  fair  value  including,  but not  limited  to,  analysis  of
undiscounted  cash flows,  third party  appraisals or valuations and contractual
sales  value of  similar  properties.  Impairment  is the  amount  by which  the
carrying value of the asset exceeds its fair value.

The Company has obtained an "Opinion of Market  Value",  dated February 3, 2003,
for  a  majority  of  its  property  from  Economics  Research  Associates,   an
experienced and reputable advisor for developers and others.

MARINE FOREST - "ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A LOAN"

The Company  accounts  for the notes  receivable  from Marine  Forest  under the
provisions of SFAS No. 114,  "Accounting by Creditors for Impairment of a Loan".
Under SFAS No. 114, a loan is impaired when,  based on current  information  and
events, it is probable that a creditor will be unable to collect all amounts due
according to the contractual terms of the loan agreement.  SFAS No. 114 requires
lenders to measure  impaired  loans based on: (i) the present  value of expected
future cash flows  discounted at the loans'  effective  interest rate;  (ii) the
loans'  observable market price or (iii) the fair value of the collateral if the
loan is collateral-dependent.  An allowance for loan losses is maintained if the
measure of an impaired loan is less than its recorded investment. Adjustments to
the allowance are made through corresponding charges or credits to the provision
for loan losses.


                                       13
<PAGE>

RESULTS OF OPERATIONS

The following  table sets forth the  statements of income of the Company for the
the nine months ended  September 30, 2003 and 2002:


                                             2003              2002

Real estate sales                        $ 7,989,000       $ 2,686,000
Rentals                                      194,000           221,000
Cattle sales                                 248,000           259,000
Other                                        210,000           220,000
                                         -----------       -----------
     Total revenues                        8,641,000         3,386,000
                                         -----------       -----------

Cost of real estate sales                  2,548,000           849,000
Cost of rentals                               91,000            86,000
Cost of cattle sales                         180,000           156,000
Cost of other                                157,000           163,000
                                         -----------       -----------
     Total cost of revenues                2,976,000         1,254,000
                                         -----------       -----------

Gross profit                               5,665,000         2,132,000

General and administrative expenses        1,892,000         1,215,000
                                         -----------       -----------

Income from operations                     3,773,000           917,000
                                         -----------       -----------

Interest income                              206,000           240,000
Interest expense                             (18,000)         (106,000)
Income taxes                              (1,522,000)         (411,000)
                                         -----------       -----------

                                          (1,334,000)         (277,000)
                                         -----------       -----------

Net income                               $ 2,439,000       $   640,000
                                         ===========       ===========


REAL ESTATE SALES -

For the nine months ended  September 30, 2003, the Company sold 32 parcels to 17
different  buyers of  properties  for proceeds of  approximately  $8,000,000  as
compared  to the nine months  ended  September  30, 2002 where the Company  sold
eight  properties  for  proceeds  of  approximately  $2,700,000  an  approximate
$5,300,000  increase.  In 2002, the Company had been experiencing closing delays
caused by the Company's  survey  company,  the largest survey company on the Big
Island of Hawaii and probably the only survey company large enough to handle the
Company's PCRS (Parcel Consolidation  Re-Subdivision)  parcels and subdivisions,
being  backlogged  with work.  To address  the  backlog,  the  Company  switched
surveyors  on  several  projects.  Land  court  and  county  approval  processes
(generally three months or more), which occur subsequent to the surveying, could
contribute, however, to a slowing in the closing process.

The Company  anticipates  closing  between 3 to 5 transactions in the last three
months of 2003 for  approximately  $4,000,000.  As a result of the  survey  work
becoming quicker, the Company anticipates closing  approximately  $16,000,000 in
the next twelve months. There can be no assurances that the Company will be able
to close the balance of these contracts in 2004.


                                       14
<PAGE>

Real estate sales expense for the nine months ended  September 30, 2003 and 2002
was approximately 32% of real estate sales.

RENTAL REVENUES -

Rental  revenues for the nine months ended September 30, 2003 are 12% lower than
the rental  revenues  realized for the nine months ended September 30, 2002. The
Company  believes  total rental  revenues in 2003 could  continue to decrease as
compared to total rental revenues  realized in 2002 as long as land continues to
be sold.

CATTLE SALES -

The  approximate 4% decrease in cattle sales is  attributable to the decrease in
the  average  price per head of cattle  and the  decrease  in the  cattle  sold.
Specifically, for the nine months ended September 30, 2003, the Company sold 901
heads at an average price of approximately  $275 per head versus the same period
in 2002,  where the Company sold 930 heads at an average price of  approximately
$279 per head.  The  deteriorated  cattle  sales  margins  are  attributable  to
increased  costs  resulting from the increase in rent expense caused by the sale
and lease back of former pasturelands. Cattle sales will continue to decrease as
the Company continues to sell pasturelands.

OTHER REVENUES -

Other revenues experienced no significant fluctuations.  The Company anticipates
other revenues to remain constant through the remainder of 2003.

GENERAL AND ADMINISTRATIVE EXPENSES -

On an overall basis, general and administrative expenses increased approximately
56% for the nine months ended  September 30, 2003 as compared to the same period
in 2002.  The  components  of general and  administrative  expenses for the nine
months  ended  September  30,  2003  include   salaries  and  related  costs  of
approximately  $334,000;  professional fees (legal,  auditing and consulting) of
approximately  $740,000;  franchise and other taxes of  approximately  $120,000;
depreciation of approximately $107,000; insurance of approximately $112,000; and
other expenses aggregating approximately $479,000. The components of general and
administrative  expenses  for the nine months ended  September  30, 2002 include
salaries and related costs of approximately $373,000;  professional fees (legal,
auditing and consulting) of approximately $289,000; franchise and other taxes of
approximately  $142,000;  depreciation of approximately  $112,000;  insurance of
approximately $89,000; and other expenses aggregating approximately $210,000.

Professional  fees  more than  doubled in 2003 as a result of (i)  higher  legal
costs in  connection  with hiring  legal  counsel to  negotiate  and address the
development  cost activities and (ii) an increase in consulting fees paid to the
Company's  President and Chief Executive  Officer.  Insurance  expense increased
approximately 26% in 2003.  Travel and entertainment by executives  increased in
2003 to help progress development plans.


                                       15
<PAGE>

OTHER INCOME AND EXPENSE  -

Interest  expense  for  the  nine  months  ended  September  30,  2002  included
approximately  $75,000 of interest  charges (a finance  cost)  incurred from the
loss on sale of mortgage notes.

The following  table sets forth the  statements of income of the Company for the
three months ended  September 30, 2003 and 2002:


                                              2003             2002

Real estate sales                        $ 1,428,000       $ 1,368,000
Rentals                                       53,000            61,000
Cattle sales                                 101,000            69,000
Other                                         89,000            95,000
                                         -----------       -----------
     Total revenues                        1,671,000         1,593,000
                                         -----------       -----------

Cost of real estate sales                    446,000           465,000
Cost of rentals                               30,000            29,000
Cost of cattle sales                          67,000            67,000
Cost of other                                 46,000            44,000
                                         -----------       -----------

     Total cost of revenues                  589,000           605,000
                                         -----------       -----------

Gross profit                               1,082,000           988,000

General and administrative expenses          754,000           440,000
                                         -----------       -----------

Income from operations                       328,000           548,000
                                         -----------       -----------

Interest income                               97,000           103,000
Interest expense                              (5,000)           (8,000)
Income taxes                                (204,000)         (246,000)
                                         -----------       -----------
                                            (112,000)         (151,000)
                                         -----------       -----------

Net income                               $   216,000       $   397,000
                                         ===========       ===========

REAL ESTATE SALES -

During the three months ended  September  30, 2003,  the Company sold 5 lots for
proceeds of  approximately  $1,428,000,  as compared to the three  months  ended
September 30, 2002 where the Company sold two parcel of properties  for proceeds
of approximately  $1,368,000,  an approximate $60,000 increase. See management's
discussion  and analysis for the nine months ended  September  30, 2003 and 2002
for discussion of delays and future expectations.

RENTAL REVENUES -

Rental  revenues  decreased by  approximately  $8,000 for the three months ended
September 30, 2003 as compared to the three months ended September 30, 2002.

CATTLE SALES -

Cattle  sales  increased  by  approximately  $32,000 for the three  months ended
September  30,  2003 as 350 heads of cattle  were sold  compared to 279 heads of
cattle  during the same period of the prior  year.  The  Company  believes  that
cattle sales could  decrease for the  foreseeable  future due to the  continuing
sale of pasturelands.


                                       16
<PAGE>

OTHER REVENUES -

Other  revenues  decreased  by  approximately  $6,000 for the three months ended
September 20, 2003 as compared to the three months ended September 30, 2002.

GENERAL AND ADMINISTRATIVE EXPENSES -

On an overall basis, general and administrative expenses increased approximately
71% for the three months ended September 30, 2003 as compared to the same period
in 2002.  The  components of general and  administrative  expenses for the three
months  ended  September  30,  2003  include   salaries  and  related  costs  of
approximately  $129,000;  professional fees (legal,  auditing and consulting) of
approximately  $243,000;  franchise  and other taxes of  approximately  $53,000;
depreciation of approximately  $17,000;  insurance of approximately $37,000; and
other expenses aggregating approximately $275,000. The components of general and
administrative  expenses for the three months ended  September  30, 2002 include
salaries and related costs of approximately $111,000;  professional fees (legal,
auditing and consulting) of approximately $147,000; franchise and other taxes of
approximately  $40,000;  depreciation  of  approximately  $16,000;  insurance of
approximately $29,000; and other expenses aggregating approximately $97,000.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

For the nine months ended  September  30, 2003 and 2002,  the Company's net cash
used  in  operating  activities  of  approximately  $4,622,000  and  $2,116,000,
respectively, is comprised of the following:

                                                       2003            2002

Net income                                        $  2,439,000    $    640,000

Depreciation and amortization                          107,000         112,000

Deferred income taxes                                    6,000           8,000

Stock compensation charge                               31,000

Net gain on sales and disposition of property
  and assets                                        (6,288,000)     (2,061,000)

Changes in operating assets
 and liabilities                                      (917,000)       (815,000)
                                                  ------------    ------------
                                                  $ (4,622,000)   $ (2,116,000)
                                                  ============    ============



                                       17
<PAGE>

For the nine months ended  September  30, 2003 and 2002,  the Company's net cash
provided by investing  activities of  approximately  $5,951,000 and  $2,651,000,
respectively, is comprised of the following:


                                            2003              2002

Capital expenditures including
  real estate development               $  (657,000)      $  (859,000)

Proceeds from sales of property           6,331,000         2,686,000

Proceeds from notes receivable              277,000           824,000
                                        -----------       -----------

                                        $ 5,951,000       $ 2,651,000
                                        ===========       ===========

Approximately  $639,000 of the $657,000 of the September 2003 quarter's  capital
expenditures  and  approximately  $754,000 of the $859,000 of the  September 30,
2002 quarter's  capital  expenditures  was made to progress the Company's Kohala
Preserve  development   endeavors.   These  expenditures  include  approximately
$408,000 and  $134,000,  in the nine months ended  September  30, 2003 and 2002,
respectively, for land clearing, leveling and grading, approximately $15,000 and
$71,000 of professional fees including  consulting,  approximately  $216,000 and
$599,000 in the nine months ended September 30, 2003 and 2002, respectively, for
design, planning, engineering and surveying and other costs.

For the nine months ended  September  30, 2003 and 2002,  the Company's net cash
used  for   financing   activities  of   approximately   $26,000  and  $397,000,
respectively, is comprised of the following:



                                                 2003            2002

Repayment of debt (to President)              $      --      $ (375,000)

Debt repayments, net                            (26,000)        (22,000)
                                              ---------      ----------

                                              $ (26,000)     $ (397,000)
                                              =========      ==========

As of September 30, 2003, the Company has total current assets of  approximately
$14,843,000 and total current liabilities of approximately $533,000 or a working
capital of  approximately  $14,310,000.  As  previously  discussed,  the Company
anticipates  2003  revenue  levels to be higher than levels  experienced  during
2002. However, given the Company's anticipated cash requirements to complete the
revised Kohala Preserve  development  project (discussed below),  future capital
raising or debt financing activities may be required.


                                       18
<PAGE>

KOHALA PRESERVE (FORMERLY MAHUKONA) DEVELOPMENT

The Company  continues to strategize its  development  plans relative to its 642
acres of land in the North  Kohala  district  of  Hawaii  Island in the state of
Hawaii (known as the Kohala Preserve development project). The original plan for
this valuable parcel of land was the development of a hotel, 18-hole golf course
and resort homes.  However,  during 2001, the Company hired several consultants,
with extensive  experience in high-end  resort  development  and  marketing,  to
reassess its development strategy with respect to Kohala Preserve property,  the
goal of which is to provide the Company  guidance in  determining  an  effective
development  strategy that will optimize the property's economic potential.  The
present  assessment of the consultants  for the Kohala Preserve  property is the
development of an all-inclusive fractional interest club community structured as
an undivided  interest  ("UDI").  A UDI would allow the prospective buyer to use
the Kohala  Preserve  facility  plus the  eco-ranch  lands and would  provide an
ownership interest in both. A UDI would not allow the prospective buyer to own a
specific  parcel of land,  but only a fraction of each square foot of  property.
The revised Kohala  Preserve  development  project is subject to further Company
and consultant  review and analysis that is expected to be completed  during the
next six months.

Based  on  the  present  assessment  of its  consultants,  the  Kohala  Preserve
development  project cost  (excluding  ongoing costs and  maintenance)  would be
approximately  $213.7 million and completed  substantially  (approximately  80%)
over a three-year period. Based on information provided by its consultants,  the
Company  anticipates  the  timing and  details  of the  $213.7  million to be as
follows (in thousands):

                                   YEAR 1     YEAR 2     YEAR 3     BEYOND

Infrastructure and amenities     $ 21,062   $ 31,762   $ 13,280   $ 15,586
3-Bedroom fractionals                                    15,080     15,998
2-Bedroom fractionals                                     8,918      3,546
Hales                                                     4,262      4,389
3-Bedroom condos                                         11,310
2-Bedroom condos                                          5,016
Lots                                             822                 2,471
Hotel                              16,243     43,949

                                 --------   --------   --------   --------
                                 $ 37,305   $ 76,533   $ 57,866   $ 41,990
                                 ========   ========   ========   ========

The Company  recognizes  that its current  operations  will not be sufficient to
fund the cost of Kohala  Preserve's  development and it may not be successful in
future capital raising or debt financing activities. Accordingly, the Company is
exploring other financing strategies including,  but not limited to, a 50% joint
venture  with  development  partners,  including,  but not limited  to,  another
property  development  company,  a  fractional  facility  management  company or
private investors.


                                       19
<PAGE>

MARINE FOREST

Pursuant to  uncollateralized  promissory  notes,  the Company  advanced  Marine
Forest, a related Japanese corporation that controls  approximately 400 acres of
land in Okinawa, Japan, $9.75 million. The notes bear interest at the U.S. prime
rate, at the date of issuance, plus one percent. Under their original terms, the
notes  were due six  months  after  date of  issuance.  However,  the notes were
extended and  additional  six months and  subsequently  extended to December 31,
2002, as a concession to Marine Forest to advance  Marine  Forest's  development
projects.  Marine Forest's current  development  plans are based upon a recently
completed  study  prepared by a consultant for the Kohala  Preserve  development
plan. The Company believes that Marine Forest may sell its development  projects
based on the aforementioned  study and repay the notes and interest  thereafter.
However,  this  action  has not been  initiated  at this point and when (and if)
initiated,  it would take at least a year, if not longer,  to consummate  such a
transaction.

As of  September  30,  2003  and  through  the date  hereof,  the  notes  remain
outstanding.  Further,  since issuance of the notes and through the date hereof,
no interest  has been paid to the Company.  Accordingly,  during the years ended
December  31,  2002 and  2001,  in light of the  speculative  nature  of  Marine
Forest's  development  projects  among other reasons and in accordance  with its
compliance  with the  requirements  of SFAS No. 114 (see previous  discussion of
Critical  Accounting  Policies),  the Company  recorded an impairment  charge of
approximately   $3.8   million  and  $7.2   million,   respectively,   including
approximately $1.3 million of aggregate accrued interest receivable.  During the
year ended December 31, 2002, the Company discontinued  accruing interest income
on the notes in light of its impairment charge.

MILLENNIUM

In January 2003, pursuant to an Asset Purchase  Agreement,  the Company acquired
the   assets  of   Millennium   International   Sports  &   Entertainment,   LLC
("Millennium"),  which  consisted of sports and  entertainment  memorabilia.  In
consideration  for the assets  received,  the Company  will issue  shares of its
common stock if certain  revenue levels related to the sales of the  memorabilia
are  attained  by  certain  dates.  If  revenues  related  to the  sales  of the
memorabilia  equal or exceed $8 million by December  31,  2003,  an aggregate of
350,000  shares of the  Company's  common  stock  would be issued to the  former
members  of  Millenium,  all of whom  executed  employment  agreements  with the
Company in  connection  with the January 2003  transaction.  Since the Company's
acquisition of Millennium and through May 15, 2003,  there has been little to no
revenues related to the sales of the  memorabilia.  Pursuant to the terms of the
Asset Purchase Agreement,  the Company notified Millennium in May of 2003 of its
election to rescind.


                                       20
<PAGE>

CONTRACTUAL COMMITMENTS

The Company is obligated  under various  contractual  commitments  over the next
several years.  Following is a summary of those  commitments as of September 30,
2003:


                                                                GREATER
                                   1 YEAR       1 -3 YEARS    THAN 3 YEARS

Notes payable (a)                $  34,000      $  46,000      $ 329,000

                                 ---------      ---------      ---------
                                 $  34,000      $  46,000      $ 329,000
                                 =========      =========      =========

(a)   Excludes obligation pursuant to notes receivable financing whereby a cash
      outlay is only required if the financial institution requires the Company
      to repurchase a defaulted note.





                                       21
<PAGE>


Item 3.           Evaluation of Disclosure Controls and Procedures

(a) Evaluation of disclosure  controls and  procedures.  Our president and chief
financial   officer,   after  evaluating  the  effectiveness  of  the  Company's
"disclosure  controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules  13a-14(c) and  15-d-14(c)) as of a date (the  "Evaluation  Date")
within 90 days before the filing date of this quarterly  report,  have concluded
that as of the  Evaluation  Date, our  disclosure  controls and procedures  were
adequate and designed to ensure that material information relating to us and our
consolidated  subsidiaries  would be made known to them by others  within  those
entities.

(b)  Changes in  internal  controls.  There were no  significant  changes in our
internal controls or to our knowledge, in other factors that could significantly
affect our disclosure controls and procedures subsequent to the Evaluation Date.

PART II - OTHER INFORMATION

Item 1.           Legal Proceedings:

There have been no  material  changes in legal  proceedings  as  required  to be
reported on Form 10-QSB from as previously  reported in the Company's 10-KSB for
the fiscal year ended December 31, 2002.

Item 2.           Change in Securities

                  In January  2003,  the  Company  issued  15,000  shares of its
                  common  stock  valued  at  $31,000   pursuant  to   employment
                  contracts.

Item 3.           Defaults Upon Senior Securities:

                  None

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

                  None

Item 5.           Other information:

                  None

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

                  (a) Exhibits

                      Exhibit 31 Rule 13a-14(a)/15d-14(a) Certification -
                      President and Chief Executive Officer.

                      Exhibit 32 Section 1350 Certification - President and
                      Chief Executive Officer.

                  (b) Reports on Form 8-K.

                  Form 8-K filed on November 6, 2003 - Other Events.

                  SIGNATURES




                                       22
<PAGE>

                                   SIGNATURES

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

                              SURETY HOLDINGS CORP.
                                  (Registrant)




                              By: /s/ Howard R. Knapp
                              --------------------------------
                              Howard R. Knapp
                              President, Chief Executive and Chief Financial
                                Officer



Dated:  November 11, 2003




                                       23
<PAGE>

                                 EXHIBIT INDEX

Exhibit Number      Description
--------------      -----------
      31            Rule 13a-14(a)/15d-14(a) Certification -
                    President and Chief Executive Officer.

      32            Section 1350 Certification - President and
                    Chief Executive Officer.






                                       24