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

                                    FORM 10-K

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

                    For the fiscal year ended June 30, 2001

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

                        For the transition period from to

                        COMMISSION FILE NUMBER 001-12212

                         DRUMMOND FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)

                    Washington                          95-4426690
             (State or other jurisdiction of         (I.R.S. Employer
             incorporation or organization)          Identification No.)

                        17 DAME STREET, DUBLIN 2 IRELAND
                    (Address of principal executive offices)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (3531) 679-1688

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
              SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:


                          COMMON STOCK, $0.01 PAR VALUE
                                (Title of Class)

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

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

The  aggregate  market  value of the voting and non-voting common equity held by
non-affiliates  of the Registrant was approximately $108,508 as of September 21,
2001,  computed  on  the  basis  of  the  closing  price  on  such  date.

The  number  of  shares  outstanding  of  the  Registrant's  Common  Stock as of
September  21,  2001  was  2,718,600.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the 2001 Proxy Statement to be filed within 120 days of the fiscal
year  ended  June  30,  2001  are  incorporated  by  reference  into  Part  III.

<PAGE>

FORWARD-LOOKING  STATEMENTS

Statements  in  this report, to the extent that they are not based on historical
events,  constitute  forward-looking  statements.  Forward-looking  statements
include,  without  limitation,  statements  regarding  the  outlook  for  future
operations,  forecasts  of  future  costs and expenditures, evaluation of market
conditions, the outcome of legal proceedings, the adequacy of reserves, or other
business  plans.  Investors  are  cautioned  that forward-looking statements are
subject  to  an inherent risk that actual results may vary materially from those
described  herein.  Factors  that  may  result  in such variance, in addition to
those  accompanying  the forward-looking statements, include changes in interest
rates,  prices,  and  other economic conditions; actions by competitors; natural
phenomena;  actions  by  government  authorities;  uncertainties associated with
legal  proceedings; technological development; future decisions by management in
response  to  changing  conditions;  and misjudgments in the course of preparing
forward-looking  statements.

<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE
                                     PART I

ITEM  1.     BUSINESS                                                         4

ITEM  2.     PROPERTIES                                                       5

ITEM  3.     LEGAL  PROCEEDINGS                                               5

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS      5

                                     PART II

ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
             STOCKHOLDER  MATTERS                                             6

ITEM  6.     SELECTED  FINANCIAL  DATA                                        7

ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF
             FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS               8

ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT
              MARKET  RISK                                                   10

ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA                 11

ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
             ACCOUNTING  AND  FINANCIAL  DISCLOSURE                          12

                                    PART III

ITEM  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT       12

ITEM  11.     EXECUTIVE  COMPENSATION                                        12

ITEM  12.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS
              AND  MANAGEMENT                                                12

ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS             12

                                     PART IV

ITEM  14.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND
              REPORTS  ON  FORM  8-K                                         12

SIGNATURES                                                                   30

<PAGE>

                                     PART I
ITEM  1.     BUSINESS

THE  CORPORATION

Drummond  Financial  Corporation  was  incorporated in June 1993 pursuant to the
laws  of  the  State  of  Delaware  and commenced operations in August 1993.  In
October  1996, the Corporation changed its name from "CVD Financial Corporation"
to  "Drummond  Financial  Corporation".  In July, 2001 the Corporation changed
its domicile from the State of Delaware to the State of Washington.

In  this  document,  unless  the  context  otherwise requires, the "Corporation"
refers  to  Drummond  Financial  Corporation  and  its  subsidiaries.

GENERAL

The  Corporation  operates  in  the financial services business internationally,
engaging  primarily  in merchant banking activities.  The Corporation's merchant
banking activities include seeking controlling interests in businesses or assets
which  the  Corporation believes are undervalued. The Corporation was previously
engaged  in  asset-based  commercial  lending,  which  primarily  involved  the
administration  and realization of an existing loan portfolio comprised of loans
to  emerging  companies.

The  Corporation  is  focusing on expanding its merchant banking activities. The
Corporation  is  seeking  controlling  interests  in  businesses  or  operating
companies  that  generate  or will potentially generate positive cash flows from
operations as opportunities arise.  The Corporation anticipates that substantial
capital  may  be  required  to  further  its  merchant  banking  activities, and
anticipates  that  such  capital will be provided from cash on hand, through the
sale  or  exchange of assets, or through debt or equity financing.  No assurance
can  be  given  that  any  necessary  capital  will  be available when required.

COMPETITION

The  Corporation  competes  against  investment  banks, merchant banks and other
investment  managers  for  appropriate  investments.  This  business  is  highly
competitive  and  is  subject to fluctuations based upon many factors over which
the  Corporation  has  no  control,  such  as  the  condition of public markets,
interest  rates  and  the  state  of capital markets.  Many of the Corporation's
competitors  are national or international companies with far greater resources,
capital  and  access  to  information  than  the  Corporation.  As a result, the
Corporation  may  become  involved in transactions with more risk than if it had
greater  resources.

While  the  Corporation  has  nominally  competed with commercial banks, leasing
companies  and  asset-based  lenders  with  respect  to  its asset-based lending
activities,  its  primary competitors have been venture capital firms which also
invest  in  emerging  growth  companies.

As  at  June  30,  2001,  the  Corporation  had  one  employee.

<PAGE>

ITEM  2.     PROPERTIES

The Corporation's administrative office is located in Geneva, Switzerland and is
leased.

ITEM  3.     LEGAL  PROCEEDINGS

In  September  1999,  Gibralt  Holdings  Ltd.  ("Gibralt")  commenced a putative
derivative  action in Delaware Chancery Court naming the Corporation, certain of
its  directors  and officers and others as defendants.  The claim has been filed
in  the  form  of a class action on behalf of shareholders, but has not received
Court  certification as such.  Gibralt alleges that the defendants have breached
certain fiduciary duties, engaged in self-dealing and failed in their disclosure
obligations.  The  remedies  sought  by  Gibralt  include,  among  other things,
recovery  of  funds, judgment for damages and certain other remedies that may be
sought  in  the hearing of the claim.  The Corporation believes Gibralt's claims
to  be  entirely  without  merit  and  intends  to vigorously defend against the
lawsuit.

The  Corporation  is involved in claims and matters of litigation arising in the
ordinary  course  of  its  business,  including  collection  and related actions
concerning  delinquent  loans made by the Corporation.  The Corporation does not
believe  that the outcome of such litigation will have a material adverse effect
on  its  business  or  financial  condition.

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

On  June  18,  2001,  the  board of directors of the Corporation and of Drummond
Merger  Corporation approved an agreement and plan of merger (the "Merger").  On
June 18, 2001, shareholders of record of the Corporation's outstanding $0.01 par
value  common  shares  (the  "Common  Stock") and Series 1, Preferred Stock (the
"Preferred  Stock") owning in the aggregate 1,344,250 shares of Common Stock and
3,000,000  shares  of  Preferred  Stock, representing 76.0% of the voting shares
eligible  to  vote  on  the  Merger  and  representing  100%  of the outstanding
Preferred Stock, executed a written consent approving the Merger.  A majority of
all  shares entitled to vote on the Merger and a majority of the Preferred Stock
was required to approve the Merger.  The purpose of the Merger was to change the
domicile  of  the  Corporation  from  the State of Delaware  to  the  State  of
Washington.

<PAGE>

                                     PART II

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

(a)  MARKET  INFORMATION.  In  March  1997,  the  Corporation's common stock was
listed  and posted for trading on the Vancouver Stock Exchange (now known as the
Canadian Venture Exchange) under the trading symbol "DFC.U".  Since August 1995,
the  Corporation's  common stock has been quoted on the OTC Bulletin Board under
the  trading  symbol  "DFCU".

The  following  table  sets forth the high and low sales prices per share of the
Corporation's  common stock on the OTC Bulletin Board for the periods indicated:

<TABLE>
<CAPTION>

Fiscal Quarter Ended         High    Low
--------------------         ----    ----
<S>                          <C>     <C>
1999
September 30                 0.34    0.16
December 31                  0.37    0.25

2000
March 31                     0.50    0.25
June 30                      0.96    0.19
September 30                 0.37    0.24
December 31                  0.25    0.13

2001
March 31                     0.14    0.07
June 30                      0.80    0.06
Period Ended September 21    0.17    0.08

</TABLE>

(b)  SHAREHOLDERS.  As  of  September  21,  2001,  there  were  approximately 39
holders  of  record  of  the  Corporation's  common  stock.

(c)  DIVIDENDS.  The  Corporation has not paid any dividends on its common stock
and  the  directors  do  not  contemplate  the  payment  of  such  dividends.

<PAGE>

ITEM  6.     SELECTED  FINANCIAL  DATA

The  following  table  reflects  selected  consolidated  financial  data for the
Corporation for the last five fiscal years ended June 30, 2001.  The information
in  the  table  was  extracted  from  the  more  detailed consolidated financial
statements  and  related notes included herein and should be read in conjunction
with  such  financial  statements  and  related  notes.

<TABLE>
<CAPTION>

                                                                              YEAR ENDED JUNE 30,
                                                      -------------------------------------------------------------------
                                                         2001            2000           1999          1998         1997
                                                      ----------       --------       --------      --------     --------
<S>                                                   <C>              <C>            <C>           <C>         <C>

                                                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
OPERATING DATA
Revenues                                              $      872       $  2,650       $  2,297      $  1,354     $  4,253
Expenses                                                   2,140          2,541          1,960         3,540        4,602
Income (loss) from continuing
   operations                                             (1,269)           108            336        (2,607)        (639)
Net income (loss)                                         (1,269)           108            336        (2,122)       2,338

COMMON SHARE DATA(1)
Income (loss) from continuing
   operations per common share.                            (0.58)         (0.07)          0.01         (1.07)       (0.35)

Net income (loss) per common
   share                                                   (0.58)         (0.07)          0.01         (0.89)        0.74

Weighted average common shares
   outstanding (in thousands).                             2,719          2,719          2,719         2,719        2,719

BALANCE SHEET DATA
Total assets                                              23,536         26,000         25,999        29,535       31,560
Long-term obligations                                     21,515         21,515         21,515        21,515       23,002
Total stockholders' equity(2)                              1,119          3,079          3,271         3,235        5,657

</TABLE>
_______________
(1)     Basic  and  diluted  common  share  data  is  the  same.
(2)     Including  preferred  stock  of  face  value  $6,000,000.

<PAGE>

ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
             CONDITION  AND  RESULTS  OF  OPERATIONS

The  following discussion and analysis of the financial condition and results of
operations  of  the  Corporation  for the three fiscal years ended June 30, 2001
should  be  read  in  conjunction with the consolidated financial statements and
related  notes  included  elsewhere  herein.

RESULTS  OF  OPERATIONS

YEAR  ENDED  JUNE  30,  2001  COMPARED  TO  THE  YEAR  ENDED  JUNE  30,  2000

Revenues  for  the  year ended June 30, 2001 decreased to $0.9 million from $2.7
million for the year ended June 30, 2000, primarily as a result of a net loss on
investments.  Interest revenue  decreased to $0.9 million for the year ended
June 30, 2001 from $1.1 million for the year ended June 30, 2000.
Revenues  from  dividends and other activities increased to $0.4 million for the
year  ended  June  30,  2001 from $0.3 million for the year ended June 30, 2000.

Costs  and  expenses  for the year ended June 30, 2001 decreased to $2.1 million
from  $2.5  million  for  the year ended June 30, 2000, primarily as a result of
lower  interest  and  general  and  administrative  expenses.  General  and
administrative  expenses  decreased  to $0.9 million for the year ended June 30,
2001  from  $1.2  million  for  the  year  ended  June  30,  2000.

Interest expense decreased to $1.2 million for the year ended June 30, 2001 from
$1.3  million  for  the  year  ended  June  30,  2000.

No  income  tax  provision  was recognized for the years ended June 30, 2001 and
2000,  respectively,  except  for  the  payment of a minimum tax of $1,000.  The
Corporation  has  deferred  tax  benefits  with  respect  to  net operating loss
carry-forwards which have not been recognized as there is no assurance that they
will  be  realized.

Net  loss for the year ended June 30, 2001 was $1.3 million, or $0.58 per common
share, compared to a net income of $0.1 million, or $0.07 loss per common share,
for  the  year  ended  June  30,  2000.

YEAR  ENDED  JUNE  30,  2000  COMPARED  TO  THE  YEAR  ENDED  JUNE  30,  1999

Revenues  for  the  year ended June 30, 2000 increased to $2.7 million from $2.3
million for the year ended June 30, 1999, primarily as a result of a net gain on
sales  of  investments.  Interest revenue increased slightly
to  $1.1 million for the year ended June 30, 2000 from $1.0 million for the year
ended  June  30,  1999.  Revenues  from dividends and other activities were $0.3
million  in  the  years  ended  June  30,  2000  and  1999.

Costs  and  expenses  for the year ended June 30, 2000 increased to $2.5 million
from  $2.0  million  for  the year ended June 30, 1999, primarily as a result of
lower  costs in 1999 resulting from recovery of credit loss in the year. General
and  administrative  expenses  increased  slightly  to $1.2 million for the year
ended  June  30,  2000  from  $1.1  million  for  the  year ended June 30, 1999.

<PAGE>

Interest expense decreased to $1.3 million for the year ended June 30, 2000 from
$2.0  million  for  the  year  ended  June  30, 1999, primarily as a result of a
reduction  in  the  interest rate on indebtedness. Interest on the Corporation's
long-term  debt was accrued at the rate of approximately 5.65% per annum for the
year ended June 30, 2000, compared to approximately 8.63% per annum for the year
ended  June  30,  1999.

No  income  tax  provision  was recognized for the years ended June 30, 2000 and
1999,  respectively,  except  for  the  payment of a minimum tax of $1,000.  The
Corporation  has  deferred  tax  benefits  with  respect  to  net operating loss
carry-forwards which have not been recognized as there is no assurance that they
will  be  realized.

Net  income for the year ended June 30, 2000 was $0.1 million, or $0.07 loss per
common  share,  compared  to  a  net income of $0.3 million, or $0.01 per common
share,  for  the  year  ended  June  30,  1999.

LIQUIDITY  AND  CAPITAL  RESOURCES

The  Corporation's cash and cash equivalents at June 30, 2001 were $5.7 million,
a  decrease  of  $0.5  million  from  June  30,  2000.

Cash  used  in  operating  activities  for the year ended June 30, 2001 was $0.9
million,  compared to $4.3 million provided by operating activities for the year
ended  June  30,  2000.  Cash  used by operating activities before activities in
trading securities was $0.2 million in the year ended June 30, 2001, compared to
$0.7  million  in the year ended June 30, 2000.  An increase in accounts payable
and  accrued  liabilities  provided  cash of $166,000 in the year ended June 30,
2001,  compared  to  using  cash  of $81,000 in the year ended June 30, 2000. A
decrease  in  receivables  provided  cash of $0.9 million in the year ended June
30, 2001, compared to an increase of the same using cash of $0.7 million in the
year ended June 30, 2000.  Net sales of trading securities used cash of
$0.6 million in the year ended June 30, 2001,  compared  to  providing  cash
of $5.0 million in the year ended June 30, 2000.

Investing  activities  for  the  year  ended June 30, 2001 provided cash of $0.6
million,  compared  to  using  cash  of $2.1 million for the year ended June 30,
2000.  A  net increase in loans used cash of $5.9 million in the year ended June
30,  2001  compared  to  nil  in the preceding year.  In the year ended June 30,
2001, a net decrease in notes receivable provided cash of $6.5 million, compared
to  a net increase in same using cash of $2.1 million in the year ended June 30,
2000.

Financing  activities  for  the  years ended June 30, 2001 and 2000 used cash of
$0.3  million in each year, as a result of the payment of dividends on preferred
shares.

During  the  year  ended  June  30,  2000,  the  Corporation entered into a debt
restructuring  agreement  with MFC Bancorp Ltd. whereby interest on a promissory
note  was reduced from 8.75% to 5% per annum and the promissory note was secured
by  way  of  a general security agreement and securities pledge agreement on the
assets  of  the  Corporation.

<PAGE>

The  Corporation  anticipates  that  its  cash, investments on hand and interest
income  will be sufficient to service the Corporation's debt costs and cover the
day-to-day  general  and  administrative  expenses of the Corporation during the
short-term.

FINANCE  RECEIVABLES

The  Corporation  fully  settled its loan portfolio during fiscal 1999 and since
then  it  has  had  no  loan  commitments or finance receivables (principal plus
interest  and  reimbursable  costs  less  unamortized  commitment  fees).

ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT
              MARKET  RISK

The  Corporation  is  exposed to market risks from changes in interest rates and
equity  prices  which  may  affect  its  results  of  operations  and  financial
condition.  The Corporation manages these risks through internal risk management
policies.  The  Corporation does not enter into derivative contracts for its own
account  to  hedge  against  these  risks.

INTEREST  RATE  RISK

Fluctuations  in  interest  rates  may  affect  the  fair  value  of  financial
instruments  sensitive  to  interest  rates.  An  increase in interest rates may
decrease  the  fair value and a decrease in interest rates may increase the fair
value  of  such  financial  instruments. The Corporation's financial instruments
which  may  be  sensitive  to  interest rate fluctuations are investments, notes
receivable  and debt obligations. The following table provides information about
the Corporation's exposure to interest rate fluctuations for the carrying amount
of  financial  instruments that may be sensitive to such fluctuations as at June
30,  2001  and  2000  and  expected  cash  flows  from  these  instruments:

As at  JUNE  30,  2001

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW(3)
                                                 ------------------------------------------------------------------
                     CARRYING        FAIR
                      VALUE          VALUE        2002       2003       2004       2005       2006       THEREAFTER
                    ----------      -------      ------     ------     ------     ------     ------      ----------
<S>                  <C>            <C>          <C>        <C>        <C>        <C>        <C>        <C>
                                                              (IN THOUSANDS)
Investments(1)       $ 6,456        $ 6,456      $  756     $  300     $  300     $  300     $  300        $ 6,000
Notes receivable       6,042          6,042       6,372          -          -          -          -              -
Debt obligations(2)   21,515         21,515       1,076      1,076      1,076      1,076      1,076         23,756

</TABLE>
__________
(1)     Investments  consist  of  debt  securities  and  fixed yield securities.
(2)     Debt  obligations consist of a promissory note bearing interest at 5.00%
        per  annum  and  maturing  on  July  31,  2008.
(3)     Including interest and dividends.  Current investments are assumed to be
        sold in year 1 and long-term investment in perpetual preferred shares
        in  year  6.

<PAGE>

As at  JUNE  30,  2000

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW(3)
                                                ------------------------------------------------------------------
                     CARRYING        FAIR
                      VALUE          VALUE       2001       2002       2003       2004       2005       THEREAFTER
                    ----------      -------     ------     ------     ------     ------     ------      ----------
<S>                  <C>             <C>        <C>        <C>         <C>       <C>         <C>          <C>
                                                             (IN THOUSANDS)
Investments(1)       $ 7,670        $ 7,670     $1,970     $  300     $  300     $  300     $  300         $ 6,000
Notes receivable       6,689          6,689      7,052          -          -          -          -               -
Debt obligations(2)   21,515         21,515      1,076      1,076      1,076      1,076      1,076          24,832

</TABLE>
__________
(1)     Investments  consist  of  debt  securities  and  fixed yield securities.
(2)     Debt  obligations consist of a promissory note bearing interest at 5.00%
        per  annum  and  maturing  on  July  31,  2008.
(3)     Including interest and dividends.  Current investments are assumed to be
        sold in year 1 and long-term investment in perpetual preferred shares
        in  year  6.

EQUITY  PRICE  RISK

Changes  in  trading  prices  of  equity securities may affect the fair value of
equity  securities.  An  increase in trading prices will increase the fair value
and  a  decrease  in  trading  prices  will  decrease  the  fair value of equity
securities.  The  Corporation's  financial instruments which may be sensitive to
fluctuations  in  equity  prices  are  investments. The following table provides
information  about  the  Corporation's exposure to fluctuations in equity prices
for  the carrying amount of financial instruments sensitive to such fluctuations
and  expected  cash  flows  from  these  instruments:

As at  JUNE  30,  2001

<TABLE>
<CAPTION>

                                                                 EXPECTED FUTURE CASH FLOW
                                               -----------------------------------------------------------------
                  CARRYING         FAIR
                   VALUE           VALUE        2002       2003       2004       2005       2006      THEREAFTER
                 ----------       -------      ------     ------     ------     ------     ------     ----------
<S>               <C>             <C>          <C>        <C>        <C>        <C>        <C>        <C>
                                                            (IN THOUSANDS)
Investments(1)   $ 2,734         $ 2,734      $ 2,645    $    -     $    -     $    -     $    -         $   89

</TABLE>
__________
(1)     Investments  consist  of  equity  securities.

As at  JUNE  30,  2000

<TABLE>
<CAPTION>

                                                                 EXPECTED FUTURE CASH FLOW
                                               ------------------------------------------------------------------
                  CARRYING         FAIR
                   VALUE . . . .   VALUE        2001        2002       2003       2004       2005       THEREAFTER
                 ----------       -------      ------      ------     ------     ------     ------      ----------
<S>               <C>              <C>         <C>         <C>        <C>        <C>        <C>         <C>
                                                            (IN THOUSANDS)
Investments(1)    $ 1,701         $ 1,701      $ 1,701     $    -     $    -     $    -     $    -        $      -

</TABLE>
__________
(1)     Investments  consist  of  equity  securities.

ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

The  consolidated  financial statements and supplementary data required pursuant
to  this Item 8, and as listed in Item 14 of this annual report, are included in
this  annual  report  commencing  on  page  14.

<PAGE>

ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
             ACCOUNTING  AND  FINANCIAL  DISCLOSURE

Not  applicable.

                                    PART III

ITEM  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

Incorporated by reference from the Registrant's definitive proxy statement to be
filed  within  120  days  of  the  end  of  the  Registrant's  fiscal  year.

ITEM  11.     EXECUTIVE  COMPENSATION

Incorporated by reference from the Registrant's definitive proxy statement to be
filed  within  120  days  of  the  end  of  the  Registrant's  fiscal  year.

ITEM  12.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS
              AND  MANAGEMENT

Incorporated by reference from the Registrant's definitive proxy statement to be
filed  within  120  days  of  the  end  of  the  Registrant's  fiscal  year.

ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

Incorporated by reference from the Registrant's definitive proxy statement to be
filed  within  120  days  of  the  end  of  the  Registrant's  fiscal  year.

                                     PART IV

ITEM  14.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND
              REPORTS  ON  FORM  8-K

(a)     (1)     Index  to  Financial  Statements

                Independent  Auditors'  Report
                Consolidated  Balance  Sheets
                Consolidated  Statements  of  Operations
                Consolidated  Statements  of  Cash  Flows
                Consolidated  Statement  of  Shareholders'  Equity
                Notes  to  the  Consolidated  Financial  Statements

<PAGE>

(2)     Financial  Statement  Schedules

None.

(3)     Exhibits

        2.1     Arrangement  Agreement among Drummond Financial (B.C.) Ltd.,
                MFC Bancorp Ltd. and Drummond Financial Corporation dated
                February 23, 1998. Incorporated by reference  to  Form  T-3  of
                MFC  Bancorp  Ltd.  dated  March  2,  1998.
        2.2     Amendment  Agreement  among  Drummond Financial (B.C.) Ltd.,
                MFC Bancorp Ltd.  and  Drummond  Financial Corporation dated
                March 23, 1998. Incorporated by reference  to  Form  10-KSB
                Dated September  28,  1998.
        2.3     Plan  and Agreement of Merger between Drummond Financial
                Corporation and Drummond  Merger  Corporation dated June 18,
                2001.  Incorporated by reference to Information  Statement  on
                Form Def 14C of Drummond Financial Corporation filed July  11,
                2001.
        3.1     Certificate  of  Incorporation  dated  June  1,  1993.
                Incorporated by reference to  Form  S-1  filed  June  7,  1993.
        3.2     Certificate  of  Designations  dated  July  19,  1996.
                Incorporated by reference  to  Form  10-KSB  dated  September
                20,  1996.
        3.3     Certificate of Amendment to the Certificate of Incorporation of
                Drummond Financial  Corporation dated October 14, 1996.
                Incorporated by reference to Form 10-QSB dated November 11,
                1996.
        3.4     Bylaws.  Incorporated  by  reference  to  Form  S-1  filed
                June 7, 1993.
        3.5     Amendment to the Bylaws adopted as of July 20, 1993.
                Incorporated by reference to Amendment No. 1 to Form S-1
                filed  July  26,  1993.
       10.1     1993 Stock Option Plan.  Incorporated by reference to Form S-1
                filed June  7,  1993.
       10.2     Profit  Sharing  Plan.  Incorporated by reference to Amendment
                No. 1 to Form  S-1  filed  July  26,  1993.
       10.3     Debt  Restructuring  Agreement  between  MFC  Bancorp Ltd. and
                Drummond Financial  Corporation dated August 30, 1999.
                Incorporated by reference to Form 10-K dated September 24, 1999.
       21       List  of  subsidiaries  of  the  Registrant.

(b)     Reports  on  Form  8-K

           Form  8-K  dated  June  19,  2001
                 Item  5  -  Other  Events

<PAGE>

                         DRUMMOND FINANCIAL CORPORATION


                        CONSOLIDATED FINANCIAL STATEMENTS


                                  JUNE 30, 2001

<PAGE>

                          INDEPENDENT AUDITORS' REPORT





To  the  Shareholders  of
Drummond  Financial  Corporation


We  have  audited  the  consolidated  balance  sheets  of  Drummond  Financial
Corporation as at June 30, 2001 and 2000 and the related consolidated statements
of  operations, cash flows and shareholders' equity for the years ended June 30,
2001,  2000  and  1999.  These  consolidated  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  audits.

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

In  our  opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at June 30, 2001 and
2000  and  the results of its operations and cash flows for the years ended June
30,  2001,  2000  and  1999  in  accordance  with  generally accepted accounting
principles  in  the  United  States  of  America.

<TABLE>
<CAPTION>
<S>                 <C>
Vancouver, Canada.                                          Chartered Accountants
September 19, 2001
</TABLE>

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
CONSOLIDATED  BALANCE  SHEETS
(Dollars  stated  in  thousands)
AS  AT  JUNE  30

<TABLE>
<CAPTION>

                                                                                        2001        2000
                                                                                       ------      ------
<S>                                                                                    <C>         <C>
ASSETS

CASH AND CASH EQUIVALENTS                                                              $ 5,714    $  6,238

RECEIVABLES (Note 4)                                                                     7,883       9,508

INVESTMENTS (Note 5)                                                                     9,190       9,371

DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of $864 (2000 - $730)        749         883
                                                                                       -------    --------

                                                                                       $23,536      26,000


LIABILITIES AND SHAREHOLDERS' EQUITY

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                                               $   216    $     50

INTEREST PAYABLE                                                                           537       1,207

ACCRUED DIVIDENDS PAYABLE                                                                  149         149

DEBT (Note 7)                                                                           21,515      21,515
                                                                                       -------    --------

                                                                                        22,417      22,921
                                                                                       -------     -------

SHAREHOLDERS' EQUITY (Note 8)
     Capital stock
       Preferred stock, $0.01 par value
          5,000,000 shares authorized
          3,000,000 shares issued and outstanding at June 30, 2001 and 2000                 30          30
       Additional paid-in capital                                                        5,970       5,970
                                                                                       -------     -------

                                                                                         6,000       6,000
                                                                                       -------     -------
       Common stock, $0.01 par value
          10,000,000 shares authorized
          2,718,600 shares issued and outstanding at June 30, 2001 and 2000                 27          27
       Additional paid-in capital                                                       14,727      14,727
                                                                                       -------     -------

                                                                                        14,754      14,754
     Accumulated other comprehensive loss                                                 (391)          -
     Deficit                                                                           (19,244)    (17,675)
                                                                                       -------     -------

                                                                                        (4,881)     (2,921)
                                                                                       -------     -------

                                                                                         1,119       3,079
                                                                                       -------     -------
                                                                                       $23,536      26,000

</TABLE>



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

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(Dollars  stated  in  thousands;  except  per  share  amounts)
YEAR  ENDED  JUNE  30

<TABLE>
<CAPTION>

                                                      2001         2000         1999
                                                -----------  -----------  -----------
<S>                                             <C>          <C>          <C>
REVENUE
 Interest                                        $      918   $    1,075   $      993
 Gain (loss) on investments, net                       (415)       1,272        1,004
 Dividend income                                        352          300          300
 Other                                                   17            3            -
                                                -----------  -----------  -----------

                                                       872        2,650        2,297
                                                -----------  -----------  -----------

COST AND EXPENSES
 Interest                                            1,211        1,349        2,029
 Recovery of credit losses                               -            -       (1,139)
 General and administrative                             929        1,192        1,070
                                                -----------  -----------  -----------

                                                     2,140        2,541        1,960
                                                -----------  -----------  -----------

INCOME (LOSS) FROM OPERATIONS                       (1,268)         109          337

INCOME TAX EXPENSE                                      (1)          (1)          (1)
                                                -----------  -----------  -----------

NET INCOME (LOSS)                               $   (1,269)  $      108   $      336


BASIC EARNINGS (LOSS) PER SHARE                 $    (0.58)  $    (0.07)  $     0.01


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING    2,718,600    2,718,600    2,718,600

</TABLE>



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

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
(Dollars  stated  in  thousands)
YEAR  ENDED  JUNE  30

<TABLE>
<CAPTION>

                                                          2001      2000      1999
                                                      ---------  --------  --------
<S>                                                   <C>        <C>       <C>

CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss) for the year                        $ (1,269)  $   108   $   336
 Adjustments to reconcile income (loss) to cash:
   Loss (gain) on investments, net                          415    (1,272)   (1,004)
   Recovery of credit losses                                  -         -    (1,139)
   Amortization of deferred debt issuance costs             134       134       134

 Changes in non-cash working capital balances:
   Interest receivable                                    (402)     (576)        -
   Other receivable                                      1,341      (168)     (407)
   Due from affiliate                                       40       860    (2,300)
   Interest payable                                       (670)      274      (416)
   Accounts payable and accrued liabilities                166       (81)     (630)
   Other                                                   (2)        6         -
                                                      ---------  --------  --------

                                                          (247)     (715)   (5,426)

 Purchase of trading securities                         (2,825)     (328)   (4,405)
 Proceeds from sales of trading securities               2,201     5,373     8,480
                                                      ---------  --------  --------

 Net cash provided by (used in) operating activities      (871)    4,330    (1,351)
                                                      ---------  --------  --------


CASH FLOWS FROM INVESTING ACTIVITIES
 Advances on loans receivable                          (11,752)        -         -
 Payments collected on loans receivable                  5,852         -     1,139
 Decrease (increase) in notes receivable, net            6,547    (2,072)    3,619
                                                      ---------  --------  --------

 Net cash provided by (used in) investing activities       647    (2,072)    4,758
                                                      ---------  --------  --------

</TABLE>





                                  - continued -



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

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (continued)
(Dollars  stated  in  thousands)
YEAR  ENDED  JUNE  30

<TABLE>
<CAPTION>

                                                                 2001     2000      1999
                                                               -------  -------  --------
<S>                                                            <C>      <C>      <C>

CONTINUED



CASH FLOWS FROM FINANCING ACTIVITIES
 Note payable, net                                             $    -   $    -   $(2,526)
 Dividends paid on preferred shares                              (300)    (300)     (300)
                                                               -------  -------  --------

 Net cash used in financing activities                           (300)    (300)   (2,826)
                                                               -------  -------  --------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FOR THE YEAR    (524)   1,958       581


CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                    6,238    4,280     3,699
                                                               -------  -------  --------


CASH AND CASH EQUIVALENTS, END OF YEAR                        $5,714   $6,238   $ 4,280


CASH PAID DURING THE YEAR FOR:
   Interest expense                                           $1,747   $  941   $ 2,311
   Income taxes                                                    1        1         1

</TABLE>



SUPPLEMENTAL  DISCLOSURE  WITH  RESPECT  TO  NON-CASH  INVESTING  AND  FINANCING
ACTIVITIES  (Note  14)



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

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
CONSOLIDATED  STATEMENT  OF  SHAREHOLDERS'  EQUITY
(Dollars  stated  in  thousands)

<TABLE>
<CAPTION>

                 Preferred Stock                      Common Stock
                 ---------------                      -------------
                                                                                       Accum-
                                                                                       ulated
                                                                                        Other
                                         Additional    Number           Additional     Compre-
                 Number                     Paid-in    of                  Paid-in     hensive              Treasury
                 of Shares     Amount       Capital    Shares    Amount    Capital     Loss       Deficit   Stock
                ----------     ------    ----------    ------    ------    -------     -------    -------   ---------
<S>              <C>              <C>            <C>       <C>          <C>        <C>         <C>         <C>        <C>
BALANCE AT
  JUNE 30,
  1998          3,000,000     $      30  $ 5,970     4,264,000   $  43   $17,767       $     -   $(17,519)  $ (3,056)

Net income
  for
  the year              -             -        -             -       -         -             -        336         -

Retirement of
 treasury stock         -             -        -    (1,545,400)    (16)   (3,040)            -          -     3,056

Dividends paid
  and payable .         -             -        -            -        -         -             -       (300)        -
                 --------     ---------  -------     --------   ------   -------        ------    -------     ------

BALANCE AT
  JUNE 30,
  1999          3,000,000            30    5,970     2,718,600       27    14,727             -     (17,483)       -

Net income
  for
  the year              -             -       -             -         -        -              -        108        -

Dividends
  paid
  and payable           -             -        -            -         -       -               -       (300)        -
                 --------     ---------   ------     --------     -----  -------         ------    -------  --------

BALANCE AT
  JUNE 30,
  2000          3,000,000            30    5,970     2,718,600       27    14,727             -    (17,675)        -

Net loss for
  the year              -             -        -             -        -         -            -     (1,269)        -

Dividends paid
  and payable           -             -        -             -        -         -           -       (300)        -

Unrealized
 holding
 loss on
 available-
 for-sale
 securities             -             -        -             -        -         -         (391)         -         -
                 --------     ---------   ------     ---------     -----  -------         ------    -------  --------


BALANCE AT
  JUNE 30,
  2001          3,000,000     $      30   $ 5,970   2 ,718,600     $  27   $ 14,727       $ (391)  $(19,244)  $     -


                Total
                Share-
                holders'
                Equity
               --------
<S>              <C>

BALANCE AT
  JUNE 30, 1998  $ 3,235

Net income for
  the year           336

Retirement of
 treasury stock        -

Dividends paid
  and payable       (300)
                 --------

BALANCE AT
  JUNE 30, 1999    3,271

Net income for
  the year           108

Dividends paid
  and payable       (300)
                 --------

BALANCE AT
  JUNE 30, 2000    3,079

Net loss for
  the year       (1,269)

Dividends paid
  and payable       (300)

Unrealized
 holding
 loss on
 available-
 for-sale
 securities         (391)
                 --------

BALANCE AT
  JUNE 30, 2001  $ 1,119


</TABLE>



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

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




1.     NATURE  OF  OPERATIONS

       Drummond  Financial  Corporation  (the  "Company"),  a
       Washington corporation, was formed  in  June  1993.  In
       August 1993, the Company completed an initial public
       offering  of  common  stock concurrent  with  a
       debenture  offering.

       The  Company  presently  operates  in  the financial services
       industry, which is comprised of investment and merchant banking
       activities and  asset-based commercial lending.  The merchant
       banking activities are expected to include the acquisition  of
       controlling interests in businesses or assets which the Company
       believes  are  under-valued.  The asset-based commercial lending
       primarily involves the administration and realization of an
       existing loan portfolio comprised  of loans to emerging
       companies. The Company now focuses on investment and  merchant
       banking  activities while de-emphasizing asset-based commercial
       lending.



2.     BASIS  OF  PRESENTATION

       These  consolidated  financial  statements  have  been prepared
       by management in conformity  with  generally  accepted  accounting
       principles  applicable in the United  States  of  America,  and  are
       stated  in  United  States  dollars.



3.     SIGNIFICANT  ACCOUNTING  POLICIES

       In  preparing  these  financial  statements,  management  is
       required  to  make estimates  and  assumptions  that  affect
       the  reported  amounts  of assets and liabilities  as  of  the
       date of the balance sheet and revenues and expenses for the  year.
       Actual  results  in  future  periods  could  be different from these
       estimates  made  in  the  current  year.  The  following  is  a  summary
       of the significant  accounting  policies  of  the  Company:


       BASIS  OF  CONSOLIDATION

       These consolidated financial statements included the accounts of the
       Company and its subsidiaries.  Significant inter-company accounts and
       transactions have been eliminated.


       CASH  AND  CASH  EQUIVALENTS

       Cash  equivalents consist of highly liquid investments with an
       original maturity of  three  months  or  less.  These are recorded
       at cost which approximates fair value  based  on the reported market
       value.  Occasionally, the Company maintains cash  balances  at
       foreign  financial institutions in excess of insured limits.


       FINANCIAL  INSTRUMENTS

       The  Company's financial instruments consist of cash and cash
       equivalents, receivables, investments, accounts payable and
       accrued liabilities, interest payable, accrued dividends
       payable and debt. Unless otherwise noted, it is management's
       opinion that the Company is not exposed  to  significant
       interest,  currency or credit risks arising from these
       financial instruments.  The fair value of these financial
       instruments approximate their carrying value, unless
       otherwise noted.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




3.     SIGNIFICANT  ACCOUNTING  POLICIES  (cont'd)


       FINANCE  RECEIVABLES  AND  ALLOWANCE  FOR  CREDIT  LOSSES

       Finance  receivables,  also  known as recorded investments in loans,
       include the outstanding  loan  balance  (net  of  any  charge-offs),
       accrued  interest, reimbursable  expenses  and  are  net  of  deferred
       loan  fees.

       The Company maintains an allowance for credit losses at an amount
       Estimated to cover potential losses on finance receivables which
       have experienced an event of  impairment or for which future collection
       of outstanding principal, interest and  reimbursable  expenses  has
       become  doubtful.  Amounts  deemed  to  be uncollectible  are  charged
       off against the allowance and subsequent recoveries, if  any, are
       credited to the allowance.  The amount of the allowance is based on
       the  Company's evaluation  of  numerous  factors, including the adequacy
       of the collateral securing  the  loans,  the  operating  environments
       of  the various borrowers  and  the  historical experience of the
       various borrowers' management, and  reflect the Company's best estimate
       of the necessary level of the allowance for  credit  losses.

       Under  the provisions of Financial Accounting Standards Board ("FASB")
       Statement No.  114,  "Accounting  by  Creditors  for Impairment of a
       Loan", when a loan is impaired  as  defined in the statement, a lender
       shall measure impairment at the present  value  of expected future cash
       flows discounted at the loan's effective interest  rate, or as a
       practical expedient, based on a loan's observable market price  or
       the fair value of the collateral if the loan is collateral dependent.
       The  Company  has adopted  a  measurement method on a loan-by-loan basis.
       By definition, the Company's non-performing loans are impaired.  A
       specific reserve is established for each impaired loan equal to the
       amount by which the Company's recorded  investment  in  the  loan
       exceeds  the  net present value of the loan determined  in  accordance
       with  FASB  Statement  No.  114.

       The  Company  continues  to  apply  FASB  Statement  No.  5
       "Accounting  for Contingencies"  to  provide  an  allowance
       on  a  pool  of  unimpaired  loans.

       INVESTMENTS

       The Company's available-for-sale and trading securities are stated
       at their fair values.  Any unrealized holding gains or losses of
       available-for-sale securities are excluded from earnings and
       reported as a separate component of shareholders' equity  until
       realized.  If a loss in value in available-for-sale securities
       is considered  to be other than temporary, it is recognized in
       the determination of net  income.  Gains  and  losses on trading
       securities are included in earnings.  Cost  is based on the
       specific identification method to determine realized gains or
       losses.

       Warrants to acquire common stock of the various borrowers
       held by the Company for which a readily determinable fair market
       value is available and the Company has an unrestricted right
       to sell the warrant and/or underlying securities within one year
       are included in trading securities.

       Investments  in  other companies where control is temporary or
       ownership is less than  20% are carried using the cost method
       of accounting.  The Company accounts for  its  investments  in
       companies where the ownership is 20% or more under the
       equity  method.

       DEFERRED  DEBT  ISSUANCE  COSTS

       Deferred  debt  issuance  costs  consist  of underwriters' fees and
       expenses and other costs  capitalized  in  connection  with  the
       Company's August 1993 debt offering.  These costs are being amortized
       on a straight-line basis which approximates the interest  method over
       the term of the related debt.  The amortization is included in
       interest expense.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




3.     SIGNIFICANT  ACCOUNTING  POLICIES  (cont'd)



       REVENUE  RECOGNITION

       Revenue  consists  principally of interest income from finance
       receivables, other  receivables,  temporary  investments  of  cash
       and cash equivalents, and amortization  of  loan  commitment  fees,
       net  of  related  costs,  received in connection  with  the  making
       of loans, as well as sales of trading securities.  Interest  income
       is  recognized  when  earned  using  the interest method.  The
       Company,  as a general policy, suspends the recognition of income on
       loans which are  more  than  90  days contractually delinquent or
       earlier if the Company has material  evidence of the borrower's
       inability to meet its commitments under the loan  agreement  (e.g.
       the borrower files for bankruptcy protection).  The recognition of
       income is generally resumed, and suspended income is recognized as
       interest  revenue, when the loan becomes contractually current or
       collection of  suspended  amounts  is assured.  Loan commitment fees,
       net of related costs, are deferred and recognized over the term of
       the loan using the interest method.  For delinquent loans,
       amortization of the corresponding net loan commitment fees is
       suspended and subsequently resumed concurrently with  the related
       recognition of  interest  income.

       INCOME  TAXES

       Certain revenue and expense items, primarily related to the allowance
       for credit losses,  are  accounted  for  in  different time periods
       for financial reporting purposes  as  compared  to  income  tax
       reporting purposes.  Deferred taxes are recognized  using  the liability
       method, and tax rates are applied to cumulative temporary differences
       based on when and how they are expected to be included for income  tax
       reporting  purposes.  Valuation  allowances  are  established, when
       necessary, to reduce deferred tax assets to the amount which management
       believes is  more  likely  than  not  to  be  realized.

       EARNINGS  PER  SHARE

       Basic earnings per share is  computed by dividing income available
       to common shareholders by the weighted average number of common shares
       outstanding in the period.

       STOCK-BASED  COMPENSATION

       FASB Statement No. 123, "Accounting for Stock-Based Compensation",
       encourages, but does not require, companies to record
       compensation cost for stock-based employee compensation plans
       at fair value.  The Company has chosen to account for  stock-based
       compensation using Accounting Principles Board Opinion No. 25,
       "Accounting for Stock Issued to Employees".  Accordingly, compensation
       cost for stock  options  is measured as the excess, if any, of the
       quoted market price of the  Company's  stock  at  the  date of the
       grant over the amount an employee is required  to  pay  for  the
       stock.

      COMPREHENSIVE  INCOME

      In  June  1997,  the FASB issued Statement No. 130 "Reporting
      Comprehensive Income", which establishes standards for the
      reporting  and  display  of comprehensive  income and its
      components (revenues, expenses, gains and losses).  The purpose
      of reporting comprehensive income is to present a measure of all
      changes in shareholders' equity other than transactions with
      owners in their capacity as owners.  The Company has other
      comprehensive loss of $391,000, $Nil and $Nil during the years
      ended June 30, 2001, 2000 and 1999, respectively, representing the
      unrealized holding loss on available-for-sale securities.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




3.     SIGNIFICANT  ACCOUNTING  POLICIES  (cont'd)

     COMPARATIVE  FIGURES

     Certain  comparative  figures have been reclassified to conform
     with the current year's  presentation.



4.     RECEIVABLES

<TABLE>
<CAPTION>

                                    2001    2000
<S>                                 <C>     <C>
Notes and loans receivable        $6,042  $6,689
Accrued dividend receivable          149     149
Other receivables                  1,692   2,630
Due from affiliate                     -      40
                                  ------  ------

                                  $7,883  $9,508

</TABLE>



The  carrying  amount  of the receivables approximates their fair value which is
based  on  the  discounted  present  value of their estimated future cash flows.



5.     INVESTMENTS

<TABLE>
<CAPTION>

                                 2001    2000
                               ======  ======
<S>                            <C>     <C>
Trading securities:
 Bonds and debentures          $  456  $1,670
 Equity securities              2,645   1,701
                               ------  ------

                                3,101   3,371
Available-for-sale securities   6,089   6,000
                               ------  ------

                               $9,190  $9,371

</TABLE>



For  the  year ended June 30, 2001, the Company recognized an unrealized holding
loss  of $75,000 (2000 - $40,000 loss; 1999 - $272,000 gain) and a realized loss
of  $340,000  (2000  -  $846,000 gain; 1999 - $732,000 loss) on trading
securities.

Available-for-sale  securities  consist  of  preferred shares in a company under
common  control  and  marketable securities.  The preferred shares are stated at
cost  of  $6,000,000  at June 30, 2001 and 2000 because there is no ready market
for  the  shares.  The  carrying  amount  approximates their fair value which is
based on their retractibility feature and dividend rate compared to market rate.
The  Company  recorded an unrealized loss of $391,000 (2000 - $Nil; 1999 - $Nil)
on  the  available-for-sale  securities which is recorded as other comprehensive
loss  under  shareholders'  equity  section.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




6.     INVESTMENT  -  AT  EQUITY

       As  at June 30, 1998, the Company's investment was comprised of
       1,070,320 common shares of  Ichor  Corporation which represented
       21.81% of the total outstanding shares.  The  Company has
       accounted  for  its investment  using  the  equity method of
       accounting.  During  1999, the  Company sold the investment
       to an affiliate for consideration of  94% of the proceeds
       from the future sales by the affiliate of all or part of the
       investment on or before December 31, 2003.  During 2000,
       779,435 shares  of  Ichor  Corporation  were  sold  for
       an accounting gain of $2,158,000.

7.     DEBT

       Under  an  indenture  dated August 26, 1993 (the "Master Indenture")
       the Company was  authorized  to issue up to $500 million of unsecured,
       subordinated variable rate  bonds  (the  "Bonds").  The  Bonds  could
       have been issued in series, each substantially  identical  in  form
       pari passu in right and having substantially identical  terms  except
       for the date of issuance.  The Company could not issue any  subsequent
       series  of  Bonds  unless  no event of default under the Master
       Indenture  had  occurred  or  had  been  continuing  with  respect  to
       any Bond previously  issued  within the 12 month period immediately
       preceding the date of issuance  of  such  subsequent  series,  and not
       less than 75 percent of the net proceeds received from the issuance of
       the immediately preceding series of Bonds had  been  utilized  or
       formally  committed.

       In  August  1993,  the  Company  made an initial issuance of Bonds at
       par in the aggregate  principal amount of $50 million  in a public
       offering concurrent with the  Company's  initial  public offering of
       Common Stock.  The sale of the Bonds generated  net  proceeds of $46.9
       million after related debt issuance costs.  No other  issuances  of
       Bonds  had  since  occurred.

       Interest  on  the  Bonds  was payable semi-annually on January 25 and
       July 25 to holders  of record on the preceding December 31, and June 30,
       respectively.  The interest  paid  for  each  semi-annual period was the
       greater of: (i) the Bank's prime  rate  as  of  the  first  day  of the
       semi-annual period, (ii) the Bank's weighted  daily  average  prime
       rate during the semi-annual period, (iii) a rate specified  by  the
       Company prior to the commencement of the semi-annual period,
       and,  (iv) 80 percent of the "portfolio yield".  Portfolio yield was
       defined as: (i)  the  aggregate  of  interest received from the
       Company's loan portfolio and gains less losses, if any, realized from
       the disposition of equity securities or warrants  to acquire equity
       securities received in connection with the making or purchasing  of
       loans;  less  (ii)  the  provision  for  credit  losses.

       The  Bonds  were  to  mature  on  July  31,  2008  and were subject to
       Mandatory redemption by the Company in annual instalments commencing
       July 31, 2004 through July  31,  2008.  The  annual  instalment  amount
       was equal to 20 percent of the outstanding principal on June 30, 2004.
       The  Bonds  were  also  subject to mandatory redemption generally upon
       the sale or transfer of substantially all of the assets of the Company.

       In  February  1998,  MFC  Bancorp  Ltd. owned all of the Bonds, which
       had a face value  of  $21,515,000,  as  approved  by  a  court  order.

       On  January 25, 1999, MFC Bancorp Ltd. delivered all of the outstanding
       Bonds to the  Company  in exchange for a promissory note.
       The promissory note was to pay interest  at  8.75% per annum payable
       semi-annually on January 25 and July 25 of each  year  and  matures
       on July 31, 2008.  In August 1999, The Company entered into a debt
       restructuring agreement with MFC Bancorp Ltd., pursuant to which the
       rate  of  interest  is  reduced to 5% per annum and the debt is secured
       by fixed liens  upon  the assets of the Company.  The promissory
       note had a fair value of approximately  $21,515,000  as  of
       June 30, 2001 and 2000 which is based on the present  value  taking
       into  consideration  the  security  and  interest  rate.
       Interest paid or accrued on the promissory note and/or Bonds was
       $1,076,000 (2000 - $1,207,000; 1999- $1,856,000), and accrued
       interest payable was $537,000 as at June  30,  2001  (2000  -
       $1,207,000).

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




8.     SHAREHOLDERS'  EQUITY

       In June 1996, the Company issued 3,000,000 shares of its
       Preferred Stock, Series 1 for $6,000,000 cash.  The Preferred Stock,
       Series 1 pays a cumulative dividend at 5% per annum on paid-up amount;
       accrued interest at 8% per annum on accrued and  unpaid  dividends;
       is redeemable by the Company at any time at the paid-up
       amount  plus  10%  premium;  and  has  variable  voting  rights.

       MFC  Bancorp  Ltd.  owns  directly  and  indirectly  49.4%
       (2000 - 49.4%) of the Company's  Common Stock and 100% (2000 - 100%)
       of the Company's Preferred Stock.


9.     STOCK  OPTION  PLAN

       In  June  1993, the Board of Directors approved the adoption
       of the Stock Option Plan.  Under the plan, substantially all
       employees, consultants and non-employee directors  are  eligible
       to  receive  options to  purchase up to an aggregate of 400,000
       shares  of  the  Company's  common stock at exercise prices which
       cannot be less than  the  fair  market value of the shares on the
       date the options are granted.  The term of each option can be no
       more than 10 years.  Non-employee directors of the Company can be
       granted options to purchase 25,000 shares of  common stock on the  date
       they become a director and additional options to purchase 3,500 shares
       of common stock are granted upon the completion of each full year of
       service and at  the  Annual  Meeting  of  Shareholders  thereafter.

       At June 30, 2001, 2000 and 1999 options to purchase 375,000 shares
       of the Company's Common Stock are available for future grant.  There
       were no options granted  in  either 2001, 2000 or 1999.  There were no
       stock options outstanding as  at  June  30,  2001  and  2000.

       The  disclosure  requirements  of  FASB  Statement No. 123 are effective
       for the Company's financial statements starting from the fiscal year
       ended June 30, 1997.  No pro forma disclosures are presented because
       there have been no options granted  after  the  fiscal  year  ended
       June  30,  1995.


10.     INCOME  TAXES

        There  was no provision for income taxes for the years ended June 30,
        2001, 2000 and  1999  (other than the payment of state minimum income
        tax of $1,000 each in 2001,  2000  and  1999).

        Differences  between  the United States federal statutory and the
        Company's effective  tax  rates  are  as  follows:

<TABLE>
<CAPTION>

                                                             2001    2000    1999
                                                            ------  ------  ------
<S>                                                         <C>     <C>     <C>
United States federal statutory rate on income (loss) from
 operations                                                 $(431)  $  37   $ 114
Timing differences on credit losses                             -       -    (714)
Other                                                          (5)   (223)   (243)
Tax loss benefit not recorded for book purposes               436     186     843
                                                            ------  ------  ------

                                                            $   -   $   -   $   -

</TABLE>

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




10.     INCOME  TAXES  (cont'd)

The  net deferred tax assets at June 30, 2001 and 2000 consist of the following:

<TABLE>
<CAPTION>

                                             2001       2000
                                            ------     ------
<S>                                          <C>       <C>
Net operating loss carryforwards            $ 3,777    $ 2,930
Investment loss differences                     344        233
Other timing differences                        227         86
Valuation allowance                          (4,348)    (3,249)
                                            -------     ------

Deferred tax asset, net. . . . .            $     -     $    -

</TABLE>



        At  June  30,  2001,  the  Company  had  $11.1  million  in net
        operating loss carryforwards  for  United  States federal income
        tax purposes.  The  carryforwards expire in the fiscal years
        ending  in 2009 to 2020.


11.     SEGMENTED  INFORMATION

        The  Company  conducted substantially all of its business of
        investment and merchant  banking activities and asset-based
        commercial lending in North America as  one  business  segment.



12.     RELATED  PARTY  TRANSACTIONS

        During  the  year  ended  June  30,  2001,  the  Company:

        a)   Paid  or  accrued  $300,000  (2000  -  $300,000;  1999  -
             $300,000)  in administrative  fees  to  MFC  Bancorp  Ltd.,
             and $Nil (2000 - $300,000; 1999 - $300,000)  to  Logan
             International Corp. whose former director is a director and
             officer  of  the  Company.  These  fees  were  paid  for  the
             accounting  and administration  of  the  Company  and
             reimbursement  of  office  expenses.

        b)   Paid  $300,000  (2000  -  $300,000;  1999 - $300,000) of
             dividends on its preferred  shares  held by a subsidiary
             of MFC Bancorp Ltd. and accrued $149,000 (2000  -  $149,000)
             for  dividends  to  a  subsidiary  of  MFC.

        c)   Received  $300,000 (2000 - $300,000; 1999 - $300,000) of dividends
             on its investments in preferred shares issued by another
             subsidiary of MFC Bancorp Ltd. and  accrued  $149,000 (2000 -
             $149,000) for dividends from a subsidiary of MFC.

        d)   Received  or  accrued  $Nil (2000 - $Nil; 1999 - $82,000) interest
             income from  a  company  which  had  a  common  director.

        e)   Received  $972,000  (2000 - $Nil; 1999 - $Nil) on redemption of
             preferred shares  and  $52,000  (2000  -  $Nil;  1999  -  $Nil)
             for  dividends from Ichor Corporation.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




13.     COMMITMENTS  AND  CONTINGENCIES

        In September  1999,  Gibralt Holdings Ltd. ("Gibralt") commenced  a
        putative  derivative action in Delaware Chancery  Court  naming
        the  Company, certain of its directors and officers and others as
        defendants.  The claim has been filed in the form of a class action
        on behalf  of  shareholders, but  has  not  received  Court
        certification as such. Gibralt  alleges that  the  defendants
        have breached certain fiduciary duties,
        engaged  in  self-dealing  and  failed  in  their  disclosure
        obligations.  The remedies  sought  by  Gibralt  include,  among
        other things, recovery of funds, judgement  for  damages  and  certain
        other  remedies that may be sought in the hearing  of  the  claim.
        The  Company  believes Gibralt's claims to be entirely without  merit
        and  intends  to  vigorously  defend  against  the  lawsuit.



14.     SUPPLEMENTAL  DISCLOSURE  WITH  RESPECT  TO  CONSOLIDATED
          STATEMENT  OF  CASH  FLOWS

        Significant  non-cash  transactions  in  2001:  Nil

        Significant  non-cash  transactions  in  2000  include:

        (a)   The  Company  received  securities  with  fair  value  of
              $972,000  as settlement  of  an  amount  due  from  Ichor
              Corporation  plus  related accrued interest.

        Significant  non-cash  transactions  in  1999  include:

        (a)   The Company exchanged bonds payable with a carrying value of
              $21,515,000 for  a  note  payable  of  $21,515,000.

        (b)   The  Company  cancelled  1,545,400  common shares held as
              treasury stock valued  at  $3,056,000.



15.     DIFFERENCES  BETWEEN  UNITED  STATES  AND  CANADIAN  GENERALLY
          ACCEPTED  ACCOUNTING  PRINCIPLES

        The Company's consolidated financial statements have been prepared in
        Accordance with  United States Generally Accepted Accounting Principles
        ("U.S. GAAP") which conform  in  all  material  respects with Canadian
        Generally Accepted Accounting Principles ("Canadian  GAAP") except as
        set  forth  below:

        INVESTMENTS

        U.S.  GAAP  requires that trading securities be carried at fair market
        value with holding  gains  and  losses  included  in  the  net income
        or loss.  Warrants to acquire  common  stock  for  which  a  readily
        determinable fair market value is available  and  the Company has an
        unrestricted right to sell the warrant and/or underlying  securities
        within  one  year  are  included  in trading securities. Canadian GAAP
        would require that such securities be carried at the lower of cost
        or  market  with  gains  recorded  only  as realized.  There were no
        differences between U.S. and Canadian GAAP in the determination of net
        income (loss) for the years  ended  June  30,  2001,  2000  and  1999.

<PAGE>

DRUMMOND  FINANCIAL  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  tables  stated  in  thousands)
JUNE  30,  2001




15.     DIFFERENCES  BETWEEN  UNITED  STATES  AND  CANADIAN  GENERALLY
          ACCEPTED  ACCOUNTING  PRINCIPLES  (cont'd  )

        INVESTMENTS  (cont'd  )

        U.S.  GAAP  requires  that  the  available for-sale securities be
        carried at fair market  value  with  holding  gains  and losses
        included in the determination of comprehensive  income  and
        reported  as  a  separate component of shareholders' equity.  Canadian
        GAAP would require that such securities be carried at cost and
        written  down  only  when  a  decline  in  value of the investment is
        other than temporary.  Under  Canadian GAAP, shareholders' equity and
        investment would both increase  by  $391,000  (2000  -  $Nil).

<PAGE>

                                   SIGNATURES


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

                                               DRUMMOND  FINANCIAL  CORPORATION


Date:  September  21,  2001                    By:     /s/  Michael  J.  Smith
                                                       -----------------------
                                                       Michael  J.  Smith
                                                       President,  Chief
                                                       Executive  Officer,
                                                       Chief  Financial  Officer
                                                       and  Director

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


/s/  Michael  J.  Smith           Date:   September  21,  2001
-----------------------
Michael  J.  Smith
President,  Chief
Executive  Officer,
Chief  Financial  Officer
and  Director


/s/  Young-Soo  Ko                Date:   September  21,  2001
------------------
Young-Soo  Ko
Director


/s/  Oq-Hyun  Chin                Date:   September  21,  2001
------------------
Oq-Hyun  Chin
Director

<PAGE>

                                      - 2 -


                                  EXHIBIT INDEX

EXHIBIT  NO.      DOCUMENT

   2.1            Arrangement  Agreement among Drummond
                  Financial (B.C.) Ltd., MFC Bancorp
                  Ltd. and Drummond Financial Corporation dated
                  February 23, 1998. Incorporated by reference  to
                  Form  T-3  of  MFC  Bancorp  Ltd.  dated  March  2,  1998.
   2.2            Amendment  Agreement  among  Drummond Financial (B.C.) Ltd.,
                  MFC Bancorp Ltd.  and  Drummond Financial Corporation dated
                  March 23, 1998.  Incorporated by reference  to  Form  10-KSB
                  dated  September  28,  1998.
   3.1            Certificate  of  Incorporation  dated  June  1,  1993.
                  Incorporated  by reference  to  Form  S-1  filed  June  7,
                  1993.
   3.2            Certificate  of  Designations  dated  July  19,  1996.
                  Incorporated by reference to Form 10-KSB dated September
                  20,  1996.
   3.3            Certificate of Amendment to the Certificate of Incorporation
                  of Drummond Financial  Corporation dated October 14, 1996.
                  Incorporated by reference to Form 10-QSB  dated  November  11,
                  1996.
   3.4            Bylaws.  Incorporated  by  reference  to  Form  S-1  filed
                  June 7, 1993.
   3.5            Amendment  to  the  Bylaws  adopted as of July 20, 1993.
                  Incorporated by reference  to  Amendment  No.  1  to  Form
                  S-1  filed  July  26,  1993.
  10.1            1993  Stock  Option  Plan.  Incorporated by reference to
                  Form S-1 filed June  7,  1993.
  10.2            Profit  Sharing  Plan.  Incorporated by reference to
                  Amendment No. 1 to Form  S-1  filed  July  26,  1993.
  10.3            Debt  Restructuring  Agreement  between  MFC  Bancorp Ltd.
                  and Drummond Financial  Corporation dated August 30, 1999.
                  Incorporated by reference to Form 10-K dated September 24,
                  1999.
  21              List  of  subsidiaries  of  the  Registrant.