<PAGE>

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

                                  FORM 10-KSB

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

         [_]  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:  0-22076

                              DTVN HOLDINGS, INC.
                (Name of small business issuer in its charter)

          DELAWARE                                     76-0404904
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)

635 WEST CAMPBELL ROAD, SUITE 130                        75080
     RICHARDSON, TEXAS                                 (Zip Code)
(Address of principal executive offices)

                   ISSUER'S TELEPHONE NUMBER  (972) 783-0284

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                    Common Stock, $.001 par value per share

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

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [_]

     Issuer's revenues for fiscal year ended December 31, 2000:  $11,402,028

     As of March 20, 2001, there were 49,965,951 shares of the registrant's
common stock, $.001 par value per share (the "Common Stock"), outstanding.  The
aggregate market value of the Common Stock held by non-affiliates of the
registrant, as of such date was approximately $699,332.75 (based on the closing
price of $0.625 per share as reported on the OTC Bulletin Board).

     Portions of the registrant's Proxy Statement for its 2001 Annual Meeting of
Stockholders, as described in the Table of Contents enclosed, are incorporated
herein by reference into Part III of this Form 10-KSB.  If the Proxy Statement
is not filed with the Securities and Exchange Commission in definitive form
prior to April 30, 2001, the registrant intends to amend this report to include
information omitted from Part III hereof.

     Transitional Small Business Disclosure Format
     Yes [_]   No [X]
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                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                      <C>
ITEM 1.  DESCRIPTION OF BUSINESS.......................................................     2
         The Company...................................................................     2
         The Market....................................................................     4
         Benefits of Using the Company.................................................     4
         Growth Strategy...............................................................     5
         Acquisition Strategy..........................................................     6
         Services......................................................................     6
         Customers.....................................................................     6
         Sales and Marketing...........................................................     7
         Competition...................................................................     7
         Government Regulation.........................................................     8
         Employees.....................................................................     9
         Risk Factors..................................................................     9
ITEM 2.  DESCRIPTION OF PROPERTY.......................................................    16
ITEM 3.  LEGAL PROCEEDINGS.............................................................    16
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........................    17
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........    18
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....................    19
         Forward-Looking Statements....................................................    20
         Overview......................................................................    20
         Results of Operations for Year Ended December 31, 2000 Compared to
           Year Ended December 31, 1999................................................    21
         Liquidity and Capital Resources...............................................    22
ITEM 7.  FINANCIAL STATEMENTS..........................................................    24
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE....................................................    38
ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT............................    40
ITEM 10. EXECUTIVE COMPENSATION........................................................    40
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................    40
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................    40
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..............................................    40
</TABLE>
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                                     PART I

FORWARD-LOOKING STATEMENTS

     The information in this report includes "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934, and the Private Securities Litigation Reform
Act of 1995.  DTVN Holdings, Inc. (the "Company") includes this statement for
the express purpose of availing itself of the protections of these safe harbor
provisions with respect to all of the forward-looking statements the Company
makes.  The forward-looking statements in this report reflect the Company's
current views with respect to possible future events and financial performance.
The Company is subject to certain risks and uncertainties, including without
limitation the absence of significant revenues, financial resources, significant
competition and those other risks and uncertainties discussed herein that could
cause the Company's actual results to differ materially from its historical
results or those that the Company hopes to achieve.  In this report, the words,
"anticipates," "plans," "believes," "expects," "intends," "future" and similar
expressions identify certain forward-looking statements.  Please do not place
undue reliance on the forward-looking statements contained in this report.  The
Company undertakes no obligation to announce publicly revisions that the Company
makes to these forward-looking statements to reflect the effect of events or
circumstances that may arise after the date of this report.  All written and
oral forward-looking statements made subsequent to the date of this report and
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by this section.  It is important to note that the
actual results could differ materially from those in forward-looking statements
as a result of Company's many factors, including those discussed under the
heading "Risk Factors" and elsewhere in this report.

ITEM 1.  DESCRIPTION OF BUSINESS

The Company

     The Company is a wholesale provider of voice and data services over a
"next-generation" packet switched network.  As of December 31, 2000, the Company
was providing services to several domestic carriers and generating revenue in 13
cities.  Through its network, the Company transports a large volume of toll
quality voice and data services.  The entrance point for communications traffic
over its network is referred to as a "POP" (point of presence).  The Company's
customers interconnect with its network by connecting dedicated facilities to
gateways located in one of its POPs.

     The Company was incorporated in 1993.  The Company engaged in acquiring
leases, drilling, and producing reserves utilizing focused geologic concepts and
advanced 3D seismic technology beginning in 1995.  On June 9, 2000, the Company
and its wholly owned subsidiary, DVN Acquisition Corporation, and DataVoN Inc.
("DataVoN") completed the transactions contemplated by a merger agreement
pursuant to which DataVoN became a wholly owned subsidiary of the Company.
References to the "Company" refer to the operations of DataVoN prior to the
merger and the combined operations of DataVoN and the Company subsequent to the
merger.  As a result of the merger, the Company is now organized along two lines
of businesses,

                                       2
<PAGE>

DataVoN and Zydeco Exploration, Inc. ("Zydeco"). DataVoN provides voice and data
services to a number of domestic and international carriers and Internet service
providers ("ISPs") desiring to employ the benefits of Voice over Internet
Protocol ("VoIP") technology and networking. Zydeco is an independent energy
company that has been engaged in the exploration for oil and gas utilizing
advanced three-dimensional seismic and computer-aided exploration techniques.
Because of market conditions, Zydeco's operations were curtailed prior to the
merger, and it has focused its efforts on (1) conserving cash resources, (2)
concentrating on marketing saleable assets, and (3) seeking alternate sources of
capital for possible drilling participation and general working capital,
including potential business combinations outside of the oil and gas industry.
The Company is considering its alternatives with respect to the operations of
Zydeco. Zydeco's operations are currently not material to the Company's combined
result of Zydeco's operations, and thus, the Company does not discuss them
below.

     The Company is building one of the nation's first "next-generation" packet
switched internet protocol ("IP") networks to deliver voice and data services.
A unique, meshed IP backbone will provide transport services for toll quality
traffic between any of the Company's connected cities.  The Company believes
that its network architecture, compared to traditional networks, drastically
reduces the costs of originating, transporting and terminating traffic while
providing network scalability for future growth.

     As of December 31, 2000, the Company was providing services to several high
volume United States carriers in 13 cities.  The Company currently has revenue-
generating POPs located in 14 cities in Texas, Arizona, California, Colorado,
Florida, Georgia, Maryland, Nevada, and Washington, D.C. During the year ended
December 31, 2000, the Company transported in excess of 1.6 billion minutes of
traffic.

     The Company's primary business is delivering toll quality voice and data
services.  The Company's network entrance and termination points for
communications traffic are the POPs.  The Company places equipment in the POPs
that act as gateways to the Company's network.  The gateway can be used to
digitize, compress, and packetize voice and data transmissions at the
originating point.  The packets are then transmitted over the Company's IP
backbone to the destination gateway.  At termination, the traffic is returned to
its original state and routed to a customer or the public switched telephone
network.  This process enables routing of communications traffic in a managed IP
environment.  Generally, the Company's customers interconnect with the Company's
network by connecting dedicated facilities to the Company's equipment in a POP.

     By leasing bandwidth on a managed IP backbone, the Company avoids having to
build a private, dedicated network of fiber and cable connections, which would
delay the Company's time-to-market in many locations and would be more costly to
deploy.  The Company also uses private leased lines or traditional circuit-based
networks where the managed IP network is unavailable.

                                       3
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THE MARKET

     Although it has been possible to transmit voice over data networks since
1995, only recently has the technology improved to the point that phone-to-phone
calls can be transmitted over data networks with similar quality to that of
traditional voice networks.  According to International Data Corporation, a
market research firm, the combined U.S. voice and data market today represents a
$280.0+ billion marketplace.  In 2000, the voice market was a $238 billion
industry that is expected to grow modestly at a 2% to 2 1/2% growth rate per
year.  The data market was a $42.0 billion industry growing at a more
significant 34% annual rate per year.

     Traditionally, the technology used to carry voice traffic required
significantly more resources than that required to transport data.  However,
inherent packetization technologies used in data transport introduced latency,
affecting the quality of transmitting voice over data networks.  Advances in
voice coders/decoders and the introduction of managed IP networks guaranteeing
acceptable round trip packet intervals have substantially reduced latency.
Moreover, this architecture has worked to not only reduce the cost of
transporting toll quality voice traffic through a more efficient use of the
network but also to allow convergence of voice and data so that they may be
delivered on the same network infrastructure, eliminating the need to build two
separate networks.

     VoIP carriers make no distinction between voice and data transmission.
VoIP carriers transport voice via packet switched technology, rendering the
distinction between a voice transmission and a data transmission meaningless.
To the VoIP carrier, both are handled in the same manner.

     The Company's telephony services enable telecommunications carriers and
other communications service providers to utilize the technologies and
efficiencies of internet protocol to cut costs and offer new services to add and
retain customers.

BENEFITS OF USING THE COMPANY

     The Company enables integrated communications service providers to
outsource their voice and data services over an IP backbone Network at lower
costs than over traditional networks while maintaining a toll quality
transmission.

     The Company believes its services provide the following key benefits to its
customers:

     .  Low Price. The Company believes its services are often the low-price
        option for carriers because packet switching is more efficient than
        traditional circuit switching. In addition, the Company leverages the
        packet switched network to deliver both voice and data traffic, which
        results in lower costs than circuit-based alternatives that deploy
        duplicate networks to deliver voice and data services.

     .  Network Expertise. The Company believes it has positioned itself with
        quality IP technology vendors and a highly qualified team with extensive
        telecommunications network expertise. The Company has a Network
        Operations

                                       4
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        Center ("NOC") located in Richardson, Texas, that is currently staffed
        by six people. There are two groups that work within the NOC: (a) the
        network engineering group, and (b) the network operations group. The
        network engineering group is responsible for design and specifications,
        planning and implementation with the network as well as operational
        support. The operations group oversees a nationwide network using a
        network management system, which notifies the Company's staff of network
        errors. Both groups cover problems that may arise twenty-four hours per
        day, seven days per week so that trouble tickets and other network-
        related issues are handled as quickly as possible.

     .  Redundant Network Structure. The Company has constructed and continues
        to develop a network infrastructure able to handle substantial minutes
        of traffic. The Company's network architecture is scalable, allowing it
        to support customers' future growth. The Company also plans to pursue
        strategic relationships to reduce network costs and increase network
        utilization.

     .  Improve Capital Allocation of Customers. By purchasing origination,
        transport, and termination services from the Company, the customer can
        deploy financial resources in areas other than network infrastructure.
        The Company's customers can gain a competitive advantage or maintain
        competitive parity with their competitors by expanding their end user
        offerings (i.e., marketing, customer service) without incurring the
        substantial capital investments and operating costs that would otherwise
        be required to build and deploy their own multiple-service network.

GROWTH STRATEGY

     The Company plans to leverage its customer relationships, operational
expertise, regulatory insight, and state-of-the-art network as a platform from
which to drive future growth.  Specifically, the Company believes the following
growth opportunities are available:

     .  Increased service capabilities in strong markets. As customer needs
        develop, the Company intends to acquire additional bandwidth and open
        additional POP's in several existing markets;

     .  Expanded customer base through strategic marketing relationships and
        wholesale contracts. The Company plans to enter into new sales contracts
        with regional emerging carriers;

     .  Expansion in new geographic areas. The Company plans to expand into
        second tier markets; and

     .  New product offerings. The Company plans to leverage its IP network and
        its inherent flexibility by developing and offering enhanced services.

                                       5
<PAGE>

ACQUISITION STRATEGY

     As part of its strategy to provide comprehensive communications
services as part of the leverage of the Company's network, the Company intends
to expand through strategic and tactical acquisitions of companies and through
attracting individuals with relevant expertise, both within existing lines of
business and complementary lines of business.  The Company believes that the
recent upheavals in the telecommunications sector have created opportunities for
expansion through acquisitions.  This strategy will attempt to speed the time to
market for new products and will expand the Company's existing customer base.
The Company plans to rely on the experience of its management team to identify
acquisition opportunities.  To date the company has no agreements to acquire any
companies.

SERVICES

     The Company's current services include:

     .  Terminations. Customers can meet the Company at any of several nodes
        located in cities throughout the United States and terminate to on-net
        or off-net cities. The meet point is the same for both.

     .  Originations. On-net cities will also have a local origination product.
        The Company can transport this traffic across its network to other
        cities.

     .  Resale Transmission Services. The Company has negotiated resale
        contracts with multiple tier one carriers. These resale contracts enable
        the Company to provide total ubiquitous telecommunications services that
        meet the needs of any potential customer. The services include off-net
        network capabilities for those customers requiring services to locations
        (domestically and internationally) that are not currently on the
        Company's network. These resale contracts enable the Company to offer
        nationwide voice termination capability, private line services, 8XX
        origination and all other traditional IXC products and services at very
        competitive pricing.

     In the future, the Company expects to offer switched packet-based
transmission services, enhanced services such as video on demand and streaming
video, and international services.

CUSTOMERS

     The Company does not sell its services to consumers.  The Company's
customers are service providers--specifically, tier one and two
telecommunications carriers, competitive local exchange carriers, ISPs, prepaid
service providers, enhanced services providers, independent telephone companies,
and emerging global carriers.  Tier one carriers generally have annual revenues
in excess of $2.0 billion.  Tier two carriers generally have revenues between
$750 million and $2.0 billion.

                                       6
<PAGE>

     As of December 31, 2000, the Company's customers were contracting with the
Company for transmission of approximately 150 million minutes per month in the
following cities:

     Atlanta            Denver              Phoenix
     Austin             Fort Worth          San Antonio
     Baltimore          Houston             San Diego
     Dallas             Los Angeles
     Miami              Washington, D.C.

Since the beginning of 2001, the Company has been generating revenue from a
location in Las Vegas.

     For the year ended December 31, 2000, the Company's two largest customers
accounted for approximately 89% of the Company's revenues. Since January 1,
2001, the Company's two largest customers have accounted for approximately 86%
of the Company's revenues. To date, the Company's customers have generally
entered into annual contracts that are subject to automatic annual renewals
absent written notice not to renew. The Company anticipates other types of
contractual customer relationships as the Company's network expands and new
services are offered.

SALES AND MARKETING

     The Company intends to leverage the improved speed to market of new
products using a "next-generation" packet switched network and to leverage the
existing customer relationships and the Company's price competitiveness as its
network is expanded. The Company also intends to exploit the unique peering
capabilities of its network to maintain and enhance customer traffic.

     This will be accomplished through direct sales by Company representatives
and agents and through participation at industry trade shows. The Company also
intends to derive sales from the formation of strategic alliances with industry
leaders offering products and/or services which require the capabilities and
pricing offered by the Company's network.

COMPETITION

     The Company competes in the market for enhanced IP communications services
and the market for carrier transmission services.  Each of these markets is
highly competitive with numerous service providers.  The Company faces
competition from a variety of sources, including large communications service
providers with more resources, longer operating histories, and more established
positions in the telecommunications marketplace.  Some of the competitors have
begun to develop or deploy IP telephony capabilities.  Most of the Company's
competitors are larger companies.

     Large carriers carry a substantial majority of the domestic and
international traffic.  Carriers like British Telecom and Deutsche Telecom, have
started to deploy packet-switched networks for voice and data traffic.  These
carriers have substantial resources and have large budgets available for
research and development.  In addition, several companies, many with

                                       7
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significant resources, such as Level 3 and Qwest Communications, are building
fiber optic networks, primarily in the United States, for IP telephony traffic.
These networks can be expected to carry voice and data traffic.

     The Company also competes with companies who have focused primarily on IP
telephony.  AT&T, Clearinghouse, GRIC Communications, iBasis, and ITXC, all of
which have substantially greater financial, marketing, and network resources
than the Company, sell international voice and data over the Internet.  Other IP
telephony companies, including Net2Phone and Delta Three.com, are currently
focusing on the retail market and personal computer-based IP telephony.

     Competition for gateway access, call management, and enhanced services is
becoming intense.  Even though the Company faces increasing competition in this
market space, the Company believes these companies may represent potential
future customers and strategic partners.

GOVERNMENT REGULATION

     The Company believes that under United States law, based on specific
regulatory classifications and recent regulatory decisions, the IP
communications services that the Company provides constitutes information
services, as opposed to regulated telecommunications services.  As such, the
FCC's current position is that information service providers, including IP
telephony providers, are not telecommunications carriers, and thus not currently
subject to FCC regulations or any regulations by state agencies charged with
regulating telecommunications carriers.  Nevertheless, aspects of the Company's
operations may be subject to state or federal regulation, including regulation
governing universal service funding, disclosure of confidential communications,
copyright and excise tax issues.

     On April 10, 1998, the FCC issued a report to Congress discussing its
implementation of certain universal service provisions contained in the 1996
amendments to the Communications Act of 1934.  In its report, the FCC stated
that it would undertake an examination of whether phone-to-phone IP telephony
should be considered an information service or a telecommunications service.
The FCC noted that certain forms of phone-to-phone IP telephony appeared to lack
the characteristics of an information service and to have the same functionality
as non-Internet protocol telecommunications services.

     In addition, the FCC is currently considering whether to impose surcharges
or other common carrier regulations upon certain providers of Internet and IP
telephony, primarily those which provide Internet and IP telephony services to
end users located in the United States.  Although the FCC decided that
information service providers, including Internet and IP telephony providers,
are not telecommunications carriers, various companies have challenged that
decision.  Congressional dissatisfaction with the FCC's conclusions could result
in requirements that the FCC impose greater or lesser regulations.  It is also
possible that the FCC will adopt a regulatory framework for IP telephony
providers different than that applied to traditional common carriers.  Several
efforts have been made in the United States to enact federal legislation that
would either regulate or exempt from regulation communications services

                                       8
<PAGE>

provided over the Internet. Any change in the existing regulation of IP
telephony by the FCC or Congress could materially adversely affect the Company's
business, financial condition, and results of operation.

     The Company cannot give any assurances that IP telephony will continue to
be lightly regulated by the FCC and state regulatory agencies.  Although the FCC
has determined that, at present, information service providers, including IP
telephony providers, are not telecommunications carriers, the Company cannot be
certain that this position will continue.

     In the future, the FCC may require providers of Internet and IP telephony
services to be subject to traditional common carrier regulation, make universal
service contributions, and/or pay access charges.  Increased regulation of the
Internet may slow its growth.  Such regulation may negatively impact the cost of
doing business over the Internet and materially adversely affect the Company's
business, operating results, financial condition, and future prospects.

     In addition to the FCC and Congress, state regulatory authorities, and
legislators may assert jurisdiction over the provision of intrastate IP
telephony services.  Some states already have initiated proceedings to examine
the regulation of such services.

     The Company's management cannot assure investors that its service will not
be regulated in the future.  Several efforts have been made in the United States
to enact federal legislation that would either regulate or exempt from
regulation communications services provided over the Internet or IP technology.
Increased regulation of the Internet and IP communication may slow its growth,
particularly if other countries also impose regulations.  Such regulation may
negatively impact the cost of doing business and materially adversely affect the
Company's business, operating results, financial condition, and future
prospects.

     While the Company believes that the transport of voice communications
services over the Internet and private IP networks is currently permitted under
the United States law, some foreign countries have laws or regulations that may
prohibit voice communications over the Internet.

EMPLOYEES

     As of December 31, 2000, the Company and its subsidiaries had 21 full-time
employees.

RISK FACTORS

     Many of the statements, estimates, predictions, and projections contained
in this "Description of Business" section and the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section of this
annual report on Form 10-KSB, in addition to certain statements contained
elsewhere in this annual report, are "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act.  These forward-looking statements are prospective, involving risks and
uncertainties.  While these forward-looking statements, and any assumptions on
which they are based, are made in good faith and reflect the Company's current
judgment regarding the direction of its business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions, or other future performance suggested herein.  The following risk

                                       9
<PAGE>

factors should be considered carefully by the Company's stockholders and
prospective investors in evaluating the Company and its business.  The Company
does not undertake to release publicly any revisions to forward-looking
statements that may be made to reflect events or circumstances after the date of
this annual report or to reflect the occurrence of unanticipated events.

Risks Related to the Company's Operations
-----------------------------------------

     The Company has a limited operating history upon which to base an
investment decision, and you may inaccurately assess its prospects for success.

     The Company acquired DataVoN in June, 2000, through a merger.  Since the
merger, the Company has primarily conducted its business activities through
DataVon.  DataVoN was incorporated in November 1997 and first began to offer
commercial services in January 1998.  Due to the Company's limited operating
history in its current line of business, it is difficult for the Company to
predict future results of operations.  Moreover, the Company cannot be sure that
it has accurately identified all of the risks to its business, especially since
the Company uses new, and in many cases, unproven technologies, and provides new
services.  As a result, its past results and rates of growth may not be a
meaningful indicator of its future results of operations.  Also, your assessment
of the prospects for the Company's success may prove inaccurate.

     The Company's revenue would decline significantly if it lost one or more of
its most significant customers.

     The Company generates much of its revenue from a limited number of
customers.  Customers may discontinue their use of the Company's services at any
time, and without notice.  Therefore, in any given quarter, the Company would
lose a significant amount of revenue if it lost one or more major customers.

     Failure to obtain necessary additional capital in the future on acceptable
terms to the Company would prevent the Company from executing its business plan.

     The Company needs additional capital to finance investments in equipment
and corporate infrastructure, expand its network, increase the range of services
it offers and respond to competitive pressures and perceived opportunities.
Cash flow from operations and cash on hand may not be sufficient to cover the
Company's operating expenses and capital investment needs.  The Company cannot
assure you that additional financing will be available on terms acceptable to
it, if at all.  Failure to obtain additional funding would prevent the Company
from making expenditures that will allow it to grow or maintain its operations.

     If the Company raises additional funds by selling equity securities or
issuing debt, new investors may receive more favorable terms than current
stockholders, who may experience dilution.

     If the Company raises additional funds by selling equity securities, the
relative equity ownership of its existing investors could be diluted or new
investors could obtain terms more

                                       10
<PAGE>

favorable than previous investors. If the Company raises additional funds
through debt financing, it could incur significant borrowing costs. The failure
to obtain additional financing when required could result in the Company being
unable to grow as required to attain profitable operations.

     The Company may not be able to generate sufficient revenue to maintain
profitability if telecommunications carriers and other communications service
providers are reluctant to use its services or do not use its services in
sufficient volume.

     If the market for IP telephony and new services does not develop as the
Company expects, or develops more slowly than expected, its business, financial
condition, and results of operations will be materially adversely affected.

     The Company's customers may be reluctant to use its services for a number
of reasons, including:

     .  perceptions that the quality of voice transmitted over the packet
        switched data network is low;
     .  perceptions that IP telephony is unreliable; and
     .  traffic may not be able to be delivered with significant cost
        advantages.

     The growth of its business depends on carriers and other communications
service providers generating an increased volume of voice and data traffic, and
selecting its network to carry at least some of this traffic.  If the volume of
voice and data traffic fails to increase, or decreases, and these third-parties
do not employ the Company's network, the Company's ability to generate
sufficient revenues to maintain profitability will be materially adversely
affected.  The Company can not assure you that end-users will continue to
purchase services from its customers or that its customers will maintain a
demand for its services.

     The Company depends on its key personnel and may have difficulty attracting
and retaining the skilled employees it needs to execute its growth plans.

     The Company depends heavily on its key management.  The Company's future
success will depend, in large part, on the continued service of its key
management and technical personnel, including Hugh D. Simpson, its President and
Chief Executive Officer.  If any of these individuals is unable or unwilling to
continue in their present positions, the Company's business, financial condition
and results of operations would suffer.

     The Company will need to attract skilled personnel to execute its growth
plans.  The Company's future success will depend, in large part, on its ability
to attract, retain and motivate highly skilled employees, particularly
engineering and technical personnel.  Competition for such employees in the
Company's industry is intense.  The Company has from time to time in the past
experienced, and it expects to continue to experience in the future, difficulty
in hiring and retaining employees with appropriate qualifications.  The Company
may not be able to retain its employees or attract, assimilate or retain other
highly qualified employees in the future.  If the

                                       11
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Company does not succeed in attracting and retaining skilled personnel, it may
not be able to grow at a sufficient rate to maintain profitable operations.

     The Company may face quality and capacity problems over its network upon
failures by third parties.

     Vendors.  The Company relies upon third-party vendors to provide it with
the equipment and software that the Company uses to transfer and translate calls
from traditional voice networks to the packet switched network, and vice versa.
The Company cannot assure you that it will be able to continue purchasing such
equipment and software on acceptable terms, if at all.  If the Company becomes
unable to purchase the equipment needed to maintain and expand its network as
currently configured, the Company may not be able to maintain or expand its
network to accommodate growth and the Company may consequently be unable to grow
revenues sufficiently to maintain projections.

     Parties that Maintain Phone and Data Lines.  The Company's business model
depends on the availability of the managed IP network bandwidth to transmit
voice and data calls, and to provide other value-added services.  Third-parties
maintain, and in many cases own, the traditional voice networks as well as data
networks.  Some of these third-parties are national telephone companies.  They
may increase their charges for using these lines at any time and decrease the
Company's profitability.  They may also fail to properly maintain their lines
and disrupt the Company's ability to provide service to its customers.  Any
failure by these third-parties to maintain these lines and networks that leads
to a material disruption of the Company's ability to provide services and could
discourage its customers from using the Company's network, which could have the
effect of preventing the Company's ability to maintain projections.

     Strategic Relationships.  The Company depends in part on its strategic
relationships to expand its distribution channels and develop and market its
services.  The Company's strategic relationship partners may choose not to renew
existing arrangements on commercially acceptable terms, if at all.  In general,
if the Company loses certain key strategic relationships, or if the Company
fails to develop new relationships in the future, its ability to expand the
scope and capacity of its network, and to maintain state-of-the-art technology,
would be materially adversely affected.

     The Company may not be able to succeed in the intensely competitive market
for its services.

     The market for VoIP, data and other value-added services is extremely
competitive and will likely become more competitive.  Internet protocol and IP
telephony service providers, such as GRIC Communications, iBasis and ITXC Corp.,
route traffic to destinations worldwide and compete directly with the Company.
Also, IP telephony service providers, such as Net2Phone, that presently focus on
retail customers may in the future enter the Company's market and compete with
the Company.  In addition, major telecommunications carriers, such as AT&T,
Deutsche Telekom, MCI WorldCom and Qwest Communications, have all entered or
announced plans to enter the IP telephony market.  All of these companies are
larger than the Company and

                                       12
<PAGE>

have substantially greater managerial and financial resources than the Company.
Intense competition in the Company's markets can be expected to continue to put
downward pressure on prices and adversely affect its profitability. The Company
cannot assure you that it will be able to compete successfully against its
competitors and the Company may lose customers or fail to grow its business as a
result of this competition.

     The Company is subject to downward pricing pressures which could prevent
the Company from maintaining profitability.

     As a result of numerous factors, including increased competition, prices
for long distance calls have been decreasing.  This downward trend of prices to
end-users has caused the Company to lower the prices it charges communications
service providers for call completion on its network.  If this downward pricing
pressure continues, the Company cannot assure you that it will be able to offer
IP telephony services at costs lower than, or competitive with, the traditional
voice network services with which it competes.  The continued downward pressure
on prices would have a material adverse effect on the Company's ability to
operate its network and business profitability.

     If the Company is not able to keep up with rapid technological change in a
cost effective way, the relative quality of its services could suffer.

     The technology upon which the Company's services depend is changing
rapidly.  Significant technological changes could render the equipment which the
Company uses obsolete, and competitors may begin to offer new services that it
is unable to offer.  The Company must adapt to its rapidly changing market by
continually improving the responsiveness, reliability, services and features of
its network and by developing new features and applications to meet customer
needs.  If the Company is unable to successfully respond to these developments
or does not respond in a cost-effective way, it may not be able to offer
competitive services.

     The Company may not be able to expand and upgrade its network adequately to
accommodate any future growth.

     The Company's business requires that it handle a large number of calls
simultaneously.  As the Company expands its operations, the Company expects to
handle significantly more calls.  The Company will need to expand and upgrade
its hardware and software to accommodate such increased traffic.  If the Company
does not expand and upgrade quickly enough, it will not have sufficient capacity
to handle the traffic and its operating performance would suffer.  Consequently,
the Company could develop a negative reputation with its customers and lose
business.

     If the Company fails to manage its growth, the Company could lose
customers.

     The Company has grown rapidly to date and expects to continue to grow
rapidly.  In order to increase the number of its customers and the size of its
operations, the Company will need to improve its administrative, accounting,
operating systems, and controls.  The Company may need to redesign several
internal systems.  The Company's attention to these matters may

                                       13
<PAGE>

distract it from other aspects of its business. Moreover, failure to implement
new systems and controls may hamper the Company's ability to provide services to
customers and may impair the quality of its services which could result in the
loss of customers.

     Fluctuations in the Company's quarterly results of operations that result
from various factors inherent in its business may cause the market price of the
Common Stock to fall.

     The Company's revenue and results of operations have fluctuated and may
continue to fluctuate significantly from quarter to quarter in the future due to
a number of factors, many of which are not in its control, including, but not
limited to:

     .  the amount of traffic the Company is able to sell to its customers, and
        their decisions on whether to route traffic over the Company's network;
     .  the percentage of traffic that the Company is able to carry over the
        managed IP network, rather than over the more costly traditional public-
        switched telephone network;
     .  the Company's ability to negotiate changes in the termination fees
        charged by its local providers when its margins deteriorate;
     .  capital expenditures required to expand or upgrade its network;
     .  technical difficulties or failures of its network systems or third-party
        delays in expansion or provisioning system problems; and
     .  the Company's ability to offer value-added services that are appealing
        to the market.

     Because of these factors, you should not rely on quarter-to-quarter
comparisons of the Company's results of operations as an indication of its
future performance.  It is possible that, in future periods, the Company's
results of operations will be significantly lower than the estimates of public
market analysts and investors.  Such a discrepancy could cause the price of the
Common Stock to decline significantly.

     The Company believes that it does not infringe upon the proprietary rights
of any third party, and no third party has asserted a patent infringement claim
against the Company.

     If is possible, however, that such a claim might be asserted successfully
against the Company in the future.  The Company's ability to provide its
services depends on its freedom to operate.  That is, the Company must ensure
that it does not infringe upon the proprietary rights of others or have licensed
all such rights.  The Company has not requested or obtained an opinion from
counsel as to whether its services infringe upon the intellectual property
rights of any third parties.  A party making an infringement claim could secure
a substantial monetary award or obtain injunctive relief which could effectively
block its ability to provide services in the United States.

     If any of these risks materialize, the Company could be forced to suspend
operations, to pay significant amounts to defend its rights, and a substantial
amount of management's attention may be diverted from its ongoing business, each
of which could materially adversely affect its ability to maintain
profitability.

                                       14
<PAGE>

     The Company relies on a variety of technologies, primarily software, that
it licenses from third parties.

     Continued use of this technology by the Company may require that it
purchase new or additional licenses from third parties.  There can be no
assurances that the Company can obtain those third party licenses needed for its
business or that the third party technology licenses that it does have will
continue to be available to it on commercially reasonable terms or at all.  The
loss or inability to maintain or obtain upgrades to any of these technology
licenses could result in delays or breakdowns in the Company's ability to
continue developing and providing its services or to enhance and upgrade its
services.

     The Company may undertake strategic acquisitions in the future and any
difficulties from integrating such acquisitions could damage its ability to
attain or maintain profitability.

     The Company may acquire businesses and technologies that complement or
augment its existing businesses, services and technologies.  Integrating any
newly acquired businesses or technologies could be expensive and time-consuming.
The Company may not be able to integrate any acquired business successfully.
Moreover, the Company may need to raise additional funds through public or
private debt or equity financing to acquire any businesses, which may result in
dilution for stockholders and the incurrence of indebtedness.  The Company may
not be able to operate acquired businesses profitably or otherwise implement its
growth strategy successfully.

Risks Related to the IP Telephony Industry
------------------------------------------

     The telecommunications industry is subject to domestic governmental
regulation and legal uncertainties which could prevent the Company from
executing its business plan.

     While the FCC has tentatively decided that information service providers,
including IP telephony providers, are not telecommunications carriers for
regulatory purposes, various companies have challenged that decision.  Congress
is dissatisfied with the conclusions of the FCC and the FCC could impose greater
or lesser regulation on the Company 's industry.  The FCC is currently
considering, for example, whether to impose surcharges or other regulations upon
certain providers of IP telephony, primarily those which provide IP telephony
services to end-users located within the United States.

  Aspects of the Company's operations may be, or become, subject to state or
federal regulations governing universal service funding, disclosure of
confidential communications, copyright and excise taxes.  The Company cannot
assure you that government agencies will not increasingly regulate Internet-
related services.  Increased regulation of the Internet may slow its growth.
Such regulation may also negatively impact the cost of doing business over the
Internet and materially adversely affect the Company's ability to maintain
profitability.

                                       15
<PAGE>

Risks Related to the OTC Bulletin Board
---------------------------------------

     Because the Common Stock is traded on the OTC Bulletin Board, the Company
cannot guarantee an orderly public market for the Common Stock, and there are
numerous risks related to buying low-priced stocks (stocks that are less than
$5.00 per share).

     The Common Stock is currently traded on the OTC Bulletin Board.  As a
result, you may find it more difficult to sell the Common Stock or to obtain
accurate quotations of the market value of the Common Stock as compared to
shares that are quoted on The Nasdaq Stock Market or traded on an exchange.  The
Company cannot assure you that a regular trading market will develop or be
sustained.

     For as long as the Common Stock is traded on the OTC Bulletin Board and if
the trading price of the Common Stock is below $5.00 per share, trading in the
Company's securities will be subject to the requirements of certain "penny
stock" rules of the SEC.  These rules require additional disclosure to investors
by broker-dealers for any trades involving a penny stock.  Penny stock rules
require that the broker-dealer deliver to the investor a disclosure statement
explaining the penny stock market and the associated risks with the market prior
to any penny stock transaction.  There are also sales practice requirements for
broker-dealers who sell penny stocks to most persons.  For these types of
transactions, the broker-dealer must make a determination that the purchaser is
suitable for the transaction and must receive the purchaser's written consent to
the transaction prior to sale.  These additional burdens on brokers and dealers
may discourage them from making transactions in the Common Stock.  This could
severely limit the market price and liquidity of the Company's securities and
the ability of purchasers to sell any of the shares of the Company in the
secondary market.  That, in turn, could materially and adversely affect the
market price and severely limit the liquidity of the Common Stock.

ITEM 2.  DESCRIPTION OF PROPERTY.

     The Company's executive office is located at 635 West Campbell Road, Suite
130, Richardson, Texas, a suburb of Dallas.  Those offices constitute
approximately 4,623 square feet of commercial space under lease through
September 31, 2004 and approximately 1,771 square feet of commercial space under
lease through April 30, 2003.  The Company also leases approximately 372 square
feet of office space in Houston, Texas on a month to month basis.

ITEM 3.  LEGAL PROCEEDINGS.

     In a complaint filed on December 9, 1999 in the District Court of Tarrant
County in the State of Texas (the "Court"), Teton Enterprises brought suit
against DataVoN and Hugh D. Simpson.  The complaint alleges that DataVoN owes
the plaintiff, a former sales person doing business under a corporate name,
certain commissions pursuant to a contract entered into between the parties.
DataVoN has countersued the plaintiff for amounts owed by the plaintiff to
DataVoN.  The litigation was set for trial in July of 2001, but was recently
taken off that trial setting until further notice from the Court.  The Court has
informed all parties to the litigation that the new setting may be either in
August or September, 2001.  Extensive discovery has been exchanged by both
parties and summary judgements are pending before the Court, which are

                                       16
<PAGE>

scheduled to be heard on April 3, 2001. No determination of the outcome is
possible at this time. The plaintiff alleges maximum economic damages in the
amount of approximately $4.0 million, which is contradictory to the disclosures
made by plaintiff regarding calculation of economic damages pled. DataVon
alleges in its counterclaim, among other claims pled, that the plaintiff owes
DataVon in excess of $200,000, which DataVon disclosures clearly confirm such
calculation of economic damages claimed. Management of DataVoN can make no
assurances as to the outcome of such litigation or the effects it will have on
the business of DataVoN or its financial condition; however, DataVon is
confident that a ruling on the pending summary judgment motions will more
clearly define any disputes between the parties. The defendants will continue to
defend the action vigorously.

     In February 2001, Cheniere Energy, Inc. submitted an issue to the American
Arbitration Association.  The issue does not appear to have been previously
arbitrated and to be covered by the exploration agreement between the Company
and Cheniere Energy, Inc. which expires in May 2001.  The arbitration is in its
very early stages, and no determination of the outcome, or if such arbitration
is appropriate under the exploration agreement, is possible at this time.

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

     The following matters were voted upon at a duly called special meeting of
the Company's stockholders held on December 21, 2000.  Each of the proposals was
approved by the Company's stockholders by the votes indicated below.  Of the
42,775,951 outstanding voting shares of the Common Stock entitled to vote at the
meeting, 42,079,645 shares were represented at the meeting in person or by
proxy.  Of the 7,190 shares of the Company's Series A Convertible Preferred
Stock, $.001 par value per share (the "Series A Preferred Stock"), entitled to
vote at the meeting, all 7,190 shares were represented at the meeting in person
or by proxy.

     1. Amend the Company's Certificate of Incorporation to increase the number
        of authorized shares of Common Stock from 50,000,000 to 150,000,000.

                              For       49,136,745/1/
                              Against      132,900
                              Abstain            0
                              Non-vote     696,306

     2. Amend the Company's Certificate of Incorporation to change the name of
        the Company from "Zydeco Energy, Inc." to "DTVN Holdings, Inc."

                              For       49,259,245/1/
                              Against        8,100
                              Abstain            0
                              Non-vote     698,606

                                       17
<PAGE>

     3. Approve the Company's 2000 Stock Option and Restricted Stock Plan

                              For       39,873,889/1/
                              Against      120,400
                              Abstain       13,500
                              Non-vote   9,958,162
___________

/1/ Includes the affirmative vote of the holder of 7,190 shares of the Series A
    Preferred Stock. For each proposal submitted to a vote of the Company's
    stockholders, each share of Common Stock is entitled to one vote and each
    share of Series A Preferred Stock is entitled to 1,000 votes except as
    otherwise required by law.

                                    PART II

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

     The Common Stock has traded on the OTC Bulletin Board under the symbol
"DTVN" since December 26, 2000 to reflect the change in the Company's name from
"Zydeco Energy, Inc." to "DTVN Holdings, Inc." Prior to that date, the Common
Stock was quoted under the symbol "ZNRG" on the OTC Bulletin Board from May 25,
1999 to December 25, 2000, and the Nasdaq National Market from August 19, 1997
to May 24, 1999. Warrants to purchase one share of Common Stock (the "Warrants")
traded on the OTC Bulletin Board under the symbol "ZNRGW" from May 25, 1999
until their expiration on December 13, 2000. The Warrants traded under the
symbol "ZNRGW" on the Nasdaq National Market from August 19, 1997 to May 24,
1999. The following table sets forth the quarterly high and low sales prices of
the Common Stock and the Warrants as reported by the Nasdaq National Market and
OTC Bulletin for the periods indicated. These quotations reflect interdealer
prices, without retail mark-up, mark-down, or commission, and may not represent
actual transactions.


<TABLE>
<CAPTION>

                                   Common Stock           Warrants
                                -----------------     ----------------
                                  High       Low       High       Low
                                  ----       ---       ----       ---

Year Ended December 31, 1999
<S>                             <C>        <C>        <C>       <C>
  First Quarter                 1.3125     0.2500      0.4380   0.0310
  Second Quarter                0.2812     0.0469      0.2810   0.0100
  Third Quarter                 0.2188     0.1250      0.1050   0.0100
  Fourth Quarter                0.1875     0.0469      0.0300   0.0010

Year Ended December 31, 2000
  First Quarter                 5.7500     0.0781      0.5620   0.0010
  Second Quarter                3.0625     0.8750      0.4730   0.1250
  Third Quarter                 2.0312     0.7188      0.1250   0.0150
  Fourth Quarter                1.6875     0.3125      0.0400   0.0010
</TABLE>

                                       18
<PAGE>

     As of March 20, 2001, there were 49,965,951 shares of the Common Stock
outstanding, held by approximately 80 holders of record.

     The Company has not declared or paid any cash dividends on its Common Stock
and does not anticipate declaring or paying any in the foreseeable future.  The
Board of Directors intends to retain future earnings, if any, to support the
growth of the Company's business.  The declaration and payment of future
dividends, if any, will be at the sole discretion of the Board of Directors and
will depend upon the Company's profitability, financial condition, prospects,
cash requirements, and other factors deemed relevant by the Board of Directors.

     On June 9, 2000, the Company issued 32,623,855 shares of the Common Stock
and 7,190 shares of the Series A Preferred Stock in connection with its merger
with DataVoN.  Each of the 7,190 shares of Series A Preferred Stock issued in
the merger was entitled to 1,000 votes on all matters, except as required by
law, with the Common Stock.  The 7,190 shares of Series A Preferred Stock were
convertible into 7,190,000 shares of the Common Stock (or 1,000 shares of Common
Stock for each share of Series A Preferred Stock).  The Series A Preferred Stock
was issued in the merger because of limitations on the number of authorized
shares of Common Stock under the Company's Certificate of Incorporation.  By
their terms, all outstanding shares of the Series A Preferred Stock issued in
the merger automatically convert into shares of the Common Stock upon approval
by the Company's stockholders of an amendment to the Company's Certificate of
Incorporation to increase the number of shares of Common Stock that the Company
is authorized to issue.  Pursuant to stockholder approval obtained at a special
meeting of the Company's stockholders held on December 21, 2000, the Company's
Certificate of Incorporation was amended to increase the number of authorized
shares of the Common Stock.  As a result of receiving the stockholder approval,
the 7,190 shares of the Series A Convertible Preferred Stock issued in the
merger were automatically converted into 7,190,000 shares of the Common Stock
pursuant to their terms.

     Upon the consummation of the Company's merger with DataVoN, the Company
issued to two individuals for broker services, warrants to purchase an aggregate
of 523,756 shares of the Common Stock at $0.08 per share.

     The above transactions were private transactions not involving a public
offering and were exempt from the registration provisions of the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof.
The sales of the securities were without the use of an underwriter, and the
shares contain a restrictive legend permitting the transfer thereof only upon
registration of the shares or an exemption under the Securities Act.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the consolidated
financial statements and footnotes included herein for the years ended December
31, 2000 and December 31, 1999.

                                       19
<PAGE>

FORWARD-LOOKING STATEMENTS

     Statements contained in this report are not based on historical fact,
including without limitation statements containing the words "believes," "may,"
"will," "estimate," "continue," "anticipates," "intends," "expects" and words of
similar import, constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995.  Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, events or developments to be materially different
from any future results, events or developments expressed or implied by such
forward-looking statements.  Such factors include, among others, the following:
general economic and business conditions, both nationally and in the regions in
which the Company operates; technology changes; competition; changes in business
strategy or development plans; the ability to attract and retain qualified
personnel; liability and other claims asserted against the Company; and other
factors referenced in the Company's filings with the Securities and Exchange
Commission.  Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.  The Company disclaims any
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future results, events or developments.

OVERVIEW

     The Company is a wholesale provider of voice and data services over a
"next-generation" packet switched network.  As of December 31, 2000, the Company
was providing services to several domestic carriers.  The Company is currently
operating in 14 cities.  Through its network, the Company transports toll
quality voice and data services.  The entrance point for communications traffic
over its network is referred to as a POP.  The Company's customers interconnect
with the Company's network by connecting dedicated voice circuits from the
customers' facilities to gateways located in one of the Company's POPs.

     The Company was incorporated in 1993 and began conducting oil and gas
seismic exploration operations in late 1995.  On June 9, 2000, the Company
merged with DataVoN.  As a result of this merger, the former stockholders of
DataVoN now own approximately 80% of the voting power of the Company's stock.
The merger was accounted for as a reverse acquisition of the Company by DataVoN
under the purchase method of accounting.  Accordingly, the historical financial
statements of DataVoN prior to the merger have become the Company's financial
statements, and the Company's results of operations will be combined with those
of DataVoN from and after the date of the merger.  As the oil and gas seismic
exploration operations are not currently material to the Company's combined
results of operations, the Company does not discuss them below.

     At the end of 2000, the Company's primary source of revenue was the fees
received for transporting telecommunications traffic across its network.  The
Company charges its customers fees based upon per minute or flat rate charges
and recognizes this revenue in the period in which the network usage occurs or
transportation services are rendered. In January of 2001, the Company entered
into several master services agreements whereby the Company agreed to provide
origination, transport and termination services to new customers. Having
received purchase orders under one of the master agreements, the Company began
providing services to the new customer in March 2001. The contract provides for
weekly billing, and the Company began billing and collecting for these services
in March 2001.

                                       20
<PAGE>

     The Company's most significant costs and expenses are data communications
and telecommunications expenses which are comprised primarily of collocation
facility fees, transport fees, termination fees, and equipment expenses.
Generally, collocation facility fees include charges for lease of rack space,
power consumption and  delivery of associated services to "host" the equipment.
Transport fees are paid to a "back bone provider" to carry traffic between POPs
where the equipment is located.  Termination fees are paid to local service
providers to terminate calls.  When possible equipment costs are capitalized and
depreciated over their estimated useful lives.  Other expenses include charges
for connections between the Company's POPs and its vendors for termination
services and software support and management systems required in maintaining its
network.

RESULTS OF OPERATIONS FOR YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED
DECEMBER 31, 1999

       Revenue. The Company's revenue increased by $3.1 million to $11.4 million
for the year ended December 31, 2000, from $8.3 million for the year ended
December 31, 1999. The increase in revenue resulted from an increase in the
amount of traffic carried over the Company's network.

     Cost of Services.  Cost of services increased by approximately $1.0 million
to $7.1 million for the year ended December 31, 2000, from $6.1 million for the
year ended December 31, 1999.  The increase in expense was driven by the
increase in traffic described above.  Collocation facility fees increased to
$300,000 for the year ended December 31, 2000, from $30,000 for the year ended
December 31, 1999.  Telecommunications fees increased to $6.8 million for the
year ended December 31, 2000 from $6.1 million for the year ended December 31,
1999.  As a percentage of net service revenue, cost of services expense
decreased to approximately 63% for the year ended December 31, 2000, from
approximately 73% for the year ended December 31, 1999.

     Selling and Marketing Expenses.  Selling and marketing expenses include
expenses relating to the salaries, payroll taxes, benefits and commissions that
the Company pays for sales personnel and the expenses associated with the
development and implementation of its promotion and marketing campaigns,
including expenses relating to its outside public relations firm and industry
analysts.  Selling and marketing expenses decreased by $.6 million to $.1
million for the year ended December 31, 2000 from $.7 million for the year ended
December 31, 1999.  This decrease is attributable to the Company replacing
commissioned sales agents with employees.

     General and Administrative Expenses.  General and administrative expenses
include salary, payroll tax and benefit expenses and related costs for general
corporate functions, including executive management, administration, office
facilities, information technology, human resources and amortization of unearned
stock compensation.  General and administrative expenses increased by $4.1
million to $4.8 million for the year ended December 31, 2000, from $.7 million
for the year ended December 31, 1999.  General and administrative expenses
increased primarily due to an increase in the stock-based compensation expense
of $2.3 million,

                                       21
<PAGE>

the number of personnel, and an increase in consulting and professional fees. As
a percentage of net revenue, general and administrative expenses increased to
approximately 42% for the year ended December 31, 2000, from 8% for the year
ended December 31, 1999 due to the factors described above.

     Depreciation, Amortization and Depletion Expense. Depreciation,
amortization and depletion expense increased by $3.2 million for the year ended
December 31, 2000 from 1999. This increase primarily resulted from amortization
of goodwill associated with the merger.

     Interest Income and Interest Expense.  Interest expense is primarily
comprised of interest on the Company's notes payable, and various capital
leases.  Interest income is primarily composed of income earned on the Company's
cash and cash equivalents and certificates of deposit.

LIQUIDITY AND CAPITAL RESOURCES

       The Company's principal capital and liquidity needs historically and
currently have related to the development of its network infrastructure, its
sales and marketing activities, and general capital needs.  The Company's
capital needs have been met, in large part, from cash flow generated from
operations.  Because the Company is placing greater emphasis on expanding its
network infrastructure, the Company plans to meet an increasing portion of its
capital needs through equity investments, capital leases and/or other forms of
equipment financing.

     Net cash provided by operating activities was $3.6 million for the year
ended December 31, 2000, as compared to $1.1 million for the year ended December
31, 1999.  The increase was primarily attributable to increased revenue from
voice and data services.

     Net cash used in financing activities was $1.1 million for the year ended
December 31, 2000, as compared to $.7 million for the year ended December 31,
1999.

     In March 2000, the Company entered into a note payable arrangement with a
vendor for the purchase of network equipment.   In October of 2000, the Company
refinanced the equipment with a master revolving note with a bank to include
future purchase of equipment.    The interest is payable monthly at an interest
rate of the bank's prime rate plus .5%, with the outstanding principal
converting into an installment loan on May 22, 2001.  The total amount available
under the arrangement is $.8 million of which $.3 million was borrowed as of
March 15, 2001.

     On May 1, 2000, the Company entered into a Security Agreement and Note
Payable with a related party for $.3 million.  The note bears interest at 9% per
annum.  The note is due on demand but no later than July 15, 2001.  The balance
as of March 15, 2001 is $.1 million.  The note is secured by substantially all
of the Company's assets.

     On June 21, 2000, the Company entered into a Loan and Security Agreement
with a bank that provides access to a $.5 million revolving credit facility.
The line of credit is secured by a lien on all of the Company's trade
receivables.  Interest accrues daily on the unpaid principal of the facility at
an annual rate equal to the prime rate, as defined in the Loan and Security

                                       22
<PAGE>

Agreement, plus .5%.  As of March 15, 2001, the Company had made no borrowings
under the Loan and Security Agreement.

     On November 5, 2000, the Company entered into a Variable Rate Installment
Agreement with a bank for $.3 million.  The note bears interest at prime plus 1%
per annum.  The note is due November 5, 2003.  As of December 31, 2000, the
balance was $.3 million.

     Capital expenditures totaled approximately $980,000 for the year ended
December 31, 2000. The Company expects to continue the expansion of its network
throughout 2001 and intends to increase its capital expenditures accordingly.
The Company has incurred $2.0 million, $.7 million of which were capital leases
and cash from operations and $1.3 of which were operating leases, since December
31, 2000. The Company intends to incur approximately $10 million in additional
capital expenditures during the remainder of 2001 through a combination of
operating and capital leases, cash from operations, and the issuance of either
debt or equity securities or both. The Company currently does not have
sufficient cash on hand, existing borrowing availability or any commitments for
the cash to fund all of the planned capital expenditures. The Company intends to
use cash flows from operations, issuance of obligations under capital and
operating leases, and proceeds from the sale of either debt or equity securities
or both to fund such capital expenditures. There can be no assurance that the
Company will be able to generate sufficient cash flow or obtain such outside
financing to fund the planned capital expenditures. If the Company is unable to
generate sufficient cash flow or obtain such outside financing, the planned
expansion of its network infrastructure will be reduced, delayed or canceled and
such reduction, delay or cancellation could have a material adverse effect on
the business, financial condition or results of operations of the Company.

       The Company believes that its cash on hand, cash flows from operations,
borrowing availability under its revolving line of credit will be sufficient to
satisfy existing commitments and plans other than the planned capital
expenditures.  However, there can be no assurance that the Company will be able
to make planned borrowings, that its business will generate sufficient cash
flows from operations, that sufficient equity capital can be raised or that
future borrowings will be available in an amount sufficient to enable the
Company to make necessary capital or other expenditures including the planned
capital expenditures.

                                       23
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS



                          Independent Auditors' Report


The Stockholders and Board of Directors of
DTVN Holdings, Inc.:



We have audited the accompanying consolidated balance sheets of DTVN Holdings,
Inc. (formerly Zydeco Energy, Inc.) and subsidiaries, as of December 31, 2000
and 1999, and the related consolidated statements of operations, stockholders'
equity (deficit) and comprehensive loss and cash flows for the years then
ended.  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 auditing standards generally accepted
in the United States of America.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DTVN Holdings, Inc.
and subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

                                    KPMG LLP

Dallas, Texas
February 16, 2001

                                       24
<PAGE>

                              DTVN HOLDINGS, INC.
                        (Formerly Zydeco Energy, Inc.)

                          Consolidated Balance Sheets

                For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>

                     ASSETS                           2000           1999
                                                  ------------   ------------
<S>                                               <C>            <C>
Current assets:
  Cash and cash equivalents                       $  2,895,402   $    394,740
  Other current investments (note 5)                   100,000             --
  Accounts receivable                                  278,059        621,535
  Vendor deposit (note 2)                               64,000        360,000
  Deferred income taxes (note 8)                       902,339         16,947
  Other current assets                                 121,674         29,889
                                                  ------------   ------------
    Total current assets                             4,361,474      1,423,111
                                                  ------------   ------------
Property and equipment, net (note 3 and 4)           1,136,806        147,845
Goodwill, net (notes 1a and 1f)                     23,562,199             --
Investments (note 5)                                   182,061         96,290
Purchased technology (note 12)                         635,508             --
                                                  ------------   ------------
                                                  $ 29,878,048   $  1,667,246
                                                  ============   ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $  1,314,688   $    305,375
  Unearned revenue                                     697,758        493,882
  Accrued liabilities and other                        994,609        326,108
  Customer deposit (note 2)                                 --        360,000
  Notes payable to related parties (note 6 and 7)      249,090             --
  Current portion of notes payable (note 7)            211,035             --
  Current installments of obligations under
   capital leases (note 4)                              11,971         22,432
                                                  ------------   ------------
    Total current liabilities                        3,479,151      1,507,797
                                                  ------------   ------------
Deferred income taxes (note 8)                          39,101             --
Line of credit and notes payable less current
  portion (note 7)                                     343,411             --
Obligations under capital leases, excluding
  current installments (note 4)                         12,139         61,049
                                                  ------------   ------------
    Total liabilities                                3,873,802      1,568,846
                                                  ------------   ------------
Stockholders' equity:
  Common stock, par value $.001; 150,000,000
    authorized, and 49,965,951 issued and
    outstanding in 2000; 50,000,000 shares
    authorized, and 1,000,000 issued and
    outstanding in 1999                                 49,966          1,000
  Additional paid in capital                        29,959,014             --
  Retained earnings (accumulated deficit)           (4,057,027)        97,400
  Accumulated other comprehensive income                52,293             --
                                                  ------------   ------------
    Total Stockholders' equity                      26,004,246         98,400
                                                  ------------   ------------
Commitments and contingencies (notes 4 and 11)
                                                  ------------   ------------
                                                  $ 29,878,048   $  1,667,246
                                                  ============   ============

</TABLE>

See accompanying notes to consolidated financial statements.

                                       25
<PAGE>

                              DTVN HOLDINGS, INC.
                        (Formerly Zydeco Energy, Inc.)

                     Consolidated Statements of Operations


                For the years ended December 31, 2000 and 1999

<TABLE>
<CAPTION>


                                                 2000                 1999
                                            ---------------      --------------
<S>                                         <C>                  <C>
Net service revenue                         $    11,290,239      $    8,273,472
Other revenue                                       111,789                  --
                                            ---------------      --------------
  Total revenue                                  11,402,028           8,273,472

Costs and expenses (notes 4 and 6):
  Cost of services                                7,068,647           6,059,472
  Selling and marketing                             121,026             692,525
  General and administrative (including
    $2,251,416 and $0 non-cash
      expenses for 2000 and 1999)                 4,799,632             673,880
  Depreciation, amortization and depletion
    (note 4)                                        288,627              16,072
  Amortization of goodwill                        2,973,199                  --
                                            ---------------      --------------
    Total costs and expenses                     15,251,131           7,441,949
                                            ---------------      --------------
    Operating income (loss)                      (3,849,103)            831,523

Interest income                                      87,383              33,509

Interest expense (note 7)                            56,940              21,729

Loss on disposition of assets                         3,011                  --
                                            ---------------      --------------

    Income (loss) before income taxes            (3,821,671)            843,303

Income tax expense (benefit) (note 8)              (836,554)             37,356
                                            ---------------      --------------

       Net income (loss)                    $    (2,985,117)     $      805,947
                                            ===============      ==============

Net income (loss) per common share -
  basic and diluted (note 1K)               $         (0.06)
                                            ===============

Weighted average common shares
  outstanding - basic and diluted                46,370,951
                                            ===============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       26
<PAGE>

                              DTVN HOLDINGS, INC.
                        (Formerly Zydeco Energy, Inc.)

        Consolidated Statements of Stockholders' Equity (Deficit) and
                              Comprehensive Loss

                For the years ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                            PREFERRED STOCK                  COMMON STOCK
                                                         SHARES                  AMOUNT                 SHARES          AMOUNT
                                                      ------------          ---------------       --------------    ------------
<S>                                                   <C>                   <C>                   <C>               <C>
Balance at January 1, 1999                                     --                      --               1,000,000        $   1,000

Net income                                                     --                      --                      --               --

Dividend payments                                              --                      --                      --               --
                                                       ----------           -------------             -----------        ---------

Balance at December 31, 1999                                   --                      --               1,000,000            1,000

Change in tax status from  S corporation to
  C corporation (note 1):

Net income through change in tax status (note 1)               --                      --                      --               --

Dividend payments                                              --                      --                      --               --

Reflect change in tax status                                   --                      --                      --               --

Merger between DataVoN and DTVN (note 1):

Reverse acquisition and new capitalization of DTVN
  (note 1)                                                  7,190                       7              41,775,951           41,776

Conversion of preferred stock                              (7,190)                     (7)              7,190,000            7,190

Amortization of stock-based compensation                       --                      --                      --               --


Comprehensive loss:

  Unrealized gain on investments                               --                      --                      --               --

  Net loss since change in tax status                          --                      --                      --               --

  Total Comprehensive Loss                                     --                      --                      --               --
                                                       ----------           -------------             -----------        ---------
Balance at December 31, 2000                                   --                      --              49,965,951        $  49,966
                                                       ==========           =============             ===========        =========


                                                                              RETAINED          ACCUMULATED           TOTAL
                                                                              EARNINGS            OTHER            STOCKHOLDER'S
                                                      ADDITIONAL            ACCUMULATED        COMPREHENSIVE           EQUITY
                                                    PAID IN CAPITAL          (DEFICIT)            INCOME             (DEFICIT)
                                                    ---------------         -----------        -------------       -------------
<S>                                                 <C>                     <C>                <C>                  <C>
Balance at January 1, 1999                                       --             (97,199)                  --             (96,199)

Net income                                                       --             805,947                   --             805,947

Dividend payments                                                --            (611,348)                  --            (611,348)
                                                        -----------         -----------              -------         -----------
Balance at December 31, 1999                                     --              97,400                   --              98,400

Change in tax status from S corporation to
  C corporation (note 1):                                                                                                     --

Net income through change in tax status (note 1)                 --           1,071,910                   --           1,071,910

Dividend payments                                                --          (1,375,446)                  --          (1,375,446)

Reflect change in tax status                               (206,136)            206,136                   --                  --

Merger between DataVoN and DTVN (note 1):

Reverse acquisition and new capitalization of DTVN
  (note 1)                                               27,920,917                  --                   --          27,962,700

Conversion of preferred stock                                (7,183)                 --                   --                  --

Amortization of stock-based compensation                  2,251,416                  --                   --           2,251,416

Comprehensive loss:

  Unrealized gain on investments                                 --                  --               52,293              52,293

  Net loss since change in tax status                            --          (4,057,027)                  --          (4,057,027)

  Total comprehensive loss                                       --          (4,057,027)              52,293          (4,004,734)
                                                        -----------         -----------              -------         -----------
Balance at December 31, 2000                             29,959,014          (4,057,027)              52,293          26,004,246
                                                        ===========         ===========              =======         ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       27
<PAGE>

                              DTVN HOLDINGS, INC.
                        (Formerly Zydeco Energy, Inc.)

                     Consolidated Statements of Cash Flows

                For the years ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                    2000             1999
                                                                                ------------       ---------
<S>                                                                              <C>                 <C>
Cash flows from operating activities:
  Net income (loss)                                                              $(2,985,117)        805,947
  Adjustments to reconcile net income to net cash provided
    by operating activities:
      Depreciation, amortization and depletion                                     3,261,826          16,072
      Amortization of stock-based compensation                                     2,251,416              --
      Deferred income taxes                                                         (836,554)         (8,222)
      Loss on disposal of asset                                                        3,011              --
      Changes in assets and liabilities:
        Accounts receivable                                                          494,611        (318,586)
        Customer deposit                                                            (360,000)             --
        Vendor deposit                                                               296,000              --
        Accounts payable and accrued liabilities and other                         1,401,878         344,571
        Unearned revenue                                                             203,876         238,306
        Other                                                                        (91,785)        (20,686)
                                                                                 -----------       ---------
             Net cash provided by operating activities                             3,639,162       1,057,402
                                                                                 -----------       ---------
Cash flows from investing activities:
  Purchase of investments                                                             (3,710)        (96,290)
  Cash acquired during merger, net of direct acquistion costs                        432,414               -
  Purchase of property and equipment                                                (478,635)        (54,367)
                                                                                 -----------       ---------
            Net cash used in investing activities                                    (49,931)       (150,657)
                                                                                 -----------       ---------
Cash flows from financing activities:
  Proceeds from notes payable to related parties                                     250,000              --
  Principal payments on notes payable to related parties                                (910)        (51,828)
  Proceeds from notes payable                                                        566,822              --
  Principal payments on notes payable                                               (514,085)             --
  Borrowings on line of credit                                                            --         174,250
  Payments on line of credit                                                              --        (174,250)
  Principal payments on obligations under capital leases                             (14,950)         (8,825)
  Payments of dividends                                                           (1,375,446)       (611,348)
                                                                                 -----------       ---------

            Net cash used in financing activities                                 (1,088,569)       (672,001)
                                                                                 -----------       ---------
Net increase in cash and cash equivalents                                          2,500,662         234,744
Cash and cash equivalents at beginning of year                                       394,740         159,996
                                                                                 -----------       ---------
Cash and cash equivalents at end of year                                         $ 2,895,402         394,740
                                                                                 ===========       =========
Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                         $    20,822           4,045
                                                                                 ===========       =========
  Cash paid during the year for income taxes                                     $    27,180           7,259
                                                                                 ===========       =========
Non-cash investing activities:
  Capital leases for equipment                                                   $        --          92,306
                                                                                 ===========       =========
  Notes payable for equipment                                                    $   501,709              --
                                                                                 ===========       =========
  Reverse acquisition of Zydeco by DataVoN (note 1)                              $27,962,700              --
                                                                                 ===========       =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       28
<PAGE>

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A) MERGER AND BASIS OF FINANCIAL REPORTING

    On June 9, 2000, DataVoN, Inc. (DataVoN), formerly HR Partners, Inc., merged
    (the Merger) with DTVN Holdings, Inc. (DTVN), formerly Zydeco Energy, Inc.
    and DataVoN became a subsidiary of DTVN. Shareholders of DataVoN received
    shares of DTVN equal to a majority of the shares of DTVN outstanding after
    the transaction. Accordingly, the business combination has been accounted
    for as a reverse acquisition of DTVN by DataVoN using the purchase method of
    accounting. Accordingly, the historical financial statements of DataVoN
    prior to the Merger have become the financial statements of the registrant,
    and the results of operations of DTVN have been combined with DataVoN
    beginning on June 9, 2000. References to the "Company" refer to operations
    of DataVoN prior to the Merger and the combined operations of DataVoN and
    DTVN subsequent to the Merger. The purchase price totaled approximately $28
    million, which is comprised of the traded market value of DTVN's outstanding
    common stock and the fair value of DTVN's outstanding options and warrants
    at the date the Merger was agreed and announced, and direct acquisition
    costs. A substantial portion of the purchase price was allocated to goodwill
    that is being amortized to expense over a five-year period.

    Under the terms of the Merger, DataVoN's shareholders received 32,623,855
    shares of common stock and 7,190 shares of preferred stock of DTVN. The
    shares of preferred stock automatically converted into 7,190,000 common
    shares on December 21, 2000. Accordingly, all share and per share
    information has been revised to reflect the exchange ratio on a retroactive
    basis.

    DTVN, a Delaware corporation, is a holding company headquartered in
    Richardson, Texas, a suburb of Dallas, Texas. DTVN has two principal lines
    of business: DataVoN, an emerging carrier of toll quality voice and data
    communications services over private IP networks (VoIPN) and Zydeco
    Exploration, Inc., an oil and gas services company with proprietary 3D
    seismic technology.

    DTVN operates Internet Protocol Terminations in Texas, Colorado, Georgia,
    California, Maryland, the District of Columbia, Arizona, and Florida.

    In connection with the transaction, the following assets were acquired,
    liabilities assumed and common and preferred stock issued.

             Cash, net of direct acquisition costs        $    432,414
             Current assets other than cash                    151,135
             Equipment                                         312,093
             Investments                                       797,859
             Goodwill                                       26,535,398
             Current liabilities                              (266,199)
             Common and preferred stock issued             (27,962,700)

         Proforma results of operations of the Company as if the share exchange
         had occurred as of the beginning of the periods presented is as
         follows:

                                               2000             1999
                                            -----------     -----------
             Revenue                        $11,686,706     $ 8,460,838
                                            ===========     ===========
             Net loss                       $(6,948,839)    $(7,775,659)
                                            ===========     ===========
             Proforma net loss per share          ($.14)          ($.23)

                                       29
<PAGE>

    (B)  PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the financial statements of
    DTVN and its two wholly owned subsidiaries. All significant intercompany
    balances and transactions have been eliminated in consolidation.

    (C)  CASH EQUIVALENTS AND CERTIFICATES OF DEPOSIT

    For purposes of the statements of cash flows, the Company considers all
    demand deposits, time deposits and other highly liquid investments with an
    initial maturity of less than 90 days to be cash equivalents.

    Certificates of deposit are classified as available-for-sale and are
    carried at fair value, which approximates cost.

    (D)  INVESTMENT SECURITIES

    Investment securities held as of December 31, 2000 include U.S. Treasury
    securities and corporate equity securities. The Company classifies its
    securities as available-for-sale.

    Available-for-sale securities are recorded at fair value. Unrealized holding
    gains and losses, net of the related tax effect, on available-for-sale
    securities are excluded from earnings and are reported as a separate
    component of other comprehensive income until realized. Realized gains and
    losses from the sale of available-for-sale securities are determined based
    on specific identification basis.

    A decline in the market value of any available-for-sale security below cost
    that is deemed to be other than temporary results in a reduction in carrying
    amount to fair value. The impairment is charged to earnings and a new cost
    basis for the security is established. Dividend and interest income are
    recognized when earned.

    (E)  EQUIPMENT

    Equipment is recorded at cost. Maintenance and repairs are charged against
    income as incurred, while major replacements are capitalized. The cost and
    related accumulated depreciation of assets sold or retired are removed from
    the accounts, and any resulting gain or loss is reflected in operations.
    Equipment under capital leases is stated at the present value of minimum
    lease payments.

    The Company provides depreciation on equipment using the straight-line
    method over the estimated useful lives of the respective assets. Equipment
    held under capital leases are amortized straight line over the shorter of
    the lease term or estimated useful life of the asset.

    (F)  GOODWILL

    Goodwill, which represents the excess of purchase price over fair value of
    net assets acquired, is amortized on a straight-line basis over a five year
    period. The Company assesses the recoverability of this intangible asset by
    determining whether the amortization of the goodwill balance over its
    remaining life can be recovered through undiscounted future operating cash
    flows of the acquired operations. The amount of goodwill impairment, if any,
    is measured based on projected undiscounted future operating cash flows
    expected to be generated by the acquired business. The assessment of the
    recoverability of goodwill will be impacted if estimated future operating
    cash flows are not achieved. As of December 31,

                                       30
<PAGE>

    2000 the goodwill attributable to the acquisition was $26,535,398 of which
    $2,973,199 was amortized throughout fiscal 2000 for a net balance of
    $23,562,199.

    (G)  INCOME TAXES

    The Company was a Subchapter S corporation through the date of the merger.
    The federal income tax liability incurred as a result of the Company's
    earnings was the responsibility of its stockholder. Therefore, no federal
    income taxes were provided in the Company's financial statements as of
    December 31, 1999. The Company made distributions to its stockholder to pay
    federal income taxes owed by the stockholder related to the Company's
    taxable income. In June 2000, the Company changed its tax status to a C
    corporation for federal income tax purposes and recorded approximately
    $42,000 of deferred tax assets.

    Subsequent to the merger, federal and state income taxes are accounted for
    under the asset and liability method. Deferred tax assets and liabilities
    are recognized for the future tax consequences attributable to differences
    between the financial statement carrying amounts of existing assets and
    liabilities and their respective tax bases and operating loss and tax credit
    carryforwards. Deferred tax assets and liabilities are measured using
    enacted tax rates expected to apply to taxable income in the years in which
    those temporary differences are expected to be recovered or settled. The
    effect on deferred tax assets and liabilities of a change in tax rates is
    recognized in income in the period that includes the enactment date.

    (H)  REVENUE RECOGNITION

    The Company generally bills for its services based on capacity made
    available to its customers, rather than actual usage. Service based on
    capacity is generally billed monthly in advance. Revenue from service billed
    in advance is deferred and recognized as revenue when earned. Service based
    on actual usage is recognized as revenue when earned and is billed monthly
    in arrears.

    The Company may incur incremental costs to establish new connections with
    customers. In these situations, the Company may charge its customers a set
    up fee for the new connections. The Company defers these set-up fees, and
    incremental set-up costs, and recognizes them ratably over the initial
    service commitment period for the new connection, which is generally one
    year.

    (I) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

    Long-lived assets are reviewed for impairment whenever events or changes in
    circumstances indicate that the carrying amount of an asset may not be
    recoverable. Recoverability of assets to be held and used is measured by a
    comparison of the carrying amount of an asset to future net cash flows
    expected to be generated by the asset. If such assets are considered to be
    impaired, the impairment to be recognized is measured by the amount by which
    the carrying amount of the assets exceeds the fair value of the assets.
    Assets to be disposed of are reported at the lower of the carrying amount or
    fair value less costs to sell.

    (J)  USE OF ESTIMATES

    Management of the Company has made a number of estimates and assumptions
    that affect the reported amounts of assets and liabilities and disclosure of
    contingent assets and liabilities to prepare these financial statements in
    conformity with accounting principles generally accepted in the United
    States of America. Actual results could differ from those estimates.

                                       31
<PAGE>

    (K)  NET INCOME (LOSS)  PER SHARE

    Basic and diluted net income (loss) per common share was determined by
    dividing net income (loss) by the weighted average common shares outstanding
    during the period. As of December 31, 2000, the Company had 49,965,951
    shares issued and outstanding. Per share amounts are not reflected for 1999
    due to the recapitalization of the Company as a result of the reverse
    acquisition in 2000.

    (L) FAIR VALUE OF FINANCIAL INSTRUMENTS

    Financial instruments consist principally of cash equivalents, certificates
    of deposit, accounts receivable, accounts payable and short-term notes
    payable. The estimated fair value of these instruments approximates their
    carrying value.

    (M)  CONCENTRATIONS OF CREDIT RISK

    The Company's customers are primarily well-established long distance
    carriers throughout the United States. Two non-affiliated customers
    comprised 54% and 35% of revenues during 2000, and 0% and 0% of accounts
    receivable at December 31, 2000. Two non-affiliated customers comprised 68%
    and 23% of revenues during 1999, and 36% and 57% of accounts receivable at
    December 31, 1999.

(2) DEPOSITS

    Deposits required prior to the provision of bandwidth capacity was
    $64,000 and $360,000 in 2000 and 1999, respectively.

    In 1999 the Company obtained deposits for equivalent amounts from one its
    customers prior to establishing new service for the bandwidth capacity. In
    April 2000, the vendor returned all but $64,000 of the deposit to the
    Company which was retained as a continuing deposit and the Company returned
    the $360,000 its customer.

(3) PROPERTY AND EQUIPMENT

    Property and equipment, net, consisted of the following:

<TABLE>
<CAPTION>
                                                ESTIMATED
                                               USEFUL LIFE             2000                    1999
                                           -----------------     -----------------      -----------------
<S>                                        <C>                   <C>                     <C>
Computer equipment (note 4)                     3-5 years           $   59,985               $ 23,084
Vehicle                                          4 years                     -                 51,745
Office equipment and furniture (note            3-10 years              99,305                 34,683
 4)
Telecommunications equipment                     5 years               925,462                 56,504
Leasehold improvements                          Lease-Term              36,956                      -
Oil and gas properties                                                 285,000                      -
                                                                    ----------               --------
     Total property and equipment                                    1,406,708                166,016
Less accumulated depreciation,
 amortization and depletion                                           (269,902)               (18,171)
                                                                    ----------               --------
Property and equipment, net                                         $1,136,806               $147,845
                                                                    ==========               ========
</TABLE>

                                       32
<PAGE>

(4) LEASES

   (A) OPERATING LEASES

       The Company leases office space from M.M. Simpson and an airplane from
       EDVon, Inc.  The Company also leases an airplane hangar from McKinney
       Executive Air.  Total rental expense was $80,725 in 2000 and $36,715 in
       1999.  Of the total rental expense, $75,265 was paid to related parties
       in 2000 and $35,515 was paid to related parties in 1999.  All leases were
       entered into in the normal course of business.

       Future minimum lease payments under non-cancelable operating leases (with
       initial or remaining lease terms in excess of one year) as of December
       31, 2000 are: 2001 - $89,460; 2002 - $91,860; 2003 - $94,260; 2004 -
       $71,200 and 2005 - $45,600.  All but $19,565 of these future minimum
       lease payments are due to EDVon, Inc.

   (B) CAPITAL LEASES

       In 1999, the Company entered into capital leases with EDVon, Inc., M.M.
       Simpson and an agent of Fidelity National Title, all of which are related
       parties, for computers, a vehicle and office equipment that expire at
       various dates through 2003, except for the vehicle which was terminated
       on May 1, 2000.  At December 31, 2000, the gross amount of equipment and
       related accumulated amortization recorded under capital leases were as
       follows:


                 Computer equipment                           $ 20,292
                 Office equipment and furniture                 20,269
                                                              --------
                                                              $ 40,561
                 Less accumulated amortization                 (16,451)
                                                              --------
                                                              $ 24,110
                                                              ========

       Amortization of assets held under capital leases of $10,818 is included
       with depreciation expense.

       The lease terms for the equipment under capital leases are 36 months.
       Future minimum lease payments, of which all is due to related parties,
       under capital leases as of December 31, 2000 are:


              2001                                              $13,911
              2002                                               11,311
              2003                                                1,528
                                                                -------

          Total minimum lease payments                           26,750

       Less amounts representing interest (at
         approximately 9.5%)                                      2,640
                                                                -------

          Present value of minimum capital lease
            payments                                             24,110

       Less current installments of obligations under
         capital leases                                          11,971
                                                                -------

          Obligations under capital leases,
            excluding current installments                      $12,139
                                                                =======

                                       33
<PAGE>

(5) INVESTMENT SECURITIES

    The cost, gross unrealized holding gains, gross unrealized holding losses
    and fair value of available-for-sale securities by major security type at
    December 31, 2000 were as follows:

<TABLE>
<CAPTION>
                                                                   Gross                  Gross
                                                                unrealized             unrealized                Fair
                                              Cost             holding gains         holding losses             value
                                        --------------     ------------------     ------------------      ---------------
<S>                                     <C>                <C>                    <C>                     <C>
Available for sale:
U.S. Treasury securities                  $ 50,000               $    --                  $--                  $ 50,000
Corporate equity securities                 79,761                52,300                   --                   132,061
Certificates of deposit                    100,000                    --                   --                   100,000
                                          --------               -------                  ---                  --------
                                          $229,761               $52,300                  $                    $282,061
                                          --------               -------                  ---                  --------
</TABLE>

    In 1999, the Company's available for sale securities consisted only of
    certificates of deposit whose carrying value approximate their fair market
    value.

(6) RELATED PARTY TRANSACTIONS

    In 2000 and 1999, the Company entered into a number of transactions in the
    normal course of business with related parties. These transactions include
    operating and capital leases with related parties (see note 4), notes
    payable to related parties (see note 6) and services provided by related
    parties (see below).

    The Company paid a related party, M.M. Simpson & Associates, P.C. (M.M.
    Simpson), $126,221 and $7,589 in 2000 and 1999, respectively, for legal
    services provided to the Company.

    The Company also paid M.M. Simpson $25,955 and $29,683 in 2000 and 1999,
    respectively, for payroll costs of shared employees.

(7) NOTES PAYABLE

    In March 2000, the Company entered into a note payable arrangement with a
    vendor for the purchase of network equipment.  In October 22, 2000, the
    Company refinanced the equipment with a master revolving note with a bank to
    include future purchase of equipment. Interest is payable monthly, with
    outstanding principal on May 22, 2001 converting into an installment loan.
    The total amount available under the master note is $802,436, of which
    $298,869 was borrowed as of December 31, 2000.  The interest rate is the
    bank's prime rate plus .5% (9% at December 31, 2000).  This note payable is
    guaranteed by the majority stockholder of the Company and by the
    stockholder's spouse.

    On May 1, 2000, the Company entered into a Security Agreement and note
    payable from a related party for $250,000. The note bears interest at 9% per
    annum. The note is due on demand but no later than July 15, 2001. As of
    December 31, 2000, the balance was $249,090. The note is secured by
    substantially all assets of the Company.

    On June 21, 2000, the Company entered in a Loan and Security agreement with
    a bank that provides access to a $500,000 revolving credit facility. The
    line of credit is secured by a lien on all trade receivables. Interest
    accrues daily on the unpaid principal of the facility at an annual rate
    equal to the prime rate, as defined in the Loan and Security Agreement, plus
    .5%. As of December 31, 2000, no borrowings had been made under the Loan and
    Security Agreement.

                                       34
<PAGE>

    On November 5, 2000, the Company entered into a Variable Rate Installment
    agreement with a bank for $267,953. The note bears interest at prime plus 1%
    per annum and is secured by equipment and the personal guarantee of the
    majority stockholder. The note is due November 5, 2003. As of December 31,
    2000, the balance was $255,577.

    Total interest expense incurred to related parties (see notes 4 and 7) under
    notes payable and capital leases amounted to $17,898 and $3,757 in 2000 and
    1999, respectively.

    The aggregate maturities of lines of credit and notes payable by year are as
    follows:

          Fiscal Year
          ----------------------------------------
              2001                                               $460,125
              2002                                                246,127
              2003                                                 97,284
                                                                 --------
          Total                                                   803,536
                                                                 --------

          Current installments                                    460,125
                                                                 --------

          Long-term notes payable, excluding
           current installments                                  $343,411
                                                                 --------


(8) INCOME TAXES

    On June 9, 2000, the Company converted from an S corporation to a C
    corporation and, thus, became subject to the U.S. corporate federal income
    tax.  Prior to this time, the Company was treated as a pass-through entity
    under Sub-chapter S of the Internal Revenue Code.

    The Texas franchise tax is equal to the greater of (1) 0.25% of the
    corporation's net taxable capital and (2) 4.5% of the corporation's net
    taxable earned surplus.  Net taxable earned surplus is based on federal
    taxable income, subject to certain adjustments.  The total computed Texas
    franchise tax is an income tax to the extent that the tax exceeds the
    capital-based tax in a given year.

    Income tax (benefit)/expense for the years ended December 31, 2000 and 1999
    differed from the amount computed by applying the U.S. federal income tax
    rate of 34% to profit/(loss) before taxes as a result of the following:

<TABLE>
<CAPTION>
                                                              2000                   1999
                                                       -----------------      -----------------
<S>                                                  <C>                      <C>
Computed "expected" tax expense                           $(1,297,637)            $ 286,723
State income tax expense, net of federal benefit              (62,143)               37,197
Amortization of goodwill                                    1,010,896                     0
Benefit of Subchapter S-election                             (453,606)             (286,723)
Conversion from Subchapter S to C                             (41,878)                    0
Benefit of lower tax bracket                                  (19,626)                    0
Other                                                          27,440                   159
                                                          -----------             ---------
Total income tax expense (benefit)                        $  (836,554)            $  37,356
                                                          ===========             =========
</TABLE>

   The tax effects of temporary differences that give rise to significant
   portions of the deferred tax assets and deferred tax liabilities, related
   substantially to federal income taxes, at December 31, 2000 and December 31,
   1999 include:

                                       35
<PAGE>

<TABLE>
<CAPTION>
                                                              2000                   1999
                                                       -----------------      -----------------
<S>                                                    <C>                    <C>
Accrual to cash adjustment under Section 481(a)            $ 60,848                $18,621
Allowance for doubtful accounts                               9,144                      -
Non-qualified tock compensation                             832,348                      -
Plant and equipment, principally due to
 Differences in depreciation                                (39,101)                (1,674)
                                                           --------                -------
Net deferred tax asset                                     $863,239                $16,947
                                                           ========                =======
</TABLE>

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some or all of the deferred tax
     assets will not be realized. The ultimate realization of deferred tax
     assets is dependent upon the generation of future taxable income of
     approximately $2.4 million during the periods in which those temporary
     differences become deductible. Management considers the scheduled reversal
     of deferred tax liabilities, projected future taxable income and tax
     planning strategies in making this assessment. Based upon the level of
     historical taxable income and projections for future taxable income over
     the periods which the deferred tax assets are deductible, management
     believes it is more likely than not the Company will realize the benefits
     of these deductible differences at December 31, 2000. The amount of the
     deferred tax asset considered realizable, however, could be reduced in the
     near term if estimates of future taxable income during the carryforward
     period are reduced.

(9)  SEGMENT INFORMATION

     SFAS No. 131, Disclosures About Segments of an Enterprise and Related
     Information, establishes standards for reporting information regarding
     operating segments in annual financial statements and requires selected
     information for those segments to be presented in interim financial reports
     issued to stockholders. Operating segments are identified as components of
     an enterprise about which separate discrete financial information is
     available for evaluation by the chief operating decision maker, or
     decision-making group, in deciding how to allocate resources and assess
     performance.

     The Company's chief operating decision-maker, as defined under SFAS No.
     131, is the chief executive officer. As a result of the Merger, the Company
     is now organized along two lines of business, telecommunications services
     and oil and gas exploration and production. Telecommunications services
     provides internet protocol bandwidth capacity to a number of major domestic
     and international carriers and IP providers desiring to employ the benefits
     of Voice over Internet Protocol (VoIP) technology and networking. Oil and
     gas exploration and production consists of Zydeco Exploration, Inc.
     (Zydeco) and it has been engaged in the exploration of oil and gas
     utilizing advanced three-dimensional seismic and computer-aided exploration
     techniques. Because of market conditions, Zydeco's operations were
     curtailed prior to the Merger and it had focused its efforts on (1)
     conserving cash resources; (2) concentrating on marketing salable assets;
     and (3) seeking alternate sources of capital for possible drilling
     participation and general working capital, including potential business
     combinations outside of the oil and gas industry. The Company is
     considering its alternatives with respect to the operations of Zydeco.
     Zydeco's revenues and net loss for the period from the Merger date to
     December 31, 2000 are insignificant and Zydeco's total assets were
     $2,331,777 at December 31, 2000.

(10) STOCK OPTION PLANS

     In March 2000, DataVoN adopted a stock option plan (the Plan) which was
     assumed by the Company under the terms of the Merger.  Under the Plan, the
     Company may grant to officers, directors, consultants and key employees
     options to purchase shares of the Company's common stock for an exercise
     price of not less than 85% of the fair value of the common stock at the
     date of grant.

                                       36
<PAGE>

     In December, 2000, the Company adopted a stock option and restricted stock
     plan pursuant to which the Company's Board of Directors may grant shares of
     the Company's common stock that are subject to certain terms and
     restrictions and options to purchase shares of the Company's common stock
     to officers, directors, consultants and key employees. Stock options are
     granted with an exercise price equal to the fair market value of the common
     stock at the date of the grant.

     As of December 31, 2000, there were 5,817,500 shares available for grant
     under the two incentive compensation programs. The per share weighted-
     average fair value of stock options granted during 2000 was $598,870 using
     the Black-Shoals option pricing model with the following assumptions:
     dividend yield-0%, expected volatility-20% and risk-free interest rate-5%
     and an expected option term of ten years.

     Stock option transactions during 1999 and 2000 were as follows:

<TABLE>
<CAPTION>
                                                    Weighted
                                                    Average
                                        Number      Exercise
                                      Of Options     Price
                                      -----------   --------
<S>                                   <C>           <C>
   Outstanding December 31, 1999               0
   Exercised                                   0
   Granted                             4,254,959        $.61
   Forfeited                            (550,030)       $.49
                                       ---------        ----

   Outstanding December 31, 2000       3,704,929        $.63
                                       =========        ====
</TABLE>

   The following table summarizes certain information about the Company's stock
   options at December 31, 2000:

                              Options Outstanding
                              -------------------
<TABLE>
<CAPTION>

Range of Average      Number of    Weighted Average Remaining    Weighted Exercise
Exercise Prices        Options    Contractual Life Outstanding         Price
-------------------   ---------   ----------------------------   -----------------
<S>                   <C>         <C>                            <C>
   $.00 - $.50        2,122,429               9.28                     $.48
   $.51 - $1.50       1,582,500               9.98                     $.81
</TABLE>

   No options were exercisable as of December 31, 2000.

   The Company applies Accounting Principles Board Opinion No. 25, "Accounting
   for Stock Issued to Employees" in accounting for the program.  If
   compensation cost for the Company's program had been determined consistent
   with SFAS 123, the Company's net loss and loss per share on a pro forma
   basis for 2000 would have been as follows:


   Year Ended December 31,                     2000

   Net Loss
      As reported                       ($2,985,117)
      Pro forma                         ($3,583,987)
   Basic and diluted loss per share
      As reported                            ($0.06)
   Pro forma                                 ($0.05)

   There was no SFAS 123 impact for the year ended December 31, 1999.

                                       37
<PAGE>

(11) CONTINGENCIES

     In a complaint filed on December 9, 1999 in the District Court of Tarrant
     County in the State of Texas (the "Court"), Teton Enterprises brought suit
     against DataVoN and Hugh D. Simpson. The complaint alleges that DataVoN
     owes the plaintiff, a former sales person doing business under a corporate
     name, certain commissions pursuant to a contract entered into between the
     parties. DataVoN has countersued the plaintiff for amounts owed by the
     plaintiff to DataVoN. The litigation was set for trial in July of 2001, but
     was recently taken off that trial setting until further notice from the
     Court. The Court has informed all parties to the litigation that the new
     setting may be either in August or September, 2001. Extensive discovery has
     been exchanged by both parties and summary judgements are pending before
     the Court, which are scheduled to be heard on April 3, 2001. No
     determination of the outcome is possible at this time. The plaintiff
     alleges maximum economic damages in the amount of approximately $4.0
     million, which is contradictory to the disclosures made by plaintiff
     regarding calculation of economic damages pled. DataVon alleges in its
     counterclaim, among other claims pled, that the plaintiff owes DataVon in
     excess of $200,000, which DataVon disclosures clearly confirm such
     calculation of economic damages pled. Management of DataVoN can make no
     assurances as to the outcome of such litigation or the effects it will have
     on the business of DataVoN or its financial condition; however, DataVon is
     confident that a ruling on the pending summary judgment motions will more
     clearly define any disputes between the parties. The defendants will
     continue to defend the action vigorously.

     In February 2001, Cheniere Energy, Inc. submitted an issue to the American
     Arbitration Association. The issue does not appear to have been previously
     arbitrated and to be covered by the exploration agreement between the
     Company and Cheniere Energy, Inc. which expires in May 2001. The
     arbitration is in its very early stages, and no determination of the
     outcome, or if such arbitration is appropriate under the exploration
     agreement, is possible at this time.

(12) PURCHASED TECHNOLOGY

     Other assets include 3D seismic imaging technology that is being amortized
     over 16 years.  The balance at December 31, 2000 of $635,508 is net of
     amortization of $32,586.

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

     In December, 1999, the Company decided to replace Arthur Andersen LLP
("Andersen") as its independent accountants to audit its financial statements
for economic reasons.  Andersen's reports on the Company's financial statements
for the fiscal year ended 1999 and 1998 did not contain any adverse opinion or
disclaimer of opinion; however, the report included in the 1998 Form 10-K was
modified to disclose uncertainties regarding the Company's ability to continue
as a growing concern.  The decision to change accountants was approved by the
Company's Board of Directors on December 31, 1999.  During the Company's fiscal
years ended 1999 and 1998

                                       38
<PAGE>

and any subsequent interim period foreseeing the change in accountants, there
were no disagreements with Andersen on any matter of accounting principals or
practices, financial statement disclosure, or auditing scope or procedure. The
decision to change accountants was based on comparative costs of the audit
services provided by Andersen and its replacement, the firm of Hein + Associates
LLP ("Hein"). The Company requested that Andersen furnish it with a letter
addressed to the U.S. Securities and Exchange Commission (the "SEC") stating
whether it agrees with the above statements. A copy of that letter was filed
with the SEC.

     The Company engaged Hein to serve as the Company's independent accountants
as of January 21, 2000.  At the time of its engagement, Hein had not been
consulted during the fiscal years ended 1999 or 1998 or any subsequent interim
period on any matters relating to accounting principals or a specific
transaction, either completed or proposed.

     Effective August 4, 2000, the Company dismissed Hein as the Company's
independent accountants.  None of the reports of Hein on the financial
statements during the past fiscal year contained an adverse opinion or
disclaimer of opinion, or was qualified or modified as to uncertainty, audit
scope, or accounting principals.  During the Company's engagement of Hein, there
were no disagreements with Hein on any matter of accounting principals or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to Hein's satisfaction would have caused Hein to
make reference to the subject matter of the disagreement in connection with this
report.  The Company requested that Hein furnish a letter addressed to the SEC
stating whether it agrees with the above statements.  A copy of that letter was
filed with the SEC.

     On August 4, 2000, the Company engaged KPMG LLP ("KPMG"), to serve as the
Company's independent accountant in future periods.  Prior to August 4, 2000,
KPMG had served as the independent auditor for DataVoN.  Except for consultation
with matters related to DataVoN, during the Company's fiscal years ended 1999
and 1998 and the subsequent interim preceding this engagement of KPMG, neither
the Company nor anyone on its behalf has consulted with KPMG regarding the
application or accounting principals to a specific or contemplated transaction,
or the type of audit opinion that might be rendered on the Company's financial
statements, and no written or oral advice was provided to the Company that was a
fact of considered by the Company in reaching the decision as to any accounting,
auditing, or financial reporting issue.

     The Company's release of Hein and engagement of KPMG was approved and
ratified by the Company's Board of Directors.

                                       39
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

       The information required by this item will be contained under the caption
"Election of Directors" in the Company's Proxy Statement to be distributed in
connection with its 2001 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 10.  EXECUTIVE COMPENSATION

     The information required by this item will be contained under the caption
"Executive Compensation" in the Company's Proxy Statement to be distributed in
connection with its 2001 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item will be contained under the caption
"Stock Ownership " in the Company's Proxy Statement to be distributed in
connection with its 2001 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item will be contained under the caption
"Certain Relationships" in the Company's Proxy Statement to be distributed in
connection with its 2001 Annual Meeting of Stockholders and is incorporated
herein by reference.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<TABLE>
<CAPTION>
     EXHIBIT NO.                                       DESCRIPTION
     -----------                                       -----------
<C>                     <S>
         3.1            Certificate of Incorporation and Certificates of Amendment thereto
                        (incorporated by reference to the Company's Annual Report on Form 10-K
                        for the year ended December 31, 1995).

         3.2            Certificate of Amendment to Certificate of Incorporation, dated December
                        21, 2000 (incorporated by reference to Form 8-K (File No. 0-22076) filed
                        with the SEC on December 21, 2000).

</TABLE>
                                       40
<PAGE>

<TABLE>
<S>                     <C>
         3.3            Amended and Restated Bylaws (incorporated by reference to the Company's
                        Quarterly Report on Form 10-QSB for the quarterly period ended September
                        30, 2000).

         3.4            Certificate of Designations of Series A Convertible Preferred Stock of
                        the Company (incorporated by reference to Form 8-K (File No. 0-22076)
                        filed with the SEC on June 19, 2000).

        10.1            Form of Warrant Agreement by and among Zydeco Energy, Inc. and Brean
                        Murray & Co., Inc. (incorporated by reference to Registration Statement
                        on Form S-1 (Reg. No. 333-27679)).

        10.2            Agreement and Plan of Merger among Zydeco Energy, Inc., DVN Acquisition
                        Corporation, and DataVoN Inc. dated as of May 23, 2000 (incorporated by
                        reference to Form 8-K (File No. 0-22076) filed with the SEC on May 24,
                        2000).

        10.3            2000 Stock Option Plan (formerly known as DataVoN Inc. 2000 Stock Option
                        Plan) (incorporated by reference to Registration Statement on Form S-8
                        (Reg. No. 333-41492) filed with the SEC on July 14, 2000).

        10.4            2000 Stock Option and Restricted Stock Plan (incorporated by reference
                        to Registration Statement on Form S-8 (Reg. No. 333-53348) filed with
                        the SEC on January 8, 2001).

        16.1            Letters on Change in Certifying Accountant (incorporated by reference to
                        Form 8-K (File No. 0-22076) filed with the SEC on February 2, 2000 and
                        August 8, 2000).

       21.1*            Subsidiaries of the Company.

       23.1*            Consent of KPMG LLP.
</TABLE>

          * Filed herewith.

(b) REPORTS ON FORM 8-K

         On October 10, 2000, the Company filed a Report on Form 8-K pursuant
    to Item 5 disclosing the appointment of additional members of its Board of
    Directors.

         On December 22, 2000, the Company filed a Report on Form 8-K pursuant
    to Item 5 disclosing stockholder approval of amendments to the Company's
    Certificate of Incorporation to change the name of the Company and increase
    the number of authorized shares of the Common Stock and the adoption and
    stock approval of the Company's 2000 Stock Option and Restricted Stock Plan.
    Such Report on Form 8-K also disclosed the

                                       41
<PAGE>

    automatic conversion of the outstanding shares of Series A Preferred Stock
    into shares of Common Stock as a result of the amendment to the Company's
    Certificate of Incorporation to increase the number of authorized shares of
    Common Stock.

                                       42
<PAGE>

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

                               By  /s/ Hugh D. Simpson
                                   -------------------
                                   Hugh D. Simpson
                                   President and Chief Executive Officer
                                   Date:  March 26, 2001

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

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

/s/ Hugh D. Simpson       President, Chief Executive Officer,        March 26, 2001
------------------------  and Chairman of the Board
Hugh D. Simpson           (Principal Executive Officer)

/s/ Marcia C. Kennedy     Chief Financial Officer and Director       March 26, 2001
------------------------  (Principal Accounting Officer)
Marcia C. Kennedy


------------------------  Director
Amar Budarapu


/s/ Robert E. Conn        Director                                   March 26, 2001
------------------------
Robert E. Conn


/s/ David G. Olson        Director                                   March 26, 2001
------------------------
David G. Olson


/s/ G. Edward Powell      Director                                   March 26, 2001
------------------------
G. Edward Powell

                          Director
------------------------
Robert A. Veschi
</TABLE>

                                       43
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT NO.                                         DESCRIPTION
     -----------                                         -----------
<C>                      <S>
         3.1             Certificate of Incorporation and Certificates of Amendment thereto
                         (incorporated by reference to the Company's Annual Report on Form 10-K for
                         the year ended December 31, 1995).

         3.2             Certificate of Amendment to Certificate of Incorporation, dated December
                         21, 2000 (incorporated by reference to Form 8-K (File No. 0-22076) filed
                         with the SEC on December 21, 2000).

         3.3             Amended and Restated Bylaws (incorporated by reference to the Company's
                         Quarterly Report on Form 10-QSB for the quarterly period ended September
                         30, 2000).

         3.4             Certificate of Designations of Series A Convertible Preferred Stock of the
                         Company (incorporated by reference to Form 8-K (File No. 0-22076) filed
                         with the SEC on June 19, 2000).

        10.1             Form of Warrant Agreement by and among Zydeco Energy, Inc. and Brean Murray
                         & Co., Inc. (incorporated by reference to Registration Statement on Form
                         S-1 (Reg. No. 333-27679)).

        10.2             Agreement and Plan of Merger among Zydeco Energy, Inc., DVN Acquisition
                         Corporation, and DataVoN Inc. dated as of May 23, 2000 (incorporated by
                         reference to Form 8-K (File No. 0-22076) filed with the SEC on May 24,
                         2000).

        10.3             2000 Stock Option Plan (formerly known as DataVoN Inc. 2000 Stock Option
                         Plan) (incorporated by reference to Registration Statement on Form S-8
                         (Reg. No. 333-41492) filed with the SEC on July 14, 2000).

        10.4             2000 Stock Option and Restricted Stock Plan (incorporated by reference to
                         Registration Statement on Form S-8 (Reg. No. 333-53348) filed with the SEC
                         on January 8, 2001).

        16.1             Letters on Change in Certifying Accountant (incorporated by reference to
                         Form 8-K (File No. 0-22076) filed with the SEC on February 2, 2000 and
                         August 8, 2000).

       21.1*             Subsidiaries of the Company.

       23.1*             Consent of KPMG LLP.
</TABLE>

     * Filed herewith.

                                       44