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

                                 FORM 10-KSB
(Mark One)
 [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the fiscal year ended September 30, 2000

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

                For the transition period from _____. to ___..__

                      Commission File Number: 000-26740

                         AMERICAN HEALTHCHOICE, INC.
                (Name of small business issuer in its charter)

            New York                                      11-2931252
   (State or other jurisdiction             I.R.S. Employer Identification No.)
 of incorporation or organization

 1300 W. Walnut Hill Lane, Suite 275 Irving, Texas           75038
     (Address of principal executive offices)              (Zip Code)

                Issuer's telephone number: (972) 751-1900

        Securities registered pursuant to Section 12(b) of the Act:
      Title of each class           Name of each exchange on which registered
              None                                     None

         Securities registered pursuant to Section 12(g) of the Act:

                   COMMON STOCK, PAR VALUE $.001 PER SHARE
                               (Title of class)

      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.
                                  Yes [X]  No [ ]

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

      State issuer's revenues for its most recent fiscal year: $3,674,000

      State the aggregate market  value of the  voting and non-voting  common
 equity held by non-affiliates  computed by reference to  the price at  which
 the common equity  was sold, or  the average bid  and asked  prices  of such
 common equity,  as  of  a specified  date  within  the past  60  days.  (See
 definition of affiliate in Rule 12b-2 of the Exchange Act). $1,200,000 as of
 December 31, 2000*.
<PAGE>

                        (ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDINGS DURING THE PAST FIVE YEARS)

      Check whether the issuer has filed  all documents and reports  required
 to be  filed by  Section 12,  13 or  15(d)  of the  Exchange Act  after  the
 distribution of securities under a plan confirmed by a court. Yes [X] No [ ]

                  (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
 State the number of  shares outstanding of each  of the issuer's classes  of
 common equity, as of the latest practicable date:
 As of December 31, 2000, the Registrant had 80,559,259 shares outstanding
 of common stock.

 *    Based on  the  last  reported  price  of an  actual  transaction  in
      Registrant's common  stock  on  December  31,  2000 and  reports  of
      beneficial ownership filed  by directors  and executive  officers of
      Registrant  and  by  beneficial  owners  of  more  than  5%  of  the
      outstanding shares  of  common stock  of  Registrant; however,  such
      determination of shares owned  by affiliates does not  constitute an
      admission of affiliate  status or beneficial  interest in  shares of
      Registrant's common stock.


                    DOCUMENTS INCORPORATED BY REFERENCE
                                   None

                  Transitional Small Business Disclosure
                            Format (Check one)
                             Yes [ ]      No [X]

<PAGE>


                      AMERICAN HEALTHCHOICE, INC.

                              FORM 10-KSB

                           TABLE OF CONTENTS

                                                                       Page
                                                                       ----
                                 PART I

 Item 1.   Description of Business..................................    1

 Item 2.   Description of Property..................................    7

 Item 3.   Legal Proceedings........................................    8

 Item 4.   Submission of Matters to a Vote of Security Holders......    8



                                PART II

 Item 5.   Market for Common Equity and Related Stockholder Matters     9

 Item 6.   Management's Discussion and Analysis or Plan of Operation   10

 Item 7.   Financial Statements.....................................   13

 Item 8.   Changes In and Disagreements with Accountants
             on Accounting and Financial Disclosure.................   31



                                   PART III

 Item 9.   Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the
             Exchange Act...........................................   32

 Item 10.  Executive Compensation...................................   35

 Item 11.  Security Ownership of Certain Beneficial
             Owners and Management..................................   38

 Item 12.  Certain Relationships and Related Transactions...........   39

 Item 13.  Exhibits and Reports on Form 8-K.........................   40

 Signatures.........................................................   43

<PAGE>


                                 PART I


 ITEM 1. DESCRIPTION OF BUSINESS


 History

      American HealthChoice, Inc., a New  York corporation formerly known  as
 Paudan,  Inc.  (together   with  its  subsidiaries,   the  "Company"),   was
 incorporated on September 14, 1988 and was initially formed with the  intent
 of acquiring a  suitable business that  management determined had  potential
 for future growth.   Until March  1995 the Company  had no  operations.   On
 March 31,  1995, the  Company underwent  a comprehensive  reorganization  by
 acquiring American  HealthChoice, Inc.,  a Delaware  corporation  ("American
 HealthChoice (DE)"), formed  in 1993 to  organize and  acquire primary  care
 clinics and  to  provide,  on an  ongoing  basis,  comprehensive  management
 services.   At  the time  of  this transaction  American  HealthChoice  (DE)
 operated six clinics  which provided medical,  chiropractic, diagnostic  and
 physical therapy  services in  Texas and  Louisiana.   The Company  acquired
 American  HealthChoice  (DE)  in  a  reverse  acquisition  in  exchange  for
 4,962,000 shares  of  the Company's  $0.001  par  value  common  stock.   In
 connection  with   the   reorganization,  the   stockholders   of   American
 HealthChoice (DE) acquired 91.6 % of the voting shares  of the Company.  The
 Company changed its name  from Paudan, Inc.  to American HealthChoice,  Inc.
 during fiscal year 1995.


 General

      The Company owns, operates  and manages thirteen  clinics.  Twelve  are
 primary care  clinics,  of  which  two  are  medical  clinics  and  ten  are
 chiropractic clinics.  The Company also  has a physical therapy  facility at
 its largest  chiropractic clinic.   The  clinics are  located in  Texas  and
 Louisiana.  The  clinic locations are  leased except for  one clinic  in San
 Antonio.  See Item 2 "Description of  Property."  At September 30, 2000  the
 Company had a total of 65 employees.  Of this number 8  were employed by the
 Company's medical  clinics,  49 by  the  chiropractic and  physical  therapy
 clinics, and 8 at the Company's corporate office.

      All key  employee/providers  serve  pursuant  to  employment  contracts
 covering compensation, benefits,  terms of  one year  or more  and, in  some
 cases, agreements  not to  compete upon  termination.   All compensation  is
 based  upon  fixed  salaries  as  set  forth  in  employment  contracts  for
 identifiable services.  Some of these employee/providers are eligible for  a
 bonus; however,  bonuses are  tied directly  to the  employee's  performance
 within the clinic and are not based on referrals.

      The Company  depends  upon  third party  payors  for  reimbursement  of
 approximately 95%  of patient  services.   The  Company believes  that  this
 percentage is comparable to other organizations providing comparable patient
 services.  The Company receives reimbursement for medical services from many
 managed care companies  including Health  Maintenance Organizations  (HMOs),
 Preferred Provider Organizations (PPOs), other health  care plans, and to  a
 lesser extent  from Medicare  and Medicaid.    A substantial  percentage  of
 reimbursements for services are received from patient insurance  settlements
 administered by attorneys representing patients with third party claims.
<PAGE>

      The address of the Company's principal office is 1300 West Walnut  Hill
 Lane, Suite  275, Irving,  Texas 75038.  The Company's  telephone number  is
 (972) 751-1900 and its fax number is (972) 751-1901.
 Business Strategy

      Current Profitability.  The Company  achieved profitability  in  fiscal
 2000 as a  result of actions  initiated in 1998  and completed in  September
 2000.  In January of 2000 the Company completed the sale of the last of  the
 Georgia clinics acquired in  1996.  Losses sustained  at these clinics  were
 the primary reason  for substantial  operating losses  reported by  American
 HealthChoice in fiscal years  1997, 1998 and 1999.   In September 2000,  the
 Company acquired three established  chiropractic clinics with gross  patient
 revenue of  approximately $4,000,000  and earnings  before interest,  taxes,
 depreciation and amortization ("EBITDA") of approximately $1,400,000 for the
 twelve months ended  December 31, 1999.   Lastly,  management has  continued
 steps begun  in1998 to  increase profitability  at existing  clinics and  to
 reduce corporate overhead.

      Growth.  Over the past two years, the profit margins on personal injury
 and workers compensation  services have  proven to  be significantly  higher
 than those for services provided  to patients under managed care  contracts.
 The 1999 favorable court ruling effecting telemarketing in Texas has allowed
 the Company  to increase  the number  of patients  at the  existing  clinics
 requiring these  types of  services.   The Company  plans to  acquire  other
 established clinics in Texas from individual doctors, who provide these same
 services.   The  Company  will only  consider  acquiring  clinics  that  are
 profitable and  cash  flow  positive.   In  this  regard,  the  Company  has
 developed  an  acquisition   model  that   requires  the   seller  to   meet
 predetermined cash flow  targets over a  three-year period before  receiving
 100% of the purchase price.


 Primary Sources of Company Revenue

      The  Company  derives  its  revenue  from  several  different  sources,
 including managed care plans  e.g. HMOs, PPOs, Medicaid/Medicare,  indemnity
 plans, insurance  settlements from  third party  payors and  self-pay.   The
 company strives to diversify its patient base and hence its revenue  sources
 so that any one clinic is not dependent upon one source of revenue.  In  the
 past, this has caused problems for the Company from loss of Medicaid claims,
 change in marketing laws, and clinics  dependent on one doctor.  To  correct
 these problems,  the Company  has made  concerted efforts  to diversify  its
 patient base  at  each  clinic.    Where  the  patient  base  could  not  be
 diversified and  was  incurring ongoing  losses,  the Company  divested  the
 clinic through sale or closure.  The Company now believes each clinic is not
 as susceptible  to changes  in a  particular revenue  source.   The  primary
 sources of revenue for the Company are as follows:
<PAGE>

      Patient Insurance  Settlements.   The  Company's  chiropractic  clinics
 derive a significant portion of their revenue from insurance settlements  to
 injured patients treated by  the clinic.  The  medical clinics receive  some
 revenue from patient insurance settlements but are not necessarily dependent
 on these types of settlements.  Typically, a patient seeks treatment from  a
 clinic based on  representations by  his/her attorney  or insurance  company
 that payment for  treating the patient  will be forthcoming  upon proof  the
 patient is entitled to  the patient's medical  claims.  The  representations
 are usually in the form of a Letter of Protection (LOP) or a Personal Injury
 Payment (PIP) from the patient/insured's insurance  policy.  Based on  these
 representations, the clinic will treat the patient without requiring payment
 at the time services are rendered.

      Due to the nature  of proving and documenting  the patient claims,  the
 patient's medical bill may not  be paid  at the time services  are rendered.
 The delay in  payment is  usually under one  year but  can be  significantly
 extended past one  year if the  attorney and insurance  company go to  trial
 over the patient's claims.  Upon  an agreement to pay the patient's  claims,
 the clinic is then paid.

      Since many insurance settlements are a compromise between the insurance
 company and the patient,  often the Company must  take a lesser amount  than
 the original fees for services rendered.  In some instances, if the  patient
 is under a LOP and their attorney decides not to pursue the claim, then  the
 clinic may have to write the account off as bad debt.  The Company  believes
 that accounts  receivable  from  patient settlements  have  been  adequately
 reserved to account  for the reduced  collections.   See Item  6-"Management
 Discussion and Analysis or Plan of Operation."

      Health Plans.  These plans traditionally market health benefit coverage
 to employer groups,  who provide such  benefits to their  employees such  as
 HMOs or PPOs or other health care plans.  Employees can usually enroll their
 spouses and dependents as well.   Many times employers  will pay for all  or
 nearly all of the cost of covering the employee through a health plan.  Some
 employers will pay for all of  the cost of dependent coverage, while  others
 require the employee to pay for some or all of dependent coverage.

      Currently,  the  Company  contracts  with  a  number  of  managed  care
 companies to provide patient care for  the employees who enroll under  their
 health  care  plans.    All  of  the  Company's  medical  clinics  derive  a
 significant amount of revenue from these plans.  Under many of these  plans,
 the clinics' agree to accept  predetermined fees for corresponding  services
 rendered.  None of the medical clinics are dependent on any one plan because
 each clinic has patients enrolled in a variety of plans.

      Once services are rendered to the patient, the clinic generates a  bill
 for the patient and his/her insurance company.  The patient usually makes  a
 nominal co-payment and then  the clinic files the  remaining claim with  the
 applicable insurance company.  Payments  from the insurance company  usually
 take less than thirty days.  Due to patient registration procedures and  set
 fees predetermined by  the insurance company,  the Company  can predict  the
 revenue earned for  the services  rendered.   If the  clinic's service  fees
 exceed the amounts set by the insurance companies, then the excess amount is
 either paid by the patient or written off as bad debt.

<PAGE>
      If the provider, usually a physician, is not enrolled (credentialed) in
 the managed care plan, then the plan may not pay for the services  performed
 for  their  patient.    If  a  particular  clinic  experiences  turnover  of
 physicians, it must get the new provider (physician) credentialed with  each
 patient's plan.  This process takes time, and in the interim, the clinic may
 treat the  patient  for no  charge  as a  courtesy  until the  new  provider
 (physician) receives credentials from the various plans.

      Medicare/Medicaid.   The federal  government, through  the Health  Care
 Financing  Administration  ("HCFA"),  allows  federally  qualified   medical
 organizations to  enter  into  agreements to  provide  all  covered  medical
 services to  Medicare/Medicaid beneficiaries  who choose  to enroll  in  the
 program.  None  of the Company's  clinics are solely  dependent on  payments
 from Medicare/Medicaid, nor does any one clinic derive a material portion of
 its revenue from Medicare/Medicaid.

      Self-pay.  All of the Company's clinics involve some level of self-pay.
  Self-pay is simply that the patient is responsible for payment at the  time
 the services are rendered.  The amount of self-paying patients varies widely
 depending on the specifics of a clinic, its location, and the patient  base.


 Chiropractic Services

      The Company currently owns and  operates ten primary care  chiropractic
 clinics,  which  are  located  in  suburban  areas  and  serve  the  general
 population for their  surrounding communities.   The services  are based  on
 preventative treatment and treatment of the nerve system and body structure,
 such as  the  spinal  column.   Most  of  the chiropractic  clinics  have  a
 chiropractor that is complemented with the appropriate support staff.

      The Company's  patient base  is developed  through its  reputation  for
 quality treatment, patient  referrals, printed  advertisements, and  special
 promotion such as open houses, circulars, community participation, etc.  The
 Company obtains significant referrals  due to its  willingness to work  with
 patients and their insurance company or attorney to provide treatment during
 the pendency of the patient's injury settlement.

      Chiropractic service  is a  highly competitive  business in  which  the
 Company competes with  numerous chiropractors  in the  same suburban  areas.
 Most, if not  all of the  Company's competition comes  from privately  owned
 chiropractic clinics, usually owned by the treating doctor.

      In recent years, there have been significant changes in the health care
 industry affecting chiropractic  services.   Pressures to  reduce costs  and
 show profits  has forced  some managed  care plans  to exclude  chiropractic
 treatment or institute procedures that can  discourage a patient to  utilize
 their health care plan.  Additionally, in September 1997 the State of  Texas
 implemented new regulations that govern marketing of medical services.   The
 Company adjusted its marketing efforts to ensure compliance with the changes
 in  the  new  marketing  laws.     Specifically,  the  Company  ceased   its
 telemarketing efforts and  strengthened its audit  procedures to  ensure any
 new patient referrals meet  the requirements of the  new law.  Citing  First
 Amendment protection  of  commercial  speech, the  United  States  Court  of
 Appeals, 5th Circuit, ruled  in September 1999 that  the 1997 amendments  to
 the Texas  statutes,  which  prohibited  direct  telemarketing  of  accident
 victims, were unconstitutional.  The Company has reestablished telemarketing
 procedures at its  Texas clinics and  expects an increase  in the number  of
 patients seeking treatment.
<PAGE>

      The marketing services offered  by the Company  are designed to  assist
 the clinics  in developing  a patient  base through  promoting the  clinics'
 services.  The  Company provides advice  and assistance to  the clinics  for
 marketing and  advertising.   The Company  believes that  marketing  must be
 integrated into all aspects of the  clinic operations including finance  and
 office administration.  The Company's patient base is developed through  its
 reputation for quality treatment, patient referrals, printed advertisements,
 and special promotion  such as  discounts, free  initial examinations,  open
 houses, circulars,  community  participation,  etc.    The  Company  obtains
 significant referrals due to its willingness to work with patients and their
 insurance company or attorney  to provide treatment  during the pendency  of
 the patient's injury  settlement.   As a  result, the  Company believes  the
 total management of the clinics provides  the economies of scale to  develop
 the clinic and provides the best use of these services, therefore, giving it
 a competitive advantage over a privately owned clinic.

      Although the Company believes that the services and benefits it  offers
 to providers make  the Company an  attractive purchaser  of such  practices,
 there can  be  no  assurance  that  the Company  will  be  able  to  compete
 effectively with competitors on terms beneficial to the Company.


 Medical Services

      The Company owns and operates two primary care medical clinics  located
 in San Antonio.   The patient  source for the  Southcross clinic comes  from
 people familiar  with  the  clinic's location,  the  provider's  reputation,
 managed care plans,  commercial contracts, referrals  from attorneys,  other
 providers, and  general advertising.   The  San  Pedro clinic  services  are
 almost exclusively  personal  injury  and  worker  compensation  cases.  The
 patient  source  for   this  clinic  comes   from  attorney  referrals   and
 chiropractic clinics, including company owned clinics in San Antonio.


 Government Regulation

      As a participant in the health care industry, the Company's  operations
 are  subject  to  extensive  and  increasing  regulation  by  a  number   of
 governmental entities at the federal, state  and local levels.  The  Company
 is also subject to laws and regulations relating to business corporations in
 general.  The  Company believes its  operations are  in material  compliance
 with applicable  laws.    Nevertheless, because  of  the  structure  of  the
 Company's relationship  with physicians  and clinics,  many aspects  of  the
 Company's business operations have not been the subject of state or  federal
 regulatory interpretation and there can be no assurance that the health care
 regulatory environment  will  not change  so  as to  restrict  or  otherwise
 adversely affect  the  Company's  or  the  affiliated  physician's  existing
 operations or possible expansion.

      The laws  of many  states prohibit  business corporations  such as  the
 Company from  practicing  medicine  and  employing  physicians  to  practice
 medicine.  The Company performs services that do not impose any requirements
 that would violate  the ethics  applicable to  the practice  of medicine  or
 violate any law.  The laws  in most states regarding the corporate  practice
 of  medicine  have  been  subjected  to  limited  judicial  and   regulatory
 interpretation and, therefore, no assurance can be given that the  Company's
 activities will be found to be in compliance, if challenged.
<PAGE>

      In addition to  prohibiting the practice  of medicine, numerous  states
 prohibit entities  like the  Company from  engaging in  certain health  care
 related activities  such as  fee-splitting with  physicians.   For  example,
 Florida enacted its Patient  Self-Referral Act in  April 1992 that  severely
 restricts patient  referrals for  certain  services, prohibits  mark-ups  of
 certain procedures, requires disclosure of ownership in businesses to  which
 patients are referred and places other regulations on health care providers.
 The Company  believes it  is likely  that other  states will  adopt  similar
 legislation.   Accordingly,  expansion  of  the  Company's  operations  into
 Florida and  other  states  could  lead  to  structural  and  organizational
 modifications of the Company's form of relationships with physician  groups.
 Such changes, if any, could have an adverse effect on the Company.

      Certain provisions of the Social Security Act, commonly referred to  as
 the "Anti-Kickback Statute," prohibit  the offer, payment, solicitation,  or
 receipt of any form of remuneration  in return for the referral of  Medicare
 state health program patients  or patient care  opportunities, or in  return
 for the recommendation, arrangement,  purchase, lease or  order of items  or
 services that are covered by Medicare  or state health programs.  The  Anti-
 Kickback Statute  is broad  in scope  and has  been broadly  interpreted  by
 courts in many jurisdictions.   Read literally, the  statute places at  risk
 many  legitimate   business   arrangements,  potentially   subjecting   such
 arrangements to lengthy, expensive investigations and prosecutions initiated
 by federal  and state  governmental officials.    Many states  have  adopted
 similar prohibitions  against  payments  intended  to  induce  referrals  of
 Medicaid and other third party payor patients.  The Company believes that it
 is not  in a  position to  make or  influence the  referral of  patients  of
 services reimbursed under government programs  to the physician groups  and,
 therefore, believes its operations do not violate the Anti-Kickback Statute.

      In July 1991, in part to  address concerns regarding the  Anti-Kickback
 Statute,  the  federal   government  published   regulations  that   provide
 exceptions, or "safe harbors," for transactions  that will be deemed not  to
 violate the Anti-Kickback Statute.  Among  the safe harbors included in  the
 regulations were provisions relating to the sale of practitioner  practices,
 management and personal  services  agreements,  and  employee relationships.
 Additional safe  harbors  were  published in  September  1993  offering  new
 protections under the Anti-Kickback  Statute to eight activities,  including
 referrals within group practices consisting of active investors.  The  Anti-
 Kickback statute  was amended  in 1996  to simply  exclude all  risk-sharing
 arrangements from the  scope of  the statute. In  July 1998,  the Office  of
 Inspector General  ("OIG")  issued  a  final  rule  establishing  a  process
 allowing entities to obtain formal guidance regarding the application of the
 Anti-Kickback statute, the safe harbor provisions, and other OIG health care
 fraud and abuse sanctions.  The Company does not believe it is in  violation
 of the Anti-Kickback Statute, even though  its operations do not fit  within
 any of the existing  or proposed safe harbors.   To help ensure  compliance,
 the Company owns its clinics and contractually sets forth terms of  provider
 (employee) compensation,  severely  limits  its  providers'  investment  and
 ownership in related companies, and prohibits referrals for compensation.
<PAGE>

      Significant prohibitions against  physician referrals  were enacted  by
 Congress  in  the   Omnibus  Budget  Reconciliation   Act  of  1993.   These
 prohibitions,  commonly  known  as  "Stark  II,"  amended  prior   physician
 self-referral legislation know  as "Stark I"  by dramatically enlarging  the
 field of  physician owned  or physician  interested  entities to  which  the
 referral prohibitions apply.  Effective January 1, 1995, Stark II prohibits,
 subject to certain  exemptions, a  physician or  a member  of his  immediate
 family from referring Medicare or Medicaid  patients to an entity  providing
 "designated health  services" in  which the  physician has  an ownership  or
 investment interest,  or  with  which  the  physician  has  entered  into  a
 compensation arrangement including the physician's own group practice.   The
 designated health services include radiology and other diagnostic  services,
 radiation therapy  services:  physical and  occupational  therapy  services,
 durable medical equipment, parenteral and enteral nutrients, equipment,  and
 supplies, prosthetics, orthotics, outpatient prescription drugs, home health
 services, and inpatient and outpatient hospital services. The penalties  for
 violating Stark  II include  a prohibition  on payment  by these  government
 programs and  civil penalties  of  as much  as  $15,000 for  each  violative
 referral and $100,000 for  participation in a  "circumvention scheme."   The
 Company believes that  its activities  are not in  violation of  Stark I  or
 Stark II because it  has no referral relationships  for the small amount  of
 Medicaid/Medicare work  that is  does.   However, the  Stark legislation  is
 broad and ambiguous and interpretative regulations clarifying the provisions
 of Stark II  have not  been issued.   While the  Company believes  it is  in
 compliance with the Stark legislation, future regulations could require  the
 Company to modify the form of its relationships with physicians and clinics.

      There are also state and federal  civil and criminal statutes  imposing
 substantial penalties, including civil and criminal fines and  imprisonment,
 on health care providers which fraudulently or wrongfully bill  governmental
 or other  third party  payors for  health care  services.   The federal  law
 prohibiting false billings allows a private  person to bring a civil  action
 in the name of the United States government for violations of its provision.
 The  Company believes it is in material compliance with such laws, but there
 is no assurance  that the  Company's activities  will not  be challenged  or
 scrutinized by governmental authorities.   Moreover, technical Medicare  and
 other  reimbursement  rules  affect  the  structure  of  physician   billing
 arrangements.  The Company believes it  is in material compliance with  such
 regulations, although regulatory  authorities may differ  and in such  event
 the Company may have to modify its relationship with physicians and clinics.
 Noncompliance with such  regulations may adversely  affect the operation  of
 the Company and subject it to penalties and additional costs.

      Laws in all states regulate the business of insurance and the operation
 of HMOs.   Many  states also  regulate the  establishment and  operation  of
 networks of health care providers.  While these laws do not generally  apply
 to the hiring and contracting of  physicians by other health care  providers
 or to companies which participate in capitated arrangements, there can be no
 assurance that regulatory  authorities of the  states in  which the  Company
 operates would not apply  these laws to require  licensure of the  Company's
 operations as an insurer, as an HMO or  as a provider network.  The  Company
 believes that it is in compliance with these laws in the states in which  it
 does business, but there can be no assurance that future interpretations  of
 insurance laws and health care network laws by the regulatory authorities in
 these states or in  the states into  which the Company  may expand will  not
 require licensure  or  a restructuring  of  some  or all  of  the  Company's
 operations.
<PAGE>


 Recent Developments

      The  Company  acquired  three   established  chiropractic  clinics   in
 September 2000.  Management is currently  in the process of integrating  the
 operations of these  clinics.  Steps  taken include the  appointment of  the
 former owner of the acquired clinics to act as liaison for all marketing and
 patient development  efforts at  the Texas  clinics.   This individual  will
 report  to  the  president  of  American  HealthChoice  and  work  with  the
 individual clinic doctors.  In addition, the corporate financial group is in
 the process  of implementing  financial  reporting and  accounts  receivable
 collection procedures at the clinics.

      The Company has recently negotiated new employment agreements with  the
 president and CEO, the  chief financial officer and  the clinic director  of
 one of its largest chiropractic clinics.  These agreements include incentive
 bonuses directly tied to  the Company achieving  projected EBITDA in  fiscal
 2001 and  in future  years.   Management continues  to focus  on  maximizing
 clinic profitability and controlling expenses.


 ITEM 2. DESCRIPTION OF PROPERTY

      The Company  leases  approximately  3,500  square  feet  in  an  office
 building in Irving, Texas at a monthly rent $6,500 for use as its  principal
 headquarters.  The Company currently owns  a parcel of land in San  Antonio,
 Texas, on which the Company's Southcross clinic is located.

      The Company owns, operates  and manages thirteen  clinics.  Twelve  are
 primary care  clinics,  of  which  two  are  medical  clinics  and  ten  are
 chiropractic clinics.  The Company also  has a physical therapy facility  at
 its largest chiropractic  clinic.  The  following table  lists the  clinics,
 locations, monthly rents, services provided, and date acquired or  commenced
 operation by the Company.

<PAGE>
<TABLE>

Clinics in Operation  Location         Monthly      Services      Date Acquired
 in Fiscal 2000                        Rent         Provided
--------------------  ---------------  -------  ----------------- --------------
<S>                   <C>             <C>       <C>               <C>
United Chiropractic   Katy, TX         $3,600   Chiropractic &    October 1994
 Clinic                                         physical therapy

United Chiropractic   San Antonio, TX  $2,300   Chiropractic &    July 1994
 Clinic (Wurzbach)                              physical therapy

United Chiropractic   San Antonio, TX  $1,000   Chiropractic &    October 1994
 Clinic (San Pedro)                             physical therapy

Atlas Sports &        San Antonio, TX  $1,000   Physical therapy  October 1994
 Injury (Bandera)

United Chiropractic   San Antonio, TX  $2,000   Chiropractic      October 1994
 Clinic (Bandera)

San Pedro Medical     San Antonio, TX  $1,100   Primary medical   October 1994
  Clinic                                        care

Southcross Medical    San Antonio, TX  $2,000   Urgent & primary  December 1995
 Clinic                                         medical care

United Chiropractic   New Orleans, LA  $1,600   Chiropractic      July 1994
 (New Orleans East)

United Chiropractic   New Orleans, LA  $1,200   Chiropractic      July 1994
 (Uptown)

Peachtree Medical     Conyers, GA     returned  Urgent & primary  February 1996
 Center of Conyers**                            medical care

Peachtree Medical     McDonough, GA    sold     Primary medical   February 1996
Center of McDonough*                            care

Valley Family         McAllen, TX      $3,000   Chiropractic      January 1996
 Health Center

Valley Family         San Benito, TX     $900   Chiropractic      September 2000
 Health Center

Crosstown             Corpus Christi,  $1,000   Chiropractic      September 2000
 Chiropractic Clinic   TX

Laredo Family         Laredo, TX       $3,900   Chiropractic      September 2000
 Health Clinic
                                       ------
Total rent                            $24,600
                                       ======

 *    Clinic sold in January 2000.
 **   Clinic returned to previous owner in October 1999.
</TABLE>
<PAGE>

 ITEM 3. LEGAL PROCEEDINGS

 One former doctor and two physicians' assistants who worked at the Norcross,
 Georgia clinic have filed a law suit  naming the Company  as  a codefendant.
 The one doctor  and one  of the physician  assistants worked  at the  clinic
 prior to the Company purchasing the clinic.  The other physicians' assistant
 left the  clinic within  one year  of  the Company's  purchase.   The  claim
 alleges a right to the account  receivable for patients the doctors  treated
 at the clinic that were collected  after the doctors' employment ended  with
 the  clinic.  The  Company denies any liability  and intends to cross  claim
 against the  former managing  doctor  of the  clinic.  The case  was:  Susan
 Johnson, Gilberto Martorell, and Henry Heard v. American HealthChoice, Inc.,
 dba Peachtree  Corners Medical  Center, and  Malcolm  Dulock, filed  in  the
 Superior Court  of Gwinnett  County, Georgia.   The  Plan of  Reorganization
 approved the  United States  Bankruptcy Court  in  August 2000,  allows  the
 plaintiffs to pursue  their claim with  the Company's malpractice  insurance
 carrier with no further obligation on the part of American HealthChoice.

 A person claiming  to have performed  certain services in  formation of  the
 Company has sued claiming he is due a larger percentage of the Company stock
 than what he received.  The Company was served notice on March 29, 1998  and
 has retained a law firm to seek a  dismissal or in the alternative a  change
 of venue.   The case is Stewart v. American HealthChoice, Inc. filed in  the
 United States District Court, Middle District  of Florida,  Tampa  Division.
 The case  has been  transferred to  the United  States Bankruptcy  Court  in
 Dallas, Texas.  A trial is scheduled in January 2001.

 The Company was  engaged in  litigation filed on  February 23,  1998 with  a
 former landlord at a location where  the Company closed a clinic for  breach
 of lease.   The Company answered  and counter claimed  against landlord  for
 landlord's failure to  perform under the  agreement.  The  case is:  Assist,
 Inc., v. American HealthChoice, Inc., filed  in State District Court,  285th
 Judicial District, Bexar  County, Texas.   The claim was  disallowed by  the
 United States Bankruptcy Court.

 The Company was engaged  in litigation with an  equipment lessor.  The  suit
 was filed October 14, 1998.  The  plaintiff alleged that the Company is  the
 guarantor for a  company called Corrective  Vision Center that  went out  of
 business.   The  case was:  Advanta  Business Services  Corp.,  v.  American
 HealthChoice, Inc., filed in the County Civil Court of Harris County at  Law
 No. 4, Harris County, Texas.  Advanta won a decision for the full amount  of
 the suit at a summary judgement hearing on January 20, 1999.  The  plaintiff
 failed to file a claim with the Bankruptcy Court and is barred from  further
 action.

 The Company was served a complaint on December 7, 1999 alleging  unspecified
 damages arising from an alleged contract  breach concerning the purchase  of
 the McAllen Texas clinic in 1996.  The  case was filed in the 16th  District
 Court, of  Denton  County,  Texas.    In  connection  with  the  Chapter  11
 Bankruptcy, the  case was  transferred to  the Bankruptcy  Court in  Dallas,
 Texas.   The case  is scheduled  for trial  in January  2001.   The  Company
 believes the Bankruptcy  Court will dismiss  the case  for several  reasons,
 including the fact that the plaintiff failed to file a claim in the  Chapter
 11 Bankruptcy.
<PAGE>

 On October 19, 1999,  American HealthChoice, Inc.,  the parent company,  and
 AHC Physicians  Corporation,  Inc.,  a  subsidiary  that  owns  the  Georgia
 clinics, filed  Chapter  11  Bankruptcy Petitions  with  the  United  States
 Bankruptcy Court, Northern District of Texas, Dallas Division (Case No.  99-
 37314).   A  Plan  of  Reorganization  was  approve  by  the  United  States
 Bankruptcy Court on  August 8,  2000 and  became effective  on September  9,
 2000.

 The Company has been named in  other litigation. In Management's  judgement,
 the matters do not involve material amounts of exposure for the Company.


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

      No matter was  submitted to  a vote  of security  holders, through  the
 solicitation of proxies or otherwise, during the quarter ended September 30,
 2000.

                                PART II



 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Market Information.   During the quarter  ended December  31, 1998  the
 Company's common stock was  listed on The Nasdaq  SmallCap Market under  the
 symbol "AHIC".  The common stock was delisted by The  Nasdaq Stock Market on
 December 1, 1998.  From December 3, 1998 to the present, the common has been
 quoted on the OTC Bulletin Board under the symbol "AHIC".

 The following table presents the high and low bid prices for each quarter:

                  Quarter Ended            High Bid    Low Bid
                  ------------------       --------   --------
                  December 31, 1998         $0.063     $0.0156
                  March 31, 1999            $0.0625    $0.0156
                  June 30, 1999             $0.2969    $0.0312
                  September 30, 1999        $0.0938    $0.0156
                  December 31, 1999         $0.0469    $0.0156
                  March 31, 2000            $0.5156    $0.0156
                  June 30, 2000             $0.2344    $0.0938
                  September 30, 2000        $0.1562    $0.0469


      Holders.   Based  on information  provided  by the  Company's  transfer
 agent, the Company  had approximately 100  holders of record  of its  common
 stock at September 30, 2000.

      Dividends.  The Company has paid no cash dividends since its inception,
 and it is unlikely that any cash dividend will  be paid in the future.   The
 declaration in the  future of any  cash or stock  dividends will  be at  the
 discretion of the  Board depending upon  the earnings, capital  requirements
 and financial position of the Company, general economic conditions and other
 pertinent factors.  There  are no dividend restrictions  in any creditor  or
 other agreement to which the Company is a party.
<PAGE>


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

 Results of Operations

<TABLE>
      The following summary of earnings and related discussion of the results
 of operations should be read in conjunction with the Company's  Consolidated
 Financial Statements and Notes thereto included elsewhere in this document.

                                             Years Ended September 30,

                                        1998          1999          2000
                                     ----------    ----------    ----------
   <S>                              <C>           <C>           <C>
   Net Patient Revenues             $ 7,226,000   $ 4,809,000   $ 3,674,000
   Operating Expenses:
     Compensation and benefits        6,009,000     3,771,000     2,238,000
     Allowance for doubtful accounts
      at closed clinics                       -     1,848,000             -
     General and administrative       2,716,000     1,517,000       817,000
     Rent                               880,000       430,000       282,000
     Other                              248,000       170,000       247,000
                                     ----------    ----------    ----------
         Total Operating Expenses     9,853,000     7,736,000     3,584,000

   Other Income (Expense):
     Interest expense and other
       costs of borrowing              (732,000)     (611,000)      (12,000)
     Other income (expense), net       (419,000)      693,000       115,000
                                     ----------    ----------    ----------
         Total Other Income          (1,151,000)       83,000       103,000
                                     ----------    ----------    ----------
   Income (Loss) Before
     Income Taxes                   $(3,778,000)  $(2,844,000)  $   193,000
                                     ==========    ==========    ==========
</TABLE>


 Fiscal Ended September 30, 2000 Compared to Fiscal Ended September 30, 1999

      Net Patient Revenues.   For the fiscal year  ended September 30,  2000,
 net patient revenues decreased from $4,809,000  for the same period in  1999
 to $3,674,000  in  2000.   Approximately  $1,326,000  of  the  decrease  was
 attributable to  net patient  revenue for  the sold  Georgia clinics.    Net
 patient revenue at  clinics operated in  both periods  increased $20,000  in
 2000 compared  to  1999.    Net patient  revenue  for  clinics  acquired  in
 September 2000 was $171,000.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 2000, compensation  and  benefits  decreased  from  $3,771,000  in  1999  to
 $2,238,000  in  2000.    Approximately   $1,175,000  of  the  decrease   was
 attributable to compensation  and benefits  for  the sold  Georgia  clinics.
 Approximately $413,000 of the decrease was due to fewer clinic employees and
 salary reductions taken by clinic physicians and executive officers in 2000.
 Compensation  and benefits for  the clinics acquired  in September 2000  was
 $55,000.
<PAGE>

      General and Administrative.   For the fiscal  year ended September  30,
 2000, general and administrative expense  decreased from $1,517,000 in  1999
 to  $817,000  in  2000.    Approximately   $554,000  of  the  decrease   was
 attributable to general and administrative  expenses for the closed  Georgia
 clinics.  An increase in marketing  expense of $150,000 in 2000 compared  to
 1999 was offset by a $338,000  decrease in other general and  administrative
 expenses at clinics operated in both  periods and  at the corporate  office.
 General and administrative  expense for  the clinics  acquired in  September
 2000 was $42,000.

      Rent.  For  the fiscal year  ended September 30,  2000, rent  decreased
 $148,000 from $430,000 in 1999 to $282,000 in 2000.  Approximately  $144,000
 of the decrease was attributable to rent for the closed Georgia clinics.

      Other Operating  Expenses.   For the  fiscal year  ended September  30,
 2000, other operating expenses included $102,000 of reorganization  expenses
 and $145,000 of  depreciation and amortization.   For  1999 other  operating
 expenses included $170,000 of depreciation and amortization.

      Other Income and Expense.  Other income in 2000 included a $36,000 gain
 related to the sale of the  Georgia clinics and $79,000 in debt  forgiveness
 in connection  with the  Chapter 11  Bankruptcy.   Other income  in 1999  of
 $693,000 is  attributable to  a $272,000  gain  recognized on  the  Norcross
 clinic sale in February  1999 and a $485,000  gain on expiration of  options
 and warrants  during the  fiscal  year.   Interest  expense other  costs  of
 borrowing decreased from $611,000 in 1999 to $12,000 in 2000 as a result  of
 the cessation  of  accrued  interest  on  the  $3,385,000  principal  amount
 debentures on October 19,1999.


 Fiscal Year Ended September 30, 1999 Compared to Fiscal Year Ended September
 30, 1998

      Net Patient Revenues.   For the fiscal year  ended September 30,  1999,
 net patient revenues decreased from $7,226,000  for the same period in  1998
 to  $4,809,000  in  1999.  The decrease was a result  of the closure or sale
 of five  clinics  in fiscal 1998  and  the  sale  of  the  Norcross  clinic.
 Approximately $1,800,000 of  the decrease  is attributable  to the  Norcross
 clinic sale as of December 31, 1998.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 1999, compensation  and  benefits  decreased  from  $6,009,000  in  1998  to
 $3,771,000 in 1999.  The decrease, which exceeded the comparable  percentage
 decrease in revenues, was due primarily  to personnel reductions related  to
 closure of unprofitable clinics in fiscal 1998 and the sale of the  Norcross
 clinic.  Approximately  $1,500,000 of the  decrease is  attributable to  the
 Norcross clinic sale as of December 31, 1998.

      Allowance for Doubtful Accounts at Closed Clinics.  The Company  closed
 five clinics in fiscal 1998 and established allowances for doubtful accounts
 at September 30, 1998 based on  historical collection experience.   However,
 actual collections during the  twelve months ended  September 30, 1999  have
 been less than projected.  The $1,848,000 additional allowance reflects this
 shortfall in collections on accounts receivable at these closed clinics and,
 in addition, less than anticipated collections of certain one-year and older
 accounts receivable for the Norcross clinic.
<PAGE>

      General and Administrative.   For the fiscal  year ended September  30,
 1999, general and administrative expense  decreased from $2,716,000 in  1998
 to  $1,517,000  in   1999.  Approximately  $350,000   of  the  decrease   is
 attributable to  the  Norcross clinic  sale  as  of December  31,  1998  and
 approximately $200,000 is attributable to reduced marketing and advertising.
 The remainder of the decrease is due to overall reductions in administrative
 expenses including legal and travel.

      Rent.  For  the fiscal year  ended September 30,  1999, rent  decreased
 $450,000 from $880,000 in 1998 to $430,000 in 1999.  The decrease was due to
 clinic closures and the sale of the Norcross clinic.

      Other Income  and  Expense.    Other income  in  1999  of  $693,000  is
 attributable to a $272,000  gain recognized on the  Norcross clinic sale  in
 February 1999 and  a $485,000  gain on  expiration of  options and  warrants
 during the  fiscal  year.   Other  expense of  $419,000  in fiscal  1998  is
 primarily attributable  to  establishment  of a  100%  reserve  for  a  note
 receivable in the amount of $225,000 related to the Company's investment  in
 an eye clinic.

 Liquidity and Capital Resources

      For the  fiscal  year  ended  September 30,  2000,  net  cash  used  in
 operating activities was  $123,000 as compared  to $662,000  for the  twelve
 months ended September  30, 1999.   The decrease of  $539,000 was  primarily
 attributable to  the  improvement  in  operating  results  from  a  loss  of
 $2,844,000 in 1999 to a profit of $193,000 in 2000.

      Net cash used by investing activities for the year ended September  30,
 2000, of  $696,000 was  primarily attributable  to  the purchase  of  clinic
 assets in September 2000.  Net cash provided by investing activities for the
 year ended September 30, 1999 is primarily attributable to proceeds from the
 sale of clinic assets and was used to fund operating activities.

      Net cash provided by financing activities for the year ended  September
 30, 2000 was $830,000,  resulting primarily from  $925,000 in proceeds  from
 notes payable. Net cash provided by financing activities for the year  ended
 September 30,  1999  was  $141,000  resulting  primarily  from  $287,000  in
 proceeds from notes payable and was used to fund operating activities.

      Based on continuing operating profit from clinics in operation for  the
 entire year of  fiscal 2000 and  incremental profit from  the three  clinics
 acquired in September 2000, the Company anticipates that cash from operating
 activities will be sufficient  to fund the  bankruptcy claim obligations  of
 $500,000 due  in the  next twelve  months  and anticipated  working  capital
 requirements.

      The Company  may acquire  additional established  clinics in  the  next
 twelve months.  Funding for these acquisitions will be a combination of cash
 and new issue  common stock.   Management does not  anticipate any  material
 capital expenditures requiring cash in the next twelve months.


 Year 2000 Issue

 All of the  Company's critical operating  and accounting  systems were  Year
 2000 compliant by  December 31, 1999.   The  Company incurred  approximately
 $20,000 for new equipment to meet all Year 2000 requirements.
<PAGE>


 Forward-Looking Information

      This report contains certain forward-looking statements and information
 relating to  the Company  that are  based on  the beliefs  of the  Company's
 management  as  well  as  assumptions  made  by  and  information  currently
 available to the Company's management. When  used in the report, words  such
 as "anticipate," "believe,"  "estimate," "expect,"  "intend," "should,"  and
 similar expressions,  as  they relate  to  the Company  or  its  management,
 identify forward-looking statements.   Such statements  reflect the  current
 views of  the Company  with respect  to  future events  and are  subject  to
 certain risks, uncertainties,  and assumptions relating  to the  operations,
 results of  operations,  liquidity,  and growth  strategy  of  the  Company,
 including competitive factors  and pricing pressures,  changes in legal  and
 regulatory requirements, interest  rate fluctuations,  and general  economic
 conditions, as well as other factors  described in this report.  Should  one
 or more of  the risks materialize,  or should  underlying assumptions  prove
 incorrect, actual  results  or  outcomes  may  vary  materially  from  those
 described herein as anticipated, believed, estimated, expected, or intended.
<PAGE>


 ITEM 7. FINANCIAL STATEMENTS

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES


                                    INDEX


                                                                  Page
                                                                  ----
 FINANCIAL STATEMENTS:


 Independent Auditors Report                                       14


 Consolidated Balance Sheet - September 30, 2000                   15


 Consolidated Statements of Operations - Years Ended               16
      September 30, 1999 and 2000


 Consolidated Statement of Stockholders' Equity - Years            17
      Ended September 30, 1999 and 2000


 Consolidated Statements of Cash Flows - Years Ended               18
      September 30, 1999 and 2000


 Notes to Consolidated Financial Statements                        19


<PAGE>


                      INDEPENDENT AUDITORS REPORT



 To the Board of Directors
 American HealthChoice, Inc. and subsidiaries


 We have  audited the  accompanying consolidated  balance sheet  of  American
 HealthChoice, Inc.  and  subsidiaries as  of  September 30,  2000,  and  the
 related consolidated  statements of  operations, stockholders'  equity,  and
 cash flows for each of the two years in the period ended September 30, 2000.
 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  audit 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  financial statements.    An  audit  also  includes
 assessing the accounting principles used  and significant estimates made  by
 management,  as  well   as  evaluating  the   overall  financial   statement
 presentation.  We believe that our audits provide a reasonable basis for our
 opinion.

 In our  opinion, the  consolidated financial  statements referred  to  above
 present  fairly,  in  all  material  respects,  the  consolidated  financial
 position of American HealthChoice, Inc. and subsidiaries as of September 30,
 2000, and the results of their operations  and their cash flows for each  of
 the two years in the period ended September 30, 2000 year in conformity with
 accounting principles generally accepted in the United States of America.


 Lane Gorman Trubitt, L.L.P.
 Dallas, Texas
 January 5, 2001

<PAGE>
<TABLE>
                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET
                              SEPTEMBER 30, 2000


                                 ASSETS

 <S>                                                      <C>
 Current Assets:
 Cash                                                     $        40,701
 Accounts receivable, less allowance for doubtful
   of $7,733,745                                                7,430,581
 Advances and notes receivable                                     74,822
 Other current assets                                              34,763
                                                           --------------
      Total current assets                                      7,580,867

 Property and equipment, net                                      468,477
 Goodwill, net                                                  3,817,666
 Other assets                                                     242,613
                                                           --------------
      Total assets                                        $    12,109,623
                                                           ==============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:
 Current portion of capital lease obligations             $        53,365
 Current bankruptcy claims                                        446,800
 Accrued payroll and payroll taxes                                171,993
 Accounts payable and accrued expenses                            200,122
                                                           --------------
      Total current liabilities                                   872,280

 Convertible debentures                                         3,697,000
 Notes payable                                                    907,500
 Long-term bankruptcy claims                                      761,250
 Capital lease obligations, less current portion                   12,500
                                                           --------------
      Total liabilities                                         6,250,530

 Commitments                                                            _

 Stockholders' Equity:
 Preferred stock, $.001 par value; 5,000,000
   shares authorized; none issued                                       -
 Common stock, $.001 par value; 115,000,000 shares
   authorized; 71,144,259 shares issued and outstanding            71,144
 Options to acquire common stock                                  200,104
 Additional paid-in capital                                    18,645,290
 Accumulated deficit                                          (13,057,445)
                                                           --------------
      Total stockholders' equity                                5,859,093
                                                           --------------
      Total liabilities and stockholders' equity          $    12,109,623
                                                           ==============

      See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   Years Ended September 30,
                                                     1999            2000
                                                  ----------      ----------
 <S>                                             <C>             <C>
 Net Patient Revenues                            $ 4,808,559     $ 3,674,003

 Operating Expenses:
   Compensation and benefits                       3,770,514       2,238,643
   Allowance for doubtful accounts at              1,848,000               -
     closed clinics
   Depreciation and amortization                     170,348         144,674
   General and administrative                      1,517,158         817,155
   Reorganization                                          -         101,730
   Rent                                              429,601         282,150
                                                  ----------      ----------
      Total operating expenses                     7,735,621       3,584,352

 Other Income (Expense):
   Gain on sale of clinic                            272,350          36,508
   Interest expense and other costs of borrowing    (611,166)        (12,193)
   Other expense                                     (24,440)              -
   Other income                                      446,430          78,611
                                                  ----------      ----------
      Total other income (expenses)                   83,174         102,926
                                                  ----------      ----------
 Net Income (Loss)                               $(2,843,888)    $   192,577
                                                  ==========      ==========

 Basic and Diluted Net Income (Loss) Per        $     (0.12)     $      0.01


 Weighted Average Common Shares Outstanding       22,924,169      31,727,592


      See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>

                                                      AMERICAN HEALTHCHOICE, INC.
                                                           AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                           FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 2000




                                                                    Option to    Additional
                                                  Common Stock       Acquire      Paid-in     Accumulated
                                                Shares     Amount     Common       Capital      Deficit        Total
                                                                      Stock
                                              ----------   -------   --------    ----------   ----------     ----------
 <S>                                          <C>         <C>       <C>         <C>          <C>            <C>
 Balances at September 30,1998                14,519,632  $ 14,520  $ 685,664   $12,875,040  $(10,406,134)  $ 3,169,090

 Common stock issued in connection
   with debenture conversion                   1,826,825     1,826          -        79,974             -        81,800
 Common stock issued in connection
   with directors notes payable conversion     8,525,864     8,526          -       179,044             -       187,570
 Common stock issued in
   Connection with bridge loans                2,941,938     2,942          -       209,558             -       212,500
 Common stock issued in connection
   with consulting agreement                     250,000       250          -        12,250             -        12,500
 Common stock issued in connection
   with employment incentives                     80,000        80          -         7,424             -         7,504
 Gain recognized on expiration of
   Warrants and options                                -         -   (485,560)            -             -      (485,560)
 Net loss                                              -         -          -             -    (2,843,888)   (2,843,888)
                                              -------------------------------------------------------------------------
 Balances at September 30,1999                28,144,259    28,144    200,104    13,363,290   (13,250,022)      341,516
 Common stock issued in connection
   with clinic acquisitions                   34,000,000    34,000          -     5,066,000             -     5,100,000
 Common stock issued in connection
   with financing                              9,000,000     9,000          -       216,000             -       225,000
 Net income                                            -         -          -             -       192,577       192,577
                                              -------------------------------------------------------------------------
 Balances at September 30, 2000               71,144,259  $ 71,144   $200,104   $18,645,290  $(13,057,445)  $ 5,859,093
                                              =========================================================================


                                  See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>

                          AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                             Years Ended September 30,
                                                                1999            2000
                                                             ----------      ----------
 <S>                                                        <C>             <C>
 Cash Flows From Operating Activities:
 Net income (loss)                                          $(2,843,888)    $   192,577
 Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
   Allowance for doubtful accounts                            3,781,900       1,630,962
   Gain on disposition of clinic assets                        (272,350)        (36,508)
   Depreciation and amortization                                170,348         144,674
   Expensing of notes payable financing costs                   110,483               -
   Loss on disposal of equipment                                 44,413               -
   Stock transactions:
     Stock issued in connection with
       financing transactions                                   212,500               -
     Employee compensation-stock                                  7,504               -
     Consulting fees-stock                                       12,500               -
   Gain on expiration of options and warrants                  (485,560)              -

 Change in operating assets and liabilities, net:
   Accounts receivable-trade                                 (1,816,709)     (1,888,293)
   Other current assets                                         (26,262)          1,784
   Accounts payable and accrued expenses                        443,347        (167,822)
                                                             ----------      ----------
        Net cash used in operating activities                  (661,774)       (122,626)
  Cash Flows From Investing Activities:
   Repayments on advances and notes receivable                   98,696         125,000
   Property and equipment                                        (4,406)                 -
   Purchase of clinic assets                                          -        (900,000)
   Proceeds from sale of clinic assets                          285,000          79,430
                                                             ----------      ----------
        Net cash provided by (used in) investing activities     379,290        (695,570)
  Cash Flows From Financing Activities:
   Proceeds from notes payable                                  287,500         925,000
   Payments on notes payable and capital leases                (146,049)        (94,965)
                                                             ----------      ----------
        Net cash provided by financing activities               141,451         830,035
                                                             ----------      ----------
 Net Increase (Decrease) In Cash                               (141,033)         11,839
 Cash At Beginning Of Year                                      169,895          28,862
                                                             ----------      ----------
 Cash At End Of Year                                        $    28,862     $    40,701
                                                             ==========      ==========

<PAGE>
 Supplemental Disclosure Of Cash Flow Information:
   Interest paid                                            $    32,000     $     2,500

 Supplemental Disclosure Of Non-cash Transactions:
   Offset accounts payable against accounts receivable          236,600               -
   Issuance of stock as partial payment on notes
      payable to directors                                      187,570               -
   Offset notes payable against goodwill and accounts
     receivable                                                 252,959               -
   Conversion of debenture and accrued interest
     into stock                                                  55,594               -
   Debenture payment offset against proceeds from
     Norcross clinic sale                                       665,000               -
   Offset notes payable against accounts receivable,
     equipment and goodwill                                           -         289,534
   Issuance of stock in connection with financing
     activities                                                       -         225,000
   Issuance of stock in connection with purchase of
     clinic assets                                                    -       5,100,000
   Return of capital lease assets to lessor                           -          91,288
   Reclassify accrued interest to debentures                          -         312,000
   Reclassify capital leases and notes payable to
     bankruptcy claims                                                -         420,897
   Reclassify accounts payable and accrued expenses to
     bankruptcy claims                                                -         815,482
   Conversion of capital lease assets to operating leases             -          85,558



   See accompanying notes to these consolidated financial statements.
</TABLE>
<PAGE>



                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1. Organization and Summary of Significant Accounting Policies

 Organization - American  HealthChoice, Inc. and  Subsidiaries (the  Company)
 consists of  a  parent  company  and  thirteen  clinics  providing  medical,
 physical therapy, and chiropractic services in San Antonio, McAllen, Laredo,
 San Benito,  Corpus Christi and Houston,  Texas and New Orleans,  Louisiana.
 Substantially all of the Company's  revenues are derived from  chiropractic,
 physical therapy and medical services provided to individuals living in  the
 vicinity of the clinics.

 Consolidation Policy -  The accompanying  consolidated financial  statements
 include the accounts of the Company and its wholly-owned subsidiaries.   All
 material inter-company  accounts and  transactions have  been eliminated  in
 consolidation.

 Net Patient Revenues - Revenue is  recognized upon performance of  services.
 Substantially all of the Company's revenues are derived from personal injury
 claims and claims  filed on  major medical  policies, worker's  compensation
 policies, Medicare  or  Medicaid.   Allowances  for  discounts  on  services
 provided  are  recognized  in  the periods  the related  revenue is  earned.
 Allowances are  maintained at  levels considered  appropriate by  management
 based  upon  historical  charge-off  experience  and  other  factors  deemed
 pertinent by management.   Fiscal 2000 and 1999  net patient revenues; as  a
 percentage of  total  revenues,  for  medical  and  chiropractic,  including
 physical  therapy  services  amounted   to  18%  and   82%,  30%  and   70%,
 respectively.

 Cash Equivalents - For purposes of the statements of cash flows, the Company
 considers all highly liquid  debt instruments purchased  with a maturity  of
 three months or  less to  be cash equivalents.   The  Company maintains  its
 accounts at financial institutions located in Texas, Louisiana, and Georgia.
 The bank accounts are insured  by the Federal Deposit Insurance  Corporation
 up to $100,000.

 Capital Leases  -  The  assets and  related  obligations  for  property  and
 equipment under capital leases are initially recorded at an amount equal  to
 the present value of  future minimum lease payments.   Assets under  capital
 leases are  amortized over  the life  of the  lease or  useful life  of  the
 assets.   Interest  expense is  accrued  on  the basis  of  the  outstanding
 obligations under capital leases.

 Advertising Costs - The Company's policy is to expense all advertising costs
 in the period in which advertising  first takes place.  Advertising  expense
 was approximately $264,000 and  $117,000 for the  years ended September  30,
 2000 and 1999 respectively.

 Property and Equipment, net - Property and equipment are stated at cost less
 accumulated depreciation.    Depreciation  is provided  over  the  estimated
 useful lives of the related assets, primarily using straight-line methods.
<PAGE>

 Income taxes  -  The  Company accounts  for  income  taxes  under  Financial
 Accounting Standards Board (FASB) Statement No. 109, "Accounting for  Income
 Taxes." FASB  Statement  No. 109  requires  that deferred  income  taxes  be
 recorded on  a  liability  method  for  temporary  differences  between  the
 financial reporting and tax bases of a company's assets and liabilities,  as
 adjusted when new tax rates are enacted.

 Goodwill - Goodwill arose from the  Company's acquisitions of three  clinics
 in September 2000 and is being amortized using the straight-line method over
 10 years.  During 2000, goodwill  of approximately $130,000 was written  off
 as a part of disposing of or closing clinics.

 Recent   Accounting   Pronouncements   -   There   were   no   authoritative
 pronouncements adopted in the years ended  September 30, 2000 and 1999  that
 had a material effect on the Company's consolidated financial statements.

 The Financial Accounting Standards Board  has released FAS 138,  "Accounting
 for  Certain  Derivative  Instruments  and  Certain  Hedging  Activities"(An
 amendment of FASB Statement No. 133), FAS 139, "Recission of FASB  Statement
 No. 53 and amendments to FASB Statements No.  63, 89 and 121," and FAS  140,
 "Accounting  for   Transfers  and   Servicing   of  Financial   Assets   and
 Extinguishments of Liabilities"  (A replacement of FASB Statement  No. 125).
 The Company believes that the impact of these new standards will not have  a
 material effect on the Company's consolidated financial position, results of
 operations or disclosures.

 Use of  Estimates  -  In  preparing  the  Company's  consolidated  financial
 statements, management is  required to make  estimates and assumptions  that
 effect the amounts reported in  these financial statements and  accompanying
 notes.  Actual  results could  differ from  those estimates.   The  accounts
 receivable allowance is a significant estimate.

 Earnings per  Share  - Basic  earnings  per  share are  computed  using  the
 weighted-average number of common shares outstanding.  Diluted earnings  per
 share are  computed using  the  weighted-average common  shares  outstanding
 after giving effect to  potential common stock from  stock options based  on
 the treasury  stock  method,  plus  other  potentially  dilutive  securities
 outstanding.  If the result of assumed conversions is dilutive, net earnings
 are adjusted for  the interest expense  on the convertible  debt, while  the
 average shares of common stock outstanding are increased.

 The potentially dilutive securities held at September 30, 2000 and 1999 were
 convertible debentures  and stock  options.   For  1999  the effect  of  the
 assumed conversion of these  securities was anti dilutive  and for 2000  the
 effect was immaterial.


 2. Clinic Acquisitions

 On September  1, 2000,  the Company  acquired  for cash  and stock  all  the
 operating assets of three Texas chiropractic clinics located in Laredo,  San
 Benito and Corpus  Christi.  The  total acquisition cost  was $6,000,000  of
 which $900,000 was paid in cash and $5,100,000 was paid through the issuance
 of 34,000,000 shares of the Company's common stock.
<PAGE>

 The  Asset  Sale  and  Purchase  Agreement  (the  "Agreement")  states  that
 20,000,000 shares  from the  34,000,000 shares  issued  shall be  placed  in
 escrow for possible redemption by the  Company based on the Earnings  before
 Interest, Taxes, Depreciation and  Amortization ("EBITDA") for the  acquired
 clinics during the  two year period  commencing September 1,  2000.  If  the
 combined EBITDA of the acquired clinics for the year ended September 1, 2001
 does not reach  $1,500,000, the  Company shall have  the right  to redeem  a
 proportionate number of 10,000,000 shares based on the percentage difference
 between the actual EBITDA for the period and $1,500,000.  The Company  shall
 have the same right of redemption  based on an additional 10,000,000  shares
 for the year ended September 30, 2002.  In addition, the Agreement  provides
 for a purchase  adjustment if the  average daily closing  bid price for  the
 common stock of the Company is below $.15 per share for the 90 trading  days
 before September 1, 2001 and September  1, 2002.  A proportionate number  of
 additional shares  will be  issued for  the  difference between  the  actual
 average share bid price and $.15  based on 24,000,000 shares and  10,000,000
 at September 1, 2001 and September  1, 2002, respectively.  The  calculation
 of additional shares to be issued  shall be reduced for any shares  redeemed
 per the EBITDA adjustment.

 The acquisition has been  accounted for as  a purchase.   The excess of  the
 total acquisition cost  over the fair  value of the  net assets acquired  of
 $3,850,000  is  being amortized over ten  years by the straight-line method.
 The results of operations of the acquired clinics since the acquisition  are
 included in  the consolidated  financial statements.   Unaudited  pro  forma
 results of operations  for the eight  months ended August  31, 2000 and  the
 twelve months  ended December  31, 1999  as though  these clinics  had  been
 acquired as of January 1, 1999 follow:

                                  Twelve months ended     Eight months ended
                                   December 31, 1999        August 31, 2000
                                   -----------------        ---------------
      Net revenue                      6,999,000               4,172,000

      Net income (loss)               (1,734,000)                288,000

      Basic and diluted earnings
       (loss) per share                    (0.03)                   0.00

 The preceding  amounts reflect  adjustments  for amortization  of  goodwill,
 additional depreciation on  revalued purchased assets,  imputed interest  on
 borrowed funds and income taxes.
<PAGE>


 3. Reorganization

 On October 19, 1999,  American HealthChoice, Inc.,  the parent company,  and
 AHC Physicians  Corporation,  Inc.,  a  subsidiary  that  owns  the  Georgia
 clinics, filed  Chapter  11  Bankruptcy Petitions  with  the  United  States
 Bankruptcy Court, Northern District of Texas, Dallas Division (Case No.  99-
 37314).  The Company elected to file the petitions for two primary  reasons.
 First,  it was unable to restructure terms of the September 1997 and  August
 1998 Debenture  Agreements, which  would have  allowed  for new  funding  to
 acquire profitable  clinics.   Second, in  early October  1999, the  Company
 received an adverse  ruling on a  lawsuit.  The  Company filed a  Disclosure
 Statement and Plan of  Reorganization on February 16,  2000.  The  Company's
 Amended Joint  Disclosure  Statement  was  approved  by  the  United  States
 Bankruptcy Court on April 6, 2000 and subsequently distributed to  creditors
 and other parties in interest.  The Company's Amended Plan of Reorganization
 (the "Plan")was confirmed by the United States Bankruptcy Court on August 8,
 2000 and became effective September 9, 2000.

 An important provision of the Plan was the acquisition of three  established
 clinics with  expected  gross annual  revenue  of $4,000,000  and  projected
 EBITDA of approximately $1,200,000.  The  purchase price is $6,000,000  with
 $900,000 in cash and $2,100,000 in common stock at closing and the remainder
 of $3,000,000 in  common stock, which  will be held  in escrow until  annual
 cash flow targets are achieved over a two year period.  The acquisition  was
 completed on September 1, 2000.

 In addition, the  Plan allows  the holders  of the  August 1998  Convertible
 Debenture, who are  owed $3,385,000 face  amount, plus  accrued interest  of
 $312,000 as of October 19, 1999, to convert their debentures into 20,475,000
 shares of common stock over a three year period ending August 24, 2003.

 Certain capital lease assets were returned  to the lessor and other  capital
 leases were  converted  to  operating leases  as  part  of the  Plan.    The
 settlements with  these  lessors did  not  have  a material  effect  on  the
 financial position or operating results of  the Company.  Bankruptcy  claims
 of other  creditors and  certain  insiders in  the  amount of  $516,000  and
 $650,000,  respectively,  will  be  paid  in  full  in  three  equal  annual
 installments beginning September 2001.

 Shareholders of  the Company's  common stock  as of  October 19,  1999  will
 exchange shares issued before  the filing date for  an equivalent number  of
 new shares as approved in the Plan.

 The acquisition of the clinics in September 2000 and future working  capital
 requirements will be funded through an infusion of approximately  $1,000,000
 in new  capital.   The  debenture conversions  and  the acquisition  of  the
 clinics will increase the  number of outstanding shares  of common stock  to
 approximately 90 million.
<PAGE>


 4. Property and Equipment

 Property and equipment consists of the following:
                                                               September 30,
                                                 Useful Life       2000
                                                 -----------    ----------
      Land                                                 -   $   120,000
      Building and leasehold improvements         2-39 years        73,263
      Furniture and equipment, including
        equipment under capital leases            5-15 years       953,711
      Less accumulated depreciation and
        amortization                                              (678,497)
                                                                ----------
                                                               $   468,477
                                                                ==========
 The following is a summary of equipment
   under capital leases:
      Equipment                                                $   359,020
      Less accumulated amortization                               (328,095)
                                                                ----------
                                                               $    30,925
                                                                ==========

 Substantially all assets leased are pledged as collateral under the existing
 capital lease agreements.


 5. Clinic Divestitures

 On February 12, 1999,  the Company executed an  asset purchase agreement  to
 sell substantially  all  the assets  of  the Norcross,  Georgia  clinic  for
 $1,075,000; payable $950,000 in cash and a note for $125,000 due January 31,
 2000.   The  Company  used  $665,000  of the  cash  proceeds  to  redeem  8%
 Cumulative Convertible Debentures  issued September 1997  in a Regulation  S
 offering.  The book value of the assets sold was $802,650 as of December 31,
 1998 comprised of $227,750 in accounts receivable less than six months  old,
 $355,400 in inventory and equipment,  and $219,500 of un-amortized  goodwill
 attributable to the purchase  of the clinic in  1996.  The Company  retained
 $227,750 in accounts receivable  less than six months  old and all  accounts
 receivable older than six months.

 On December 3, 1999 an order was  entered by the Bankruptcy Court to  return
 the Conyers,  Georgia  clinic to  the  previous  owner in  settlement  of  a
 lawsuit.   In compliance  with  the order,  the  Company recorded  an  asset
 writeoff of accounts receivable and equipment of $125,000, and  un-amortized
 goodwill of $130,000.  In return, the previous owner agreed to  cancellation
 of a note  payable in  the amount of  $290,000.   As a  result, the  Company
 recognized a  gain on  disposition  of $35,000.  On  February 4,  2000,  the
 Bankruptcy Court approved the sale of the McDonough, Georgia clinic  assets,
 excluding accounts receivable, for a $67,500 cash payment.  The sales  price
 approximates the book value of the clinic equipment.

 The net revenue and  operating income (loss) from  the Georgia clinics  were
 approximately $234,000  and  $1,000  for fiscal  2000,  and  $1,336,000  and
 $(827,000) for 1999.
<PAGE>


 6. Advances and Notes Receivable

 In connection with  the sale of  the Norcross clinic  in  February 1999, the
 Company received a note in the amount of $125,000 due January 31, 2000.  The
 note was paid in full in February 2000.


 7. Notes Payable

                       Description                     9/30/1999    9/30/2000
                                                       ---------    ---------
  1. Demand notes payable to two directors in
     connection with the return of 158,765 shares
     of common stock.  Interest rate is 8%.           $  187,568   $        -

  2. Notes payable to physician in connection with
     the Metropolitan clinic acquisition.
     Collateral is accounts receivable and equipment.    313,699            -

  3. Bridge loans                                        212,500        7,500

  4. Note payable                                              -      900,000

     Other notes payable                                  12,647            -
                                                       ---------    ---------
                                                         726,414      907,500
     Current maturities                                 (726,414)           -
                                                       ---------    ---------
     Long-term notes payable                          $        -   $  907,500
                                                       =========    =========


    1. On  December  17,  1998,  the  president  and  CEO,  and  a  principal
       shareholder  and  board  member,  agreed  to  exchange  $132,012   and
       $55,558, respectively, of  notes payable for  6,000,523 and  2,525,341
       shares of common  stock, respectively.  The  market price at the  date
       of election  was  $0.022 per  share.    The principal  balance  as  of
       October 19,1999 in  the amount of $187,568  is included in  bankruptcy
       claims as of September 30, 2000.

    2. The note payable is to the physician, who was the former owner of  the
       Conyers Clinic, with a principal balance of $313,699  at September 30,
       1999.  The doctor filed  a lawsuit for nonpayment  in March 1999.   On
       December 3, 1999, the Bankruptcy  Court approved a settlement  whereby
       the clinic assets  were conveyed to the  physician in full  settlement
       of claims  against the Company.   The  principal balance  of the  note
       exceeded  the  book  value  of  the  clinic  assets  by  approximately
       $35,000.
<PAGE>

    3. From January to September 1999, certain officers and directors, and  a
       beneficial  owner of  more  than  5%  of  the  common  stock  advanced
       $287,5000 in  bridge loans in  anticipation of  the Company  obtaining
       new funding  to  complete an  acquisition of  profitable  chiropractic
       clinics in Texas.  The Company's  President and CEO made loans in  the
       principal amount of $80,000.   A beneficial owner  of more than 5%  of
       the common stock advanced $175,000 of the total amount.  See  Footnote
       8 "Related Party Transactions."   Three additional loans in the  total
       amount of $25,000  were made  by two directors  of the  Company.   The
       remaining loan  in  the amount  of $7,500  was  made by  an  unrelated
       party. Consideration for these loans  in the amount of $32,500  was an
       equivalent value in  common stock computed  using the  share price  on
       the date of  the loan.   In this  regard, the  Company issued  693,453
       restricted  common shares  at  share  prices ranging  from  $0.035  to
       $0.08.  The  principal balance for  related party bridge  loans  as of
       October 19, 1999 in the  amount of $205,000 is included in  bankruptcy
       claims as of September 30, 2000.

    4. The note payable is to an investment group, in which certain  officers
       and directors, and a  beneficial owner of more  than 5% of the  common
       stock have a financial  interest.  The note  bears interest  at 8% per
       annum and is  due August 31, 2002.   As additional consideration,  the
       investment group  was  issued 9,000,000  shares of  restricted  common
       stock with a fair  value of $0.025 per  share.  These financing  costs
       are in Other Assets as of  September 30, 2000 and are being  amortized
       over the  term of  the loan.   On  December 15,  2000, the  investment
       group provided  an additional  loan of  $50,000 and  received  500,000
       shares of common  stock as additional consideration.   See Footnote  8
       "Related Party Transactions."

 8. Related Party Transactions

 The President and Chief  Executive Officer of  the Company, provided  bridge
 loans between June and August 1999 in  the aggregate amount of $80,000.   As
 additional consideration for making the loans  in the amount  of $55,000, an
 equivalent value in common stock was issued, computed using the share  price
 on the  date of  the  loan.   In this  regard,  the Company  issued  598,485
 restricted  common  shares at  share prices  ranging from  $0.06  to  $0.11.
 Bridge  loans  to  related  parties  in  the  amount  of  $80,000   remained
 outstanding at September 30, 1999.
<PAGE>

 Mainstream Enterprises LLC ("Mainstream"), a  beneficial owner of more  than
 5% of the  outstanding stock  at September  30, 1999,  also provided  bridge
 loans to the Company between January  and July 1999 in the aggregate  amount
 of $175,000.   Mainstream first  loaned the  Company $25,000  on January  1,
 1999.  Consideration for this loan  was the forgiveness of a $5,069  monthly
 installment payment on a note receivable from Mainstream related to the sale
 of a clinic owned by the Company in  Brownsville, Texas in June 1998.   This
 loan was settled as of March 31, 1999 by an offset for equivalent amount due
 the Company for corporate office expenses.  Mainstream loaned the Company an
 additional $25,000 on April  8, 1999.  Consideration  for this loan was  the
 forgiveness of a $5,069 monthly installment  payment on the note  receivable
 for each month  the loan  remained outstanding.   This loan  was settled  on
 September 30, 1999  by an offset  to the note  receivable in  the amount  of
 $25,000 related to the sale  of a clinic to  Mainstream (see below) and  six
 monthly installment payments totaling $30,414.   Between April 30, 1999  and
 July 8  1999,  Mainstream  provided  six  additional  bridge  loans  in  the
 aggregate of $125,000.  As additional consideration for making these  loans,
 an equivalent value  in common stock  was issued, computed  using the  share
 price on the date of the loan.  In this regard, the Company issued 1,650,000
 restricted common  shares  at  share  prices  ranging from  $0.04 to  $0.10.
 Bridge loans to Mainstream in the amount of $100,000 remained outstanding at
 September 30, 1999.

 Between August 20 and 29, 1999,  Mainstream made advance principal  payments
 in the amount of $75,000 on the note  receivable related to the sale of  the
 Brownsville clinic.    Consideration  for these  advance  payments  was  the
 forgiveness of $75,000 in principal on the note receivable.

 On September 30, 1999, the Company sold a chiropractic clinic located in San
 Antonio, which had been  open for approximately  four months, to  Mainstream
 for $50,000.  The sales price approximated the value of accounts  receivable
 at September 30, 1999.  A bridge loan dated  April 8, 1999 in the amount  of
 $25,000 and a bridge loan dated May 25,  1999 in the amount of $25,000  were
 used as an offset to the sales price.

 Belair Capital Group, Ltd. ("Belair"),  a Nevada limited liability  company,
 is the  holder of  a $900,000  note payable  issued in  connection with  the
 acquisition of three clinics  in September 2000.   In addition, the  Company
 issued 9,000,000 shares of common stock to Belair as further  consideration.
 See Footnote 7 "Notes Payable" and  Footnote  2 "Clinic Acquisitions."   The
 note payable of $900,000  and the 9,000,000 shares  of common stock are  the
 sole assets  of Belair.   The  following shareholders  are also  members  of
 Belair: the president and CEO (45% member interest), a principal shareholder
 and board member  (14% member interest),  and the seller  of the clinics,  a
 beneficial owner of more than 5%  of the outstanding stock at September  30,
 2000 (28%  member  interest).  On December  15,  2000,  Belair  provided  an
 additional loan of $50,000  and received 500,000 shares  of common stock  as
 additional consideration.

 On October 1, 2000, the Company entered into new employment agreements  with
 the President and CEO,  the Chief Financial Officer  and, a director of  the
 Company, who  is also  the director  at one  of the  New Orleans,  Louisiana
 clinics.  As consideration for entering  into these agreements, the  Company
 issued 5,200,000 shares of  common stock to the  President and CEO,  500,000
 shares of common stock to the CFO and 3,215,000 shares to the director
<PAGE>

 9. Commitments

 Rent expense for  the years ended  September 30, 1999  and 2000 amounted  to
 approximately $430,000 and $282,000,  respectively. The Company also  leases
 equipment under  capital leases  with interest  rates ranging  from 9.0%  to
 10.0%.  Future minimum lease payments  under operating leases with terms  in
 excess of one year and capital leases are as follows:

             Year ended September 30,      Operating          Capital
             ------------------------       --------          -------
             2001                          $ 300,400         $ 61,600
             2002                            200,600           13,950
             2003                            132,200                -
             2004                             29,400                -
             2005                                  -                -
                                            --------          -------
             Total minimum lease           $ 662,600           75,550
                                            ========
             Future interest                                   (9,685)
                                                              -------
                                                               65,865
             Less current portion                             (53,365)
                                                              -------
             Non-current portion                             $ 12,500
                                                              =======

 The Company has a three-year employment agreement ending September 30,  2003
 with its  chief executive  officer.   In  the event  of termination  of  the
 agreement for any reason, he  will be entitled to  a severance pay equal  to
 six months of his full salary.  After a change of control of the Company, as
 defined in  the  employment  agreement, if  the  chief  executive  officer's
 employment is  terminated,  he terminates  his  employment, his  duties  are
 changed or certain other specified events take place, he will be entitled to
 a severance  payment  equal  to twice  his  effective  annual  compensation,
 together with a continuation of all employee benefits for one year.


 10. Convertible Debentures

 In September 1997, the Company sold two 8% Cumulative Convertible Debentures
 in the  aggregate amount  of $3,550,000  in a  Regulation S  offering.   The
 Debentures are convertible  after 82  days at  a conversion  price equal  to
 eighty (80%) of the average closing bid price of the shares of common  stock
 of the Company  as quoted on  the Nasdaq SmallCap  Market for  the five  (5)
 trading days preceding the date of conversion.  The interest on the note  is
 payable in cash or in kind as  shares.  An investment banking firm  received
 $461,500  for  all  fees.    Financing  costs  including  interest  for  the
 debentures was  recorded in  the fourth  quarter of  fiscal 1997.    Between
 February 16, 1998 and August 24,1999 $1,300,594 of Debentures and $71,141 in
 accrued interest were converted for 5,045,121  shares of common stock.   The
 conversion price per share ranged from $1.25 to $0.022 per share.
<PAGE>

 In August 1998 the Company sold 8% Cumulative Convertible Debentures in  the
 aggregate amount of $3,385,000  in a Regulation D  offering to four  limited
 partnerships  not  affiliated  with  the   Company.    The  debentures   are
 convertible at a conversion  price equal to eighty  (80%) of the average  of
 the closing bid price of the shares of common stock of the Company as quoted
 on the Nasdaq SmallCap  Market for the five  (5) trading days preceding  the
 date of conversion, provided  no holder may covert  an amount of  Debentures
 which would result in the holder and its affiliates beneficially owning more
 than 4.9% of the  outstanding shares of  common stock of  the Company.   The
 Debentures are payable in full on August 24, 2001 (the "Maturity Date"), and
 may be partially  converted from time  to time into  Common Stock until  the
 Maturity Date.  The Company may prepay  the debentures at any time,  and any
 debentures remaining  unpaid  at the  Maturity  Date  will  automatically be
 converted into shares  of Common Stock  at the  conversion rate,  regardless
 whether any holder or its  affiliates would then own  more than 4.9% of  the
 outstanding shares of  Common Stock.   The Company  has  pledged  all of its
 tangible and intangible personal property as  security for repayment of  the
 Debentures.

 As part  of  the Plan  of  Reorganization  confirmed by  the  United  States
 Bankruptcy Court on  August 8,  2000 and  effective September  9, 2000,  the
 holders of  the  August  1998 Regulation  D  Debentures  agreed  to  replace
 debentures in the  principal amount of  $3,385,000 and  accrued interest  of
 $312,000 as of October 19, 1999 with new three year debentures dated  August
 24, 2000.  The issuance of these new debentures replaced and superceded  any
 prior debt obligation  of the  Company to the  holders of  the Regulation  D
 debentures.  The new  debentures are convertible  into 20,475,000 shares  of
 common stock  at the  holders option  at any  time during  the term  of  the
 debentures.

 Per the  new debenture  agreement, in  satisfaction of  its obligation,  the
 Company issued 20,475,000 shares of common stock on September 19, 2000 to an
 escrow trustee designated by the debenture holders.  At any time during  the
 three period ended August 24, 2003, upon receipt of a conversion notice from
 the debenture  holders,  the  escrow trustee  will  instruct  the  Company's
 transfer agent to issue a  portion of the 20,475,000  shares in the name  of
 individual debenture holders.  Pursuant to Section 1145 of the United States
 Bankruptcy Code, the shares then issued to the debenture holders are  exempt
 from registration under the Securities Act of 1933.  Upon conversion by  the
 debenture holders of a specified number of the 20,475,000 shares held by the
 escrow trustee, the Company will transfer a proportionate amount in  dollars
 of the  $3,697,000 principal  of  the new  debentures  to common  stock  and
 additional paid in capital included in stockholders' equity.  Until the time
 of conversion, the debenture holders will  have no shareholder rights as  to
 the 20,475,000 issued  by the  Company in  settlement of  its obligation  in
 September 2000.

<PAGE>
<TABLE>
 Following is a summary  of debenture activity for  the year ended  September
 30, 2000:

                                         New         Reg. D          Total
                                      ---------     ----------      ---------
 <S>                                 <C>           <C>             <C>
 Principal balance at                $        -    $ 3,385,000     $3,385,000
   September 30, 1999
 Replacement of debentures per Plan   3,385,000     (3,385,000)             -
 Reclassify accrued interest            312,000              -        312,000
                                      ---------     ----------      ---------
 Principal balance at
   September 30,  2000               $3,697,000    $         -     $3,697,000
                                      =========     ==========      =========
</TABLE>

 11. Stockholders' Equity

 On December 17, 1998, the president and CEO, and a principal shareholder and
 board member,  agreed to  exchange $132,012  and $55,558,  respectively,  of
 notes payable for common stock.  The Company issued 6,000,523 and  2,525,341
 shares of common  stock, respectively, at  $0.022 per share,  which was  the
 market price at the date of election.

 In fiscal year 1999, the Company issued 1,826,825 shares of common stock for
 the conversion of  $55,594  of debentures and  $26,206  in accrued interest.
 The conversion price per share ranged from $0.06 to $0.022 per share.

 In fiscal year 1999, the Company issued 2,941,938 shares of common stock  in
 connection with bridge  loans in  the amount of  $212,500.   See Footnote  7
 "Notes Payable" and Footnote 8 "Related Party Transactions."

 In fiscal year  1999, the Company  issued 80,000 shares  of common stock  to
 employees for  employment  bonuses  and incentive  awards  including  50,000
 shares to the President and CEO.  The price per share was $0.0938.

 In August  1999,  the Company  issued  250,000  shares of  common  stock  in
 connection with a consulting agreement at $.05 per share.

 In September 2000, the Company issued  34,000,000 shares of common stock  in
 connection with  the  acquisition  of  clinics.    See  Footnote  2  "Clinic
 Acquisition" and Footnote 8 "Related Party Transactions."

 In September 2000, the  Company issued 9,000,000  shares in connection  with
 financing related  to the  acquisition of  clinics. See  Footnote 2  "Clinic
 Acquisition", Footnote  7  "Notes Payable"  and  Footnote 8  "Related  Party
 Transactions."

 On October 1, 2000, the Company entered into new employment agreements  with
 the President and CEO,  the Chief Financial Officer  and, a director of  the
 Company, who  is also  the director  at one  of the  New Orleans,  Louisiana
 clinics.  As consideration for entering  into these agreements, the  Company
 issued 5,200,000 shares of  common stock to the  President and CEO,  500,000
 shares of common stock to the CFO and 3,215,000 shares to the director.

 The holders of any preferred stock,  which might be issued, shall have  such
 rights, preferences and  privileges as may  be determined  by the  Company's
 board of directors. Currently there are no holders of preferred stock.
<PAGE>


 12. Concentration of Credit Risk

 In the normal  course of  providing health  care services,  the Company  may
 extend credit to patients without  requiring collateral.  Each  individual's
 ability to  pay  balances due  the  Company  is assessed  and  reserves  are
 established to provide for management's estimate of uncollectible  balances.
 Future  revenues of the Company are largely dependent on third-party  payors
 and private insurance companies, especially  in instances where the  Company
 accepts assignment.

 The Company's trade receivables  at September 30, 1999  and 2000 consist  of
 the following, stated as a percentage of total accounts receivable:


                                                           1999       2000
                                                           ----       ----
     Personal injury claims                                  78%       68%
     Medical claims filed with insurance companies           13        18
     Workman's compensation claims                            8        14
     Other claims                                             1         -
                                                            ----      ----
                                                            100%      100%
                                                            ====      ====

 13. Income Taxes

 There are two  components of income  tax provision,  current  and  deferred.
 Current income tax provisions approximate taxes  to be paid or refunded  for
 the  applicable   period.   Balance  sheet  amounts  of  deferred  taxes are
 recognized on  the temporary  differences between  the bases  of  assets and
 liabilities as  measured by  tax laws  and their  bases as  reported in  the
 financial statements.  The measurement of deferred  tax assets is reduced if
 necessary, by  the amount  of  any tax  benefits  that, based  on  available
 evidence, are not expected to be realized.  Deferred tax expense or  benefit
 is then recognized  for the  change in  deferred tax  liabilities or  assets
 between periods.

 The principal  differences resulting  in deferred  taxes are  the  financial
 statement bases versus the tax bases  of amortization of goodwill,  vacation
 accrual, employee stock options, and section 481 adjustment due to a  change
 from cash to accrual for tax purposes in fiscal year 1997.

 The deferred tax assets in the  consolidated balance sheet at September  30,
 2000 are as follows:

                                           Current        Non-current
                                          --------        -----------
      Vacation accrual                   $   3,300       $          -
      Goodwill                                   -             46,900
      Contributions carry-forwards               -              1,500
      Net operating loss carry-forwards          -          5,169,100
                                          --------        -----------
          Total assets                       3,300          5,217,500
          Less valuation allowance          (3,300)        (5,217,500)
                                          --------        -----------
                                         $       -       $          -
                                           =======        ===========
<PAGE>

 At September 30, 2000, the Company  has net operating loss and  contribution
 carry forwards  of approximately  $13,784,000 and  $3,900, respectively,  to
 offset future taxable income.  These carry forwards expire through the  year
 2014.  A valuation allowance was established to reduce the net deferred  tax
 asset for the  amounts that will  more likely than  not be  realized.   This
 reduction is  primarily  necessary  due to  restrictions  in  the  Company's
 ability  to utilize  all of  the  net  operating loss carry forwards imposed
 by  Section 382  of  the  Internal Code  due to ownership  changes resulting
 from  clinic  acquisitions  in  September 2000.   See  Footnote  2   "Clinic
 Acquisitions."


 14. Stock Options and Warrants

 In August 1995, the Company adopted its 1995 Employee Stock Option Plan (the
 "Employee Plan") under which options to purchase shares of common stock  may
 be issued to employees and consultants of the Company.  The Company reserved
 1,000,000 shares of Common Stock for issuance under the Employee Plan.  Also
 in August 1995,  the Company adopted  the 1995  Non-Employee Director  Stock
 Option Plan (the "Director Plan") which provides for the grant of options to
 directors of up to  250,000 shares that do  not qualify as "incentive  stock
 options" under the Internal Revenue Code of 1986.

<TABLE>
 The following schedule summarizes the changes  in the Employee Plan and  the
 Director Plan for the two years ended September 30, 2000:

                                                         Option Price
                                                   --------------------------
                                       Number of    Per Share    Total Option
                                         Shares                      Price
                                      ---------    ----------     ----------
 <S>                                  <C>         <C>            <C>
 Outstanding at September 30, 1998      937,833   $0.28 - $3.00  $ 1,688,100
   (937,833 exercisable)

 For the year ended September 30, 1999:
       Granted                          200,000       $0.09           18,800
       Granted (1)                      710,000       $0.05           35,500
       Cancelled (1)                    710,000   $0.28 - $2.34    1,179,400
       Expired                            3,333        $3.00          10,000
       Exercised                              -         -                  -
                                      ---------                   ----------
 Outstanding at September 30, 1999    1,134,500   $0.05 - $2.34      553,000
   (1,134,500 exercisable)

 For the year ended September 30, 2000:
       Granted                          777,500       $0.05           38,900
       Cancelled                        675,000   $0.05 - $2.00      188,800
       Expired                                -         -                  -
       Exercised                              -         -                  -
                                      ---------                   ----------
 Outstanding at September 30, 2000    1,237,000   $0.05 - $2.34  $   403,100
   (1,237,000 exercisable)            =========                   ==========
<PAGE>


           (1)    On December  17,  1998, the  Board  of Directors  passed  a
           resolution to  lower the exercise price  on 610,000 options  under
           the Employee  Plan and 100,000  under the Director  Plan to  $0.05
           per share.  The reduction in the price per share for the  Director
           Plan options resulted in other income of $92,542.

 The Company granted an  investment group the right  to acquire an option  to
 acquire common stock at specified prices over a defined period of time.  The
 agreement provided for each  option to be issued  in exchange for  $100,000,
 which amount will be applied  to the purchase of  common stock, when and  if
 the option is exercised.   The following is  a summary of  the terms of  the
 transaction:

    Last                          Nonrefundable                Possible
   Option                            Fee To       Total        Exercise
  Purchase                          Acquire     Exercise         Price
    Date                             Option       Price        Per Share
 ------------------                --------     --------          -----
 March 18, 1996                   $ 100,000    $ 750,000         $ 2.25
 June 18, 1996                    $ 100,000    $ 750,000         $ 4.90
 September 18, 1996               $ 100,000    $ 750,000         $ 4.90
 December 18, 1996                $ 100,000    $ 750,000         $ 4.90

 As of September  30, 1999, the  investment group has  exercised all  options
 under the first option, 128,827 options under the second option, and  99,277
 under the third option.   The remaining options  available under the  second
 and third options  expired during the  year ended September  30, 1998.   The
 153,061 remaining options under the fourth  option, expired on December  18,
 1998.

 On March 19, 1997, the Company issued 1,000,000 warrants to purchase  common
 stock at  $2.375  per share.    On April  22,  1997, an  additional  400,000
 warrants to purchase  common stock at  $3.00 per share.   The warrants  were
 issued in  connection with  the issuance  of  $2,600,000 of  8%  convertible
 debentures.  The warrants expired April 14, 1999.  On December 17, 1998, the
 Board of  Directors passed  a resolution  to cancel  the 1,000,000  warrants
 issued on  March 19,  1997, resulting  in  other income  of $236,945.    The
 remaining 400,000 warrants expired in April 1999, resulting in other  income
 of $56,073.

 In compliance  with  SFAS  No. 123,  the  Company  recognizes  and  measures
 compensation costs  related to  the Employee  Plan utilizing  the  intrinsic
 value based method.  Accordingly, no  compensation cost has been recorded.
 Had compensation  expense  been  determined on  the  fair  value  of  awards
 granted, net income (loss) and net  income (loss) per share would have  been
 as follows:
                                2000                       1999
                                ----                       ----
                      As Reported   Pro forma    As Reported   Pro forma
                      -----------   ---------    -----------   -----------
   Net income (loss)   $ 192,577    $ 138,275    $(2,843,888)  $(2,862,480)
   Net income (loss)
     per share         $    0.01    $    0.00    $     (0.12)  $     (0.12)
<PAGE>


 The fair value of  all options and warrants  are estimated using the  Black-
 Scholes option-pricing  model  with  the following  assumptions:  risk  free
 interest rate 5.75% for 2000  and 5.5% for 1999;  expected life 5 years  for
 2000 and 3 years for  1999; expected volatility 265%  for 2000 and 298%  for
 1999; dividend yield  0%.  The  fair values generated  by the  Black-Scholes
 model may not  be indicative of  the future benefit,  if any,  which may  be
 received by  the holders.    The weighted  average  exercise price  for  all
 options outstanding was $0.33 and $0.49  as of September 30, 2000 and  1999,
 respectively.  Since certain options have an indeterminable expiration,  the
 weighted average expiration date could not be determined.


 15. Stock Purchase Plans

 In August 1995, the  Company adopted its 1995  Employee Stock Purchase  Plan
 (the "Stock  Purchase  Plan"),  effective  October  1,  1995,  which  allows
 employees to acquire common stock of the  Company at 85% of its fair  market
 value from payroll deductions received from the employees.  The Company  has
 reserved a  total of  250,000 shares  of  its common  stock  to be  sold  to
 eligible employees under the Stock Purchase Plan.  As of September 30, 2000,
 no employees were participating in the  Stock Purchase Plan.  In July  1997,
 the Company adopted its  1997 Executive Stock  Bonus Plan ("Executive  Stock
 Bonus Plan") under which options to  purchase shares of common stock may  be
 issued to employees of the Company.  The Company reserved 260,870 shares  of
 Common Stock for issuance under the  Executive Bonus Plan.  As of  September
 30, 2000, 190,475 shares  have been issued under  the Executive Stock  Bonus
 Plan.

 16. Consultant Stock Plans

 In March 1997, the Company authorized for issuance 200,000 shares of  Common
 Stock pursuant to a  consulting agreement ("Consultant  Plan 1"). In  August
 1997, the Company reserved  250,000 shares of Common  Stock for issuance  to
 other consultants ("Consultant Plan 2"). Consultant Plan 2 expired  December
 31, 1999.  As of September 30,  2000, 200,000 shares have been issued  under
 Consultant Plan  1 and  40,000 shares  under Consultant  Plan 2.The  Company
 issued two consultant stock plans under an S-8 SEC registration.


 17. Disclosures About Fair Value of Financial Instruments

 Generally, the fair  value of  financial instruments  classified as  current
 assets or  liabilities  approximate carrying  value  due to  the  short-term
 maturity of the instruments.  The  fair value of long-term debt and  capital
 lease instruments  was  based  on  current  borrowing  rates  available  for
 financing with  similar  terms  and  maturities.   The  fair  value  of  the
 convertible debentures  was  estimated at  the  market value  of  20,415,000
 shares of common stock into which the debentures are convertible.

                                      Carrying Value     Fair Value
                                      --------------     ----------
       Long-term debt                      907,500          907,500
       Capital lease obligations            65,865           65,865
       Bankruptcy claims                 1,208,050        1,042,705
       Convertible debentures            3,697,000        1,433,250
<PAGE>


 18. Legal Proceedings

 One former doctor and two physicians' assistants who worked at the Norcross,
 Georgia clinic have filed a law suit  naming  the  Company as a codefendant.
 The one doctor  and one  of the physician  assistants worked  at the  clinic
 prior to the Company purchasing the clinic.  The other physicians' assistant
 left the  clinic within  one year  of  the Company's  purchase.   The  claim
 alleges a right to the account  receivable for patients the doctors  treated
 at the clinic that were collected  after the doctors' employment ended  with
 the  clinic.  The  Company denies any liability  and intends to cross  claim
 against the  former managing  doctor  of the  clinic.  The case  was:  Susan
 Johnson, Gilberto Martorell, and Henry Heard v. American HealthChoice, Inc.,
 dba Peachtree  Corners Medical  Center, and  Malcolm  Dulock, filed  in  the
 Superior Court  of Gwinnett  County,  Georgia.  The  Plan of  Reorganization
 approved the  United States  Bankruptcy Court  in  August 2000,  allows  the
 plaintiffs to pursue  their claim with  the Company's malpractice  insurance
 carrier with no further obligation on the part of American HealthChoice.

 A person claiming  to have performed  certain services in  formation of  the
 Company has sued claiming he is due a larger percentage of the Company stock
 than what he received.  The Company was served notice on March 29, 1998  and
 has retained a law firm to seek a  dismissal or in the alternative a  change
 of venue.   The case is Stewart v. American HealthChoice, Inc. filed in  the
 United States District Court,  Middle District  of Florida,  Tampa Division.
 The case  has been  transferred to  the United  States Bankruptcy  Court  in
 Dallas, Texas.  A trial is scheduled in January 2001.

 The Company was  engaged in  litigation filed on  February 23,  1998 with  a
 former landlord at a location where  the Company closed a clinic for  breach
 of lease.   The Company answered  and counter claimed  against landlord  for
 landlord's failure to  perform under the  agreement.  The  case is:  Assist,
 Inc., v. American HealthChoice, Inc., filed  in State District Court,  285th
 Judicial District, Bexar  County, Texas.   The claim was  disallowed by  the
 United States Bankruptcy Court.

 The Company was engaged  in litigation with an  equipment lessor.  The  suit
 was filed October 14, 1998.  The  plaintiff alleged that the Company is  the
 guarantor for a  company called Corrective  Vision Center that  went out  of
 business.   The  case was:  Advanta  Business Services  Corp.,  v.  American
 HealthChoice, Inc., filed in the County Civil Court of Harris County at  Law
 No. 4, Harris County, Texas.  Advanta won a decision for the full amount  of
 the suit at a summary judgement hearing on January 20, 1999.  The  plaintiff
 failed to file a claim with the Bankruptcy Court and is barred from  further
 action.

 The Company was served a complaint on December 7, 1999 alleging  unspecified
 damages arising from an alleged contract  breach concerning the purchase  of
 the McAllen Texas clinic in 1996.  The  case was filed in the 16th  District
 Court, of  Denton  County,  Texas.    In  connection  with  the  Chapter  11
 Bankruptcy, the  case was  transferred to  the Bankruptcy  Court in  Dallas,
 Texas.   The case  is scheduled  for trial  in January  2001.   The  Company
 believes the Bankruptcy  Court will dismiss  the case  for several  reasons,
 including the fact that the plaintiff failed to file a claim in the  Chapter
 11 Bankruptcy.
<PAGE>

 On October 19, 1999,  American HealthChoice, Inc.,  the parent company,  and
 AHC Physicians  Corporation,  Inc.,  a  subsidiary  that  owns  the  Georgia
 clinics, filed  Chapter  11  Bankruptcy Petitions  with  the  United  States
 Bankruptcy Court, Northern District of Texas, Dallas Division (Case No.  99-
 37314).   A  Plan  of  Reorganization  was  approve  by  the  United  States
 Bankruptcy Court on  August 8,  2000 and  became effective  on September  9,
 2000.

 The Company has been named in  other litigation. In Management's  judgement,
 the matters do not involve material amounts of exposure for the Company.


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

 None to report

<PAGE>

                                   PART III


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


      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


 The following table sets forth information regarding the executive  officers
 and directors of the Company.


         Name                 Age     Position                 Since
  ----------------------      ---  -------------------       -----------
  Joseph W. Stucki, D.C.       41  President, Chief          March 1995
                                   Executive Officer and
                                   Chairman of the Board
                                   of Directors

  John C. Stuecheli            53  Chief Financial           January 1999
                                   Officer, Vice President
                                   and Secretary

  Jeffrey Jones, D.C.          39  Director                  March 1995

  Michael R. Smith, M.D.       42  Director                  December 1996

  John V. Mansfield            53  Director                  June 1998

  James Roberts                41  Director                  June 1998



      Joseph W.  Stucki,  D.C.   Dr.  Stucki  is  Chairman of  the  Board  of
 Directors, Chief Executive Officer and President of the Company.  Dr. Stucki
 has been a licensed chiropractor for  approximately 18 years.  In May  1983,
 he founded  United  Chiropractic Clinics,  Inc.  and, as  its  Chairman  and
 President,  purchased  or  developed  and  opened  approximately  84  multi-
 disciplined clinics  (chiropractic,  medical,  physical  therapist,  massage
 therapist, etc.).  From 1988 through 1995, Dr. Stucki served as Chairman and
 Chief Executive Officer of United Health  Services.  United Health  Services
 developed approximately 150  franchises throughout the  United States.   Dr.
 Stucki has been a consultant to health care organizations on various  issues
 including  practice  management,  strategic  development,  and  mergers  and
 acquisitions.   Dr.  Stucki  has authored  several  papers  and  manuals  on
 practice management and has been a guest speaker on health care issues.  Dr.
 Stucki is a member of various national, state, and local organizations.

      John C. Stuecheli  Mr. Stuecheli  became Chief Financial Officer,  Vice
 President of Finance  and Secretary  of the Company  in January  1999.   Mr.
 Stuecheli was first employed by the Company in November 1998 as  Controller.
 From  November 1996  to October 1998,  Mr. Stuecheli was  Vice President  of
 Finance and  Chief Financial  Officer for  Irata, Inc.,  a manufacturer  and
 operator of photo booths and other  vending equipment.  From September  1993
 to October 1996, he was an independent consultant specializing in  financial
 restructuring.
<PAGE>

      Jeffrey Jones, D.C.  Dr. Jones is a Director of the Company.  He is the
 Clinic Director  of  the United  Chiropractic  Uptown Clinic,  New  Orleans,
 Louisiana, owned by a subsidiary of the Company.  He obtained his  Louisiana
 Doctor of Chiropractic license in July 1985, and began his association  with
 the United Chiropractic Uptown clinic shortly thereafter.  In the past,  Dr.
 Jones has acted as Regional Manager  of other United Clinics in the  greater
 New Orleans  area.   He  is  a member  of  the Chiropractic  Association  of
 Louisiana,  The   Union  of   Chiropractic  Physicians   and  the   American
 Chiropractic Association.

      Michael R. Smith, M.D.  Dr. Smith  became a Director of the Company  in
 December 1996.  Dr. Smith, a practicing physician board certified in  family
 practice, was employed by the Company from September 1994 to December  2000.
  He provided medical services at two of the Company's clinics and served  as
 the Medical Director for the Company's Texas clinics.  He continues to serve
 on the Board of Directors of AHC Physicians Corporation, Inc., a  subsidiary
 of the  Company.   From June  1992 through  August 1994,  Dr. Smith  was  an
 employee  and  then partner at the  Texas Trauma Rehabilitation Association.
 Dr. Smith graduated from The University of Texas Medical Branch in 1984.

      John V. Mansfield.  Mr. Mansfield  became a Director of the Company  in
 June 1998.  He has been the President and Chief Executive Officer of Harland
 Properties, Inc. since February 1992 and of Axis Capital LLC since May 1997.
  Harland Properties, Inc., a privately owned located in London, Ontario,  is
 engaged in  the  business  of  real  property  management,  development  and
 consulting.   Axis  Capital  LLC, a  privately  owned  located  in  Atlanta,
 Georgia, provides advisory services  for companies in transition,  including
 start-ups, turnarounds, new growth initiatives and mergers and acquisitions.

      James Roberts.  Mr.  Roberts became a Director  of the Company in  June
 1998.  He  has been  the Managing Director  of The  Center For  Church-Based
 Training, located  in  Dallas, Texas,  since  February  1999.   He  was  the
 President of Health  Dental Plus, Inc. from  September 1993 to January 1999.
 Center  For  Church-Based  Training,  a  non-profit  organization,  provides
 advisory services to  churches and  other religious  organizations.   Health
 Dental Plus, Inc. is  engaged in the marketing  of dental benefits plans  to
 employer groups and individuals.

      Members of the Company's Board of Directors are elected to hold  office
 until the  next  meeting of  stockholders  and until  their  successors  are
 elected and  qualified.   Officers  are  elected  to serve  subject  to  the
 discretion of the Board  of Directors until  their successors are  appointed
 and have qualified.

      The committees of the Company's Board of Directors are as follows:

           Audit Committee          John V. Mansfield, Chairman
                                    James Roberts

           Compensation Committee   James Roberts, Chairman
                                    John V. Mansfield
                                    Dr. Joseph W. Stucki

      The Company does not have a Nominating Committee.
<PAGE>

  Compliance With Section 16(a) Of The Securities Exchange Act Of 1934

      Section 16(a) of the Securities Exchange Act of 1934 requires that  the
 Company's officers and directors, and persons who own more than ten  percent
 (10%) of a registered class of the Company's equity securities file  reports
 of ownership  and changes  in ownership  with  the Securities  and  Exchange
 Commission ("SEC") and with the exchange  on which the Company's  securities
 are traded. Such reporting persons are required by SEC regulation to furnish
 the Company with copies of all Section 16(a) forms so filed.

      Based solely on a  review of Forms  3, 4 and  5 and amendments  thereto
 furnished to the  Company pursuant to  Rule 16a-3(e)  promulgated under  the
 Securities Exchange Act of 1934, or upon written representations received by
 the Company,  the Company  is aware  of the  following failures  to file  by
 reporting persons.

      (1) Dr. J. W. Stucki failed to  file a form 4  for the sale of  100,000
          shares on December 31, 1999 with a transaction value of $2,000.
      (2) Dr. J. W. Stucki failed  to file a  form 4 for  the sale of  75,000
          shares between January 19, and January  25, 2000 with a transaction
          value of $21,000.
      (3) Dr. J. W. Stucki failed to file a form 5 for the purchase of 36,150
          shares between April 25, and May 25,  2000 with a transaction value
          of $9,000.
      (4) Dr. Jeff Jones  failed to  file a  form 4  for the  sale of  70,000
          shares on December 30, 1999 with a transaction value of $1,400.
      (5) Dr. Jeff Jones failed to  file a form 5  for the purchase of  4,150
          shares on May 16, 2000 with a transaction value of $1,000.
      (6) Dr. Michael Smith failed to  file a form 4  for the sale of  17,000
          shares on April 8, 2000 with a transaction value of $8,000.

   Late Form 5's for the above transactons will be filed by January 31, 2001.

<PAGE>
 ITEM 10. EXECUTIVE COMPENSATION

                         Executive Compensation

      The following table sets forth information concerning all cash and non-
 cash compensation awarded  to, earned  by, or  paid to  the Company's  Chief
 Executive Officer  and Chief  Financial Officer  for the  last three  fiscal
 years.  No other executive officer of the Company who was serving at the end
 of fiscal 2000  earned more than  $100,000 of annual  base compensation  for
 services in all capacities to the Company and its subsidiaries.


</TABLE>
<TABLE>
                    Summary Compensation Table
                                                 Long-Term Compensation
                                                 -----------------------
                         Fiscal                              Under-lying
                          Year       Annual      Restricted  Securities    All other
  Name and Principal     Ending   Compensation     Stock       Options   Compensation
  Position              September    Salary      Awards ($)      (#)         ($)
                           30          ($)
  --------------------    ----     ----------   -----------   ----------    ------
  <S>                     <C>      <C>           <C>          <C>           <C>
  Dr. Joseph W. Stucki    2000        262,950
  Chairman of the Board,  1999        262,950     4,690 (1)   200,000 (3)   55,000 (4)
  President and Chief
  Executive Officer       1998        262,950    14,050 (1)

  John C. Stuecheli       2000        101,250                  42,500 (5)
  Vice President, Chief
  Financial Officer       1999         62,500
  and Secretary           1998              - (2)

</TABLE>
 ___________________________
 (1)  Dr. Stucki was entitled to a stock bonus of 50,000 shares on June 1  of
      each year of his employment agreement  for the three year period  ended
      May31, 2000.  The closing bid prices per share on June 1, 1998 and 1999
      were $0.281 and $0.0938, respectively.

 (2)  Mr. Stuecheli assumed his position  as Vice President, Chief  Financial
      Officer and Secretary of the Company  on January 1, 1999.  The  Company
      did not employ Mr. Stuecheli in fiscal 1998.

 (3)  On December 17,  1998, the Board  of Directors passed  a resolution  to
      lower the  exercise  price  to  $0.05  per  share  on  610,000  options
      outstanding under the  1995 Employee Stock  Plan (the "Employee  Plan")
      and 100,000  options  outstanding  under the  1995  Non-Employee  Stock
      Option Plan  (the "Director  Plan").   The  exercise price  on  150,000
      options held by  Dr. Stucki under  the Employee Plan  was lowered  from
      $2.00 per share and 50,000 options under the Director Plan was  lowered
      from $2.34.   For disclosure purposes,  the aforementioned 200,000  re-
      priced options are  reported as  grants to  Dr. Stucki  in fiscal  year
      1999.

 (4)  Value of common  stock issued  as additional  consideration for  bridge
      loans.

 (5)  Options granted under  the Employee Plan  in connection  with a  salary
      reduction during the pendency of Chapter 11 Bankruptcy.
<PAGE>


                    Stock Option and Stock Purchase Plans

      The following tables  set forth the  number of options  granted to  the
 Company's Chief Executive Officer and Chief Financial Officer during  fiscal
 2000 and the value of the unexercised options held by them at September  30,
 2000.


<TABLE>
                   Option/SAR Grants in Last Fiscal Year

                             Number of       % of
                            Securities       Total
                              Under-       Options/
                              lying          SARs
                             Options/      Granted     Exercise
                               SARs           to       or Base
                             Granted       Employees    Price     Expiration
        Name                   (#)      In Fiscal Year  ($/Sh)       Date
  --------------------      -----------  ------------   -----     -----------
  <S>                       <C>               <C>       <C>       <C>
  John C. Stuecheli         42,500            5%        $0.05     9/1/05

 ____________________


                  Aggregate Option/SAR Exercises in Last Fiscal Year
                      And Fiscal 2000 Year-End Option/SAR Values

                                                    Number of
                                                   Securities       Value of
                                                   Underlying      Unexercised
                                                   Unexercised     In-the Money
                                                   Options/SARs    Options/SARs
                           Shares                  At FY-End (#)   At FY-End ($)
                          Acquired     Value
                        On Exercise   Realized     Exercisable/     Exercisable/
   Name                     (#)         ($)       Unexercisable    Unexercisable
  --------------------  ------------  --------    --------------   -------------
   <S>                      <C>         <C>        <C>              <C>
   Dr. Joseph               None        None       200,000/   -     $ 3,000 (1)
   W. Stucki

   John C.                  None        None        42,500/   -       $ 637 (1)
   Stuecheli
 ____________________

 (1)  All options are exercisable.  Value  is based on the closing price  per
      share on  December 31,  2000 as  quoted on  the OTC  Bulletin Board  of
      $0.065.
</TABLE>
<PAGE>

                            Employee Benefit Plans

      In August 1995, the Company adopted its 1995 Employee Stock Option Plan
 (the "Employee Plan") under which options to purchase shares of Common Stock
 may be issued  to employees  and consultants of  the Company.   The  Company
 reserved 1,000,000 shares of  Common Stock for  issuance under the  Employee
 Plan.   Also in  August  1995, the  Company  adopted the  1995  Non-Employee
 Director Stock  Option Plan  (the "Director  Plan") which  provides for  the
 grant of options to directors of up to 250,000 shares that do not qualify as
 "incentive stock  options" under  the Internal  Revenue Code  of 1986.    In
 addition, the Company  adopted its 1995  Employee Stock  Purchase Plan  (the
 "Stock Purchase Plan"), effective October 1, 1995, which allows employees to
 acquire Common Stock of  the Company at  85% of its  fair market value  from
 payroll deductions received from the employees.  The Company has reserved  a
 total of 250,000 shares of its Common Stock to be sold to eligible employees
 under the Stock  Purchase Plan.   In October  1996, the  Board of  Directors
 amended each of the Employee Plan, the Director Plan, and the Stock Purchase
 Plan to clarify various matters concerning the administration of such plans.
 In March 1997,  the Company authorized for issuance 200,000 shares of Common
 Stock pursuant to  a consulting agreement  ("Consultant Plan 1").   In  July
 1997, the Company adopted  its 1997 Executive  Stock Bonus Plan  ("Executive
 Stock Bonus Plan") under  which options to purchase  shares of Common  Stock
 may be issued to  employees of the Company.   The Company reserved  260,8700
 shares of Common  Stock for  issuance under the  Executive Bonus  Plan.   In
 August 1997,  the  Company  reserved 250,000  shares  of  Common  Stock  for
 issuance to other consultants  ("Consultant Plan 2").   The following  table
 presents the number of  shares issued or options  granted under each of  the
 Plans as of September 30, 2000:

<TABLE>
                             Options
                          Granted/Shares       Option Shares
     Plan                     Issued             Exercised
 -------------                -------            ---------
 <S>                          <C>                   <C>
 Employee Plan                987,000                 0

 Director Plan                250,000                 0

 Stock Purchase Plan                0                 0

 Executive Stock Bonus Plan   190,475                 0

 Consultant Plan 1            200,000                 0

 Consultant Plan 2             40,000                 0
</TABLE>
<PAGE>

                          Compensation of Directors

      The Company  pays  its Directors  $1,500  for each  Board  of  Director
 meeting attended in person and $250 for each telephonic Board meeting.   The
 Company reimburses  all  Directors  for  reasonable  out-of-pocket  expenses
 incurred in connection with attending Board of Director meetings.   Pursuant
 to the Director Plan, any new Director elected to the Board of Directors  is
 to receive a 10-year option to purchase 10,000 shares of Common Stock at  an
 exercise  price  determined by the Board of  Directors at the time of grant.
 If a non-employee Director is re-elected, such Director is to receive,  upon
 such re-election, a 10-year option to purchase 5,000 shares of Common  Stock
 at an exercise price  determined by the  Board of Directors  at the time  of
 grant.  As of  September 30, 2000,  no options have  been granted under  the
 Director Plan except  for a one-time  grant of options  to purchase  100,000
 shares granted to  a former  Director.   See "Employment  Agreements" for  a
 discussion of the compensation paid to  Dr. Jeffrey Jones as an employee  of
 the Company.   Dr. Michael  R. Smith was  paid a  salary of  $140,000 as  an
 employee of the Company for the fiscal year ended September 30, 2000.

                            Employment Agreements

      Effective October  1,  2000,  the Company  entered  into  a  three-year
 employment agreement with  Dr. Joseph W.  Stucki to serve  as President  and
 Chief Executive  Officer  of  the  Company for  an  annual  base  salary  of
 $250,000.    As  added  consideration  for  entering  into  the   employment
 agreement, Dr. Stucki received 5,200,000 shares of common stock.  The shares
 bear a "Rule  144" restrictive legend  and are valued  at $0.025 per  share,
 which is  the  estimated fair  market  value as  of  October 1,  2000.    In
 addition, at the end of each year of employment he will receive a number  of
 shares of  the Company's  common stock  equivalent to  $50,000 and,  if  the
 Company reports  EBITDA of  $1,000,000 or  more for  the fiscal  year  ended
 September 30, 2001,  he will receive  a performance bonus  of $20,000.   Dr.
 Stucki is  also  entitled  to  a  car allowance  of  $1,000  per  month  and
 reimbursement  of  up  to  $1,500  per  year  for  continuing   professional
 education.  In the event of termination  of the agreement for any reason  by
 the Company or Dr. Stucki, he will be  entitled to a severance pay equal  to
 twelve months of his full salary.  After a change of control of the Company,
 as defined  in  the employment  agreement,  if Dr.  Stucki's  employment  is
 terminated, he terminates his employment, his duties are changed or  certain
 other specified  events take  place,  he will  be  entitled to  a  severance
 payment equal to twice  his effective annual  compensation, together with  a
 continuation of all employee benefits for two years.

      Effective October 1, 2000, United Chiropractic Clinic of Uptown,  Inc.,
 a subsidiary of the  Company, entered into a  two year employment  agreement
 with Dr. Jeffrey Jones as a clinic director providing chiropractic  services
 at the New Orleans Uptown clinic for an annual base salary of $150,000.   As
 added consideration for  entering into the  employment agreement, Dr.  Jones
 received 3,215,000 shares  of common stock.   The shares  bear a "Rule  144"
 restrictive legend  and  are  valued  at $0.025  per  share,  which  is  the
 estimated fair market value as of October 1,  2000.  He is also entitled  to
 standard employee benefits and a term life insurance policy of $500,000.
<PAGE>

      Effective October  1,  2000,  the Company  entered  into  a  three-year
 employment agreement  with John  C. Stuecheli  to serve  as Chief  Financial
 Officer and Secretary of the Company for an annual base salary of  $110,000.
 As  added  consideration for  entering into  the employment  agreement,  Mr.
 Stuecheli received 500,000 shares of common stock.  The shares bear a  "Rule
 144" restrictive legend  and are valued  at $0.025 per  share, which is  the
 estimated fair market  value as of  October 1, 2000.   In  addition, if  the
 Company reports  EBITDA of  $1,000,000 or  more for  the fiscal  year  ended
 September 30, 2001, he will receive a performance bonus of $10,000.


 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth  information regarding the ownership  of
 the Company's  Common stock  as of  December  31, 2000,  by (i)  each  known
 beneficial owner of more  than five percent (5%)  of the outstanding  Common
 Stock, (ii)  each  Director, (iii)  each  executive officer,  and  (iv)  the
 executive officers and Directors as a group.  All share numbers are provided
 based on information supplied to management of the Company by the respective
 individuals and members of the group.   Unless otherwise indicated, each  of
 the stockholders has sole  voting and investment power  with respect to  the
 shares beneficially owned.
                                                 Number of      Percent of
                                                  Shares           Class
                                                 ----------        -----
     David P. Voracek, D.C.(1)                   34,204,091        42.5%
     2025 Tartan Trail
     Highland Village, Texas 75077

     Joseph W. Stucki, D.C.(2)                   18,700,478        23.2%
     1300 West Walnut Hill Lane, Suite 275
     Irving, Texas 75038

     Jeffrey Jones, D.C.(3)                       8,499,902        10.54%
     807 S. Carrollton Avenue
     New Orleans, Louisiana 70118

     John C. Stuecheli.(4)                          643,000            *
     1300 West Walnut Hill Lane Suite 275
     Irving, Texas 75038

     Michael R. Smith, M.D.                         371,167            *
     118 Canyon Circle
     Boerne, Texas 78006

     James Roberts                                    9,500            *
     6712 Biltmore Pl.
     Plano, Texas 75023

     John V. Mansfield                                    -            -
     10956 Big Canoe
     Big Canoe, Georgia 30143

     Officers and Directors as                   28,224,047        34.9%
     a group (6 persons)
 __________________________
 *    Less than one percent.
<PAGE>
 (1)  The number of shares reported includes 1,650,000 shares owned of record
      by Mainstream Enterprises  LLC, a limited  liability company, of  which
      Dr. Voracek is  the sole member,  4,553,571 shares owned  of record  by
      Acme Corpus Chiropractic Clinic, LLC,  a limited liability company,  of
      which Dr. Voracek is a 50% member, 10,200,000 shares owned of record by
      Laredo Family Enterprises, LLC, a  limited liability company, of  which
      Dr. Voracek is the  sole member, 15,300,000 shares  owned of record  by
      Acme Chiropractic,  LLC,  a limited  liability  company, of  which  Dr.
      Voracek is the  sole member, and  2,480,520 shares owned  of record  by
      Belair Capital Group, Ltd., a limited  liability company, in which  Dr.
      Voracek has a 26% member interest.

 (2)  Dr. Stucki is the  Chief Executive Officer,  President and Chairman  of
      the Board of Directors of the  Company.  The number of shares  reported
      includes 4,308,000  shares owned  of record  by Belair  Capital  Group,
      Ltd., a limited liability company, in which Dr. Stucki has a 45% member
      interest and 200,000 shares issuable upon exercise of options at  $0.05
      per share, which are currently exercisable.

 (3)  Dr. Jones is a Director of the Company.  The number of shares  reported
      includes 1,586,480  shares owned  of record  by Belair  Capital  Group,
      Ltd., a limited liability company, in which Dr. Jones has a 17%  member
      interest and 110,000 shares issuable upon exercise of options at  $0.05
      per share, which are currently exercisable.

 (4)  Mr. Stuecheli  is the  Chief Financial  Officer  and Secretary  of  the
      Company.  The number  of shares owned  includes 42,500 shares  issuable
      upon exercise  of  options at  $0.05  per share,  which  are  currently
      exercisable.


 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Dr. J. W. Stucki, the Chief  Executive Officer, President and  Chairman
 of the  Board of  Directors of  the Company,  provided bridge  loans  to the
 Company between June and August 1999 in the aggregate amount of $80,000.  As
 additional consideration  for making  loans in  the  amount  of  $55,000, an
 equivalent value in common stock was issued, computed using the share  price
 on the  date of  the loan.    In this  regard,  the Company  issued  598,485
 restricted common  shares at  share  prices  ranging from  $0.06  to  $0.11.
 Bridge loans in the amount of $80,000 remained outstanding at September  30,
 1999.
<PAGE>

      Mainstream Enterprises LLC ("Mainstream"),  a beneficial owner of  more
 than 5% of the outstanding stock at September 30, 1999, also provided bridge
 loans to the Company between January  and July 1999 in the aggregate  amount
 of $175,000.   Mainstream first  loaned the  Company $25,000  on January  1,
 1999.  Consideration for this loan  was the forgiveness of a $5,069  monthly
 installment payment on a note receivable from Mainstream related to the sale
 of a clinic owned by the Company in  Brownsville, Texas in June 1998.   This
 loan was settled as of March 31, 1999 by an offset for equivalent amount due
 the Company for corporate office expenses.  Mainstream loaned the Company an
 additional $25,000 on April  8, 1999.  Consideration  for this loan was  the
 forgiveness of a $5,069 monthly installment  payment on the note  receivable
 for each month  the loan  remained outstanding.   This loan  was settled  on
 September 30, 1999  by an offset  to the note  receivable in  the  amount of
 $25,000 related to the sale  of a clinic to  Mainstream (see below) and  six
 monthly installment payments totaling $30,414.   Between  April 30, 1999 and
 July 8  1999,  Mainstream  provided  six  additional  bridge  loans  in  the
 aggregate of $125,000.  As additional  consideration for making  these loans
 an equivalent value  in common stock  was issued, computed  using the  share
 price on the date of the loan.  In this regard, the Company issued 1,650,000
 restricted common  shares at  share  prices  ranging  from  $0.04 to  $0.10.
 Bridge loans in the amount of $100,000 remained outstanding at September 30,
 1999.

      Between August  20  and 29,  1999,  Mainstream made  advance  principal
 payments in the amount of $75,000 on the note receivable related to the sale
 of the Brownsville clinic.  Consideration for these advance payments was the
 forgiveness of $75,000 in principal on the note receivable.

      On September 30, 1999, the Company  sold a chiropractic clinic  located
 in San  Antonio, which  had  been open  for  approximately four  months,  to
 Mainstream for  $50,000.   The sales  price approximated  the value  of  the
 accounts receivable at  September 30, 1999.   A bridge  loan dated April  8,
 1999 in the amount of $25,000  and a bridge loan dated  May 25, 1999 in  the
 amount of $25,000 were used as an offset to the sales price.

 Belair Capital Group, Ltd. ("Belair"),  a Nevada limited liability  company,
 is the  holder of  a $900,000  note payable  issued in  connection with  the
 acquisition of three clinics  in September 2000.   In addition, the  Company
 issued 9,000,000 shares of common stock to Belair as further  consideration.
 The note payable of  $900,000 and  the 9,000,000 shares of common stock  are
 the sole assets of Belair.   The following shareholders are also members  of
 Belair: Dr. J.W. Stucki (45% member interest), Dr. Jeffrey Jones (14% member
 interest) and Dr. David Voracek (28% member interest).
<PAGE>


 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

      (a)  Exhibits Required by Item 601

      (1)  The following financial statements are filed herewith in Item 7

           (i)       Consolidated Balance sheet as of September 30, 2000
           (ii)      Consolidated Statements of Operations for the years
                     ended September 30, 2000 and 1999.
           (iii)     Consolidated Statement of Stockholders' Equity for
                     the years ended September 30, 2000 and 1999.
           (iv)      Consolidated Statements of Cash Flows for the years
                     ended September 30, 2000 and 1999.
           (v)       Notes to Consolidated Financial Statements.

      (2)
           2.1  Debtors American HealthChoice, Inc. and AHC Physicians
                Corp., Inc. Amended Joint Plan of reorganization dated March
                31, 2000 (incorporated by reference to Exhibit 2.1 to Current
                Report on Form 8-K dated September 25, 2000).

           3.1  Certificate of Incorporation of American HealthChoice,
                Inc. (incorporated by reference to Exhibit 4.1 to
                Registration Statement on Form SB-2, Registration
                Number 33-09311, filed on July 31, 1996)

           3.2  Certificate of Amendment to Certificate of Incorporation
                of American HealthChoice, Inc. (incorporated by reference
                to Exhibit 3.2 to Form 10-KSB, file number 000-26740,
                filed for the fiscal year ended September 30, 1996).

           3.3  Bylaws of American HealthChoice, Inc. (incorporated by
                referenceto Exhibit 3.3 to Form 10-KSB, file number 000-
                26740,filed for the fiscal year ended September 30, 1996).

           4.1  Form of Debenture for $3,385,000 of 8% convertible
                debentures due August 24, 2001 (incorporated by reference to
                Exhibit (c)(ii) to Current Report on Form 8-K dated August
                24, 1998).

           4.2  Form of Subscription Agreement between the Registrant and
                the holders of the debentures referenced in Exhibit 4.1
                (incorporated by reference to Exhibit (c)(ii) to Current
                Report on Form 8-K dated August 24, 1998).

           4.3  Form of Security Agreement entered into between the
                Registrant and the holders of the debentures referenced in
                Exhibit 4.1 (incorporated by reference to Exhibit (c)(ii) to
                Current Report on Form 8-K dated August 24, 1998).

           4.4  Form of Registrations Rights Agreement between the
                Registrant and the holders of the debentures referenced in
                Exhibit 4.1 (incorporated by reference to Exhibit (c)(ii) to
                Current Report on Form 8-K dated August 24, 1998).
<PAGE>

           4.5  Security Agreement dated August 19, 2000 between American
                HealthChoice, Inc. and Southridge Capital LLC in its capacity
                as collateral agent for Sovereign Partners, L.P., Dominion
                Capital Fund, Ltd., Canadian Advantage Limited Partnership,
                and Atlantis Capital Fund. (incorporated by reference to
                Exhibit 4.1 to Current Report on Form 8-K dated September 25,
                2000).

           4.6  8% Senior Secured Convertible Debenture due August 19, 2003.
                (incorporated by reference to Exhibit 4.2 to Current Report
                on Form 8-K dated September 25, 2000).

           4.7  Stock Trust and Escrow Agreement entered into as of August
                19, 2000 by and between American HealthChoice, Inc.,
                Sovereign Partners, L.P., Dominion Capital Fund, Ltd.,
                Canadian Advantage Limited Partnership, Atlantis Capital Fund
                and Krieger & Prager, LLP. (incorporated by reference to
                Exhibit 4.3 to Current Report on Form 8-K dated September 25,
                2000).

           10.3 1995  Non-Employee Director Stock  Option Plan  (incorporated
                by reference to Exhibit 10.1  to Form10-QSB, file number  33-
                30677-NY, filed for the quarter ended June 30, 1995).

           10.4 1995 Employee Stock Purchase Plan (incorporated by
                reference to Exhibit 10.3 to Form 10-QSB, file number
                33-30677-NY, filed for the quarter ended June 30,1995).

           10.5 1995 Employee Stock Option Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.8 to Form 10-QSB,
                file number 000-26740, filed for the quarter ended June
                30,1995).

           10.6 1995 Non-Employee Director  Plan Amendment  1996-1.
                (incorporated by reference to Exhibit 10.9 to  Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

           10.7 1995 Employee Stock Purchase Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.10 to Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

           10.8 1997 Consultant Stock Plan, (incorporated by reference
                to Form S-8 file number 333-26065, filed for the quarter
                ended March 31, 1997).

           10.9 1997 Consultant Stock Plan, (incorporated by reference
                to Form S-8 file number 333-35581, filed for the quarter
                ended September 30, 1997).

          10.10 1997  Executive Bonus Plan, (incorporated by reference
                to Form S-8 file number 333-36475, filed for the quarter
                ended September 30, 1997).
<PAGE>

          10.13 Employment Agreement for Chief Executive Officer dated
                June 1,1997 between American HealthChoice, Inc. and Dr.
                Wes Stucki (incorporated by reference to Exhibit 10.13
                to Form 10-KSB, file number 000-26740, filed for the
                fiscal year ended September 30, 1998).

          10.14 Asset Purchase Agreement dated February 12, 1999 between AHC
                Physicians Corporation and Georgia Clinic LLC (incorporated
                by reference file number 000-26740, filed for the fiscal
                quarter ended March 31,1999).

          10.15 Demand Note dated June 10, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.15 to Form 10-KSB, file number 000-
                26740, filed for the fiscal year ended September 30, 1999).

          10.16 Demand Note dated June 25, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.16 to Form 10-KSB, file number 000-
                26740, filed for the fiscal year ended September 30, 1999).

          10.17 Demand Note dated April 30, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.17 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.18 Demand Note dated May 25, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.18 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.19 Demand Note dated May 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.19 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.20 Demand Note dated June 15, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.20 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.21 Demand Note dated July 1, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.21 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.22 Demand Note dated July 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.22 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).
<PAGE>

          10.23 Demand Note dated August 8, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.23 to Form 10-KSB, file number 000-
                26740, filed for the fiscal year ended September 30, 1999).

          10.24 Asset Sale and Purchase Agreement dated September 1, 2000 by
                and between Acme Corpus Chiropractic Clinic, LLC, Laredo
                Family Enterprises, LLC, Acme Chiropractic Clinic, LLC and
                American HealthChoice, Inc.*

          10.25 Loan Agreement dated September 1, 2000 between Belair
                Capital, Ltd. and American HealthChoice, Inc.*

          10.26 Employment Agreement effective October 1, 2000 between Dr.
                J. W. Stucki and American HealthChoice, Inc.*

          10.27 Employment Agreement effective October 1, 2000 between Dr.
                Jeffrey Jones and American HealthChoice, Inc.*

          10.28 Employment Agreement effective October 1, 2000 between John
                C. Stuecheli and American HealthChoice, Inc.*

          10.29 Laredo Family Enterprises, LLC Financial Statements for the
                twelve months ended December 31, 1999*

          10.30 San Benito Chiropractic Clinic, LLC Financial Statements for
                the twelve months ended December 31, 1999*

          10.31 Acme Corpus Chiropractic Clinic, LLC Financial Statements
                for the twelve months ended December 31, 1999*

          21    List of Subsidiaries of American HealthChoice, Inc.*

          23.1  Consent of Certified Public Accountants*

          27    Financial Data Schedule*

      * Filed herewith

 (b) The  Company filed  a Form  8-K  on September 25, 2000 relating  to  the
 approval of the Plan of Reorganization.
<PAGE>


                               SIGNATURES

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



                               AMERICAN HEALTHCHOICE, INC.

 Date: January 16, 2001        By:  /s/ Dr. J.W. Stucki
                               Dr. J.W. Stucki, Chief Executive
                               Officer and President

      In accordance with the Securities Exchange Act of 1934, this Report has
 been signed below by the following  persons on behalf of the Registrant  and
 in the capacities and on the dates indicated.

     Signature                          Title                         Date
 -------------------      ---------------------------------   ----------------
 /s/ Dr. J.W. Stucki      Chief Executive Officer, President
     Dr. J.W. Stucki      and Chairman of the Board
                          (Principal Executive Officer)       January 16, 2001

 /s/ John C. Stuecheli    Chief Financial Officer and
     John C. Stuecheli    Vice President-Finance
                          (Principal Financial and
                          Accounting Officer)                 January 16, 2001

 /s/ John V. Mansfield    Director, Chairman of Audit
     John V. Mansfield    Committee                           January 16, 2001

 /s/ James Roberts        Director
     James Roberts                                            January 16, 2001

 /s/ Dr. Jeff Jones       Director
     Dr. Jeff Jones                                           January 16, 2001

 /s/ Dr. Michael Smith    Director
     Dr. Michael Smith                                        January 16, 2001