SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                   FORM 10-KSB


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

         For the fiscal year ended May 31, 1999

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


                        Commission File Number 033-67536


                       AMERICAN DREAM ENTERTAINMENT, INC.
                       ---------------------------------
               (Exact name of registrant as specified in charter)



         Minnesota                                     59-3169033
         ---------                                     ----------
  (State or other jurisdiction                        (IRS Employer
of incorporation or organization)                   Identification No.)


1800 East Sahara Avenue, Suite 107, Las Vegas, Nevada              89104
-----------------------------------------------------              -----
    (Address of principal executive offices)                     (Zip Code)



       Registrant's telephone Number, including area code: (702) 734-7557

Securities registered pursuant to Section 12(b) of the Exchange Act: None

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

     [ X ] Yes  [    ] No

     Check if no  disclosure  of  delinquent  filers in  response to Item 405 of
Regulation S-B is contained in this form,  and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  of  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   reporting  period  May  31,
1999........$-0-.

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant at May 31, 1999 was $-0-.  There was no bid price of the common stock
at that date.

                     FEDERAL AFFORDABLE HOUSING CORPORATION
                     --------------------------------------
          (Former name or former address, if changed since last report)


<PAGE>

                       AMERICAN DREAM ENTERTAINMENT, INC.
                 (f/k/a Federal Affordable Housing Corporation)



                               FORM 10-KSB - Index


                                     PART I

                                                                            Page



Item 1.  Description of Business.........................................     2

Item 2.  Description of Property.........................................     8

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

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


                                     PART II


Item 5.  Market of the Registrant's Securities and
         Related Stockholder Matters.....................................     9

Item 6.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations...................    10

Item 7.  Financial Statements and Supplementary Data.....................    12

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosures.......................................    12

                                    PART III


Item  9. Directors and Executive Officers of the Registrant..............    12

Item 10. Executive Compensation..........................................    13

Item 11. Security Ownership of Certain Beneficial Owners and Management..    14

Item 12.          Certain Relationships and Related Transactions.........    15

Item 13.          Exhibits, Consolidated Financial Statements,
                  Schedules and Reports on Form 8-K......................    16

                  Signatures.............................................    17

                                       1
<PAGE>

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This  Annual  Report on Form  10-KSB and the  documents  incorporated  herein by
reference contain forward-looking statements that have been made pursuant to the
provisions  of the  Private  Securities  Litigation  Reform  Act of  1995.  Such
forward-looking  statements  are based on current  expectations,  estimates  and
projections about American Dream Entertainment's industry, management's beliefs,
and  assumptions  made by management.  Words such as  "anticipates,"  "expects,"
"intends," "plans," "believes," "seeks,"  "estimates,"  variations of such words
and  similar   expressions   are  intended  to  identify  such   forward-looking
statements.  These  statements are not guarantees of future  performance and are
subject to certain risks,  uncertainties  and assumptions  that are difficult to
predict;  therefore, actual results and outcomes may differ materially from what
is expressed or forecasted in any such forward-looking statements.


                                     PART I
                                     ------


ITEM 1.  BUSINESS

GENERAL

American  Dream   Entertainment,   Inc.,  formerly  Federal  Affordable  Housing
Corporation,  has obtained certain rights under a License and Royalty  Agreement
from  Dreamweavers,   N.V.  to  market  and  distribute,   the  "Robin  and  The
Dreamweavers" medial concept in the United States. American Dream's objective is
to create,  develop, and produce animated properties that are typically marketed
to television, home-video and theatrical exhibition companies.

Federal Affordable Housing Corporation was originally organized on March 5, 1993
to develop residential subdivisions,  and construct,  market and sell affordable
homes in the Tampa,  Florida market.  Federal Affordable Housing Corporation was
restructured  December  31,  1998,  reflecting  a new line of  business  for the
exploitation of media products known as "Robin and The Dreamweavers"  within the
United States.  All assets and  liabilities  were  transferred to a newly formed
subsidiary,  AAA Homes,  Inc at December 31, 1998. The stock of AAA Homes,  Inc.
was distributed to our shareholders of record as of February 1, 1999.

We have not generated any media revenues to-date.  We plan to generate revenues,
in the  future,  from  the  creation,  development,  production,  licensing  and
distribution of animated properties relating to "Robin and The Dreamweavers" for
exhibition in all domestic media,  which include home video,  pay television and
cable  television  markets.  We have  also  developed  plans  to  produce  music
properties based on the characters from the animated series.

The Company's principal office is located at 1800 East Sahara Avenue, Suite 107,
Las Vegas, Nevada 89104.

RECENT DEVELOPMENTS

On March 5, 1999,  Dreamweavers N.V., Curacao,  Netherlands Antilles corporation
entered  into  a  Royalty  and  License   Agreement   granting   American  Dream
Entertainment  an  exclusive  license in the  United  States to exploit a medial
concept  known as "Robin  and The  Dreamweavers".  The  holding  Company of this
medial concept,  Dreamweavers NV, owns 100% of the rights for the "Robin and The
Dreamweavers"  animated  properties.  In consideration of the License  Agreement
American Dream Entertainment issued 16,000,000 shares of restricted common stock
to Dreamweavers N.V. and agreed to pay Dreamweavers,  N.V. a royalty equal to 3%
of gross revenues.

The 16,000,000  shares  represents  approximately  88% of the total  outstanding
stock of  American  Dream  Entertainment  formerly  Federal  Affordable  Housing
Corporation.  In addition, this License Agreement provides for a cash payment of
$5,500,000,  from a private placement of our securities,  to Dreamweavers,  N.V.
for the right to the medial products  consisting of a feature film together with
the  license  for TV  production  of "Robin and The  Dreamweavers",  license for
merchandising "Robin and The Dreamweavers",  license for the music of "Robin and
The  Dreamweavers",  license  for  designer  fashion  wear  of  "Robin  and  The
Dreamweavers", license of the video of "Robin and The Dreamweavers", and license
for  private  label  merchandising  of "Robin  and The  Dreamweavers"  ancillary
products.

                                       2
<PAGE>


Upon execution of the License Agreement, the President,  Secretary and Director,
Mr. Dick Metz,  resigned and Mr. Dirk W. Peschar,  a resident and citizen of The
Netherlands was appointed President,  Secretary and Director of the Company. Mr.
Peschar also serves as Chief Executive Officer of Dreamweavers N.V.

In connection  with the License  Agreement and in order to restructure  American
Dream  Entertainment to reflect the new line of business for the exploitation of
media products known as "Robin and The  Dreamweavers"  within the United States,
we  divested  all  assets  and  liabilities  by  transferring  such  assets  and
liabilities to a newly formed  subsidiary,  AAA Homes, Inc. We agreed to have no
more than 1,000,000 shares of common stock  outstanding prior to the issuance of
16,000,000  shares of restricted common stock to Dreamweavers N.V. Mr. Dick Metz
is the sole  director  and officer of AAA Homes,  Inc.  The shares of AAA Homes,
Inc. were distributed to our shareholders of record as of February 1, 1999.

In May 1999, we amended our Certificate of Incorporation  through actions by our
majority  stockholder,  Dreamweavers  N.V. to change our name to American  Dream
Entertainment,  Inc. and to increase the authorized common stock from 20,000,000
to 50,000,000 shares.

BUSINESS MODEL AND PRODUCTS

In February 1999, American Dream Entertainment  acquired the exclusive rights in
the  United  States to  exploit  the  Media  Property  known as  "Robin  and The
Dreamweavers" under a License and Royalty Agreement granted by Dreamweavers N.V.
a Curacao Company that has developed the "Robin and The  Dreamweavers"  concept.
This concept consists of several media products, an animated feature length show
for television,  animated television series, a soundtrack,  an Internet Site and
games,  a Robin  private  label (a  fashion  label with  designs  based upon the
character of "Robin"),  ancillary  merchandising  products  related to the video
games, toys, apparel, school supplies and cosmetic products.

We plan to develop and exploit our products in several  media and  entertainment
franchises,   based  upon  our  animation  property  known  as  "Robin  and  The
Dreamweavers".  This project  combines the portrayal of a beautiful woman in the
eye-catching  style of  Vargas  with  contemporary  humor and  comedic  turns to
develop  "Robin"  our  heroine.  Robin is  contemporary,  hip,  sexy,  and wise,
characteristic   of  today's  young  woman.   Robin  appeals  to  all  ages  and
demographics,  especially  those that enjoy house,  dance music, RIB and HIP HOP
music.

We plan  on  launching  our  marketing  campaign  by  establishing  broadcasting
contracts with "Cable" television network companies. In addition, in conjunction
with these broadcasting  contracts, we plan on establishing marketing agreements
for the merchandising of the music,  fashion wear and related products under the
"Robin and The Dreamweavers" trade mark.

American Dream Entertainment plans on marketing the following products:

         -        Animated Feature Film for Television.

                  We are in the process of developing a feature length animation
                  movie  (72  minutes  in  length  utilizing   traditional  cell
                  animation  techniques  for  exhibition  in the United  States.
                  Exhibition  will include home video,  pay  television and free
                  television markets.

         -        Animated Television Series.

                  We are developing 26 half-hour  episodes for exhibition in all
                  domestic and international  media channels.  Each episode will
                  be a complete story  featuring the characters from the feature
                  film and will address  contemporary  social issues relevant to
                  young adults.  Additionally,  the characters of "Robin and The
                  Dreamweavers"   may  further  be  applied  to  an  interactive
                  television game show.

         -        Music CD's.

                                       3
<PAGE>


                  American  Dream  plans  on  incorporating   songs  written  by
                  successful  songwriters  into  a  double  CD  album,  with  an
                  underscore  house CD and dance  music CD.  These  CD's will be
                  launched  simultaneously  with the  feature  film.  We plan to
                  ensure a  contemporary  music focus and will utilize,  "up and
                  coming"  dance  producers  to  provide  new  songs by  various
                  performers.

         -        Internet Web Site and Interactive Games.

                  We will utilize  broad-based  proprietary  digital development
                  techniques  to  create  leading  edge  entertainment  content.
                  CD-Roms  and a  multi-lingual  Internet  Site  will  feature a
                  multi-player   game  experience,   sponsorship  and  marketing
                  opportunities,   as  well  as,  gaming  applets  and  shopping
                  components.  These will be  corporate  sponsored or charged to
                  viewer participants.  The Internet Site will be used to create
                  awareness  of the  characters,  assist  in  cross  promotional
                  efforts, and generate product sales,  advertising revenues and
                  subscription fees.

                  We will be poised to take advantage of new  technologies  with
                  cable access to on-line  services,  "cyber  cable" the hot new
                  interactive  technology that's right around the corner.  These
                  new  technologies  promise  to  bind  fast  access  speeds  to
                  everything  that  cyberspace has to offer.  Existing cable and
                  telephone  operators are going to bundle  Internet and on-line
                  service access together,  just like cable television packages.
                  Consumers will surf the Internet at greater  speeds,  download
                  video clips in the blink of an eye, and generally  continue to
                  blur  the  lines  between   broadcasters   cable  and  on-line
                  services.

         -        A "Robin" Private Label.

                  Capitalizing  on unique  designs  based upon the  character of
                  Robin and her  friends,  we will  develop a fashion  label and
                  utilize our characters,  especially  "Robin" in  international
                  campaigns.

         -        Ancillary Merchandising Products.

                  Gaming  applets will be marketed to video game  companies  for
                  licensing.  We will oversee all licensing and merchandising of
                  consumer  products  (i.e.  toys,  apparel,  school  supplies).
                  American Dream is currently developing  electronic gadgets for
                  young  adults  such  as; a pager  memo  watch,  pocket  E-mail
                  device,  and other devices utilizing its characters.  Also, we
                  are in the process of developing  products such as stationery,
                  personal  care,  cosmetic  products and other  exciting  young
                  adult oriented merchandise.

MATERIAL CONTRACTS

American  Dream   Entertainment  is  the  beneficiary  to  License  and  Royalty
Agreements.  We have an  exclusive  license for a period of fifteen  (15) years,
with an option to extend the  license for an  additional  five (5) years for the
United States rights to "Robin and The  Dreamweavers".  This License grants us a
full range of media products which include the following:


     -        Animated Feature Length Movie for Television
     -        Animated Television Series
     -        Music CD's
     -        Internet Web Site and Games
     -        A "Robin" Private Label
     -        Ancillary Merchandising Products.

INDUSTRY

General

Animation  has been a major  entertainment  medium for  decades.  Since  cartoon
characters  appear the same dubbed in any  language,  animation  easily  crosses
national and language barriers. In addition, animation generally does not become
"dated" as does  live-action  programming,  allowing  an  animated  series to be
enjoyed by each new generation of children.

                                       4
<PAGE>


Children  are the primary  target  market for animated  television  programming.
Nielsen data indicate that children aged two to eleven are the nation's heaviest
consumers  of  television,  watching  an  average  of almost 22 hours each week.
Growth In  advertising  spending  targeted at children and the  expansion in the
number of television  channels  dedicated to children's  programming  around the
world have caused an increase in the demand for animated television programming.

Animated  programming  has  expanded  beyond the  traditional  Saturday  morning
line-up.  Monday  through  Friday  mornings and  afternoons  now attract an even
greater  number  of  young  viewers  than  Saturday  morning.   There  are  many
programming  blocks targeted toward children,  including "The Disney Afternoon,"
Fox  Children's  Network and WB Kids.  In addition,  many  first-run  syndicates
provide  programming  blocks of animation  Monday  through  Friday and on Sunday
mornings. Furthermore, programming successes such as "The Simpson's" and "Beavis
& Butthead",  and more recently "King of the Hill",  demonstrate  that animation
also appeals to adults.

Increases in cable and satellite channels world wide and the privatization,  new
entry and expansion in the international broadcast, satellite and cable industry
are  providing  additional  opportunities  for growth for  animation  companies,
especially those companies which own and distribute their own programs.

An increase in the number of channels and broadcasters world-wide, especially in
the United  States,  has caused an increase in competition  among  broadcasters.
This competition has had a negative impact on certain broadcasters that have had
difficulty  competing.  However,  the more successful and committed  programmers
have  grown  significantly.  In this  environment,  access to  distribution  has
emerged as a more limiting factor and a key element of success.

Animation Production

The first step of a typical animation  production is the creation of the script.
A story editor  supervises the  preparation of each episode's  script by various
freelance  script  writers.  Next,  artists  depict  the  story  and  action  In
storyboards  which  provide a blueprint for the  animation  process.  Voices and
songs  are  recorded  and the  recordings  are  analyzed  and  timed so that the
animation  can be  synchronized  to the voice  track.  Based on the  script  and
storyboard, artists create character designs, as well as key background drawings
and paintings.  These  essential  elements are assembled  into a  pre-production
package for each  episode  which is then  shipped to an overseas  subcontractor.
Subcontractors  use  the  pre-production   materials  to  perform  most  of  the
labor-intensive aspects of production.  Most of these subcontractors are located
In low-cost  labor  countries in the Far East,  including  South Korea,  Taiwan,
China and the Philippines.  When completed, the subcontractor ships the negative
and work-print for each episode to the producer.  The film is then taken through
a  post-production  process  which  involves  editing the picture and  dialogue,
transferring the filmed Images to video tape, creating sound effects,  composing
and producing the musical  score and mixing and  synchronizing  the sound to the
picture. After the post-production process, an episode is ready for delivery.

COMPETITION

American Dream Entertainment will experience intense competition with respect to
its animated feature film and its animation products.

Our animated  feature  film will  compete  with  feature  films and other family
oriented  entertainment  products  produced  by major movie  studios,  including
Disney,  DreamWorks SKG  ("DreamWorks"),  Pixar,  Warner Bros., Inc.,  Twentieth
Century Fox Film  Corporation  ("Twentieth  Century  Fox"),  Paramount  Pictures
("Paramount"),  Columbia Tri-Star Pictures Inc., Lucas film Ltd. ("Lucas film"),
Universal City Studios,  Inc. and MGMUA,  as well as numerous other  independent
motion picture production companies.

In 1998,  competition  significantly  intensified  in the animated  feature film
market from these and other movie  studios.  American  Dream's film will compete
with the  feature  films of other  movie  studios  for  optimal  release  dates,
audience acceptance and exhibition  outlets.  The majority of movie studios with
which we compete have  significantly  greater name recognition and significantly
greater financial,  technical, creative, marketing and other resources than does
American Dream Entertainment.

We believe  that the  primary  competitive  factors  in the market for  animated
feature films include creative content and talent, product quality,  technology,
access to distribution channels and marketing resources.  Because American Dream
is a new company with limited financial resources, there is no assurance that we
will be able to  compete  with  these  factors.  However,  we  intend,  wherever
possible to enter into contractual  relationships with companies which have been
engaged in the communications, marketing and Internet business for a significant
period of time to allow the  Company to utilize its assets and  management  team
productively.

                                       5
<PAGE>


We expect  competition  to intensify  and increase in this market in the future.
Currently,  the  majority of our  potential  competitors  have longer  operating
histories,  greater  name  recognition,  and  significantly  greater  financial,
technical,  marketing and other  resources  than American  Dream  Entertainment.
There can be no assurance that we will be able to compete  successfully  against
these  competitors.  Such  competition  could  materially  adversely  affect our
business, operating results or financial condition.

MARKETING AND DISTRIBUTION

American Dream Entertainment has identified a niche in the market for television
animation.  The majority of today's  animation  programming  is directed  toward
children in the age brackets of two to five or six to ten years old. However,  a
third age  bracket  is  evolving  of  sixteen  years old and  older.  This third
category  views  programs such as: "The  Simpson's"  and "King of the Hill".  We
believe that "Robin and The Dreamweavers"  will be successful in attracting this
age bracket.

This group has shown a preference for animation content such as: "He-Man and the
Master of the Universe",  "She-Ra Princess of Power", "Teen Age Mutant Turtles",
and "Sailor Moon".  Currently,  there is very limited  product  directed at this
audience with the exception of "Beavis and Butthead",  "Spawn", "South park" and
Daria".

We have recognized the value of these viewers. This target group gains increased
financial  independence  beginning  at age 13, at which time they  typically  go
unsupervised  to the  movies or malls,  shop on their  own,  and make  their own
purchasing  decisions.  Young  adults  have an  average  of $500  per  month  in
disposable  income.  They  typically  influence  20% of  family  spending  which
represents more than 20% of the total dollar amount spent on CD's,  Electronics,
and Video games.

"Robin and The Dreamweavers" was created and designed to attract the appetite of
this market and stimulate  purchases of ancillary products that include lines of
merchandise  that are  designed  for the young adult  market.  Examples of these
products are clothing,  accessories,  compact discs,  stationery items,  fitness
Items, cosmetics, jewelry, watches, cell-phones, home furnishing, bank accounts,
limited access credit cards, video games, and computers.

Media Exploitation

American  Dream  plans  on  utilizing  the  following   media  outlets  for  the
exploitation of its products:

    -    U.S. TELEVISION

         Networks.  The  United  States  network  television  market is the most
         valuable  market to  producers  of animated  programming.  In the past,
         networks  have  generally  reached the largest  audiences  and paid the
         highest license fees, enabling a producer to finance a more significant
         portion of its  production  costs  through  network  license  fees than
         licensing the same program to cable  networks or first-run  syndicates.
         Weekend morning  children's  programming  currently  broadcasts on ABC,
         CBS,  FOX,  UPN  and WB  (the  "Networks").  In  addition,  FOX  and WB
         broadcast  animated  programming  for young  audiences  during  weekday
         mornings   and   afternoons.   NBC  has  not   broadcasted   children's
         programming, including animation, since 1992.

         Syndication.  Syndication provides an important  first-run,  as well as
         repeat,   broadcast  market  for  animated   programs.   Traditionally,
         syndication has been populated by programs that support merchandise and
         whose characters are featured in toy lines,  apparel and other consumer
         products.  During the 1996-97 season,  syndicators  such as Buena Vista
         Television Distribution, Saban Entertainment,  Bohbot Entertainment and
         Claster  Television were  distributing top rated  children's  programs,
         both Monday through Friday and on Saturdays and Sundays.

                                       6
<PAGE>


         Cable  and  Direct  Broadcast  Satellite  ("DBS").  Cable  and  DBS are
         becoming more popular with children.  The growth in the number of cable
         channels and the  development  of DBS provides  additional  outlets for
         animated  programming.  The cable  channels which  currently  broadcast
         animated programs include Nickelodeon, USA Network, The Disney Channel,
         The Cartoon  Network,  The Comedy  Channel,  The Family  Channel,  HBO,
         Showtime and MTV. Both Disney and Fox Kids Network  recently  announced
         that they will be launching all-kids programming cable channels. Recent
         increases in the penetration and viewership for Turner-Warners  Cartoon
         Network may indicate that this avenue of  distribution/exhibition  will
         continue  to grow as an  important  outlet  for  animated  programming.
         Notwithstanding  potential growth in the animated programming industry,
         other factors exert contrary pressures on the number of slots available
         for animated  programming and we believe that there will be fewer slots
         available for such  programming  in the 1998-99  season than existed in
         the past.

    -    NATIONAL TELEVISION

         The  growth in the  number  national  television  outlets  has  created
         additional demand for animated  programming.  The  commercialisation of
         the television industry has encouraged a ratings/revenue-oriented focus
         among  broadcasters,  thereby  increasing the demand for higher quality
         television  entertainment.  Animated  programs  produced  in the United
         States have  enjoyed  wide  acceptance  nationally.  In  addition,  the
         national  market has experienced an increase in the number of cable and
         satellite programming  services.  These added programming services have
         created an opportunity for distributors,  including  American Dream, to
         license   simultaneously  both  traditional   broadcast  and  satellite
         programming  rights  within  the  same  territory.  Television,  cable,
         satellite  and home video  sales of animated  programs  produced in the
         United  States can account for the  majority of the revenue for a given
         program. Because the global demand has grown, it has created a need for
         and  an  opportunity  to  produce   internationally   created  animated
         programs.  U.S. producers work collaboratively with their international
         peers  to  develop  and   produce   programs   for   initial   releases
         simultaneously  throughout the world.  American Dream  Entertainment is
         concentrating its efforts on the U.S. market,  which is the largest and
         most  lucrative  market  and the  market  for  which  we have  obtained
         exclusive rights under our Licensing and Royalty Agreement.

    -    HOME VIDEO

         The home video distribution business involves the promotion and sale of
         videocassettes  and  videodisks to local,  regional and national  video
         retailers (i.e.  video specially  stores,  convenience  stores,  record
         stores and other outlets), which then rent or sell such video cassettes
         and video disks to consumers primarily for private viewing.  When video
         cassettes are sold directly to the public they are priced significantly
         lower than the prices charged to  wholesalers  who will rent the video.
         This   direct   sale  to   consumers   is   commonly   referred  to  as
         the"sell-through  market." In a typical home video deal,  the wholesale
         distributor will receive a non-refundable advance to be applied against
         royalties which may range from 8% to 25% of the wholesale selling price
         of a video cassette or disk.

    -    LICENSING AND MERCHANDISING

         Due to the significant revenue that can be generated from licensing and
         merchandising  television characters,  producers and owners of animated
         characters  seek to drive  sales of toys and  other  licensed  products
         through the production and  distribution  of programs  featuring  their
         characters.  According  to "The  Licensing  Letter"  (a  licensing  and
         merchandising  trade  periodical that is published  monthly),  U.S. and
         Canadian    retail   sales   of   products    derived   from   licensed
         entertainment/character  properties were approximately $16.7 billion in
         1996. Numerous programs (such as The Teenage Mutant Ninja Turtles, G.I.
         Joe, Power Rangers, Sonic the Hedgehog and Transformers) were initially
         produced in large part to support the sales of  merchandise  associated
         with these programs.

         In addition to utilizing  television to advertise products to children,
         children's    programming   itself   provides   broad   licensing   and
         merchandising opportunities.  Characters developed in a popular series,
         and often the series  themselves,  achieve a high level of  recognition
         and  popularity  among  children,  making them valuable  assets for the
         licensing and merchandising  market,  where they can provide attractive
         "branding"  opportunities.  The children's market Is one of the fastest
         growing  segments  in  licensed   merchandising   sales,   relating  to
         children-oriented  products.  Among the most popular licensed items are
         toys,  T-shirts,  food,  watches  and soft  vinyl  goods such as boots,
         backpacks and raincoats.

                                       7
<PAGE>


         In addition to the  distribution  venues  described  above, a number of
         other  sources  of  revenue  exist for the  exploitation  of  ancillary
         rights.  For Instance,  interactive  technology is rapidly  evolving to
         integrate  full motion  video with the personal  computer,  creating an
         increasing array of opportunities  for distribution  rights in a market
         commonly referred to as "multimedia".

    -    THE INTERNET

         The interactive  entertainment software industry generated an estimated
         $4.4 billion in retail sales in 1996,  according to IDC/Link  research,
         and $3.3  billion in  indirect  sales,  for a total of $7.7  billion in
         direct and indirect sales.

         The  video  game  market  has  grown  exponentially  since it was first
         introduced  in  the  late  1970s.  Today,  almost  two-thirds  of  U.S.
         households have a cartridge game system or a personal computer on which
         games  can be  played.  In  addition,  today's  gamers  are able to use
         advanced  gaming systems,  including  networked PCs, to challenge other
         players which is infinitely more  interesting  than playing against the
         computer.

         The Internet has the potential of making  multi-player  gaming explode.
         Currently,  more than 5 million  users are spending more than 5 hours a
         week  on-line.  However,  gaming on the  Internet has not yet taken off
         because of several complex  technological  challenges,  one of which is
         the problem of "latency" or lag time.

         In 1999, American Dream Entertainment will lauch real-time multi-player
         gaming  over  the  Internet.  This  multiplayer  game  "Robin  and  The
         Dreamweavers",  will focus on environmental  issues and will capitalize
         on the  natural  desire to explore the world and  participate  in great
         adventures.   Participants   will  be  able  to  check-out  the  latest
         multi-player episodic game story and test their skills against millions
         of  potential  opponents.  They  will  also be able to  participate  in
         contests,  tournaments,  and special  events that are targeted to their
         individual   game  and  leisure   interests.   This   service  will  be
         speech-enabled,  so players will be able to taunt their  opponents,  or
         cheer their teams on, as they play.  In addition,  text and voice based
         chat areas will  provide a place to hang out with  friends,  meet other
         players and even plot winning  strategies  with their  teams.  Industry
         insiders  believe  that  one of the next big  waves  will be  PC-based,
         real-time multi-player internet games, especially because PCs have much
         more built-in connectivity than traditional video-game platforms.

         We maintain an Internet  Site that displays  information  regarding the
         "Robin and The Dreamweavers"  media products,  and general  information
         about us and our  progress  in  marketing  products,  news  relating to
         product improvements and new products, distribution agreements, release
         dates of  feature  films,  video  series  Internet  games,  and  future
         developments.  In  addition,  we utilize  the  Internet  to display and
         market  the  products  that we intend to  provide  which  will  include
         merchandising various products for direct sale over the Internet.

EMPLOYEES

As of May 31,  1999,  American  Dream had (4) four  employees.  We consider  our
relations with our employees to be excellent.


ITEM 2.  PROPERTIES

We  currently  lease and occupy an office  located at 20501  Ventura  Boulevard,
Woodland Hills,  California 91364-2313.  Our monthly lease payment is $540. This
lease expires in February 2000.

ITEM 3.  LEGAL PROCEEDINGS.

American Dream Entertainment is not party to any material legal proceedings.


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

On May 28, 1999, pursuant to an action by Dreamweavers, N.V., as the holder of a
majority of our outstanding shares of Common Stock, an Amendment to our Articles
of  Incorporation  was filed with the State of Minnesota,  which (i) changed our
corporate  name from Federal  Affordable  Housing  Corporation to American Dream
Entertainment, Inc. and (ii) increased our authorized Common Stock to 50,000,000
shares, par value $.0001. Dreamweavers, N.V., as the holder of a majority of the
outstanding shares of Common Stock, also appointed Mr. Dirk W. Peschar, Arjen de
Groot and Mr. Jules H. van Marken as our officers and  directors  and the former
officers and directors of Federal Affordable Housing Corporation resigned.

                                       8
<PAGE>


                                     PART II
                                     -------


ITEM 5. MARKET PRICE OF AND  DIVIDENDS  ON THE  REGISTRANT'S  COMMON  EQUITY AND
        OTHER SHAREHOLDER MATTERS

Set forth  below is  information  concerning  the  trading  history  of  Federal
Affordable Housing  Corporation's Common Stock. As noted below, our Common Stock
ceased  trading in the fourth  quarter of 1997. The transfer agent and registrar
for the Common Stock is American  Securities Transfer and Trust, Inc. 12039 West
Alameda  Parkway,  Lakewood,  Colorado 80226. The following table sets forth, to
the  best of our  knowledge,  for the  periods  indicated  the high and low sale
prices for shares of our Common  Stock as reported to us by  representatives  of
our prior underwriter, Bernard, Lee & Edwards Securities, Inc.



                                                       Sales Price
                                             High                       Low

Fiscal Year Ended 1995
         Fourth Quarter                      8-1/2                      7
         Third Quarter                       8-1/2                      7

Fiscal Year Ended 1996
         Fourth Quarter                      8                          6-3/4
         Third Quarter                       8                          6-3/4
         Second Quarter                      8                          7
         First Quarter                       8                          7

Fiscal Year Ended 1997
         Fourth Quarter                      --                         --
         Third Quarter                       7-3/4                      6-1/2
         Second Quarter                      7-3/4                      6-1/2
         First Quarter                       8                          6-1/2


The Company's  common stock is not listed on NASDAQ,  or is not currently traded
in the  over-the-counter  market  in  the so  called  "pink  sheets,"  or on the
"Electronic  Bulletin Board" of the National  Association of Securities Dealers,
Inc. (the "NASD"). Accordingly, an investor may find it difficult to dispose of,
or obtain  accurate  quotations  as to the  market  value of the  common  stock.
Further,  in the absence of a security being quoted on NASDAQ, a market price of
at least $5.00 per share or the Company  having in excess of  $2,000,000  in net
tangible  assets,  trading  in the  Company's  securities  may be  covered  by a
Securities and Exchange  Commission  ("SEC") rule that imposes  additional sales
practice  requirements  on  broker-dealers  who sell such  securities to persons
other  than   established   customers  and   accredited   investors   (generally
institutions  with net worth in excess of $1,000,000 or annual income  exceeding
$200,000 or $300,000 jointly with their spouse). For transactions covered by the
rule, the broker-dealer  must make a special  suitability  determination for the
purchaser and receive the purchasers' written agreement to the transaction prior
to the sale.  Consequently,  the rule affects the ability of  broker-dealers  to
sell the Company's  securities  and also may affect the ability of purchasers in
his offering to sell their securities in the secondary market.

Previously,  the SEC adopted seven rules ("Rules") under the Securities Exchange
Act  of  1934   requiring   broker/dealers   engaging  in  certain   recommended
transactions with their customers in specified equity securities  falling within
the definition of "penny stock"  (generally  non-NASDAQ  securities priced below
$5.00 per share) to provide to those customers  certain  specified  information.
Unless  the  transaction  is exempt  under the Rules,  broker/dealers  effecting
customer transactions in such defined penny stocks are required to provide their
customers  with: (1) a risk disclosure  document;  (2) disclosure of current bid
and  ask  quotations,  if  any;  (3)  disclosure  of  the  compensation  of  the
broker/dealers and its sales person in the transaction;  and (4) monthly account
statements  showing the market value of each penny stock held in the  customer's
account.


                                       9
<PAGE>


As a result of the aforesaid rules regulating penny stocks, the market liquidity
for the Company's  securities could be severely  adversely  affected by limiting
the ability of broker-dealers  to sell the Company's  securities and the ability
of shareholders sell their securities in the secondary market.

The Company has a pending Form 211 Application with the National  Association of
Securities Dealers ("NASD") to commence trading of the Company's common stock in
the counter  market in either the so called "pink sheets" or on the  "Electronic
Bulletin  Board",  of the NASD. On August 30, 1999, we received a comment letter
from  the  staff at the  NASD  requesting  that a copy of this  Form  10-KSB  be
provided to the staff of the NASD upon filing with the SEC.  The comment  letter
indicated  that the staff of the NASD will  re-examine  our Form 211  submission
following receipt of this Form 10-KSB. We are not aware of any other open issues
remaining  with the NASD. If the NASD does not approve our Form 211  Application
or if the NASD continues to indicate that our Form 211 Application is deficient,
we will not be able to commence trading of our common stock. Although we believe
the filing of this Form 10-KSB will  satisfy the staff of the NASD,  there is no
assurance that the NASD will approve our Form 211 filing.

Recent SEC and NASD revisions and  interpretations of Rule 15c2-11 require us to
maintain our status as a reporting company under Section 12(q) of the Securities
Exchange  At of 1934.  Our  failure to timely file  annual,  quarterly  or other
reports  may  affect  our  ability to  maintain  listing in the OTC  "Electronic
Bulletin Board".

DILUTION AND ABSENCE OF DIVIDENDS

We have not paid any cash  dividends on our common  stock and do not  anticipate
paying any such cash dividends in the foreseeable future. Earnings, if any, will
be retained to finance future growth.  We plan to issue our shares in private or
public  offerings to obtain  financing,  capital or to acquire other  businesses
that can improve our  performance  and growth.  Future  issuance and or sales of
substantial  amounts of common stock could adversely  affect  prevailing  market
prices in our common stock.

TRANSFER AGENT AND WARRANT AGENT

American  Securities  Transfer & Trust,  Inc.  of Denver,  Colorado  acts as the
Company's Transfer Agent and Warrant Agent.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Federal  Affordable  Housing  Corporation  was  restructured  December 31, 1998,
reflecting a new line of business for the  exploitation  of media products known
as "Robin  and The  Dreamweavers"  within  the  United  States.  All  assets and
liabilities  were  transferred to a newly formed  subsidiary,  AAA Homes, Inc at
December  31,  1998.  The  stock  of AAA  Homes,  Inc.  was  distributed  to our
shareholders  of record as of February 1, 1999. In May, 1999 we changed our name
to American Dream Entertainment, Inc. to reflect this new line of business.

There were no revenues from December 31, 1998 until May 31, 1999 in the animated
film  business  and we have  incurred  significant  losses  associated  with the
promotion of our animated feature film.  American Dream  Entertainment  does not
expect to generate  revenues until its "Robin and The  Dreamweavers"  project is
completed and becomes contractually available for telecasting or exhibition. The
amount  of  distribution  and  licensing   revenues  earned  by  American  Dream
Entertainment  will be dependent  on, among other  things,  the timeline for the
completion of the project and its distribution by others.

In the fiscal year ended May 31, 1998, Federal Affordable Housing  Corporation's
principal  lines of business were in developing land for the purpose of building
and  selling  residential  housing.  In this  last  year of  operations  in this
business we sold 32 lots and 3 houses.  We have since transferred all operations
involving  real  estate  and the  development  thereof,  to AAA Homes,  Inc.  at
December 31, 1998.


                                       10
<PAGE>


RESULTS OF OPERATIONS

FISCAL YEAR 1999 COMPARED TO FISCAL YEAR 1998

There were no revenues  for the year ended May 31,  1999.  Revenues for the year
ended May 31, 1998 were  $481,400  which  consisted  of the sales of real estate
involving 32 lots and 3 houses.

Cost of sales for the  fiscal  year  ended  May 31,  1998  were  $457,275  which
represents a percentage of revenues of 95%.  There were no cost of sales for the
fiscal year ended May 31, 1999.

For the year ended May 31,  1999,  total  selling,  general  and  administrative
expenses were  $261,069 as compared to $90,413 for the previous  fiscal year, an
increase of $170,656 or 189%. Of this $170,656 increase in selling,  general and
administrative, approximately $142,170 was due to promotional efforts associated
with our animated feature film which was not pertinent in the prior year.

The decrease in interest  expense was  primarily  due to the sale of the 32 lots
and 3 houses and the complete  payment of notes payable and long-term  debt upon
sale of these  properties.  Interest  expense  for the fiscal year ended May 31,
1999 was $ -0- as compared to $20,555 in the previous year.

Net loss was $249,880 for the year ended May 31, 1999, as compared to a net loss
of $77,800 for the previous fiscal year ended May 31, 1998. This increase in net
loss is associated  with  promotional  efforts  related to our animated  feature
film. In addition,  there were no revenues in the fiscal year ended May 31, 1999
to absorb selling,  general,  and  administrative  expenses  incurred during the
period.

FISCAL YEAR 1998 COMPARED TO FISCAL YEAR 1997

Sales in 1998 increased 3295% to $481,400 over the $14,178  recorded in 1997, as
a result of the sale of houses and land.  The company  sold 32 lots and 3 houses
in the fiscal year ended May 31, 1998.

Cost of goods sold for the fiscal year ended May 31, 1998, increased to $457,275
from zero in fiscal 1997. Cost of goods as a percentage of sales  represents 95%
in fiscal 1998.

For the year ended May 31,  1998,  total  selling,  general  and  administrative
expenses were $90,413,  as compared to $49,936 for the previous  fiscal year, an
increase of $40,477.  This increase was due to a $40,000 disclosure  requirement
in SAB 1:B  regarding  compensation  expense  for the  fair  value  of  services
provided by management.

Net loss was $77,800 for the year ended May 31, 1998,  as compared to a net loss
of $35,758 for the previous  fiscal year ended May 31, 1997. The increase in net
loss was primarily  attributable to a $40,000 disclosure  requirement in SAB 1:B
regarding  compensation  expense  for the fair  value of  services  provided  by
management which increased general and administrative expense.

LIQUIDITY AND CAPITAL RESOURCES

Our  operations  are  currently  funded  through  advances made on our behalf by
Dreamweavers, N.V. Through May 31, 1999, Dreamweavers has advanced approximately
$193,201 on our behalf.  These amounts primarily relate to promotional costs and
payments made to  consultants,  advisors,  reimbursement  of travel expenses and
lease  expenses.  We are  not  presently  generating  sufficient  revenues  from
operations  to fund capital  requirements.  Our ability to alleviate our working
capital deficit and obtain capital adequate to fund future costs associated with
operations and expansion plans is dependent upon Dreamweavers,  N.V.  commitment
to continue funding our operations,  the private placement of our securities and
the realization of projected sales for our products.  There is no assurance that
such revenues will be generated or that other funding will be available.

INFLATION

Inflation  has not  proven to be a factor in the  Company's  business  since its
inception  and is not  expected  to  have a  material  impact  on the  Company's
business in the foreseeable future.

                                       11
<PAGE>

YEAR 2000

The Year 2000  problem is the result of  computer  programming  using two digits
rather than four to define the  applicable  year.  Computer  programs  that have
time-sensitive  software may recognize a date using "00" as the Year 1900 rather
than the Year 2000.
This could result in a major system failure or miscalculations.

We use software,  computer  technology and other services developed and provided
by  third-party  vendors that may fail due to the year 2000  phenomenon.  We are
currently reviewing our products,  our internal computer systems and the systems
of  third  parties  on which we rely for  handling  the Year  2000.  We are also
seeking  confirmation  from  third  parties  that  their  systems  are Year 2000
compliant or plans are being  developed to address the Year 2000 problem.  Based
on  information  available to date,  we believe that we will be able to complete
our Year 2000  compliance  review and make any  necessary  modifications  to our
internal  systems prior to the end of 2000. We further  believe that such review
and  modification  will not require us to incur any material charge to operating
expenses,  although we cannot  provide any assurance that such expenses will not
be  material.  In  addition,  even if the year 2000  issue  does not  internally
materially  affect American Dream  Entertainment,  we could be affected  through
disruption in the operation of the activities in which we interact.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is presented at page F-1.


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

The  information  required by this item is incorporated by reference to the Form
8-Ks  filed  on July  13,  July 26 and  August  6,  1999  regarding  Changes  in
Registrant's Certifying Accountant.



                                    PART III
                                    --------


ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS , PROMOTERS AND CONTROL PERSONS.

DIRECTORS

The members of American Dream  Entertainment's  Board of Directors as of May 31,
1999 are as follows:

NAME                   AGE                        POSITION

Dirk W. Peschar        41                Chairman of the Board of Directors
                                         President, Chief Executive Officer

Arjen de Groot         36                Chief Financial Officer, Vice President
                                         of Operations, Director

Jules H. van Marken    65                Director

Executive  officers are elected by the Board of Directors  and serve until their
successors are duly elected and qualify, subject to earlier removal by the Board
of Directors.  Directors are elected at the annual  meeting of  shareholders  to
serve for their term and until their respective  successors are duly elected and
qualify, or until their earlier resignation,  removal from office, or death. The
remaining  directors  may fill any  vacancy  in the  Board of  Directors  for an
unexpired  term.  See "Board of Directors"  for a discussion  of the  Directors'
terms.

                                       12
<PAGE>


Dirk W. Peschar is our President,  Chief  Executive  Officer and Chairman of the
Board.  Mr.  Peschar is also a shareholder  of  Dreamweavers,  N.V. Mr.  Peschar
conceived of the "Robin and The Dreamweavers" concept in 1997. In the 1980's Mr.
Peschar was a client services  director at Saatchi & Saatchi.  His clients there
included high profile companies such as Proctor and Gamble and Mercedes Benz. In
1992,  Mr.  Peschar  founded  Shore   Communications   Network,   a  Netherlands
corporation,  which  was an  advertising  agency,  specializing  in fast  moving
consumer products.  He developed his business to four offices in The Netherlands
before it was sold in 1996. In 1996,  Mr. Peschar was client  Services  Director
for Pay-Per-View Netherlands, where he met Mr. de Groot.

Arjen de Groot is our Chief Financial Officer and a Director.  From 1994 through
1997, Mr. de Groot was the financial director of Pay-Per-View,  Netherlands. Mr.
de Groot is also a shareholder of  Dreamweavers,  N.V. In 1997, Mr. de Groot met
with Mr. Peschar and became  involved in "Robin and The  Dreamweavers"  project.
Mr. de Groot has been an  entrepreneur  in The  Netherlands  since 1985, and has
been involved in numerous start-up business interests.

Jules H. van Marken is a Director  of the  Company.  Mr. van Marken is a retired
television  pioneer and continues to consult  businesses in the  television  and
entertainment  industry. He was recently senior consultant for Graf Pay Per View
TV (New York), and in Europe for Phillips and KPN.

BOARD OF DIRECTORS

The Company's Bylaws fix the size of the Board of Directors at no fewer than one
and no more than 10 members,  to be elected annually by a plurality of the votes
cast by the holders of Common Stock,  and to serve until the next annual meeting
of  stockholders  and until their  successors  have been  elected or until their
earlier resignation or removal. Currently, there are three (3) directors.


ITEM 10.  EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following  table shows the  compensation  paid or accrued by the Company for
the fiscal year ended May 31, 1999, to or for the account of the Chief Executive
Officer. No other executive officer of the Company received an annual salary and
bonus in excess of $100,000 or more during the stated period.  Accordingly,  the
summary  compensation  table does not include  compensation  of other  executive
officers.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                    Annual Compensation           Long-Term Compensation Awards

                                                                 Restricted
                                                  Other Annual   Stock     Options/  LTIP      All Other
Name & Principal              Salary    Bonus     Compensation   Award(s)  SARs      Payouts   Compensation
Position            Year        ($)      ($)          ($)          ($)      ($)       ($)         ($)


<S>                <C>        <C>       <C>       <C>            <C>       <C>        <C>         <C>
Dirk W. Peschar
President, CEO      1999      18,000     ---           ---         ---      ---       ---         ---

</TABLE>


(1)  Represents  amount  of Mr.  Peschar's  salary  and  expense  reimbursements
     allocated to the Company from Dreamweavers, N.V.

During fiscal year ended May 31, 1999, the former executive  officers of Federal
Affordable Housing Corporation did not receive any compensation.  We do not have
employment agreements with any of our employees. We do not have any stock option
plans.

                                       13
<PAGE>


AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES

         The information  provided in the table below provides  information with
respect to each  exercise  of stock  option  during  fiscal  1999 by each of the
executive  officers named in the summary  compensation table and the fiscal year
end value of unexercised options.

<TABLE>

<S>                        <C>                   <C>                 <C>                       <C>
-------------------------- --------------------- ------------------- ------------------------  -----------------------
(a)                        (b)                   (c)                 (d)                       (e)
-------------------------- --------------------- ------------------- ------------------------  -----------------------
-------------------------- --------------------- ------------------- ------------------------  -----------------------
                                                                                               Value of Unexercised
                                                                     Number of Unexercised     In-the Money Options
                           Shares Acquired                           options at FY-End         at FY-End($)
Name                       Exercise              Value Realize($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(1)
-------------------------- --------------------- ------------------- ------------------------  -----------------------
Dirk W. Peschar                    -0-                 -0-                      -0-                      -0-
===================
</TABLE>

(1)      The  aggregate  dollar  values in column (c) and (e) are  calculated by
         determining the difference  between the fair market value of the Common
         Stock  underlying  the options and the exercise price of the options at
         exercise or fiscal year end,  respectively.  In calculating  the dollar
         value realized upon exercise,  the value of any payment of the exercise
         price is not included.

DIRECTOR COMPENSATION

         A director  who is an employee of the  Company  receives no  additional
compensation  for services as director or for attendance at or  participation in
meetings except  reimbursement  of out-of-pocket  expenses and options.  Outside
directors  will  be  reimbursed  for  out-of-pocket   expenditures  incurred  in
attending or otherwise participating in meetings and may be issued stock options
for serving as a  director.  The  Company  has no other  arrangements  regarding
compensation for services as a director.



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth  certain  information  with  respect  to  the
beneficial ownership known to Company of shares of Company Common Stock owned as
of May 31, 1999  beneficially by (i) each person who beneficially owns more than
5% of the outstanding  Company Common Stock,  (ii) each director of the Company,
(iii) the Officers of the Company,  and (iv) directors and executive officers of
the Company as a group:


                                   Amount and Nature of
Name of Beneficial Owner(3)        Beneficial Ownership(1)  Percent of Class(2)
---------------------------        -----------------------  -------------------

Dirk W. Peschar (4) (5)                   6,160,000               33.4%
Arjen de Groot (6)                          960,000                5.2%
Jules H. van Marken                             ---                  0%
Dreamweavers, N.V.                       16,000,000                 89%
La Salle Group, Ltd.                        980,000                5.5%
All directors and executive officers
as a group (3 persons) (5)(6)             7,120,000               38.6%

(1)  Represents sole voting and investment power unless otherwise indicated.


                                       14
<PAGE>

(2)  Based  on   approximately   17,980,000   shares  of  Company  Common  Stock
     outstanding as of May 31, 1999 plus, as to each person listed, that portion
     of the  unissued  shares of Company  Common  Stock  subject to  outstanding
     options which may be exercised by such person,  and as to all directors and
     executive  officers as a group,  unissued shares of Company Common Stock as
     to which the  members of such  group  have the right to acquire  beneficial
     ownership upon the exercise of stock options within the next 60 days.

(3)  The address of each individual is in care of the Company.

(4)  May be deemed to be a  "founder"  of the  Company  for the  purpose  of the
     Securities Act.

(5)  The number of shares shown in the above tables reflect  indirect  ownership
     through Dreamweavers,  N.V. Mr. Peschar owns 38.5% of Dreamweavers, NV. and
     accordingly  indirectly  owns 33.4% of American Dream  Entertainment,  Inc.
     (88% ownership of Dreamweavers, N.V. multiplied by 38.5%).

(6)  The number of shares shown in the above tables reflect  indirect  ownership
     through  Dreamweavers,  NV.  Mr.  de  Groot  owns,  personally  or  through
     affiliate  entities,  6% of Dreamweavers,  N.V. and accordingly  indirectly
     owns  5.2%  of  American  Dream   Entertainment,   Inc.  (8%  ownership  of
     Dreamweavers, N.V. multiplied by 6%).


ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On  March  5,  1999,   Dreamweavers,   N.V.,  Curacao,  a  Netherlands  Antilles
corporation,  entered  into a Royalty and License  Agreement  granting  American
Dream  Entertainment,  Inc. an exclusive  license  agreement to exploit a medial
concept known as "Robin and The Dreamweavers". The holding company of this media
concept, Dreamweavers NV, owns 100% of the rights of the animated properties. In
consideration  of  the  License  Agreement,   we  issued  16,000,000  shares  of
restricted  common stock to Dreamweavers,  N.V. which includes a royalty payment
to Dreamweavers, N.V. equal to 3% of gross revenues.

The 16,000,000  shares  represents  approximately  88% of our total  outstanding
stock.  In  addition,  this  License  Agreement  provides  for a cash payment of
$5,500,000,  from a private placement of our securities,  to Dreamweavers,  N.V.
for the rights to the medial products consisting of a feature film together with
the  license  for TV  production  of "Robin and The  Dreamweavers",  license for
merchandising "Robin and The Dreamweavers",  license for the music of "Robin and
The  Dreamweavers",  license  for  designer  fashion  wear  of  "Robin  and  The
Dreamweavers", license of the video of "Robin and The Dreamweavers", and license
for  private  label  merchandising  of "Robin  and The  Dreamweavers"  ancillary
products.

Upon execution of the License Agreement, the President,  Secretary and Director,
Mr. Dick Metz,  resigned and Mr. Dick W. Peschar,  a resident and citizen of The
Netherlands, was appointed President, Secretary and Director of the Company. Mr.
Peschar also serves as CEO of Dreamweavers, N.V.

In connection  with the License  Agreement and in order to restructure  American
Dream  Entertainment to reflect the new line of business for the exploitation of
media products known as "Robin and The  Dreamweavers"  within the United States,
we  divested  all  assets  and  liabilities  by  transferring  such  assets  and
liabilities to a newly formed  subsidiary,  AAA Homes, Inc. We agreed to have no
more than 1,000,000 shares of common stock  outstanding prior to the issuance of
16,000,000 shares of restricted common stock to Dreamweavers, N.V. Mr. Dick Metz
is the sole  director  and officer of AAA Homes,  Inc.  The shares of AAA Homes,
Inc. were distributed to the Company's  shareholders of record as of February 1,
1999.

La Salle Group,  Ltd. is an unaffiliated  entity and has acted as  Dreamweavers,
N.V.'s advisor and  consultant.  In connection  with the License  Agreement this
entity was issued 980,000 restricted shares of our Common Stock.

Through May 31, 1999, Dreamweavers, N.V. has advanced us approximately $193,201.
In the calendar year ended  December 31, 1998,  Dreamweavers,  N.V. has invested
approximately $3,400,000 for development,  set up, marketing and sales expenses.
To date, in fiscal 1999, Dreamweavers,  N.V. has invested an additional $850,000
into the "Robin and The Dreamweavers" project. Dreamweavers, N.V. intends to pay
these  advances from the  $5,500,000  payment due  Dreamweavers,  N.V. under the
License Agreement.

                                       15
<PAGE>



ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.

(a)      The following documents are filed as part of this report:

         (1)(2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.

         Financial Statements filed as part of this Report are set forth in Item
         7 and  are  presented  at  page  F-1 of  this  Report;  which  list  is
         incorporated herein by reference. The Financial Statement Schedules and
         the Report of Independent Auditors as to Schedules follow the Exhibits.

(a)(3) EXHIBITS.

(b)      Reports on Form 8-K

         (i)      Form 8-K filed June 16, 1999 containing  information regarding
                  the Change of Control and  Acquisition  of Royalty and License
                  Agreement.

         (ii)     Form 8-Ks filed on July 13, July 26, and August 6, 1999,
                  regarding the change in our Certified Public Accountant.

(c) Exhibits. See the Indexes to Exhibits below.

INDEX TO EXHBITS.

All of the  items  below  are  incorporated  by  reference  to the  Registrant's
Registration  Statement on Form SB-2, File No.  33-67536-A,  effective March 10,
1995,  except for Exhibits 3.1 and 99.3,  which are included with the filing and
Exhibits 99.4 and 99.5,  which were filed with the Form 8-K dated March 5, 1999,
which is included with this filing.

Number                                  Description

3.1  Amendment  to  Articles  of  Incorporation  changing  name  and  increasing
     authorized common stock - May, 1999 (1)

4.1  Form of Common Stock Certificate (Exhibit 4.A of Form SB-2)

4.2  Form of Investor's Stock Purchase Warrant Certificate  (Exhibit 4.B of Form
     SB-2)

99.3 Office  Real  Estate  Lease  - 20300  Venture  Boulevard,  Woodland  Hills,
     California - dated February 12, 1999 (1)

99.4 Agreement  between   Dreamweavers,   N.V.,   Federal   Affordable   Housing
     Corporation and AAA Homes, Inc. relating to restructuring
     and license agreement (2)

99.5 Heads of the License and Royalty  Agreement  will  Dreamweavers,  N.V.  for
     "Robin and The Dreamweavers" concepts in the United States (2)

(1)  Filed herewith
(2)  Filed as exhibits to Form 8-K filed on June 16, 1999.


                                       16
<PAGE>


SIGNATURES


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



Date:   September 7, 1999               By:      /s/Dirk W. Peschar
                                                  ------------------
                                                  Dirk W. Peschar,
                                                  Principal Executive Officer
                                                  and President

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

         SIGNATURE         TITLE                                     DATE
         ---------         -----                                     ----

/s/ Dirk W. Peschar        President and Chief Executive
----------------------     Officer (Principal Executive        September 7, 1999
Dirk W. Peschar            Officer) and Director

/s/ Jules H. van Marken    Director                            September 7, 1999
-----------------------
Jules H. van Marken

/s/ Arjen de Groot         Chief Financial Officer (Principal  September 7, 1999
------------------         Financial Officer) Principal
Arjen de Groot             Accounting Officer, Director



                                       17
<PAGE>


                              Financial Statements

                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998

                          Independent Auditors' Report



<PAGE>





                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                              Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998










                                    Contents



Independent Auditors' Report on Financial Statements.......................F-1

Financial Statements:

    Balance Sheet..........................................................F-2
    Statements of Operations...............................................F-3
    Statements of Changes in Stockholders' Deficit.........................F-4
    Statements of Cash Flows.........................................F-5 - F-6
    Notes to Financial Statements...................................F-7 - F-11




<PAGE>




                          Independent Auditors' Report




Board of Directors
American Dream Entertainment, Inc.
    (f/k/a Federal Affordable Housing Corporation)
Las Vegas, Nevada


We have audited the accompanying  balance sheet of American Dream Entertainment,
Inc. (f/k/a Federal Affordable  Housing  Corporation) as of May 31, 1999 and the
related  statements of operations,  changes in stockholders'  deficit,  and cash
flows for the years ended May 31, 1999 and 1998. These financial  statements are
the  responsibility  of the  management of American  Dream  Entertainment,  Inc.
(f/k/a Federal Affordable Housing Corporation). Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of American Dream  Entertainment,
Inc. (f/k/a Federal Affordable  Housing  Corporation) as of May 31, 1999 and the
results of its  operations  and its cash flows for the years  ended May 31, 1999
and 1998 in conformity with generally accepted accounting principles.




Certified Public Accountants
Tampa, Florida
August 31, 1999


                                       F-1
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                                  Balance Sheet

                                  May 31, 1999





Assets
Current assets:
    Prepaid offering costs                                     $        104,098
                                                               ----------------

Other assets:
    Trademark and license                                             5,501,600
    Deposits                                                                550
                                                               ----------------
Total other assets                                                    5,502,150
                                                               ----------------

                                                               $      5,606,248
                                                               ================



Liabilities and Stockholders' Deficit Current liabilities:
    Due to stockholders                                        $      5,693,201
    Accrued expenses                                                    163,128
                                                               ----------------
Total current liabilities                                             5,856,329
                                                               ----------------


Stockholders' deficit:
    Common stock; $.0001 par value; 50,000,000 shares
        authorized; 17,980,000 shares issued and outstanding              1,798
    Capital in excess of par value                                      152,573
    Accumulated deficit                                                (404,452)
                                                               ----------------
Total stockholders' deficit                                            (250,081)
                                                               ----------------


                                                               $      5,606,248
                                                               ================





Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                      F-2
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                            Statements of Operations





                                                    Year Ended May 31,
                                               --------------------------
                                                 1999               1998
                                               --------------------------

Sales                                                       $    481,400

Cost of sales                                                    457,275
                                               -------------------------

Gross profit                                                      24,125
                                               -------------------------

Operating expenses:
    General and administrative expenses      $   (261,069)       (90,413)
    Interest expense                                             (20,555)
    Other income                                   11,189          9,043
                                               -------------------------
                                                 (249,880)      (101,925)
                                               -------------------------

Net loss                                    $    (249,880)  $    (77,800)
                                               =========================

Loss per share                              $        (.05)         $(.16)
                                               =========================







Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                      F-3
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                  Statements of Changes in Stockholders' Equity

                        Years Ended May 31, 1999 and 1998


<TABLE>
<CAPTION>



                                                                                      Capital In
                                                            Common Stock              Excess Of        Accumulated
                                                       Shares          Amount         Par Value        Deficit

<S>                                                  <C>          <C>            <C>               <C>
Balance, May 31, 1997,
    as previously stated                              493,500      $      49      $    486,838      $    (84,303)

Error in recording proceeds
    from stock offering                                                                (58,921)            7,531
                                                ----------------- --------------- -----------------   -----------

Balance, May 31, 1997,
    as restated                                       493,500             49           427,917           (76,772)

Distributions to stockholders                                                         (148,501)

Contribution of services and rent                                                       40,000

Net loss for year                                                                                        (77,800)
                                                ----------------- --------------- -----------------   -----------
Balance, May 31, 1998                                 493,500             49           319,416          (154,572)

Corporate restructuring                               506,500             51               (51)

Distributions of assets to
    stockholders                                                                      (166,792)

Issuance of common stock for
    trademark and license                          16,980,000          1,698

Net loss for year                                                                                       (249,880)
                                                ----------------- --------------- -----------------   -----------
Balance, May 31, 1999                              17,980,000      $   1,798      $    152,573        $ (404,452)
                                                ================= =============== =================   ===========


</TABLE>


Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.


                                      F-4
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                            Statements of Cash Flows

<TABLE>
<CAPTION>



                                                                                           Year Ended May 31,
                                                                                     ------------------------------
                                                                                         1999              1998
                                                                                     ------------------------------
<S>                                                                                 <C>               <C>
Operating activities
    Net loss                                                                         $   (249,880)     $    (77,800)
                                                                                     ----------------  ------------
    Adjustments to reconcile net loss to net cash
        (used) provided by operating activities:
           Services contributed by stockholder                                                               40,000
           (Increase) decrease in:
               Inventory of lots                                                                            377,295
               Mortgage receivable                                                                         (221,500)
           Increase (decrease) in:
               Security deposits                                                             (550)
               Accrued expenses                                                           123,128
                                                                                     ---------------  -------------
    Total adjustments                                                                     122,578           195,795
                                                                                     ---------------  -------------
    Net cash (used) provided by operating activities                                     (127,302)          117,995
                                                                                     ---------------  -------------

Investing activities
    Proceeds from sale of investments                                                                       300,000
                                                                                     ---------------  -------------

Financing activities
    Advances from stockholders                                                            189,103            22,848
    Interest on mortgage                                                                   (1,188)
    Payments to stockholders                                                              (11,514)
    Cash transfer to subsidiary                                                           (53,313)
    Payments on notes payable and long-term debt                                                           (376,474)
    Payments on prepaid offering costs                                                    (64,000)
                                                                                     ---------------  -------------
    Net cash provided (used) by financing activities                                       59,088          (353,626)
                                                                                     ---------------  -------------

Net (decrease) increase in cash                                                           (68,214)           64,369

Cash, beginning of year                                                                    68,214             3,845
                                                                                     ---------------  -------------

Cash, end of year                                                                    $          0      $     68,214
                                                                                     ===============  =============

</TABLE>



Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                      F-5
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                            Statements of Cash Flows


<TABLE>
<CAPTION>


                                                                                            Year Ended May 31,
                                                                                     ------------------------------
                                                                                         1999              1998
                                                                                     ------------------------------
<S>                                                                                 <C>               <C>
Supplemental disclosures of cash flow information and
    noncash investing and financing activities
        Cash paid during the year for interest                                       $          0      $     20,555
                                                                                     ==============================
</TABLE>

    During the year  ended May 31,  1999,  the  Company  transferred  all of its
    assets and liabilities  that relate to the operations of Federal  Affordable
    Housing Corporation to AAA Homes, Inc., its wholly owned subsidiary. The net
    value of those assets and liabilities  was $166,792.  Then all of the common
    stock of AAA Homes,  Inc. was  distributed to  stockholders  of record as of
    February 1, 1999. The assets and liabilities  distributed to AAA Homes, Inc.
    are as follows:

        Cash                                                 $     53,313
        Construction in progress                                    7,273
        Mortgage receivable                                       222,688
        Deposits                                                      424
        Stockholder payable                                       (35,676)
        Dividend payable                                          (81,230)
                                                             ------------
                                                             $    166,792
                                                             ============

    On March 15, 1999, the Company acquired the trademark and license for "Robin
    and The Dreamweavers"  (see Note 1). The Company agreed to pay $5,500,000 on
    the completion of a private placement offering.  Also,  16,000,000 shares of
    stock were issued at $.0001 per share.

    As part of the license and transfer,  the Company  issued  980,000 shares of
    stock for  services.  These shares of stock were valued at $.0001 per share.
    The  recipient of these shares also received  $100,000 in  consulting  fees,
    which were capitalized as prepaid offering costs.

    During the year ended May 31, 1998,  the Company  forgave a $67,271  related
    party receivable in return for 74,500 shares of the related company's stock.
    This  stock  was   subsequently   distributed   to  some  of  the  Company's
    stockholders.  Two of the  Company's  stockholders  did not receive stock as
    part of this dividend.  The Company has recorded a dividend payable totaling
    $81,230 for their pro rata share of the dividend (see Note 4).






Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                      F-6
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                          Notes to Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998




1.      Background Information and Change In Control

American Dream  Entertainment,  Inc. (the "Company") is a Minnesota  corporation
incorporated  on  March  5,  1993 as  Federal  Affordable  Housing  Corporation.
Originally,  the Company's  principal lines of business were developing land for
the  purpose of  building  and  selling  residential  housing.  Operations  were
concentrated in Florida.

On March 5, 1999, the Company entered into a license and royalty  agreement with
Dreamweavers  N.V., a company  organized under the laws of Curacao.  The Company
has purchased from Dreamweavers N.V. and its affiliated  companies the trademark
and  exclusive  right to  commercially  exploit  "Robin  and the  Dreamweavers,"
including media  products,  as well as a feature film together with licenses for
television  production,  music videos, and private label  merchandising,  in the
United  States  for  $5,500,000,  which  shall  be  payable  on  the  successful
completion  of a private  placement  of the  Company's  securities.  As  further
consideration for the granting of the exclusive  license and royalty  agreement,
the Company  issued to  Dreamweavers  N.V.  16,000,000  shares of its restricted
common stock. The 16,000,000  shares  represent  approximately 88 percent of the
total outstanding  stock of the Company.  Hence, the Company is a majority owned
subsidiary  of  Dreamweavers  N.V.  These shares were valued at par value $.0001
since the Company was inactive and had not been trading.

In accordance with this agreement,  the Company has changed its name to American
Dream  Entertainment,  Inc.  The  Company  also  increased  the number of shares
authorized to 50,000,000 and established a par value of $.0001 per share.

The Company  assigned and  transferred  all of its assets  (except for the above
license and royalty  agreement) and  liabilities  to AAA Homes,  Inc., a related
party.  This transfer has been treated as a distribution to stockholders for the
net book value of those assets transferred, which amounted to $166,792.

The corporate headquarters of the Company is located in Las Vegas, Nevada.









Read independent auditors' report.


                                      F-7
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                          Notes to Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998




2.      Significant Accounting Policies

The significant accounting policies followed are:

        The  preparation  of financial  statements in conformity  with generally
        accepted accounting principles requires management to make estimates and
        assumptions  that affect the reported  amounts of assets and liabilities
        and disclosure of contingent  assets and  liabilities at the date of the
        financial  statements and the reported  amounts of revenues and expenses
        during the  reporting  period.  Actual  results  could differ from those
        estimates.

        The  Company's  trademark  and license will be amortized on the ratio of
        current gross  revenues to expected total gross  revenues.  Estimates of
        total gross revenues can change significantly due to the level of market
        acceptance  of  film  and  television  products.  Accordingly,   revenue
        estimates are reviewed  periodically and amortization is adjusted.  Such
        adjustments  could have a material  effect on results of  operations  in
        future periods.  As of May 31, 1999, no  amortization  has been recorded
        since the film is still in production.

        The Company continually reviews the recoverability of the carrying value
        of long-term  assets using the  methodology  prescribed in SFAS 121. The
        Company also reviews long-lived assets and the related intangible assets
        for impairment whenever events or changes in circumstances  indicate the
        carrying amount of such assets may not be recoverable. Recoverability of
        these assets is determined by comparing the forecasted  undiscounted net
        cash flows of the operation to which the assets relate,  to the carrying
        amount including associated intangible assets of such operation.  If the
        operation is determined  to be unable to recover the carrying  amount of
        its assets,  then intangible assets are written down first,  followed by
        the other long-lived assets of the operation,  to fair value. Fair value
        is  determined  based on  discounted  cash  flows or  appraised  values,
        depending upon the nature of the assets. As of May 31, 1999, the Company
        has determined that no such impairment has occurred.

        In connection with the Company's private  placement,  offering costs are
        deferred and are offset against the proceeds of the offering or expensed
        if the total offering is unsuccessful, both on a pro rata basis.




Read independent auditors' report.


                                      F-8
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                          Notes to Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998




2.      Significant Accounting Policies (continued)

        Deferred tax assets and  liabilities  are  recognized  for the estimated
        future  tax  consequences   attributable  to  differences   between  the
        financial statements carrying amounts of existing assets and liabilities
        and  their  respective  income  tax  bases.   Deferred  tax  assets  and
        liabilities  are measured  using enacted tax rates  expected to apply to
        taxable  income in the years in which those  temporary  differences  are
        expected to be recovered  or settled.  The effect on deferred tax assets
        and  liabilities of a change in tax rates is recognized in income in the
        period that includes the enactment date.

        Basic loss per share is computed by dividing income  available to common
        stockholders by the weighted average number of common shares outstanding
        for the period.

        The Company  records  shares of common stock as  outstanding at the time
        the Company becomes contractually obligated to issue shares.


3.      Related Party Transactions

After the  Company's  change in control on March 5, 1999,  the Company  received
advances from the new majority stockholder.  The advances totaled $193,201 as of
May 31,  1999 and are  non-interest  bearing,  unsecured,  and have no  specific
repayment terms.

The Company  entered into a license and royalty  agreement with the new majority
stockholder.  The Company has agreed to purchase from  Dreamweavers N.V. and its
affiliated  companies the trademark and exclusive right to commercially  exploit
"Robin and the Dreamweavers," including media products, as well as consisting of
a feature film together with licenses for television  production,  music videos,
and private  label  merchandising,  in the United States for  $5,500,000,  which
shall be payable on the  successful  completion  of a private  placement  of the
Company's securities. As further consideration for the granting of the exclusive
license  and  royalty  agreement,   the  Company  issued  to  Dreamweavers  N.V.
16,000,000 shares of its restricted common stock. The Company will pay a royalty
fee of three  percent of the revenues  generated  from the  exploitation  of the
marketing and/or operation of "Robin and The  Dreamweavers." The initial term of
the royalty agreement is for 15 years, which may be extended for an additional 5
years.





Read independent auditors' report.


                                      F-9
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                          Notes to Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998




3.      Related Party Transactions (continued)

The office  spaced used by the Company has been provided free of charge for 1998
by a stockholder  of the Company.  In addition,  this  stockholder  has provided
management  services for 1998 to the Company  free of charge.  The fair value of
these  services  and the rent,  which  totals  $40,000,  has been  recorded as a
contribution to capital in the accompanying financial statements.

The above transactions are not necessarily indicative of transactions that would
have been entered into by independent parties.


4.      Distribution of Suncoast Food Services, Inc. Common Stock

In prior years,  the Company loaned  $67,271 to Suncoast Food Services,  Inc., a
related  company.  In  satisfaction of this debt,  Suncoast Food Services,  Inc.
transferred 74,500 shares of its stock to the Company. During the year ended May
31, 1998, the Company distributed all 74,500 shares to certain  stockholders and
recorded a dividend payable  totaling  $81,230 to the stockholders  that did not
receive the shares of Suncoast Food Services,  Inc. The unpaid dividend  payable
was distributed to AAA Homes, Inc. on March 5, 1999.


5.      Income Taxes

Income tax consists of the following:

                                                1999            1998
                                              ------------------------

        Loss carryforward                 $    140,000      $   55,000
        Less valuation allowance               140,000          55,000
                                              ------------------------
        Net deferred tax asset            $          0      $        0
                                              ========================

The amount of unused tax losses  available  to carry  forward and apply  against
future  years'  taxable  income is  approximately  $412,000.  Deduction of these
losses  will be limited  due to the change of control of the  Company  that took
place on March 5, 1999. The losses will expire between 2008 and 2013. Management
has  established a valuation  allowance  equal to the amount of the deferred tax
assets due to the uncertainty of the Company's realization of this benefit.



Read independent auditors' report.


                                      F-10
<PAGE>



                       American Dream Entertainment, Inc.
                 (f/k/a Federal Affordable Housing Corporation)

                          Notes to Financial Statements

                             As of May 31, 1999 and
                    For the Years Ended May 31, 1999 and 1998




6.      Loss Per Share

The net loss per share amount is based on weighted  average  shares  outstanding
for  the  years  ended  May  31,  1999  and  1998  of  4,815,614   and  493,500,
respectively.

Diluted net loss per share amounts are not  presented  because the Company has a
simple capital structure that consists of common stock and includes no potential
securities that would cause dilution of the number of shares.


7.      Prior Period Adjustment

Retained earnings at the beginning of 1998 has been adjusted to correct an error
in recording the proceeds of a stock offering.  The effect of this error in 1997
would have been to increase the net income in 1997 by $7,531.






Read independent auditors' report.



                                      F-11