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


                                   FORM 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT
      OF 1934.

For the quarterly period ended August 31, 2005.
                               ---------------

                                       OR

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

For the transition period from                       to                        .
                               --------------------      ---------------------

                          Commission file number 0-4465
                                                 ------

                            eLEC Communications Corp.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

         New York                                               13-2511270
--------------------------------------------------------------------------------
(State or Other Jurisdiction                                (I.R.S. Employer
 of Incorporation or Organization)                           Identification No.)

75 South Broadway, Suite 302, White Plains, New York              10601
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                        (Zip Code)

Issuer's Telephone Number, Including Area Code    914-682-0214
                                                  ------------

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

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined by Rule 12b-2 of the Exchange Act). Yes [_] No [X .

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest  practicable  date:  16,839,282 shares of Common
                                                     ---------------------------
Stock, par value $.10 per share, as of October 1, 2005.
------------------------------------------------------

<PAGE>

                          PART 1. FINANCIAL INFORMATION
                          -----------------------------

Item 1.  Financial Statements
-------  --------------------

                   eLEC Communications Corp. and Subsidiaries
                      Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                                       August 31, 2005
                                                                       ---------------
                                                                         (Unaudited)
<S>                                                                     <C>
Assets
Current assets:
  Cash and cash equivalents                                             $    413,896
  Accounts receivable, net                                                 1,342,716
  Prepaid expenses and other current assets                                   85,077
                                                                        ------------
Total current assets                                                       1,841,689

Property, plant and equipment, net                                           509,533

Other assets                                                                 167,165

Deferred finance costs                                                       173,710
                                                                        ------------
Total assets                                                            $  2,692,097
                                                                        ============

Liabilities and stockholders' equity deficiency Current liabilities:
  Short-term borrowings                                                 $    310,953
  Current maturities of long-term debt and capital lease
     obligations                                                             759,373
  Accounts payable and accrued expenses                                    2,628,288
  Taxes payable                                                              701,694
  Due to related party                                                        59,060
  Deferred revenue                                                           355,000
                                                                        ------------
Total current liabilities                                                  4,814,368
                                                                        ------------

Long-term debt                                                               520,403
                                                                        ------------
Stockholders' equity deficiency:
  Common stock, $.10 par value, 50,000,000 shares authorized,
    16,839,282 shares issued                                               1,683,928
  Capital in excess of par value                                          26,743,533
  Deficit                                                                (31,061,721)
  Accumulated other comprehensive loss, unrealized loss on securities         (8,414)
                                                                        ------------
     Total stockholders' equity deficiency                                (2,642,674)
                                                                        ------------
Total liabilities and stockholders' equity deficiency                   $  2,692,097
                                                                        ============
</TABLE>

See notes to the condensed consolidated financial statements.


                                       2
<PAGE>
<TABLE>
<CAPTION>

                               eLEC Communications Corp. and Subsidiaries
             Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
                                               (Unaudited)

                                                 For the Nine Months Ended       For the Three Months Ended
                                               Aug. 31, 2005   Aug. 31, 2004   Aug. 31, 2005   Aug. 31, 2004
                                               -------------   -------------   -------------   -------------
<S>                                             <C>             <C>             <C>             <C>
Revenues                                        $ 12,825,614    $  6,207,988    $  4,146,759    $  2,438,064
                                                ------------    ------------    ------------    ------------

Costs and expenses:
 Costs of services                                 6,793,655       2,955,924       2,239,915       1,159,223
 Selling, general and administrative               8,099,313       3,610,685       2,369,496       1,670,626
 Depreciation and amortization                        26,248          12,112          22,806           4,301
                                                ------------    ------------    ------------    ------------
               Total costs and expenses           14,919,216       6,578,721       4,632,217       2,834,150
                                                ------------    ------------    ------------    ------------

Loss from operations                              (2,093,602)       (370,733)       (485,458)       (396,086)
                                                ------------    ------------    ------------    ------------

Other income (expense):
Interest expense                                    (580,025)         (3,126)       (263,837)             --
Other income (loss)                                   51,301          28,153          16,328         (22,498)
Gain on sale of investment securities and
other investments                                    352,887             770         323,253              --
Change in warrant valuation                          151,568              --          34,575              --
                                                ------------    ------------    ------------    ------------
       Total other income (expense)                  (24,269)         25,797         110,319         (22,498)
                                                ------------    ------------    ------------    ------------

Loss before bankruptcy reorganization items
and income tax benefit                            (2,117,871)       (344,936)       (375,139)       (418,584)
                                                ------------    ------------    ------------    ------------

Reorganization items:
  Gain on settlement with creditors                       --         904,027              --              --
  Professional fees                                       --        (161,008)             --              --
                                                ------------    ------------    ------------    ------------
                                                          --         743,019              --              --
                                                ------------    ------------    ------------    ------------

Income (loss) before income tax benefit           (2,117,871)        398,083        (375,139)       (418,584)

Income tax benefit                                        --         (47,937)             --              --
                                                ------------    ------------    ------------    ------------

Net income (loss)                                 (2,117,871)        446,020        (375,139)       (418,584)

Other comprehensive loss -
  unrealized loss on marketable securities            (6,563)         (2,566)         (1,180)           (270)
                                                ------------    ------------    ------------    ------------

Comprehensive income (loss)                      ($2,124,434)   $    443,454       ($376,319)      ($418,854)
                                                ============    ============    ============    ============

Basic and diluted earnings (loss) per share           ($0.13)   $       0.03          ($0.02)         ($0.03)
                                                ============    ============    ============    ============

Weighted average number of common shares
outstanding
   Basic                                          16,748,041      16,254,282      16,798,847      16,254,282
                                                ============    ============    ============    ============
   Diluted                                        16,748,041      16,652,398      16,798,847      16,254,282
                                                ============    ============    ============    ============
</TABLE>

See notes to the condensed consolidated financial statements.


                                                    3
<PAGE>
<TABLE>
<CAPTION>

                               eLEC Communications Corp. and Subsidiaries
                             Condensed Consolidated Statements of Cash Flows
                                               (Unaudited)


                                                                         For the Nine Months Ended
                                                                       Aug. 31, 2005  Aug. 31, 2004
                                                                       -------------  -------------
<S>                                                                     <C>              <C>
Net cash used in operating activities:                                  ($1,800,541)     ($366,808)
                                                                        -----------    -----------

Cash flows used in investing activities:
   Purchase of property and equipment                                      (343,370)       (88,569)
   Purchase of investment securities                                         (7,006)            --
   Proceeds from investment securities                                      356,699            770
                                                                        -----------    -----------
Net cash provided by (used in) investing activities                           6,323        (87,799)
                                                                        -----------    -----------

Cash flows from financing activities:
   Repayment of long-term debt                                             (242,424)        (7,260)
   Principal payments on pre-petition debt in  bankruptcy proceedings            --        (23,830)
   Proceeds from short-term borrowings                                      273,686             --
   Proceeds from secured convertible note                                 1,744,500             --
   Proceeds from the exercise of options                                     60,500             --
                                                                        -----------    -----------
   Net cash provided by (used in) financing activities                    1,836,262        (31,090)
                                                                        -----------    -----------

Increase (decrease) in cash and cash equivalents                             42,044       (485,697)
Cash and cash equivalents at beginning of period                            371,852        669,022
                                                                        -----------    -----------
Cash and cash equivalents at the end of period                          $   413,896    $   183,325
                                                                        ===========    ===========
</TABLE>



See notes to the condensed consolidated financial statements.


                                                   4
<PAGE>

                            eLEC COMMUNICATIONS CORP.
                            -------------------------

        Notes To Condensed Consolidated Financial Statements (Unaudited)
        ----------------------------------------------------------------

Note 1-Basis of Presentation
----------------------------

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions  to Form 10-QSB of Regulation
S-B.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating results for the nine-month period ended August 31, 2005 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended  November 30, 2005.  For further  information,  refer to the  consolidated
financial statements and footnotes thereto included in our Annual Report on Form
10-KSB for the year ended November 30, 2004.

Note 2-Principal Financing Arrangements
---------------------------------------

On December 17, 2004,  we sold a promissory  note (the "Note") in the  principal
amount of  approximately  $328,767 and 160,000 shares of our  restricted  common
stock to an unaffiliated party for $300,000, of which $32,000 has been allocated
to common  stock  issuances.  The Note is payable on  December  17,  2005 and is
unsecured.  The Note  requires us to spend the proceeds of the Note on sales and
marketing efforts.  We recorded costs of $36,314 in connection with the issuance
of the Note,  which are being amortized over the term of the Note.  Amortization
of these costs for the nine- and  three-month  periods ended August 31, 2005 was
$25,668 and $9,153,  respectively,  and was included in our selling, general and
administrative expenses ("SG&A") as financing costs. Amortization of the $32,000
debt  discount for the nine- and  three-month  periods ended August 31, 2005 was
$22,619 and $8,066, respectively, and was included in interest expense.

On February 8, 2005, we entered into a secured financing arrangement with Laurus
Master Fund, Ltd.  ("Laurus").  The financing  consisted of a $2 million secured
convertible term note (the  "Convertible  Note") that bears interest at the rate
of prime (as published in the Wall Street Journal),  plus three percent (9.5% as
of August 31, 2005),  and was initially  scheduled to mature on February 8, 2006
but was  subsequently  extended  to February 8, 2008.  The  Convertible  Note is
convertible  into shares of our common stock at an initial  fixed price of $0.63
per share.  The fixed  conversion  price of the  Convertible  Note is subject to
anti-dilution  protection,  on a  weighted-average  basis,  upon our issuance of
additional  shares of our  common  stock at a price  that is less than the fixed
conversion price.

In connection with the financing, Laurus was also issued warrants to purchase up
to 793,650 shares of our common stock.  The warrants are exercisable as follows:
264,550  shares at $0.72 per  share;  264,550  shares at $0.79 per share and the
balance  at  $0.95  per  share.  The  underlying   contracts  contained  certain
provisions providing for a cash settlement. EITF 00-19 precludes classifying the
warrants as equity,  as all of the conditions stated in paragraphs 14-32 of EITF
00-19 were not  satisfied.  Accordingly,  the warrants  have been  classified as
debt.  The proceeds of the  Convertible  Note were  allocated  first to the fair
value of the warrants  (liability) and the remainder to the debt instrument.  We
computed the beneficial conversion feature embedded in


                                       5
<PAGE>

the debt instrument using the effective conversion price in accordance with EITF
98-5,  EITF 00-19 and EITF 00-27. We recorded (i) debt discounts of $504,128 for
the valuation of the 793,650 warrants issued with the Convertible Note (computed
using a Black-Scholes model with an interest rate of 2.31%,  volatility of 158%,
zero  dividends  and  expected  term of  seven  years);  (ii)  $705,866  for the
beneficial  conversion  feature  inherent  in the  Convertible  Note;  and (iii)
$106,500 for debt issue costs paid to affiliates of the lender. In addition,  we
issued to Source  Capital Group Inc., an  investment  banking firm,  warrants to
purchase  up to 253,968  shares of our  common  stock as  additional  debt issue
costs.  These warrants were valued at $149,783 using the Black-Scholes  model as
discussed  above.  Total debt  issuance  costs  incurred  to third  parties  for
arranging the financing aggregated $311,287, including the value of the warrants
to Source  Capital  Group  Inc.  Amortization  of these  costs for the nine- and
three-month   periods   ended  August  31,  2005  was  $658,230  and   $297,941,
respectively, of which $204,196 and $93,180,  respectively, was included in SG&A
as  financing  costs and $454,035 and  $204,761,  respectively,  was included in
interest expense.  Discounts are being amortized over one year, the initial term
of the  Convertible  Note,  using the  effective  interest  method.  The warrant
liability  is adjusted  at each  reporting  date to fair market  value using the
Black-Scholes  model, with a corresponding  charge or credit to income.  For the
nine- and  three-month  periods  ended  August 31, 2005,  we recorded  income of
$151,568 and $34,575, respectively.

To secure the payment of all of our  obligations  to Laurus,  we entered  into a
Master  Security  Agreement  that  assigns  and  grants to  Laurus a  continuing
security  interest  in all of the  following  property  now owned or at any time
acquired by us or our  subsidiaries,  or in which we or any of our  subsidiaries
now has or at any time in the future may acquire any right,  title or  interest:
all cash, cash equivalents,  accounts, deposit accounts,  inventory,  equipment,
goods, documents, instruments (including, without limitation, promissory notes),
contract  rights,  general  tangibles,  chattel paper,  supporting  obligations,
investment   property,    letter-of-credit   rights,    trademarks,    trademark
applications, patents, patent applications,  copyrights, copyright applications,
and any other  intellectual  property,  in each case,  in which we or any of our
subsidiaries now has or may acquire any right,  title or interest,  all proceeds
and products thereof (including, without limitation,  proceeds of insurance) and
all  additions,  accessions  and  substitutions.  In the  event we or any of our
subsidiaries wishes to finance an acquisition in the ordinary course of business
of any  hereafter-acquired  equipment  and  has  obtained  a  commitment  from a
financing source to finance such equipment from an unrelated third party, Laurus
has agreed to release its security interest on such hereafter-acquired equipment
so financed by such third party financing source.

The Convertible Note is to be repaid using cash or an equity  conversion  option
as follows: we are obligated to make monthly payments to Laurus in the amount of
$60,606,  together  with any accrued and unpaid  interest to date.  By the fifth
business  day prior to each  payment  date,  Laurus may  deliver to us a written
notice  directing that the monthly amount payable on the next payment date shall
be paid in either  shares of common  stock or a  combination  of cash and common
stock.  If a  repayment  notice is not  delivered  by  Laurus  on or before  the
applicable  notice date for any payment  date,  then we are obligated to pay the
monthly amount due in cash. Any portion of the monthly amount paid in cash shall
be paid to Laurus in an amount  equal to 102% of the  principal  portion  of the
monthly  amount due. If Laurus elects to receive all or a portion of the monthly
amount in shares of our common stock,  the number of such shares to be issued by
us will be determined  by dividing the portion of the monthly  amount to be paid
in shares of common stock, by the applicable  fixed conversion  price,  which is
presently  $0.63  per  share.  Payments  due on June 1,  July  1,  August  1 and
September 1, 2005 were made in cash.


                                       6
<PAGE>

A registration  rights agreement was executed requiring us to register under the
Securities  Act of 1933, as amended,  the shares of our common stock  underlying
the  Convertible  Note and  warrants  and our  registration  statement  filed in
response to such requirement was declared effective on June 10, 2005.

Note 3-Major Customer
---------------------

During the nine- and  three-month  periods  ended August 31, 2005 and August 31,
2004, no one customer accounted for more than 10% of revenue.

Note 4-Income Taxes
-------------------

At November 30, 2004, we had net operating loss carryforwards for Federal income
tax  purposes of  approximately  $21,000,000  expiring in the years 2008 through
2024. There is an annual limitation of approximately $187,000 on the utilization
of approximately  $2,450,000 of such net operating loss carryforwards  under the
provisions of Internal Revenue Code Section 382.

Note 5-Earnings (Loss) Per Common Share
---------------------------------------

Basic  earnings  (loss) per common share are  calculated  by dividing net income
(loss) by the weighted  average number of common shares  outstanding  during the
period.  Diluted  earnings per share is calculated by dividing net income by the
sum of the  weighted  average  number  of  common  shares  outstanding  plus all
additional  common  shares  that  would  have been  outstanding  if  potentially
dilutive  securities had been issued unless such inclusion  reduced the loss per
share. A  reconciliation  of the shares used in the computation of our basic and
diluted earnings per common share is as follows:

                                                          Nine Months Ended
                                                   Aug. 31, 2005   Aug. 31, 2004
                                                   -------------   -------------
Weighted average common shares outstanding           16,748,041     16,254,282
Dilutive effect of securities                                --        398,116
                                                     ----------     ----------
                                                     16,748,041     16,652,398
                                                     ==========     ==========

                                                         Three Months Ended
                                                   Aug. 31, 2005   Aug. 31, 2004
                                                   -------------   -------------

Weighted average common shares outstanding           16,798,847     16,254,282
Dilutive effect of securities                                --             --
                                                     ----------     ----------
                                                     16,798,847     16,254,282
                                                     ==========     ==========

For the nine- and  three-month  periods  ended  August 31,  2005,  approximately
7,800,000 of our stock options,  warrants and shares issuable upon the potential
conversion of the Convertible Note were excluded from the calculation of diluted
earnings  (loss) per share  because the effect would be  anti-dilutive.  For the
nine- and three-month periods ended August 31, 2004, approximately 1,500,000 and
2,500,000 of our stock options and warrants  were excluded from the  calculation
of diluted earnings per share because the effect would be anti-dilutive.


                                       7
<PAGE>

Note 6-Subsidiary's Plan of Reorganization
------------------------------------------

On July 29, 2002, Telecarrier Services, Inc. ("TSI"), a wholly-owned subsidiary,
filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy
Code in the United  States  Bankruptcy  Court for the  Southern  District of New
York.  On April 8, 2004,  the United  States  Bankruptcy  Court for the Southern
District of New York confirmed a Plan of Reorganization  (the "Bankruptcy Plan")
for TSI. The Bankruptcy Plan authorized us to disburse  $325,000 to creditors in
full  satisfaction of claims  amounting to  approximately  $1,229,000,  when TSI
emerged from  bankruptcy.  For the  nine-month  period ended August 31, 2004, we
reported a gain of  approximately  $904,000 as a result of TSI's settlement with
creditors and approximately  $161,000 in professional fees. Included in our gain
for the nine-months  ended August 31, 2004 was a gain of  approximately  $51,000
that resulted from a  court-stipulated  reduction in  post-petition  liabilities
(See Note 9). These items are included under the heading  "Reorganization items"
in our Condensed  Consolidated  Statement of Operations and Comprehensive Income
(Loss). No such transaction  occurred in the three-month period ended August 31,
2004 or in the nine- and three-month periods ended August 31, 2005.

Note 7-Risks and Uncertainties
------------------------------

We buy  substantially  all  of  our  landline  telecommunication  services  from
Regional  Bell  Operating  Companies  ("RBOCs"),  and  are,  therefore,   highly
dependent  upon them. We believe our  relationship  with the RBOCs from which we
purchase services is satisfactory.  We also believe there are other suppliers of
telecommunication  services in the  geographical  locations  in which we conduct
business.  In  addition,  we are at risk to  regulatory  changes that govern the
rates we are to be  charged  and the  obligations  of the RBOCs to  interconnect
with, or provide  unbundled network elements to their  competitors.  The Federal
Communications  Commission  ("FCC") and state public  utility  commissions  have
adopted extensive rules to implement the  Telecommunications  Act of 1996, which
sets standards for  relationships  between  communications  providers,  and they
revisit  such  regulations  on an  ongoing  basis in  response  to the  evolving
marketplace and court decisions.  In light of the foregoing, it is possible that
the loss of our  relationship  with  the  primary  RBOC  that  supplies  us with
wholesale  telephone  services  or  a  significant  unfavorable  change  in  the
regulatory  environment  would have a severe  near-term impact on our ability to
conduct our landline telecommunications  business. In order to reduce regulatory
risks  going  forward,   our  principal   operating   subsidiary  has  signed  a
commercially negotiated wholesale services agreement with two of the RBOCs.

Future  results  of  operations  involve a number  of risks  and  uncertainties.
Factors  that could  affect  future  operating  results and cash flows and cause
actual results to vary materially from historical  results include,  but are not
limited to:

      -     Our  business  strategy  with  respect  to  bundled  local  and long
            distance services may not succeed.

      -     Our business  strategy with respect to Voice over Internet  Protocol
            ("VoIP") may not succeed.


                                       8
<PAGE>

      -     Failure  to  manage,  or  difficulties  in  managing,   our  growth,
            operations or  restructurings,  including  attracting  and retaining
            qualified  personnel and opening up new  territories for our service
            with favorable gross margins.

      -     Dependence on the  availability or  functionality of incumbent local
            telephone  companies'  networks,  which we  purchase  on a wholesale
            basis and resell.

      -     Dependence on third party companies to process call records from our
            customers and provide billing services.

      -     Increased price competition in local and long distance service.

      -     Failure or interruption in our network and information systems.

      -     Changes in government policy, regulation and enforcement.

      -     Failure of our  collection  management  system  and credit  controls
            efforts for customers.

      -     Inability to adapt to technological change.

      -     Competition in the telecommunications industry.

      -     Inability to manage customer attrition and bad debt expense.

      -     Adverse change in our relationship with third party carriers.

      -     Failure or bankruptcy  of other  telecommunications  companies  upon
            whom we rely for services and revenues.

      -     Lack of capital or  borrowing  capacity,  and  inability to generate
            cash flow.

      -     Inability to launch our VoIP telephony product, the success of which
            may be dependent upon a variety of factors, including scalability of
            our systems, product and feature selection, timely implementation of
            new  products,   product  performance,   implementation  of  service
            features  mandated  by  federal  and state  laws,  effectiveness  of
            promotional  efforts,  cost  effectiveness  of  our  products,   and
            appropriate identification of market demand for our existing and new
            products.

Because of the  unexpected  level of losses that we have incurred in the current
year,  as  well  as  other  factors,  including,  but not  limited  to,  (1) the
significant use of our cash resources  during the current year, (2) our negative
working capital, and (3) our negative shareholders equity as of August 31, 2005,
our ability to continue as a going concern is dependent upon factors, including,
but not  limited  to, our ability to (x)  improve  our  operating  results,  (y)
generate  sufficient  cash from our  businesses to meet our  obligations as they
become  due,  and  (z)  raise  additional  cash  through  borrowings  or  equity
financings. We anticipate that we will be able to raise cash through our current
lender, with whom we have a good relationship.  We have initially approached our
current  lender to fund the growth of VoX,  and it has  responded  in a positive
manner to our  inquiries.  There can be no assurance,  however,  that we will be
able to successfully accomplish these objectives.

Note 8-Stock-Based Compensation Plans
-------------------------------------

We issue  stock  options to our  employees  and  outside  directors  pursuant to
stockholder-approved  and non-approved stock option programs. We account for our
stock-based  compensation  plans under the intrinsic value method of accounting,
as defined by Accounting  Principles Board Opinion No. 25,  Accounting for Stock
Issued to  Employees,  and  related  interpretations.  No  stock-based  employee
compensation  cost was  reflected in net income  (loss) for the nine- and


                                       9
<PAGE>

three- months ended August 31, 2005 and 2004, as all options granted under these
plans had an exercise  price equal to the fair  market  value of the  underlying
common stock on the date of the grant. For pro forma disclosures,  the estimated
fair value of the options was amortized  over the vesting  periods,  which range
from  immediate  vesting to three years.  The following  table  illustrates  the
affect on net income  (loss) per share if we had  accounted for our stock option
and stock  purchase  plans  under the fair  value  method  of  accounting  under
Statement of Financial Accounting  Standards ("SFAS") No. 123R,  "Accounting for
Stock-Based  Compensation",   as  amended  by  SFAS  No.  148,  "Accounting  for
Stock-Based Compensation - Transition and Disclosure":

<TABLE>
<CAPTION>
                                          For the Nine Months Ended        For the Three Months Ended
                                       Aug. 31, 2005     Aug. 31, 2004    Aug. 31, 2005    Aug. 31, 2004
                                       -------------     -------------    -------------    -------------
<S>                                     <C>                 <C>             <C>              <C>
Net income (loss) as reported           ($2,117,871)        $446,020        ($375,139)       ($418,584)
Deduct: Total stock-based employee
    compensation expense determined
    under fair value-based method
    for all awards, net of related
    tax effects                            (279,664)        (168,724)         (79,315)         (56,593)
                                        -----------         --------        ---------        ---------
Pro forma net income (loss)             ($2,397,535)        $277,296        ($454,454)       ($475,177)
                                        -----------         --------        ---------        ---------
Earnings (loss) per share
  Basic, as reported                         ($0.13)            $.03           ($0.02)           ($.03)
  Basic, pro forma                           ($0.14)            $.02           ($0.03)           ($.03)

  Diluted, as reported                       ($0.13)            $.03           ($0.02)           ($.03)
  Diluted, pro forma                         ($0.14)            $.02           ($0.03)           ($.03)

</TABLE>

Note 9-Related Party Transactions
---------------------------------

TSI had an  agreement,  effective  January 2, 2002,  with Telco  Services,  Inc.
("Telco"),  a  corporation  owned by a former  shareholder,  under  which  Telco
provided  TSI with  collection,  sales  and  other  services.  As a result  of a
court-stipulated  agreement  between TSI and Telco,  entered into on February 6,
2004,  the amount  owed Telco for such  services  was  reduced by  approximately
$51,000.  Such reduction was reported as a gain for the nine-month  period ended
August 31, 2004 (See Note 6).

During the nine- and three-month periods ended August 31, 2005, we billed Cordia
Corporation ("Cordia"), a related party, $57,394 and $16,542,  respectively, for
commissions  and other  costs,  and  Cordia  billed us  $454,851  and  $104,005,
respectively, for telecommunications services, billing services and other sundry
costs. During the nine- and three-month periods ended August 31, 2004, we billed
Cordia,  $306,804 and $8,773,  respectively,  for  telecommunications  services,
commissions  and other  costs,  and  Cordia  billed us  $531,352  and  $142,856,
respectively, for telecommunications services, billing services and other sundry
costs. As of August 31, 2005, we owed Cordia $59,060.


                                       10
<PAGE>

Note 10-Defined Benefit Plan
----------------------------

We sponsor a defined benefit plan covering two active  employees and a number of
former employees. Our funding policy with respect to the defined benefit plan is
to contribute  annually not less than the minimum required by applicable law and
regulation to cover the normal cost and to fund supplemental costs, if any, from
the date each  supplemental  cost was  incurred.  Contributions  are intended to
provide  not only for  benefits  attributable  to service to date,  but also for
those expected in the future.

For the nine-  and  three-month  periods  ended  August  31,  2005 and 2004,  we
recorded  pension  expense  of  $72,000  and  $24,000,   respectively.  For  the
nine-month  periods ended August 31, 2005 and 2004, we  contributed  $25,000 and
$64,000,  respectively,  to our defined benefit plan. We expect to contribute an
additional  $75,000 to our defined benefit plan in remainder of fiscal 2005. The
current  investment  strategy  for the  defined  benefit  plan is to  invest  in
conservative debt and equity  securities.  The expected long-term rate of return
on plan assets is 8%.


                                       11
<PAGE>

Item 2.  Management's Analysis and Discussion or Plan of Operation
-------  ---------------------------------------------------------

      The statements  contained in this Report that are not historical facts are
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995 with respect to our financial  condition,  results
of   operations   and   business,   which  can  be  identified  by  the  use  of
forward-looking   terminology,   such  as  "estimates,"   "projects,"   "plans,"
"believes,"  "expects,"  "anticipates,"  "intends,"  or the negative  thereof or
other variations  thereon,  or by discussions of strategy that involve risks and
uncertainties.  Management  wishes to caution the reader of the  forward-looking
statements,  that such statements,  which are contained in this Report,  reflect
our current  beliefs with respect to future events and involve known and unknown
risks, uncertainties and other factors, including, but not limited to, economic,
competitive,  regulatory,  technological,  key  employee,  and general  business
factors affecting our operations,  markets, growth, services, products, licenses
and  other  factors  discussed  in our other  filings  with the  Securities  and
Exchange   Commission,   and  that  these   statements  are  only  estimates  or
predictions.  No assurances  can be given  regarding the  achievement  of future
results, as actual results may differ materially as a result of risks facing us,
and actual events may differ from the assumptions underlying the statements that
have been made regarding  anticipated events.  Factors that may cause our actual
results, performance or achievements,  or industry results, to differ materially
from those  contemplated by such  forward-looking  statements  include,  without
limitation:  (1) the availability of additional funds to successfully pursue our
business plan; (2) the impact of changes the Federal  Communications  Commission
or State Public Service Commissions may make to existing  telecommunication laws
and  regulations,  including  laws  dealing  with  Internet  telephony;  (3) the
cooperation of incumbent carriers that have signed a wholesale service agreement
with us to replace the unbundled network elements  platform;  (4) our ability to
maintain,  attract and integrate internal management,  technical information and
management  information  systems;  (5) our  ability  to market our  services  to
current  and new  customers  and  generate  customer  demand for our product and
services  in the  geographical  areas in which we  operate;  (6) our  success in
gaining regulatory approval to access new markets;  (7) our ability to negotiate
and maintain suitable  interconnection  agreements with the incumbent  carriers;
(8) the  availability  and  maintenance of suitable vendor  relationships,  in a
timely manner,  at reasonable  cost; (9) the intensity of competition;  and (10)
general  economic  conditions.  All written and oral forward looking  statements
made in  connection  with this  Report  that are  attributable  to us or persons
acting  on our  behalf  are  expressly  qualified  in  their  entirety  by these
cautionary  statements.  Given the uncertainties  that surround such statements,
prospective  investors  are  cautioned  not to  place  undue  reliance  on  such
forward-looking statements.

Overview

eLEC Communications Corp. is a  telecommunications  service holding company with
operations in three wholly-owned subsidiaries.  Two of our subsidiaries focus on
delivering  integrated  telephone  service by leasing landlines as a competitive
local exchange  carrier  ("CLEC") and one subsidiary  focuses on delivering such
services by utilizing  high-speed Internet connections to provide VoIP services.
We offer  small  businesses  and  residential  consumers  an  integrated  set of
telecommunications  products  and  services,  including  local  exchange,  local
access,  domestic and international  long distance  telephone,  VoIP, and a full
suite of features and calling  plans.  More  recently,  we began  operating as a
facilities-based   VoIP  carrier  for  other  VoIP  companies,   as  we  provide
origination and  termination of VoIP traffic as a service to other carriers.  To
date,  VoIP  revenues  have not been  material.  Based upon the  contracts  that
customers  have  recently  signed  with us for VoIP  services  and the number of
potential  customers who are  negotiating  contracts


                                       12
<PAGE>

for our VoIP services,  we anticipate  that VoIP revenues in fiscal 2006 will be
more  than  50%  of  our  consolidated   revenues,   and  could  conceivably  be
substantially higher.

Our VoIP service is provided by a wholly-owned  subsidiary,  VoX  Communications
Corp. ("VoX"). VoX owns proprietary source code and a softswitch that enables it
to provide  more than 20 Class 5 call  features,  voice mail and  enhanced  call
handling on its own Session  Initiation  Protocol  ("SIP") server suite. Our SIP
servers are part of a cluster of servers, which we refer to as a server farm, in
which each  server  performs  different  network  tasks,  including  back-up and
redundant  services.  We believe  the server  farm  structure  can be easily and
cost-effectively scaled as our VoIP business grows. In addition,  servers within
our  server  farm can be  assigned  different  tasks as  demand  on the  network
dictates.  If a server  goes down,  our server farm is designed in a manner that
subscribers  should not have a call  interrupted.  VoX supports  origination and
termination using both the G.711 and G.729 voice codecs.  Our research indicates
that  approximately  90% of the VoIP traffic in the United  States is carried at
G.711, and therefore, for our wholesale customers who have already established a
VoIP  business  that uses G.711,  we provide  this  service.  For our own retail
customers and for the  technologically-advanced  wholesale accounts,  we use the
more efficient G.729 codec,  which utilizes  significantly less bandwidth in the
transmission of voice services.

We believe our server farm  provides us a superior  approach to providing  voice
services  over the  Internet  because it  requires  significantly  less  capital
expenditures than other VoIP strategies.  Our equipment expenditures required to
build one server  farm,  which we project will carry  10,000  retail  subscriber
lines,  are  approximately  $100,000.  We believe our server farm  approach will
provide us significant capital savings when compared to other VoIP carriers that
may  purchase  one large switch for more than $2 million and then seek to market
to  consumers  as  quickly  as  possible  to bring the  switch to an  acceptable
utilization level. We also believe our approach is significantly better than the
traditional  telecom  approach that required  hundreds of millions of dollars in
capital expenditures in order to build a network.

Plan of Operation

When we lease landlines in our CLEC business, we utilize the network of an RBOC.
We are dependent on the RBOC for significant operational items such as access to
its back-office  support systems,  repair  functions and switching  functions in
order to provide  our  customers  with  Plain Old  Telephone  Service  ("POTS").
Although we have been able to successfully provide POTS lines, and we believe we
can continue to do so, we also believe  there is greater value in operating as a
facilities-based VoIP carrier, in which case we will no longer be dependent upon
the RBOC, and other carriers will depend on us to carry their traffic. Beginning
in the second  quarter of fiscal 2005,  we have focused a greater  amount of our
corporate  resources on the development and implementation of our VoIP platform.
We plan to  continue  this  focus  going  forward  so that the  majority  of our
revenues will eventually come from our VoIP services.

We plan to grow two  kinds of VoIP  customer  bases,  wholesale  and  retail.  A
wholesale  customer is a carrier,  such as a cable company or a CLEC that has an
existing  customer  base  and  desires  to  provide  our  VoIP  services  to its
customers.  Depending upon how our wholesale customer wants to operate,  we will
either provide it with VoIP services on a private-label basis, in which case the
customer  of our  wholesale  customer  will not  know  they  are  receiving  VoX
services;  or as a VoX product,  with the sponsorship of our wholesale customer.
The cable  companies that have signed with us are already  providing  high-speed
Internet access to their customers.  We believe these cable customers would like
to up-sell their Internet subscribers VoIP services before another


                                       13
<PAGE>

VoIP provider  offers these  customers a VoIP product.  For wholesale  customers
that are CLECs,  we  anticipate  that several of these  accounts will be able to
sell VoIP services to many consumers beyond their existing customer base. One of
our new wholesale  customers has attracted more than 10,000  end-users as a CLEC
operating in only one state, and now plans to use the same marketing  strategies
in  all 50  states  to  sell  our  VoIP  services.  In  addition  to the  larger
geographical market that VoIP can offer a CLEC, we anticipate that our wholesale
VoIP services will be an attractive  solution to many CLECs that are looking for
an alternative to reselling the services offered by a RBOC.

We  plan  to  offer  our  retail  VoIP  product   directly  to   consumers   via
telemarketing,  agents and  Internet  offers.  We will  incur a direct  customer
acquisition  cost  when we  obtain  a new  retail  customer,  whereas  with  our
wholesale  accounts,  the customer  acquisition  cost is borne by the  wholesale
account.  In  launching  our  retail  program,  we are  working  with  telesales
companies  and agents to spread our  acquisition  costs over  several  months in
order to limit the amount of upfront capital required to create revenue growth.

Nine Months Ended August 31, 2005 vs. Nine Months Ended August 31, 2004
-----------------------------------------------------------------------

Our  revenue for the  nine-month  period  ended  August 31,  2005  increased  by
approximately $6,618,000, or approximately 107%, to approximately $12,826,000 as
compared to approximately  $6,208,000  reported for the nine-month  period ended
August 31, 2004.  The growth in revenues  was directly  related to the growth in
the  number of local  access  lines  that we served in our CLEC  customer  base.
Beginning  with the third  quarter,  we have  focused  more or our  efforts  and
financial resources on building our VoIP operations and acquiring wholesale VoIP
customers.  It is more  difficult for us to estimate  wholesale line growth than
retail line growth, as we are dependent on the wholesale  customer to market the
VoIP services to the end-user.  We find the wholesale model beneficial to us, as
we believe  smaller  cash  expenditures  are  required on our part to secure new
accounts.  In order to better control and estimate our future revenue growth, in
October 2005, we began using telemarketing to acquire new VoIP retail customers.
We have  established  agreements  with call centers that allow us to pay for our
customer  acquisition costs over a three-month period so that these costs can be
paid from the cash payments we receive from our newly-acquired customers. If our
telemarketing  efforts are an effective manner for adding new retail  customers,
we believe the  deferred  payment  arrangement  offered by the call centers will
allow us rapidly to scale our retail customer base.

Our gross profit for the  nine-month  period ended August 31, 2005  increased by
approximately   $2,780,000  to  approximately   $6,032,000  from   approximately
$3,252,000  reported for the nine-month period ended August 31, 2004. During the
same fiscal periods,  our gross profit percentage decreased to 47.0% from 52.4%.
The increase in gross profit  resulted from the increase in our customer base in
the first nine months of fiscal 2005 over the same  period in fiscal  2004.  The
decrease in our gross profit percentage during the 2005 period resulted from the
higher cost of services that we are now incurring  under our wholesale  services
agreement  with Verizon,  as compared to the costs we previously  incurred under
the Unbundled Network Elements Platform ("UNE-P") service offering.  Our selling
strategy in the remainder of fiscal 2005 is to continue to penetrate states that
offer the  opportunity  to achieve  gross  margins  that are higher than 40%. We
anticipate  that our VoIP  product  will also be able to yield gross  margins in
excess of 40%.


                                       14
<PAGE>

SG&A  increased  by  approximately   $4,488,000,   or  approximately   124%,  to
approximately  $8,099,000 for the  nine-month  period ended August 31, 2005 from
approximately  $3,611,000  reported  for the prior year fiscal  period.  Of this
increase,  approximately  $2,765,000  was for bad  debt  expense,  approximately
$661,000 was for increased personnel costs, of which approximately  $290,000 was
related to VoX,  approximately  $241,000  was for billing  costs,  approximately
$232,000 was for financing  costs (See Note 2),  approximately  $107,000 was for
non-employee option costs, and approximately $97,000 was for other VoX operating
costs.  From January 2005 until mid-April 2005, our CLECs attracted an unusually
high number of  residential  consumers  that did not pay our  invoices,  and for
which we  subsequently  terminated  services,  even  though such  customers  had
qualifying credit scores.  Although growth tends to be easier in the residential
market  than in the  business  market,  in the third  quarter  we began  selling
approximately 75% of our new CLEC lines to business customers, who we have found
are better at paying  their  monthly  telephone  bills.  We are also  allocating
significantly  less marketing dollars to new CLEC line acquisition  costs. Going
forward,  we do not anticipate the  continuation  of this high percentage of bad
debt  expense  with our CLEC  customers,  as the  residential  customers  we are
accepting from outside marketing agencies must be more creditworthy and must pay
their  first  bill in  order  for the  marketing  company  to  receive  its full
commission.  With our VoIP customers,  we anticipate almost no bad debt expense,
as we require credit card payment from our  residential  VoIP users,  and all of
our wholesale  accounts are credit  checked and required to pay us a deposit for
future  services.  We also believe VoIP customers will generate a  significantly
lower bad debt percentage  because they tend to be more  sophisticated  Internet
users that are already paying for a broadband connection.

Depreciation  expense  increased  to  approximately  $26,000 for the  nine-month
period  ended  August 31,  2005 as  compared  to  approximately  $12,000 for the
nine-month  period ended August 31, 2004 as we began to amortize the capitalized
costs of our VoIP platform in the third quarter of fiscal 2005. In June 2005, we
began  running live  customers on our VoIP  platform and  consequently,  we have
begun to depreciate the cost of the platform.

Interest expense increased by approximately  $577,000 to approximately  $580,000
for the  nine-month  period ended  August 31, 2005 as compared to  approximately
$3,000 for the nine-month period ended August 31, 2004, as a result of increased
borrowings under our financing agreements (See Note 2).

Other income  amounted to  approximately  $51,000 and $28,000 for the nine-month
periods ended August 31, 2005 and 2004, respectively. For fiscal 2005, income of
approximately $51,000 resulted primarily from commission income. For fiscal 2004
income of  approximately  $28,000 resulted  primarily from commission  income of
approximately  $88,000,  which was partially offset by approximately  $45,000 in
additional costs  associated with the sale of our  headquarters  building in the
fourth quarter of fiscal 2003.

For the  nine-month  period  ended  August  31,  2005,  we  recorded  income  of
approximately  $152,500,  which  resulted from the change in the market value of
the warrants  issued to Laurus as part of the Laurus  financing (See Note 2). No
such income was recorded in the nine-month period ended August 31, 2004.

For the nine-month periods ended August 31, 2005 and 2004, we recorded gain on
the sale of investment securities of approximately $353,000 and $1,000,
respectively.


                                       15
<PAGE>

For  the  nine-month  period  ended  August  31,  2004,  we  reported  a gain on
settlement with creditors of approximately $904,000, which was offset in part by
approximately $161,000 in professional fees (See Note 6).

For the  nine-month  period ended August 31, 2004,  we recorded a tax benefit of
$48,000 that resulted  from the  reduction of an estimated  accrual of corporate
tax expense for fiscal 2003.  No such  benefit was  recorded for the  nine-month
period ended August 31, 2005.

Three Months Ended August 31, 2005 vs. Three Months Ended August 31, 2004
-------------------------------------------------------------------------

Our revenue for the  three-month  period  ended  August 31,  2005  increased  by
approximately  $1,709,000,  or approximately 70%, to approximately $4,147,000 as
compared to approximately  $2,438,000  reported for the three-month period ended
August 31, 2004.  The growth in revenues  was directly  related to the growth in
the number of local access lines served by our CLEC customer  base. As we manage
the launch of our VoIP platform,  we expect to use funds that  previously  would
have  been  used to  maintain  or grow  our  CLEC  customer  base to pay for the
expenses associated with launching our VoIP operation. Although we began signing
up VoIP  customers  in the third  quarter of fiscal  2005,  it is  difficult  to
project  the level of success  of our VoIP  telemarketing  efforts  and our VoIP
wholesale program until we have several months of experience selling our product
in this manner.

Our gross profit for the  three-month  period ended August 31, 2005 increased by
approximately $628,000 to approximately $1,907,000 from approximately $1,279,000
reported for the  three-month  period  ended  August 31,  2004.  During the same
fiscal periods,  our gross profit percentage  decreased to 46.0% from 52.5%. The
increase in our gross profit  resulted from the increase in our customer base in
the third  quarter of fiscal  2005 over the third  quarter of fiscal  2004.  The
decrease in our gross profit percentage during the 2005 period resulted from the
higher cost of services that we are now incurring  under our wholesale  services
agreement  with Verizon,  as compared to the costs we previously  incurred under
the UNE-P service  offering.  As discussed above, our selling strategy in fiscal
2005 is to continue to penetrate  states that offer the  opportunity  to achieve
POTS gross margins that are higher than 40%. We anticipate that our VoIP product
will also be able to yield gross margins in excess of 40%.

SG&A increased by approximately $698,000, or approximately 42%, to approximately
$2,369,000 for the three-month  period ended August 31, 2005 from  approximately
$1,671,000  reported  for the  prior  year  fiscal  period.  Of  this  increase,
approximately $680,000 was for bad debt expense,  approximately $189,000 was for
increased personnel costs, of which  approximately  $120,000 was related to VoX,
approximately  $70,000 was for billing  costs,  approximately  $104,000  was for
financing costs (See Note 2), approximately  $43,000 was for non-employee option
costs,  and  approximately  $60,000  was for other  VoX  operating  costs.  This
increase in expense was partially offset by a reduction in  telemarketing  costs
of  approximately  $506,000.  As  discussed  above,  going  forward,  we do  not
anticipate the continuation of this high percentage of bad debt expense with our
CLEC  customers,  as the  residential  customers we are  accepting  from outside
marketing  agencies must be creditworthy  and must pay their first bill in order
for the marketing company to receive its full commission.

Depreciation  expense  increased to  approximately  $23,000 for the  three-month
period  ended  August  31,  2005 as  compared  to  approximately  $4,000 for the
three-month period ended August 31, 2004 as we began to amortize the capitalized
costs of our VoIP platform in the third quarter of fiscal 2005.


                                       16
<PAGE>

Interest  expense  for  the  three-month   period  ended  August  31,  2005  was
approximately  $264,000,  as a result of increased  borrowings  under our recent
financing  agreements  (See  Note  2).  We  had  no  interest  expense  for  the
three-month period ended August 31, 2004.

Other income (loss) for the  three-month  periods ended August 31, 2005 and 2004
was approximately $16,000 and ($22,000),  respectively.  For fiscal 2005, income
of approximately  $16,000 resulted  primarily from commission income. For fiscal
2004, loss of approximately ($22,000), resulted primarily from commission income
of approximately  $22,000 that was offset by approximately $45,000 in additional
costs  associated  with  the sale of our  headquarters  building  in the  fourth
quarter of fiscal 2003

For the  three-month  period  ended  August  31,  2005,  we  recorded  income of
approximately  $35,000 related to the change in the market value of the warrants
issued to Laurus as part of the Laurus  financing  (See Note 2). No such  income
was recorded in the three-month period ended August 31, 2004.

For the three-month period ended August 31, 2005 we recorded gain on the sale of
investment securities and other investments of approximately $323,000.

Liquidity and Capital Resources
-------------------------------

At August 31, 2005, we had cash and cash equivalents of  approximately  $414,000
and negative working capital of approximately $2,973,000.

Net cash used in operating activities  aggregated  approximately  $1,801,000 and
$367,000 in the nine-month periods ended August 31, 2005 and 2004, respectively.
The  principal  use of cash in  fiscal  2005  was the  loss  for the  period  of
approximately  $2,118,000.  The principal use of cash in fiscal 2004 was the net
change in  operating  assets  and  liabilities  and the  pay-off  of  bankruptcy
liabilities,  partially  offset by the income  for the  period of  approximately
$446,000.

Net cash provided by (used in) investing  activities in the  nine-month  periods
ended August 31, 2005 and 2004  aggregated  approximately  $6,000 and ($88,000),
respectively.  The  principal  source of cash in fiscal 2005 was the proceeds of
the sale of investment securities of approximately $356,000, which was partially
offset by capital expenditures of approximately  $343,000.  The principal use of
cash in fiscal 2004 was for capital expenditures.

Net cash provided by (used in)  financing  activities  aggregated  approximately
$1,836,000  and  ($31,000) in the  nine-month  periods ended August 31, 2005 and
2004,  respectively.  In fiscal 2005, net cash provided by financing  activities
resulted from the proceeds of short-term and long-term notes, warrants and stock
issuances  and the  exercise of stock  options in the  amounts of  approximately
$2,018,000  and  $60,500,  respectively,  which  was  partially  offset  by debt
repayment of approximately  $242,000. In fiscal 2004, net cash used in financing
activities resulted from the repayment of debt.

For the nine-month period ended August 31, 2005, we had  approximately  $326,000
in capital expenditures primarily related to our VoIP initiative. We expect that
other capital  expenditures over the next 12 months will relate primarily to the
continued  roll-out of our VoIP  services and will only be required to support a
growing customer base of VoIP subscribers.


                                       17
<PAGE>

While we have  reported  profits  in the last two  fiscal  years,  we also  have
sustained net losses from operations during those periods,  as we have worked to
build our customer base. Our operating  losses have been funded through the sale
of non-operating  assets,  the issuance of equity securities and borrowings.  We
believe our current cash and cash  equivalents  may not be sufficient to finance
our operations through at least the next 12 months. We will continue to evaluate
our cash needs and growth  opportunities  and we anticipate  seeking  additional
equity or debt  financing in order to achieve our overall  business  objectives.
There  can be no  assurance  that  such  financing  will be  available,  or,  if
available, will be at a price that will be acceptable to us. Failure to generate
sufficient  revenues,  raise additional capital or reduce certain  discretionary
spending  will  likely  have an adverse  impact on our  ability  to achieve  our
longer-term business objectives.

Item 3.  Controls and Procedures
-------  -----------------------

      Disclosure  Controls and Procedures.  We maintain  disclosure controls and
procedures  designed to ensure that information  required to be disclosed in our
reports under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"), is recorded,  processed,  summarized and reported within the time periods
specified in the Exchange  Act, and that such  information  is  accumulated  and
communicated  to our  management,  including our chief  executive  officer/chief
financial officer,  as appropriate to allow timely decisions  regarding required
disclosure.  In designing and evaluating the disclosure controls and procedures,
management  recognized  that any  controls  and  procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the  cost-benefit  relationship of possible  controls and
procedures.

In  connection  with the  completion  of its audit of,  and the  issuance  of an
unqualified report on, our consolidated financial statements for the fiscal year
ended November 30, 2004, our  independent  auditors,  Nussbaum Yates and Wolpow,
P.C.  ("NYW"),  communicated to our Audit  Committee that the following  matters
involving our internal controls and operations were considered to be "reportable
conditions," as defined under standards established by the American Institute of
Certified Public Accountants or AICPA:

      o     Lack of  quantity of staff,  which led to issues  related to lack of
            segregation  of  duties,   inadequate  supervision,   timeliness  of
            financial reporting and year-end closing process;

      o     Lack of quantity of staff, which led to issues related to the timely
            preparation and filing of municipal  telecommunications tax returns;
            and

      o     Lack  of  quantity  of  staff,  which  led  to  tax  payments  being
            classified   as   cost  of   services   and  an   overstatement   of
            telecommunications taxes payable.

Reportable  conditions  are matters  coming to the attention of our  independent
auditor that, in its judgment,  relate to significant deficiencies in the design
or operation  of internal  controls  and could  adversely  affect our ability to
record,  process,  summarize  and  report  financial  data  consistent  with the
assertions  of  management in the  financial  statements.  In addition,  NYW has
advised us that it considers the first matter noted above,  which relates to the
lack of a segregation of duties,  to be a "material  weakness" that may increase
the possibility that a material  misstatement in our financial  statements might
not be prevented or detected by our employees in the normal course of performing
their assigned functions.


                                       18
<PAGE>

As  required  by SEC Rule  13a-15(b),  we carried  out an  evaluation  under the
supervision and with the  participation  of our management,  including our chief
executive  officer/chief  financial officer,  of the effectiveness of the design
and  operations  of  our  disclosure  controls  and  procedures.  Based  on  the
foregoing,  our chief executive  officer/chief financial officer determined that
the  deficiencies  identified  by NYW could cause our  disclosure  controls  and
procedures  to be less  effective  at a  reasonable  assurance  level  than  was
desirable.   However,  we  are  actively  seeking  to  remedy  the  deficiencies
identified  herein,  including hiring additional staff to assure  segregation of
duties,  additional review procedures and timeliness of financial reporting,  as
well as preparing and filing telecommunications tax returns. Our chief executive
officer/chief  financial  officer  did not note any other  material  weakness or
significant  deficiencies in our disclosure  controls and procedures during this
evaluation.  We  continue  to improve  and refine our  internal  controls.  This
process is ongoing.  In June 2005, we hired an  additional  staff member for our
accounting  department to address the  segregation  of duties issues and to help
with tax filings.

      Internal  Control  Over  Financial  Reporting.   Other  than  the  matters
discussed  above,  our  chief  executive  officer/chief  financial  officer  has
determined  that our internal  controls and procedures  were effective as of the
end of the period  covered by this  report.  During the third  quarter of fiscal
2005,  there were no significant  changes in our internal control over financial
reporting or in other factors that materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting.



                                       19
<PAGE>

                            eLEC COMMUNICATIONS CORP.
                            -------------------------
                            PART II-OTHER INFORMATION
                            -------------------------

Item 1.     Legal Proceedings
-------     -----------------

            None

Item 2.     Changes in Securities and Purchases of Equity Securities
-------     --------------------------------------------------------

            In June and August 2005,  we issued an aggregate of 60,000 shares of
            our common stock in conjunction with the exercise of options granted
            under our Employee  Stock Option Plan, as amended.  Such shares were
            issued in reliance upon the exemption from registration  provided by
            Section 4(2) of the Securities Act of 1933, as amended, on the basis
            that such issuance did not involve a public offering, no underwriter
            fees or commissions  were paid in connection  with such issuance and
            each  recipient  of such  shares was an  `accredited  investor,'  as
            defined  in  Regulation  D under  the  Securities  Act of  1933,  as
            amended.

Item 3.     Defaults Upon Senior Securities
-------     -------------------------------

            None


Item 5.     Other Information
-------     -----------------

            None

Item 6.     Exhibits
-------     --------

                  31.1  Certification  of our Chief Executive  Officer and Chief
                        Financial Officer,  Paul H. Riss,  Pursuant to 18 U.S.C.
                        1350 (Section 302 of the Sarbanes-Oxley Act of 2002)

                  32.1  Certification  of our Chief Executive  Officer and Chief
                        Financial Officer,  Paul H. Riss,  Pursuant to 18 U.S.C.
                        1350 (Section 906 of the Sarbanes-Oxley Act of 2002)


                                       20
<PAGE>

Signatures
----------

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

                                                  eLEC Communications Corp.



October 17, 2005                                  By:   /s/ Paul H. Riss
----------------                                        ------------------------
Date                                                    Paul H. Riss
                                                        Chief Executive Officer
                                                        (Principal Financial and
                                                         Accounting Officer)




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