SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

(Mark One)

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
       SECURITIES EXCHANGE ACT OF 1934.

                 For the quarterly period ended August 31, 2002.


                                       OR

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

        For the transition period from ______________ to ______________.

                          Commission file number 0-4465

                            eLEC Communications Corp.
--------------------------------------------------------------------------------
          ( 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.)


                  543 Main Street New Rochelle, New York 10801
--------------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


Issuer's Telephone Number, Including Area Code  914-633-6500
                                                ------------


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

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 15,619,282 shares of
Common Stock, par value $.10 per share, as of October 1, 2002.

<PAGE>


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

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

<TABLE>
<CAPTION>

                   eLEC Communications Corp. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                                                                   August 31, 2002
                                                                   ---------------
                                                                     (Unaudited)
<S>                                                                 <C>
Assets
Current assets:
  Cash and cash equivalents                                         $  1,011,375
   Accounts receivable                                                 1,571,929
   Investment securities                                                 107,138
   Other investments                                                     240,000
   Prepaid expenses and other current assets                             316,883
                                                                    ------------
Total current assets                                                   3,247,325

Property, plant  and equipment, net                                    1,936,522

Other assets                                                             297,388
                                                                    ------------
Total assets                                                        $  5,481,235
                                                                    ============

Liabilities and stockholders' equity deficiency
Current liabilities:
  Secured short-term borrowings                                     $    210,347
  Current maturities of long-term debt and capital lease
     obligations                                                         257,559
  Accounts payable and accrued expenses                               12,494,835
  Taxes payable                                                          708,404
                                                                    ------------
Total current liabilities                                             13,671,145
                                                                    ------------
Long-term debt and capital lease obligations, less current
     maturities                                                        1,100,000
                                                                    ------------
Stockholders' equity:
  Preferred stock, $.10 par value, 1,000,000 shares authorized
    Series B issued, 16 shares in 2002                                         2
  Common stock $.10 par value, 50,000,000 shares authorized,
    15,619,282 issued in 2002                                          1,561,928
  Capital in excess of par value                                      25,676,342
  Deficit                                                            (36,597,511)
  Treasury stock at cost, 11,000 shares                                  (27,500)

  Accumulated other comprehensive income, unrealized gain on
      securities                                                          96,829
                                                                    ------------
    Total stockholders' equity deficiency                             (9,289,910)
                                                                    ------------
Total liabilities and stockholders' equity                          $  5,481,235
                                                                    ============
</TABLE>

See notes to the condensed consolidated financial statements

                                       2

<PAGE>


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

<TABLE>
<CAPTION>

                                                                   For the Nine Months Ended        For the Three Months Ended
                                                                 Aug. 31, 2002   Aug. 31, 2001    Aug. 31, 2002    Aug.31, 2001
                                                                 -------------   -------------    -------------    ------------
<S>                                                             <C>              <C>              <C>              <C>
Revenues                                                        $ 11,805,200     $ 14,947,642     $  3,629,517     $  5,649,465
Cost of revenues                                                   7,789,871        9,175,602        2,305,277        3,293,927
                                                                   ---------        ---------        ---------        ---------
Gross profit                                                       4,015,329        5,772,040        1,324,240        2,355,538
                                                                   ---------        ---------        ---------        ---------

Costs and expenses:
   Selling, general and administrative                             7,286,855        9,602,926        2,290,554        2,938,916
   Depreciation and amortization                                     180,546          755,691           44,327          285,397
                                                                     -------          -------           ------          -------
               Total costs and expenses                            7,467,401       10,358,617        2,334,881        3,224,313
                                                                   ---------       ----------        ---------        ---------

Loss from operations                                              (3,452,072)      (4,586,577)      (1,010,641)        (868,775)
                                                                  ----------       ----------       ----------         --------

Other income (expense):
Interest expense                                                    (386,186)        (506,416)         (87,283)        (200,417)
Interest income                                                       16,056           23,508            5,453            9,806
Miscellaneous income, net                                          1,342,618          887,911          701,376           53,440
                                                                   ---------          -------          -------           ------
                                                                     972,488          405,003          619,546         (137,171)
                                                                     -------          -------          -------         --------

Loss from continuing operations                                   (2,479,584)      (4,181,574)        (391,095)      (1,005,946)

Gain from discontinued operations                                         --          112,522               --           21,380
                                                                     -------          -------          -------           ------

Net loss                                                          (2,479,584)      (4,069,052)        (391,095)        (984,566)

Other  comprehensive  income (loss) -
unrealized gain (loss) on marketable
securities                                                            92,258       (1,912,910)          28,910       (1,122,353)
                                                                      ------       ----------           ------       ----------

Comprehensive loss                                              ($ 2,387,326)    ($ 5,981,962)    ($   362,185)    ($ 2,106,919)
                                                                ============     ============     ============     ============

Basic and diluted income (loss) per share
Continuing operations                                           ($      0.16)    ($      0.28)    ($      0.03)    ($      0.07)
Discontinued operations                                                   --              .01               --               --
                                                                ------------     ------------     ------------     ------------
Net loss                                                        ($      0.16)    ($      0.27)    ($      0.03)    ($      0.07)
                                                                ============     ============     ============     ============

Weighted average number of common shares outstanding              15,608,282       15,606,818       14,871,898       14,966,103
                                                                  ==========       ==========       ==========       ==========
</TABLE>

See notes to the condensed consolidated financial statements


                                       3
<PAGE>


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

<TABLE>
<CAPTION>

                                                                     For the Nine Months Ended
                                                                    Aug. 31, 2002   Aug. 31, 2001
                                                                    -------------   -------------
<S>                                                                  <C>             <C>
Net cash provided by (used in) operating activities:                 $ 2,942,305     ($2,897,427)
                                                                     -----------     -----------

Cash flows from investing activities:
   Purchase of property and equipment                                                 (1,179,167)
   Proceeds from sale of marketable securities                         1,380,911         992,062
   Proceeds from sale of property                                          4,000         933,238
   Proceeds from agreement to sell subsidiary                             43,662          43,662
                                                                          ------          ------
Net cash provided by investing activities                              1,428,573         789,795
                                                                       ---------         -------

Cash flows from financing activities:
   (Decrease) increase in loans payable to financial institutions     (4,202,119)      2,239,879
   Pay-off of Canadian mortgage                                               --        (283,920)
   Proceeds from exercise of stock options                                45,000              --
                                                                          ------       ---------
Net cash (used in) provided by financing activities                   (4,157,119)      1,955,959
                                                                      ----------       ---------

Increase (decrease) in cash and cash equivalents                         213,759        (151,673)
Cash and cash equivalents at beginning of period                         797,616         509,657
                                                                         -------         -------
Cash and cash equivalents at the end of period                       $ 1,011,375     $   357,984
                                                                     ===========     ===========
Supplemental disclosures of cash flow information
Cash paid during the period for:
    Interest                                                         $   386,186     $   428,052
                                                                     -----------     -----------
</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.  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, 2002 are not  necessarily
indicative  of the results that may be expected for the year ended  November 30,
2002. For further  information,  refer to the consolidated  financial statements
and  footnotes  thereto  included in our Annual Report on Form 10-K for the year
ended November 30, 2001.

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

During the third  quarter of fiscal 2002, we paid in full all amounts due to our
former  lender  Textron  Financial  ("Textron"),  formerly  known as RFC Capital
Corporation,  and all collateral securing such loan was released.  Our financing
arrangements  consist of a mortgage  loan of $1.1 million due in December  2005,
with  monthly  payments  of interest  only at the rate of 11% per annum,  and no
prepayment  penalty,  and a $150,000  working  capital loan to our  wholly-owned
subsidiary, Telecarrier Services, Inc. ("TSI"), which has filed for relief under
Chapter 11 of the United States Bankruptcy Code. See Note 7.

Note 3-Investment Securities
----------------------------

Details as to investment securities at August 31, 2002 are as follows:

                                            Fair             Unrealized
                               Cost        Value            Holding Gain
                               ----        -----            ------------
Equity securities            $10,309      $107,138            $96,829

Our  investment  securities at August 31, 2002 consisted of 42,515 common shares
of Talk  America  Holdings  Inc.  ("Talk")  valued at $2.52 per share.  The Talk
shares have been subject to market  fluctuations  and at October 14, 2002 closed
at $2.11 per share.

During the three and nine months  ended  August 31,  2002,  we sold  303,000 and
1,219,900  shares  of  Talk,  respectively,  realizing  a gain of  approximately
$697,000 and $1,381,000 for the respective periods. Of the 1,219,900 shares sold
during the  nine-months  ended  August 31,  2002,  1,000,000 of such shares were
pledged as collateral under our former loan agreement with Textron, the proceeds
of which, amounting to approximately $1,141,000, were used to pay down the loan.
The gain on the sale of Talk stock is included under the caption  "Miscellaneous
income,  net"  on  the  Condensed  Consolidated  Statements  of  Operations  and
Comprehensive Loss.

                                       5
<PAGE>


Note 4-Major Customer
---------------------

During  the three  and nine  months  ended  August  31,  2002,  no one  customer
accounted  for more than 10% of revenue.  During the three and nine months ended
August  31,  2001,  we  had  revenue  from  one  customer  that   accounted  for
approximately 15% and 17%, respectively, of our revenue.


Note 5-Income Taxes
-------------------

At November 30, 2001, we had net operating loss carryforwards for Federal income
tax  purposes of  approximately  $21,000,000  expiring in the years 2002 through
2021. There is an annual limitation of approximately $187,000 on the utilization
of approximately  $1,700,000 of such net operating loss carryforwards  under the
provisions of Internal Revenue Code Section 382.

As of August 31, 2002, we had an unrealized gain on our ownership of Talk common
stock  of  approximately  $97,000.  Upon the  sale of the  Talk  stock,  our net
operating  loss will be reduced to the extent of any realized  gain on the sale.
Accordingly, deferred taxes have not been provided on the unrealized gain.


Note 6-Earnings (Loss) Per Common Share
---------------------------------------

Basic  earnings  (loss) per common  share is  calculated  by dividing net income
(loss) by the weighted  average number of common shares  outstanding  during the
period.  Diluted  earnings (loss) per share is calculated by dividing net income
(loss) 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. There were no potentially  dilutive securities for the three
and nine months ended August 31, 2002 and 2001.

Note 7-Petition for Relief Under Chapter 11
-------------------------------------------

On July 29, 2002, (the "Petition Date"), TSI, our wholly-owned subsidiary, which
has licenses to resell local and long distance service in three states,  filed a
voluntary petition for relief under Chapter 11 of the federal bankruptcy laws in
the United States Bankruptcy Court for the Southern District of New York and was
assigned Case No. 02-20379 (ASH).  Under Chapter 11, among over things,  actions
to collect  certain claims  (liabilities  subject to compromise)  against TSI in
existence  prior to the Petition  Date are stayed while TSI  continues  business
operations as a Debtor-in-Possession.  Additional claims (liabilities subject to
compromise)  may arise  subsequent to the Petition Date resulting from rejection
of executory  contracts,  including equipment leases, and from the determination
by the court (or  agreed to by  parties  in  interest)  of  allowed  claims  for
contingent and disputed  claims.  The actions to collect on or enforce the claim
secured by TSI's assets ("Secured  Claim") are also stayed,  although the holder
of such  claim has the right to move the court  for  relief  from the stay.  The
Secured  Claim is secured  primarily  by a lien on  assets.  TSI will also incur
liabilities  for,  among  other  things,  goods or  services  provided  to it as
Debtor-in-Possession  after the Petition Date, as well as costs  associated with
the reorganization, including fees and expenses of TSI's bankruptcy attorney. At
August  31,  2002,  the  Condensed  Balance  Sheet and  Condensed  Statement  of
Operations of TSI were as follows:


                                       6
<PAGE>

<TABLE>
<CAPTION>

                            Telecarrier Services Inc.
                             (Debtor-in-Possession)
                             Condensed Balance Sheet
                                                             August 31, 2002
                                                             ---------------
                                                              (Unaudited)
<S>                                                          <C>
Assets
Current assets:
  Cash and cash equivalents                                  $   360,100
   Prepaid expenses and other current assets                       2,688
                                                                   -----
Total current assets                                             362,788
                                                                 -------

Intercompany receivable                                          225,092
Allowance for doubtful collection                               (225,092)
                                                                --------
Net intercompany receivable                                           --
                                                                --------
Total assets                                                 $   362,788
                                                             ===========

Liabilities and stockholders' equity deficiency
Liabilities not subject to compromise
Current liabilities:
    Accounts  payable                                        $     1,072
    Secured borrowings                                           150,000
                                                                 -------
Total current liabilities                                        151,072
                                                                 -------
Liabilities subject to compromise
  Accounts payable                                               645,551
  Accrued expenses                                               103,249
                                                                 -------
Total liabilities subject to compromise                          748,800
                                                                 -------
Total liabilities                                                899,872
                                                                 -------

Stockholders' equity:
  Common stock                                                     4,000
  Capital in excess of par value                               1,578,686
  Deficit                                                     (2,119,770)
                                                              ----------
    Total stockholders' equity deficiency                       (537,084)
                                                                --------
Total liabilities and stockholders' deficiency               $   362,788
                                                             ===========
</TABLE>


                            Telecarrier Services Inc.
                             (Debtor-in-Possession)
                        Condensed Statement of Operations
                    For the Nine Months Ended August 31, 2002
                                   (Unaudited)


Revenues                                   $      --
Cost of revenues                                  --
                                           ---------
Gross profit                                      --
                                           ---------

Costs and expenses:
   Selling, general and administrative       229,272
   Reorganization costs                       75,000
   Depreciation and amortization               7,100
                                           ---------
               Total costs and expenses      311,372
                                           ---------

Loss from operations                        (311,372)
                                            --------

Other (expense):
Interest expense                              (7,268)
Miscellaneous expense                        (32,973)
                                             -------
                                             (40,241)
                                             -------
Net loss                                   ($351,613)
                                           =========


                                       7
<PAGE>

Note 8-Subsequent Events
------------------------

On September  3, 2002,  we entered into a  definitive  purchase  agreement  (the
"Agreement")  to  sell  substantially  all of  the  assets  of our  wholly-owned
subsidiary,  Essex  Communications,  Inc. ("Essex"),  to Essex Acquisition Corp.
("EAC"), a wholly-owned  subsidiary of BiznessOnline.com,  in exchange for $5.00
and the  assumption by EAC of certain  liabilities  of Essex,  which amounted to
approximately $9,800,000 at September 3, 2002, including all obligations due and
payable to Essex's largest vendor,  Verizon Services Corp. In addition,  EAC has
agreed to fund, at its option, and manage the operations of Essex pursuant to an
interim consulting and funding agreement, until the transaction closes. Upon the
closing of the transaction, EAC will reimburse us $270,000 in respect of amounts
previously paid by us under a guarantee agreement to Essex's former lender. This
reimbursement   will  allow  us  to  continue   operations   of  our   remaining
telecommunications  subsidiaries,  subject to our receipt of additional accounts
receivable  financing.  In the third quarter of fiscal 2002,  Essex  represented
approximately  97% of our total revenues.  However,  since September 3, 2002, we
have not been  selling  access  lines or  marketing  services  to EAC or  Essex.
Instead,  we  have  been  selling  access  lines  and  adding  customers  to our
newly-licensed CLEC, New Rochelle Telephone Corp.  ("NRTC").  If the sale occurs
as described in the Agreement, it will result in a substantial gain. The closing
of the  transaction  is subject to receipt of,  among other  things,  applicable
shareholder and regulatory approvals and must be completed by December 31, 2002.
If the  transaction  fails to close for  reasons  other than a material  uncured
breach of the  Agreement  by EAC,  then  Essex will be  obligated  to pay EAC as
liquidated damages the sum of $1,000,000 in cash and to sell to EAC all customer
lines in the State of New York at a cost of $50 per line.

Terms of the proposed sale are described in our proxy statement dated October 9,
2002,  a copy  of  which  has  been  filed  with  the  Securities  and  Exchange
Commission.

Note 9-Risks and Uncertainties
------------------------------

We buy  substantially all of our  telecommunication  services from Regional Bell
Operating Companies ("RBOCs"),  and are, therefore,  highly dependent upon them.
We believe there are less desirable suppliers of  telecommunication  services in
the geographical  locations in which we conduct business. In addition, we are at
risk to  regulatory  agreements  that govern the rates we are to be charged.  In
light  of the  foregoing,  it is  reasonably  possible  that  the  loss of these
relationships  with  the  RBOCs  or a  significant  unfavorable  change  in  the
regulatory  agreements  structure  would have a severe  near-term  impact on our
ability to conduct our telecommunications business.

In certain states, Essex has been billed for certain amounts from the RBOCs that
are in dispute. We believe that the related invoicing of taxes,  subscriber line
charges,  other fees and  features  are not in  accordance  with the  agreements
negotiated  with the RBOCs.  At August 31, 2002,  Essex had not paid for and had
not accrued  approximately  $3,000,000 of such disputed amounts.  We believe the
majority of these disputes will be resolved in conjunction with the negotiations
to sell certain assets of Essex to EAC.

As of August 31, 2002, we reflected undisputed liabilities of Essex to the RBOCs
of approximately $8,900,000, substantially all of which were past due. Essex has
an understanding with the RBOC that provides Essex with the most services to

                                       8
<PAGE>

continue  to provide  service to Essex's  customers,  as long as Essex is making
payments for its current invoices and certain progress  payments toward the past
due amounts.  Such  agreement is designed to allow Essex to continue  operations
until the anticipated  closing of the sale of certain assets to EAC. If Essex is
unable to make these payments, it would put Essex at risk to lose the underlying
services  that are being  provided by the RBOC.  Essex's  lack of ability to pay
outstanding  invoices to an  underlying  carrier has forced it to abandon  local
service in the states of Florida  and  Kentucky.  For the three and nine  months
ended August 31, 2002, sales in this region  accounted for  approximately 4% and
5%,  respectively,  of  total  sales as  compared  to  approximately  5% and 7%,
respectively, for the three and nine months ended August 31, 2001.

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.

     -    Failure to obtain working  capital  financing  sufficient to carry out
          our plan.

     -    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, as they relate to the unbundled network
          element platform or the resale of such 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.


                                       9
<PAGE>

Item 2. Management's  Analysis and Discussion of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

     The statements  contained in this Report that are not historical  facts are
"forward-looking   statements"   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;  (2) our success in selling Essex or  substantially  all of its assets
and the  selling  price we obtain;  (3) our  ability to  maintain,  attract  and
integrate internal management,  technical information and management information
systems; (4) the cooperation of incumbent carriers in implementing the unbundled
network elements platform required by the Federal Communications Commission; (5)
our ability to market our  services to current and new  customers  and  generate
customer demand for our products and services in the geographical areas in which
we can  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
impact of changes in telecommunication laws and regulations;  (10) the intensity
of  competition;  and (11)  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  full-service  telecommunications  company that
focuses on developing  integrated  telephone service in the emerging competitive
local  exchange  carrier  ("CLEC")  industry.  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,  and a full suite of features,  including items such as
three-way  calling,  call  waiting  and voice  mail.  We have  built a  scalable
operating  platform that can provision a local telephone line, provide dial-tone
to our customers, read usage records, rate telephone calls for billing purposes,
prepare  monthly  invoices to  customers,  provide  real-time  on-line  customer
support  services at our inbound call  centers,  capture  credit and  collection
data, calculate gross margins for each line and perform any moves, adds, changes
and repairs that a customer requests.  We utilize universal client technology so
that our employees  and agents can access our system from any personal  computer
using any Internet browser.


                                       10
<PAGE>


We  believe  that the  Telecommunications  Act of 1996 (the  "Telecommunications
Act"),  which opened the local exchange  market to  competition,  has created an
attractive  opportunity for CLECs,  such as eLEC. Like most CLECs,  our entry in
this industry was dependent  upon the provisions of the  Telecommunications  Act
that allow  CLECs to lease  various  elements of the  networks of the  incumbent
local exchange carriers  ("ILECs") that are necessary to provide local telephone
service in a cost-effective manner. This aspect of the Telecommunications Act is
referred to as "unbundling" the ILEC networks,  and allows us to lease unbundled
network  elements  on an  as-needed  basis  and  provide  such  elements  to our
customers at a lower cost than that which the ILEC is charging.

Although  we  believe  the  opportunity  for  CLECs  is  attractive,  it is also
challenging.  We must  contend  with  federal and state  government  regulators,
rapidly changing  technologies,  incumbent  carriers that are better staffed and
capitalized  than  us and  real-time  business  partners  that  also  carry  our
customer's  phone call,  whether it be local,  long  distance or  international.
While we are  managing  these  challenges,  we also must  provide  connectivity,
superior  customer service and a culture of continuous  improvement.  Because of
the complexity of the business,  we have focused our energies on simplifying our
working environment and improving performance through automation. We believe one
of the greatest  accomplishments  in building  our business  over the past three
years was the  development of our own operations  support  systems  ("OSS").  We
believe our OSS is the crucial  enabler  that allows us to  effectively  support
customer orders, service delivery, service assurance, billing and collections in
an automated manner.

Other   CLECs   have   invested   a   substantial   amount  of  capital  to  buy
circuit-switched  equipment and rollout fiber, only to find that their equipment
is severely  underutilized  and that there is a  significant  shortfall in their
revenue  stream when  compared  to their  capital  investment.  We refer to this
strategy as a "facilities-first"  strategy, because the CLEC has invested in its
equipment  and placed the  equipment in service  before the CLEC has developed a
customer  base.  Our  strategy  is a  "customer-first,"  or  a  "deferred-build"
strategy.  We invested  our capital in our OSS to support our  customers  and we
lease  facilities  on an as-needed  basis from ILECs while we build our customer
base.  After  we have  obtained  a  substantial  geographical  concentration  of
customers, we will make decisions regarding the purchase and installation of our
own network  equipment.  This  strategy  allows us to be very  flexible with our
customer  base as we  grow  our  business.  We can  move  our  customer  base to
alternative access, if appropriate,  and we will not become a captive of our own
underutilized  equipment,  as can happen  with a  "facilities-first"  CLEC.  The
technological  advances in equipment  and the lowering of equipment  prices have
substantiated our deferred-build strategy.

When we lease lines from an ILEC, we use the unbundled network elements platform
("UNE-P")  service  offering.  UNE-P allows us to lease the network  elements we
need,  such as the local line and the port on a local switch,  so we can provide
local dial tone service to our customers.  We are capable of providing virtually
all of the  same  additional  voice  services  provided  by any  ILEC,  such  as
three-way calling,  call waiting, call forwarding and caller ID. We sell all our
services at a fee that is at least ten percent less than the rate charged by the
ILEC. We typically sell our business  customers the identical  service they were
buying from the ILEC so our  customers  see a savings on their  telephone  bills
when they change to our service. We are currently marketing to residential users
a selection  of three flat rate plans that allow them to have access to numerous
calling features for a fixed monthly price.

                                       11
<PAGE>


We believe we can provide  competitive service under the UNE-P service offering.
We believe UNE-P is the preferable  platform under which any CLEC should operate
while it is growing and building a customer base. We have designed our OSS to be
flexible and scalable so that any company  that wants to begin  providing  local
exchange services utilizing UNE-P can rely on our OSS.

Due to the changing capital environments during 2001 and our inability to obtain
sufficient  capital  to  build  both a CLEC  and an OSS for a UNE-P  and  resale
customer  base,  we have been forced to scale back our  operations as a CLEC and
have  entered  into an asset  purchase  agreement  with EAC to sell  most of the
assets of Essex to EAC. The sale includes the  assumption by EAC of  liabilities
of Essex of  approximately  $9,800,000 at August 31, 2002. We have distributed a
proxy  statement to our  shareholders  in  conjunction  with such  proposed sale
seeking shareholder approval of the proposed sale.

We believe many CLECs have failed because they did not have sufficient  revenues
to support the cost of operating  the network they built.  We also believe other
CLECs have failed because they did not have the back-office systems necessary to
effectively  support  customer  orders,  service  delivery,  service  assurance,
billing and collections in an efficient manner. While we have leased networks to
avoid the high cost of  building  a network  and have  focused  our  efforts  on
building our OSS, we have not been able to bring our  operations  to a breakeven
point,  and have been struggling with negative working capital for more than one
year, while our losses continue.  Due to our financial  condition,  we have been
unable to apply funds for effective marketing to customers, and, prior to August
31, 2002,  we had been unable to obtain the consent of our former  lender to the
purchase of any customer bases that would have helped us obtain enough customers
to reach a  breakeven  level.  To help  conserve  cash,  we have scaled back our
telemarketing efforts, which we believe are predictable as to costs and results,
and moved to a more  cash-efficient  agent model,  which  requires  smaller cash
expenditures up front,  but will make it more difficult to predict the timing of
when new customers will sign up for our service.

As a  result  of our  financial  condition,  we are  exploring  alternatives  to
preserve and generate additional revenues from our OSS. EAC will utilize our OSS
at least until  February  2003, to manage and service the customers  that it has
agreed to  purchase  from us. We also have  been in  discussions  regarding  the
licensing  of our OSS to  companies  that are seeking to purchase  local  access
lines,  but are not  currently  a licensed  CLEC.  We hope to be able to use our
billing  platform to generate  revenues from our OSS.  There can be no assurance
that we will be successful in generating  third-party  revenues from our OSS, or
that we will be able to  satisfactorily  dispose of Essex, or one or more of our
other subsidiaries,  on satisfactory terms.  Failure to sell Essex or its assets
and liabilities on satisfactory terms could cause us to seek to reorganize under
applicable  bankruptcy laws. Even if we are successful in disposing of Essex, we
still may be forced to reorganize under applicable bankruptcy laws.



Nine Months Ended August 31, 2002 vs. Nine Months Ended August 31, 2001
-----------------------------------------------------------------------

Our net revenues for the  nine-month  period ending August 31, 2002 decreased by
approximately  $3,143,000, or approximately 21%, to approximately $11,805,000 as
compared to approximately  $14,948,000 reported for the nine-month period ending
August 31, 2001. This decrease was directly  related to a decrease in the number
of our customers,  including the loss of our largest customer, and the number of
access lines that we bill each month. If we sell the assets of Essex by December

                                       12
<PAGE>

31, 2002 as we expect to do, we estimate that our revenues for our first quarter
of fiscal 2003 will likely  decline by over 90%. In the third  quarter of fiscal
2002, Essex represented  approximately 97% of our total revenues.  However, from
the date we executed the agreement with EAC to sell the assets of Essex, we have
been selling access lines and adding customers through our newly-licensed  CLEC,
NRTC,  and we plan  to  telemarket  and  use  agents  to add  customers  in that
subsidiary,  as we attempt to rebuild our customer  base and grow our  business.
Our limited  telemarketing  has remained  effective in  attracting  the expected
number of new accounts,  based upon the number of hours we dial.  Currently,  we
are not  telemarketing for EAC or for Essex, and we anticipate that we will only
be telemarketing to add new accounts for NRTC.

Our gross profit for the  nine-month  period ending August 31, 2002 decreased by
approximately   $1,757,000  to  approximately   $4,015,000  from   approximately
$5,772,000  reported for the  nine-month  period ending August 31, 2001, and our
gross  profit  percentage  decreased  to 34.0% from 38.6%  reported in the prior
fiscal period. The change in gross profit is attributable to the decrease in our
customer  base.  The  reduction in gross profit  percentage in comparison to the
prior year period is due to our  inability to obtain  credits from the RBOCs for
billing disputes.

Selling, general and administrative expenses ("SG&A") decreased by approximately
$2,316,000, or approximately 24%, to approximately $7,287,000 for the nine-month
period ending August 31, 2002 from  approximately  $9,603,000  reported in prior
fiscal  period.  This  decrease in expense is directly  related to our  efforts,
started in the second half of fiscal  2001,  to implement  various  cost-cutting
measures,  which  included,  among other things,  a reduction in staffing in all
areas of our operations and reduced spending on our marketing  efforts.  We have
closed our network  operations  center in Norwalk,  Connecticut  as part of this
cost  cutting  move,  and we no longer  offer our own  digital  subscriber  line
service.  We  continue to  evaluate  our  operations  for  efficiencies  and our
employee staffing requirements,  and we expect to implement further SG&A expense
reductions in the remainder of fiscal 2002.

Depreciation and  amortization  expense  decreased by approximately  $575,000 to
approximately  $181,000 for the  nine-month  period  ending August 31, 2002 from
approximately  $756,000  reported in the prior  fiscal  period.  The decrease is
attributed to the impairment  charge taken for certain  long-lived assets in the
fourth quarter of fiscal 2001.

Interest  expense for the nine-month  period ending August 31, 2002 decreased by
approximately  $120,000 to approximately  $386,000 from  approximately  $506,000
reported in prior fiscal period primarily due to decreased  average  borrowings,
offset by higher interest rates charged by our former lender.

Miscellaneous  income for the nine-month periods ending August 31, 2002 and 2001
of approximately $1,343,000 and $888,000, respectively,  resulted primarily from
the sale of Talk shares.

Three Months Ended August 31, 2002 vs. Three Months Ended August 31, 2001
-------------------------------------------------------------------------

Our net revenues for the three-month  period ending August 31, 2002 decreased by
approximately  $2,019,000,  or approximately 36%, to approximately $3,630,000 as
compared to approximately  $5,649,000 reported for the three-month period ending
August 31,  2001.  As  discussed  above,  the decrease is related to the loss of
customers,  including our largest customer. In addition, our financial condition

                                       13
<PAGE>

has not  allowed  us to spend the  marketing  dollars  necessary  to obtain  new
customers to replace the customers we have lost.

Our gross profit for the three-month  period ending August 31, 2002 decreased by
approximately   $1,032,000  to  approximately   $1,324,000  from   approximately
$2,356,000  reported in the  three-month  period ending August 31, 2001, and our
gross  profit  percentage  decreased  to 36.5% from 41.7%  reported in the prior
fiscal period. The change in gross profit is attributable to the decrease in our
customer  base.  The  reduction in gross profit  percentage in comparison to the
prior year period is due to our  inability to obtain  credits from the RBOCs for
billing disputes.

SG&A expenses  decreased by approximately  $648,000,  or  approximately  22%, to
approximately  $2,291,000 for the three-month period ending August 31, 2002 from
approximately  $2,939,000  reported in the prior fiscal period. This decrease in
expense is directly related to our efforts, started in the second half of fiscal
2001, to implement various cost-cutting  measures,  which included,  among other
things,  a  reduction  in  staffing of our  telemarketing  division  and reduced
spending on our marketing  efforts.  As discussed above, we continue to evaluate
our operations for efficiencies and our employee staffing  requirements,  and we
expect to implement  further SG&A expense  reductions in the remainder of fiscal
2002

Depreciation and  amortization  expense  decreased by approximately  $241,000 to
approximately  $44,000 for the  three-month  period  ending August 31, 2002 from
approximately  $285,000  reported in the prior  fiscal  period.  The decrease is
attributed to the impairment  charge taken for certain  long-lived assets in the
fourth quarter of fiscal 2001.

Interest expense for the three-month  period ending August 31, 2002 decreased by
approximately  $113,000 to  approximately  $87,000 from  approximately  $200,000
reported in the  three-month  period  ending  August 31, 2001  primarily  due to
decreased  average  borrowings,  offset by higher  interest rates charged by our
former lender.

Miscellaneous income for the three-month periods ending August 31, 2002 and 2001
of approximately $701,000 and $53,000, respectively, resulted primarily from the
sale of Talk shares.

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

At August 31, 2002, we had cash and cash equivalents  available of approximately
$1,011,000,   and  negative  working  capital  of   approximately   $10,424,000.
Approximately $360,000 of our cash balances are contained in TSI, our subsidiary
that is currently  operating  as a  Debtor-in-Possession.  The negative  working
capital is due to our cumulative losses over the last several years and our lack
of a long-term debt facility to fund our  operations.  A long-term debt facility
from prior years was paid in full in August 2002. Our lack of a long-term credit
facility to fund our current  liabilities has caused our current  liabilities to
be significantly higher than in prior years.

Net cash provided by (used in)  operating  activities  aggregated  approximately
$2,942,000 and ($2,897,000) in the nine-month periods ending August 31, 2002 and
2001, respectively. The principal source of cash in fiscal 2002 was the loss for
the period of  approximately  $2,480,000,  offset by the  increase  in  accounts
payable and accrued  expenses,  principally  through the delaying of payments to
vendors, of approximately  $4,978,000.  The principal use of cash in fiscal 2001

                                       14
<PAGE>

was the loss for the  period of  approximately  $4,069,000  and an  increase  in
accounts  receivable  of  approximately  $1,685,000,  offset by an  increase  in
accounts payable of approximately $2,593,000

Net cash provided by investing activities  aggregated  approximately  $1,429,000
and  $790,000  in the  nine-month  periods  ending  August  31,  2002 and  2001,
respectively.  The principal source of cash in fiscal 2002 was the proceeds from
the sale of marketable  securities of  approximately  $1,381,000.  The principal
sources of cash in fiscal  2001 were the  proceeds  from the sale of  marketable
securities of approximately  $992,000 and the proceeds from the sale of property
of approximately  $933,000,  offset by the purchase of property and equipment of
approximately $1,179,000.

Net cash (used in) provided by  financing  activities  aggregated  approximately
($4,157,000) and $1,956,000 in the nine-month periods ending August 31, 2002 and
2001,  respectively.  In  fiscal  2002,  net cash used in  financing  activities
resulted  from  the  repayment  of short  and  long-term  debt of  approximately
$4,202,000,  which was  partially  offset by the  proceeds  from the exercise of
stock options of  approximately  $45,000.  In fiscal 2001,  net cash provided by
financing   activities  resulted  from  increased  borrowings  of  approximately
$2,240,000, partially offset by a mortgage repayment of approximately $284,000.

For  the   nine-month   period  ending  August  31,  2002,  we  had  no  capital
expenditures.  We do not expect to make any significant capital  expenditures in
the remainder of fiscal 2002 or in fiscal 2003.

At August 31, 2002, we owned approximately  42,515 shares of Talk (NASDAQ:TALK).
We have the right to purchase  285,714  additional  shares of Talk for $2.10 per
share under the terms of a warrant that  expires in August 2005.  At October 14,
2002,  Talk common stock was trading at $2.11 per share.  At August 31, 2002, we
also owned approximately 270,000 shares of Cordia Corporation  (OTCBB:CORG),  of
which 223,000 shares are  "restricted  securities," as defined in the Securities
Act of 1933,  as amended.  Such shares  became  eligible  for sale in the public
markets, subject to certain limitations, in February 2002.

The  report  of the  independent  auditors  on  our  2001  financial  statements
indicates there is substantial  doubt about the Company's ability to continue as
a going concern.  Management anticipates that, without the sale of a significant
potion  of our  assets,  we must  raise  at least  $5  million  to meet the cash
requirements  needed to  continue  operations  as  described  previously  in the
Overview  section.  Given the current  market price of our stock and the current
market  conditions  in the  telecom  sector,  it is  doubtful we will be able to
obtain such funding when needed,  or that such funding,  if  available,  will be
obtainable on acceptable  terms. We therefore believe the best alternative is to
divest  most of our  assets  of Essex to EAC,  and our  board of  directors  has
recommended to shareholders that they vote to approve such divestiture. Although
EAC will attempt to negotiate lower payment amounts with our creditors,  and has
already  done so with several  creditors,  this  divestiture  will relieve us of
approximately   $9.8  million  of  liabilities  in  exchange  for  the  sale  of
approximately  20,000  customer  lines,  plus  the  related  licenses,  accounts
receivable and cash balances in Essex.  Our failure to complete this transaction
with EAC will most likely require us to file for bankruptcy  protection from our
creditors and may lead to the eventual cessation of our business operations.

We are currently working to rebuild our customer base in NRTC, another CLEC that
we own. In order to succeed in our  business  model,  we will  require  accounts
receivable  financing  from a

                                       15
<PAGE>

conventional lender to fund the growth of this subsidiary. Our failure to obtain
such  financing  or to  otherwise  raise  the funds  necessary  to  finance  our
operations  will have an adverse effect on our ability to carry out our business
plan. Our inability to carry out this plan will likely result in the continuance
of  unprofitable  operations,  and  the  eventual  shut  down of  vendor  credit
facilities,  which would adversely affect our ability to continue operating as a
going concern.

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

          (a) Within the 90 days  prior to the date of this  report,  we carried
     out an evaluation,  under the supervision and with the participation of our
     management,  including our Chief Executive Officer and principal accounting
     officer, of the effectiveness of the design and operation of our disclosure
     controls and  procedures  pursuant to Exchange Act Rule 13a-14.  Based upon
     that  evaluation,  our Chief  Executive  Officer and  principal  accounting
     officer concluded that our disclosure controls and procedures are effective
     in timely  alerting  him to  material  information  relating to our company
     (including its  consolidated  subsidiaries)  required to be included in our
     periodic SEC filings.

          (b) There have been no significant changes in our internal controls or
     in other  factors that could  significantly  affect our  internal  controls
     subsequent  to the date we  carried  out  this  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.


                            PART II-OTHER INFORMATION
                            -------------------------

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

We intend to hold an annual  meeting  of  shareholders  during the month of May,
2003. Proposals of shareholders intended for presentation at that annual meeting
and  intended to be included in our proxy  statement  and form of proxy for that
meeting must be received at our executive offices by February 1, 2003.


Item 6.    Exhibits and Reports on Form 8-K
-------------------------------------------

(a)      Exhibits.
                         None

(b)      Reports on Form 8-K

               During  the  third  quarter  of fiscal  2002,  we filed a Current
          Report  on  Form  8-K  reporting  that  our  wholly-owned  subsidiary,
          Telecarrier  Services,  Inc,  filed,  on July 29,  2002,  a  voluntary
          petition for  protection  under  Chapter 11 of the federal  bankruptcy
          laws with the United States Bankruptcy Court for the Southern District
          of New York.

               On  September  3,  2002,  we filed a  Current  Report on Form 8-K
          reporting that we entered in a definitive  purchase  agreement,  dated
          September  3,  2002,  to sell  substantially  all of the assets of our
          wholly-owned subsidiary, Essex Communications, Inc.




                                       16
<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.



Date  October 15, 2002                           By: /s/ Paul H. Riss
                                                     -------------------------
                                                     Paul H. Riss
                                                     Chief Executive Officer
                                                      (Principal Financial and
                                                       Accounting Officer)


                                       17
<PAGE>


                                 Certifications


     I, Paul H. Riss, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of eLEC Communications
     Corp.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   I am responsible for establishing and maintaining  disclosure  controls and
     procedures  (as  defined in Exchange  Act Rules  13a-14 and 15d-14) for the
     registrant and I have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to me by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

                                       18
<PAGE>


     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  my   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures  based on my
          evaluation as of the Evaluation Date;

5.   I have disclosed,  based on my most recent evaluation,  to the registrant's
     auditors and the audit  committee of  registrant's  board of directors  (or
     persons performing the equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   I have  indicated  in this  quarterly  report  whether  or not  there  were
     significant  changes in internal  controls or in other  factors  that could
     significantly  affect internal  controls  subsequent to the date of my most
     recent  evaluation,   including  any  corrective  actions  with  regard  to
     significant deficiencies and material weaknesses.


Date: October 15, 2002

                                          /s/ Paul H. Riss
                                          ------------------------------------
                                          Paul H. Riss
                                          Chief Executive Officer and Principal
                                          Financial and Accounting Officer



                                       19