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

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

For the fiscal year ended May 31, 2003               Commission File No. 0-27539

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                 For the transition period from______to_________

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
       ------------------------------------------------------------------
                    (Exact name of registrant in its charter)

         Florida                                                 65-0574760
------------------------------                               ------------------
State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

11601 Biscayne Blvd., Suite 201
          Miami, FL                                                33181
----------------------------------------                         ----------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (305) 893-9273

Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $.001 par value per share
                     ---------------------------------------
                                (Title of Class)

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

YES [X]         NO [ ]

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

Issuer's revenues for its most recent fiscal year. $145,850

The aggregate market value of the voting common stock held by non-affiliates of
the Registrant as of August 29, 2003: Not Determinable.

As of August 29, 2003 the Registrant had 8,204,508 shares of common stock
outstanding.

                                       2
<PAGE>
                                     PART 1

ITEM 1.  DESCRIPTION OF BUSINESS

(A) GENERAL BUSINESS DEVELOPMENT

         HISTORY

         Distribution Management Services, Inc. ("Distribution" or the
"Company"), was incorporated in Florida on January 25, 1995. The Company was
formed specifically to operate a construction and demolition recycling center.
In furtherance of its business plan, the Company acquired a tract of land at
2000 N. Miami Avenue, Miami, Florida and caused same to be zoned for operation
as a recycling center. The recycling center was licensed with the Florida
Department of Environmental Regulation ("DERM") on July 6, 1995. The license is
renewable annually, through Miami-Dade County, Florida, upon payment of $2,100.

         The Company constructed the buildings and placed the improvements on
the land and obtained a temporary Certificate of Occupancy from the City of
Miami on December 4, 1998. It commenced operations on or about February 1, 1999.
The permanent Certificate of Occupancy was obtained from the City of Miami on
June 24, 1999 upon compliance with all state, county and city regulations. These
certificates are issued by the City of Miami to permit occupancy and use of the
facility. The permanent Certificate of Occupancy requires no renewals or
reissuance.

         On December 8, 1999, the Company filed a Form 10-SB registration
statement with Securities and Exchange Commission ("SEC") which became effective
in December 1999. Since such time, the Company has been subject to the reporting
requirements of the Securities Exchange Act of 1934.

(B)      BUSINESS OF THE COMPANY

         PRINCIPAL OPERATIONS, SERVICES AND MARKETS

         As of the fiscal year ended May 31, 2003 and subsequently until it was
sold on July 25, 2003, the Company, through a third party operator, operated a
transfer station (also referred to herein as the recycling center) at the site
which provides contractors, truckers and demolition companies, under state
supervision, a conveniently located facility where recyclable materials from
demolition or new construction jobs can be segregated into usable or waste
categories. Once segregated, the materials are disposed of in accordance with
the requirements of DERM.

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<PAGE>
         Materials from the demolition or construction of buildings, such as
aluminum, glass, cardboard, paper, wood and like materials are segregated and
sold to junk dealers. The materials are then sold by such dealers to
manufacturers and are subsequently used in the manufacture of recycled goods of
a like kind. Materials which are not recyclable are delivered to landfills
operated by independent operators located in Miami-Dade County, Florida. These
landfills are operated under licenses from Miami-Dade County, Florida. There are
several of these other landfills scattered in locations throughout Miami-Dade
County.

         In addition to the transfer station, the Company had been exploring the
possibility of expanding its operations into other areas of environmental
concern including the acquisition of a landfill which would be operated in
conjunction with the Company's recycling center and trucking facilities which
would enable the Company to provide a full service operation to contractors and
developers. Management determined not to pursue the acquisition of a landfill or
the development of trucking operations. Instead, it has been in discussions
regarding the acquisition of other businesses. On May 23, 2003, the Company
acquired the rights, title and interest to two (2) full length motion picture
scripts as described below. It is the Company's intention to produce, market and
distribute one or both of these scripts as full length motion pictures as
described in this Annual Report.

         Until the sale of the property and recycling center (collectively, the
"Center") in July 2003, the Company derived its income solely from its Amended
Operation Agreement (the "Agreement") with the operator of the landfill. The
Agreement was entered into by the Company and the operator on December 22, 1998,
and is for a period of five consecutive years with automatic renewal annually
unless notice of termination is given by the operator. The operator also has an
option (the "Option") to purchase the Center during the initial five year term
of the Agreement at a purchase price of from 115% to 175% (determined by in
which year of the Agreement the Option is exercised) of $1,300,000 which was set
by the Company and the operator based, in part, upon the Company's investment in
the recycling center. The initial term of the Agreement will expire in December
2003. The Agreement was assigned by the original operator, Peerless Dade, Inc.,
to a new operator as permitted under the terms of the Agreement on October 24,
2000. The current operator of the Center is Star Services Group, Inc. and its
affiliates (the "Operator"). All other terms and conditions of the Agreement
remained the same except that the Company receives 10% of the gross amount
collected by the Operator from "tipping fees"for the first 450 yards of
materials received each day and 6% in excess of 450 yards per day. The original
agreement provided for 6% and 10%, respectively.

         The Operator charges construction or waste removal companies "tipping
fees" of $7.00 to $7.50 per yard for dumping of construction waste or demolition
materials at the transfer station which, on average, will receive from 850 to
1,500 yards of material per day, subject to local weather and construction
conditions. The Operator provides all machinery for the operation and assumes
all costs, expenses and maintenance of the operation of the recycling center.
Under the terms of the Agreement, the Company is responsible for the payment of


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<PAGE>
mortgages, real estate taxes, permits and licenses (which taxes, permits and
licenses cost approximately $7,650 per year in the aggregate) and any capital
improvements. The $375,000 mortgage note payable on the facility which bears
interest at the rate of 12% per annum due February 1, 2004 was repaid from the
proceeds from the sale of the Center. See "Properties" herein and "Management's
Discussion & Analysis."

         For fiscal year 2003, the Center received an average of 800 to 1,000
cubic yards of materials per day, far below the average of 1,100 yards received
in the prior fiscal year and the 1,500 yards that was anticipated to be
received. This reduction in yardage is the basis for certain allegations in the
Company's lawsuit against the Operator and affiliated parties.

         DISTRIBUTION METHODS

         Construction and demolition waste materials are delivered to the Center
by independent truckers who pay a fee of $7.00 to $7.50 per yard as "tipping
fees" to dispose of the materials.

         At the present time, the Company does not handle the materials once
they are removed from the Company's transfer station. The Company intended, if
the required financing could be obtained, to purchase a landfill and acquire the
necessary equipment to transport the materials to the Company's landfill,
thereby establishing additional sources of revenue. However, the Company
subsequently abandoned these plans and there are currently no plans to purchase
a landfill.

         SALE OF CENTER

         The Company entered into a Contract of Sale dated April 23, 2003
("Contract") with Southern Waste Systems Ltd.("Southern") to purchase the Center
for $1,050,000. The closing of the transaction occurred on July 25, 2003 after
Southern had completed satisfactory due diligence and all conditions precedent
had been met. The Company used the net proceeds from the sale to (i) satisfy the
existing mortgage on the Center, including all unpaid interest, (ii) repay other
debt to non-affiliated third parties, and (iii) for working capital. The sale of
the Center is recorded in the Company's financial statements under "Discontinued
Operations". "See Item 7. Financial Statements".

         In addition to customary terms and conditions, the Contract provides
that if the Operator exercises its Option, to purchase the Center, at the
purchase price of $2,275,000 which is the Option price for the fifth year of the
Agreement, then Southern will receive (a) return of the purchase price, or any
expenses incurred in connection therewith; (b) all expenses incurred to transfer
title to the Operator; (c) reimbursement for any expenses incurred in improving
the property; and (d) twenty-five (25%) percent of the difference between the
original purchase price paid by Southern and the purchase price paid under the
exercise of the Option. The Option expires on December 31, 2003 and there is no
assurance that the Operator will exercise the Option.

                                       5
<PAGE>
         On August 4, 2003, the Company filed suit against the Operator of the
Center and its affiliates which include Dade Recycling and Disposal, Allied
Waste Industries, Inc., Browning Ferris Industries, Inc. and Awin Management,
Inc. The suit seeks an accounting and damages alleging fraudulent breach of
contract, negligence and breach of contract arising from the Operator's
operation of the Center and the Amended Operation Agreement. See Item 3. Legal
Proceedings".

         COMPETITION

         The issuance of permits for the operation of facilities similar to the
Company's Center are extremely limited. There are presently no similar
facilities available to contractors and waste removal companies in the City of
Miami. Management believes that no additional permits in proximity to the
Company's Center will be issued in the near future. Accordingly, management does
not anticipate that it will be subject to significant competition in the
foreseeable future although no assurances are given.

         DEPENDENCE ON MAJOR CUSTOMER

         Until the sale of the Center in July 2003, the Company's income was
solely dependent on the Operator who is the exclusive operator for the Center
pursuant to the Agreement. The existence of the Agreement may have an adverse
effect on the income received by the Company since the volume of business is
controlled by the Operator. The Agreement provides, however, that the Operator
is required to exercise commercially reasonable efforts to maximize the business
operations of the Center. In August 2003 the Company filed a lawsuit against the
Operator and its affiliates alleging, among other claims, that the Operator
failed to fulfill certain of its obligations under the Agreement. See "Item 3.
Legal Proceedings".

         PATENTS AND PROPRIETARY RIGHTS

         The Company has acquired the rights to two (2) movie scripts, each of
which is copyrighted through the copyright office of the United States.

         GOVERNMENTAL APPROVALS AND REGULATIONS

         The Company's Center has been approved by and operates under licenses
issued by the State of Florida, City of Miami and Miami-Dade County, Florida,
all in accordance with the regulations imposed by DERM and enforced through the
City of Miami and Miami-Dade County, Florida. As of the date of this Report, all
licenses and permits are in good standing. The Solid Waste Operating Permit
issued, through DERM by Miami-Dade County, Florida, must be renewed annually.

         The Company and the Operator are subject, directly and indirectly, to
regulations and various laws of the State of Florida, City of Miami and
Miami-Dade County, Florida relating to the operation of the Company's business.
The Company and the Operator are in material compliance with all applicable laws
relating to the Company's business and operations, particularly the requirements
of DERM which required that the Company file a Contamination Assessment Plan
(the "Plan"). The Plan was filed with DERM on September 16, 1999. The Plan was
prepared by LandScience, Inc. Environmental Consultants. LandScience, Inc.,
whose office is located at 2124 NE 123rd Street, #206, North Miami, Florida


                                       6
<PAGE>
33181, specializes in environmental concerns. All groundwater samples from the
Center were previously submitted to DERM.

         On September 1, 1999, Leo Greenfield, the President and a director of
the Company, was individually charged by the State of Florida with "littering"
in violation of Fla.Stat. 403.413(4) which is a third degree felony and carries
a maximum penalty of up to five years imprisonment and a possible $5,000 fine.
Such charge was based on a claim that 22 barrels of liquid material pumped from
a ground storage tank during construction of the facility were temporarily
stored by the contractor in a fenced-off alley adjoining the Company's property.
At such time, Leo Greenfield was not an officer or director of the Company.
Three months prior to the charges being made, the barrels and material were
disposed of in accordance with the requirements and approval of DERM and in
accordance with all environmental regulations. Mr. Greenfield denied any
violation of such statute or wrongdoing of any kind; however, in order to
dispose of the charge, Mr. Greenfield entered a plea of nolle contender on March
21, 2000, without an adjudication, and the Company paid the County's expenses
related to this matter of approximately $12,500.

         RESEARCH AND DEVELOPMENT COSTS

         The Company is not involved with any research or development at this
time.

         EMPLOYEES

         As of the present time the Company has no paid employees. The
President, Vice President and the Secretary of the Company presently serve
without compensation and have provided the services required to establish the
Company's current business and operation. The value of Mr. Greenfield's services
are recorded at their estimated fair value in the financial statements. In
August 2003, Mr. Greenfield converted the value of his services to the Company,
as recorded in the Company's audited financial statements for the fiscal years
ended May 31, 2002 and May 31, 2003, into shares of the Company's restricted
common stock at fair market value. See "Item 10. Executive Compensation"

ITEM 2.  PROPERTIES.

         The Company's executive offices are located at 11601 Biscayne Blvd.,
Suite 201, Miami, Florida 33181, and substantially all of its operating
activities are conducted from that location which is the office of the
President. The Company pays no rent for these offices; however, the President is
under no continuing obligation to provide the use of the Company's executive
offices free of charge. Management believes that as the Company expands its
business it will enter into an appropriate lease agreement for such facilities
as may be necessary for conducting its operations. Any such lease agreement is
expected to be on such terms and conditions customary for similar facilities in
the Company's geographical area. Until the sale of the Center, the Company's
operations were conducted from facilities located on real property owned by the
Company. The Company is not in the business of investing in real estate or real
estate mortgages.

         Until the sale of the Center in July 2003, the Company was the owner in
fee simple of a tract of land comprising approximately 32,000 square feet
located at 2000 North Miami Avenue, Miami, Florida, upon which it constructed
the Center. The Center is enclosed by an 8' high concrete wall, and consists of
a 5,000 square foot open operations building and a 900 square foot office


                                       7
<PAGE>
facility. The remaining areas of the site are appropriately paved and drained
and are used as receiving areas. The improvements were financed in part by a
mortgage loan from an unaffiliated third party in the aggregate amount of
$375,000 which bears interest at 12% per annum payable monthly. The maturity
date of the mortgage was February 1, 2001 but was extended by the lender to
February 1, 2004. This property was sold by the Company to Southern in July
2003. The proceeds from the sale were used, in part, to fully satisfy the
existing mortgage on the property.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is a party to the following legal proceedings:

                  a. Suit filed in August 2003 in the Circuit Court, in and for
Miami-Dade County, Florida, Case No. 03-17989 CA 01/15, Distribution Management
Services, Inc. v. Peerless Dade, Inc., et al. The Company is seeking from the
operator of the recycling center and related parties (i) an accounting, and (ii)
damages for fraudulent breach of contract, negligence and breach of contract.
The suit was filed on August 4, 2003 and the parties have been served; however,
as of the date of this report, no responsive pleadings have been filed by any of
the served defendants.

                  b. Suit filed in May 1999 in the Circuit Court, in and for
Miami-Dade County, Florida, Case No. 99-13058 CA 10, Central Concrete v.
Distribution Management Services, Inc., seeking $26,484.93 pursuant to a claim
for payment in connection with construction materials provided to the Company.
The Company paid approximately $35,000 in settlement of this lawsuit and it was
dismissed on October 10, 2001.

                  c. Suit filed in September 1999 in the Circuit Court ,in and
for Miami-Dade County, Florida, Case No. 99-21685 CM 05, Rock Power Corp. v.
Distribution Management Services, Inc., pursuant to a claim for payment in
connection with the replacement of a City of Miami water line for a cost of
approximately $97,000. In May 2002, payment in full was made by the Company and
the suit was dismissed.

                  d. Suit filed in March 1998 in the Circuit Court, in and for
Miami-Dade County, Florida, Case No. 98-6581 CA 02 (03), Ronald L. Book v.
Romolo Egidi, et al. Plaintiff claimed an ownership interest in the real
property on which the Center is located which collateralized a loan previously
made to the Company to purchase the property. The case was settled and the Court
dismissed the suit but retained jurisdiction to reinstate the claim in the event
the Agreement to Settle and Standstill Agreement entered into on July 7, 1999,
was not complied with. A payment was made by the Company to the plaintiff in the
amount of $135,000, with an additional payment of $50,000 in May 2001. The
Company also issued 5,000 shares of restricted common stock to the Plaintiff in
December 2000. A Quit Claim Deed dated May 10, 2001 in favor of the Company was
filed and recorded, general releases executed and the matters entirely settled.

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

         No matter was submitted to the vote of security holders during the year
ended May 31, 2003.

                                       8
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                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's common stock currently trades in the "pink sheets" under
the trading symbol "DMGS". The Company's common stock was listed for trading on
the over- the-counter bulletin board (OTC:BB) on August 17, 1999, but became
ineligible to continue trading on October 18, 2000 because its Form 10-KSB for
the fiscal year ended May 31, 2000 was not timely filed with the Securities and
Exchange Commission. The Company was relisted on the OTC:BB in fiscal 2002.

         The following table sets forth the highest and lowest bi prices for the
common stock for each calendar quarter and subsequent interim period since the
common stock commenced actual trading, as reported by the National Quotation
Bureau, and represent interdealer quotations, without retail markup, markdown or
commission and may not be reflective of actual transactions:


Fiscal 2002                  High Bid                   Low Bid
-----------                  --------                   -------
First Quarter                .11                        .11

Second Quarter               .11                        .11

Third Quarter                .11                        .11

Fourth Quarter               no listed trades           no listed trades

Fiscal 2003
-----------
First Quarter                .11                        .10

Second Quarter               .20                        .12

Third Quarter                .20                        .05

Fourth Quarter               .18                        .10

Fiscal 2004
-----------
June 1-August 29             1.85                       .13

                                       9
<PAGE>
         There can be no assurance that an active public market for the common
stock will continue or be sustained. In addition, the shares of common stock are
subject to various governmental or regulatory body rules which affect the
liquidity of the shares.

         The Company presently is authorized to issue 50,000,000 shares of
common stock, of which 8,204,508 shares were outstanding on August 29, 2003. The
Company amended its Articles of Incorporation on August 27, 2003 by the vote of
the holders of a majority of the shares of common stock to increase its
authorized shares of common stock from 15,000,000 to 50,000,000. In addition to
increasing the authorized capital stock, the Company also amended its Articles
of Incorporation to exempt it from the provisions of Section 607.0901 of the
Florida Business Corporation Act relating to affiliated transactions and Section
607.0902. of the Florida Business Corporation Act relating to control share
acquisitions. The amendment relating to affiliated transactions will be
effective 18 months following the date of the amendment. The amendment relating
to control share acquisitions is effective upon filing.

HOLDERS

         There were approximately 36 holders of record of the Company's common
stock as of August 29, 2003.

DIVIDENDS

         The Company has never paid cash dividends on its common stock and does
not intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.


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

         RESULTS OF OPERATIONS

         Twelve Months Ended May 31, 20032 compared to May 31, 2002.

           During the fiscal year ended May 31, 2003, payments were made against
various obligations of the Company including settlement of one lawsuit. For the
year ended May 31, 2003 the Company received revenues from the operation of the
Center of approximately $145,850 compared with revenues of $137,100 for the
fiscal year ended May 31, 2002, representing an increase of approximately 6%.
This increase was primarily due to an increase in the materials brought to the
Center during the period but is less than management had anticipated. This
amount represents the Company's share of revenues pursuant to the Agreement
described in Item 1. of this Report and in Note 6 to the Company's audited
financial statements.

         The gross volume of materials delivered to the Center averaged
approximately 800 to 1,000 yards per day during fiscal 2003 compared to 1,100
yards in fiscal 2002. This amount is still approximately up to 53% less than the
anticipated volume of 1,500 yards per day. The Company has sued the Operator and
its affiliates alleging, among other matters, that the reduction in the amount
of materials was part a fraudulent scheme intended to reduce the amount of the


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DERM performance bond and the payments to be made to the Company under the
Amended Operation Agreement. See Item 3. "Legal Proceedings".

         LIQUIDITY AND CAPITAL RESOURCES

         As of May 31, 2003, the Company had cash on hand of approximately
$2,600. The monthly gross revenue received by the Company was approximately
$11,500 per month for the fiscal year ended May 31, 2002 and $12,150 for the
fiscal year ended May 31, 2003, or an increase of approximately 5%.

         As of the date of this report, the Company has no revenues from
operations as the result of the sale of the Center in July 2003. It has used a
portion of the net proceeds from the sale to fully satisfy the mortgage on the
property as well as pay down or satisfy certain other obligations to non-
affiliates. The balance of the net proceeds is being used for working capital.
Management believes that these funds will be sufficient for the Company's
working capital needs for the next 12 months, exclusive of the funds necessary
for the production of the films as described below, since the Company has also
significantly reduced its outstanding debt to related parties. On July 17, 2003
the Company's Board of Directors approved the conversion of certain debt owed by
the Company to Leo Greenfield, President and Chairman, and related parties. The
amount converted was (i) $100,000 of the principal amount of existing loans owed
by the Company, (ii) accrued unpaid interest of $$99,546 on all loans as of May
31, 2003,and (ii) accrued salary of $89,475 for the fiscal years ended May 31,
2002 and 2003. The conversions were based on the closing price of a share of the
Company's common stock as quoted on the OTC:BB on July 16, 2003, the trading day
immediately preceding the Board resolution. On that date, the closing price per
share was $.13 which resulted in the issuance to an entity owned and controlled
by Mr. Greenfield in August 2003 of 2,223,228 shares of restricted common stock.

         After the conversion as described above, there are currently
outstanding three loans from three related parties in the principal sum of $
150,000, $35,275 and $ 76,317, respectively. All of the loans are due upon
demand and bear interest at the applicable Federal rate. These related parties
have no obligation to make any further loans to the Company in the future
notwithstanding that they have made loans in the past. These loans may be
converted, in whole or in part, by the related parties in their discretion into
shares of the Company's restricted common stock at fair market value although
there is no assurance given that this will occur. See "Certain Relationships and
Related Transactions."

         On May 30, 2003, the Company entered into an agreement with Jordan
Klein, Sr. and Jordan Klein, Jr. (collectively "Klein") to purchase certain
copyrighted movie scripts (the "Assets") that had been written and developed by
Klein (the "Script Agreement"). Pursuant to the terms of the Script Agreement,
Klein also agreed to use their substantial skills, talents and expertise as
experienced underwater photographers, cameramen, engineers and producers in more
than 75 feature films and for television to produce, market and distribute the
Assets utilizing their own equipment at no additional cost to the Company. As
consideration for the Assets which have been independently appraised at
$2,000,000, the Company issued to Klein an aggregate of 500,000 shares of its
restricted common stock and two (2%) percent of the gross proceeds received by
the Company, if any, from the marketing and distribution of the Assets. They
have also been appointed to each serve on the Company's Board of Directors. The
Company intends to finance the production costs estimated at $3,000,000 for the
first of these films from the proceeds of a private offering of its restricted
equity securities. No assurance can be given that the Company will be successful
in raising all of the necessary


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<PAGE>

funding to do so. The inability to raise the requisite funding could have a
material adverse impact on the Company's planned business and ita financial
condition and prevent the production of any of the films. Further, there can be
no assurances that the Company will be able to secure funding from other sources
in the amounts needed or on terms that are satisfactory to the Company.

         In August 2003 the Company issued 250,000 shares of restricted common
stock to a non-affiliate to provide certain consulting services to the Company.

         From time to time, the Company may evaluate potential acquisitions
involving complementary businesses, services, products or technologies. The
Company's future capital requirements will depend on many factors, including
acquisitions, if any, growth of the Company's customer base, economic conditions
and other factors including the results of future operations. Any such
acquisition would require additional funding, through the sale of Company
securities and/or other financing sources. There can be no assurances that such
financing will be available to the Company.

         The Company currently has no paid employees. There are no present plans
to hire any additional personnel in connection with the Company's planned film
production. However, if operations are expanded through growth or acquisitions,
the Company expects to hire personnel to meet these needs and may enter into
employment agreements with its president or others to oversee its operations.
The number of employees which may be hired will be determined by the continuity
or modification of the present Agreement and/or the expansion of the Company's
present business or into other business ventures. The number of employees
actually hired will be based on the Company's ability to support the increased
cost through cash flow generated by such business.

         IMPACT OF INFLATION

         Although the Company has not attempted to calculate the effect of
inflation, management does not believe inflation has had or will have a material
effect on its results of operations.

         FORWARD-LOOKING STATEMENTS

         In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is providing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements made herein. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions of
future events or performance are not statements of historical facts and may be
forward-looking. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and uncertainties,
including but not limited to, economic, competitive, regulatory, growth
strategies, available financing and other factors discussed elsewhere in this
report and in documents filed by the Company with the SEC. Many of these factors
are beyond the Company's control. Actual results could differ materially from
the forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking
information contained in this report will, in fact, occur. Any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New


                                       12
<PAGE>
factors emerge from time to time and it is not possible for management to
predict all of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements of the Company required by Regulation S-B are
attached to this Report. Reference is made to Item 13 below for an index to the
financial statements and financial statements schedules.

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

         On May 19, 2003, the Company filed a Form 8-K reporting a change in its
certifying accountant on May 12, 2003. The Company reported the dismissal of
Marvin B. Seidman, CPA and the retention of Berkovits, Lago & Co. LLP as its
certified public accountant for the purpose of conducting its audits and
providing financial reports for the Company.

         The decision to dismiss Marvin B. Seidman, CPA was recommended and
approved by the Board of Directors. During the two most recent fiscal years and
through the date of dismissal, there were no disagreements over accounting
matters, financial disclosures or any other limitations on the scope or
procedure of the independent auditor in the course of performing professional
services and there was no adverse opinion or disclaimer of opinion, nor were its
reports modified as to audit scope or accounting principles.

                                    PART III

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

         (A) IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

         As of August 29, 2003, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors are as follows:

<TABLE>
<CAPTION>

Name                  Age     Position                       Period Served As Director
----                  ---     --------                       -------------------------
<S>                   <C>     <C>                            <C>
Leo Greenfield        79      President and Director         March 1999 to Present

Barbara Greenfield    65      Vice President and Director    March 1998 to Present

Maria Elena
Lopez de Mendoza      63      Secretary and Director         March 1998 to Present

Jordan Klein, Sr.     78      Vice President                 August 2003 to Present
                              Director                       May 2003 to Present
Jordan Klein, Jr.     39      Director                       May 2003 to Present
</TABLE>

                                       13
<PAGE>
          The Company's directors are elected at the annual meeting of
stockholders and hold office until their successors are elected and qualified.
The Company's officers are appointed by the Board of Directors and serve at the
pleasure of the Board and subject to employment agreements, if any, approved and
ratified by the Board. The Company did not hold an annual meeting in the fiscal
year ended May 31, 2003.

         LEO GREENFIELD

         Mr. Greenfield has been President and a director of the Company since
March 1999. He is also the vice president of Double D, Inc., a privately held
Florida holding company with no operations or business, which is a major
shareholder of the Company. From May 1997 to March 1998, he acted as business
consultant for the Company in arranging the financing for and supervising
construction of the Company's facilities. In March 1998, he became the General
Manager of the Company. He still serves in that capacity although he has now
become President and Director of the Company. He holds an LLB Degree from the
University of Miami (1948) and a BSBA Degree from the University of Miami
(1950). In 1990 he was convicted of obstruction of justice and resigned from The
Florida Bar. On September 1, 1999 Mr. Greenfield was individually charged by the
State of Florida with "littering" in violation of Fla. Stat.403.413(4), a class
three felony with a maximum penalty of five years imprisonment and possibly up
to a $5,000 fine, based on a claim that 22 barrels of liquid material were
pumped from a ground storage tank during construction of the facility by the
contractor and during the time that Mr. Greenfield was not an officer or
director of the Company. They were temporarily stored in a fenced-off alley
adjoining the Company's property. These barrels and the material were disposed
of in accordance with the requirements and approval of DERM and all
environmental regulations three months prior to the charges being made and. Mr.
Greenfield denied any violation of such statute or wrongdoing of any kind;
however, in order to dispose of the charge, Mr. Greenfield entered a plea of
nolle contendre on March 21, 2000, without an adjudication, and the Company paid
the County's expenses of approximately $12,500.

         BARBARA GREENFIELD

         Mrs. Greenfield has been Vice President and a director of the Company
since March 1998. She is president of Double D, Inc., a majority shareholder of
the Company. Since June 2000, Ms. Greenfield had been employed by the City of
Hollywood, Florida Fire Rescue Department. Ms. Greenfield has been employed as a
controller and consultant in designing computer programs. Since June 2000, she
has been employed by the City of Hollywood, Florida in a data entry/secretarial
position. In 1998 she was employed by Panciera Funeral Homes in Hollywood,
Florida and designed a computer program for their Pre-Need Division. She was
involved in the ownership and management of Powergate Plaza, a shopping center
located in Pompano Beach, Florida until it was sold in November 2001. Ms.
Greenfield attended the University of Miami and graduated from the School of
Interior Design, a private design school. She is a licensed practitioner and has
been active in the field since 1969.

         MARIA ELENA LOPEZ DE MENDOZA

         Ms. Mendoza has been Secretary and Director of the Company since March
1998 and has been providing administrative services to the Company since such
time. She had previously been employed by Mr. Greenfield, President of the
Company, since 1973 in both the operation of his law office as well as various
business enterprises in which he had been engaged.

                                       14
<PAGE>
         JORDAN N. KLEIN, SR.

         Mr. Klein has been a director of the Company since May 2003 and a vice
President since August 2003. He is the Chief Executive Officer of several
closely held companies: Aero Marine, Inc., DanJor, Inc. and Jordan Klein
Productions, Inc. Jordan Klein Productions, Inc. has specialized for over 30
years in underwater lighting, set design, construction, location scouting and
complete camera crews for over 300 commercials, more than 50 feature films and
television. It has manufactured props and sets for such television shows as
Flipper, Sea Hunt and The X Files and feature films such as Thunderball, The
Abyss, Splash, Cocoon, Never Say Never Again and You Only Live Twice. Jordan
Klein, Sr. has been directing and filming topside and specializing in underwater
feature films, commercials and aerial filming for over 40 years and has been an
IA cameraman for more than 25 years. He has also designed and manufactures
underwater camera housings for the Arriflex and the Sony Betacam.

         Mr. Klein has received numerous national and international awards for
his work. He was the co-winner of an Academy Award (for Director of Underwater
Engineering, and design and construction of the underwater props, sets and
special effects for "Thunderball") in 1966 from the Academy of Motion Picture
Arts and Sciences and won an Academy Award for Technical Achievement in
Underwater Engineering in 2002. He was inducted into the Underwater Hall of
Fame in 2003 and is a member of the Underwater Society of America (1991 "NOGI"
Award Winner), International Underwater SCUBA Association and the International
Association of Television Stage Employees.

         JORDAN KLEIN, JR.

         Jordan Klein, Jr. has been a director of the Company since May 2003 and
is the son of Jordan Klein, Sr. He is a film director and cameraman for Jordan
Klein Productions, Inc. He also is President of Jordan Klein, Inc. doing
business as Jordan Klein Film & Video for the last 15 years. Mr. Klein is also a
pilot, advanced open water SCUBA diver, a certified Steadicam
Operator/Instructor, yacht/boat operator. He has been a camera operator on such
feature films as The Abyss, Cocoon and Cocoon II, Shoot to Kill, Splash, Billy
Bathgate and Jaws 3D and on more than 30 commercials. He has also worked on
music videos for Garth Brooks and Julio Iglesias among others in addition to
numerous documentaries for such organizations as National Geographic, National
Geographic Explorer, the Discovery Channel, PBS Nature and the BBC. He is a
member of the Professional Association of Diving Instructors.

(B) DIRECTORSHIPS

         None of the Company's executive officers or directors is a director of
any company with a class of equity securities registered pursuant to Section 12
of the Exchange Act or subject to the requirements of Section 15(d) of the
Exchange Act or any company registered as an investment company under the
Investment Company Act of 1940.

(C) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES

         None

                                       15
<PAGE>
         (D)      FAMILY RELATIONSHIPS

         Leo Greenfield and Barbara Greenfield, President/Director and Vice
President/Director of the Company, respectively, have been married since 1959.
Jordan Klein, Sr. and Jordan Klein, Jr. are father and son. No other family
relationship exists between the officers or any other person who may be selected
as a director or executive officer of the Company.

ITEM 10. EXECUTIVE COMPENSATION

         The Company did not compensate prior management in the years ended May
31, 2000, 2001 and 2003, nor is it presently compensating its officers or
directors but has accrued salary in its financial statements. In July 2003 the
Company converted an aggregate of $89,475 in accrued salary for Mr. Greenfield
for the fiscal years ended May 31, 2002 and 2003 into an aggregate of 688,269
shares of restricted common stock at fair market value. It does intend at a
future date to enter into employment contracts with its officers for
compensation on a reasonable basis as may be approved by the Board of Directors
once there are sufficient revenues to do so as to which no assurances are given.

         SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                               Annual Compensation                            Long Term Compensation
                               -------------------                            ----------------------
                                                                              Awards    Payouts
                                                                              ------    -------
                                                     Annual      Restricted   Under-             Other
Name and                                             Compen-     Stock        lying     LTIP     Comp-
Principal Position         Year    Salary   Bonus    sation      Awards       Option    Payouts  ensation
------------------         ----    ------   -----    ------      ------       ------    -------  --------
<S>                        <C>      <C>     <C>      <C>          <C>          <C>      <C>      <C>
Leo Greenfield             2003     None    None     None         None         None     None     None
President/Director         2002     None    None     None         None         None     None     None
                           2001     None    None     None         None         None     None     None

Barbara Greenfield         2003     None    None     None         None         None     None     None
Vice President/Director    2002     None    None     None         None         None     None     None
                           2001     None    None     None         None         None     None     None

Maria Elena                2003     None    None     None         None         None     None     None
Lopez de Mendoza           2002     None    None     None         None         None     None     None
Secretary/Director         2001     None    None     None         100000       None     None     None
</TABLE>

                                       16
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         All reports required by Section 16(a) of the Exchange Act were not
filed on a timely basis by all directors, officers and beneficial owners of more
than ten percent (10%) of any class of equity securities of the Company
registered pursuant to Section 12 of the Act. The Form 3 reporting the
beneficial ownership of Company securities by Jordan Klein, Sr. and Jordan
Klein, Jr. as newly appointed directors as of May 30, 2003 was filed in July
2003.

         OPTION GRANTS IN FISCAL 2002

         None

         AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTIONS/SAR VALUE
         TABLE

         None

         LONG TERM INCENTIVE PLAN ("LTIP") AWARDS TABLE

         None

         COMPENSATION OF DIRECTORS

         None

         EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
         CONTROL ARRANGEMENTS

         None

         REPORT ON REPRICING OF OPTIONS/SARS

         None


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         The following table sets forth as of August 29, 2003 the ownership of
common stock by persons who own beneficially more than 5% of the outstanding
shares of the Company's common stock:

                                       17
<PAGE>
<TABLE>
<CAPTION>
                     Name and Address                 Amount and Nature of
Title of Class      of Beneficial Owner               Beneficial Ownership     Percent of Class(1)
--------------      -------------------               --------------------     -------------------
<S>                 <C>                                     <C>                       <C>
Common              CEDE & CO.
                    P.O. Box 222
                    Bowling Green Station
                    New York, NY 10274                      1,890,000                 23%

Common              Fidra Holdings Ltd.
                    Cable Beach Ct, Suite 1
                    West Bay Street
                    Nassau, Bahamas                           824,500                 10%
</TABLE>
----------
(1) Percentages are calculated based upon 8,204,508 shares issued and
    outstanding as of August 29, 2003.

         (B) SECURITY OWNERSHIP OF MANAGEMENT

<TABLE>
<CAPTION>
                     Name and Address                 Amount and Nature of      Percent
Title of Class      of Beneficial Owner               Beneficial Ownership     of Class(1)
--------------      -------------------               --------------------     -----------
<S>                 <C>                                     <C>                  <C>
Common              Double D, Inc.(2)                       1,200,000            14.6%
                    1721 Trafalgar Circle
                    Hollywood, FL 33069

Common              Three G International, Inc.(3)          2,223,228            27.1%
                    11601 Biscayne Blvd.
                    Suite 201
                    Miami, FL 33181

Common              Leo Greenfield(2)(3)                    3,423,228            41.7%
                    11601 Biscayne Blvd.
                    Suite 201
                    Miami, FL 33181

Common              Barbara Greenfield(2)(3)                1,200,000            14.6 %
                    11601 Biscayne Blvd.
                    Suite 201
                    Miami, FL 33181
</TABLE>

                                       18
<PAGE>

<TABLE>
<CAPTION>
                     Name and Address                 Amount and Nature of      Percent
Title of Class      of Beneficial Owner               Beneficial Ownership     of Class(1)
--------------      -------------------               --------------------     -----------
<S>                 <C>                                     <C>                  <C>
Common              Maria Elena Lopez                         100,000             1.2%
                    de Mendoza (3)
                    11601 Biscayne Blvd.
                    Suite 201
                    Miami, FL 33181

Common              Jordan Klein, Sr.                         300,000             3.7%
                    10197 S.E. 144th Place
                    Summerfield, FL34491

Common              Jordan Klein, Jr.                         200,000             2.4%
                    10197 S.E. 144th Place
                    Summerfield, FL34491

All officers and directors
as a group (5 persons)                                      4,203,238            51.2%
</TABLE>
----------
(1)      All percentages are calculated based upon 8,204,508 shares issued and
         outstanding as of August 29, 2003.

(2)      Double D, Inc. is a Florida corporation. 100% of the common stock of
         Double D, Inc. is owned by Barbara Greenfield, vice president and a
         director of the Company, and Leo Greenfield, President of the Company.
         For the purposes of Rule 13(d), Mr. Greenfield claims beneficial
         ownership of these shares with Barbara Greenfield, his wife.

(3)      Three G International, Inc., a Florida corporation owned and controlled
         by Mr. Greenfield, acquired 2,223,228 shares of the Company's
         restricted common stock upon conversion of (i) accrued unpaid interest
         of $99,546 on Mr. Greenfield's and related parties' outstanding loans
         to the Company as of May 31, 2003, (ii) $100,000 principal amount of
         interest on certain loans payable to Mr. Greenfield and related
         parties, and (iii) Mr. Greenfield's accrued unpaid salary of $89,475
         for the fiscal years ended May 31, 2002 and 2003. The conversion was at
         $.13 per share based upon the closing price of a share of common stock
         on July 16, 2003, the trading day immediately preceding the resolution
         of the Board of Directors approving the conversion. For the purposes of
         Rule 13(d), Mr. Greenfield claims beneficial ownership of these shares
         and Barbara Greenfield, his wife, disclaims beneficial ownership of
         these shares.

         (C) CHANGES IN CONTROL

         There is no arrangement which may result in a change of control.


                                       19
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the past two (2) years, the Company has not entered into a
transaction with a value in excess of $60,000 with a director, officer or
beneficial owner of 5% or more of the Company's common stock, except as
disclosed in the following paragraphs:

                  (i) On or about December 31, 1997, Double D, Inc., a company
owned by Leo Greenfield, President and a director of the Company, and Barbara
Greenfield, Vice President and a director of the Company, loaned the Company
$150,000. The loan is payable upon demand and bears interest at the applicable
Federal rate. The proceeds of this loan provided additional funding for the
construction of the facility.

                  (ii) In or about July 2002, Leo Greenfield, President and a
director of the Company, loaned the Company $105,062 to pay for the settlement
of litigation involving the Company. The loan is due upon demand and bears
interest at the applicable Federal rate.

                  (iii) From approximately May 1998 through July 2002,
Greenfield and DuVal, P.A. loaned the Company an aggregate of approximately
$75,700. The loan is due upon demand and bears interest at the applicable
Federal rate. The proceeds of this loan provided additional funding for the
construction of the facility and payment of approximately $35,000 for the
settlement of litigation.

                  (iv) In July 2003, upon the approval of the Board of
Directors, the Company converted $100,000 of the principal amount due under the
loans listed in (i), (ii) and (iii) above and all accrued unpaid interest on all
of such loans in the sum of $99,546 as of May 31, 2003 into 1,534,969 shares of
the Company's restricted common stock. In addition, the Company also converted
Mr. Greenfield's accrued unpaid salary of $89,475 for the fiscal years ended May
31, 2002 and 2003. The conversion was at $.13 per share based upon the closing
price of a share of common stock on July 16, 2003, the trading day immediately
preceding the resolution of the Board of Directors approving the conversion. The
shares were issued to Three G International, Inc., a company owned and
controlled by Mr. Greenfield.

                  (v) In May 2003, the Company entered into the Script Agreement
with Jordan Klein, Sr. and Jordan Klein, Jr. In consideration for acquiring the
two copyrighted scripts independently appraised at $2,000,000, Jordan Klein, Sr.
and Jordan Klein, Jr. (i) received 300,000 and 200,000 shares, respectively, of
the Company's restricted common stock, (ii) and an agreement to receive 2% of
the gross income from the marketing and distribution relating to the scripts,
and (iii) appointment as directors to the Company's Board of Directors.

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

         (A) DOCUMENTS FILED AS PART OF THIS REPORT:

             See Index to Financial Statements attached, which are included as
             an integral part of this Report.

                                       20
<PAGE>
         (B) REPORTS ON FORM 8-K

             The Company filed a report on Form 8-K on May 19, 2003 relating to
             the change of auditor. The Company also filed a Form 8-K on June
             12, 2003 relating to the acquisition of assets from the Kleins and
             a Form 8-K on July 28, 2003 relating to the sale of the Center.

         (C) EXHIBITS

             2    Articles of Incorporation, as amended, filed as an exhibit and
                  incorporated by reference to the Company's Form 10-SB filed on
                  December 8, 1999.

             2.1  Amendment to the Articles of Incorporation filed on August 27,
                  2003.*

             3    Bylaws filed as an exhibit and incorporated by reference to
                  the Company's Form 10- SB filed on December 8, 1999.

             10.1 Amended Operation Agreement dated December 23, 1998 filed as
                  an exhibit and incorporated by reference to the Company's Form
                  10-SB filed on December 8, 1999.

             10.2 Assumption Agreement dated October 24, 2000 filed as an
                  exhibit and incorporated by reference to the Company's Form
                  10- KSB for the fiscal year ended May 31, 2000 filed on
                  September 5, 2001.

             10.3 Agreement between the Company and Jordan Klein, Sr. and Jordan
                  Klein, Jr. dated May 30, 2003 attached as an exhibit and
                  incorporated by reference to the Current Report on Form 8-K
                  filed on June 12, 2003.

             10.4 Contract for Sale between the Company and Southern Waste
                  Systems Ltd. dated April 23, 2003 attached as an exhibit and
                  incorporated by reference to the Current Report on Form 8-K
                  filed on July 28, 2003.

             23.1 Consent of Marvin B. Seidman, C.P.A*

             31   Section 302 Certification.*

             32   Section 906 Certification.*

----------
* Filed as an exhibit

                                       21
<PAGE>
                                   SIGNATURES

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

                                        Distribution Management Services, Inc.


Date: September 9, 2003                 By:  /s/ Leo Greenfield
                                             ------------------
                                        Leo Greenfield, President
                                        and Principal Financial Officer


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


/s/ Leo Greenfield                                            September 9, 2003
------------------                                            -----------------
Leo Greenfield                                                       Date
President and Director


/s/ Barbara Greenfield                                        September 9, 2003
----------------------                                        -----------------
Barbara Greenfield                                                   Date
Vice President and
Director


/s/ Maria Elena Lopez de Mendoza                              September 9, 2003
--------------------------------                              -----------------
Maria Elena Lopez de Mendoza                                         Date
Secretary and Director


/s/ Jordan Klein, Sr.                                         September 9, 2003
---------------------                                         -----------------
Jordan Klein, Sr.
Director


/s/Jordan Klein, Jr.                                          September 9, 2003
--------------------                                          -----------------
Jordan Klein, Jr.
Director

                                       22
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                              FINANCIAL STATEMENTS
                        YEARS ENDED MAY 31, 2003 AND 2002



                                TABLE OF CONTENTS



                                                                      Page No.


Independent Auditors' Report                                           F-2-3

Balance Sheets                                                         F-4

Statements of Operations                                               F-5

Statements of Changes in Stockholders' Equity                          F-6

Statements of Cash Flows                                               F-7

Notes to Financial Statements                                          F-8-18



                                       F-1

<PAGE>
                          Independent Auditors' Report

To the Board of Directors and
Stockholders of Distribution Management Services, Inc.

We have audited the balance sheet of Distribution Management Services, Inc. (the
"Company") as of May 31, 2003 and the related statements of operations, changes
in stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Distribution Management Services, Inc.
for the year ended May 31, 2002 were audited by another auditor whose report
thereon was dated July 25, 2002.

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

In our opinion, such financial statements referred to above present fairly, in
all material respects, the financial position of Distribution Management
Services, Inc. as of May 31, 2003, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company's dependence on outside financing, lack of sufficient
working capital, recurring losses from operations, and the discontinued
operations raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans as to these matters are also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.



BERKOVITS, LAGO AND COMPANY LLP


Ft. Lauderdale, Florida
August 27, 2003


                                      F-2

<PAGE>
                             Marvin B. Seidman, CPA
                          Certified Public Accountant
                             8501 S.W. 29th Street
                              Miami, Florida 33155
                                 (305) 221-8271

                          INDEPENDENT AUDITOR'S REPORT


The Board of Directors
Distribution Management Services, Inc.
Miami, Florida

I have audited the accompanying balance sheet of Distribution Management
Services, Inc. as of May 31, 2002, and the related statements of operations and
statement of change in stockholders' equity, and cash flows for the two years
then ended. These financial statements are the responsibility of the management
of Distribution Management Services, Inc. My responsibility is to express an
opinion on these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Distribution Management Services,
Inc. as of May 31, 2002, and the results of its operations and cash flows for
the two years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring net losses and is
dependent upon the continued sale of its securities or obtaining debt financing
for funds to meet its cash requirements. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
with regard to these matters are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


Marvin B. Seidman, CPA
Certified Public Accountant

July 25, 2002


                                      F-3
<PAGE>
                       DISTRIBUTION MANAGEMENT SERVICES, INC.
                                    BALANCE SHEET
                                    MAY 31, 2003
                                      (audited)


                                       Assets

Current assets
Cash                                                            $     2,562
   Accounts receivable                                               11,518
                                                                -----------
Total current assets                                                 14,080

Property, plant and equipment, held for sale                        950,146

Proprietary interest in movie rights                              2,000,000
                                                                -----------

                                                                $ 2,964,226
                                                                ===========

                        Liabilities and Stockholders' Equity

Current liabilities
Accounts payable                                                $    20,904
Accrued interest                                                     99,546
Mortgage payable                                                    375,000
Loans payable - related party                                       261,592
Other liabilities                                                   100,000
                                                                -----------
Total current liabilities                                           857,042

Convertible debenture payable                                        20,000
                                                                -----------
                                                                    877,042

Stockholders' equity
   Common stock, $0.001 par value, 15,000,000 shares
     authorized, 5,231,280 shares issued and  outstanding             5,231
   Additional paid in capital                                     3,095,025
Less: subscription receivable                                        (3,100)
   Accumulated deficit                                           (1,009,972)
                                                                -----------
Total stockholders' equity                                        2,087,184
                                                                -----------

                                                                $ 2,964,226
                                                                ===========


                                      F-4
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                            STATEMENTS OF OPERATIONS
                           FOR THE YEARS ENDED MAY 31,
                                    (audited)


                                               2003          2002
                                           -----------    -----------


Results from continuing operations         $        --    $        --
                                           -----------    -----------

Discontinued operations:
   Loss from discontinued operations           (86,358)        (5,731)
                                           -----------    -----------

Net loss                                   $   (86,358)   $    (5,731)
                                           ===========    ===========
Loss percommon share

Basic and diluted loss per common share
   from continuing operations              $        --    $        --
                                           ===========    ===========

Basic and diluted loss per common share
   from discontinued operations            $    (0.017)   $    (0.001)
                                           ===========    ===========

Weighted average number of common
   shares outstanding                        5,231,280      5,231,280
                                           ===========    ===========


                                      F-5
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                  MAY 31, 2003
                                    (audited)
<TABLE>
<CAPTION>


                                                               Stock         Additional
                                     Common Stock           Subscription      Paid-In      Accumulated
                                 Shares        Amount    Receivable/Payable   Capital        Deficit          Total
                              ------------   ----------- ------------------ ------------   -----------     -----------

<S>                             <C>          <C>            <C>             <C>            <C>             <C>
Balance, May 31, 2001           5,231,280    $     5,231    $    (3,600)    $ 1,055,637    $  (917,883)    $   139,385

Contributed services                   --             --             --          15,600             --          15,600

Contributed rent                       --             --             --           4,344             --           4,344

Net loss                               --             --             --              --         (5,731)         (5,731)
                              -----------    -----------    -----------     -----------    -----------     -----------

Balance May 31, 2002            5,231,280          5,231         (3,600)      1,075,581       (923,614)        153,598

Contributed services                   --             --             --          15,600             --          15,600

Contributed rent                       --             --             --           4,344             --           4,344

Common stock to be issued
   for movie script rights             --             --            500       1,999,500             --       2,000,000

Net loss                               --             --             --              --        (86,358)        (86,358)

                              -----------    -----------    -----------     -----------    -----------     -----------
Balance, May 31, 2003           5,231,280    $     5,231    $    (3,100)    $ 3,095,025    $(1,009,972)    $ 2,087,184
                              ===========    ===========    ===========     ===========    ===========     ===========
</TABLE>


                                      F-6
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                            STATEMENTS OF CASH FLOWS
                           FOR THE YEARS ENDED MAY 31,
                                    (audited)
<TABLE>
<CAPTION>


                                                             2003           2002
                                                        ---------------------------
<S>                                                     <C>             <C>
Cash flows from operating activities:
  Net (loss) income                                     $   (86,358)    $    (5,731)
                                                        -----------     -----------

  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Depreciation                                           20,800          20,921
      Additional paid in capital contributed as rent
        and services performed                               19,944          19,944
      (Increase) decrease in:
         Accounts receivable                                  4,448          (4,930)
         Prepaid expenses                                    45,522          (4,188)
         Other assets                                         4,590              --
      Increase (decrease) in:
         Accounts payable and accrued expenses               25,042         (59,281)
         Other liabilities                                  100,000              --
                                                        -----------     -----------
      Total adjustments                                     220,345         (27,534)
                                                        -----------     -----------
Net cash provided by (used in) operating activities         133,987         (33,265)
                                                        -----------     -----------

Cash flows from investing activities:
  Capital expenditures                                      (63,593)        (25,927)
                                                        -----------     -----------
Net cash used in investing activities                       (63,593)        (25,927)
                                                        -----------     -----------

Cash flows from financing activities:
 Proceeds from stockholders and related party loans              --          54,195
 Repayment of stockholders and related party loans          (69,170)             --
                                                        -----------     -----------
Net cash used in financing activities                       (69,170)         54,195
                                                        -----------     -----------

Net increase (decrease) in cash and cash equivalents          1,224          (4,997)

Cash and cash equivalents, beginning of year                  1,338           6,335
                                                        -----------     -----------

Cash and cash equivalents, end of year                  $     2,562     $     1,338
                                                        ===========     ===========

Supplemental disclosures of cash flow information:
Cash paid during the year for:
                                                        -----------     -----------
    Interest expense                                    $   105,113     $    34,817
                                                        ===========     ===========

Non-cash activities:
    500,000 shares of common stock to be issued for
     proprietary rights in movies
       Appraised value of movie rights                  $ 2,000,000     $        --
       Stock subscription payable                              (500)             --
       Additional paid in capital                        (1,999,500)             --
                                                        -----------     -----------
                                                        $        --     $        --
                                                        ===========     ===========
</TABLE>

                                      F-7
<PAGE>



                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Discontinued Operations
------------------------------------------------

Distribution Management Services, Inc. (the Company) was incorporated in the
State of Florida on January 25, 1995. The Company was organized for the purpose
of operating a transfer station for recycling of construction and demolition
materials in Miami, Florida. From incorporation, the Company was principally
engaged in organizational activities, construction of its recycling facility,
and raising capital until approximately May 1999. Accordingly, the Company was
considered to be in the development stage.

The Company entered into a contract of sale in April 2003 to sell the recycling
center for $1,050,000. The closing of this transaction occurred on July 25, 2003
after the purchaser had completed satisfactory due diligence and all conditions
precedent had been met.

All revenues generated for the current year and prior related solely to the
recycling center. Revenues included in discontinued operations amounted to
$145,850 for the current year. Expenses included in discontinued operations
amounted to $232,208 for the current year. The property, plant and equipment
became assets classified as held for sale as a result of the contract of sale.
No write-downs were taken as the value of these assets is greater than their
carrying value.

Assets and liabilities 'to be disposed of' were comprised of the following at
May 31, 2003:

         Assets:
         Property, plant and equipment, net                   $950,146
                                                              ========

         Liabilities:
         Mortgage payable                                     $375,000
         Other liabilities                                     100,000
                                                              --------
                                                              $475,000
                                                              ========

The Company has been in discussions regarding the acquisition of other
businesses. On May 23, 2003, the Company acquired the rights, title and interest
to two (2) full length motion picture scripts. It is the Company's intention to
produce, market and distribute one or both of these scripts as full length
motion pictures (see Note 2).


                                      F-8
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                  (CONTINUED)


Cash and Cash Equivalents
-------------------------
All cash in bank accounts and petty cash are considered cash and cash
equivalents.

Accounts Receivable
-------------------

Represents current amount of recycling fees due. These amounts are normally
collected on a monthly basis. No allowance for doubtful account is deemed
necessary.

Fair Value of Financial Instruments
-----------------------------------

The Company considers carrying amounts of cash receivables, accounts payable and
expenses accrued in the ordinary course of business to approximate fair value
because of the short maturity of these financial instruments.

Concentrations
--------------
One hundred percent (100%) of the Company's accounts receivable and revenue is
derived from the Operator of the recycling center.

Property, Plant, and Equipment
------------------------------

Property, plant and equipment are recorded at cost, including interest incurred
during the period of construction. Depreciation has been calculated using the
straight-line method of depreciation over the estimated useful lives of the
assets. The estimated useful life of the recycling facility is 40 years. As of
April 2003, property, plant and equipment are no longer being depreciated since
they became assets classified as held for sale as a result of the contract of
sale (see Note 9). No write-downs were taken as the fair value of these assets
is greater than their carrying value.

Proprietary Interest in Movie Rights
------------------------------------

The Company has acquired the rights to two (2) movie scripts which are recorded
at appraised value (see note 9). The appraised value is based on the knowledge
and experience of an independent appraiser who has taken the following criteria
into consideration: the backgrounds and abilities of the film's director and
producer; the potential income from the distribution of the films and other
sources of revenue, such as television series and DVDs, which may result over a
period of years. The only limiting condition which would affect the appraised
value would be the quality of the products to be produced from the scripts.

No assurance can be given that the Company will be successful in its efforts
relating to the above movie rights. These financial statements do not include
any adjustments relating to the future impairment or recoverability of these
assets.


                                      F-9
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                  (CONTINUED)

Reclassification
----------------

Certain reclassifications were made to the fiscal year ended May 31, 2002
consolidated financial statements in order for the presentation to conform to
the fiscal year ended May 31, 2003 consolidated financial statement
presentation.

Revenue Recognition
-------------------

The limited revenues generated by the Company consisted solely of recycling fees
in connection with the Amended Operation Agreement described in Note 7. The
Company recognized revenue when the recycling services were performed. The
recycling center was subsequently sold on July 25, 2003 (see Note 9).

Financial Statement Estimates
-----------------------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

Net Loss Per Common Share
-------------------------

The net loss per common share in the accompanying statements of operations has
been computed based upon the provisions of Statement of Financial Accounting
Standards No. 128, Earnings Per Share. The basic and diluted net earnings per
common share in the accompanying statements of operations is based upon the net
loss divided by the weighted average number of shares outstanding during each
period. Diluted per share data is the same as basic per share data since the
inclusion of all potentially dilutive common shares that would be issuable upon
the exercise of options and warrants would be anti-dilutive.

                                      F-10
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                  (CONTINUED)

Income Taxes
------------

The Company accounts for income taxes using Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes", which requires
recognition of deferred tax liabilities and assets for expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.

New Accounting Pronouncements
-----------------------------

Management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying consolidated financial statements.

In August 2001, the Financial Accounting Standards Board (FASB) issued FAS 144,
Accounting for the Impairment of Disposal of Long-Lived Assets. This standard
supersedes FAS 121, Accounting for the Impairment of Long-Lived Assets to be
Disposed Of, and provides a single accounting model for long-lived assets to be
disposed of. This standard significantly changes the criteria that would have to
be met to classify an asset as held-for sale. This distinction is important
because assets to be disposed of are stated at the lower of their fair values or
carrying amounts and depreciation is no longer recognized. The new rules will
also supercede the provisions of APB Opinion 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, with
regard to reporting the effects of a disposal of a segment of a business and
will require expected future operating losses from Discontinued Operations to be
displayed in Discontinued Operations in the period in which the losses are
incurred, rather than as of the measurement date as required by APB 30. This
statement is effective for fiscal years beginning after December 15, 2001. The
Company adopted this statement on June 1, 2002. The adoption of FAS 144 did not
have a material impact on the Company's operations or financial position.

                                      F-11
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                  (CONTINUED)

In June 2002, the FASB issued Statement No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. Adoption of this Statement
is required with the beginning of fiscal year 2003. The Company has not yet
determined what impact the adoption of FAS 146 will have on its operations and
financial position.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure an amendment of FASB Statement No. 123.
This Statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of that Statement to
require prominent disclosure about the effects on reported net income of an
entity's accounting policy decisions with respect to stock-based employee
compensation. Finally, this Statement amends APB Opinion No. 28, Interim
Financial Reporting, to require disclosure about those effects in interim
financial information. The Company intends to continue to account for
stock-based compensation based on the provisions of APB Opinion No. 25. SFAS
148's amendment of the transition and annual disclosure provisions of SFAS 123
are effective for fiscal years ending after December 15, 2002, and the
disclosure requirements for interim financial statements are effective for
interim periods beginning after December 15, 2002. The Company adopted the
disclosure provisions of SFAS 148 on December 31, 2002.

NOTE 2   GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which assume that the Company will
continue on a going concern basis, including, the realization of assets and
liquidation of liabilities in the ordinary course of business. The Company
intends to finance production of the movie rights from the proceeds of a private
offering of its restricted equity securities. No assurance can be given that the
Company will be successful in it efforts relating to the above movie rights.
There are significant uncertainties with regard to the Company's ability to
generate sufficient cash flows from operations or other sources (including
related party loans, see note 5) to meet and fund its commitments with regard to
existing liabilities and recurring expenses. These factors raise substantial
doubt about the Company's ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

                                      F-12
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 3   PROPERTY, PLANT AND EQUIPMENT, HELD FOR SALE

Property, plant and equipment, held for sale at May 31, 2003 consisted of the
following:

         Land                             $   125,000
         Plant and Equipment                  911,867
                                          -----------
                                          $ 1,036,867
         Less Accumulated Depreciation        (86,721)
                                          -----------
                                          $   950,146
                                          ===========

Depreciation expense for the year ended May 31, 2003 was $20,800.

NOTE 4   MORTGAGE PAYABLE

Mortgage payable to an individual; collateralized by the property, plant, and
equipment. Interest at 12% is payable monthly. Principal is due February 1, 2004
in the amount of $375,000. This mortgage was paid in full during July 2003 with
a portion of the proceeds from the sale of the recycling center (see note 9).

NOTE 5   STOCKHOLDER AND RELATED PARTY TRANSACTIONS

There are significant funds that have been advanced by or through Mr. Leo
Greenfield and related parties evidenced by the amounts shown on the Balance
Sheet as a current liability. This liability could adversely affect cash flow in
the future. A portion of this liability has been satisfied through the issuance
of stock subsequent to year end (see note 9).

The Company used the office facilities of a related party as its administrative
offices. There is currently no lease agreement with this related party. The
Company records an imputed rent, which is charged to operations.

The Company's president has agreed not to receive any compensation. The value of
his services is recorded as estimated fair value of his services contributed in
the Statement of Change in Stockholders' Equity.

There are substantial loans by these related parties which can affect liquidity
and based on management policy are to be repaid when Company is profitable
enough. This is considered a temporary advance by related parties instead of a
contribution to capital; therefore, interest is being accrued.


                                      F-13
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 6   LOANS PAYABLE - RELATED PARTY
<TABLE>
<CAPTION>

The Company has outstanding loans payable at May 31, 2003 as follows:
<S>                                                                                    <C>

          In December 1997, Double D, Inc., a company owned by Leo Greenfield,
          President and a director of the Company, and Barbara Greenfield, Vice
          President and a director of the Company, loaned the Company $150,000.
          The loan is unsecured, due upon demand and bears interest at the
          applicable Federal rate. The proceeds of this loan provided additional
          funding for the construction of the facility.                                 $150,000

             In July 2002, Leo Greenfield, President and director of the
             Company, loaned the Company $105,062 to pay for the settlement of
             litigation involving the Company. The loan is unsecured, due upon
             demand and bears interest at the
             applicable Federal rate.                                                     76,317

          From May 1998 through July 2002, Greenfield and DuVal, P.A. loaned the
          Company an aggregate of approximately $75,700. The loan is unsecured,
          due upon demand and bears interest at the applicable Federal Rate. The
          proceeds of this loan provided additional funding for the construction
          of the facility and payment of approximately $35,000 for the
          settlement of
          litigation.                                                                     32,275
                                                                                         -------


            Total                                                                        $261,592
                                                                                         ========
</TABLE>

In July 2003, upon the approval of the Board of Directors, Mr. Greenfield
converted $100,000 of principal amount due under the loans above into shares of
the Company's restricted common stock (see Note 9).


                                      F-14
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 7   COMMITMENTS AND CONTINGENCIES

Litigation Proceedings
----------------------

The Company was a party to the following legal proceedings:

         a.       A suit was filed against the Company in May 1999 in the
                  Circuit Court, in and for Miami-Dade County, Florida, seeking
                  $26,485.00 pursuant to a claim for payment in connection with
                  construction materials provided to the Company. The Company
                  paid approximately $35,000 in settlement of this lawsuit and
                  it was dismissed on October 10, 2001.

         b.       A suit was filed against the Company in September 1999 in the
                  Circuit Court, in and for Miami-Dade County Florida, pursuant
                  to a claim for payment in connection with the replacement of a
                  City of Miami water line for a cost of approximately $97,000.
                  In May 2002, payment in full was made by the Company and the
                  suit was dismissed.


                                      F-15
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 7   COMMITMENTS AND CONTINGENCIES (CONTINUED)

Amended Operation Agreement
---------------------------

During December 1998, the Company entered into an Operation Agreement (as
amended) with a management company to operate a recycling facility. The
agreement called for an advance to the Company by the management company in the
amount of $75,000. The management company will be reimbursed by retaining fifty
percent of the gross amounts collected until the advance is fully repaid.
Interest will accrue on the unpaid balance at a rate of 7% per month. Use of the
advanced funds was exclusively for the purpose of obtaining the use permit from
the City of Miami and the completion of any necessary work for the commencement
of the facility's operations. As of May 31, 2003, there is no outstanding
balance.

The agreement also stated that the management company will operate the facility
on a day to day basis, including providing equipment necessary for operations,
performing hiring and firing of its employees and paying all necessary operating
expenses relating to the operations of the facility.

The Company receives revenues in an amount equal to 6% of amounts collected for
receipt of 0 - 450 cubic yards of construction and demolition debris received
each day, less any applicable local, state or federal sales taxes due thereon.
For each cubic yard in excess of 450 yards per day, the Company receives an
amount equal to 10% of the gross amounts collected.

The agreement also includes an option for the management company that operates
the recycling facility to purchase the facility. The option is exercisable from
the date of the agreement through December 31, 2003 even though the facility was
sold on July 25, 2003 (See Note 9). Based on the timing of the exercise of the
option, the purchase price ranges from $1,495,000 to $2,275,000. The term of the
agreement is for five years commencing on December 22, 1998.

Environmental Regulation and Compliance
---------------------------------------

The Company is subject directly and indirectly to regulations and various laws
of both the State of Florida and Miami-Dade County as well as Federal
regulations and statutes. The Company believes it is in compliance with all
applicable laws and has obtained an annual solid waste operating permit, which
company keeps current.


                                      F-16
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 8   INCOME TAXES

No credit for income taxes has been reflected in the accompanying financial
statements for 2002 and 2003 because of the significant uncertainty that exists
regarding the realization of such income tax credits (see below).

As of May 31, 2003, the Company estimates that it has net operating loss carry
forwards of approximately $750,000 which expire in various years through 2015;
however, the utilization of the benefits of such carry forwards may be limited,
as more fully discussed below. Sufficient uncertainty exists regarding the
realization of these operating loss carry forwards and, accordingly, deferred
tax assets of approximately $300,000 as of May 31, 2003 were subject to and
presented net of a 100% valuation allowance, therefore, zero.


                                      F-17
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 9   SUBSEQUENT EVENTS

Sale of Recycling Center
------------------------

The Company entered into a contract of sale in April 2003 to sell the Center for
$1,050,000. A down payment of $100,000 was received in April 2003 as reflected
as other liabilities on the financial statements of the Company. The closing of
this transaction occurred on July 25, 2003 after the purchaser had completed
satisfactory due diligence and all conditions precedent had been met. The
Company used the net proceeds from the sale to (i) satisfy the existing mortgage
on the Center, including all unpaid interest, (ii) repay other debt to
non-affiliated third parties, and (iii) for working capital.

Stock Issuance
--------------

On May 30, 2003, the Registrant entered into an agreement with two individuals
to purchase certain copyrighted movie scripts that had been written and
developed by the two individuals. As consideration for the assets, during
August, 2003, the Registrant issued to the two individuals an aggregate of
500,000 shares of its restricted common stock and two (2%) percent of the gross
proceeds received by the Registrant, if any, from the marketing and distribution
of the assets.

An entity owned and controlled by Mr. Greenfield acquired 2,223,228 shares of
the Company's restricted common stock on August 4, 2003 upon conversion of (i)
accrued unpaid interest of $99,546 on outstanding loans to the Company as of May
31, 2003, (ii) $100,000 principal amount of interest on certain loans payable to
Mr. Greenfield and related parties, and (iii) accrued unpaid salary of $89,475
for the fiscal years ended May 31, 2002 and 2003. The conversion was at $.13 per
share based upon the closing price of a share of common stock on July 16, 2003,
the trading day immediately preceding the resolution of the Board of Directors
approving the conversion.

Stock Authorization
-------------------

The Company amended its Articles of Incorporation on August 27, 2003, in order
to increase the authorized number of shares of common stock from Fifteen Million
(15,000,000) Shares to Fifty Million (50,000,000) Shares.

                                      F-18
<PAGE>

                  DISTRIBUTION MANAGEMENT SERVICES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003


NOTE 9   SUBSEQUENT EVENTS (CONTINUED)

Legal Proceedings
-----------------

A suit was filed by the Company in August 2003 in the Circuit Court, in and for
Miami-Dade County, Florida. The Company is seeking from the operator of the
recycling center and related parties (i) an accounting, and (ii) damages for
alleged fraudulent breach of contract, negligence and breach of contract. The
suit was filed on August 4, 2003 and the parties have been served; however, no
responsive pleadings have been filed by any of the served defendants.


                                      F-19
<PAGE>

Exhibit Index


Exhibit
-------

2.1      Amendment to the Articles of Incorporation filed on August 27, 2003.

23.1     Consent of Marvin B. Seidman, C.P.A

31       Section 302 Certification.

32       Section 906 Certification.