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

                                  FORM 10-QSB

      X Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
                              Exchange Act of 1934
                 For the quarterly period ended: March 31, 2004
                                       or
      Transition Report Pursuant to Section 13 or 15 (d) of the Securities
                              Exchange Act of 1934

                        Commission File Number: 0-24684

                            ZENEX INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)

         Colorado                                              73-1587867
(State of incorporation)                                (I.R.S. Employer ID no.)

                          14220 South Meridian Avenue
                          Oklahoma City, Oklahoma 73173
              (Address of Principal Executive Offices) (Zip Code)
          Issuer's telephone number, including area code: 405-692-2300

Check  whether  the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 at least the past 90
days:  Yes  [X]  No  [ ]

Shares  of  Common  Stock,  $.001  par  value,  outstanding  as of May 20, 2004:
47,836,558.

Transitional  Small  Business  Disclosure  Format:  Yes  [ ]  No  [X]



                                        1
<PAGE>

                            ZENEX INTERNATIONAL, INC.


                                      INDEX

                          PART I. FINANCIAL INFORMATION

Item  1.  Financial  Statements

          Independent  Accountant's  Review  Report                           3

          Financial  Statements:

               Consolidated  Balance  Sheets                                4-5

              Consolidated  Statements  of  Operations                      6-7

              Consolidated  Statements  of  Cash  Flows                     8-9

              Notes  to  the  Financial  Statements                       10-20

Item  2.  Management's Discussion and Analysis or Plan of Operation          21

Item  3.  Controls  and  Procedures                                          25


                           PART II. OTHER INFORMATION


Item  6.   Exhibits  and  Reports  on  Form  8-K                             26

           Signatures                                                        26






                                        2
<PAGE>


                            ZENEX INTERNATIONAL, INC.

                         PART I - FINANCIAL INFORMATION

Item  1.  Financial  Statements  -  March  31,  2004  and  2003

This  quarterly  report  on Form 10-QSB should be read in conjunction with Zenex
International,  Inc.'s  Annual Report on Form 10-KSB for the year ended December
31,  2003.
































                                        3
<PAGE>

                            Independent Review Report



Board  of  Directors  and  Stockholders
Zenex  International,  Inc.

We  have   reviewed  the   accompanying  consolidated  balance  sheet  of  Zenex
International,  Inc.  as  of  March  31,  2004,  and  the  related  consolidated
statements of income for the three months ended March 31, 2004 and 2003, and the
consolidated  statements of cash flows for the three months ended March 31, 2004
and  2003  in  accordance with Statements on Standards for Accounting and Review
Services  issued  by  the  American  Institute  of Certified Public Accountants.
These  financial  statements are the responsibility of the Company's management.

A  review  of  interim financial statements consists principally of inquiries of
company  personnel  and  analytical procedures applied to financial data.  It is
substantially less in scope than an audit conducted in accordance with generally
accepted  auditing  standards,  the  objective  of which is the expression of an
opinion regarding the financial statements taken as a whole.  Accordingly, we do
not  express  such  an  opinion.

Based  on  our review we are not aware of any material modifications that should
be  made  to  the accompanying financial statements for them to be in conformity
with  generally  accepted  accounting  principles.

The  December  31,  2003 financial statements for Zenex International, Inc. were
audited  by us and we expressed an unqualified opinion in our report dated March
16,  2004,  but  we  have not performed any auditing procedures since that date.


Sutton  Robinson  Freeman  &  Co.,  P.C.




Certified  Public  Accountants
Tulsa,  Oklahoma

May  12,  2004



                                        4
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                      March 31,     December 31,
                                                        2004           2003
                                                    (Unaudited)
                                                    -----------     ------------
                                     Assets

Current  Assets
<S>                                                 <C>             <C>
  Cash                                              $   155,674     $    400,407
  Accounts receivable                                 3,748,725        3,210,159
  Costs  and  estimated  earnings  in
    excess of billings on uncompleted contracts          48,810          941,635
  Officer receivable                                    216,332          214,562
  Income  tax  receivable                               136,592                -
  Prepaid expenses                                       33,249           96,337
  Employee and other receivables                        101,463           95,454
                                                    -----------     ------------
                                                      4,440,845        4,958,554
                                                    -----------     ------------


Non-Current  Related  Party  Receivable               1,683,115        1,669,343
                                                    -----------     ------------


Property and Equipment                                1,870,167        1,779,557
  Less:  accumulated depreciation                    (1,253,803)      (1,219,301)
                                                    -----------     ------------
                                                        616,364          560,256
                                                    -----------     ------------

Other
  Marketable equity securities                            3,485            4,510
  Deferred tax asset                                  1,053,000        1,047,000
                                                    -----------     ------------
                                                      1,056,485        1,051,510
                                                    -----------     ------------

                                                    $ 7,796,809     $  8,239,663
                                                    ===========     ============
</TABLE>




              See accompanying notes and accountant's review report.

                                        4

<PAGE>

                            ZENEX INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                      March 31,     December 31,
                                                        2004           2003
                                                    (Unaudited)
                                                    -----------     ------------
    Liabilities  and  Stockholders'  Equity
Current  Liabilities
<S>                                                 <C>             <C>
  Advances on line of credit                        $ 1,356,320     $   733,743
  Current portion of long-term debt                     852,765         872,401
  Accounts and subcontract payables                   1,067,214       1,696,051
  Accrued liabilities                                   292,620         285,179
  Insurance payable                                      17,340          42,579
  Income tax payable                                          -         161,597
  Billings  in  excess  of  costs  and
    estimated earnings on uncompleted contracts         502,396         202,638
                                                    -----------     -----------
                                                      4,088,655       3,994,188
                                                    -----------     -----------

Long-Term Debt (Net of Current Portion)                 337,908         419,166
                                                    -----------     -----------

Stockholders'  Equity
  Preferred stock ($0.001 par value, 20,000,000
    shares authorized, no shares issued and                   -               -
    outstanding)
  Common  stock  ($0.001  par  value,  100,000,000
    shares  authorized,  47,836,558  and  47,836,558
    shares issued and outstanding at March 31,
    2004 and December 31, 2003)                          47,836          47,836
  Paid-in capital                                     4,861,532       4,861,532
  Unrealized gain (loss) on available for
    sale securities                                     (19,970)        (18,945)
  Retained earnings (deficit)                        (1,519,152)     (1,064,114)
                                                    -----------     -----------
                                                      3,370,246       3,826,309
                                                    -----------     -----------

                                                    $ 7,796,809     $ 8,239,663
                                                    ===========     ===========
</TABLE>



              See accompanying notes and accountant's review report.

                                        5

<PAGE>

                            ZENEX INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         Three  Months  Ended
                                                              March  31,
                                                          2004          2003
                                                      -----------   -----------
<S>                                                   <C>           <C>
Revenues                                              $ 2,396,872   $ 1,477,008

Operating  Expenses
  Cost  of  sales                                       2,886,464     1,276,926
  Selling,  general  and  administrative                  248,262       764,426
  Warranty  expense                                        43,507        18,221
                                                      -----------   -----------
                                                        3,178,233     2,059,573
                                                      -----------   -----------

Operating  Income  (Loss)                                (781,361)     (582,565)

Other  Income  (Expense)
  Interest  income                                         17,559        22,567
  Gain  (loss)  on  sale  of  equipment                    (4,998)        5,000
  Other  income                                             9,698         6,391
                                                      -----------   -----------
                                                           22,259        33,958
                                                      -----------   -----------

Net  Income  (Loss)  from  Operations
  Before  Income  Taxes                                  (759,102)     (548,607)

  Income  tax  (expense)  benefit                         304,064       221,192
                                                      -----------   -----------


Net  Income  (Loss)  Before  Discontinued
  Operations  and  Sale  of  Discontinued
  Business                                            $  (455,038)   $ (327,415)
</TABLE>


              See accompanying notes and accountant's review report.

                                        6

<PAGE>

                            ZENEX INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         Three  Months  Ended
                                                              March  31,
                                                          2004          2003
                                                      -----------   -----------
Discontinued  Operations


  Gain on forgiveness of debt from discontinued
<S>                                                   <C>           <C>
   operations  net  of income taxes                   $         -   $ 1,312,777

  Gain (loss) on sale of discontinued operations
    net  of  income  taxes                                      -    (1,127,014)
                                                      -----------   -----------

Net  Income  (Loss)                                      (455,038)     (141,652)

Other  Comprehensive  Income:
  Unrealized  holding  gains  (losses)                     (1,025)       (1,230)
  Reclassification  adjustment                                  -             -
                                                      -----------   -----------

Comprehensive  Income  (Loss)                         $  (456,063)  $  (142,882)
                                                      ===========   ===========

  Primary Earnings (Loss) per Share                   $    (0.010)  $    (0.003)
                                                      ===========   ===========

  Fully Diluted Earnings (Loss) per Share             $    (0.006)  $    (0.003)
                                                      ===========   ===========

  Earnings  (Loss)  per  Share  from
    Discontinued  Operations                          $         -   $     0.004
                                                      ===========   ===========

  Earnings  (Loss)  per  Share  from
    Continuing  Operations                            $    (0.010)  $    (0.007)
                                                      ===========   ===========
</TABLE>







              See accompanying notes and accountant's review report.

                                        7

<PAGE>

                            ZENEX INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW


<TABLE>
<CAPTION>
                                                        Three  Months  Ended
                                                             March  31,
                                                         2004           2003
                                                    -------------  -------------
Cash  Flows  from  Operating  Activities
<S>                                                 <C>            <C>
  Net income (loss)                                 $  (455,038)   $  (141,652)

  Reconciliation of net income (loss) to net cash
    provided  by  operating  activities:

    Depreciation and amortization                        42,518          42,620
    Gain (loss) on sale of property and equipment         4,998       1,127,014
    Realized  gain  on forgiveness of debt                    -      (1,317,777)
    (Increase)  Decrease  from  changes  in:
      Accounts receivable                              (538,566)        977,191
      Costs  and  estimated  earnings  in  excess
        of billings on uncompleted contracts            892,825         (28,935)
      Shareholder  receivable                                 -             463
      Officer receivable                                 (1,770)         (2,671)
      Income  tax  receivable                          (136,592)              -
      Related party receivable                          (13,772)        (12,926)
      Deferred  taxes                                    (6,000)       (221,441)
      Prepaid expenses                                   63,088         123,443
      Employee and other receivables                     (6,009)        161,785
    Increase  (Decrease)  from  changes  in:
      Accounts payable                                 (628,837)       (658,928)
      Insurance payable                                 (25,239)         27,946
      Accrued liabilities                                 7,441         (17,967)
      Income  tax  payable                             (161,597)              -
      Billings  in  excess  of  costs  and
        estimated earnings on uncompleted
        contracts                                       299,758          67,184

    Net adjustments to net income                      (207,754)        267,001
                                                    -----------    ------------
    Net cash provided (used) by
      operating activities                             (662,792)        125,349
                                                    -----------    ------------
</TABLE>


              See accompanying notes and accountant's review report.

                                        8

<PAGE>

                            ZENEX INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW


<TABLE>
<CAPTION>
                                                        Three  Months  Ended
                                                             March  31,
                                                         2004           2003
                                                    -------------  -------------
Cash  Flows  from  Investing  Activities
<S>                                                 <C>            <C>
  Proceeds from sale of property and equipment            5,985           5,000
  Purchase of property and equipment                   (109,609)        (28,950)
                                                    -----------    ------------

  Net  cash  provided  (used)  by
    investing  activities                              (103,624)        (23,950)
                                                    -----------    ------------

Cash  Flows  from  Financing  Activities
  Net  change  in  line  of  credit                     622,577         (40,000)
  Proceeds  from  long-term  debt                             -         120,000
  Retirement  of  long-term  debt                      (100,894)       (245,520)
                                                    -----------    ------------

  Net cash provided (used)
    by financing activities                             521,683        (165,520)
                                                    -----------    ------------

Net Increase in Cash                                   (244,733)        (64,121)

Cash  at  Beginning  of  Period                         400,407               -
                                                    -----------    ------------

Cash  at  End  of  Period                           $   155,674    $    (64,121)
                                                    ===========    ============

Supplemental  Disclosure  of  Cash  Flow
  Information

  Cash  paid  for:
    Interest                                        $    44,609    $     43,359
    Taxes                                                   125             250
                                                    -----------    ------------

Supplemental  Schedule  of  Non-Cash
  Investing  and  Financing  Activities

  Fixed  asset  additions                           $         -    $     38,803
                                                    -----------    ------------
  Liabilities  assumed  or  incurred                          -          38,803
                                                    ===========    ============

   Common  stock  issued for services               $         -    $     35,000
                                                    ===========    ============
</TABLE>








              See accompanying notes and accountant's review report.

                                        9

<PAGE>
                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

Organization  and  Nature  of  Business

Zenex  International,  Inc.  (formerly  Zenex Telecom, Inc.) was incorporated on
March 4, 1991, in the state of Colorado.  On November 15, 2001, the shareholders
approved  the  change of the corporate name from Lone Wolf Energy, Inc. to Zenex
Telecom, Inc., which was changed on August 3, 2002, to Zenex International, Inc.
(the  "Company").

The  Company,  through  a  subsidiary,  Aduddell  Roofing  &  Sheet Metal, Inc.,
("Aduddell  Roofing"),  is  engaged in the commercial and industrial roofing and
re-roofing  businesses.  The  Company has been engaged in the telecommunications
services industry through Zenex Long Distance, Inc. (d/b/a Zenex Communications,
Inc.)  ("Zenex Communications").  Aduddell Roofing was acquired in October 2002,
and  the  Company  subsequently  discontinued  the  operations  of  Zenex
Communications.

In  accordance  with  the  Agreement  and  Plan  of  Split-Off  and  Merger (the
"Agreement"),  the  Company  acquired  Aduddell  Roofing,  through a transaction
approved  by  the  Boards of Directors of the Company and Aduddell Roofing.  The
Agreement  was  signed  on  September  27, 2002, and qualified as reorganization
under the meaning of Section 368(a) of the Internal Revenue Service Code.  Prior
to  closing  the  transaction,  Aduddell  Roofing formed a separate wholly owned
subsidiary,  Aduddell  Holdings,  and  transferred  and  split-off  certain
non-operating  assets and liabilities that were not retained in Aduddell Roofing
after  the  merger.  Tim  Aduddell,  the  owner  of 100% of the Aduddell Roofing
common  stock,  transferred a portion of his common stock of Aduddell Roofing to
Aduddell  Roofing in exchange for 100% of the common shares of Aduddell Holdings
to  effect  the  split-off of the non-operating assets of Aduddell Roofing.  Tim
Aduddell  also  transferred  his remaining common stock of Aduddell Roofing to a
newly  formed  subsidiary  of  the  Company,  AR  Acquisition  Corp. ("Sub")  in
exchange  for  10.0  million shares of common stock and options to purchase 30.0
million  shares  of  common  stock  for $0.04 per share.  The purchase method of
accounting  was used for the business combination.  The transaction was recorded
at  $2,928,840,  the  fair value of the acquired net assets of Aduddell Roofing.
Subsequent  to  the  exchange, Aduddell Roofing merged into the Sub and Aduddell
Roofing  became  the  surviving corporation.  Subsequent to the merger, Aduddell
Roofing became a wholly owned subsidiary of  the Company and Aduddell Holdings a
100%  owned  company  of  Tim  Aduddell.

The  purpose  of  the  merger  was  to  effect the acquisition by the Company of
Aduddell  Roofing  &  Sheet  Metal,  Inc., after splitting off the non-operating
assets  of Aduddell Roofing into a separate company to be owned by Tim Aduddell.

Zenex  Communications  entered  into  agreements (the "Red River Agreements") as
discussed  in  Note 18 with Red River Networks, LLC ("Red River") to effectively
transfer  the  operations  of  the  telecommunication  segment  of the Company's
operations  to  Red  River  on  November  25,  2002.


                                       10
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
-----------------------------------------------------------------------

The  Company's  March  31, 2004 and December 31, 2003 consolidated balance sheet
includes  Aduddell  Roofing.    The  assets  of  Zenex  Communications  and
approximately  $407,900  of  note  and accounts payable were sold and assumed in
April  2003 pursuant to the Red River Agreements.  The consolidated statement of
operations  for the three months ended March 31, 2004 includes Aduddell Roofing.
The  consolidated statement of operations for the year ended December 31,  2003,
includes  Aduddell  Roofing  and  the  discontinued  operations  of  Zenex
Communications.   All significant inter-company accounts have been eliminated in
the  consolidated  financial  statements.  The consolidated financial statements
include  all  adjustments,  which, in the opinion of management are necessary in
order  to  make  the  statements  not  misleading.

Revenue  Recognition

Aduddell  Roofing  recognizes  fixed  price  contract  revenues  on  the
percentage-of-completion  method  of  accounting,  measured by the percentage of
cost incurred to date to the estimated total cost for each contract.  Management
uses  this  method  because  total  cost  is considered to be the best available
measure of progress on the contracts.  Revenues from cost-plus-fee contracts are
recognized on the basis of costs incurred during the period plus the fee earned,
measured  by  the  cost-to-cost  method.

Contract  costs  include  all direct material and labor costs and those indirect
costs  related  to  contract  performance  such  as  indirect  labor,  interest,
depreciation  and  supplies.  General  and  administrative  costs are charged to
expense  as  incurred.  Provisions for estimated losses on uncompleted contracts
are  made  in  the  period  in which such losses are determined.  Changes in job
performance, job conditions, and estimated profitability may result in revisions
to  costs  and income, which are recognized in the period in which the revisions
are  determined.

The  asset  "Costs  and  estimated earnings in excess of billings on uncompleted
contracts"  represents  revenues  recognized  in  excess of amounts billed.  The
liability,  "Billings  in  excess of costs and estimated earnings on uncompleted
contracts"  represents  billings  in  excess  of  revenues  recognized.

Cash  and  Cash  Equivalents

The  Company  considers  all  highly liquid debt or equity instruments purchased
with  an original maturity at the date of purchase of 90 days or less to be cash
equivalents.

Fair  Value  of  Financial  Instruments

The Company's financial instruments include cash, receivables, notes receivable,
marketable  securities,  short-term  payables  and  notes payable.  The carrying
amounts of cash, receivables, and short-term payables approximate fair value due
to  their  short-term  nature.  Marketable  equity  securities'  fair values are
estimates  based  on  quoted  market  prices.  The  carrying  amounts  of  notes
receivable  and payable approximate fair value based on interest rates currently
available.


                                       11
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
-----------------------------------------------------------------------

Advertising  Cost

Advertising  costs  are  expensed  when  incurred  as  selling,  general  and
administrative  expenses  in  the  accompanying  statement  of  operations.

Income  Taxes

The  Company  accounts  for  income  taxes  in  accordance  with  SFAS  No. 109,
Accounting for Income Taxes.  This statement prescribes the use of the liability
method  whereby  deferred tax assets and liabilities are determined based on the
differences  between financial reporting and tax bases of assets and liabilities
and  measured  at  tax  rates  that  will  be in effect when the differences are
expected  to  reverse.  Valuation allowances are established, when necessary, to
reduce deferred tax assets when it is more likely than not that the deferred tax
asset  will  not  be  realized.

Net  Income  (Loss)  Per  Share

The  Company  computes  net  income (loss) per share in accordance with SFAS No.
128,  Earnings  per  Share  and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under  the  provisions  of  SFAS No. 128 and SAB 98, basic net income (loss) per
share  is  calculated  by  dividing  net  income  (loss)  available  to  common
shareholders  for  the  period  by  the weighted average number of common shares
outstanding  during  the  period.

Concentrations

In  connection  with  providing  service to customers, Aduddell Roofing does not
have  contractual  agreements with suppliers.  The material and supplies used in
the  business  are  readily  available  from  several  vendors.

Although  Aduddell  Roofing had a significant number of customers for the period
ended  March  31, 2004,  two customers accounted for 30% and 28% of the revenue,
respectively.   Two  customers  accounted for 27% and 26% of the revenue for the
period  ended  December  31,  2003.

The  Company's  receivables  at March 31, 2004 and December 31, 2003, are from a
small  number  of  companies  in  various  industries  which could be subject to
business  cycle  variations.  As  of  March  31,  2004,  the  Company  had three
customers  that  accounted  for  57% of the customer accounts receivable.  As of
December  31, 2003, the Company had four customers that accounted for 79% of the
customer  accounts  receivable.  This  concentration  subjects  the Company to a
credit  risk  if  the  general  economy  or  the  companies  fail  to  perform.


                                       12
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
-----------------------------------------------------------------------

Use  of  Estimates

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

Segment  Information

Effective  January  1, 1998, the Company adopted the provisions of SFAS No. 131,
Disclosures  about  Segments  of  an  Enterprise  and  Related Information.  The
Company  identifies  its  operating  segments  based  upon  business activities,
management  responsibilities  and  geographical  location.  Certain items in the
September  30,  2002, financial statements have been reclassified to reflect the
discontinued  operations  of the Company.  Net income from continuing operations
reflects  the  operations  of  Aduddell  Roofing, the single business segment in
which  the  Company  operates  at  March  31,  2004.

Reclassifications

Certain  reclassifications  have  been  made  to  the  prior  period  financial
statements  to  conform  to  the  current  period  presentation.

NOTE  2  -  CONTRACT  RECEIVABLES
---------------------------------

Billed  contract  receivables  consist  of:
<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                   2004           2003
                                                   ----           ----
<S>                                          <C>              <C>
          Completed  contracts                $    376,301    $    896,850
          Contracts  in  progress                3,135,970       1,933,418
          Retainage                                236,454         379,891
                                              ------------    ------------
                                                 3,748,725       3,210,159
          Less  allowance  for  doubtful
            amounts                                      -               -
                                               -----------    ------------

                                               $ 3,748,725    $  3,210,159
                                               ===========    ============
</TABLE>

NOTE  3  -  SHAREHOLDER  AND  RELATED  PARTY  RECEIVABLE
--------------------------------------------------------

Advances  to  a  company  partially  owned by the Company's majority shareholder
totaled  $1,683,115 and $1,669,343 as of  March  31, 2004 and December 31, 2003,
respectively.  The advances are secured by marketable securities and shareholder
guaranty  bearing  interest  at  the federal mid-term rate.  The note matures on
January  1,  2007.


                                       13
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  4  -  UNCOMPLETED  CONTRACTS
----------------------------------

Costs,  estimated  earnings,  and  billings  on  uncompleted  contracts,  are as
follows:

<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                   2004           2003
                                                   ----           ----
         Costs  incurred  on  uncompleted
<S>                                           <C>             <C>
           contracts                          $  6,729,750    $  5,895,844
         Estimated  earnings  (loss)              (138,510)        503,119
                                              ------------    ------------
                                                 6,591,240       6,398,963
         Billings  to  date                      7,044,826       5,659,966
                                              ------------    ------------

                                              $   (453,586)   $    738,997
                                              ============    ============
</TABLE>

Included  in  the  accompanying  balance  sheet  under  the  following captions:

<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                   2004           2003
                                                   ----           ----
          Costs  and  estimated  earnings
          in  excess of billings on
<S>                                           <C>             <C>
          uncompleted contracts               $     48,810    $    941,635
          Billings  in  excess  of  costs
          and estimated earnings on
          uncompleted contracts                   (502,396)       (202,638)
                                              ------------    ------------
                                              $   (453,586)   $    738,997
                                              ============    ============
</TABLE>

NOTE  5  -  PROPERTY  AND  EQUIPMENT
------------------------------------

Property  and  equipment  are  recorded  at  cost.  Expenditures for repairs and
maintenance  are  charged  to  operations when incurred.  Major improvements and
renewals  that  extend  the useful life of the related asset are capitalized and
depreciated  over  the remaining useful life.  Depreciation and amortization are
computed for financial and income tax reporting purposes using straight-line and
accelerated  methods over estimated useful lives ranging from five to ten years.
Depreciation  expense  for  the  three months ended March 31, 2004, was $42,518.
The  following  table  summarizes the classifications of property and equipment,
total  accumulated  depreciation  and  the  related  estimated  useful  lives:

<TABLE>
<CAPTION>
       Property and Equipment                         Cost                 Years
       ----------------------            -----------------------------     -----
                                           March 31,      December 31,
                                             2004            2003
                                             ----            ----
<S>                                      <C>             <C>                <C>
     Machinery and equipment             $    489,128    $    489,129       5-10
     Office furniture and equipment           182,720         162,345       5-7
     Transportation equipment               1,168,910       1,098,674        5
     Leasehold improvements                    29,409          29,409        5
                                         ------------    ------------
                                            1,870,167       1,779,557
     Less:  accumulated  depreciation       1,253,803       1,219,301
                                         ------------    ------------

     Net  property  and  equipment        $   616,364    $    560,256
                                          ===========    ============
</TABLE>


                                       14
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  6  -  MARKETABLE  EQUITY  SECURITIES
------------------------------------------

The Company's securities that are bought and held principally for the purpose of
selling  them  in  the  near term are classified as trading securities.  Trading
securities  are  recorded  at fair value on the balance sheet in current assets,
with  the  change  in  fair  value  during  the  period  included  in  earnings.
Securities  that  the  Company  has  the  positive intent and ability to hold to
maturity are classified as held-to-maturity securities and recorded at amortized
cost  in  investments.  Securities not classified as held-to-maturity or trading
are  classified  as  available-for-sale.  Available-for-sale  securities  are
recorded at fair value on the balance sheet with the change in fair value during
the  period  excluded  from  earnings  and  reported  as a separate component of
Shareholders'  Equity.  All  of  the  Company's  securities  are  classified
available-for-sale  at March 31, 2004 and December 31, 2003.  Unrealized holding
losses  on  these  securities  totaled $19,970 and $18,945 at March 31, 2004 and
December  31,  2003,  respectively.

NOTE  7  -  LINE  OF  CREDIT
----------------------------

The  Company has a $2,000,035 revolving line of credit.  The line bears interest
at 1.25% over the Wall Street Journal Prime Rate (currently 5.25) and is secured
by  all  accounts,  property  and  equipment and shareholder guaranty.  The line
matures  on  November  14,  2004.  Outstanding  advances  totaled $1,495,061 and
$733,743  at  March  31,  2004  and  December  31,  2003,  respectively.

NOTE  8  -  LONG-TERM  DEBT
---------------------------

The  Company  has  the  following  long-term  debt  as  of:
<TABLE>
<CAPTION>
                                                     March 31,     December 31,
                                                       2004             2003
                                                       ----             ----

          $450,000  line  of credit with
          interest payable monthly at 1.5%
          over Wall Street Prime secured by
          all assets of Zenex Communications
          and the personal guaranty of certain
<S>                                                  <C>            <C>
          Directors                                     450,000        450,000

          Note  payable  secured  by  all
          accounts, equipment  and  general
          intangibles,  bearing interest  at
          2.75%  over  New  York  Prime (6.75%)
          due  in  monthly  installments  of
          $17,581  through  November  2006              506,057        565,473
</TABLE>



                                       15
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  8  -  LONG-TERM  DEBT  (continued)
----------------------------------------
<TABLE>
<CAPTION>
                                                     March 31,     December 31,
                                                       2004             2003
                                                       ----             ----

          Notes  payable to shareholder bearing
          interest at 5% due in monthly
          installments of  $5,000  through
          March  2005 with a balloon payment
<S>                                                  <C>            <C>
          of $120,000 in September 2004                  179,569        204,569

          0%  to 8.99% fixed rate notes secured
          by transportation equipment due in
          varying monthly  installments
          through  Sept.  2005                            53,299         64,379

          4%  fixed  rate note secured by
          equipment, due in monthly installments
          of $1,825 through  May  2004                     1,748          7,146
                                                     -----------    -----------

                                                       1,190,673      1,291,567

          Less:  current  portion  of
            long-term  debt                              852,765        872,401
                                                     -----------    -----------

                                                     $   337,908    $   419,166
                                                     ===========    ===========
</TABLE>

Maturities  of  long-term  debt  as  of  March  31,  2004,  are  as  follows:
<TABLE>
<CAPTION>
                         Year                        Amount
                         ----                        ------
<S>                                               <C>
                         2005                     $    209,315
                         2007                          128,593
                                                  ------------
                                                  $    337,908
                                                  ============
</TABLE>

Interest  expense  for  the  three  months  ended  March  31, 2004, was $44,609.

NOTE  9  -  INCOME  TAXES
-------------------------

At  December  31,  2003,  the  Company had net operating losses of approximately
$3,900,000  available to reduce future federal and state taxable income.  Unless
utilized,  the  carry forward amounts will begin to expire in 2012.  For federal
and  state  tax purposes, the Company's net operating loss carry forward amounts
are  subject  to  an annual limitation due to a greater than 50% change in stock
ownership,  as  defined  by  federal  and  state  tax  law.

Under  the  provisions  of  FAS-109,  Accounting  for Income Taxes, deferred tax
liabilities  and  assets are measured using the applicable tax rate based on the
taxable  and  deductible  temporary differences and operating loss carry forward
amounts.  Taxable  temporary  differences  result principally from the excess of
depreciation  for  tax purposes over the amount deducted for financial reporting
purposes.  Deductible  temporary   differences  and  the  operating  loss  carry
forward,  giving  rise  to  deferred  tax  assets,  are  reduced  by a valuation
allowance  if  it  is  more likely than not that some or all of the deferred tax
assets  will  not  be  realized.


                                       16
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  9  -  INCOME  TAXES  (continued)
--------------------------------------

The  components  of  the  net  deferred  tax  asset  are  as  follows:
<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                   2004           2003
                                                   ----           ----
<S>                                           <C>             <C>
     Deferred  tax  liability
       on depreciation                        $   (42,000)    $   (48,000)
     Deferred  tax  asset  for  loss
       carry forward                            1,334,150       1,340,150
                                              -----------     -----------
     Deferred  tax  asset                       1,292,150       1,292,150
     Less:  valuation  allowance                  245,150         245,150
                                              -----------     -----------

     Net  deferred  tax  asset                $ 1,047,000     $ 1,047,000
                                              ===========     ===========
</TABLE>

The  Company  has  established  a  valuation  allowance for a portion of its net
deferred  tax  asset  due  to the ownership changes limitation on the use of the
loss  carry  forward.

NOTE  10  -  BACKLOG
--------------------

The  estimated  gross revenue on work performed on signed contracts at March 31,
2004,  was  $3,172,219.

NOTE  11  -  EARN-OUT  CONVERSION
---------------------------------

Prestige,  a   wholly   owned   subsidiary  of  the  Company,   acquired   Zenex
Communications  on  February  19, 1999.  The terms of the acquisition included a
provision  whereby  the  sellers  may  earn additional amounts if the cumulative
collected  gross  sales revenue reaches certain levels, (the "earn-out rights").
In  accordance  with  the  Agreement,  $317,647  in  earn-out  rights was due on
December  30,  2001.

In  August  2002,  an  Agency  Agreement  was  signed with a related party, (the
"Agent")  for  assistance in commercial debt restructuring and conversion of the
earn-out  rights  obligation  into  equity.  Under  the  terms  of  the   Agency
Agreement,  the Agent contacted and offered a Conversion Agreement to the former
shareholders of Prestige.  The Agent is to be compensated with 700,000 shares of
common stock.  The deemed value of the conversion is $0.52 per share.  Under the
terms  of  the  Conversion  Agreement,  certain  former   Prestige  shareholders
converted  their  earn-out  rights to Company stock.  1,794,268 shares of common
stock  were issued for the conversion and 700,000 shares issued under the Agency
Agreement.  As  of  March  31,  2004,  approximately  89% of the former Prestige
shareholders  agreed  to  the  conversion.

NOTE  12  -  COMMITMENTS  AND  CONTINGENCIES
--------------------------------------------

In  regard  to  the  Red  River  sale  discussed  in Note 18, the Company is the
guarantor on notes totaling approximately $327,641.  In the event that Red River
does  not  sign  the  option  agreement  and execute an operating agreement, the
Company  will  be  required to service approximately $7,000 in monthly principal
and  interest  payments.


                                       17
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  12  -  COMMITMENTS  AND  CONTINGENCIES  (continued)
---------------------------------------------------------

The Company warrants its work in the normal course of business.  In management's
opinion,  there were no outstanding claims which would have a material effect on
the  Company's  operations  or  financial  position.
The  Company  maintains  cash  balances  at  several  banks.  Accounts  at  each
institution  are  insured  by  the  Federal  Deposit Insurance Corporation up to
$100,000.  Any amounts in excess of this would not be insured if the institution
should  fail.

NOTE  13  -  EARNINGS  PER  SHARE
---------------------------------
<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                   2004           2003
                                                   ----           ----
<S>                                           <C>             <C>
     Primary  earnings  per  share:
      (in  thousands)
      Common  shares  outstanding               47,836,558      47,836,558
      Weighted average shares outstanding       47,836,558      47,836,558
                                               -----------     ------------
      Earnings  (loss)  per  share             $     (.010)    $      .028
                                               ===========     ===========

    Fully  diluted  earnings  per  share:
      Common  shares  outstanding               78,536,558       78,536,558
      Weighted  average  shares  outstanding    78,536,558       78,536,558
                                               -----------     ------------
      Earnings  (loss)  per  share             $     (.006)    $       .017
                                               ===========     ============
</TABLE>

NOTE  14  -  LETTER  OF  CREDIT
-------------------------------

At  March  31,  2004  the  Company had a $175,000 letter of credit issued to its
insurance  carrier  that  matures  on  January  16,  2005.

NOTE  15  -  STOCK  OPTIONS
---------------------------

In  accordance  with the terms of an April 1999 loan agreement with Federal Bank
Centre, a five-year option was granted to the bank to purchase 500,000 shares of
the  Company's  common  stock  for  $0.15  per  share.

In  accordance  with  the  terms  of  a  January  2001  loan  agreement  with  a
shareholder, a five-year option was granted for the purchase of 1,200,000 shares
of  the  Company's  common  stock  for  $0.10  per  share.

In  connection with the terms of the Agreement and Plan of Split Off and Merger,
signed  September  27,  2002,  Tim  Aduddell  was  granted an option to purchase
30,000,000  shares  of  common  stock  for  $0.04  per  share.

In  connection  with  the  financing  of certain equipment described in  200,000
options  at  $0.08  per  share  were  granted.


                                       18
<PAGE>
..                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  16  -  RELATED  PARTY  TRANSACTION
----------------------------------------

Aduddell Roofing leases office and warehouse space from Aduddell Holdings, Inc.,
a  corporation  wholly  owned  by  Tim  Aduddell,  a majority shareholder of the
Company.  The  lease  is  for  one  year and expires on September 30, 2004.  The
monthly  lease  payments are $16,250.  For the three months ended March 31, 2004
rent  expense  totaled  $50,000.

NOTE  18  -  DISCONTINUED  OPERATIONS
-------------------------------------

Zenex Communications, a subsidiary of the Company, entered into three agreements
(the  "Red  River  Agreements")  with  Red River Networks, LLC ("Red River"), an
Oklahoma  limited  liability  company,  effective  November 25, 2002.  Red River
provides consulting and related services in the long distance telecommunications
industry.  Zenex  Communications  is  the owner of direct long distance services
and  prepaid  accounts  and  is  in  the  business  of  providing  long distance
telecommunications,  in  part,  by  means of its own switching equipment.  Zenex
Communications  was unable to pay the amount owed to Global Crossings Bandwidth,
Inc. ("Global"), Zenex Communications' primary carrier of long distance traffic.
In  an  attempt  to prevent the termination of services from Global and to allow
Zenex  Communications to continue to operate in a limited fashion and windup its
affairs in an orderly manner, Zenex Communications and Red River agreed that (a)
Red  River would acquire Zenex Communications Customers (Book of Business) under
the  Purchase  Agreement  (b)  Zenex  Communications would issue to Red River an
option  to  acquire Zenex Communications' equipment under the terms of an Option
Agreement,  and  (c)  Zenex  Communications  would  retain  Red River to provide
certain services on the terms and conditions set forth in the Service Agreement.
The  three  agreements  effectively terminated the telecommunications segment of
the  Company.

Purchase  Agreement

Under  the  terms  of  the  Purchase  Agreement,  Red River agreed to pay Global
$27,843  to  prevent  the  immediate  termination  of Zenex Communications' long
distance  services  and  to  buy  Zenex  Communications' Book of Business, which
includes  all  of  the  Customers and pre-paid accounts of Zenex Communications.

Option  Agreement

Under  the  terms  of  the Option Agreement (the "Option"), Zenex Communications
granted  Red River the exclusive and irrevocable option to purchase all of Zenex
Communications'   rights,   title,  and   interest  in  certain   switching  and
telecommunications  equipment  used in the direct long distance service provided
by  Zenex  Communications.  Additionally,  Red  River  was  to  assume   certain
promissory notes with a remaining balance of approximately $332,000.  The option
expired  on  April  30, 2003, and there is no assurance that Red River will sign
the  option  agreement.



                                       19
<PAGE>

                            ZENEX INTERNATIONAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE  18  -  DISCONTINUED  OPERATIONS  (continued)
--------------------------------------------------

Service  Agreement

Under  the  terms of the Service Agreement, Red River agreed to provide to Zenex
Communications  on  a nonexclusive basis, services relating to the operations of
the equipment under the Option Agreement for the benefit of the Book of Business
purchased  by  Red  River  under  the  Purchase Agreement.  Zenex Communications
agreed  to  pay  Red  River  a  fee  in  the  amount  of the accounts receivable
outstanding  at  November  25,  2002,  approximately  $632,000, and all accounts
receivable arising during  the  term  of  the  Service  Agreement. Additionally,
Zenex  Communications  directed  Red  River  to  pay  certain operating and debt
service  costs  of  Zenex  Communications.






























                                       20
<PAGE>

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

     We  are  engaged  in  the  commercial and industrial roofing and re-roofing
businesses  through  Aduddell  Roofing & Sheet Metal, Inc. ("Aduddell Roofing").
The  terms  "Zenex", "we", "our" and "us" and other similar terms refer to Zenex
International,  Inc. and its direct and indirect subsidiaries, unless we specify
otherwise.  Zenex  (R)  is  our  registered  trademark.  All  other trade names,
trademarks and product names in this report are the property of their respective
owners.

                           FORWARD-LOOKING STATEMENTS

     This  quarterly  report  on Form 10-QSB includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities  Act),  and  Section  21E  of the Securities Exchange Act of 1934, as
amended   (the  Exchange  Act),   which   can  be   identified  by  the  use  of
forward-looking  terminology  such  as:   "may",  "might",   "could",   "would",
"believe",  "expect",  "intend",   "plan",  "seek",  "anticipate",   "estimate",
"project"  or  "continue" or the negative thereof or other variations thereon or
comparable  terminology. All statements other than statements of historical fact
included  in this quarterly report on Form 10-QSB, including without limitation,
the  statements  under  "Item 2. Management's Discussion and Analysis or Plan of
Operation"  and  located  elsewhere  herein regarding our financial position and
liquidity  are forward-looking statements. These forward-looking statements also
include,  but  are  not  limited  to:

          -    our  ability  to  expand  Zenex's  business;

          -    actions  of  our  competitors;  and

          -    statements  regarding  our  anticipated revenues, expense levels,
               liquidity  and  capital resources and projections of when we will
               achieve  break-even  or  positive  operating  cash  flow.

     Although  we  believe  the  expectations  reflected in such forward-looking
statements are reasonable, we can give no assurance such expectations will prove
to have been correct. Important factors with respect to any such forward-looking
statements,  including  certain  risks and uncertainties that could cause actual
results  to differ materially from our expectations (Cautionary Statements), are
disclosed  in  this  quarterly  report  on  Form  10-QSB.

     These  forward-looking   statements  involve   known  and   unknown  risks,
uncertainties  and  other factors that may cause our actual results, performance
or  achievements to be materially different from any future results, performance
or  achievements  expressed  or  implied by such forward-looking statements. All
subsequent  written  and  oral  forward-looking statements attributable to us or
persons  acting  on  our behalf are expressly qualified in their entirety by the
Cautionary  Statements.  See  "Risk Factors" in our annual report on Form 10-KSB
for  further  information  regarding  risks  and  uncertainties  related  to our
businesses.


                                       21
<PAGE>

     The  following   discussion  should   be  read  in  conjunction   with  our
consolidated  financial  statements  and  notes  thereto.

Introduction

     Our  revenues  are  derived  primarily from comprehensive roofing services,
including re-roofing, restoration and repair, new roof construction, sheet metal
fabrication  and  waterproofing.  We  also  provide  limited residential roofing
services.  We  also offer maintenance services, which provide recurring revenues
and  ongoing  interaction  with  our customers.  Almost all our revenues for the
three  months  ended  March 31, 2004, were derived from re-roofing, restoration,
and  repair  services.  Revenues  from  fixed-price  construction and renovation
contracts  are generally accounted for on a percentage-of-completion basis using
the  cost-to-cost  method.  The  cost-to-cost  method  measures  the  percentage
completion of a contract based on total costs incurred to date compared to total
estimated  costs to completion.  Typically, because of winter weather during the
first  and fourth calendar quarters of each year, we have experienced periods of
relatively  lower  revenues  and gross profits with no corresponding decrease in
selling,  general  and  administrative  expenses.   Cost  of  revenues  consists
primarily  of compensation and benefits to field staff, materials, subcontracted
services,  parts and supplies, depreciation, fuel and other vehicle expenses and
equipment rentals.  Our gross profit percentage, which is gross profit expressed
as  a  percentage  of revenues, depends primarily on the relative proportions of
costs  related  to labor and materials.  On jobs in which a higher percentage of
the  cost of revenues consists of labor costs, we typically achieve higher gross
margins  than  on  jobs  where materials represent more of the cost of revenues.
Margins  are  also affected by the competitive bidding process and the technical
difficulty  of  the  project.  New  roof  construction work is more likely to be
competitively  bid   than  re-roofing,   restoration  and  repair.    Typically,
re-roofing, restoration and repair jobs are more labor intensive and have higher
margins  than  new  roof  construction.

Seasonal  and  Cyclical  Nature  of  the  Commercial  Roofing  Industry

     The  construction  industry  is  cyclical  and  is  influenced  by seasonal
factors,  as construction activities are usually lower during winter months than
other  periods.  We attempt to increase winter productivity by concentrating our
business in the southern half of the United States.  Nevertheless, we expect our
revenues  and  operating results generally will be lower in the first and fourth
quarters.

Retention

     Retention  is  typically  required  by  roofing  contracts  for  commercial
construction.  Retention  (defined  as  amounts  withheld from progress billings
until  final  and satisfactory contract completion) is typical on new commercial
construction  work  for  both the sheet metal and roofing operations.  Retention
typically  ranges from 5% to 10% of the contract, and may be reduced at the time
of  final billing of our portion of the contract.  The balance may be held until
final  closeout of the project, including the work of other subcontractors.  The
amount  of  retention  will  vary  based  upon  the  mix  and timing of contract
completion.


                                       22
<PAGE>

Discontinued  Operations

     Before  the  acquisition  of Aduddell Roofing effective October 1, 2002, we
were  primarily engaged in the wholesale of telecommunication services through a
subsidiary,  Zenex  Communications.  In  2001,  Zenex  Communications  lost  its
largest  customer,  and  never  fully  recovered   in  a  struggling   industry.
To  facilitate  continued service to its customers and permit an orderly winding
up of its affairs, Communications entered into several agreements with Red River
Networks,  LLC,  an  unaffiliated  entity,  in  November  2003.    Under   these
agreements,   Red  River   purchased  Communications'   service  contracts  (its
customers)  for  $27,843  and  acquired  an  option  to purchase Communications'
switching  and  other  telecommunications equipment for the assumption of office
leases  and  $525,000 in borrowings that are guaranteed by a third party and the
Company.  The  bank  was  unwilling  to  refinance  the  loans  to Red River and
therefore  required  the  third party guarantor to refinance the loans.  The Red
River  option  expired  on  April  30,  2003.  While  the parties have continued
negotiations  since the expiry and management believes the Red River transaction
will  be  closed,  there  is  no assurance that Red River will sign an operating
lease  to provide funds to pay the obligations.  In the event Red River does not
agree  to continue operating the business, we would again become responsible for
paying  the  borrowing  obligations  that  Red  River  is  currently  paying.

Critical  Accounting  Policies  and  Estimates

     General.  Our discussion and analysis of financial condition and results of
operations  are  based  upon  our  December 31, 2003 consolidated balance sheet,
which  was  prepared in accordance with accounting principles generally accepted
in the United States and our financial statements as of and for the three months
ended  March  31, 2004 and 2003, that are reviewed in accordance with Statements
on Standards for Accounting and Review services issued by the American Institute
of  Certified Public Accountants.  The preparation of these financial statements
requires  us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets  and  liabilities.  On  an  ongoing  basis,  we  evaluate  our estimates,
including  those related to allowance for doubtful accounts, the useful lives of
fixed  assets,  impairment  of  long-lived assets and income taxes.  We base our
estimates  on  historical  experience  and  on various other assumptions that we
believe  to be reasonable under the circumstances, the results of which form the
basis  for  making judgments about the carrying values of assets and liabilities
that  are  not  readily  apparent from other sources.  Actual results may differ
from  these  estimates  under  different  assumptions  or  conditions.

     We  believe  the  following  critical  accounting  policies affect our more
significant  judgments and estimates used in the preparation of our consolidated
financial  statements.

     Revenue  Recognition.  We  recognize  fixed  price contract revenues on the
percentage-of-completion  method  of  accounting,  measured by the percentage of
cost incurred to date to the estimated total cost for each contract. We consider
the  total  cost  method  to  be  the  best available measure of progress on the
contracts.  We  recognize  revenues  from cost-plus-fee contracts based on costs


                                       23
<PAGE>

incurred  during  the  period  plus the fee earned, measured by the cost-to-cost
method.

     Contract  costs  include  all  direct  material  and  labor costs and those
indirect  costs  related  to  contract  performance,  such  as  indirect  labor,
interest,  depreciation  and  supplies. Our general and administrative costs are
charged  to  expense  as  incurred.  We  make provisions for estimated losses on
uncompleted contracts in the period in which such losses are determined. Changes
in  job  performance,  job conditions, and estimated profitability may result in
revisions  to  costs  and  income, which we recognize in the period in which the
revisions  are  determined.

     The  asset  "Costs  and  estimated  earnings  in  excess  of   billings  on
uncompleted  contracts"  represents  revenues  recognized  in  excess of amounts
billed.  The  liability  "Billings  in excess of costs and estimated earnings on
uncompleted  contracts"  represents  billings  in excess of revenues recognized.

     Property  and  Equipment. Property and equipment are stated at cost, net of
accumulated  depreciation   and   amortization.   Property  and  equipment   are
depreciated  using  straight-line  and  accelerated  methods  over the estimated
useful  lives  of  the  assets,  which  range  from  five  to  ten  years.

     Changes  from  the  Prior Period.  We have not made any material changes to
our  critical accounting estimates or assumptions or the judgments affecting the
application  of  those  estimates  or  assumptions.

Results  of  Operations

     Revenues.  The  revenues  for  the  three months ended March 31, 2004, were
$2,396,872 compared to revenues of $1,477,008.  The increase in revenues was due
to  expanding  our  sales  in  existing  markets and expanding into new markets.
Typically,  because  of  winter  weather during the first quarter, we experience
lower  revenues and gross profits.  By increasing our market base both in number
of  customers  and  geographic  location we have increased revenues 62% over the
prior  quarterly period.  We feel that continuing this strategy will offset some
of  the  seasonal  variations  and  afford  improved  long-term  results.

     Operating Expenses. Operating expenses for the three months ended March 31,
2004,  were  $3,178,233  compared  to expense of $2,059,573 for the three months
ended  March 31, 2003. Operating expenses as a percentage of sales for the three
months  ended  March  31,  2004  and  2003  were  133% and 139%, respectively, a
decrease  of  6%.  Losses during the first quarter are typical for our industry.
Although  revenues  are  typically  lower  in  the  first  quarter than in other
quarters,  there  is  no   corresponding  decrease   in  selling,   general  and
administrative  expenses.  Operating  expenses  were  also adversely affected by
increases  in  insurance  costs,  specifically  workers compensation and general
liability,  travel costs and labor costs. We were particularly impacted by lower
profit  margins  on  work  that  we  sought  to  expand our market base and keep
employees  working.  As we expand our market and build relationships, we believe
our  profit  margins  will  improve.

     Discontinued  Operations.  The  operations  of  Zenex  Communications  were
discontinued  in  the fourth quarter of 2002. The discontinued operations had no
affect  upon operations for the three months ended March 31, 2004. For the three


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months  ended  March  31,  2003,  we  realized  a  net gain of $185,763 from the
discontinued  operations.   The  net  gain  includes  a  loss  on  the  sale  of
discontinued  operations  $1,127,014 and a gain from the forgiveness of debt due
to  the  insolvency  filing  of  Zenex  Communications  of  $1,321,777.

     Net  Loss.  The  net  loss  for  the three months ended March 31, 2004, was
$455,038  compared  to  a  loss of $141,652 for the three months ended March 31,
2003.  A net gain of $185,763 resulted from the discontinued operations of Zenex
Communications.   Without   the  extraordinary   gain   from   the  discontinued
operations,  the  2003  loss  would  have  been  $327,415.

     Off-Balance Sheet Arrangements.  There have been no material changes to the
off-balance  sheet  arrangements  (consisting  of  operating  leases  and a loan
guaranty)  that  we  discussed  in  our  annual  report  on  Form  10-KSB.

Liquidity  and  Capital  Resources

     From  December  31,  2003  to  March  31, 2004, total assets decreased from
$8,239,663  to  $7,796, 809, liabilities increased from $4,413,354 to $4,426,573
and  shareholder's  equity   decreased   from  $3,826,309  to  $3,370,246.  Cash
decreased from $400,407 to $155,674.  For the three months ended March 31, 2004,
net  cash used by operating activities was $662,792.  Net cash used in financing
activities  was $103,624.  Net cash provided by financing activities during this
period was $521,683, which came from line of credit advances.  At March 31, 2004
we  had  working  capital  of  $352,190  compared  to  $964,366.

     The  decrease  in  working  capital was due to the operating loss sustained
during  the  three-month  period  ended  March  31, 2004. The operating loss was
primarily  attributable  to  the  lower profit margins on work that we sought to
expand  our  market  base.  While  this strategy may adversely affect short-term
operating  results,  we  believe  the  long-term  results will prove beneficial.
Further,  we  have  sufficient capital resources to undertake this strategy. Our
accounts receivable are ample and we have significant capacity under our line of
credit.  As we move into the second and third quarters - typically our strongest
quarters - we believe improved net revenues will more than restore the decreases
experienced  in  the  first  quarter.

Item  3.  Controls  and  Procedures

     As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of
the  filing  date  of  this  report,  we  carried   out  an  evaluation  of  the
effectiveness  of  the  design  and  operation  of  our  disclosure controls and
procedures.  This  evaluation was carried out under the supervision and with the
participation  of  our  principal  executive officer and our principal financial
officer,  who  concluded  that   our  disclosure  controls  and  procedures  are
effective.  There  have  been no significant changes in our internal controls or
in  other factors, which could significantly affect internal controls subsequent
to  the  date  we  carried  out  our  evaluation.

     Disclosure  controls  and procedures are controls and other procedures that
are  designed to ensure that information required to be disclosed in our reports


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<PAGE>

filed  or  submitted  under  the Securities Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules  and  forms.  Disclosure  controls  and procedures
include,  without  limitation,  controls  and procedures designed to ensure that
information required to be disclosed in our reports filed under the Exchange Act
is accumulated and communicated to management, including our principal executive
officer  and  our  principal  financial officer, as appropriate, to allow timely
decisions  regarding  required  disclosure.

                          PART II - OTHER INFORMATION

Item  6.  Exhibits  and  Reports  on  Form  8-K

     (a)     Exhibits

                31.1     Rule  13a-14(a)  Certifications

                32.1     Section  1350  Certification

     (b)     Form  8-K's

             None

                                   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.

                                     Zenex  International,  Inc.

May  20,  2004                       By:/s/Ron  Carte
                                        ----------------------------------------
                                        Ron Carte
                                        President




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