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

                           FORM 10-KSB
(Mark One)
     [X]  Annual Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934

           For the Fiscal Year Ended December 31, 2000

          Transition Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934

                Commission File Number   000-32189

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

          UTAH                                  87-0472608
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)               Identification No.)

      1037 East 3300 South #203, Salt Lake City, Utah 84106
       (Address of principal executive offices) (Zip Code)

Issuer's telephone no.:  (801) 467-6715

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

Securities registered pursuant to Section 12(g) of the Exchange
Act:   Common

     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

     Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and
no disclosure will be contained, to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.   [ ]

     State the issuer's revenues for its most recent fiscal year.
$ -0-

     State the aggregate market value of the voting stock held by
non-affiliates computed by reference  to the price at which the
stock was sold, or the average bid and ask prices of such stock as
of a specified date within 60 days.    $ 0

     State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

           Class                    Outstanding as of Decmber 31, 2000
Common Stock, Par Value $.001                    1,412,000

               DOCUMENTS INCORPORATED BY REFERENCE
                               NONE
Transitional Small Business Disclosure Format.   Yes     No [X]


                         CHALLEDON, INC.

                        TABLE OF CONTENTS
                                                                         Page
                              PART I

Item 1.   Description of Business  . . . . . . . . . . . . . . .            3

Item 2.   Description of Property. . . . . . . . . . . . . . . .            9

Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . .            9

Item 4.   Submission of Matter to a Vote of Security
          Holders. . . . . . . . . . . . . . . . . . . . . . . .           10

                             PART II

Item 5.   Market for Common Equity and Related
          Stockholder Matters. . . . . . . . . . . . . . . . . .           10

Item 6.   Management's Discussion and Analysis or
          Plan of Operation. . . . . . . . . . . . . . . . . . .           12

Item 7.   Financial Statements . . . . . . . . . . . . . . . . .           15

          Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure . . . . . . . .           26

                             PART III

Item 9.   Directors, Executive Officers, Promoters and
          Control persons; Compliance with
          Section 16(a) of the Exchange Act. . . . . . . . . . .           26

Item 10.  Executive Compensation . . . . . . . . . . . . . . . .           28

Item 11.  Security Ownership of Certain Beneficial
          Owners and Management. . . . . . . . . . . . . . . . .           28

Item 12.  Certain Relationships and Related
          Transactions . . . . . . . . . . . . . . . . . . . . .           29

Item 13.  Exhibits and Reports on Form 8-K . . . . . . . . . . .           30

          SIGNATURES . . . . . . . . . . . . . . . . . . . . . .           31






                              PART I

Item 1.  Description of Business

Business Development

    Challedon, Inc. (the "Company") was organized on May 24, 1990,
under the laws of the State of Utah.  Since its inception, the
Company has not engaged in any material business operations.

    The Company is currently seeking potential operating
businesses and business opportunities with the intent to acquire or
merge with such businesses.  The Company is considered a
development stage company and, due to its status as a "shell"
corporation, its principal purpose is to locate and consummate a
merger or acquisition with a private entity.  Because of the
Company's current status having minimal assets and no operating
history, ir the Company does successfully acquire or merge with an
operating business opportunity, it is likely that current
shareholders will experience substantial dilution and there will be
a probable change in control of the Company.

    In December 2000, the Company voluntarily filled a
registration statement on Form 10-SB in order to make information
concerning itself more readily available to the public.  As a
result of filing its registration statement, the Company is
obligated to file with the Securities and Exchange Commission (the
"Commission") certain interim and periodic reports including an
annual report containing audited financial statements.  The Company
anticipates that it will continue to file such reports,
notwithstanding the fact that, in the future, it may not otherwise
be required to file such reports based on the criteria set forth
under Section 12(g) of the Exchange Act.

    Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any merger or acquisition.  Accordingly, any
acquired entity must also provide audited financial statements for
at least the two most recent fiscal years or, if it has been in
business for less than two years, audited statements will be
required from the period of inception.  This could limit the
Company's potential target business opportunities due to the fact
that many private business opportunities either do not have audited
financial statements, or are unable to produce audited statements
without undo time and expense.

    The Company's principal executive offices are located at 1037
East 3300 South #203, Salt Lake City, Utah 84106, and its telephone
number is (801) 467-6715.



Business of Issuer

    The Company has no operating history and no representation is
made, nor is any intended, that the Company will be able to carry
on future business activities successfully.  Further, there can be
no assurance that the Company will have the ability to acquire or
merge with an operating business, business opportunity or property
that will be of material value to the Company.

    The Company does not have significant cash or other material
assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue
as a going concern.  Accordingly, the Company's independent
accountants have included in the Company's financial statements a
going concern qualification footnote.  Further, there can be no
assurance that the Company will have the ability to acquire or
merge with an operating business, business opportunity or property
that will be of material value to the Company.

    Management plans to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or
business opportunities.  The Company currently has no commitment or
arrangement, written or oral, to participate in any business
opportunity and management cannot predict the nature of any
potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and
negotiations with any potential business or business opportunity.

Sources of Business Opportunities

    Management of the Company intends to use various resources in
the search for potential business opportunities including, but not
limited to, the Company's officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists,
members of the financial community and others who may present
management with unsolicited proposals.  Because of the Company's
lack of capital, it may not be able to retain on a fee basis
professional firms specializing in business acquisitions and
reorganizations.  Rather, the Company will most likely have to rely
on outside sources, not otherwise associated with the Company, that
will accept their compensation only after the Company has finalized
a successful acquisition or merger.  To date, the Company has not
engaged or entered into any discussion, agreement or understanding
with a particular consultant regarding the Company's search for
business opportunities.  Presently, no final decision has been made
nor is management in a position to identify any future prospective
consultants for the Company.



    If the Company elects to engage an independent consultant, it
will look only to consultants that have experience in working with
small companies in search of an appropriate business opportunity.
Also, the consultant must have experience in locating viable merger
and/or acquisition candidates and have a proven track record of
finalizing such business consolidations.  Further, the Company
would like to engage a consultant that will provide services for
only nominal up-front consideration and is willing to be fully
compensated only at the close of a business consolidation.

    The Company does not intend to limit its search to any
specific kind of industry or business.  The Company may investigate
and ultimately acquire a venture that is in its preliminary or
development stage, is already in operation, or in various stages of
its corporate existence and development.  Management cannot predict
at this time the status or nature of any venture in which the
Company may participate.  A potential venture might need additional
capital or merely desire to have its shares publicly traded.  The
most likely scenario for a possible business arrangement would
involve the acquisition of or merger with an operating business
that does not need additional capital, but which merely desires to
establish a public trading market for its shares.

Evaluation

    Once the Company has identified a particular entity as a
potential acquisition or merger candidate, management will seek to
determine whether acquisition or merger is warranted or whether
further investigation is necessary.  Such determination will
generally be based on management's knowledge and experience, or
with the assistance of outside advisors and consultants evaluating
the preliminary information available to them.  Management may
elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities.  However,
because of the Company's lack of capital it may not have the
necessary funds for a complete and exhaustive investigation of any
particular opportunity.

    In evaluating such potential business opportunities, the
Company will consider, to the extent relevant to the specific
opportunity, several factors including potential benefits to the
Company and its shareholders; working capital, financial
requirements and availability of additional financing; history of
operation, if any; nature of present and expected competition;
quality and experience of management; need for further research,
development or exploration; potential for growth and expansion;
potential for profits; and other factors deemed relevant to the
specific opportunity.

    Because the Company has not located or identified any specific
business opportunity as of the date hereof, there are certain
unidentified risks that cannot be adequately expressed prior to the
identification of a specific business opportunity.  There can be no
assurance following consummation of any acquisition or merger that
the business venture will develop into a going concern or, if the
business is already operating, that it will continue to operate
successfully.  Many of the potential business opportunities
available to the Company may involve new and untested products,
processes or market strategies which may not ultimately prove
successful.

Form of Potential Acquisition or Merger

    Presently, the Company cannot predict the manner in which it
might participate in a prospective business opportunity.  Each
separate potential opportunity will be reviewed and, upon the basis
of that review, a suitable legal structure or method of
participation will be chosen.  The particular manner in which the
Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and
desires of the Company and management of the opportunity, and the
relative negotiating strength of the parties involved.
Actual participation in a business venture may take the form of an
asset purchase, lease, joint venture, license, partnership, stock
purchase, reorganization, merger or consolidation.  The Company may
act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, the Company
does not intend to participate in opportunities through the
purchase of minority stock positions.

    Because the Company has only minimal assets and no operating
history, if the Company does successfully acquire or merge with an
operating business opportunity, it is likely that the Company's
present shareholders will experience substantial dilution and there
will be a change in control of the Company.  Most likely, the
owners of the business opportunity which the Company acquires or
mergers with will acquire control of the Company following such
transaction.  Management has not established any guidelines as to
the amount of control it will offer to prospective business
opportunities, rather management will attempt to negotiate the best
possible agreement for the benefit of the Company's shareholders.

    Management does not presently intend to borrow funds to
compensate any persons, consultants, promoters or affiliates in
relation to the consummation of a potential merger or acquisition.
However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the
Company to attempt to raise additional funds.  As of the date
hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any
capital.  In the event the Company does need to raise capital, most
likely the only method available to the Company would be the
private sale of its securities.  These possible private sales would
most likely have to be to persons known by the directors of the
Company or to venture capitalists that would be willing to accept
the risks associated with investing in a company with no current
operation.  Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender.  Management will attempt to acquire
funds on the best available terms for the Company.  However, there
can be no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms reasonable or acceptable to the
Company.  There is also a possibility that the Company could sell
securities to its management or affiliates.

    In the case of a future acquisition or merger, there exists a
possibility that a condition of such transaction might include the
sale of shares presently held by officers and/or directors of the
Company to parties affiliated with or designated by the potential
business opportunity.  Presently, management has no plans to seek
or actively negotiate such terms.  However, if this situation does
arise, management is obligated to follow the Company's Articles of
Incorporation and all applicable corporate laws in negotiating such
an arrangement.  Under this scenario of a possible sale by officers
and directors, it is unlikely that similar terms and conditions
would be offered to all other shareholders of the Company or that
the shareholders would be given the opportunity to approve such a
transaction.

    In the event of a successful acquisition or merger, a finder's
fee, in the form of cash or securities, may be paid to persons
instrumental in facilitating the transaction.  The Company has not
established any criteria or limits for the determination of a
finder's fee, although it is likely that an appropriate fee will be
based upon negotiations by the Company and the appropriate business
opportunity and the finder.  Management cannot at this time make an
estimate as to the type or amount of a potential finder's fee that
might be paid.  It is unlikely that a finder's fee will be paid to
an affiliate of the Company because of the potential conflict of
interest that might result.  If such a fee was paid to an
affiliate, it would have to be in such a manner so as not to
compromise an affiliate's possible fiduciary duty to the Company or
to violate the doctrine of corporate opportunity.  Further, in the
unlikely event a finder's fee was to be paid to an affiliate, the
Company would have such an arrangement ratified by the shareholders
in an appropriate manner.

    Presently, it is highly unlikely that the Company will acquire
or merge with a business opportunity in which the Company's
management, affiliates or promoters have an ownership interest.
Any possible related party transaction of this type would have to
be ratified by a disinterested Board of Directors and by the
shareholders.  Management does not anticipate that the Company will
acquire or merge with any related entity.  Further, as of the date
hereof, none of the Company's officers, directors, or affiliates or
associates have had any preliminary contact or discussions with any
specific business opportunity, nor are there any present plans,
proposals, arrangements or understandings regarding the possibility
of an acquisition or merger with any specific business opportunity.

Rights of Shareholders

    It is presently anticipated by management that prior to
consummating a possible acquisition or merger, the Company, if
required by relevant state laws and regulations, will seek to have
the transaction ratified by shareholders in the appropriate manner.

    Under the corporation laws of the State of Utah, shareholders
of the Company may be entitled to assert dissenters' rights if the
Company acquires or merges with a business opportunity.
Shareholders will be  entitled to dissent from and obtain payment
of the fair value of their shares in the event of consummation of
a plan of merger to which the Company is a party, if approval by
the shareholders is required under applicable Utah law.  Also,
shareholders will be entitled to dissenters' rights if the Company
enters into a share exchange if the Company's shares are to be
acquired.  A shareholder who is entitled to assert dissenter's
rights and obtain of the fair value for their shares, may not
challenge the corporate action creating this entitlement, unless
the action is unlawful or fraudulent with respect to the
shareholder or the Company.  A dissenting shareholder shall refrain
from voting their shares in approval of the corporate action.  If
the proposed action is approved by the required vote of
shareholders, the Company must give notice to all shareholders who
delivered to the Company their written notice of dissent.

Competition

    Because the Company has not identified any potential
acquisition or merger candidate, it is unable to evaluate the type
and extent of its likely competition.  The Company is aware that
there are several other public companies with only nominal assets
that are also searching for operating businesses and other business
opportunities as potential acquisition or merger candidates.  The
Company will be in direct competition with these other public
companies in its search for business opportunities and, due to the
Company's lack of funds, it may be difficult to successfully
compete with these other companies.

Employees

    As of the date hereof, the Company does not have any employees
and has no plans for retaining employees until such time as the
Company's business warrants the expense, or until the Company
successfully acquires or merges with an operating business.  The
Company may find it necessary to periodically hire part-time
clerical help on an as-needed basis.

Facilities

    The Company is currently using as its principal place of
business the personal offices of a shareholder, James R. Glavas,
located in Salt Lake City, Utah.  Mr. Glavas is the father of the
Company's President, James E. Glavas.  The facilities are shared
with other businesses.  Although the Company has no written
agreement  and  pays no rent for the use of this facility, it is
contemplated that at such future time as the Company acquires or
merges with an operating business, the Company will secure
commercial office space from which it will conduct its business.
However, until such time as the Company completes an acquisition or
merger, the type of business in which the Company will be engaged
and the type of office and other facilities that will be required
is unknown.  The Company has no current plans to secure such
commercial office space.

Industry Segments

    No information is presented regarding industry segments.  The
Company is presently a development stage company seeking a
potential acquisition of or merger with a yet to be identified
business opportunity.  Reference is made to the statements of
income included herein in response to Part F/S of this Form 10-SB
for a report of the Company's operating history for the past two
fiscal years.

Item 2.  Description of Property

    The Company does not own any material property.

Item 3.  Legal Proceedings

    The Company is not a party to any material pending legal
proceedings and no such action by, or to the best of its knowledge,
against the Company has been threatened.




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

    No matters were submitted to a vote of the Company's
Securities Holders during the fourth quarter of the Company's
fiscal year ending December 31, 2000.

                             PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

    The Company intends to make an application to the NASD for the
Company's shares to be quoted on the OTC Bulletin Board.
The Company's application to the NASD will consist of current
corporate information, financial statements and other documents as
required by Rule 15c2-11 of the Securities Exchange Act of 1934, as
amended.  Inclusion on the OTC Bulletin Board permits price
quotations for the Company's shares to be published by such
service.  The Company is not aware of any established trading
market for its common stock nor is there any record of any reported
trades in the public market in recent years.  The Company believes
that most likely its shares will not be traded in the public market
until such time as a merger or acquisition can be consummated.
Also, future secondary trading of the Company's shares may be
subject to certain state imposed restrictions regarding shares of
shell companies.  Except for its application to the OTC Bulletin
Board, there are no plans, proposals, arrangements or
understandings with any person concerning the development of a
trading market in any of the Company's securities.  The Company's
common stock has not traded in a public market.

    The ability of an individual shareholder to trade their shares
in a particular state may be subject to various rules and
regulations of that state.  A number of states require that an
issuer's securities be registered in their state or appropriately
exempted from registration before the securities are permitted to
trade in that state.  Presently, the Company has no plans to
register its securities in any particular state.  Further, most
likely the Company's  shares will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), commonly referred to as the
"penny stock" rule.  Section 15(g) sets forth certain requirements
for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act.

    The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions.  Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:
registered and traded on a national securities exchange meeting
specified criteria set by the Commission; authorized for quotation
on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or
exempted from the definition by the Commission.  If the Company's
shares are deemed to be a penny stock, trading in the shares will
be subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with assets
in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.

    For transactions covered by these rules, broker-dealers must
make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase.  Additionally, for any
transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the first transaction, of a risk
disclosure document relating to the penny stock market.  A broker-
dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current
quotations for the securities.  Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held
in the account and information on the limited market in penny
stocks.  Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in the Company's
common stock and may affect the ability of shareholders to sell
their shares.

    As of December 31, 2000, there were 1,412,000 shares of the
Company's common stock issued and outstanding and 44 holders of
record of the Company's common stock, which figure does not take
into account those shareholders whose certificates are held in the
name of broker-dealers or other nominees.  Because there has been
no established public trading market for the Company's securities,
no trading history is presented herein.

    The Company did not file a registration statement with the
Commission in connection with the issuance of any of its
outstanding shares of commons stock.  In the absence of any
evidence that the Company ever filed a registration statement with
the Commission or with any other agency relating to the issuance of
shares, it is concluded that all shares were issued as restricted
securities.  Available corporate records indicate that all of the
Company's issued and outstanding shares of common stock were issued
between 1988 and 1998 in various private, isolated transactions.
The Company has relied upon the exemption provided by Section 4(2)
of the Act in the issuance of all of its shares.  No private
placement memorandum was used in relation to the issuance of
shares.



    The Company's outstanding shares may not be sold or otherwise
transferred unless pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), or
an appropriate exemption therefrom.  Shareholders desiring to sell
or transfer their share may rely upon the exemption provided by
Rule 144 of the 1933 Act.  In general, under Rule 144 as currently
in effect, a person (or persons whose shares are aggregated) who
has beneficially owned restricted shares of the Company for at
least one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined
under the Act), is entitled to sell, within any three-month period,
an amount of shares that does not exceed the greater of (i) the
average weekly trading volume in the Company's common stock, as
reported through the automated quotation system of a registered
securities association, during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding.  A person who
is not deemed to be an "affiliate" of the Company and has not been
an affiliate for the most recent three months, and who has held
restricted shares for at least two years would be entitled to sell
such shares without regard to the resale limitations of Rule 144.

Dividend Policy

    The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that
it will pay cash dividends or make distributions in the foreseeable
future.  The Company currently intends to retain and invest future
earnings to finance its operations.

Item 6.  Management's Discussion and Analysis or Plan of Operation

    The following information should be read in conjunction with
the consolidated financial statements and notes thereto appearing
elsewhere in this Form 10-KSB.

    The Company is considered a development stage company with
minimal assets or capital and with no significant operations or
income since its inception.  The costs and expenses associated with
the preparation and filing of the Company's registration statement
and periodic reports have been paid for by an advance from a
shareholder of the Company.  It is anticipated that the Company
will require only nominal capital to maintain the corporate
viability of the Company and necessary funds will most likely be
provided by the Company's officers and directors in the immediate
future.  However, unless the Company is able to facilitate an
acquisition of or merger with an operating business or is able to
obtain significant outside financing, there is substantial doubt
about its ability to continue as a going concern.

    In the opinion of management, inflation has not and will not
have a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition
or merger.  At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.

Plan of Operation

    During the next 12 months, the Company will actively seek out
and investigate possible business opportunities with the intent to
acquire or merge with one or more business ventures.  In its search
for business opportunities, management will follow the procedures
outlined in Item 1 above.  Because the Company lacks funds, it may
be necessary for the officers and directors to either advance funds
to the Company or to accrue expenses until such time as a
successful business consolidation can be made.  Management intends
to hold expenses to a minimum and to obtain services on a
contingency basis when possible.  Further, the Company's directors
will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business
opportunity provide their remuneration.  However, if the Company
engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Company to attempt to
raise additional funds.  As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital.  In the event the
Company does need to raise capital, most likely the only method
available to the Company would be the private sale of its
securities.  Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender.  There can be no assurance that the
Company will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.

    The Company does not intend to use any employees, with the
possible exception of part-time clerical assistance on an as-needed
basis.  Outside advisors or consultants will be used only if they
can be obtained for minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this
manner and to continue its search for business opportunities during
the next twelve months.

Net Operating Loss

    The Company has accumulated approximately $3,313 of net
operating loss carryforwards as of December 31, 2000, which may be
offset against taxable income and income taxes in future years
through 2020.  The use of these losses to reduce future income
taxes will depend on the generation of sufficient taxable income
prior to the expiration of the net operating loss carryforwards.
In the event of certain changes in control of the Company, there
will be an annual limitation on the amount of net operating loss
carryforwards which can be used.  No tax benefit has been reported
in the financial statements for the year ended December 31, 2000
because there is a 50% or greater chance that the carryforward will
not be used.  Accordingly, the potential tax benefit of the loss
carryforward is offset by a valuation allowance of the same amount.

Recent Accounting Pronouncements

    In June 1999, the Financial Accounting Standards Board
("FASB") issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which was later amended by
SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities   Deferral of the Effective Date of FASB No. 133."  SFAS
No. 133 established standards for the accounting and reporting for
derivative instruments, including certain derivative instruments
embedded in other contracts, and hedging activities.  The statement
generally requires recognition of gains and losses on hedging
instruments, based on changes in fair value or the earnings effect
of a forecasted transaction.  SFAS No. 133, as amended by SFAS No.
137, is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000.  Management does not believe that SFAS No. 133
or SFAS No. 137 will have a material impact on the Company's
financial statements.

Inflation

    In the opinion of management, inflation has not had a material
effect on the operations of the Company.

Risk Factors and Cautionary Statements

    This report contains certain  forward-looking statements.  The
Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements.  Forward-
looking statements involve risks and uncertainties that could cause
actual results to differ materially from those expressed in or
implied by the statements, including, but not limited to, the
following: the ability of the Company search for appropriate
business opportunities and subsequently acquire or merge with such
entity, to meet its cash and working capital needs, the ability of
the Company to maintain its existence as a viable entity, and other
risks detailed in the Company's periodic report filings with the
Securities and Exchange Commission.





Item 7.  Financial Statements

    The Company's financial statements as of and for the fiscal
years ended December 31, 2000 and 1999 have been examined to the
extent indicated in their report by H J & Associates, LLC, formerly
Jones, Jensen and Company, independent certified accountants, and
have been prepared in accordance with generally accepted accounted
principles and pursuant to Regulation S-B as promulgated by the
Commission.  The aforementioned financial statements are included
herein in response to Item 7 of this Form 10-KSB.




















                        CHALLEDON, INC.
                 (A Development Stage Company)

                      FINANCIAL STATEMENTS

                       December 31, 2000








        McGLADREY NETWORK                                 American Institute of
An Independently Owned Member                              Certified Public
      Worldwide Services                                      Accountants
  Through RSM International
                                                          Utah Association of
                                                           Certified Public
                                                              Accountants

                                                          SEC Practice Section
                                                            Private Companies
                                                            Practice Section
                     H J & ASSOCIATES, L.L.C.

           CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

                  INDEPENDENT AUDITORS' REPORT


To the Stockholders of
Challedon, Inc.
(A Development Stage Company)
Salt Lake City, Utah

We have audited the accompanying balance sheet of Challedon,
Inc. (a development stage company) as of December 31, 2000
and the related statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 2000
and 1999, and from inception on May 24, 1990 through December
31, 2000.  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 audits.

We conducted our audits in accordance with generally accepted
auditing standards.  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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Challedon, Inc. (a development stage company)
as of December 31, 2000 and the results of its operations
and its cash flows for the years ended December 31, 2000 and 1999,
and from inception on May 24, 1990 through December 31, 2000
in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
As discussed in Note 3 to the financial statements, the Company is
a development stage company with no significant operating results
to date, which raises substantial doubt about its ability to
continue as a going concern.  Management's plans in regard to these
matters are also described in Note 3.  The financial statements
do not include any adjustments that might result from the outcome
of the uncertainty.


HJ & Associates, LLC
Salt Lake City, Utah
February 3, 2001

50 South Main Street, Suite 1450 * Salt Lake City, Utah 84144 *
       Telephone (801) 328-4408 * Facsimile (801) 328-4461


                        CHALLEDON, INC.
                 (A Development Stage Company)
                         Balance Sheet

                             ASSETS

                                                             December 31,
                                                                 2000

CURRENT ASSETS

 Cash                                                        $     1,943

 Total Current Assets                                              1,943

 TOTAL ASSETS                                                 $    1,943


         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

 Accounts payable                                              $      862
 Due to related party (Note 4)                                        470
 Taxes payable                                                      1,100

  Total Current Liabilities                                         2,432

STOCKHOLDERS' EQUITY (DEFICIT)

 Common stock, $0.001 par value, 50,000,000 shares
  authorized; 1,412,000 shares issued and outstanding               1,412
 Additional paid-in capital                                         1,412
 Deficit accumulated during the development stage                  (3,313)

  Total Stockholders' Equity (Deficit)                               (489)

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)                                               $    1,943




                        CHALLEDON, INC.
                 (A Development Stage Company)
                    Statements of Operations

                                                             From
                                                         Inception on
                                       For the              May 24,
                                     Year Ended          1990 Through
                                     December 31,        December 31,
                                  2000         1999         2000

REVENUES                      $    -       $    -       $    -

EXPENSES

 General and administrative       2,119          110        3,313

  Total Expenses                  2,119          110        3,313

(LOSS) FROM OPERATIONS           (2,119)        (110)      (3,313)

NET (LOSS)                    $  (2,119)    $   (110)    $ (3,313)

BASIC (LOSS) PER SHARE        $   (0.00)    $  (0.00)













                         CHALLEDON, INC.
                 (A Development Stage Company)
          Statements of Stockholders' Equity (Deficit)


                                                                       Deficit
                                                                     Accumulated
                                             Additional              During the
                                Common Stock   Paid-In Subscriptions Development
                              Shares    Amount Capital   Receivable    Stage

Balance at inception on
 May 24, 1990                    -     $  -     $  -     $  -      $  -

Net loss for the period
 ended December 31, 1990         -        -        -        -         (174)

Balance at
 December 31, 1990               -        -        -        -         (174)

Common stock issued on
 subscription at $0.002 per
 share - September 27, 1991   350,000      350      350     (700)     -

Net loss for the year ended
 December 31, 1991               -        -        -        -         (115)

Balance at
 December 31, 1991            350,000      350      350     (700)     (289)

Net loss for the year ended
 December 31, 1992               -        -        -        -         (120)

Balance at
 December 31, 1992            350,000      350      350     (700)     (409)

Common stock issued on
 subscription at $0.002 per
 share, September 24, 1993    350,000      350      350     (700)     -

Net loss for the year ended
 December 31, 1993               -        -        -        -         (115)

Balance at
 December 31, 1993            700,000      700      700   (1,400)     (524)

Common stock issued on
 subscription at $0.002 per
 share, February 11, 1994    350,000       350      350     (700)     -

Common stock issued for
 services at $0.002 per share,
 September 30, 1994            2,500         3        2     -         -

Net loss for the year ended
 December 31, 1994              -         -        -        -         (115)

Balance at
 December 31, 1994         1,052,500   $ 1,053   $1,052  $(2,100)  $  (639)



                        CHALLEDON, INC.
                 (A Development Stage Company)
    Statements of Stockholders' Equity (Deficit) (Continued)

                                                                     Deficit
                                                                   Accumulated
                                             Additional              During the
                              Common Stock     Paid-In Subscriptions Development
                            Shares    Amount   Capital  Receivable     Stage
Balance at
 December 31, 1994        1,052,500   $ 1,053   $ 1,052   $(2,100)   $  (639)

Common stock issued for
 services at $0.002 per
 share, September 29, 1995    4,500         4         5      -          -

Net loss for the year ended
 December 31, 1995             -         -          -        -          (115)

Balance at
 December 31, 1995        1,057,000     1,057      1,057   (2,100)      (754)

Common stock issued on
 subscription at $0.002
 per share, May 17, 1996    350,000       350        350     (700)      -

Common stock issued for
 services at $0.002 per
 share, September 27, 1996    2,500         2          3     -          -

Net loss for the year ended
 December 31, 1996             -         -          -        -          (110)

Balance at
 December 31, 1996        1,409,500     1,409      1,410   (2,800)      (864)

Common stock issued for
 services at $0.001 per
 share, September 26, 1997    2,500         3          2     -          -

Performance on stock
 subscriptions                 -         -          -       2,800       -

Net loss for the year ended
 December 31, 1997             -         -          -        -          (110)

Balance at
 December 31, 1997        1,412,000     1,412      1,412     -          (974)

Net loss for the year ended
 December 31, 1998             -         -          -        -          (110)

Balance at
 December 31, 1998        1,412,000     1,412      1,412     -        (1,084)

Net loss for the year
 ended December 31, 1999       -         -          -        -          (110)

Balance at
 December 31, 1999        1,412,000   $ 1,412    $ 1,412  $  -       $(1,194)

                        CHALLEDON, INC.
                 (A Development Stage Company)
    Statements of Stockholders' Equity (Deficit) (Continued)

                                                                     Deficit
                                                                   Accumulated
                                             Additional              During the
                              Common Stock     Paid-In Subscriptions Development
                            Shares    Amount   Capital  Receivable     Stage

Balance at
 December 31, 1999        1,412,000  $ 1,412   $ 1,412   $   -      $ (1,194)

Net loss for the year
 ended December 31, 2000       -        -         -          -        (2,119)

Balance at
 December 31, 2000        1,412,000  $ 1,412   $ 1,412   $   -      $ (3,313)


                           CHALLEDON, INC.
                    (A Development Stage Company)
                       Statements of Cash Flows

                                                                      From
                                                                  Inception on
                                                    For the          May 24,
                                                  Year Ended       1990 Through
                                                 December 31,      December 31,
                                               2000        1999        2000

CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss                                   $ (2,119)    $  (110)    $ (3,313)
 Adjustments to reconcile net loss to net
  cash provided by operations:
   Common stock issued for services             -           -              24
 Changes in operating assets and liabilities
  accounts:
   Increase in accounts payable                  862        -             862
   Increase in accrued expenses                  100         100        1,100
   Increase in due to related party              100         210          470

    Net Cash Provided by Operating Activities (1,057)       200          (857)

CASH FLOWS FORM INVESTING ACTIVITIES            -          -             -

CASH FLOWS FROM FINANCING ACTIVITIES

 Common stock issued for cash                   -          -            2,800

   Net Cash Provided by Financing Activities    -          -            2,800

NET INCREASE IN CASH                          (1,057)       200         1,943

CASH AT BEGINNING OF PERIOD                    3,000      2,800          -

CASH AT END OF PERIOD                        $ 1,943    $ 3,000       $ 1,943

CASH PAID FOR:

  Interest expense                           $  -       $  -          $  -
  Income taxes                               $  -       $  -          $  -

NON-CASH FINANCING ACTIVITIES

  Common stock issued for services           $  -       $  -           $   24




                        CHALLEDON, INC.
                 (A Development Stage Company)
               Notes to the Financial Statements
                       December 31, 2000

NOTE 1 - NATURE OF ORGANIZATION

       The financial statements presented are those of Challedon,
       Inc. (a development stage company) (the Company).  The
       Company was organized under the laws of the State of Utah
       on May 24, 1990.  The Company was organized to seek
       potential business opportunities or merge with an existing
       operating company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       a.  Accounting Method

       The financial statements are prepared using the accrual
       method of accounting.  The company has elected a December
       31 year end.

       b.  Basic Loss Per Share

       The computation of basic loss per share of common stock is
       based on the weighted average number of shares outstanding
       during the period of the financial statements (see Note 5).

       c.  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
       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.

       d.  Cash and Cash Equivalents

       The Company considers all highly liquid investments with a
       maturity of three months or less when purchased to be cash
       equivalents.

       e.  Revenue Recognition Policy

       The Company will develop its revenue recognition policies
       when planned principal operations commence.

       f.  Income Taxes

       As of December 31, 2000, the Company had a net operating
       loss carryforward for federal income tax purposes of $3,313
       that may be used in future years to offset taxable income.
       The net operating loss carryforward of $1,259 will expire
       by 2020.  The tax benefit of the cumulative carryforwards
       has been offset by a valuation allowance of the same
       amount.


                        CHALLEDON, INC.
                 (A Development Stage Company)
               Notes to the Financial Statements
                       December 31, 2000

NOTE 3 - GOING CONCERN

       The Company's financial statements are prepared using
       generally accepted accounting principles applicable to a
       going concern which contemplates the realization of assets
       and liquidation of liabilities in the normal course of
       business.  The Company has not yet established an ongoing
       source of revenues sufficient to cover its operating costs
       and allow it to continue as a going concern.  The ability
       of the Company to continue as a going concern is dependent
       on the Company obtaining adequate capital to fund operating
       losses until it becomes profitable.  If the Company is
       unable to obtain adequate capital, it could be forced to
       cease operations.

       In order to continue as a going concern, develop a reliable
       source of revenues, and achieve a profitable level of
       operations the Company will need, among other things,
       additional capital resources.  Management's plans to
       continue as a going concern include raising additional
       capital through sales of common stock.  However, management
       cannot provide any assurances that the Company will be
       successful in accomplishing any of its plans.

       The ability of the Company to continue as a going concern
       is dependent upon its ability to successfully accomplish
       the plans described in the preceding paragraph and
       eventually secure other sources of financing and attain
       profitable operations.  The accompanying financial
       statements do not include any adjustments that might be
       necessary if the Company is unable to continue as a going
       concern.

NOTE 4 - RELATED PARTY TRANSACTIONS

       The Company's president has paid out-of-pocket expenses
       through December 31, 2000 totaling $470.  The amount is
       unsecured, non-interest bearing and is due on demand.

NOTE 5 - BASIC LOSS PER SHARE

       The following is an illustration of the reconciliation of
       the numerators and denominators of the basic loss per share
       calculation:

                                                      For the
                                                    Year  Ended
                                                    December 31,
                                                2000           1999

       Net loss (numerator)                $   (2,119)    $     (110)

       Weighted average shares outstanding
       (denominator)                        1,412,000      1,412,000

       Basic loss per share                $    (0.00)    $    (0.00)





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

    Not applicable.

                             PART III

ITEM 9.  Directors, Executive Officers, Promoters and Control
         Persons; Compliance with Section 16(a) of the Exchange
         Act

    The executive officers and directors of the Company are as
follows:

           Name              Age            Position
    James E. Glavas          48        President, Chief Executive
                                       Officer and Director
    Randy Flanders           50        Vice President and Director
    Guy H. Ivins             74        Secretary / Treasurer and
                                       Director
___________________________

    All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and
qualified.  There are no agreements with respect to the election of
directors.  The Company has not compensated its directors for
service on the Board of Directors or any committee thereof, but
directors are entitled to be reimbursed for expenses incurred for
attendance at meetings of the Board of Directors and any committee
of the Board of Directors.  However, due to the Company's lack of
funds, the directors will defer their expenses and any compensation
until such time as the Company can consummate a successful
acquisition or merger.  As of the date hereof, no director has
accrued any expenses or compensation.  Officers are appointed
annually by the Board of Directors and each executive officer
serves at the discretion of the Board of Directors.  The Company
does not have any standing committees.

    Except for Guy H. Ivins, none of the Company's directors are
currently, nor for the past three years have been, a director of
any other "shell" or "blank check" company or other corporation
that is actively pursuing acquisitions or mergers.  Mr. Ivins is
presently the President and a director of Jaipur, Inc., a shell /
blank check company, incorporated in Utah on February 2, 1989.

    No director, officer, affiliate or promoter of the Company
has, within the past five years, filed any bankruptcy petition,
been convicted in or been the subject of any pending criminal
proceedings, or is any such person the subject or any order,
judgment, or decree involving the violation of any state or federal
securities laws.

    All of the Company's present directors have other full-time
employment or sources of income and will routinely devote only such
time to the Company necessary to maintain its viability.  It is
estimated that each director will devote less than ten hours per
month to the Company's activities.  The directors will, when the
situation requires, review potential business opportunities or
actively participate in negotiations for a potential merger or
acquisition on an as-needed-basis.

    Currently, there is no arrangement, agreement or understanding
between the Company's management and non-management shareholders
under which non-management shareholders may directly or indirectly
participate in or influence the management of the Company's
affairs.  Present management openly accepts and appreciates any
input or suggestions from the Company's shareholders.  However, the
Board of Directors is elected by the shareholders and the
shareholders have the ultimate say in who represents them on the
Board of Directors.  There are no agreements or understandings for
any officer or director of the Company to resign at the request of
another person and none of the current offers or directors of the
Company are acting on behalf of, or will act at the direction of
any other person.

    In connection with the preparation and filing of this
registration statement, one of the Company's shareholders, James R.
Glavas, has advanced funds to the Company to pay for certain legal
and professional fees related to the registration statement.
Although, as of the date hereof there is no agreement or
arrangement for Mr. Glavas to provide additional funds, the Company
is not precluded from approaching Mr. Glavas or any other
shareholder and requesting additional financial assistance.
Because such additional funding is only speculative at this time,
the Company has not developed any criteria or plans related to this
funding.  Mr. Glavas is the father of the Company's President,
James E. Glavas.

    The business experience of each of the persons listed above
during the past five years is as follows:

    James E. Glavas has been for the past 25 years a purchasing
agent and estimator for Sun Lithographing Company in Salt Lake
City, Utah.  Mr. Glavas attended the University of Utah from 1972
to 1976 majoring in Sociology, but did not receive a degree.

    Randy Flanders has been for the past 13 years a manager and
salesman for Realty Brokers of Utah, a Salt Lake City, Utah real
estate firm.  Prior to his association with Realty Brokers of Utah,
he was for ten years a purchasing agent for Utah Mobile Homes, Inc.
Mr. Flanders attended Kearney State from 1970 to 1972 and the
University of Nebraska from 1972 to 1974 where he majored in
Business, but did not receive a degree.

    Guy H. Ivins retired in 1985 after working for 12 years as
Chief of Right-of-Way for the Utah Department of Transportation.
Previously, Mr. Ivins served for two years as head of the Office of
Economic Opportunity for the State of Utah and was County Assessor
of Utah County, Utah for six years.  He graduated from Brigham
Young University in 1951 with a B.S. Degree in Economics.

Section 16(a) Beneficial Ownership Reporting Compliance

    Each of the Company's officers and directors is required to
file certain reports and an Annual Statement of Changes in
Beneficial Ownership, on or before the 45th day after the end of
the fiscal year.  These reports have not filed on a timely basis
and will be submitted to the Commission.

Item 10. Executive Compensation

    The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors.  The Company has not paid any salaries or other
compensation to its officers, directors or employees for the years
ended December 31, 2000 and 1999.  Further, the Company has not
entered into an employment agreement with any of its officers,
directors or any other persons and no such agreements are
anticipated in the immediate future.  It is intended that the
Company's directors will defer any compensation until such time as
an acquisition or merger can be accomplished and will strive to
have the business opportunity provide their remuneration.  As of
the date hereof, no person has accrued any compensation.

Item 11. Security Ownership of Certain Beneficial Owners and
                  Management
    The following table sets forth information, to the best of the
Company's knowledge, as of December 31, 2000, with respect to each
person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, each director and all directors and
officers as a group.

Name and Address                    Amount and Nature of        Percent
of Beneficial Owner                 Beneficial Ownership      of Class(1)
James E. Glavas*                            70,000                4.96%
  6640 South 2475 East
  Salt Lake City, UT 84121

Randy Flanders*                                500                0.04%
  1336 East 8330 South
  Salt Lake City, UT 84093

Guy H. Ivins*                               70,000                4.96%
  1120 East 700 North
  American Fork, UT 84003
All directors and officers                 140,500                9.95%
  a group (3 persons)

      *   Director and/or executive officer
Note:     Unless otherwise indicated in the footnotes below, the
          Company has been advised that each person above has sole
          voting power over the shares indicated above.

     (1)  Based upon 1,412,000 shares of common stock outstanding
          on December 31, 2000.

Item 12.  Certain Relationships and Related Transactions

     During the past two fiscal years, there have been no
transactions between the Company and any officer, director, nominee
for election as director, or any shareholder owning greater than
five percent (5%) of the Company's outstanding shares, nor any
member of the above referenced individuals' immediate family

     The Company's officers and directors are subject to the
"doctrine of corporate opportunities" only insofar as it applies to
business opportunities in which the Company has indicated an
interest, either through its proposed business plan or by way of an
express statement of interest contained in the Company's minutes.
If directors are presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors
and made available to the Company.  In the event the Board shall
reject an opportunity so presented and only in that event, any of
the Company's officers and directors may avail themselves of such
an opportunity.  Every effort will be made to resolve any conflicts
that may arise in favor of the Company.  There can be no assurance,
however, that these efforts will be successful.

     In the event of a successful acquisition or merger, a finder's
fee, in the form of cash or securities, may be paid to persons
instrumental in facilitating the transaction.  The Company has not
established any criteria or limits for the determination of a
finder's fee, although it is likely that an appropriate fee will be
based upon negotiations by the Company and the appropriate business
opportunity and the finder.  Such fees are estimated to be
customarily  between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved.  Management
cannot at this time make an estimate as to the type or amount of a
potential finder's fee that might be paid, but is expected to be
comparable to consideration normally paid in like transactions.  It
is unlikely that a finder's fee will be paid to an affiliate of the
Company because of the potential conflict of interest that might
result.  Any such fee would have to be approved by the shareholders
or a disinterested Board of Directors.



                              PART V

Item 13.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

         *2(i)      Articles of Incorporation filed as Exhibit to
                    Form 10-SB.

         *2(ii)     By-Laws filed as Exhibit to Form 10-SB.

         *4         Specimen Stock Certificate filed as Exhibit to
                    Form 10-SB.
          - - - - -
     *    Exhibits so marked have heretofore been filed with the
          Securities and Exchange Commission as part of its
          registration statement on Form 10-SB and are incorporated
          herein by reference.

     (b)  Reports on Form 8-K

                              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.

                                                Challedon, Inc.



                                            BY: /S/ James E. Glavas
                                                James E. Glavas
                                                President and Director

Dated:   April 17, 2001

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

    Signature                 Title                    Date


                              President, C.E.O.    April 17, 2001
 /S/ James E. Glavas           and Director
     James E. Glavas


                              Secretary/Treasurer  April 17, 2001
 /S/ Guy H. Ivins              and Director
     Guy H. Ivins             (Principal Accounting Officer)