<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   FORM 10-Q

     X       Quarterly Report Pursuant to Section 13 or 15(d) of the
    ---
                         Securities Exchange Act of 1934


                 For the Quarterly Period Ended March 31, 2001

                                      OR

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

                 For the Transition Period from _____ to _____

                        Commission File Number 0-19614

                                H.D. VEST, INC.
        ---------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


              Texas                                    75-2154244
----------------------------------            ---------------------------------
  (State or other jurisdiction of                      (IRS Employer
  incorporation or organization)                   Identification No.)


        6333 North State Highway 161, Fourth Floor, Irving, Texas 75038
-------------------------------------------------------------------------------
             (Address of principal executive offices and zip code)


Registrant's telephone number, including area code:         (972) 870-6000
                                                      -------------------------

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

Number of shares of the registrant's Common Stock outstanding as of April 30,
2001: 5,423,341.
<PAGE>

                               H. D. VEST, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                            Page(s)
                                                                            -------
<S>                                                                        <C>
PART I       Financial Information (Unaudited)
             ---------------------------------

Item 1       Financial Statements (Unaudited)

                Consolidated Statements of Financial Position
                   March 31, 2001 and September 30, 2000                        1

                Consolidated Statements of Operations
                   Three Months Ended March 31, 2001 and
                   March 31, 2000                                               2

                Consolidated Statements of Operations
                   Six Months Ended March 31, 2001 and
                   March 31, 2000                                               3

                Consolidated Statements of Cash Flows
                   Six Months Ended March 31, 2001 and
                   March 31, 2000                                               4

                Notes to Consolidated Financial Statements                    5-11

Item 2       Management's Discussion and Analysis of
                   Financial Condition and Results of Operations              12-15

Item 3       Quantitative and Qualitative Disclosures About                    15
                   Market Risk

PART II      Other Information
             -----------------

Item 1       Legal Proceedings                                                 16

Item 4       Submission of Matters to a Vote of Shareholders                   17

Item 5       Other Information                                                 17

Item 6       Exhibits and Reports on Form 8-K                                  17

             Signatures
</TABLE>
<PAGE>

PART I Financial Information (Unaudited)
----------------------------------------

   Item 1 Financial Statements (Unaudited)
   ---------------------------------------

                                H.D. VEST, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                                     March 31,    September 30,
                                                                                     ---------    -------------
                                                                                       2001           2000
                                                                                       ----           ----
                                                                                    (unaudited)
<S>                                                                                  <C>           <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                         $15,024,583   $24,219,035
   Commissions and accounts receivable, net                                           14,612,994    16,237,523
   Receivable from officer                                                             1,942,323            --
   Receivable from affiliate                                                             399,936       505,395
   Prepaid expenses and other assets                                                   2,058,678     2,058,469
                                                                                     -----------   -----------
Total current assets                                                                  34,038,514    43,020,422
                                                                                     -----------   -----------

Property and equipment, net of accumulated depreciation
  of $7,961,246 at March 31, 2001 and $6,286,141 at
  September 30, 2000                                                                  10,388,960     8,736,940
Intangible and other assets, net of accumulated amortization                           7,670,325     5,541,842
                                                                                     -----------   -----------

Total assets                                                                         $52,097,799   $57,299,204
                                                                                     ===========   ============

LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
   Accounts payable and accrued expenses                                             $ 7,739,170   $ 8,888,024
   Amounts due on clearing transactions                                                4,179,392     5,975,060
   Unearned revenue                                                                      715,948     3,506,461
   Commissions payable                                                                 8,600,920     8,698,522
   Note payable - current                                                              2,666,666     2,666,666
                                                                                     -----------   -----------
Total current liabilities                                                             23,902,096    29,734,733
                                                                                     -----------   -----------

Obligations under capital leases, excluding current installments                       2,063,557     2,191,880
Note payable - non current                                                             3,333,334     4,666,667
Other non current liabilities                                                         10,252,318     8,376,300

Shareholders' investment:
   Preferred stock, $6 par value; 10,000,000 shares authorized,
   250,067 shares issued and outstanding                                               1,500,402     1,500,402
   Common stock, $.05 par value; 100,000,000 shares authorized;
   5,423,341 issued and outstanding                                                      271,167       271,167
   Additional paid-in capital                                                          5,154,934     5,154,934
   Retained earnings                                                                   5,619,991     5,403,121
                                                                                     -----------   -----------

Total shareholders' investment                                                        12,546,494    12,329,624
                                                                                     -----------   -----------

Total liabilities and shareholders' investment                                       $52,097,799   $57,299,204
                                                                                     ===========   ===========
</TABLE>

      The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       1
<PAGE>

                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                            Three Months Ended
                                                                                            ------------------
                                                                                                 March 31,
                                                                                                 ---------
                                                                                       2001                         2000
                                                                                       ----                         ----
<S>                                                                                <C>                          <C>
Revenues:
     Commissions                                                                   $31,054,276                  $42,005,117
     Portfolio management fees                                                       7,946,487                    6,323,744
     Marketing and education fees                                                    2,587,239                    2,677,930
     Facility and service fee from affiliate                                           131,254                      125,528
     Interest and other                                                                725,278                      576,653
                                                                                   -----------                  -----------

Total revenues                                                                      42,444,534                   51,708,972
                                                                                   -----------                  -----------

Expenses:
     Commissions                                                                    23,101,419                   30,685,243
     Portfolio management fees                                                       5,689,955                    4,852,569
     General and administrative                                                      4,152,712                    6,081,619
     Website development and promotion                                               2,940,133                    7,842,726
     Operations                                                                      2,786,970                    2,790,899
     Representative development                                                      2,336,663                    1,892,940
     Representative recruiting                                                         214,406                      147,753
     Amortization and depreciation                                                   1,430,064                      977,504
     Interest                                                                          286,334                       98,511
                                                                                   -----------                  -----------

Total expenses                                                                      42,938,656                   55,369,764
                                                                                   -----------                  -----------

Net loss before state and federal income tax                                          (494,122)                  (3,660,792)

Recovery of state and federal income tax                                              (146,250)                  (1,481,639)
                                                                                   -----------                  -----------
Net loss                                                                             ($347,872)                 ($2,179,153)
                                                                                   -----------                  -----------

Net loss per common share-basic and diluted                                             ($0.06)                      ($0.41)
                                                                                   -----------                  -----------
Weighted average number of common shares outstanding                                 5,423,341                    5,423,341
                                                                                   -----------                  -----------
</TABLE>

      The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       2
<PAGE>

                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                                Six Months Ended
                                                                                ----------------
                                                                                    March 31,
                                                                                    --------
                                                                         2001                        2000
                                                                         ----                        ----
<S>                                                                   <C>                         <C>
Revenues:
     Commissions                                                      $ 63,515,441                 $ 73,611,131
     Portfolio management fees                                          15,875,706                   12,569,720
     Marketing and education fees                                        8,018,006                    8,079,561
     Facility and service fee from affiliate                               310,719                      300,528
     Interest and other                                                  1,485,389                    1,058,456
                                                                      ------------                 ------------

Total revenues                                                          89,205,261                   95,619,396
                                                                      ------------                 ------------

Expenses:
     Commissions                                                        47,337,597                   54,434,647
     Portfolio management fees                                          11,412,722                    9,277,403
     General and administrative                                         10,240,781                   10,881,200
     Website development and promotion                                   3,736,573                    7,666,680
     Operations                                                          6,687,839                    6,756,295
     Representative development                                          5,429,794                    4,634,178
     Representative recruiting                                             407,462                      404,786
     Amortization and depreciation                                       2,673,574                    1,785,162
     Interest                                                              610,061                      172,080
                                                                      ------------                 ------------

Total expenses                                                          88,536,403                   96,012,431
                                                                      ------------                 ------------
 Net income (loss) before state and federal income tax                     668,858                     (393,035)

 Provision (recovery) for state and federal income tax                     420,104                     (106,149)
                                                                      ------------                 ------------

Net income (loss)                                                     $    248,754                    ($286,886)
                                                                      ============                 ============

Net income (loss) per common share-basic and diluted                  $       0.04                       ($0.07)
                                                                      ============                 ============

Weighted average number of common shares outstanding                     5,423,341                    5,423,341
                                                                      ============                 ============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       3
<PAGE>

                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Six Months Ended
                                                                                   ----------------
                                                                                       March 31,
                                                                                       --------
                                                                           2001                        2000
                                                                           ----                        ----
<S>                                                                      <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income (loss)                                                  $   248,754                   ($286,886)
      Reconciliation of net income to net cash provided by
           operating activities
        Amortization and depreciation                                      2,673,574                   1,785,161
        Deferred tax provision                                               664,335                     631,621
        Loss on sale of assets                                                     -                      18,709
        Deferred rent                                                          8,886                      38,850
      Changes in assets and liabilities:
        Commissions and accounts receivable                                1,624,529                  (2,681,107)
        Receivable from affiliate                                            105,459                    (277,296)
        Prepaid expenses and other assets                                       (209)                   (812,681)
        Accounts payable and accrued expenses                             (1,550,639)                  1,489,915
        Amounts due on clearing transactions                              (1,795,668)                  6,284,526
        Unearned revenues                                                 (2,790,513)                   (244,454)
        Commissions payable                                                  (97,602)                  3,617,054
                                                                         -----------                 -----------
Net cash (used for) provided by operating activities                        (909,094)                  9,563,412
                                                                         -----------                 -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Costs to acquire/develop software                                   (3,807,566)                 (1,370,294)
      Additions to intangible and other assets                               680,614                     (50,401)
      Purchases of property and equipment                                 (1,847,893)                   (868,825)
                                                                         -----------                 -----------
Net cash (used for) investing activities                                  (4,974,845)                 (2,289,520)
                                                                         -----------                 -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Preferred stock dividends                                              (31,884)                    (95,652)
      Advances from deferred compensation plan                             1,399,585                     992,073
      Payments on deferred compensation plan                                (148,097)                    (52,759)
      Proceeds from line of credit                                                 -                   3,000,000
      Advances on notes receivable - related parties                      (1,942,323)                          -
      Payments on notes payable and capital lease obligations             (2,587,794)                   (776,520)
                                                                         -----------                 -----------

Net cash (used for) provided by financing activities                      (3,310,513)                  3,067,142
                                                                         -----------                 -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                      (9,194,452)                 10,341,034

CASH AND CASH EQUIVALENTS, September 30, 2000 and 1999                    24,219,035                  11,918,613
                                                                         -----------                 -----------

CASH AND CASH EQUIVALENTS, March 31, 2001 and 2000                       $15,024,583                 $22,259,647
                                                                         ===========                 ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements

                                       4
<PAGE>

                                H.D. VEST, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (Unaudited)


1) Basis of Financial Statements

The accompanying unaudited consolidated financial statements have been prepared
in accordance with Rule 10-01 of Regulation S-X, "Interim Financial Statements,"
and accordingly do not include all information and footnotes required under
accounting principles generally accepted in the United States for complete
financial statements. The financial statements have been prepared in conformity
with the accounting principles and practices as disclosed in H.D. Vest, Inc.'s
(the Company) annual report on Form 10-K for the year ended September 30, 2000.
In the opinion of management, these interim financial statements contain all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the Company's financial position as of March 31, 2001, and
September 30, 2000, the results of operations for the three and six month
periods ended March 31, 2001 and 2000 and the cash flows for the six month
periods ended March 31, 2001 and 2000. Results of operations for the interim
period ended March 31, 2001, are not necessarily indicative of the results that
may be expected for the year ended September 30, 2001. For additional
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended
September 30, 2000.

Certain reclassifications have been made to prior year's statements in order for
the amounts to be comparable with the current year presentation.

2) Earnings Per Share

Basic earnings per share (basic EPS) is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding.
The number of shares used to compute basic EPS for the three and six months
ended March 31, 2001 and 2000, was 5,423,341. Diluted earnings per share
(diluted EPS) is computed similarly to the computation of basic EPS except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential dilutive common shares had
been issued. The number of shares used to compute diluted EPS for the three and
six months ended March 31, 2001 was 5,571,972 and 5,538,851, respectively. The
number of shares used to compute diluted EPS for the three and six months ended
March 31, 2000 was 5,660,579 and 5,594,737, respectively.

                                       5
<PAGE>

                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

The total number of options outstanding at March 31, 2001 and 2000 were 728,948
and 931,948, respectively. Options to purchase 269,948 shares of common stock at
prices ranging from $8.50 to $20.00 per share and options to purchase 273,948
shares of common stock at prices ranging from $7.63 to $20.00 per share were
outstanding during the three and six months ended March 31, 2001, respectively,
and were not included in the computation of diluted EPS because the options'
exercise price was greater than the average market price of outstanding common
shares. Options to purchase 273,948 shares of common stock at prices ranging
from $7.63 to $20.00 per share were outstanding during the three and six months
ending March 31, 2000 and were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market price of
outstanding common shares.

There were 250,067 shares of Non-voting, cumulative Series A Convertible
Preferred Stock outstanding during the three and six months ended March 31, 2001
and 2000 that were not included in the number of shares used to compute diluted
EPS for the period because the conversion had an anti-dilutive effect on EPS.

3) Commitments and Contingencies

On April 27, 2000, the Company was notified of a claim brought by clients of a
former Registered Representative against H.D. Vest Investment Securities, Inc.
("HDVIS"), alleging actual damages of approximately $450,000 arising from
alleged conduct of the Representative. The claim is currently being litigated in
state court and HDVIS has denied liability.

On April 26, 2001, HDVIS received a letter from the offices of the State of
North Dakota Securities Commission requesting that HDVIS enter into a consent
decree with the Securities Commission based on HDVIS' alleged failure to
supervise the activities of two former representatives. Among other things, the
Commission requested that HDVIS agree to pay a fine and make a non-refundable
contribution to the State's investor protection fund. HDVIS has denied the
Commission's allegations in this matter but is cooperating with the Commission
in its ongoing review. The Company is currently unable to determine the likely
range of payment pursuant to a settlement or the likely range of liability in
the event this matter is not settled amicably.

                                       6
<PAGE>

                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

In connection with the same North Dakota matter, on April 30, 2001, HDVIS
received notice of a class action lawsuit brought against HDVIS and the former
representatives on behalf of investment clients of the former representatives.
The suit alleges damages of $50,000 in connection with the named plaintiff in
the suit, but does not specify the amount of damages sought on behalf of two
potential classes of investors on whose behalf the suit has been brought. The
Company is currently unable to determine the potential range of liability in
this matter, but intends to defend the suit vigorously.

On April 30, 2001, HDVIS received a claim from a former client alleging losses
arising from the handling of the client's accounts by a former representative of
HDVIS following the transfer of the accounts to another financial institution.
The client alleges out-of-pocket losses of approximately $880,000. The Company
is investigating the matter, but anticipates defending the claim vigorously.

We are subject to other legal proceedings and claims that have arisen in the
ordinary course of business and have not been finally adjudicated. We believe,
based on the advice of legal counsel responsible for such matters, that these
actions, when finally concluded and determined, will not have a material adverse
effect upon the financial position or results of operations of the Company.

4) Related-Party Transactions

The Company has an agreement with Herb D. Vest (principal common shareholder)
for management services to the Company. The agreement with Herb D. Vest provides
for an annual management fee plus an annual bonus based on the Company's
performance related to revenue and net income goals, additions of Company
affiliates and Fee Based Assets under Management, as established by the Board of
Directors. The agreement also provides that Mr. Vest is permitted to request and
receive advances on future management fees based on estimated future operations.

As of March 31, 2001, Mr. Vest has received $900,000 under this agreement,
consisting of $450,000 in management fees related to the six months ended March
31, 2001, and advances of $450,000 (which is recorded in Prepaid expenses and
other assets).

                                       7
<PAGE>

                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

In January 2000, Herb D. Vest and the Company agreed to remove the bonus
provision from Mr. Vest's management agreement for the fiscal year ending
September 30, 2000. In addition, in September 2000, Mr. Vest and the Company
agreed to reduce Mr. Vest's base compensation from $900,000 to $675,000 for
fiscal year 2000. Pursuant to his management agreement, Mr. Vest was entitled to
receive his full base salary and bonus during fiscal year 2001. In April 2001,
Mr. Vest and the Company agreed to remove the bonus provision from Mr. Vest's
management agreement for the fiscal year ending September 30, 2001, due to the
purchase of the Company by Wells Fargo & Co. See footnote 8 for further
discussion of the purchase. In the event that Mr. Vest's management agreement is
terminated as a result of the purchase, Mr. Vest's prepaid management fee for
2001 may be impacted.

The Company has an agreement to provide Herb D. Vest a revolving line of credit
in an amount not to exceed $2,000,000, collateralized by Mr. Vest's Company
common stock in an amount equal to the unadjusted current balance of the line of
credit based on the stock's current ask price. Under the agreement, interest
accrues on unpaid principal balances at an annual rate of 11%. At March 31,
2001, Mr. Vest had drawn $1,885,000 in principal against the line of credit. As
of March 31, 2001, we have recorded $57,323 of accrued interest on this line,
which is included in Interest and other income.

5) Web Based Fees

During the year ended September 30, 2000, the Company invited selected
Representatives to participate in the Company's new website initiative.
Representatives that elected to participate in the website initiative had their
individual profile included on the website and were eligible for new tax and
financial services referrals obtained from the website. As part of the website
initiative, the Company charged each Representative that elected to participate
in the program a fee of $950 to help offset the costs associated with the
promotion and development of the website. Each Representative that elected to
participate in the website initiative prior to December 31, 1999, had the option
to drop out of the program on October 1, 2000 and receive a full refund of the
$950 fee plus interest. For the year ended September 30, 2000, the Company
recognized $1,669,000 of these fees. The remainder was reserved for potential
refund requests. This reserve was completely used to offset such requests during
the three months ended December 31, 2000.

                                       8
<PAGE>


                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)


6) Segment Reporting

Effective January 2000, H.D. Vest Technology Services, Inc. ("HDVTI"), a wholly
owned subsidiary of the Company, became a reportable segment as defined by SFAS
131, "Disclosures about Segments of an Enterprise and Related Information". H.D.
Vest's Core business ("Core") is in the business of financial services,
organized for the purpose of investing in financial service companies and
providing management services to such companies as well as other entities.
HDVTI's sole purpose is to record the cost and related revenues generated from
the Company's website initiative.

H.D. Vest does not track assets by operating segments. Consequently, we have not
disclosed assets by operating segments. For internal and external management
reporting purposes all amounts have been restated to be effective as of October
1, 1999. The following unaudited results are separated by operating segment for
the three and six months ended March 31, 2001 and 2000:

                    For the three months ended March 31, 2001

                                        Core           HDVTI     Consolidated
                                    -----------   -------------  ------------

Revenues                            $42,406,696    $    37,838    $42,444,534

Expenses                             39,170,727      3,767,929     42,938,656
                                    -----------   -------------  ------------


Net income (loss) before taxes        3,235,969     (3,730,091)      (494,122)
                                    -----------   -------------  ------------

Income tax provision (benefit)          957,782     (1,104,032)      (146,250)
                                    -----------   -------------  ------------
Net income (loss)                   $ 2,278,187   ($ 2,626,059)     ($347,872)
                                    -----------   -------------  ------------

                                       9
<PAGE>

                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

                   For the three months ended March 31, 2000

<TABLE>
<CAPTION>
                                              Core              HDVTI          Consolidated
                                          -----------       ------------      -------------
<S>                                       <C>               <C>               <C>
Revenues                                  $51,696,936       $     12,036       $ 51,708,972

Expenses                                   47,356,073          8,013,691         55,369,764
                                          -----------       ------------      -------------

Net income (loss) before taxes              4,340,863         (8,001,655)        (3,660,792)
                                          -----------       ------------      -------------

Income tax provision (benefit)              2,119,106         (3,600,745)        (1,481,639)
                                          -----------       ------------      -------------
Net income (loss)                         $ 2,221,757        ($4,400,910)       ($2,179,153)
                                          ===========       ============      =============
</TABLE>

                   For the six months ended March 31, 2001

<TABLE>
<CAPTION>
                                              Core              HDVTI          Consolidated
                                          -----------       ------------      -------------
<S>                                       <C>               <C>               <C>
Revenues                                  $89,161,868       $     43,393      $  89,205,261

Expenses                                   83,703,521          4,832,882         88,536,403
                                          -----------       ------------      -------------

Net income (loss) before taxes              5,458,347         (4,789,489)           668,858
                                          -----------       ------------      -------------

Income tax provision (benefit)              3,428,342         (3,008,238)           420,104
                                          -----------       ------------      -------------
Net income (loss)                         $ 2,030,005        ($1,781,251)     $     248,754
                                          ===========       ============      =============
</TABLE>

                                       10
<PAGE>

                                H.D. VEST, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

                    For the six months ended March 31, 2000

<TABLE>
<CAPTION>
                                                    Core                       HDVTI                  Consolidated
                                           ---------------------     ------------------------    ----------------------
<S>                                        <C>                       <C>                         <C>
Revenues                                            $95,607,360               $     12,036               $95,619,396

Expenses                                             88,148,313                  7,864,118                96,012,431
                                           ---------------------     ------------------------    ----------------------
Net income (loss) before taxes                        7,459,047                 (7,852,082)                 (393,035)
                                           ---------------------     ------------------------    ----------------------

Income tax provision (benefit)                        3,427,288                 (3,533,437)                 (106,149)
                                           ---------------------     ------------------------    ----------------------
Net income (loss)                                   $ 4,031,759                ($4,318,645)                ($286,886)
                                           =====================     ========================    ======================
</TABLE>

Expenses for HDVTI include amortization and depreciation expense of $430,186 and
$698,699, for the three and six months ended March 31, 2001, and $170,964 and
$198,438 for the three and six months ended March 31, 2000. There was no
interest expense recorded for HDVTI during the periods presented.

7) Note Payable

Under the Company's term loan agreement, we are subject to various loan
covenants. During the quarter, the Company violated two covenants related to
total tangible net worth and total liabilities to tangible net worth. The
violations were the result of one time acquisition related issues and expenses
(see Note 8). The Company obtained a waiver from the lender for these
violations.

8) Wells Fargo Acquisition of H.D. Vest, Inc.

On March 23, 2001 H.D. Vest, Inc. and Wells Fargo & Co. ("Wells Fargo")
announced that the two companies signed a definitive agreement for Wells Fargo
to acquire H.D. Vest, Inc. In the acquisition, which requires approval from
regulators and shareholders of H.D. Vest, Inc., Wells Fargo will pay $21.03 in
cash per share of H.D. Vest, Inc. common and preferred stock and for each option
of H.D. Vest, Inc. an amount equal to the difference between $21.03 and the
exercise price of the option. It is anticipated that the acquisition will be
completed by the end of June 2001. There can be no assurance that the
acquisition will be consummated.

                                       11
<PAGE>

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

                             Results of Operations

Revenues

The Company's revenues for the three months ended March 31, 2001, were
$42,444,534, an 18% decrease from the Company's revenues for the three months
ended March 31, 2000. The Company's revenues for the six months ended March 31,
2001, were $89,205,261, a 7% decrease from the Company's revenues for the six
months ended March 31, 2000. Management believes that the decrease in revenues
is due in part to the volatility experienced in the financial markets during the
three and six month periods ended March 31, 2001. This volatility was evidenced
by the deterioration in most major market indexes during these periods.
Management further believes that this volatility has been partially offset due
to the Company's commitment to training and developing Representatives in
diversification and long-term investment activities, and its commitment to
fee-based programs which typically are more stable sources of revenue.

For the three months ended March 31, 2001, portfolio management fees were
$7,946,487, a 26% increase from the three months ended March 31, 2000. For the
six months ended March 31, 2001, portfolio management fees were $15,875,706, a
26% increase from the six months ended March 31, 2000. In order to take
advantage of the industry-wide trend of commission revenue declining as a
percentage of gross product sales, the Company has continued to devote resources
to the development of its fee-based programs. Fee-based programs produce revenue
based on quarterly charges to clients for the management of their accounts,
whereas commission-based services produce revenue based primarily on one-time
front-end sales charges for the purchase of products. Some clients may prefer
fee-based programs as opposed to more traditional commission-based services.

Net Income

The Company had a net loss of $347,872 for the three months ended March 31,
2001, compared to a net loss of $2,179,153 for the three months ended March 31,
2000. The Company had net income of $248,754 for the six months ended March 31,
2001, compared to a net loss of $286,886 for the six months ended March 31,
2000. The net loss for the three months ended March 31, 2001 decreased from the
prior year primarily due to a reduction in costs to develop and promote the
Company's website initiatives. This same reduction in costs helped the Company
generate net income for the six month period ended March 31, 2001 as compared to
the net loss in the prior year.

                                       12
<PAGE>

General and administrative expenses decreased 32% to $4,152,712 for the three
months ended March 31, 2001, compared to the prior year. General and
administrative expenses decreased 6% to $10,240,781 for the six months ended
March 31, 2001 compared to the prior year. The decrease in general and
administrative expenses compared to the prior year was due, in part, to Company
initiatives to lower overhead costs.

Website development and promotion costs decreased to $2,940,133 for three months
ended March 31, 2001, a decrease of 63% compared to the prior year. Website
development and promotion costs decreased to $3,736,573 for six months ended
March 31,2001, a decrease of 51% compared to the prior year. These decreases
were related primarily to a reduction in the advertising costs incurred to
promote the Company's website initiatives.

Representative development costs for the three months ended March 31, 2001 were
$2,336,663, a 23% increase compared to the prior year. Representative
development costs for the six months ended March 31, 2001 were $5,429,794, a 17%
increase compared to the prior year. The increase in Representative development
costs is mainly due to increased participation by Representatives in the
Company's development programs and the expansion of staff necessary to support
participation in these programs. The increase in participation by
Representatives and the related costs is directly attributable to the increased
recruitment of new Representatives in prior years. As additional Representatives
are recruited, the Company expects participation and the related costs in
development programs to continue to increase.

Representative recruiting costs for the three months ended March 31, 2001, were
$214,406, a 45% increase compared to the prior year. Representative recruiting
costs for the six months ended March 31, 2001, were $407,462, a less than 1%
increase compared to the prior year. The increase in recruiting costs in the
three month period ended March 31,2001, compared to prior year, is due to an
increase in the number of recruiting personnel to support a planned increase in
future recruiting efforts. To the extent that the Company decides in the future
to devote significant resources to rapidly expand its Representative base
through aggressive recruiting activities, future profitability would likely be
impacted negatively.

                                       13
<PAGE>

Certain sections of this Management's Discussion and Analysis of Financial
Condition and Results of Operations include forward-looking statements that
involve a number of risks and uncertainties. In addition to the factors
described above, other factors that could cause actual results to differ
materially include, but are not limited to: drastic changes in market
conditions; effects of new technology; interest rates; changes in the
availability of prospective representatives; and the risks described from time
to time in the Company's SEC reports, including but not limited to the report on
Form 10-K for the year ended September 30, 2000.

                        Liquidity and Capital Resources

At March 31, 2001, the Company had net working capital of $10,136,418 compared
to net working capital of $13,285,689 at September 30, 2000. This decrease in
working capital of $3,149,271, as well as the decrease in cash of $9,194,452,
was primarily a result of payments on long-term debt and investments in fixed
assets and software.

In November 2000 the Company announced the arrival of MyHDVEST.com, a new
product that harnesses the convenience of the Internet while tapping into the
expertise of an H.D. Vest certified public accountant (CPA), enrolled agent (EA)
or financial planner. MyHDVEST.com is a personal web page program designed to
serve as the consumer's primary life-planning portal, boasting real-time
accuracy and all the necessary tools to facilitate daily and long-term
investment planning. Additionally, CPAs, EAs and financial planners can present
their clients with financial solutions through the site, with a variety of
information and services - everything from stock quotes to online bill payments.
Both the advisor and client can share information instantaneously, thus giving
the advisor the ability to render more accurate financial planning advice. Users
also will have access to educational materials focusing on retirement, estate
planning, insurance, asset allocation and investments.

During the first six months of fiscal 2001, the Company dedicated much of its
capital to (1) the launch of MyHDVEST.com, (2) further development and promotion
of the Company's interactive financial planning website, and (3) costs incurred
for the ongoing implementation of other computer systems related to its
operating and marketing efforts. These other operating systems include
enhancements to the Company's Internet site, a back office system
implementation, and providing more technology tools for Representative use.
Management believes that this dedication to information systems will provide the
Company with more capacity to manage its current growth, support future growth
and will lead to an increase in efficiency.

                                       14
<PAGE>

We continually monitor the capital markets for opportunities to obtain financing
to meet our growth needs. To the extent that funds are available, we would
accelerate the development and promotion of our web site. Other funds would be
utilized for recruiting, development and other general business purposes. We are
required to expense many of the costs related to these items. Should we obtain
future financing to fund our growth plans, it is likely that we would record
substantial expenses in the periods during and subsequent to obtaining such
financing.

Item 3 Quantitative and Qualitative Disclosures About Market Risk
-----------------------------------------------------------------

We are exposed to market risk related to changes in U.S. prime interest rates.
No derivatives are currently used to alter the interest rate characteristics of
our debt instrument.

With respect to our interest-bearing liability, approximately $6.0 million of
long-term debt at March 31, 2001 is subject to variable rates of interest. Based
on a hypothetical 1.5% increase in interest rates, the potential annualized
losses in future pretax earnings would be a maximum of $90,000. The impact of
such a change in interest rates on the carrying value of long-term debt would
not be significant. The estimated changes to interest expense and the fair value
of long-term debt are determined considering the impact of hypothetical interest
rates on our borrowing cost and long-term debt balances. These analyses do not
consider the effects, if any, of the potential changes in our credit ratings or
the overall level of economic activity. Further, in the event of a change of
significant magnitude, management would expect to take actions intended to
further mitigate its exposure to such change.

                                       15
<PAGE>

Part II Other Information
-------------------------

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

On April 27, 2000, the Company was notified of a claim brought by clients of a
former Registered Representative against H.D. Vest Investment Securities, Inc.
("HDVIS"), alleging actual damages of approximately $450,000 arising from
alleged conduct of the Representative. The claim is currently being litigated in
state court and HDVIS has denied liability.

On April 26, 2001, HDVIS received a letter from the offices of the State of
North Dakota Securities Commission requesting that HDVIS enter into a consent
decree with the Securities Commission based on HDVIS' alleged failure to
supervise the activities of two former representatives. Among other things, the
Commission requested that HDVIS agree to pay a fine and make a non-refundable
contribution to the State's investor protection fund. HDVIS has denied the
Commission's allegations in this matter but is cooperating with the Commission
in its ongoing review. The Company is currently unable to determine the likely
range of payment pursuant to a settlement or the likely range of liability in
the event this matter is not settled amicably.

In connection with the same North Dakota matter, on April 30, 2001, HDVIS
received notice of a class action lawsuit brought against HDVIS and the former
representatives on behalf of investment clients of the former representatives.
The suit alleges damages of $50,000 in connection with the named plaintiff in
the suit, but does not specify the amount of damages sought on behalf of two
potential classes of investors on whose behalf the suit has been brought. The
Company is currently unable to determine the potential range of liability in
this matter, but intends to defend the suit vigorously.

On April 30, 2001, HDVIS received a claim from a former client alleging losses
arising from the handling of the client's accounts by a former representative of
HDVIS following the transfer of the accounts to another financial institution.
The client alleges out-of-pocket losses of approximately $880,000. The Company
is investigating the matter, but anticipates defending the claim vigorously.

We are subject to other legal proceedings and claims that have arisen in the
ordinary course of business and have not been finally adjudicated. We believe,
based on the advice of legal counsel responsible for such matters, that these
actions, when finally concluded and determined, will not have a material adverse
effect upon the financial position or results of operations of the Company.

                                       16
<PAGE>

Item 4 Submission of Matters to a Vote of Shareholders
------------------------------------------------------

None.


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

None.


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

  (a)   Exhibits

           None.

  (b)   During the quarter ended March 31, 2001, the Company filed a Current
        Report on Form 8-K dated March 23, 20001 related to the Agreement and
        Plan of Merger entered into by the Company, Starlite Merger Co. and
        Wells Fargo & Company.

                                       17
<PAGE>

                                  SIGNATURES

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


                                                   H. D. VEST, INC.
                                      ------------------------------------------
                                                     (Registrant)



      Date: May 14, 2001           By:             /s/ Herb D. Vest
                                      ------------------------------------------
                                                     Herb D. Vest
                                       Chief Executive Officer, Chairman of the
                                                        Board

      Date: May 14, 2001           By:         /s/ Wesley Ted Sinclair
                                      ------------------------------------------
                                                 Wesley Ted Sinclair
                                       Chief Financial Officer, Vice President
                                         (Principal Financial and Accounting
                                                       Officer)