UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[ x ]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES AND EXCHANGE ACT OF 1934

                       For the Quarter ended June 30, 2000

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



                           Commission File No. 0-27159

                         National Rehab Properties, Inc.
                 (Name of Small Business Issuer in its charter)

         Nevada                                              65-0439467
         (State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization               Identification No.)

                   2921 NW Sixth Avenue, Miami, Florida 33127
                    (Address of principal executive offices)

                                 (305) 573-8882
                 (Issuer's Telephone Number Including Area Code)



              (former name, former address and former fiscal year
                          if changed since last report)

     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


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

Title of each class of Common Stock              Outstanding at August 11, 2000
-----------------------------------              ------------------------------
Common Stock, $0.001 par value                              50,161,866


           Transitional Small Business Disclosure Format (check one):
                                 Yes      No x



<PAGE>


                                TABLE OF CONTENTS

              FORM 10-QSB REPORT - FOR QUARTER ENDED JUNE 30, 2000

National Rehab Properties, Inc.

PART I

     Item 1.   Financial Statements
               Condensed Consolidated Balance Sheets -
               June 30, 2000 (unaudited) and September 30, 1999 (audited)    3

               Condensed Consolidated Statements of Operations               4
               Nine months ended June 30, 2000 and 1999
               (unaudited)

               Condensed Consolidated Statements of Operations               5
               Three Months ended June 30, 2000 and 1999
               (unaudited)

               Condensed Consolidated Statements of Cash Flows               6
               Nine months ended June 30, 2000 and 1999
               (unaudited)

               Notes to Financial Statements                                 7

     Item 2.   Management's Discussion and Analysis or Plan of Operation     8

     Item 3.   Quantitative and Qualitative Disclosures About Market Risk   11

PART II

     Item 1.   Legal Proceedings                                            11
     Item 2.   Change in Securities                                         11
     Item 3.   Defaults Upon Senior Securities                              11
     Item 4.   Submission of Matters to a vote of Security Holders          11
     Item 5.   Other Information                                            11
     Item 6.   Exhibits and Reports on Form 8-K                             12

SIGNATURE PAGE                                                              12

                                       2
<PAGE>


                                     PART I

ITEM 1.           FINANCIAL STATEMENTS


<TABLE>

                National Rehab Properties, Inc. and Subsidiaries
                      Consolidated Condensed Balance Sheets

                                     ASSETS

<CAPTION>
                                                                      JUNE 30,  SEPTEMBER 30,
                                                                       2000         1999
                                                                    (UNAUDITED)   (AUDITED)
                                                                    ----------   ----------
<S>                                                                 <C>          <C>
Current Assets:
     Cash and Cash Equivalents                                      $  827,918   $  411,257
     Inventory-Real Estate Holdings                                  2,948,055    1,216,381
     Subscriptions Receivable                                                -      500,000
     Mortgages Receivable                                               52,241       12,358
     Prepaid Expenses                                                    5,000       57,000
                                                                    ----------   ----------
          Total Current Assets                                       3,833,214    2,196,996

Property, Plant and Equipment (Net of $21,657 and $12,061
     accumulated depreciation at June 30, 2000 and
     September 30, 1999)                                                47,849       47,435

Other Assets:                                                          453,750      352,062
                                                                    ----------   ----------
          Total Assets                                              $4,334,813   $2,596,493
                                                                    ==========   ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
     Accounts Payable and Accrued Expenses                          $        -   $   82,203
     Notes and Mortgages Payable                                     1,933,191    1,597,500
                                                                    ----------   ----------
          Total Current Liabilities                                  1,933,191    1,679,703

Stockholders' Equity:
     Common Stock, $.001 Par Value; authorized 100,000,000
       shares; issued and outstanding 45,316,967 and 9,054,773
       at June 30,2000 and September 30, 1999                           45,317        9,055
     Common Stock Class A Voting, $.001 Par Value; authorized
       2,000,000 shares; issued and outstanding 1,000,000 and
       1,000,000 at June 30, 2000 and September 30, 1999                 1,000        1,000
     Additional Paid In Capital                                      3,146,167    1,324,190
     Accumulated Deficit                                              (790,862)    (417,455)
                                                                    ----------   ----------
          Total Stockholders' Equity                                 2,401,622      916,790
                                                                    ----------   ----------
          Total Liabilities and Stockholders' Equity                $4,334,813   $2,596,493
                                                                    ==========   ==========

</TABLE>



                                       3
<PAGE>

<TABLE>

                         NATIONAL REHAB PROPERTIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE NINE MONTHS ENDED JUNE 30,
                                  (UNAUDITED)

<CAPTION>
                                                      2000          1999
                                                   ----------    ----------
<S>                                                <C>           <C>
Revenues                                           $    1,119    $  373,819

Cost of Goods Sold                                     27,941       138,292
                                                   ----------    ----------

Gross Profit                                          (26,822)      235,527

Operating Expenses                                    358,562       204,646
                                                   ----------    ----------

Income (Loss) Before Other Income (Expense)          (385,384)       30,881

Interest Income                                        11,977         5,355
                                                   ----------    ----------

Net Income (Loss)                                    (373,407)       36,236
                                                   ==========    ==========

Income (Loss) Per Common Share                     $  (0.0161)   $   0.0371
                                                   ==========    ==========

Weighted Average Common Shares Outstanding         23,147,168       977,370
                                                   ==========    ==========
</TABLE>

                                       4
<PAGE>

<TABLE>

                         NATIONAL REHAB PROPERTIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE THREE MONTHS ENDED JUNE 30,
                                  (UNAUDITED)

<CAPTION>
                                                 2000           1999
                                              ----------    ----------
<S>                                           <C>           <C>
Revenues                                      $        -    $    7,300

Cost of Goods Sold                                 7,598         1,000
                                              ----------    ----------

Gross Profit                                      (7,598)        6,300

Operating Expenses
                                                  72,743       138,751
                                              ----------    ----------

Income (Loss) Before Other Income (Expense)      (80,341)     (132,451)

Interest Income                                    4,524         3,039
                                              ----------    ----------

Net Income (Loss)                                (75,817)     (129,412)
                                              ==========    ==========

Income (Loss) Per Common Share                $  (0.0033)   $  (0.1324)
                                              ==========    ==========

Weighted Average Common Shares Outstanding    23,147,168       977,370
                                              ==========    ==========
</TABLE>

                                       5
<PAGE>

<TABLE>


                         NATIONAL REHAB PROPERTIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE NINE MONTHS ENDED JUNE 30


<CAPTION>
                                                                   2000           1999
                                                               ------------    -----------
<S>                                                            <C>             <C>
Cash Flow from Operating Activities:
Net Income (Loss)                                              $   (373,407)   $    36,236

Adjustments to Reconcile Net Loss to Net Cash Used For
Operating Activities:
     Depreciation and Amortization                                  15,433           7,803

Changes in Assets and Liabilities:

(Increase) Decrease in Inventory-Real Estate Holdings           (1,731,674)        585,690
(Increase) Decrease in Subscriptions Receivable                    500,000               -
(Increase) Decrease in Mortgages Receivable                        (39,883)         17,076
(Increase) Decrease in Prepaid Expenses                             52,000          22,283
(Increase) Decrease in Other Assets                               (101,688)        (79,678)
Increase (Decrease) in Accounts Payable and Accrued Expenses       (82,203)        (41,828)
Increase (Decrease) in Notes and Mortgages Payable                 335,691        (674,892)
                                                               -----------     -----------

Net Cash Used in Operating Activities                           (1,425,731)       (127,310)

Cash Flow from Investing Activities                                (15,847)        (40,681)

Cash Flow from Financing Activities:
Proceeds From Common Stock                                       1,858,239         469,000

Net increase (decrease) in Cash                                    416,661         301,009
                                                               -----------     -----------
Cash - Beginning                                                   411,257          13,754
                                                               -----------     -----------
Cash - Ending                                                  $   827,918     $   314,763
                                                               ============    ===========

</TABLE>

                                       6
<PAGE>



                         NATIONAL REHAB PROPERTIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)
GENERAL

Basis  of  Presentation  -  The  unaudited  condensed   consolidated   financial
statements include the accounts of the Company and its subsidiary.  Intercompany
balances have been eliminated in consolidation.

Interim Financial  Information - The financial  information  contained herein is
unaudited  but  includes  all normal and  recurring  adjustments  which,  in the
opinion of  management,  are  necessary to present  fairly the  information  set
forth. The unaudited condensed  consolidated financial statements should be read
in conjunction with the consolidated financial statements, which are included in
the  Company's  Annual  Report on Form 10-KSB for the year ended  September  30,
1999.The Company's results for interim periods are not necessarily indicative of
results to be expected for the fiscal year of the Company  ending  September 30,
2000. The Company  believes that this  Quarterly  Report filed on Form 10-QSB is
representative of its financial position, its results of operations and its cash
flows for the periods ended June 30, 2000 and 1999 covered thereby.

Comprehensive  Income - In June 1997, the Financial  Accounting  Standards Board
issued  Statement  of  Financial  Accounting  Standards  No. 130  ("SFAS  130"),
"Reporting  Comprehensive  Income."  SFAS 130  requires  companies  to  disclose
comprehensive  income and its components.  The Company currently has no items of
other comprehensive income and therefore SFAS 130 does not apply.

LEGAL PROCEEDINGS

The Company has no pending legal proceedings at this time.


                                       7
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Overview
--------

     The Company  was  incorporated  in Florida in 1993 and  completed a reverse
merger with a Nevada corporation in 1994. The Company has undergone many changes
to date as a result of  certain  reorganizations,  acquisitions  and  changes of
management.  Historical  changes are more fully  disclosed in the  Company's 8-K
dated  February  14,  2000.  The  Company  is  currently   authorized  to  issue
100,000,000  common  shares,  $0.001 par value and  2,000,000  shares of Class A
("super  voting")  common stock.  Our offices are located at 2921 NW 6th Avenue,
Miami, Florida 33127 and our telephone number is (305) 573-8882. Our business is
currently  based  in  Miami,  Florida.  As  a  public  Company,  National  Rehab
Properties,  Inc. is traded over-the-counter as a bulletin board stock under the
symbol "NRPI". We believe that the Company has over 1200 stockholders.

     Historically  the Company  has  specialized  in  renovating  or  rebuilding
starter  homes.  In  order  for  us to buy  real  estate  for  our  business  of
rehabilitating houses or building houses,  construction  financing is necessary.
We finance  our real estate  projects  with first  mortgages  from banks at bank
rates.

(a)   Plan of Operation:

     FORWARD-LOOKING STATEMENTS
     --------------------------

     The securities of the Company are  speculative and involve a high degree of
risk, including, but not necessarily limited to, the factors affecting operating
results  described in the Form 8K dated February 14, 2000 and other filings with
the SEC. The statements which are not historical facts contained in this report,
including statements containing words such as "believes,"  "expects," "intends,"
"estimates,"  "anticipates,"  or  similar  expressions,   are  "forward  looking
statements" (as defined in the Private Securities Litigation Reform Act of 1995)
that involve risks and uncertainties.

     The foregoing and subsequent  discussion  contains certain  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the  Securities  Exchange  Act of 1934,  which are intended to be
covered by the safe harbors created thereby.  These  forward-looking  statements
include the plans and objectives of management for future operations,  including
plans and objectives relating to the possible further  capitalization and future
acquisitions  of real estate or other cash flow  business.  The  forward-looking
statements  included  herein  are based on  current  expectations  that  involve
numerous risks and uncertainties.  Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic,  competitive and
market conditions and future business  decisions,  all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company.  Although the Company  believes  that the  assumptions  underlying  the
forward-looking  statements  are  reasonable,  any of the  assumptions  could be
inaccurate and,  therefore,  there can be no assurance that the  forward-looking
statements  included in this Form 10-QSB will prove to be accurate.  In light of
the  significant  uncertainties  inherent  in  the  forward-looking   statements
included herein,  the inclusion of such information  should not be regarded as a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.

Current Status and Operations

     Subsequent to the year ended  September 30, 1999,  the Company  changed its
operational  direction  from that of building or remodeling  relatively low cost
"starter" homes to the business of developing multifamily housing projects. As a
result of this change in operations,  although  projects are in the  development
stage,  no revenues were  generated in the six month period ended June 30, 2000.
The Company's  financial  statements are therefore not indicative of anticipated
revenues  which may be  attained  or  expenditures  which may be incurred by the
Company  in  future  periods.   The  Company's  ability  to  achieve  profitable
operations is subject to the validity of its assumptions and risk factors within
the  industry  and  pertaining  to the  Company.  The  market  for  real  estate
development  and  housing  construction  is highly  competitive  and  subject to
economic changes,  regulatory  developments and emerging industry standards.  We
believe that the principal competitive factors in its markets are conformance to
building standards, reliability, safety, price and quality of its final product.
There can be no  assurance  that the Company will  compete  successfully  in the
future with respect to these or other factors.

                                       8
<PAGE>


     For the nine months ending June 30, 2000, the Company  incurred a loss from
operations  of $385,384,  compared to income from  operations  of $30,881 in the
quarter  ending June 30, 1999.  The net loss in the nine month period ended June
2000 was the result of change in business  direction from  remodeling of private
homes to development of multifamily housing projects.  As a result of the change
in operational  direction,  there were no revenues in the quarter ended June 30,
2000.  The Company's  quarter ended June 30, 2000 financial  statements  reflect
adjustments  and  nonrecurring  items  of both  revenue  and  costs,  as well as
development stage costs and are not indicative of anticipated revenues which may
be  attained  or  expenditures  which may be  incurred  by the Company in future
periods.

     For the quarter  ending  June 30,  2000,  the Company  incurred a loss from
operations  of $80,341,  compared to a loss from  operations  of $132,451 in the
quarter  ending June 30, 1999.  The net loss in the quarter  ended June 2000 was
the result of change in business  direction from  remodeling of private homes to
development  of  multifamily  housing  projects.  As a result  of the  change in
operational  direction,  there were no revenues  in the  quarter  ended June 30,
2000.  The Company's  Quarter ended June 30, 2000 financial  statements  reflect
adjustments  and  nonrecurring  items  of both  revenue  and  costs,  as well as
development stage costs and are not indicative of anticipated revenues which may
be  attained  or  expenditures  which may be  incurred  by the Company in future
periods.

(b)   Liquidity and Capital Resources

     From July 1, 2000 to the end of fiscal year ended  September 30, 2000,  the
Company  estimates  its cash  needs to  maintain  operations  under its  current
negative cash flow situation is approximately  $75,000.  This amount is composed
of $75,000 for working capital assuming that current operations  continue in its
present status.  These amounts do not include offsets for anticipated amounts of
cash generated from operations.  The monthly  reoccurring costs of our corporate
offices are estimated to be approximately $20,000 per month. The monthly expense
of $20,000 includes payroll,  payroll taxes, dues and  subscriptions,  utilities
for the corporate offices, health insurance for the employees, general liability
insurance,   office  supplies,  postage  and  freight,   professional  fees  for
accounting,  legal and other  consultants,  corporate  office rent,  repairs and
maintenance  primarily for office equipment,  telephone  expenses and travel and
entertainment.

     The Company has limited  capitalization and is dependent on the proceeds of
private or public  offerings to continue as a going concern and  implementing  a
business  plan.  As of June 30,  2000,  the  unaudited  results  of the  Company
indicated working capital of $1,900,023.  All during fiscal 1999 and to the date
of this filing, the Company has had and continues to have a substantial need for
working  capital  for normal  operating  expenses  associated  with the  Company
continuing  as a going  concern.  This lack of cash has  slowed  its  ability to
develop its business  plan or initiate any other revenue  producing  operations.
Any activity in the real estate development business requires adequate financing
and on-going funding sources. The Company has entered this industry with limited
financing and funding sources.

     Prior to our inception as a publicly  owned  company,  we relied  primarily
upon loans originated by the Company's founder,  Richard S. Astrom.  These loans
helped to finance  working  capital needs when operations did not provide enough
cash  flow.  Additionally,  we  have  relied  upon  bank  financing  to  acquire
properties  and pay  operational  costs.  The bank  financing  has  required the
personal  guarantee of Mr.  Christopher  Astrom.  In the future, we will need to
acquire  additional  financing  for the  company  with the  proceeds of mortgage
funding or public or private  offerings of stock.  However,  we  currently  have
sufficient funds to continue  operations and new  acquisitions  will also supply
additional  funds to continue  operations.  Therefore,  any future  funding will
result from business  expansion  and/or  improvements  to our financial  lending
structure.  Thus,  we do not have a schedule of future  funds to be acquired and
quantified  because it is difficult to estimate when, or if, business  expansion
will occur or when, or if, financial lucrative opportunities present themselves.
If funds are  required in the future they may be  generated  from stock sales or
from the  mortgaging  of real estate.  There can be no  assurance  that any such
funds will be available on favorable  terms and  conditions  when the capital is
required.

     In January 1999 we completed a reverse split of our common stock on a 1 for
10 basis and proceeded to raise  $557,500 from the sale and/or  conversion  into
common stock of senior  subordinated  debentures.  The reverse split was done in
order to reduce the number of shares outstanding so that it would be possible to
attract  investment  capital through the sale of common stock. In addition,  the
Company raised  $211,500 from the sale of our  restricted  stock during the 1999
fiscal year ended September 30, 1999.

                                       9

<PAGE>


     On June 12, 2000, by a written consent in lieu of combined  special meeting
of Directors and Shareholders,  pursuant to permissive  provisions of the Nevada
General  Corporation Act, Chapter 78, Nevada Revised Statutes,  the holders of a
majority of each class of the authorized,  issued and outstanding voting capital
stock of the Company consented to the amendment of the articles of incorporation
of the Company increasing the authorized shares of the Company's $.001 par value
Common  Stock  from  40,000,000  to  100,000,000  shares  authorized.  No  proxy
statement was issued and no  shareholder  proxies were solicited or accepted for
the  written  consent  in lieu of  combined  special  meeting of  Directors  and
Shareholders.

     On June 17, 1999, by a written consent in lieu of combined  special meeting
of Directors  and  Shareholders,  a new class of common  stock,  "Class A common
stock,  " was authorized on June 17, 1999. On that same date,  1,000,000  shares
were  issued  to Mr.  Christopher  Astrom.  Each  share of Class A common  stock
entitles Mr. Astrom to the  equivalent of 20 common share votes in any matter to
be  voted  on  by  the  shareholders  of  the  Company.  The  present  principal
shareholders  will maintain  voting control of the Company based on the issuance
of 1,000,000  Class A common  shares on June 17, 1999,  which entitle the holder
thereof  (Christopher  Astrom)  to 20 votes for every  Class A share  held.  The
purpose  of issuing  these  shares is to ensure  that  current  management  will
maintain control of the Company despite maintaining beneficial ownership of less
than a majority of the shares of the Company's  common stock.  Furthermore,  the
disproportionate  vote  afforded the Class A common stock will prevent or impede
potential acquirers from seeking to acquire control of the Company,  which could
have a  depressive  effect  on the  price of our  common  stock.  An  additional
1,000,000  of the  authorized  2,000,000  shares  of  Class A  common  stock  is
available for issuance. The Class A common stock is non-transferable except to a
family member.  Richard Astrom,  President,  CEO and Director,  is the father of
Christopher  Astrom,  Vice  President,  Secretary  and  Director of the Company.
Richard  Astrom and  Christopher  Astrom  make up the  majority  of the Board of
Directors of the Company and control the  activities and actions of the Company.
The  Company's  debt in the form of  secured  mortgage  notes  and  real  estate
mortgages with regard to real estate  transactions which are entered into by the
Company are personally guaranteed by Christopher Astrom.

     On March 1,  1999,  Christopher  Astrom  was  granted  options  to  acquire
6,000,000  shares of common  stock at a price of $.001  per  share.  On April 3,
2000,  Mr.  Astrom  exercised  his option and acquired  6,000,000  shares of the
Company's $.001 par value common stock for payment of $6,000. These options were
authorized and awarded to Mr. Christopher Astrom by a written consent in lieu of
combined  special meeting of Directors and  Shareholders  held on March 1, 1999.
The options were granted to Christopher  Astrom in  consideration  for waiver of
compensation during 1996 and 1997.

     The President of the Company,  Richard  Astrom,  owed the Company  $302,000
pursuant to a note which matured  September  20, 2000.  During the quarter ended
June 30, 2000 the $302,000 note and interest  accrued thereon was converted from
a note  receivable  to a prepaid  management  fee pursuant to an agreement  with
Richard Astrom, the Company's President.

     On April 1, 2000,  the  Company  acquired,  in a  transaction  exempt  from
registration,  eighty  percent of the common stock of Encore  Services,  Inc., a
Florida  Corporation,  in exchange for (a) 250,000 shares of the Company's $.001
par value common stock issued to Braulio  Gutierrez,  and (b) an assignment  and
assumption agreement with Encore Services, Inc. whereby, with the assent of HLKT
Holdings,  L.L.C., Encore Services, Inc. assigned to the Company and the Company
irrevocably and unconditionally assumed all the rights and obligations of Encore
Services,  Inc. under a $1,000,000  convertible  Debenture  previously issued by
Encore Services,  Inc. to HLKT Holdings,  L.L.C.,  a Colorado Limited  Liability
Company,  on March 15, 2000.  On April 1, 2000 Mr.  Gutierrez was appointed as a
Director of the Company.  Commencing April 12, 2000, and continuing through June
28, 2000, the total $1,000,000 face amount of the Debenture was presented to the
Company's  transfer  agent for  conversion in  accordance  with the terms of the
Debenture to unrestricted  $.001 par value common stock of the Company  pursuant
to the assignment and assumption agreement with Encore Services, Inc. A total of
28,856,464  shares of the Company's  $.001 par value common stock were exchanged
for the $1,000,000 Debenture,  and an additional 140,023 shares of the Company's
$.001 par value common  stock were issued in payment of accrued  interest on the
Debenture.

     At June 30,  2000,  we had  $827,918 in cash  assets,  inventories  of real
estate holdings of $2,948,055 and current  liabilities of $1,933,191,  resulting
in a working  capital  reserve of  $1,900,023  at June 30, 2000.  In the quarter
ending June 30,  2000,  we recorded a net loss of $75,817.  In order to conserve
cash  assets,  the  Company's  management  expects to take  defensive  measures,
including slowing  construction,  acquiring additional mortgage

                                       10

<PAGE>

financing and/or selling additional stock.  Management  believes that we will be
able to support ourselves with operational cash flow. However, no assurances can
be given that present factors such as favorable economy and attractive  interest
rates will continue,  the effect of which might  severely  impact the ability of
the Company to sustain  itself in the future.  There can be no  assurances  that
additional funding will be available.

     At  June  30,  2000  (unaudited),  the  following  contingent  stock  issue
requirements were outstanding:

     None

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     As of the date  hereof,  the  Company's  short and long  term debt  carries
either fixed and variable  interest rates and the fair market value of this debt
is sensitive to changes in prevailing  interest rates. The Company runs the risk
that market rates will decline and the required payments on fixed rate debt will
exceed  those based on the current  market rate as well as the risk of increases
in interest  rates on variable rate debt. The Company does not use interest rate
derivative instruments to manage its exposure to interest rate changes.

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

     There is no non-course of business  legal  proceedings to which the Company
is a party or to which the  property  of the  Company is  subject  pending or is
known by the Company to be contemplated.

ITEM 2.   CHANGE IN SECURITIES.

     On June 12, 2000, by a written consent in lieu of combined  special meeting
of Directors and Shareholders,  pursuant to permissive  provisions of the Nevada
General  Corporation Act, Chapter 78, Nevada Revised Statutes,  the holders of a
majority of each class of the authorized,  issued and outstanding voting capital
stock of the Company consented to the amendment of the articles of incorporation
of the Company increasing the authorized shares of the Company's $.001 par value
Common  Stock  from  40,000,000  to  100,000,000  shares  authorized.  No  proxy
statement was issued and no  shareholder  proxies were solicited or accepted for
the  written  consent  in lieu of  combined  special  meeting of  Directors  and
Shareholders.

ITEM 3.    Defaults Upon Senior Securities.    NONE

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

     On June 12, 2000, by a written consent in lieu of combined  special meeting
of Directors and Shareholders,  pursuant to permissive  provisions of the Nevada
General  Corporation Act, Chapter 78, Nevada Revised Statutes,  the holders of a
majority of each class of the authorized,  issued and outstanding voting capital
stock of the Company consented to the amendment of the articles of incorporation
of the Company increasing the authorized shares of the Company's $.001 par value
Common  Stock  from  40,000,000  to  100,000,000  shares  authorized.  No  proxy
statement was issued and no  shareholder  proxies were solicited or accepted for
the  written  consent  in lieu of  combined  special  meeting of  Directors  and
Shareholders.

ITEM 5.  OTHER INFORMATION:

     On March 1,  1999,  Christopher  Astrom  was  granted  options  to  acquire
6,000,000  shares of common  stock at a price of $.001  per  share.  On April 3,
2000,  Mr.  Astrom  exercised  his option and acquired  6,000,000  shares of the
Company's $.001 par value common stock for payment of $6,000. These options were
authorized and awarded to Mr. Christopher Astrom by a written consent in lieu of
combined  special meeting of Directors and  Shareholders  held on March 1, 1999.
The options were granted to Christopher  Astrom in  consideration  for waiver of
compensation during 1996 and 1997.

     On April 1, 2000,  the  Company  acquired,  in a  transaction  exempt  from
registration,  eighty  percent of the common stock of Encore  Services,  Inc., a
Florida  Corporation,  in exchange for (a) 250,000 shares of the Company's $.001
par value common stock issued to Braulio  Gutierrez,  and (b) an assignment  and
assumption agreement with

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<PAGE>

Encore Services, Inc. whereby, with the assent of HLKT Holdings,  L.L.C., Encore
Services,  Inc.  assigned  to  the  Company  and  the  Company  irrevocably  and
unconditionally  assumed all the rights and obligations of Encore Services, Inc.
under a $1,000,000  convertible  Debenture previously issued by Encore Services,
Inc. to HLKT Holdings,  L.L.C., a Colorado Limited Liability  Company,  on March
15, 2000.  On April 1, 2000,  Mr.  Gutierrez  was appointed as a Director of the
Company.  Commencing  April 12, 2000, and continuing  through June 28, 2000, the
total  $1,000,000  face amount of the  Debenture  was presented to the Company's
transfer agent for  conversion in accordance  with the terms of the Debenture to
unrestricted  $.001  par  value  common  stock of the  Company  pursuant  to the
assignment  and  assumption  agreement  with  Encore  Services,  Inc. A total of
28,856,464  shares of the Company's  .001 par value common stock were  exchanged
for the $1,000,000 Debenture,  and an additional 140,023 shares of the Company's
$.001 par value common  stock were issued in payment of accrued  interest on the
Debenture.

     The President of the Company,  Richard  Astrom,  owed the Company  $302,000
pursuant to a note which matured  September  20, 2000.  During the quarter ended
June 30, 2000, the $302,000 note and interest accrued thereon was converted from
a note  receivable  to a prepaid  management  fee pursuant to an agreement  with
Richard Astrom, the Company's President.

     On June 17, 1999, by a written consent in lieu of combined  special meeting
of Directors  and  Shareholders,  a new class of common  stock,  "Class A common
stock," was authorized.  On that same date,  1,000,000 shares were issued to Mr.
Christopher  Astrom.  Each share of Class A common stock  entitles Mr. Astrom to
the  equivalent  of 20 common  share  votes in any  matter to be voted on by the
shareholders of the Company.  The present  principal  shareholders will maintain
voting control of the Company based on the issuance of 1,000,000  Class A common
shares on June 17, 1999, which entitle the holder thereof  (Christopher  Astrom)
to 20 votes for every Class A share held. The purpose of issuing these shares is
to ensure that current  management will maintain  control of the Company despite
maintaining  beneficial  ownership  of less than a majority of the shares of the
Company's  common stock.  Furthermore,  the  disproportionate  vote afforded the
Class A common stock will prevent or impede potential  acquirers from seeking to
acquire  control of the  Company,  which could have a  depressive  effect on the
price of our common stock. An additional  1,000,000 of the authorized  2,000,000
shares of Class A common stock is  available  for  issuance.  The Class A common
stock is non-transferable except to a family member. Richard Astrom,  President,
CEO and Director, is the father of Christopher Astrom, Vice President, Secretary
and Director of the Company.  Richard Astrom and Christopher  Astrom make up the
majority of the Board of Directors of the Company and control the activities and
actions of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

27       Financial Data Schedule

(b)      The Company filed the following reports on Form 8-K:

         None




                                   SIGNATURES


     Pursuant to the  requirements  of the Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the Company  has duly  caused this report  signed on its
behalf by the Undersigned, thereunto duly authorized.

                                      NATIONAL REHAB PROPERTIES, INC.

Date: August 16, 2000                     By:    /s/ Richard Astrom
                                             --------------------------------
                                             Richard Astrom, President and
                                             Chief Executive Officer


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