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

                                   FORM 10-KSB

(x)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 (FEE REQUIRED)

                   For the fiscal year ended December 31, 2003
                                             -----------------

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


Commission File number    000-33625
                       ---------------

                                  DRILLING INC.
                         -------------------------------
               (Exact name of registrant as specified in charter)

                 Nevada                                         87-0618509
--------------------------------------------                ----------------
State or other jurisdiction of incorporation          (I.R.S. Employer I.D. No.)
            or organization

1981 East Murray Holiday Road , Salt Lake City, Utah              84117
-----------------------------------------------------           -------
(Address of principal executive offices)                       (Zip Code)

Issuer's telephone number, including area code     801-272-9294
                                               --------------------

Securities registered pursuant to section 12 (b) of the Act:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------

      None                                               None

Securities registered pursuant to section 12 (g ) of the Act:

                                     Common
                                ----------------
                                (Title of Class)

Check whether the Issuer (1 ) filed all reports  required to be filed by section
13 or 15 (d) of the  Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing  requirements  for the past 90 days. (1) Yes [ x ] No [ ]
______ (2) Yes [x ] No [ ]

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

State issuer's revenues for its most recent fiscal year:  $   -
                                                           ---------



<PAGE>


State the aggregate  market value of the voting stock held by  nonaffiliates  of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the average bid and asked  prices of such
stock, as of a specified date within the past 60 days.

At December 31,  2003,  the  aggregate  market value of the voting stock held by
nonaffiliates is undeterminable and is considered to be 0.

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

                                 Not applicable

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

As of December  31,  2003,  the  registrant  had 772,200  shares of common stock
issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part
of the form 10- KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None



                                      -2-
<PAGE>




                                TABLE OF CONTENTS


PART I
------------------------------------------------------------------------------



                                                                            PAGE

ITEM 1.    DESCRIPTION OF BUSINESS                                           4

ITEM 2.    DESCRIPTION OF PROPERTIES                                         7

ITEM 3.    LEGAL PROCEEDINGS                                                 7

ITEM 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS                 8

PART II
-------
ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          8

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION         9

ITEM 7.    FINANCIAL STATEMENTS                                              9

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE                                          9

ITEM 8A.   CONTROLS AND PROCEDURES                                           10

PART III
--------
ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT                10

ITEM 10.   EXECUTIVE COMPENSATION                                            12

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT                                                    13

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    13

PART IV
-------

ITEM 13.   EXHIBITS                                                          14

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES                            15



                                      -3-
<PAGE>


ITEM 1.    DESCRIPTION OF BUSINESS


History and Organization

General

      DRILLING, INC., (hereinafter "The Company") was originally incorporated on
April  24,  1975 as Domi  Associates,  Inc.,  pursuant  to the  Nevada  Business
Corporation Act. Its original Articles of Incorporation  provided for authorized
capital of Twenty-five  hundred (2500) shares of common stock with no par value.
On March 9, 2001, the  shareholders of the Company  approved an amendment to the
Articles of Incorporation changing the authorized capital to one hundred million
(100,000,000)  shares  of common  stock  with a par value of $0.001 (1 mill) per
share and providing  for a two hundred to one forward  split of the  outstanding
shares. The amended Articles were filed with the State of Nevada on May 8, 2001.
The Company was formed with the stated purpose of conducting any lawful business
activity. However, no business was undertaken by The Company until 1984. Between
June of 1984 and February of 1986, The Company raised  $14,860  through  private
sales of its stock all of which was expended in the  evaluation  of two specific
mining  properties in Arizona and New Mexico. In 1991 the Company raised $18,000
through  private sales of its stock all of which was expended in the  evaluation
of an  alluvial  gold  property in Sierra  Leone,  Africa.  After  review of all
reports and subsequent  field  examinations,  it was determined in each instance
that the Company  either did not have the resources to pursue the project or the
project was not  economically  feasible.  The Company became inactive after 1991
and has since been in the development stage.

This report has been prepared  showing after stock split shares with a par value
of $0.001 from inception.


Business.

     Other than the  above-referenced  matters  and  seeking  and  investigating
potential  assets,  properties or businesses to acquire,  the Company has had no
business  operations since inception.  To the extent that the Company intends to
continue  to seek the  acquisition  of assets,  property  or  business  that may
benefit the Company and its  stockholders,  it is  essentially  a "blank  check"
company.  Because  the  Company has  limited  assets and  conducts no  business,
management  anticipates  that any such  acquisition  would  require  it to issue
shares of its common stock as the sole  consideration for the acquisition.  This
may result in substantial  dilution of the shares of current  stockholders.  The
Company's  Board of  Directors  shall  make the final  determination  whether to
complete any such  acquisition;  the approval of stockholders will not be sought
unless  required by  applicable  laws,  rules and  regulations,  its Articles of
Incorporation  or Bylaws,  or contract.  The Company makes no assurance that any
future enterprise will be profitable or successful.

     The Company is not currently engaging in any substantive  business activity
and has no plans to engage in any such activity in the  foreseeable  future.  In
its present form,  the Company may be deemed to be a vehicle to acquire or merge
with a business or company.  The Company  does not intend to restrict its search
to any particular business or industry,  and the areas in which it will seek out
acquisitions,  reorganizations  or mergers may include,  but will not be limited
to, the fields of high technology,  manufacturing,  natural resources,  service,
research and development, communications,  transportation, insurance, brokerage,
finance and all medically related fields,  among others.  The Company recognizes
that the number of suitable potential business ventures that may be available to
it may be extremely  limited,  and may be  restricted  to entities who desire to
avoid what  these  entities  may deem to be the  adverse  factors  related to an
initial public  offering  ("IPO").  The most prevalent of these factors  include
substantial  time  requirements,  legal and accounting  costs,  the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the lack
of or the  inability to obtain the  required  financial  statements  for such an
undertaking,  limitations  on the  amount of  dilution  to public  investors  in
comparison to the stockholders of any such entities, along with other conditions
or requirements  imposed by various federal and state securities laws, rules and
regulations.  Any of these types of  entities,  regardless  of their  prospects,
would require the Company to issue a substantial  number of shares of its common

                                      -4-
<PAGE>


stock to  complete  any such  acquisition,  reorganization  or  merger,  usually
amounting to between 80 and 95 percent of the outstanding  shares of the Company
following the completion of any such  transaction;  accordingly,  investments in
any such private  entity,  if available,  would be much more  favorable than any
investment in the Company.

     In the event that the Company  engages in any  transaction  resulting  in a
change of control of the  Company  and/or the  acquisition  of a  business,  the
Company will be required to file with the  Commission  a Current  Report on Form
8-K within 15 days of such  transaction.  A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired,  as well as pro
forma financial  information  consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.

     Management  intends to  consider  a number of  factors  prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be  determinative  or provide  any  assurance  of  success.  These may
include,  but will not be limited to an analysis of the quality of the  entity's
management  personnel;  the  anticipated  acceptability  of any new  products or
marketing concepts;  the merit of technological  changes;  its present financial
condition,  projected  growth potential and available  technical,  financial and
managerial  resources;  its working  capital,  history of operations  and future
prospects;  the nature of its present and expected competition;  the quality and
experience  of its  management  services  and the depth of its  management;  its
potential  for  further  research,  development  or  exploration;  risk  factors
specifically  related to its  business  operations;  its  potential  for growth,
expansion and profit;  the  perceived  public  recognition  or acceptance of its
products,  services,  trademarks  and name  identification;  and numerous  other
factors  which are  difficult,  if not  impossible,  to properly  or  accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.

     Regardless,  the  results  of  operations  of any  specific  entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market  strategies,  plant or product  expansion,  changes in product  emphasis,
future management  personnel and changes in innumerable other factors.  Further,
in  the  case  of a new  business  venture  or one  that  is in a  research  and
development mode, the risks will be substantial,  and there will be no objective
criteria to examine the  effectiveness or the abilities of its management or its
business  objectives.  Also,  a firm market for its products or services may yet
need to be established,  and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.

     Management  will  attempt  to  meet  personally  with  management  and  key
personnel  of the entity  sponsoring  any business  opportunity  afforded to the
Company,  visit and inspect material facilities,  obtain independent analysis or
verification  of  information   provided  and  gathered,   check  references  of
management  and key  personnel  and conduct other  reasonably  prudent  measures
calculated to ensure a reasonably  thorough  review of any  particular  business
opportunity;  however,  due to time constraints of management,  these activities
may be limited.

     The Company is unable to predict the time as to when and if it may actually
participate in any specific  business  endeavor.  The Company  anticipates  that
proposed  business  ventures  will  be made  available  to it  through  personal
contacts  of  directors,   executive   officers  and   principal   stockholders,
professional advisors, broker dealers in securities,  venture capital personnel,
members  of the  financial  community  and others  who may  present  unsolicited
proposals.  In certain cases,  the Company may agree to pay a finder's fee or to
otherwise  compensate  the persons who submit a potential  business  endeavor in
which  the  Company  eventually  participates.  Such  persons  may  include  the
Company's directors,  executive officers, beneficial owners or their affiliates.
In this  event,  such  fees may  become a factor  in  negotiations  regarding  a
potential acquisition and,  accordingly,  may present a conflict of interest for
such individuals.

     In addition,  the possibility  exists that the Company may acquire or merge
with a business or company in which the Company's executive officers, directors,
beneficial  owners or their affiliates may have an ownership  interest.  Current
Company policy does not prohibit such transactions.  Because no such transaction
is currently contemplated,  it is impossible to estimate the potential pecuniary
benefits to these persons.


                                      -5-
<PAGE>


     Further,  substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders,  after deduction of legal,  accounting and other related expenses, and
it is not  unusual  for a  portion  of  these  fees  to be paid  to  members  of
management or to principal  stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them.  In the event that
such  fees are paid,  they may  become a factor in  negotiations  regarding  any
potential acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.

    The  Company  in the past has had and  continues  to have  discussions  with
various  possible  merger or  acquisition  candidates.  However,  no  definitive
agreement has been entered into between the Company and any such candidate. Even
in the event that such an agreement is entered into between the Company and such
a candidate in the future, it would be subject to many contingencies, any one of
which might fail to be satisfied.  In that case any such  acquisition  or merger
would fail to be consumated.

Principal Products and Services.

     The  limited  business  operations  of the  Company,  as now  contemplated,
involve those of a "blank check" company. The only activities to be conducted by
the  Company  are to  manage  its  current  limited  assets  and to seek out and
investigate the  acquisition of any viable business  opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.

Distribution Methods of the Products or Services.

     Management will seek out and  investigate  business  opportunities  through
every reasonably available fashion, including personal contacts,  professionals,
securities broker dealers,  venture capital personnel,  members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its  availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.

Status of any Publicly Announced New Product or Service.

     None; not applicable.

Competitive Business Conditions.

     Management  believes  that there are  literally  thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company;  many
of  these  companies  have   substantial   current  assets  and  cash  reserves.
Competitors  also  include  thousands  of other  publicly-held  companies  whose
business  operations  have proven  unsuccessful,  and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a private
entity may have access to the public capital markets. There is no reasonable way
to predict the  competitive  position of the Company or any other  entity in the
strata of these endeavors;  however, the Company, having limited assets and cash
reserves,  will no doubt be at a  competitive  disadvantage  in  competing  with
entities which have recently  completed  IPO's,  have significant cash resources
and have recent operating  histories when compared with the complete lack of any
substantive operations by the Company for the past several years.

Sources and Availability of Raw Materials and Names of Principal Suppliers.

     None; not applicable.

Dependence on One or a Few Major Customers.

     None; not applicable.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts.

     None; not applicable.


                                      -6-
<PAGE>

Need for any Governmental Approval of Principal Products or Services.

     Because the Company currently  produces no products or services,  it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company  engages in a merger or acquisition  transaction  with an
entity  that  engages  in  such  activities,  it  will  become  subject  to  all
governmental  approval  requirements  to which the merged or acquired  entity is
subject.

Effect of Existing or Probable Governmental Regulations on Business.

     The integrated  disclosure system for small business issuers adopted by the
Commission  in  Release  No.  34-30968  and  effective  as of August  13,  1992,
substantially  modified the information  and financial  requirements of a "Small
Business  Issuer,"  defined to be an issuer  that has  revenues of less than $25
million;  is a U.S. or Canadian issuer; is not an investment  company;  and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however,  an entity is not a small business issuer if it has a public float (the
aggregate  market  value  of  the  issuer's   outstanding   securities  held  by
non-affiliates) of $25 million or more.

     The  Commission,  state  securities  commissions  and  the  North  American
Securities Administrators Association, Inc. ("NASAA") have expressed an interest
in adopting  policies that will streamline the registration  process and make it
easier for a small business issuer to have access to the public capital markets.
The present laws, rules and regulations  designed to promote availability to the
small  business  issuer of these  capital  markets and similar  laws,  rules and
regulations  that may be  adopted  in the future  will  substantially  limit the
demand for "blank  check"  companies  like the Company,  and may make the use of
these companies obsolete.

Research and Development.

     None; not applicable.

Cost and Effects of Compliance with Environmental Laws.

     None; not applicable.  However,  environmental  laws, rules and regulations
may have an adverse  effect on any business  venture viewed by the Company as an
attractive  acquisition,  reorganization or merger candidate,  and these factors
may further  limit the number of potential  candidates  available to the Company
for acquisition, reorganization or merger.

Number of Employees.

     None.



ITEM 2.  DESCRIPTION OF PROPERTIES


The Company's does not  own any property



ITEM 3.  LEGAL PROCEEDINGS


None.


                                      -7-
<PAGE>


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



No matters were  submitted to a vote of  shareholders  of the Company during the
fiscal year ended December 31, 2003.

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


Market Information

     There is no  "public  market"  for shares of common  stock of the  Company.
Although  the  Company's  shares  are  quoted on the OTC  Bulletin  Board of the
National Association of Securities Dealers, the Company is unaware of any trades
having been consummated. In any event, no assurance can be given that any market
for the Company's common stock will develop or be maintained.

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

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

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

Holders

     The number of record  holders of the Company's  common stock as of the date
of this report is  approximately  27. The Company's  transfer agent is Interwest
Transfer Company, Inc., 1981 East Murray-Holiday Rd., Salt Lake City, Utah 84117

                                      -8-
<PAGE>


Dividends

     The Company has not declared any cash  dividends with respect to its common
stock and does not intend to declare  dividends in the foreseeable  future.  The
future dividend policy of the Company cannot be ascertained  with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material  restrictions  limiting,  or that are  likely to limit,  the  Company's
ability to pay dividends on its common stock.

Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
      In May of 2001, in a private transaction,  the Company sold 120,000 shares
each to Hans  Noerring and Jean  Norerring in order to fund certain  expenses of
the Company.  In December  2003, The Company sold 35,000 shares to Jason Thomsen
in order to fund expenses of the Company.  These  transactions are deemed exempt
pursuant to Section 4(2) of the Act.



ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



Overview
--------

     The Company has not engaged in any material  operations or had any revenues
from operations since inception. The Company's plan of operation for the next 12
months  is to  continue  to  seek  the  acquisition  of  assets,  properties  or
businesses  that  may  benefit  the  Company  and its  stockholders.  Management
anticipates that to achieve any such acquisition,  the Company will issue shares
of its common stock as the sole consideration for such acquisition.

Liquidity and Capital Resources
-------------------------------

      As of  December  31,  2003,  the  Company  had  minimal  assets to pay its
liabilities.  In the past the Company has paid its expenses by selling shares of
its common stock to its officers and directors and by officers' contributions to
capital.  The Company  anticipates  that it will continue to pay its expenses by
such sale of stock or contributions from its officers.

Results of Operations
---------------------

     The Company is a development stage company and has had no operations during
the fiscal year ended December 31, 2003.


ITEM 7.  FINANCIAL STATEMENTS

The  financial  statements  of the Company are included  following the signature
page to this form 10-KSB.



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


         The Company's independent auditor for the years ended December 31, 2001
and 2002 was  Sellers and  Andersen,  LLC. On or about  January  27,  2004,  the
Company  terminated  the  engagement  of  Sellers  and  Andersen,   LLC  as  its
independent  auditor  because  Sellers and  Andersen LLC had not  completed  its


                                      -9-
<PAGE>


registration  with the Public  Company  Accounting  Standards  Board which would
allow it to render the necessary opinions on the Company's financials. The Board
of Directors approved the accounting firm of Pritchett, Siler and Hardy, P.C. to
serve as independent auditor of the Company for the year ended December 31, 2003
and any interim  periods.  The Company has been advised that neither  Pritchett,
Siler  and  Hardy,  P.C.  nor  any  of  their  members  or  associates  has  any
relationship  with the  Company or any of its  affiliates,  except in the firm's
proposed capacity as the Company's independent auditor.

     During  the  fiscal  years  ended  December  31,  2001  and  2002,  and any
subsequent  interim  periods,  the  financial  statements of the Company did not
contain any adverse  opinion or disclaimer of opinion from the Company's  former
independent  auditor,  and were not modified as to uncertainty,  audit scope, or
accounting  principles,  except the reports issued by Sellers and Andersen,  LLC
contained  a  statement  expressing  doubt  about the  ability of the Company to
continue as a going  concern due to its status as a  development  stage  company
with no significant operating results.  During the year ended December 31, 2002,
and from that date to the present,  there were no disagreements  with the former
independent auditor on any matter of accounting principles,  financial statement
disclosure,  or auditing scope or procedure which, if not resolved to the former
independent  auditor's  satisfaction,  would have caused it to make reference to
the subject matter of the disagreement in connection with its audit report.




ITEM 8A. CONTROLS AND PROCEDURES


         Based on an evaluation as of the date of the end of the period  covered
by this Form  10-KSB,  our Chief  Executive  Office/  Chief  Financial  Officer,
conducted an evaluation of the  effectiveness of the design and operation of our
disclosure  controls  and  procedures,  as required by Exchange Act Rule 13a-15.
Based on that evaluation,  our Chief Executive  Officer/ Chief Financial Officer
concluded that our disclosure  controls and procedures  were effective to ensure
that  information  required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded,  processed,  summarized  and reported
within the time periods specified by the SEC's rules and forms.

Changes in Internal Controls

         There  were  no  significant  changes  in our  internal  controls  over
financial reporting that occurred during the quarter and year ended December 31,
2003 that have  materially  affected,  or are  reasonably  likely to  materially
affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

         We  believe  that a control  system,  no matter how well  designed  and
operated,  cannot provide absolute  assurance that the objectives of the control
system are met, and no  evaluation  of controls can provide  absolute  assurance
that all control  issues and instances of fraud,  if any,  within a company have
been detected.



                                    PART III




ITEM 9.  DIRECTORS  AND  EXECUTIVE  OFFICERS,  PROMOTERS,  AND CONTROL  PERSONS;
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT



General
-------

The  following  table sets  forth  certain  information  regarding  the  current
directors and executive officers of the Company:


                                      -10-
<PAGE>


Name              Age                Title                     Held Since
----              ---                -----                     ----------

Jason Thomsen     21         President, Sec/ Treas and         10/15/03
                                 Sole Director


     All directors hold office until the next annual meeting of stockholders and
until  their  successors  have been duly  elected  and  qualified.  There are no
agreements  with  respect to the  election  of  directors.  The  Company has not
compensated its directors for service on the Board of Directors or any committee
thereof.  As of the date  hereof,  no  director  has  accrued  any  expenses  or
compensation. Officers are appointed annually by the Board of Directors and each
executive  officer  serves  at the  discretion  of the Board of  Directors.  The
Company does not have any standing committees at this time.

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

     The Company  has no audit  committee  financial  expert,  as defined  under
Section  228.401,  serving  on its  audit  committee  because  it  has no  audit
committee  and is not  required to have an audit  committee  because it is not a
listed security as defined in Section 240.10A-3.

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

Jason Thomsen: President, Sec/Treas, and Sole Director

     Mr. Thomsen has been,  since November 2002,  employed by Clark's Roofing Of
Salt Lake City, Utah as a safety  correspondent.  His duties include  securing a
jobsite for the crews of his employer and running the necessary safety lines. In
addition, since June 2002, he has been self employed as a carpet installer. From
June 1998 until June 2002 he was  employed  by V&F  Flooring  of salt Lake City,
Utah as a carpet installer.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

Except as indicated below, to the knowledge of management,  during the past five
years, no present or former director,  executive  officer or person nominated to
become a director or an executive officer of the Company:

(1) filed a petition under the federal  bankruptcy laws or any state  insolvency
law, nor had a receiver,  fiscal agent or similar  officer  appointed by a court
for the business or property of such person,  or any partnership in which he was
a general partner at or within two years before the time of such filing;

(2) was  convicted  in a  criminal  proceeding  or named  subject  of a  pending
criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated,  of any court of competent  jurisdiction,  permanently  or
temporarily enjoining him from or otherwise limiting, the following activities:

       (i)  acting  as  a  futures  commission  merchant,   introducing  broker,
       commodity  trading  advisor,   commodity  pool  operator,  floor  broker,
       leverage transaction merchant, associated person of any of the foregoing,
       or as an investment advisor, underwriter, broker or dealer in securities,
       or as an  affiliate  person,  director  or  employee  of  any  investment
       company,  or  engaging  in or  continuing  any  conduct  or  practice  in
       connection with such activity;

       (ii)  engaging in any type of business practice; or

       (iii) engaging in any activity in connection with the purchase or sale of
       any security or commodity or in connection  with any violation of federal
       or state securities laws or federal commodities laws;


                                      -11-
<PAGE>


(4)  was the  subject  of any  order,  judgment,  or  decree,  not  subsequently
reversed,  suspended,  or vacated,  of any federal or state  authority  barring,
suspending or otherwise  limiting for more than 60 days the right of such person
to engage in any activity  described  above under this Item, or to be associated
with persons engaged in any such activity;

(5) was found by a court of competent  jurisdiction  in a civil action or by the
Securities  and  Exchange  Commission  to have  violated  any  federal  or state
securities  law,  and the  judgment  in such  civil  action  or  finding  by the
Securities  and  Exchange   Commission  has  not  been  subsequently   reversed,
suspended, or vacated.

(6) was found by a court of competent  jurisdiction  in a civil action or by the
Commodity  Futures Trading  Commission to have violated any federal  commodities
law, and the judgment in such civil action or finding by the  Commodity  Futures
Trading Commission has not been subsequently reversed, suspended or vacated.

Since the Company ceased operations in 1990, the Company knows of no person, who
at any time  during  the  subsequent  fiscal  years,  was a  director,  officer,
beneficial  owner of more than ten percent of any class of equity  securities of
the  registrant  registered  pursuant to Section 12 ("Reporting  Person"),  that
failed to file on a timely basis any reports  required to be furnished  pursuant
to  Section  16 (a).  Based  upon a  review  of Forms 3 and 4  furnished  to the
registrant  under Rule 16a-3(d)  during its most recent fiscal year,  other than
disclosed below, the registrant knows of no Reporting Person that failed to file
the required reports during the most recent fiscal year or prior years.

The following table sets forth as of December 31, 2003, the name and position of
each Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16(a) during the most recent fiscal year or prior years.

Name                   Position              Reports Filed
----                   --------              -------------

          NONE




ITEM 10.  EXECUTIVE COMPENSATION



Cash Compensation

There was no cash  compensation paid to any director or executive officer of the
Company during the fiscal years ended December 31, 2003, 2002, and 2001.

Bonuses and Deferred Compensation

None.


Compensation Pursuant to Plans

None.


Pension Table

None.


Other Compensation

None

Compensation of Directors

None.

                                      -12-
<PAGE>


Termination of Employment and Change of Control Arrangement

There  are no  compensatory  plans or  arrangements,  including  payments  to be
received from the Company, with respect to any person named in Cash Compensation
set out above  which  would in any way  result in  payments  to any such  person
because of his resignation,  retirement,  or other  termination of such person's
employment with the Company or its subsidiaries, or any change in control of the
Company,  or a change in the person's  responsibilities  following a changing in
control of the Company.



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The  following  table  sets  forth  certain  information  furnished  by  current
management  concerning  the  ownership  of  common  stock of the  Company  as of
December  31,  2003,  of (i) each  person who is known to the  Company to be the
beneficial owner of more than 5 percent of the Common Stock;  (ii) all directors
and  executive  officers;  and (iii)  directors  and  executive  officers of the
Company as a group:

                                               Amount
Name and Address                            of Beneficial
of Beneficial Owner                           Ownership        Percent of Class

Jason Thomsen (Pres/Sec/
Treas/Dir)                                     35,000                 4.5%
530 W. Murray Blvd. #9D
Murray, Utah 84123

Hans Noerring ( Former Pres/Dir)*             120,000                15.5%
5821 Immigration Canyon
Salt Lake City, Utah 84108

Jean Noerring (Former Sec/Treas/Dir)*         120,000                15.5%
5821 Immigration Canyon
Salt Lake City, Utah 84108

George D. Davis                                40,000                 5.1%
1099 East Ida Circle
Sandy, Utah 84093

All officers and
directors as a group                           35,000                 4.5%

* Husband and Wife


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Transactions with Management and Others

Except as indicated below, and for the periods indicated, there were no material
transactions,  or series of similar  transactions,  since the  beginning  of the
Company's last fiscal year, or any currently proposed transactions, or series of
similar  transactions,  to which the Company was or is to be party, in which the
amount involved exceeds $60,000, and in which any director or executive officer,
or any  security  holder  who  is  known  by the  Company  to own of  record  or
beneficially  more than 5% of any class of the Company's  common  stock,  or any
member of the immediate family of any of the foregoing persons, has an interest.



                                      -13-
<PAGE>


Indebtedness of Management

There were no material  transactions,  or series of similar transactions,  since
the  beginning of the  Company's  last fiscal year,  or any  currently  proposed
transactions,  or series of similar transactions, to which the Company was or is
to be a party,  in which the amount  involved  exceeds  $60,000 and in which any
director  or  executive  officer,  or any  security  holder  who is known to the
Company  to own of  record  or  beneficially  more  than 5% of any  class of the
Company's  common  stock,  or any member of the  immediate  family of any of the
foregoing persons, has an interest.

Transactions with Promoters

There have no material  transactions  between the Company and its  promoters  or
founders.


                                     PART IV


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K



(a) (1) Financial Statements. The following financial statements are included in
this report:



Title of Document                                                           Page
-----------------                                                           ----

Report of Pritchett, Siler & Hardy, P. C., Certified Public Accountants      F-1

Balance Sheet as of December 31, 2003                                        F-2

Statements of  Operations  for years ended  December 31, 2003,  and
  2002 and the period April 24, 1975 to December 31, 2003                    F-3

Statements of Changes in Stockholders' Equity for the period
    April 24, 1975 to December 31, 2003                                      F-4

Statements of Cash Flows for the years ended December 31, 2003, and
    2002 and the period April 24, 1975 to December 31, 2003                  F-6

Notes to Financial Statements                                                F-7

(a)(2)  Financial  Statement   Schedules.   The  following  financial  statement
     schedules are included as part of this report:

None.

(a)(3) Exhibits.  The following  exhibits are included as part of this report by
reference:

Exhibit    31.1 Rule 13a-14(a)/15d-14(a) Certification.
Exhibit    32.1 Certification by the Chief Executive Officer/Acting Chief
           Financial Officer Relating to a Periodic Report Containing  Financial
           Statements.*

(b)  Reports on Form 8-K.

There  were no  reports  filed on Form 8-K  during  the  period  covered by this
report.

* The  Exhibit  attached  to this Form  10-KSB  shall not be deemed  "filed" for
purposes of Section 18 of the  Securities  Exchange  Act of 1934 (the  "Exchange
Act") or otherwise  subject to  liability  under that  section,  nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended,  or the  Exchange  Act,  except as  expressly  set forth by specific
reference in such filing.



                                      -14-
<PAGE>


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

   Not Applicable at this time




                                   SIGNATURES



         Pursuant to the  requirements of Section 13 or 15 (d) 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.

                                                     DRILLING, INC.
                                                     (Registrant)

                                                     By: S/ Jason Thomsen
                                                         ----------------------
                                                         Jason Thomsen
                                                         President and Director

Dated: 30th of January, 2004.




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report  has been  signed  below by the  following  person on behalf of the
registrant and in the capacities indicated on the 30thday of January, 2004.

S/ Jason Thomsen
------------------
Jason Thomsen
Sole Director, President, and Treasurer



                                      -15-
<PAGE>










                                 DRILLING, INC.
                          [A Development Stage Company]

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2003


                                 Drilling, Inc.
                          [A Development Stage Company]







<PAGE>




                                    CONTENTS



                                                                    PAGE

      --     Independent Auditors' Report                          F - 1


      --     Balance Sheet, December 31, 2003                      F - 2


      --     Statements of Operations, for the years
             ended December 31, 2003 and 2002
             and from inception on April 24, 1975
             through December 31, 2003                             F - 3


      --     Statement of Stockholders' Equity, from
             inception on April 24, 1975 through
             December 31, 2003                                     F - 4


      --     Statements of Cash Flows, for the years
             ended December 31, 2003 and 2002 and from
             inception on April 24, 1975through
             December 31, 2003                                     F - 6


      --     Notes to Financial Statements                         F - 7



<PAGE>


                         Pritchett, Siler & Hardy, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS
                          555 East 200 South, Suite 250
                           Sale Lake City, Utah 84102
                         (801)328-2727-Fax (801)328-1123


                          INDEPENDENT AUDITORS' REPORT


Board of Directors
DRILLING, INC.
Salt Lake City, Utah

We have audited the accompanying balance sheet of Drilling,  Inc. [a development
stage company] at December 31, 2003,  and the related  statements of operations,
stockholders'  equity and cash flows for the year ended  December  31,  2003 and
from  inception on April 24, 1975 through  December  31, 2003.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.  The  financial  statements  of  Drilling,  Inc.  for the period from
inception  on April 24, 1975  through  December  31, 2002 were  audited by other
auditors whose report,  dated March 3, 2003, expressed an unqualified opinion on
these  financial  statements.  The  financial  statements  for the  period  from
inception  on April 24, 1975  though  December  31,  2002  reflect a net loss of
$51,177 of the total net loss. The other  auditors  report has been furnished to
us, and our  opinion,  insofar as it relates to the  amounts  included  for such
prior periods, is based solely on the report of the other auditors.

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

In our  opinion,  based on our  audit  and the  report  of other  auditors,  the
financial statements audited by us present fairly, in all material respects, the
financial  position  of  Drilling,  Inc.  [a  development  stage  company] as of
December 31, 2003,  and the results of its operations and its cash flows for the
year ended December 31, 2003 and for the period from inception on April 24, 1975
through  December 31, 2003, in conformity  with  generally  accepted  accounting
principles in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 5 to the
financial  statements,  the Company has incurred  losses since its inception and
has no on-going  operations,  raising substantial doubt about the ability of the
Company to continue as a going concern.  Management's  plans in regards to these
matters are also  described in Note 5. The  financial  statements do not include
any adjustments that might result from the outcome of these uncertainties.


S/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.

January 28, 2003
Salt Lake City, Utah


                                       F-1
<PAGE>




                                 DRILLING, INC.
                          [A Development Stage Company]

                                  BALANCE SHEET


                                     ASSETS


                                                                   December 31,
                                                                      2003
                                                                    --------
CURRENT ASSETS:
     Cash                                                           $  1,767
                                                                    --------
               Total Current Assets                                    1,767
                                                                    --------
                                                                    $  1,767
                                                                    --------


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                               $   --
                                                                    --------
               Total Current Liabilities                                --
                                                                    --------
STOCKHOLDERS' EQUITY:
     Common stock, $.001 par value,
       100,000,000 shares authorized,
       772,200 shares issued and
       outstanding                                                       772
     Capital in excess of par value                                   55,810
     Deficit accumulated during the
       development stage                                             (54,815)
                                                                    --------
               Total Stockholders' Equity                              1,767
                                                                    --------
                                                                    $  1,767
                                                                    --------



    The accompanying notes are an integral part of this financial statement.

                                      F-2
<PAGE>


                                 DRILLING, INC.
                          [A Development Stage Company]


                            STATEMENTS OF OPERATIONS


                                                                  From Inception
                                            For the Years Ended    on April 24,
                                                December 31,       1975 Through
                                           ----------------------  December 31,
                                             2003          2002        2003
                                           --------      --------    --------
REVENUE:
     Sales                                 $   --        $   --       $   --
                                           --------      --------     --------
EXPENSES:
     General and administrative               3,638         3,846       54,815
                                           --------      --------     --------

LOSS BEFORE INCOME TAXES                     (3,638)       (3,846)     (54,815)

CURRENT TAX EXPENSE                            --            --           --

DEFERRED TAX EXPENSE                           --            --           --
                                           --------      --------     --------

NET LOSS                                   $ (3,638)     $ (3,846)    $(54,815)
                                           --------      --------     --------

LOSS PER COMMON SHARE                      $   (.00)     $   (.00)    $   (.19)
                                           --------      --------     --------



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

                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                                                   DRILLING, INC.
                                           [A Development Stage Company]

                                         STATEMENT OF STOCKHOLDERS' EQUITY

                                    FROM THE DATE OF INCEPTION ON April 24, 1975

                                             THROUGH DECEMBER 31, 2003


                                                                                                          Deficit
                                                                                                        Accumulated
                                                                  Common Stock          Capital in      During the
                                                             -----------------------    Excess of      Development
                                                              Shares       Amount        Par Value         Stage
                                                             ----------    ---------    -----------      ----------
<S>                                                          <C>           <C>          <C>             <C>
BALANCE, April 24, 1975                                               -  $         -  $           -    $          -

Issuance of 29,200 shares of common stock
  for cash at $.05 per share, September 1984                     29,200           29          1,431               -

Net loss for the period ended December 31, 1984                       -            -              -          (1,460)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 1984                                       29,200           29          1,431          (1,460)

Issuance of 160,000 shares of common stock
  for cash at $.05 per share, July 1985                         160,000          160          7,840               -

Net loss for the year ended December 31, 1985                         -            -              -          (8,000)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 1985                                      189,200          189          9,271          (9,460)

Issuance of 108,000 shares of common stock
  for cash at $.05 per share, February 1986                     108,000          108          5,292               -

Net loss for the year ended December 31, 1986                         -            -              -          (5,400)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 1986                                      297,200          297         14,563         (14,860)

Issuance of 200,000 shares of common stock
  for cash at $.09 per share, December 1991                     200,000          200         17,800               -

Net loss for the year ended December 31, 1991                         -            -              -         (18,000)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 1991                                      497,200          497         32,363          (32860)

Issuance of 240,000 shares of common stock
  for cash at $.05 per share, May 2001                          240,000          240         11,760               -

Contribution to capital - payment of expenses
  by shareholder                                                      -            -          2,471               -

Net loss for the year ended December 31, 2001                         -            -              -         (14,471)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 2001                                      737,200          737         46,594         (47,331)

Contribution to capital - payment of expenses
  by shareholder                                                      -            -          3,846               -

Net loss for the year ended December 31, 2002                         -            -              -          (3,846)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 2002                                      737,200          737         50,440         (51,177)

                                                       F-4
<PAGE>





                                   [Continued]

                                                   DRILLING, INC.
                                           [A Development Stage Company]

                                         STATEMENT OF STOCKHOLDERS' EQUITY

                                    FROM THE DATE OF INCEPTION ON April 24, 1975

                                             THROUGH DECEMBER 31, 2003

                                                    [Continued]


                                                                                                          Deficit
                                                                                                        Accumulated
                                                                  Common Stock          Capital in      During the
                                                             -----------------------     Excess of      Development
                                                               Shares       Amount       Par Value         Stage
                                                             ----------    ---------    -----------      ----------
Issuance of 35,000 shares of common stock
  for cash at $.07 per share, December 2003                      35,000           35          2,365               -

Contribution to capital - payment of expenses
  by shareholder                                                      -            -          3,005               -

Net loss for the year ended December 31, 2003                         -            -              -          (3,638)
                                                             ----------    ---------    -----------      ----------
BALANCE, December 31, 2003                                      772,200  $       772  $      55,810    $    (54,815)
                                                             ----------    ---------    -----------      ----------



























                      The accompanying notes are an integral part of this financial statement.

</TABLE>
                                                        F-5
<PAGE>
<TABLE>
<CAPTION>
                                                   DRILLING, INC.
                                           [A Development Stage Company]

                                              STATEMENTS OF CASH FLOWS

                                                                                                      From Inception
                                                                        For the Years Ended           on April 24,
                                                                           December 31,               1975 Through
                                                                      -------------------------       December 31,
                                                                        2003           2002               2003
                                                                      ----------     ----------       ------------
<S>                                                                 <C>            <C>                <C>
Cash Flows from Operating Activities:
     Net loss                                                       $     (3,638)  $     (3,846)     $     (54,815)
     Adjustments to reconcile net loss to net cash
       used by operating activities:
             Non cash expenses paid by shareholder                         3,005          3,846              9,322
                                                                      ----------     ----------       ------------
               Net Cash Used by Operating Activities                        (633)             -            (45,493)
                                                                      ----------     ----------       ------------

Cash Flows from Investing Activities                                           -              -                  -
                                                                      ----------     ----------       ------------
               Net Cash Provided by Investing Activities                       -              -                  -
                                                                      ----------     ----------       ------------

Cash Flows from Financing Activities:
     Proceeds from common stock issuance                                   2,400              -             47,260
                                                                      ----------     ----------       ------------
               Net Cash Provided by Financing Activities                   2,400              -             47,260
                                                                      ----------     ----------       ------------

Net Increase (Decrease) in Cash                                            1,767              -              1,767

Cash at Beginning of Period                                                    -              -                  -
                                                                      ----------     ----------       ------------

Cash at End of Period                                                $     1,767    $         -      $       1,767
                                                                      ----------     ----------       ------------

Supplemental Disclosures of Cash Flow information:
     Cash paid during the period for:
       Interest                                                      $         -    $         -      $           -
       Income taxes                                                  $         -    $         -      $           -

Supplemental schedule of Noncash Investing and Financing Activities:
     For the year ended December 31, 2003:
         Operating expenses in the amount of $3,005 were paid by shareholders of
         the company and accounted for as a contribution to capital.

     For the year ended December 31, 2002:
         Operating expenses in the amount of $3,846 were paid by shareholders of
         the company and accounted for as a contribution to capital..





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


                                                        F-6
</TABLE>
<PAGE>

                                 DRILLING, INC.
                          [A Development Stage Company]

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization  -  Drilling,  Inc.  ("the  Company")  was  organized  as Domi
     Associates,  Inc.  under the laws of the State of Nevada on April 24, 1975.
     On March 9, 2001 the name was changed to Drilling, Inc. The Company has not
     commenced  planned  principal  operations  and is  considered a development
     stage company as defined in Statement of Financial Accounting Standards No.
     7. The Company was organized to pursue the  acquisition  and development of
     mineral  properties.  During 1992 the company  abandoned  the  activity and
     became  inactive.  The  Company  has,  at the  present  time,  not paid any
     dividends and any dividends that may be paid in the future will depend upon
     the financial requirements of the Company and other relevant factors.

     Cash and Cash  Equivalents  - The Company  considers all highly liquid debt
     investments  purchased  with a maturity of three  months or less to be cash
     equivalents.

     Loss Per Share - The computation of loss per share is based on the weighted
     average  number  of shares  outstanding  during  the  period  presented  in
     accordance  with  Statement  of  Financial  Accounting  Standard  No.  128,
     "Earnings Per Share".

     Accounting   Estimates  -  The  preparation  of  financial   statements  in
     conformity  with  generally  accepted  accounting  principles in the United
     States of America  requires  management to make  estimates and  assumptions
     that affect the reported amounts of assets and liabilities, the disclosures
     of  contingent  assets  and  liabilities  at  the  date  of  the  financial
     statements,  and the reported  amount of revenues  and expenses  during the
     reported period. Actual results could differ from those estimated.

     Recently Enacted Accounting  Standards - Statement of Financial  Accounting
     Standards  ("SFAS") No. 146,  "Accounting for Costs Associated with Exit or
     Disposal  Activities",  SFAS No. 147,  "Acquisitions  of Certain  Financial
     Institutions  - an  Amendment  of FASB  Statements  No. 72 and 144 and FASB
     Interpretation   No.  9",  SFAS  No.  148,   "Accounting   for  Stock-Based
     Compensation  - Transition  and Disclosure - an Amendment of FASB Statement
     No.  123",  SFAS  No.  149,  "Amendment  of  Statement  133  on  Derivative
     Instruments  and Hedging  Activities",  and SFAS No. 150,  "Accounting  for
     Certain Financial  Instruments with Characteristics of both Liabilities and
     Equity",  were recently issued. SFAS No. 146, 147, 148, 149 and 150 have no
     current  applicability  to the  Company  or their  effect on the  financial
     statements would not have been significant.

     Income Taxes - The Company  accounts for income  taxes in  accordance  with
     Statement of Financial  Accounting Standards No. 109 "Accounting for Income
     Taxes".

     Reclassification - The financial statements for years prior to December 31,
     2003 have been reclassified to conform to the headings and  classifications
     used in the December 31, 2003 financial  statements.  During March 2001 the
     company  underwent  a forward  stock  split of 200  shares  for each  share
     outstanding.  These  financial  statements  have been prepared  using after
     split shares from inception.



                                      F-7
<PAGE>


                                 DRILLING, INC.
                          [A Development Stage Company]

                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - COMMON STOCK

     The  company  was  originally  incorporated  in  April of 1975  with  2,500
     authorized  shares of no par value common capital  stock.  In March of 2001
     the company  increased the  authorized  common capital stock to 100,000,000
     shares and  changed  the par value to $.001.  Also at this time the company
     affected  a  forward  stock  split of 200  shares  for  every  one share of
     outstanding common capital stock.

     During  September  1984 the Company  issued 29,200 shares of its previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $1,460 (or $.05 per share).

     During  July 1985,  the Company  issued  160,000  shares of its  previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $8,000 (or $.05 per share).

     During  February  1986, the Company issued 108,000 shares of its previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $5,400 (or $.05 per share).

     During  December  1991, the Company issued 200,000 shares of its previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $18,000 (or $.09 per share).

     During  May 2001,  the  Company  issued  240,000  shares of its  previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $12,000 (or $.05 per share).

     During  December  2003,  the Company issued 35,000 shares of its previously
     authorized,  but unissued  common  stock.  Total  proceeds from the sale of
     stock amounted to $2,400 (or $.07 per share).

NOTE 3 - INCOME TAXES

     The Company  accounts  for income  taxes in  accordance  with  Statement of
     Financial  Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
     No. 109 requires the Company to provide a net deferred tax  asset/liability
     equal to the expected  future tax  benefit/expense  of temporary  reporting
     differences  between  book and tax  accounting  methods  and any  available
     operating  loss or tax credit  carryforwards.  At December  31,  2003,  the
     Company has available unused operating loss  carryforwards of approximately
     $40,000,  which may be  applied  against  future  taxable  income and which
     expire in various years through 2023.


                                      F-8
<PAGE>


                                 DRILLING, INC.
                          [A Development Stage Company]

                          NOTES TO FINANCIAL STATEMENTS


     The amount of and ultimate  realization  of the benefits from the operating
     loss carryforwards for income tax purposes is dependent,  in part, upon the
     tax laws in effect,  the future  earnings of the Company,  and other future
     events,  the  effects  of  which  cannot  be  determined.  Because  of  the
     uncertainty  surrounding  the  realization of the loss  carryforwards,  the
     Company has  established a valuation  allowance  equal to the tax effect of
     the loss  carryforwards  and,  therefore,  no  deferred  tax asset has been
     recognized  for the loss  carryforwards.  The net  deferred  tax assets are
     approximately  $12,000 and $10,900 as of December 31, 2003 and December 31,
     2002, respectively, with an offsetting valuation allowance at each year end
     of the same amount  resulting  in a change in the  valuation  allowance  of
     approximately $1,100 during 2003.

NOTE 4 - RELATED PARTY TRANSACTIONS

     Management  Compensation  - During the years  ended  December  31, 2003 and
     2002,  the  Company  did not  pay  any  compensation  to its  officers  and
     directors.

     Operating  Expenses  -  Officers  and  shareholders  of  the  company  paid
     operating  expenses on behalf of the company in the amount of $3,005 during
     the year ended  December 31, 2003 and $9,322 from April 24, 1975,  the date
     of inception,  through  December 31, 2003.  Payment of these  expenses have
     been recorded as contributions to equity.

NOTE 5 - GOING CONCERN

     The accompanying financial statements have been prepared in conformity with
     generally accepted  accounting  principles in the United States of America,
     which contemplate continuation of the Company as a going concern.  However,
     the Company has  incurred  losses since its  inception  and has no on-going
     operations,  raising  substantial doubt about the ability of the Company to
     continue as a going  concern.  In this regard,  management  is proposing to
     raise any necessary  additional  funds not provided by  operations  through
     additional  sales  of its  common  stock.  There is no  assurance  that the
     Company will be successful in raising this additional  capital or achieving
     profitable  operations.   The  financial  statements  do  not  include  any
     adjustments that might result from the outcome of these uncertainties.




                                       F-9
<PAGE>


                                 DRILLING, INC.
                          [A Development Stage Company]

                          NOTES TO FINANCIAL STATEMENTS


NOTE 6 - LOSS PER SHARE

     The  following  data show the amounts used in computing  loss per share and
     the effect on income and the weighted  average number of shares of dilutive
     potential common stock for the periods presented:

<TABLE>
<CAPTION>
                                                                                  From Inception
                                                      For the Years Ended          on April 24,
                                                         December 31,              1975 Through
                                                    --------------------------     December 31,
                                                      2003           2002              2003
                                                    ----------      ----------     ------------
  <S>                                             <C>               <C>           <C>
  Loss available to common stockholders used in
    loss per share (Numerator)                     $    (3,638)    $    (3,846)    $    (54,815)
                                                    ----------      ----------     ------------
  Weighted average number of common shares
    outstanding used in loss per share during the
    period (Denominator)                               738,542         737,200          295,644
                                                    ----------      ----------     ------------


</TABLE>

     Dilutive  loss per share was not  presented,  as the  Company had no common
     equivalent   shares  for  all  periods  presented  that  would  effect  the
     computation of diluted loss per share.


                                      F-10