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 [NO FEE REQUIRED]

For the fiscal year ended December 31, 2000.

                                       OR

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

Commission file number

                            PINECREST SERVICES, INC.
          ------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Nevada                                                 67-0695367
------------------------                 ----------------------------------
(State of incorporation)                (I.R.S. Employer Identification No.)

#584, 3353 South Main Street, Salt Lake City, Utah             84115
-----------------------------------------------------------------------
(Address of principal executive offices)                     (Zip code)

Issuer's telephone number, including area code: (801) 323-2395

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

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

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

Check if disclosure  of delinquent  filers in response to item 405 of Regulation
S-B  is not  contained  herein,  and  will  not be  contained,  to the  best  of
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 revenue for its most recent fiscal year: None.

As of February 2, 2001, the  registrant  had  17,000,000  shares of common stock
outstanding.  The registrant does not have an active trading market and a market
value of the voting stock held by non-affiliates can not be determined.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format (check one): Yes ____ No   X
                                                                       ----


<PAGE>



                                     PART I
Item 1.  Description of business...............................................3
Item 2.  Description of property.............................................. 7
Item 3.  Legal proceedings.................................................... 7
Item 4.  Submission of matters to a vote of security holders.................. 7

                                     PART II

Item 5.  Market for common equity and related stockholder matters............. 7
Item 6.  Management's discussion and analysis or plan of operations........... 7
Item 7.  Financial statements................................................. 8
Item 8.  Changes in and disagreements with accountants on accounting and
         financial disclosure................................................. 8

                                    PART III

Item 9.    Directors, executive officers, promoters and control persons,
           compliance with Section 16(a) of the Exchange Act...................8
Item 10.  Executive compensation...............................................9
Item 11.  Security ownership of certain beneficial owners and management.......9
Item 12.  Certain relationships and related transactions..................... 10

                                     PART IV

Item 13.   Exhibits and reports on Form 8-K...................................10


                                        2

<PAGE>



                           FORWARD LOOKING STATEMENTS

         In this annual report references to "Pinecrest,"  "we," "us," and "our"
refer to Pinecrest Services, Inc.

         This annual report contains  certain  forward-looking  statements.  For
this purpose any  statements  contained in this annual report are not statements
of  historical  fact may be deemed  to be  forward-looking  statements.  Without
limiting  the  foregoing,  words  such as "may,"  "will,"  "expect,"  "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended to
identify  forward-looking  statements.  These statements by their nature involve
substantial  risks and  uncertainties,  and actual results may differ materially
depending  on a variety of  factors,  many of which are not  within  Pinecrest's
control.  These  factors  include  but are not  limited to  economic  conditions
generally and in the industries in which Pinecrest may participate;  competition
within  Pinecrest's  chosen  industry,  including  competition  from much larger
competitors;  technological  advances and failure by  Pinecrest to  successfully
develop business relationships.


                         ITEM 1: DESCRIPTION OF BUSINESS

Business Development

         On February 10, 1999, Pinecrest Services,  Inc. was incorporated in the
state of Nevada.  Pinecrest  completed a change of  domicile  merger with Hystar
Aerospace  Marketing  Corporation of Nebraska ("Hystar") on May 11, 2000. Hystar
merged with  Pinecrest  solely to change its domicile  from  Nebraska to Nevada.
Hystar  was  incorporated  in the state of  Nebraska  on March 7, 1986 and was a
wholly owned subsidiary of Nautilus  Entertainment,  Inc., a Nevada corporation.
Hystar was formed to lease,  sell and market the Hystar  airship and the Burkett
Mill,  a waste  milling  device.  However,  the  venture  was  found  to be cost
prohibitive and Hystar ceased such activities in 1986.  Hystar did not engage in
any further commercial operations.

Our Plan

         We are a "blank check" company and have had recurring  operating losses
for the past two fiscal years.  Our  independent  auditors have expressed  doubt
that we can continue as a going concern  unless we obtain  financing to continue
operations.

         Our business plan is to seek, investigate,  and, if warranted,  acquire
an interest in a business opportunity. Our acquisition of a business opportunity
may be made by merger,  exchange of stock,  or  otherwise.  We have very limited
sources of capital,  and we probably will only be able to take  advantage of one
business  opportunity.  At the present time we have not  identified any business
opportunity  that we plan to pursue,  nor have we  reached  any  preliminary  or
definitive   agreements  or   understandings   with  any  person  concerning  an
acquisition or merger.

         Based  on  current  economic  and  regulatory  conditions,   management
believes that it is possible, if not probable,  for a company like ours, without
many assets or liabilities,  to negotiate a merger or acquisition  with a viable
private company.  The opportunity arises  principally  because of the high legal
and  accounting  fees and the length of time  associated  with the  registration
process of "going public." However, should any of these conditions change, it is
very possible that there would be little or no economic  value for anyone taking
over control of Pinecrest.


         Our  search  for a  business  opportunity  will not be  limited  to any
particular geographical area or industry,  including both U.S. and international
companies.   Our   management  has   unrestricted   discretion  in  seeking  and
participating  in a business  opportunity,  subject to the  availability of such
opportunities,  economic  conditions and other factors.  Our management believes
that  companies  who desire a public  market to enhance  liquidity  for  current
stockholders,   or  plan  to  acquire  additional  assets  through  issuance  of
securities  rather  than  for  cash  will be  potential  merger  or  acquisition
candidates.

                                        3

<PAGE>




         The  selection of a business  opportunity  in which to  participate  is
complex and  extremely  risky and will be made by  management in the exercise of
its business  judgement.  There is no assurance that we will be able to identify
and  acquire  any  business  opportunity  which  will  ultimately  prove  to  be
beneficial  to us and our  stockholders.  Should a merger or  acquisition  prove
unsuccessful,  it is  possible  management  may  decide  not to  pursue  further
acquisition  activities  and  management  may abandon its  activities and we may
become dormant or be dissolved.

         Our  activities  are subject to several  significant  risks which arise
primarily  as a result of the fact  that we have no  specific  business  and may
acquire  or  participate  in a business  opportunity  based on the  decision  of
management  which will,  in all  probability,  act  without  consent,  vote,  or
approval of our stockholders.

         It is possible that the range of business  opportunities  that might be
available  for  consideration  by us  could  be  limited  by  impact  of the SEC
regulations  regarding  purchase and sale of "penny  stock." Our common stock is
not publicly traded at this time and we cannot assure that a market will develop
or that a  stockholder  ever will be able to liquidate his  investments  without
considerable  delay, if at all. If a market develops,  our shares will likely be
subject to the rules of the Penny  Stock  Suitability  Reform  Act of 1990.  The
liquidity of penny stock is affected by specific disclosure  procedures required
by this Act to be followed by all broker-dealers,  including but not limited to,
determining  the  suitability  of  the  stock  for a  particular  customer,  and
obtaining a written agreement from the customer to purchase the stock. This rule
may affect the ability of  broker-dealers  to sell our securities and may affect
the ability of purchasers to sell our securities in any market.

Investigation and Selection of Business Opportunities

         We anticipate  that business  opportunities  will come to our attention
from various sources,  including our officers and directors,  our  stockholders,
professional  advisors such as attorneys  and  accountants,  securities  broker-
dealers, investment banking firms, venture capitalists, members of the financial
community and others who may present unsolicited  proposals.  Management expects
that  prior  personal  and  business   relationships,   and  specifically,   our
relationship with Mutual Ventures  Corporation,  an investment banking firm, may
lead to contacts with these various sources.

         Our management will analyze the business  opportunities,  however, none
of our management are  professional  business  analysts.  (See,  Part II Item 9:
"Directors and Executive  Officers.") Our management has had limited  experience
with  mergers  and  acquisitions  of  business  opportunities  and has not  been
involved with an initial  public  offering.  Management may rely on promoters or
their  affiliates,  principal  stockholders  or  associates  to  assist  in  the
investigation and selection of business opportunities.

         Our  management  may  also  hire  an  outside  consultant.   Since  our
management  has no current plans to use any outside  consultants  or advisors to
assist in the investigation and selection of business opportunities, no policies
have been adopted  regarding use of such  consultants  or advisors.  We have not
established  the criteria to be used in selecting such  consultants or advisors,
the service to be  provided,  the term of service,  or the total  amount of fees
that may be paid. However,  because of our limited resources,  it is likely that
any  such  fee we agree  to pay  would  be paid in  stock  and not in  cash.  In
addition, there is a possibility that the amount of consultant fees may become a
factor in negotiations related to a business opportunity.

         Certain  conflicts of interest exist or may develop  between us and our
officers and directors.  Our  management  has other business  interests to which
they  currently  devote  attention,  which include their primary  employment and
management  of other blank check  reporting  companies.  They may be expected to
continue to devote their  attention to these other business  interests  although
management  time should be devoted to our  business.  As a result,  conflicts of
interest may arise that can be resolved only through their exercise of judgement
in a  manner  which  is  consistent  with  their  fiduciary  duties  to  us.  In
particular,  Mrs.  Marino,  our  President,  is a director  of other blank check
companies  with a structure and a business plan which is identical to ours.  Our
management may, in the future, be involved with other blank check companies.  In
the process of  negotiations  for an acquisition or merger or  determination  of
consulting  fees  related  to  investigation  of  a  business  opportunity,  our
principal stockholders and

                                        4

<PAGE>



management may consider their own personal pecuniary benefit or the interests of
other  blank  check  companies  they are  affiliated  with  rather than the best
interests of our other stockholders.

         We  presently  do not  foresee  entering  into a merger or  acquisition
transaction with any business with which our officers or directors are currently
affiliated.  We may acquire or merge with  companies  of which our  management's
affiliates or associates  have a direct or indirect  ownership  interest.  If we
determine in the future that a  transaction  with an  affiliate  would be in our
best  interest we are  permitted by Nevada law to enter into such a  transaction
if:

         (1) The material facts  regarding the  relationship  or interest of the
affiliate in the contract or transaction are disclosed or are known to the board
of  directors.   The  board  authorizes  the  contract  or  transaction  by  the
affirmative vote of a majority of the disinterested  directors,  even though the
disinterested directors constitute less than a quorum; or

         (2) The material facts  regarding the  relationship  or interest of the
affiliate  in  the  contract  transaction  are  disclosed  or are  known  to the
stockholders  entitled  to  vote  on  the  transaction,   and  the  contract  or
transaction is specifically approved by vote of the stockholders; or

         (3)  The  contract  or  transaction  is  fair  to us at the  time it is
authorized, approved or ratified by the board of directors or the stockholders.

         A decision to participate  in a specific  business  opportunity  may be
made upon our management's analysis of the quality of the business opportunity's
management and personnel,  the anticipated  acceptability of its new products or
marketing concept, the merit of its technological changes, the perceived benefit
that it will derive from  becoming a publicly  held entity,  and numerous  other
factors  which  are  difficult,  if  not  impossible,  to  analyze  through  the
application of any objective criteria. In many instances, we anticipate that the
historical  operations of a specific business opportunity may not necessarily be
indicative of the potential for the future because of the possible need to shift
marketing  approaches  substantially,   expand  significantly,   change  product
emphasis,  change or substantially augment management, or make other changes. We
will be dependent upon the owners of a business opportunity to identify any such
problems which may exist and to implement,  or be primarily  responsible for the
implementation of, required changes.

         In our analysis of a business  opportunity  we anticipate  that we will
consider, among other things, the following factors:

         (1)   Potential  for  growth  and   profitability,   indicated  by  new
technology, anticipated market expansion, or new products;

         (2) Our perception of how any particular  business  opportunity will be
received by the investment community and by our stockholders;

         (3)  Whether,   following  the  business  combination,   the  financial
condition  of the  business  opportunity  would be, or would have a  significant
prospect  in the  foreseeable  future  of  becoming  sufficient  to  enable  our
securities  to qualify  for  listing on a  exchange  or on a national  automated
securities quotation system, such as NASDAQ.

         (4)  Capital  requirements  and  anticipated  availability  of required
funds, to be provided by us or from  operations,  through the sale of additional
securities,  through  joint  ventures  or  similar  arrangements,  or from other
sources;

         (5)   The extent to which the business opportunity can be advanced;

         (6) Competitive position as compared to other companies of similar size
and experience within the

                                        5

<PAGE>



industry segment as well as within the industry as a whole;

         (7)  Strength  and  diversity  of existing  management,  or  management
prospect that are scheduled for recruitment;

         (8) The cost of our participation as compared to the perceived tangible
and intangible values and potential; and

         (9) The accessibility of required management expertise,  personnel, raw
materials, services, professional assistance, and other required items.

         No one of the  factors  described  above  will  be  controlling  in the
selection  of a business  opportunity.  Management  will  attempt to analyze all
factors  appropriate to each  opportunity  and make a  determination  based upon
reasonable  investigative  measures and available  data.  Potentially  available
business  opportunities  may occur in many  different  industries and at various
stages of development.  Thus, the task of comparative investigation and analysis
of  such  business  opportunities  will  be  extremely  difficult  and  complex.
Potential  investors  must  recognize  that,  because  of  our  limited  capital
available for  investigation  and  management's  limited  experience in business
analysis,  we may not discover or  adequately  evaluate  adverse facts about the
opportunity to be acquired.

Form of Acquisition

         We cannot predict the manner in which we may  participate in a business
opportunity.  Specific  business  opportunities  will be reviewed as well as our
needs and  desires  and those of the  promoters  of the  opportunity.  The legal
structure or method deemed by  management to be suitable will be selected  based
upon our review and our relative negotiating strength.  Such method may include,
but is not limited to, leases,  purchase and sale  agreements,  licenses,  joint
ventures and other contractual  arrangements.  We may act directly or indirectly
through  an  interest  in  a   partnership,   corporation   or  other  forms  of
organization.  We may be required to merge, consolidate or reorganize with other
corporations  or  forms of  business  organization.  In  addition,  our  present
management and  stockholders  most likely will not have control of a majority of
our voting shares following a merger or reorganization  transaction.  As part of
such a transaction,  our existing  directors may resign and new directors may be
appointed without any vote by our stockholders.

         We likely will  acquire  our  participation  in a business  opportunity
through the issuance of common stock or other securities.  Although the terms of
any such  transaction  cannot be predicted,  it should be noted that issuance of
additional shares might also may be done  simultaneously with a sale or transfer
of shares representing a controlling interest by current principal stockholders.

Competition

         We expect to encounter substantial  competition in our effort to locate
attractive  opportunities.   Business  development  companies,  venture  capital
partnerships and  corporations,  venture capital  affiliates of large industrial
and financial  companies,  small investment  companies,  and wealthy individuals
will be our primary competition.  Many of these entities will have significantly
greater experience, resources and managerial capabilities than we do and will be
in a  better  position  than we are to  obtain  access  to  attractive  business
opportunities.  We also will  experience  competition  from other public  "blank
check" companies, many of which may have more funds available.

Employees

         We currently have no employees.  Our management  expects to confer with
consultants, attorneys and accountants as necessary. We do not anticipate a need
to engage any  full-time  employees  so long as we are  seeking  and  evaluating
business opportunities.  We will determine the need for employees based upon the
specific business opportunity.


                                        6

<PAGE>




                        ITEM 2: DESCRIPTION OF PROPERTIES

         We do not currently own or lease any property.  We utilize office space
in the office of one of our  shareholders  at no cost.  Until we pursue a viable
business  opportunity and recognize income, we will not seek independent  office
space.


                            ITEM 3: LEGAL PROCEEDINGS

         We are not a party to any  proceedings or threatened  proceedings as of
the date of this filing.


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

         We have not submitted a matter to a vote of our shareholders during the
fourth quarter of the 2000 fiscal year.


                     ITEM 5: MARKET PRICE FOR COMMON EQUITY
                         AND RELATED STOCKHOLDER MATTERS

         We  do  not  have  an  established   public  trading  market.  We  have
approximately  77  stockholders  of record and 1,950,200  common shares are free
trading  and the  balance,  15,049,800,  are  restricted  shares as that term is
defined  in Rule 144.  We do not have any  outstanding  options or  warrants  to
purchase our common shares.  We have not declared  dividends on our common stock
and do not anticipate  paying  dividends on our common stock in the  foreseeable
future.


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

Plan of Operation

         We have no assets and have experienced  losses from inception.  For the
fiscal year ended  December  31,  2000 we had no cash on hand and total  current
liabilities  of $30,000.  The $30,000  note  payable is owed to Mutual  Ventures
Corporation  for accounting and legal fees incurred  during 1999 and paid on our
behalf.

         We have no  commitments  for capital  expenditures  for the next twelve
months. During the next twelve months we believe that our current cash needs can
be met  by  loans  from  our  directors,  officers  and  stockholders  based  on
understandings  we have  with  these  individuals.  We  anticipate  that  Mutual
Ventures  Corporation will continue to provide  investment  banking services and
advance  costs on our behalf.  We may repay these  loans,  costs of services and
advancements with cash, if available,  or we may convert them into common stock.
Management anticipates future private placements of our common shares,  however,
we presently are not conducting any offering.

         Our  reporting   obligations  involve  considerable  time,  energy  and
professional  fees.  We will  incur  expenses  due to the legal  and  accounting
services  required to prepare  such reports and the costs of filing such reports
with the Securities and Exchange  Commission.  Also, our management  must expend
time and effort to assist in the preparation and review of such reports.  In the
event we acquire a business opportunity we may incur additional expenses related
to proxy or  information  statements we must provide to our  stockholders  which
disclose that company's business operations, management and financial condition.
In  addition,  the  acquired  or merged  company  will be  subject to these same
reporting obligations


                                        7

<PAGE>



         Our management intends to actively seek business  opportunities  during
the next  twelve  months  and if we  obtain a  business  opportunity,  it may be
necessary to raise additional capital.  This may be accomplished by sales of our
common stock.


                          ITEM 7: FINANCIAL STATEMENTS

         Reference  is made to the  financial  statements  for the  years  ended
December 31, 2000 and 1999 which are attached to this Form 10-KSB report.


              ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         We  have  had no  change  in,  or  disagreements  with,  our  principal
independent accountant during our last two fiscal years.


                    ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS

         Our  executive  officers  and  directors  and  their  respective  ages,
positions and term of office are set forth below.  Biographical  information for
each of those persons is also presented  below. Our bylaws require two directors
who serve for a term of one year and our  executive  officers  are chosen by our
Board of Directors and serve at its discretion.

<TABLE>
<CAPTION>
Name               Age   Position Held                      Director or Officer Since
----------------  ----   -----------------------------      -------------------------
<S>                <C>   <C>                                <C>
April Marino       26    President, Director                February 10, 1999
Jeffrey J. Jonas   46    Secretary/Treasurer, Director      September 5, 2000
</TABLE>

         April Marino. Mrs. Marino has worked as a secretary for Mutual Ventures
Corporation  since December 18, 1997.  From January 1995 to October 1997 she was
employed by Universal Business  Insurance as a Customer Service  Representative.
She is a director of the  following  blank check  reporting  companies:  Bennion
Corporation and Galaxy Specialties, Inc.

         Jeffrey J. Jonas. Mr. Jonas was appointed Secretary/Treasurer and as an
interim  director.  Since  November  of 1992 to the  present  he has  served  as
President and principal broker of American Housing Development Corporation which
is a real estate development company.  Since 1978 he has also worked as a sports
commentator for KALL Radio and KUTV Television based in Salt Lake City, Utah. In
1978 he received a Master's degree in journalism from  Northwestern  University,
Evanston,  Illinois  and in 1977 he earned a  bachelors  degree,  cum laude,  in
journalism from the University of Utah in Salt Lake City, Utah.

b)       Compliance with Section 16(a) of the Exchange Act.

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  our
directors,  executive  officers  and persons who own more than five percent of a
registered  class of our  equity  securities,  to file with the  Securities  and
Exchange  Commission  initial  reports of  ownership  and  reports of changes in
ownership of common stock and our other equity securities.  Officers,  directors
and greater than ten-percent  beneficial  owners are required by SEC regulations
to furnish us with copies of all Section 16(a)  reports they file.  Based solely
upon review of the copies of such forms  furnished  to us during the fiscal year
ended  December  31,  2000,  VIP  Worldnet,  Inc.  filed  late a Form 3  initial
statement of beneficial ownership.



                                        8

<PAGE>



                         ITEM 10: EXECUTIVE COMPENSATION

         Our named  executive  officer has not received  any cash  compensation,
bonuses,  stock appreciation  rights,  long term  compensation,  stock awards or
long-term  incentive  rights from us during the past three fiscal years. We have
not entered into  employment  contracts  with our  executive  officers and their
compensation,  if any,  will be  determined  at the  discretion  of our Board of
Directors.

Compensation of Directors

         We do  not  have  any  standard  arrangement  for  compensation  of our
directors  for  any  services  provided  as  director,  including  services  for
committee participation or for special assignments.


                ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

         The  following  table  sets  forth  the  beneficial  ownership  of  our
outstanding common stock of each person or group known by us to own beneficially
more than 5% of our  outstanding  common stock and ownership of our  management.
Beneficial  ownership is determined in accordance  with the rules of the SEC and
generally includes voting or investment power with respect to securities. Except
as indicated by footnote,  the persons named in the table below have sole voting
power and  investment  power with respect to all shares of common stock shown as
beneficially  owned by them. The percentage of beneficial  ownership is based on
17,000,000 shares of common stock outstanding as of February 1, 2001.

                            CERTAIN BENEFICIAL OWNERS

                                           Common Stock Beneficially Owned
Name and Address of               Number of Shares of
Beneficial Owners                 Common Stock          Percentage of Class

VIP WorldNet, Inc.                15,049,400            88.5%
154 E.  Ford Avenue
Salt Lake City, Utah 84124

         * VIP  WorldNet,  Inc.  holds  15,000,000  shares and its directors and
officers  beneficially  own the  following  shares of our common  stock:  Joanne
Clinger, President, 42,200 and Wayne Reichman, Secretary, 7,200.


                                   MANAGEMENT

                                             Common Stock Beneficially Owned
Name and Address of                 Number of Shares of
Beneficial Owners                   Common Stock          Percentage of Class

April Marino                                   400             less than 1%
402 East Maxwell Lane
Salt Lake City, Utah 84115


             ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         We have not engaged in any transactions in excess of $60,000 during the
past two years involving our

                                        9

<PAGE>



executive  officers,  directors,  5% stockholders or immediate family members of
such persons.

Parent Company

         VIP  WorldNet,  Inc.  is  our  parent  company  and  beneficially  owns
15,049,400  shares of our common  stock.  Such  shares  represent  88.5 % of our
issued and outstanding shares.


                    ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K


Exhibit Number    Description
--------------    --------------------------------------------------------------

         3.1      Articles   of   Incorporation,   dated   February   10,   1999
                  (Incorporated  by  reference  to exhibit 3.1 of the Form 10-SB
                  File No. 000-30951, filed July 6, 2000)

         3.2      Articles  of  Merger  filed  May  11,  2000  (Incorporated  by
                  reference  to  exhibit  3.2  of  the  Form  10-  SB  File  No.
                  000-30951, filed July 6, 2000)

         3.3      Bylaws of Hystar Aerospace  Marketing  Corporation of Nebraska
                  (Incorporated  by  reference  to exhibit 3.3 of the Form 10-SB
                  File No. 000-30951, filed July 6, 2000)




                                    SIGNATURE


         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  registrant  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


         Date     February 9, 2001         Pinecrest Services, Inc.
             ---------------------



                                  By:      /s/ April Marino
                                     -----------------------------------------
                                       April Marino, President and Director



         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 and on the dates indicated.




         Date     February 9, 2001   By:      /s/ Jeffrey J. Jonas
             ---------------------      ----------------------------------
                                     Jeffrey J. Jonas, Secretary/Treasurer
                                                       and Director


                                       10

<PAGE>




                                      Smith
                                        &
                                     Company

           A Professional Corporation of Certified Public Accountants

                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Pinecrest Services, Inc.
(A Development Stage Company)

We have audited the accompanying  balance sheets of Pinecrest Services,  Inc. (a
development  stage  company) as of December  31, 2000 and 1999,  and the related
statements of operations,  changes in stockholders'  equity (deficit),  and cash
flows for the years  ended  December  31,  2000 and 1999,  and for the period of
March 7,  1986  (date of  inception)  to  December  31,  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Pinecrest  Services,  Inc. (a
development  stage company) as of December 31, 2000 and 1999, and the results of
its operations,  changes in stockholders'  equity (deficit),  and its cash flows
for the periods ended December 31, 2000 and 1999, and for the period of March 7,
1986 (date of  inception) to December 31, 2000,  in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company  has at  December  31,  2000 a retained  deficit of  $(47,000).  The
Company has  suffered  losses from  operations  and has a  substantial  need for
working capital.  This raises substantial doubt about its ability to continue as
a going concern.  Management's plans in regard to these matters are described in
Note 2 to the financial statements. The accompanying financial statements do not
include any adjustments that may result from the outcome of this uncertainty.


                                               /s/ Smith & Company
                                               CERTIFIED PUBLIC ACCOUNTANTS

Salt Lake City, Utah
February 2, 2001


          10 West 100 South, Suite 700o Salt Lake City, Utah 84101-1554
              Telephone: (801) 575-8297o Facsimile: (801) 575-8306
                          E-mail: smithco@dotplanet.com
          Members: American Institute of Certified Public Accountantso
                Utah Association of Certified Public Accountants

                                       F-1

<PAGE>



                            Pinecrest Services, Inc.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                           December 31, 2000 and 1999




<TABLE>
<CAPTION>
                                                                                               2000              1999
                                                                                          --------------    -------------
             ASSETS
CURRENT ASSETS
<S>                                                                                       <C>               <C>
         Cash in bank                                                                     $            0    $           0
                                                                                          --------------    -------------

                                                                                          $            0    $           0
                                                                                          ==============    =============

           LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
         Accounts payable - related party (Note 4)                                        $       30,000    $      30,000
                                                                                          --------------    -------------

                TOTAL CURRENT LIABILITIES                                                         30,000           30,000

STOCKHOLDERS' EQUITY (DEFICIT)
           Common Stock $.001 par value:
           Authorized - 20,000,000 shares
           Issued and outstanding 17,000,000 shares                                               17,000           17,000
           Deficit accumulated during the development stage                                      (47,000)         (47,000)
                                                                                          --------------    -------------

                  TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                           (30,000)         (30,000)
                                                                                          --------------    -------------

                                                                                          $            0    $           0
                                                                                          ==============    =============
</TABLE>

See Notes to Financial Statements.

                                       F-2

<PAGE>



                            Pinecrest Services, Inc.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                            3/7/86
                                                                                 Year ended                 (Date of
                                                                                 December 31,             inception) to
                                                                            2000            1999           12/31/2000
                                                                       -------------    -------------   -----------------
<S>                                                                    <C>              <C>             <C>
Net sales                                                              $           0    $           0   $               0
Cost of sales                                                                      0                0                   0
                                                                       -------------    -------------   -----------------

                GROSS PROFIT                                                       0                0                   0

General & administrative expenses                                                  0           30,000              47,000
                                                                       -------------    -------------   -----------------

                  NET LOSS                                             $           0    $     (30,000)  $         (47,000)
                                                                       =============    =============   =================

Basic and Diluted Earnings per Share
         Net (loss)                                                    $           0    $       (.002)
                                                                       =============    =============

Weighted average number of common shares                                  17,000,000       17,000,000
                                                                       =============    =============
</TABLE>







See Notes to Financial Statements.

                                       F-3

<PAGE>



                            Pinecrest Services, Inc.
                          (A Development Stage Company)
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<CAPTION>
                                                                                                            Deficit
                                                                                                          Accumulated
                                                                                 Common Stock                During
                                                                               Par Value $0.001            Development
                                                                             Shares         Amount            Stage
                                                                         -------------  -------------   -----------------
<S>                                                                      <C>            <C>             <C>
Balances at 3/7/86 (Date of inception)                                               0  $           0   $               0
         Issuance of common stock (restricted)
           at $.001 per share at 4/24/86                                    17,000,000         17,000
         Net loss for period                                                                                       (3,400)
                                                                         -------------  -------------   -----------------
Balances at 12/31/86                                                        17,000,000         17,000              (3,400)
         Net loss for year                                                                                         (3,400)
                                                                         -------------  -------------   -----------------
Balances at 12/31/87                                                        17,000,000         17,000              (6,800)
         Net loss for year                                                                                         (3,400)
                                                                         -------------  -------------   -----------------
Balances at 12/31/88                                                        17,000,000         17,000             (10,200)
         Net loss for year                                                                                         (3,400)
                                                                         -------------  -------------   -----------------
Balances at 12/31/89                                                        17,000,000         17,000             (13,600)
         Net loss for year                                                                                         (3,400)
                                                                         -------------  -------------   -----------------
Balances at 12/31/90                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/91                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/92                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/93                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/94                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/95                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/96                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/97                                                        17,000,000         17,000             (17,000)
         Net income for year                                                                                            0
                                                                         -------------  -------------   -----------------
Balances at 12/31/98                                                        17,000,000         17,000             (17,000)
         Net loss for year                                                                                        (30,000)
                                                                         -------------  -------------   -----------------
Balances at 12/31/99                                                        17,000,000         17,000             (47,000)
         Net income for period                                                                                          0
                                                                         -------------  -------------   -----------------

Balances at 12/31/00                                                        17,000,000  $      17,000   $         (47,000)
                                                                         =============  =============   =================
</TABLE>

See Notes to Financial Statements.

                                       F-4

<PAGE>



                            Pinecrest Services, Inc.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                              3/7/86
                                                                                  Year ended                (Date of
                                                                                 December 31,              inception) to
                                                                            2000             1999            12/31/2000
                                                                       -------------    -------------   -----------------
OPERATING ACTIVITIES
<S>                                                                    <C>              <C>             <C>
         Net income (loss)                                             $           0    $     (30,000)  $         (47,000)
         Adjustments to reconcile net income (loss) to
           cash used by operating activities:
             Amortization                                                          0                0              17,000
             Accounts payable - related party                                      0           30,000              30,000
                                                                       -------------    -------------   -----------------

                    NET CASH USED BY
                OPERATING ACTIVITIES                                               0                0                   0

INVESTING ACTIVITIES
         Organization costs                                                        0                0             (17,000)
                                                                       -------------    -------------   -----------------

                NET CASH REQUIRED BY
                INVESTING ACTIVITIES                                               0                0             (17,000)

FINANCING ACTIVITIES
         Proceeds from sale of common stock                                        0                0              17,000
                                                                       -------------    -------------   -----------------

                NET CASH PROVIDED BY
                FINANCING ACTIVITIES                                               0                0              17,000
                                                                       -------------    -------------   -----------------

                    INCREASE IN CASH
                AND CASH EQUIVALENTS                                               0                0                   0

         Cash and cash equivalents at beginning of period                          0                0                   0
                                                                       -------------    -------------   -----------------

         CASH & CASH EQUIVALENTS
                AT END OF PERIOD                                       $           0    $           0   $               0
                                                                       =============    =============   =================
</TABLE>




See Notes to Financial Statements.

                                       F-5

<PAGE>



                            Pinecrest Services, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         a.       Organization & Consolidation Policy

                  Pinecrest Services,  Inc. (the Company), a Nevada corporation,
                  was  incorporated  on February 10, 1999. On May 11, 2000,  the
                  Company merged with Hystar Aerospace Marketing  Corporation of
                  Nebraska   Inc.   (Hystar).   The  Company  is  the  surviving
                  corporation.

                  Hystar  Aerospace   Marketing   Corporation  of  Nebraska  was
                  incorporated March 7, 1986 to lease, sell, and market airships
                  and the Burkett  Mill, a waste  milling  device,  which rights
                  were  acquired  from VIP  Worldnet,  Inc.  initially  the only
                  shareholder. The technology to further develop the airship and
                  the mill by the parent company proved to be  prohibitive,  and
                  shortly after the acquisition of the marketing  rights further
                  activity ceased. Hystar has been inactive since that date.

                  The merger was recorded under the pooling of interests  method
                  of accounting.  Each share of the Company remained outstanding
                  as one fully paid and non-assessable share of capital stock of
                  the surviving corporation.

                  The accompanying  financial  statements  present the financial
                  condition  and  results  of  operations  of  Hystar  from  its
                  inception through the merger date and of the surviving entity,
                  the Company, as of the merger date.

         b.       Recognition of Revenue

                  The Company recognizes income and expense on the accrual basis
                  of accounting.

         c.       Net Loss Per Share

                  Basic and diluted  loss per share is computed by dividing  net
                  loss available to common  stockholders by the weighted average
                  number  of  common  shares   outstanding  during  the  periods
                  presented.  The  Company's  diluted  loss per  share  does not
                  include  any  common  stock  equivalents,  as their  effect is
                  antidilutive.

         d.       Cash and Cash Equivalents

                  The  Company  considers  all highly  liquid  investments  with
                  maturities of three months or less to be cash equivalents.

         e.       Provision for Income Taxes

                  The Company  records the income tax effect of  transactions in
                  the  same  year   that  the   transactions   enter   into  the
                  determination  of income,  regardless of when the transactions
                  are recognized  for tax purposes.  Tax credits are recorded in
                  the year  realized.  Since the  Company  has not yet  realized
                  income as of the date of this report,  no provision for income
                  taxes has been made.

                  In February,  1992, the Financial  Accounting  Standards Board
                  adopted Statement of Financial  Accounting  Standards No. 109,
                  Accounting for Income Taxes,  which  supersedes  substantially
                  all  existing  authoritative  literature  for  accounting  for
                  income taxes and requires deferred tax balances to be adjusted
                  to  reflect  the tax rates in effect  when those  amounts  are
                  expected to become  payable or  refundable.  The Statement was
                  applied in the Company's  financial  statements for the fiscal
                  year commencing January 1, 1993.

                                       F-6

<PAGE>


                            Pinecrest Services, Inc.
                          (A Development Stage Company)
                    NOTES TO FINANCIAL STATEMENTS (continued
                                December 31, 2000


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)

         e.       Provision for Income Taxes (continued)

                  No provision  for income  taxes have been  recorded due to net
                  operating loss carryforwards  totaling  approximately  $47,000
                  that will be offset against future taxable  income.  These NOL
                  carryforwards begin to expire in the year 2001. No tax benefit
                  has been  reported  in the  financial  statements  because the
                  Company  believes  there  is  a  50%  or  greater  chance  the
                  carryforwards will expire unused.

         f.       Use of Estimates

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

         g.       Dividend Policy

                  The Company has not yet adopted any policy  regarding  payment
                  of dividends.

         h.       Organization Costs

                  The Company amortized its organization  costs over a five year
                  period.

NOTE 2:  GOING CONCERN
         The accompanying  financial statements have been prepared assuming that
         the Company will continue as a going concern. The Company has no assets
         and has had recurring  operating  losses for the past several years and
         is dependent  upon  financing  to continue  operations.  The  financial
         statements  do not include any  adjustments  that might result from the
         outcome  of  this  uncertainty.  It is  management's  plan  to  find an
         operating  company to merge with,  thus  creating  necessary  operating
         revenue.

NOTE 3:  CAPITALIZATION
         In 1986, the Company issued  17,000,000  shares of common stock for the
         marketing rights to a waste milling device.  The value of this issuance
         was $17,000.

NOTE 4:  RELATED PARTY TRANSACTIONS
         During the year ended December 31, 1999, the Company  incurred  $30,000
         of professional fees payable to Mutual Ventures Corp. An officer of the
         Company is also an employee of Mutual Ventures Corp.

NOTE 5:  DEVELOPMENT STAGE COMPANY
         The  Company is a  development  stage  company as defined in  Financial
         Accounting  Standards  Board  Statement  No.  7.  It  is  concentrating
         substantially all of its efforts in raising capital and searching for a
         business operation with which to merge, or assets to acquire,  in order
         to generate significant operations.




                                       F-7