EXHIBIT 10.1

                             STOCK OPTION AGREEMENT
                                    BETWEEN
                                    JON NIX
                                      AND
                           FARRALD AND ARLENE BELOTE
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                             STOCK OPTION AGREEMENT

     This Stock Option Agreement (the  "Agreement"),  dated as of March 4, 2004,
is made by and between Farrald Belote and Arlene Belote ("Optionor") and Jon Nix
("Optionee").

         In  consideration  of ten  dollars  and  no/100ths  and other  good and
valuable  consideration,  Optionor hereby grants to the Optionee, its successors
and assigns,  the right to purchase and receive from Optionor up to an aggregate
of 5,000,000 shares (the "Shares") of common stock of National Coal Corp. or its
successors on the terms herein provided (the "Option").

         In  consideration  of the  foregoing  and for other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
for the purposed of defining the terms and  provisions of this Agreement and the
Option hereby granted, Optionor and Optionee hereby agree as follows:

          1.     Terms of Exercise.
                 -----------------

     The Option  granted herein may be exercised by Optionee in whole or in part
at any time after June 1, 2004 and 5:00 p.m. on or before March 31, 2005 at $.20
per share.  Optionee may exercise the Option from time to time by  delivering to
"Escrow Agent" (identified below) $.20 for each Share (the "Exercise Price") for
which Optionee is exercising  the Option.  Payments shall be made to Optionor by
bank check or wire transfer. Upon receipt by Escrow Agent of Optionee's payment,
Escrow Agent shall  transfer the number of Shares so purchased upon the exercise
of the Option.

         2.       Purchase Schedule and Pricing Conditions.
                  ----------------------------------------

     A) Duly  executed  certificates  representing  the shares  shall be held by
Michael A. Littman,  Escrow Agent,  who shall transfer the shares purchased upon
concurrent payment of the purchase price to Optionor.

     B) Optionee must purchase the shares within the time period and at exercise
price as specified  in paragraph 1. Failure to exercise the purchase  within the
time period shall cause the option to purchase the shares to be null and void.

     C)  Optionee  shall give 30 days  written  notice  prior to exercise to the
option in whole or in part.

         3.       Representations, Warranties, and Covenants of Optionor.
                  ------------------------------------------------------

     Optionor hereby  represents and warrants,  as of the date of this Agreement
and as of each date upon which Optionee exercises the Option, as follows:

     A) None of the  representations or warranties made by Optionor contains any
untrue statement of material fact, or omits to state any material fact necessary
to make the statements made, in the light of the circumstances  under which they
were made, not misleading.

     B) Optionor  owns all right,  title,  and  interest to the Shares,  and the
Shares  are and  will be free  and  clear  of any  and all  liens,  claims,  and
encumbrances of any kind or nature.

         4.       Unregistered Securities.
                  -----------------------

     The Shares have not been  registered  under the  Securities Act of 1933, as
amended and are currently restricted shares.


<PAGE>

         5.  Notices.  Any notice  pursuant  to this  Agreement  by  Optionor or
Optionee  shall be in  writing  and shall be  deemed to have been duly  given if
delivered  personally with written  receipt  acknowledged or mailed by certified
mail five days after mailing, return receipt requested:

         If to Optionee:

         Jon Nix
         319 Ebenezer Road
         Knoxville, TN 37923

         If to Optionor:

         Farrald Belote and
         Arlene Belote
         2810 Rocky Woods Dr.
         Kingwood, TX 77339

         Any party  hereto  may from time to time  change  the  address to which
notices to it are to be  delivered or mailed  hereunder by notice in  accordance
herewith to the other party.

         6. All the  covenants and  provisions  of this  Agreement by or for the
benefit of  Optionee  or  Optionor  shall bind and inure to the benefit of their
respective successors and assigns hereunder.

         7.       Applicable Law.
                  --------------

     This Agreement  shall be deemed to be a contract made under the laws of the
State of Colorado and for all purposes shall be construed in accordance with the
laws of said state.

         8. In the event legal action is  necessary  to enforce this  Agreement,
the  prevailing  party  shall be  entitled  to an  award  of all its  reasonable
attorney's  fees and costs  incurred  in  connection  with  enforcement  of this
Agreement.

         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.


OPTIONEE:                                            OPTIONOR:


/s/Jon Nix                                  /s/Farrald Belote
--------------------------------            -------------------------------
Jon Nix                                              Farrald Belote

                                            /s/Arlene Belote
                                            -------------------------------
                                                     Arlene Belote