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

                               FORM 10-QSB

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

                For the three months ended July 31, 2001

                       Commission File No. 0-29164

                     TRI-NATIONAL DEVELOPMENT CORP.
             (Name of Small Business Issuer in its charter)


              WYOMING                             33-0741573
     (State of Incorporation)                     (I.R.S. ID)


                    480 CAMINO DEL RIO S., SUITE 140
                       SAN DIEGO, CALIFORNIA 92108
         (Address of registrant's principal executive officers)

                             (619) 718-6370
          (Registrant's telephone number, including area code)

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

       SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                  Common Stock, No Par Value Per Share
                            (Title of Class)

Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and 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 there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will 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. [x]

As of July 31, 2001, 50,702,793 shares of the registrant's common stock
were outstanding.  The aggregate market value of the Registrants's free-
trading common stock, held by non-affiliates on September 18, 2001 was
approximately $1,900,000, based on the closing price of the stock on
September 18, 2001.

<PAGE>
                     TRI-NATIONAL DEVELOPMENT CORP.
                               FORM 10-QSB
                FOR THE THREE MONTHS ENDED JULY 31, 2001



                     PART I - FINANCIAL INFORMATION

                                                                     PAGE
                                                                     ----

ITEM 1.   Financial Statements (Unaudited)



A)   Consolidated Balance Sheets as of July 31, 2000 and 2001           3

B)   Consolidated Statements of Operations for the three months
     ended July 31, 2000 and 2001                                       4

C)   Consolidated Statements of Cash Flows for the three months
     ended July 31, 2000 and 2001                                       5

D)   Notes to the Financial Statements                                  6



ITEM 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                          17



                       PART II - OTHER INFORMATION



ITEM 1.   Legal Proceedings                                            20
ITEM 2.   Changes in Securities and Use of Proceeds                    23
ITEM 3.   Default of Senior Securities                                 24
ITEM 4.   Submission of Matters to a Vote of Security Holders          24
ITEM 5.   Other Information                                            24
ITEM 6.   Exhibits and Reports on Form 8-K                             24



Signatures                                                             24



                                    2
<PAGE>
                     PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS:                                               July 31, 01         July 31, 00
------                                                -----------         -----------
<S>                                                  <C>                 <C>
Current  assets:
---------------
Cash in banks                                        $    120,012        $    (15,343)
Cash in banks - Restricted                                      -           2,594,423
Accounts receivable, net                                  352,144           1,703,187
Citizens Business Bank Judgment Receivable (Note 2)             -           6,179,953
                                                     ------------        ------------
   Total current assets                                   472,155          10,462,219
                                                     ------------        ------------

Investments:
-----------
NetRom, Inc. convertible preferred stock                        -           1,292,794
Viper convertible preferred stock (Note 3)              1,150,000           3,000,000
MRI medical diagnostics, Inc.                                   -              18,185
Hills of bajamar (Note 4)                               4,955,695           4,269,810
Plaza resort timeshares (Note 5)                       14,648,501          14,645,085
Assisted living-Youngtown                                       -          15,544,880
Assisted living-Other Locations in process (Note 6)       496,580           5,194,518
Plaza rosarito (Note 7)                                11,484,429          11,996,153
Portal del mar condominiums (Note 8)                    1,685,007           1,484,232
Hall of fame fitness center                                     -              50,558
Bajamar Airport                                                 -              22,766
Alpine Gardens East (9)                                 2,343,923           4,297,005
El Mirador Center                                          50,000
International health network                               17,334              17,334
                                                     ------------        ------------
   Total investments                                   36,831,470          61,833,320
                                                     ------------        ------------

Other assets:
------------
Capitalized equipment lease                                     -             441,300
Property, furniture, and equipment, net                         -               3,169
Other Assets                                                    -              20,988
                                                     ------------        ------------
   Total other assets                                           -             465,456

                                                     ------------        ------------
   Total Assets                                      $ 37,303,625        $ 72,760,995
                                                     ============        ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
------------------------------------
Current liabilities:
-------------------
Accounts payable and accrued liabilities             $  4,921,403        $  2,622,365
Citizens Business Bank Judgment expenses (Note 2)               -           3,216,481
Loans payable-short term-1 year or less (Note 10)      21,401,468          31,892,828
                                                     ------------        ------------
   Total current liabilities                           26,322,871          37,731,675

Deferred revenue                                                -           4,545,279
Notes payable-net of current portion (Note 11)          9,092,581          21,260,852
                                                     ------------        ------------
   Total Liabilities                                   35,415,452          63,537,806
                                                     ------------        ------------

Stockholders' equity:
--------------------
Common stock                                           16,677,159          14,573,449
Paid in Capital                                                 -           1,431,142
Convertible preferred stock                                     -                   -
Accumulated deficit (Note 12)                         (14,788,986)         (6,781,402)
                                                     ------------        ------------
   Total stockholders' equity                           1,888,173           9,223,189
                                                     ------------        ------------

Total Liabilities and Stockholders' Equity           $ 37,303,625        $ 72,760,995
                                                     ============        ============
</TABLE>

See accompanying notes.

                                    3
<PAGE>
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND CHANGES IN RETAINED EARNINGS

<TABLE>
<CAPTION>
                                                               Period Ending
                                                       -----------------------------
                                                       31-Jul-01           31-Jul-00
                                                       ---------           ---------
<S>                                                  <C>                 <C>
REVENUES:
--------

  Revenues                                           $          -        $     11,148
                                                     ------------        ------------


OPERATING EXPENSES:
------------------

  Corporate note expense (Excluding interest)                   -             206,041
  Consulting fees                                          53,251             399,449
  Sales and marketing                                      (4,285)                440
  Legal, accounting and insurance                           7,272              36,944
  Interest expense                                          8,652              16,035
  General and administrative                              330,496             249,781
                                                     ------------        ------------
   Total operating expenses                               395,386             908,690

                                                     ------------        ------------
Loss from Operations                                     (395,386)           (897,542)

OTHER EXPENSES AND LOSSES
-------------------------

  Write-down of investments                                     -                   -
  Gain or (loss) on debt settlement                         7,965                   -
                                                     ------------        ------------

Loss before taxes                                        (387,421)           (897,542)

less: income tax

                                                     ------------        ------------
Net income (loss)                                        (387,421)           (897,542)

Retained earnings, beginning                                    -          (5,883,859)

Retained earnings, ending                            $   (387,421)       $ (6,781,401)
                                                     ============        ============


Earnings per share-fully diluted                     $     (0.008)       $     (0.028)
</TABLE>











See accompanying notes.

                                    4
<PAGE>
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                              Quarters Ending
                                                       -----------------------------
                                                       31-Jul-01           31-Jul-00
                                                       ---------           ---------
<S>                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
  Net cash loss from operations                      $   (103,838)       $   (202,982)
  Accounts receivable-Trade                                   521              12,657
  Accounts Payable-Trade                                        -                   -
                                                     ------------        ------------
   Net cash flows from operating activities              (103,317)           (190,325)
                                                     ------------        ------------

CASH FLOWS FROM INVESTMENT ACTIVITIES
-------------------------------------
  Furniture and Equipment                                       -                   -
  Alpine Gardens East                                           -                   -
  MRI Medical Diagnostics                                       -              (1,735)
  Assisted Living-Youngtown                                     -            (295,761)
  Assisted Living-Other Projects                                -          (2,744,002)
  Hills of Bajamar                                         (4,500)            (50,233)
  Plaza Rosarito                                          (12,080)           (121,755)
  Portal Del Mar                                                -                   -
  Hall of Fame Fitness Center Building                          -                 150
  International Health Network                                  -                   -
  Bajamar Las Perlas Condominiums                               -                   -
  Plaza Resort Timeshares                                       -                   -
  Other Assets                                                  -                (100)
                                                     ------------        ------------
   Net cash flows from investment activities              (16,580)         (3,213,436)
                                                     ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
  Notes and Loans Payable                                  87,525             387,808
  Common Stock Private Placements & Warrants               28,723             386,860
                                                     ------------        ------------
   Net cash flows from financing activities               116,248             774,668
                                                     ------------        ------------

      Net increase (decrease) in cash                      (3,649)         (2,629,093)
      Cash at beginning of period                         123,661           5,208,173
                                                     ------------        ------------
      Cash at end of period                          $    120,012        $  2,579,080
                                                     ============        ============
</TABLE>

See accompanying notes.
                                    5
<PAGE>
                     TRI-NATIONAL DEVELOPMENT CORP.
                    NOTES TO THE FINANCIAL STATEMENTS
          FOR THE THREE MONTHS ENDED JULY 31, 2001 (Unaudited)


NOTE 1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
          ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS ACTIVITY

Tri-National Development Corp. ("TND" or the "Company") is a multi-faceted
international real estate development, sales and management company,
publicly traded under the symbol "TNAV" on the NASDAQ OTC BB and under the
symbol "TND" on the Hamburg Stock Exchange and the Frankfurt Stock
Exchange.  The Company's development efforts are focused in four major
areas: residential development, resort properties, commercial development
and senior and assisted living facilities.

The Company was incorporated on July 31, 1979 as Rocket Energy Resources
Ltd. under the laws of the Province of British Columbia, Canada by
registration of its Memorandum and Articles. The Company changed its name
to MRI Medical Technologies, Inc. in April of 1989.  On December 7, 1992,
the Company changed its name to Tri-National Development Corp. and
recapitalized on the basis of five (5) common shares of MRI Medical
Technologies, Inc. for one (1) common share of Tri-National Development
Corp.  In January of 1997, the Shareholders approved a special resolution
to change the corporate domicile from Vancouver, B.C. to the state of
Wyoming.  On February 24, 1997, the Company's Articles of Continuation were
accepted by the state of Wyoming and it is now incorporated in good
standing under the laws of the State of Wyoming.  The Company maintains its
executive offices in San Diego, California at 480 Camino Del Rio S. in
Suite 140 and its telephone number is 619-718-6370.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Greater San
Diego Imaging Center, a 100% owned subsidiary, Tri-National Holdings, S.A.
de C.V., a 60% owned subsidiary, Planificacion Desarrollos de Jayay, SA de
CV, a 100% owned subsidiary, Inmobilaria Plaza Baja California, S.A., a
100% owned subsidiary, and Alpine Gardens East, Inc., a 51% owned
subsidiary.  All material intercompany accounts and transactions have been
eliminated in the consolidation.

EARNINGS PER SHARE

Primary earnings per share have been computed based on the weighted average
number of shares and equivalent shares outstanding during each period.  The
dilutive effect of stock options and warrants has been considered in the
computation of equivalent shares and is included from the respective dates
of issuance.

The fully diluted computation is based on the number of shares for the
three months ended July 31, 2000 and 2001.  The computation contemplates
the dilutive effects of common stock equivalent shares as well as
conversion of the convertible preferred stock.

                                    6
<PAGE>
Since the date of issuance of the warrants and options, both primary and
fully diluted earnings per share computations limit the assumption of the
repurchase of treasury shares to a maximum of 20% of the outstanding shares
of the Company.

In prior quarters, the Company had inadvertently included common stock
issued as collateral for loans in the total issued and outstanding.  In the
current quarter, the Company has made the proper calculations and deducted
common shares issued as collateral from the total issued and outstanding.

FURNITURE AND EQUIPMENT

Furniture and equipment are stated at cost and depreciated over the
estimated useful lives of the assets (three to five years) using the
straight line method.

NOTE 2.   CITIZENS BUSINESS BANK JUDGMENT RECEIVABLE

In March 1992, the Company advanced $383,064 to MRI Medical Diagnostics,
Inc. for a joint venture interest in its subsidiary, MRI Grand Terrace,
Inc., a California corporation, to enable it to acquire a retirement hotel
located in Grand Terrace, California.  In addition to the joint venture
interest, the loan was evidenced by a 15% note receivable from MRI Medical
Diagnostics, Inc. and a second trust deed and an assignment of rents from
MRI Grand Terrace, Inc..  On March 22, 1993, MRI Grand Terrace, Inc. filed
a complaint against Chino Valley Bank, now known as Citizens Business Bank
(AMEX:CVB), as a result of the purchase of the residential retirement hotel
in Grand Terrace from the Chino Valley Bank.  MRI Grand Terrace, Inc.
claimed that the sellers of the property (Chino Valley Bank) had failed to
disclose that the property's parking lot encroached on the property of the
adjacent parcel of land. Contrary to the bank's representations, the
Conditional Use Permit (CUP) under which the hotel was operating was in
violation, which restricted the ability of TND and MRI Grand Terrace, Inc.
to operate, refinance or sell the facility.  MRI Grand Terrace, Inc.
stopped making mortgage payments to the mortgage holder (the same Chino
Valley Bank), which then filed a Notice of Default as an initial step to
foreclosure on the property.  MRI Grand Terrace, Inc. then sought
Bankruptcy protection in July of 1993, and was ultimately dismissed from
Bankruptcy in May of 1995.  The Chino Valley Bank subsequently sold the
property in foreclosure to itself.  TND filed it's own action against the
Chino Valley Bank in early 1995, claiming that it was defrauded and
misrepresented when it advanced the $383,064 for the closing in 1992.  The
Company purchased the stock of MRI Grand Terrace, Inc., as described in
Note 4 to these financial statements, in an effort to control both
lawsuits.  As a result of the uncertainty of the final results of the
lawsuits, the Company previously wrote off the investment.  In May of 1998,
TND and MRI Grand rrace, Inc. received judgments in their favor for fraud,
intentional misrepresentation and deceit/negligent misrepresentation in the
Superior Court of San Bernardino, California. TND and MRI Grand Terrace,
Inc. received judgments totaling almost $5 million dollars, including
punitive and compensatory damages, plus pre-trial interest.  Beginning May
7th, 1998 the $5 million judgment began accruing, post judgment interest of
10% or $1,400 per day until the full award is paid.  A 35% portion of the
award is due to the Company's attorney.  The attorneys, however, filed for
recovery of those fees as an additional award that was heard and approved
September 25, 1998. On December 3, 1998, the court awarded the Company an
additional $185,000 in legal fees.

                                    7
<PAGE>
The bank filed its appeal on June 16, 1999 and we filed our answer to their
appeal September 16 1999, with oral arguments held on September 6, 2000.
The Appellate Court came back with a recommendation for a retrial based on
inconsistent verdicts in the first trial.   This gave Tri-National the
right to cross appeal.   However, we decided not to exercise this right on
the basis of the additional damages we believe we could show in the second
trial that were not permitted in the first trial.  Currently, the court has
ordered the case to arbitration prior to scheduling the second trial.  Due
to uncertainty of arbitration and the outcome of the second trial, the
Company has written off the original judgment.

NOTE 3.   NETROM, INC. CONVERTIBLE PREFERRED STOCK

In January of 1998, the Company, on behalf of its wholly-owned Mexican
subsidiary, Planificacion y Desarrollo Regional Jatay, S.A. de C.V., sold
50 acres of its Hills of Bajamar property to NetRom, Inc., a California
publicly traded corporation for $60,000 per acre, for a total purchase
price of $3,000,000, plus construction and management contracts on said 50
acres.

NetRom, Inc. delivered to Tri-National Development Corp. at closing,
1,000,000 shares of its Preferred Convertible stock at a value of $3.00 per
share for a total value of $3,000,000.  The preferred stock accumulated
interest at a rate of 15% per annum and was to be convertible into common
stock at $3.00 per share or market price for the 10 day average prior to
the date of conversion, whichever is less, but in no event less than $1.50
per share.  The conversion date was at the option of Tri-National
Development Corp., however, no sooner than 12 months from the date of
closing and in no case later than 15 days after the common stock of NetRom,
Inc. trades at or above $4.00 per share for a period of thirty consecutive
days.

Additionally, NetRom, Inc. provided TND warrants to purchase 1,000,000
common shares at a price of $1.25 per share, presumed that NetRom, Inc.
would achieve its stated projection of $.31 per share in earnings for the
year ending December 31, 1998.  In the event that NetRom, Inc. fell below
the $.31 per share earnings projection, but no lower than $.21 in earnings
for that period, then the warrant price would fall to $1.00 per share.
Further, if the earnings fell to between $.11 and $.21, then the option
price would be reduced to $.75 per share and in the event the earnings fell
below $.11 per share, the option price would be reduced to $.50 per share.
The price and terms for the property were based on arms length negotiations
between the parties and was approved by the Board of Directors of TND and
the shareholders of NetRom, Inc. at their Annual Meeting of Shareholders,
held on January 19, 1998.

In April of 1999, the Company converted the 1,000,000 shares of Netrom,
Inc. preferred shares to 2,320,345 shares of restricted common shares and
released for sale shares within the volume limitations pursuant to Rule
144.  As of July 31, 2001, the Company has sold 1,820,345 shares at an
average price of approximately $.30.  Current NetRom, Inc. management is in
the process of renegotiating this contract.

                                    8
<PAGE>
NOTE 4.   VIPER NETWORKS, INC. (FORMERLY TAIG VENTURES, INC.)
          PREFERRED CONVERTIBLE STOCK

In June of 1998, the Company, on behalf of its wholly-owned Mexican
subsidiary, Planificacion y Desarrollo Regional Jatay, S.A. de C.V., a
Mexican corporation, sold 50 acres of its Hills of Bajamar property to Taig
Ventures, Inc., a Utah telecommunications corporation for $60,000 per acre,
for a total purchase price of $3,000,000, plus construction and management
contracts on said 50 acres.

Taig Ventures, Inc. delivered to Tri-National Development Corp. at closing,
3,000,000 shares of its Convertible Preferred Non-Voting Class B shares at
a value of $1.00 per share for a total value of $3,000,000.  The preferred
stock accumulates interest at a rate of 15% per annum and will be
convertible into common stock at $1.00 per share or market price for the 10
day average prior to the date of conversion, whichever is less, but in no
event less than $.75 per share.  The conversion date is at the option of
Tri-National Development Corp., however, no sooner than 12 months from the
date of closing and in no case later than 15 days after the common stock of
Taig Ventures, Inc. trades at or above $2.00 per share for a period of
thirty consecutive days.

Additionally, Taig Ventures, Inc. provided TND warrants to purchase
1,000,000 common shares at a price of $3.00 per share, presuming that
Taig's common shares are trading at $4.00 or higher; $2.00 per shares if
Taig's common shares are trading between $3.00 and $4.00 per share; $1.25
per share if Taig's common shares are trading between $2.00 and $3.00; and
in no event less than $.75.  The price and terms for the property are based
on arms length negotiations between the parties and was approved by the
Board of Directors of TND and the shareholders of Taig Ventures, Inc. at
their Annual Meeting of Shareholders, held on April 30, 1999.

On November 15, 2000, Taig Ventures, Inc. executed a definitive Securities
Purchase Agreement and Plan of Reorganization (the "Purchase Agreement")
pursuant to which Taig Ventures, Inc., acquired 100% of the outstanding
common shares of Viper Networks, Inc. ("VIPER-CA"), a California
corporation, in exchange for 36,000,000 common shares of Taig Ventures,
Inc..

The acquisition was effected through a Plan of Reorganization (the
"Reorganization"), with Viper Networks, Inc. as the surviving corporation.
Upon consummation of the Purchase Agreement, Reorganization and approval by
the shareholders and the Board of Directors of Taig Ventures, Inc. at an
Extraordinary Meeting of the Shareholders held December 29, 2000, (1) the
name of the Company was changed to Viper Networks, Inc., leaving VIPER-CA,
as a wholly-owned subsidiary and (2) a reverse split of the common stock
was effected on a 1 for 12 basis.  The preferred shares were not affected
by the reverse split of the common stock.

In June of 2001, the 3,000,000 shares of preferred stock were converted to
400,000 shares of common stock.  The Company is confident Viper Networks,
Inc. will complete its filings with the U.S. Securities and Exchange
Commission and make application to the NASD or another stock exchange for
the public trading of their common stock, there can be no assurances that
they will be successful in their efforts.  As such, the Company has reduced
the value of the stock on its balance sheet from $3,000,000 to $1,150,000.

                                    9
<PAGE>
NOTE 5.   MRI MEDICAL DIAGNOSTICS, INC.

In 1992 the Company sold its wholly owned subsidiary, MRI Medical
Diagnostics Inc., a California corporation to Petro-Global, Inc., a
Colorado publicly traded corporation.  In return, the Company received
6,000,000 restricted common shares of the purchaser, Petro-Global, Inc.,
plus certain mineral properties and leases.  In 1992, the mineral
properties were written down to a nil value in the records and the name was
changed from Petro-Global, Inc. to MRI Medical Diagnostics, Inc.(MRI-Med).
MRI-Med filed for Chapter 11 bankruptcy protection in July 1993 in
conjunction with the Chino Valley Bank action (see Note 2).  After
dividends in kind totaling 2,000,000 shares in 1992 and 1993 to TND
shareholders, and due to uncertainty in the underlying value of the
remaining 4,000,000 MRI-Med shares held by the Company, the carrying cost
of these shares was written-off in 1994.  Tri-National Development Corp.
filed a reorganization plan on behalf of MRI-Med in August 1995 and, in
settlement of the litigation described in Note (2), the Company received
5,900,000 shares of MRI-Med at a deemed value of $0.50 per share, ordered
by the U.S. Federal Bankruptcy Court, plus 1,400,000 shares for
reimbursement of current expenses.  In July of 1997, MRI-Med recapitalized
on a 1 for 5 basis.  The investment is recorded in the books at a cost of
$496,994.  The Company declared and paid a stock dividend of 750,000 shares
of MRI-Med to TND shareholders of record August 31, 1997 and declared a
second stock dividend of an additional 750,000 to TND shareholders of
record January 27, 1998. After the stock dividends paid to TND shareholders
in 1992, 1993, 1997 and 1998, and shares sold to finance the
reorganization, the Company retained approximately 415,000 post-split
shares of MRI-Med. In September 2000, MRI-Med completed a reverse merger
with HomeZipr, Inc., a Delaware corporation, specializing in providing
residential mortgages.  MRI-Med subsequently completed a name change to
HomeZipr, Inc. and recapitalized its common stock on a 1 for 18 basis.
HomeZipr, Inc. now trades on the NASDAQ OTC BB under the symbol, "HZPR".

NOTE 6.   REAL ESTATE DEVELOPMENT PROPERTY: HILLS OF BAJAMAR

The Hills of Bajamar property is a 2,500-acre parcel located in the
Municipality of Ensenada, on the Pacific Ocean side of Baja California,
Mexico, roughly 50 miles south of San Diego, California. The purchase
contract completed in 1992 through the Company's wholly-owned Mexican
subsidiary, Planificacion Desarollos de Jatay, S.A. de C.V.
("Planificacion"), provides for an overall purchase price of $6,000,000 for
the 2,500 acres ($2,400 per acre or $.60 per sq. meter).   The property is
being purchased on a gradual basis in 247-acre increments at $600,000
apiece.  In September 1998, the Company, in accordance with its contract,
had taken title to its second 247-acre parcel and in September 2000, in
accordance with its contract, the Company had taken title to its third 247-
acre parcel.  This last 247-acre parcel gives the Company title to a total
of approximately 750 acres with construction rights to all 2,500 acres and
places the unpaid balance of roughly 1,750 acres in trust with Banco Ixe.
Title to additional acres will be released to the Company as annual
payments are made to the seller. In the event the Company is unable to make
its scheduled annual payments, the Company maintains ownership of any the
property already paid for, while  the unpaid property in trust is subject
to cancellation and the property will be subject to refinancing under which
the Company may be required to pay a significantly higher price per acre.
Balance owing on the remaining 1,750 acres is $4,200,000 at $600,000
annually with no interest until 2003.

                                   10
<PAGE>
NOTE 7.   PLAZAS RESORT TIMESHARES AND COMMERCIAL PROPERTY

In December of 1996, the Company entered into an acquisition agreement with
Valcas Internacional, S.A., to acquire 100% of the stock of Inmobilaria
Plaza Baja California, S.A., a Mexican corporation, including its existing
assets, which include 16+ developed acres of ocean front land within the
Bajamar resort with plans for 328 vacation ownership (timeshare) units for
$13,079,055, payable with notes for $9,079,055 and 1,000,000 Class B Series
B Convertible Preferred shares with a value of $4.00 per share(See "NOTES
PAYABLE"). During the Company's year end April 30, 2000, the Company paid
$200,000 additional as it modified the original contract and converted the
Class B Series B Preferred shares to common.

NOTE 8.   ALPINE GARDENS EAST, INC.

Alpine Gardens East, Inc. ("AGE") is a Nevada corporation created to
acquire and develop senior and assisted living facilities primarily in the
S.W. United States. In January of 1998, the Company acquired 51% of this
corporation for a combination of $270,500 in cash and 864,500 shares of
Class B Series B preferred stock.  The Class B Series B preferred stock was
converted to 864,500 common shares during year end April 30, 2000.  AGE
facilities are expected to combine housing, minimum health care and
personal support for elderly residents who need assistance with certain
activities of daily living, without the need of a complete nursing
facility.  The Company has reduced the value of this investment to
$2,373,823, as it no longer maintains a majority interest in the Youngtown
Gardens (See Note 9).

NOTE 9.   ASSISTED LIVING - YOUNGTOWN

In June of 1998, AGE closed on a 5.5 acre developed parcel to build its
first independent and assisted living project, known as Youngtown Gardens,
in Youngtown, Arizona, just north of Phoenix and adjacent to Sun City.  In
July of 1999, a formal ground breaking took place with the Mayor of
Youngtown and the Company for the recently finished construction on two
models. The project was completed with a $10,500,000 construction loan from
Vestin Mortgage (formerly Del Mar Mortgage).  This facility includes 40
two-bedroom units, 50 one-bedroom units and 36 units reserved for Alzheimer
and Dementia residents.

To reduce its liability during the fourth quarter ending April 30, 2001,
the Company successfully completed an assignment of the $13,000,000
construction loan and accrued interest and penalties to its minority
partner in this project in exchange for a reduced participation of 20% of
the future net profits after debt service

NOTE 10.  ASSISTED LIVING - OTHER LOCATIONS IN PROCESS

In October of 1998, the Company entered into a purchase agreement to
acquire 3.66 acres of undeveloped property overlooking the Pacific Ocean in
Carlsbad, California for $2,900,000, with a $125,000 down payment.  The
Company, through its majority owned subsidiary, Alpine Gardens East,
planned to develop and operate this assisted living facility, with an
Alzheimer's care component.  As of April 30, 2001, the Company had paid a
total of $125,000 in connection with this investment, prior to forgoing its
rights to complete the acquisition due to limited available funds.

                                   11
<PAGE>
In November of 1999, the Company, through a joint venture agreement, closed
and completed escrow to acquire a fully-zoned 22-acre parcel of real
property with plans, located in Temecula, California for $4,300,000 for a
combination of cash and notes.  During the fourth quarter ending April 30,
2001, the joint venture filed for Chapter 11 Reorganization to receive the
time required to close on the necessary financing to pay off the bridge
loan provide the construction financing.  The joint venture has plans to
develop a fully-inclusive senior community that will offer medical
facilities, Alzheimer's and dementia care, independent and assisted living
and senior single family housing.  The joint venture named this project,
The Arbors at Temecula, and plans to start construction in late- 2001.

In April of 1999, the Company acquired 2.39 acres of undeveloped land in
San Marcos, California for $800,000 (See "Legal Proceedings").  The Company
plans to develop a 60-unit Alzheimer's care facility.

NOTE 11.  PLAZA ROSARITO

On November 20, 1998, Tri-National Holdings, S.A. de C.V., a Mexican
subsidiary, purchased the Plaza San Fernando from Banco Bital with a $1
million cash down payment.  In July of 1999, Capital Trust Inc. of New York
provided the remaining $8 million necessary to close and complete the
escrow.  In March of 2001, the Company received a 60-day forbearance from
Capital Trust, Inc. for the repayment of the $8 million and has
subsequently defaulted (See "LEGAL PROCEEDINGS").  Plaza San Fernando's
appraised value is in excess of $23 million.  Fonatur, the tourism arm of
the Mexican government, has approved a $38 million loan for the
construction of a hotel and convention center on a portion of the property.
The Company intends to joint venture this component with a major U.S. hotel
operator.

The Company has renamed this property, Plaza Rosarito.  It is located in
the heart of Rosarito Beach in Baja California, Mexico, minutes from the
20th Century fox film studio where "Titanic" was filmed and down the street
from the famous Rosarito Beach Hotel.  Plaza Rosarito includes 15 acres of
undeveloped oceanfront land zoned for the 450-room hotel and convention
center, 18 acres of developed land, including 187,500 square feet of
existing steel, concrete and marble commercial space, 42 developed
residential lots and a 80% complete 36-unit condominium complex.  The
Company plans to sell the 30 condominiums at $100,000 each with a 20% down
payment and the balance at 11% over 10 years.  The Company's initial plans
are to sell the 32 residential lots at approximately $30,000 each with a
20% down payment and the balance at 11% over 10 years.  The Company has
initial plans and will start to execute multi-year, triple- net leases from
established preliminary commitments for approximately 100,000 square feet
of the existing commercial property at up to $2.00 per square foot per
month from U.S. and Mexican retail operations, consistent with comparable
lease rates in the area, which upon full lease up should generate in excess
of $4 million annually and become one of the most significant shopping
centers in Baja California. The Company has already received letters of
interest for roughly 60% of the 187,500 square foot shopping center.
Additionally, the Company received approval to sell the commercial space as
condominiums at up to $200 per square foot, with a 30% down payment and the
balance at 14% over 5 years.  This allows the Company an additional exit
vehicle if desired and an alternative to leasing.  The down payments would
be deposited into an escrow account, until the Company completes
approximately $1,500,000 in improvements, of which approximately $800,000
has already been completed. Upon full sell out, the

                                   12
<PAGE>
projected gross revenues generated from the property could be in excess of
$35 million, with down payments over $11 million and annual mortgage
payments of roughly $5 million.

NOTE 12.  PORTAL DEL MAR CONDOMINIUMS

In February of 1999, the Company, through a Mexican subsidiary, signed
purchase agreements and provided the $500,000 down payment to acquire
Portal Del Mar for $1,250,000.  Portal Del Mar is a 123-unit, 2 and 3-
bedroom condominium development on 6 acres overlooking the Pacific Ocean in
Baja California, Mexico, just south of Rosarito Beach. The 126 ocean view
condominiums are in various stages of completion, with approximately 46
completed. The Company is seeking a financing commitment for $7.5 million
to complete the remaining 80 units, add a clubhouse, 3 tennis courts, 2
pools and a spa with beach access and palapas.  Each condo completed is
intended to include an oversize terrace with ocean views.  Comparable
condominiums located across the road are selling in the $250,000 range.
The Company arranged financing for the remaining $750,000 of acquisition
cost and closed escrow on this property in June of 1999 and intends to
initially operate this property as a hotel and eventually begin timeshare
sales in late 2001.  In March of 2001, the lender that provided the
remaining $750,000 to close escrow, converted their loan to a 33 1/3%
equity position in the project.

The Company expects to start timeshare sales at $5,000 per week with a
$1,500 down payment and the balance at 12% over 7 years.  Upon full sell
out of the 6,222 weeks at an average price of $5,000, the projected gross
revenues would exceed $31 million with down payments of $9 million and
annual mortgage payments of approximately $2.5 million.

NOTE 13.  HALL OF FAME FITNESS CENTER

In February of 1999, the Company, through a Mexican subsidiary, signed
purchase agreements and provided a non-refundable $50,000 down payment to
acquire the former Banco Atlantico building for $950,000.  The former Banco
Atlantico building is a 20,000 square foot, 2-story commercial building in
the heart of the banking district in Tijuana, Mexico.  With a primary focus
over the last year of restructuring the $8 million loan with Capital Trust,
the Company was unable to provide the necessary funds to close this escrow
and has subsequently written off the down payment.

NOTE 14.  EL MIRADOR

During the year ended April 30, 2001, the Company signed agreements to
acquire a 20,000 square foot commercial building situated a 6-acre parcel
on a bluff 1,000 feet above sea level overlooking the Pacific Ocean with
some of the most dramatic views in Baja California, for a total purchase
price of $450,000.  Mirador is located directly south of the Bajamar Ocean
Front Hotel and Golf Resort and adjacent to the south rim of the Company's
Hills of Bajamar property.  The Company plans to utilize the commercial
space as a sales office for the Vinas de Bajamar residential lots, with
long-term plans to develop a 100-room hotel.

                                   13
<PAGE>
NOTE 15.  INTERNATIONAL HEALTH NETWORKS, INC.

International Health Networks, (IHN) is Nevada corporation and a majority-
owned non-active of the Company.  IHN is intended to be a multitude of U.S.
medical services designed for Mexico that the Company has envisioned for
the past several years as the magnet for attracting the retiree market in
Baja California, Mexico.

The primary focus for IHN will be a planned medical campus, to be built on
Hills of Bajamar property.  The medical campus was originally conceived for
by IHN in 1997 and called for 150 acres at the south end of the property.
The Company would retain the construction rights to build all required
facilities on the combined 250 acres and maintain a property management
contract. The campus would include an acute care hospital associated with
a recognized U.S. medical provider, a medical school complete with
dormitories, class rooms and auditorium, medical exhibition center, R & D
facilities for pharmaceutical industry and facilities for long-term care
combined with anti-aging and wellness programs. This campus would be
important not only to the region, but to the Company's desire to create a
retirement mecca on its properties.

NOTE 16.  CASH IN BANKS - RESTRICTED

The restricted cash in banks is funds left over from the $8 million loan
from Capital Trust, Inc. that the Company did not have signature authority.
The funds have since been recovered  by the receiver (See "LEGAL
PROCEEDINGS").

NOTE 17.  LOANS PAYABLE SHORT-TERM

The Company has made private offerings of its securities, including its
common stock and nine-month corporate notes ("Notes"), in reliance on
exemptions from the registration requirements of the Securities Act of 1933
and applicable state securities laws. The Company became the subject of a
cease and desist order issued by the Wisconsin Securities Division, based
on sales of its Notes to Wisconsin residents.  The nine-month promissory
note program was brought to the Company by the investment banking firm,
Johnson, Richards & Company, Inc., and the Company relied on
representations made by that firm that a federal exemption was available
under the right terms and conditions.  With the proceeds being used for
specific projects etc., the Notes were considered commercial paper and
exempt from securities registration.  Although the Company believes it
properly met the criteria for exemption, because it used the proceeds to
acquire real estate and is arguing that the sales met the requirements of
the Wisconsin private offering exemption, it has paid off all of the Notes
due in Wisconsin.  The Company has also agreed to a voluntary cease and
desist order in California and North Carolina with respect to sales of
those same Notes in that state.  The California Department of Corporations
and the North Carolina Department of Corporations both required the Company
to offer rescission to investors in that offering and all California and
North Carolina investors accepted that rescission offer.  This requires the
Company to repay all California and North Carolina investors their
principal only, which the Company has already started paying.  The
California order does not prohibit future exempt or qualified sales of the
Company's securities in California.

Additionally, the Louisiana Commissioner of Securities and Connecticut
Department of Banking are currently examining the sales of the Notes to its
residents.  In the event that it is found that the sales did not meet the
requirements of applicable exemptions from

                                   14
<PAGE>
registration, it is the position that the Company must refund all
investments in the Notes to Louisiana and Connecticut purchasers.  The
Company issued approximately $1,500,000 in Notes to Louisiana investors.
The Company has already started to pay off Notes due in Louisiana and
intends to meet the balance of the refund obligation with a combination of
revenues generated by Plaza Rosarito, equity and/or debt financing and the
leveraging of portions of its real estate portfolio.   There can be no
absolute assurance, however, that the violations will in fact be cured in
this manner and therefore it is possible that further remedial action may
be required.

Because the Company has relied on federal and state exemptions for
placement of its Notes, other states may find that the Company did not
comply with the various blue sky exemptions. The consequences of any such
violations may vary from state to state, but could include the requirement
that the Company rescind some or all of the sales in such states at the
request of the affected subscribers and prepare formal registration
statements and/or other documentation at the request of the securities
regulators. Additionally, the Company and/or its officers may be subject to
civil and/or criminal fines or penalties including, but not limited to, a
sanction with regard to the Company's ability to make any public offering
in the future.  It is believed that the Company can continue its operations
through its development of cash and revenues from its ongoing operations
despite the rescission offer in California and potential refund to
Louisiana investors.

Short-term notes payable at July 31, 2001, consisted of the following:

    Corporate Notes payable
       9-month notes, interest at 10%,
       currently due                              $11,294,331

    Note payable to Capital Trust
       Guaranteed by 3 officers and
       Directors and a first trust deed on
       Plaza Rosarito, interest at 12%
       due November 21, 2001                        8,432,183

    Notes payable, short term
       interest at 10%, due July 31, 2001           1,655,056
                                                  -----------

TOTAL                                             $21,401,468
                                                  ===========

NOTE 18. LONG-TERM NOTES PAYABLE

Long-term notes payable at July 31, 2001, consisted of the following:

    Note payable and cash payable to
       DUBSCA upon closing of vacation
       ownership (timeshare) project              $ 9,079,055
                                                  -----------

TOTAL                                             $ 9,079,055
                                                  ===========

                                   15
<PAGE>
NOTE 20.  PROPERTY, FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

                                                  July 31, 2001
                                                  -------------


     Furniture and equipment                      $    33,080
     Less accumulated depreciation                    (33,080)
                                                  -----------
                                                  $         0
                                                  ===========

NOTE 21.  LEASES

The Company leases one office facility in San Diego, California and one in
Ensenada, Baja California under operating leases which expire in 2001 and
the year 2002, respectively.  The leases generally require the Company to
pay all maintenance, insurance and property taxes and are subject to
certain minimum escalation provisions.  The Company also leases autos,
equipment and computers.

Future minimum operating lease payments as of July 31, 2001 are as follows:

     2001                                         $   210,700
     2002                                             252,840
                                                  -----------
                                                  $   463,540
                                                  ===========

NOTE 22.  GOING CONCERN

We require significant additional capital to restructure the Company's
existing debt, build out and operate planned properties and for general
working capital needs. Most critically, the $8,300,000 judgment held
against the Company and several of its officers and directors by Capital
Trust, Inc. and the $12,000,000 in nine-month corporate notes must both be
restructured.  We also require additional capital to invest in any new
opportunities. Capital markets have recently been volatile and uncertain.
These markets may not improve, and we may not be able to access these
markets to raise additional capital. If we fail to obtain required new
financing, the failure would have a materially adverse effect on our
business and our financial condition. For example, if we are unable to
access capital markets, we may have to restrict our activities or sell our
interests, or in one or more of our subsidiaries or other ventures earlier
than planned or at a "distressed sale" price.

The Company experienced net losses of approximately $8,540,199 in the year
ended April 30, 2001, net loss of $387,421 in the three months ended July
31, 2001 and a net loss of $897,542 for the three months ended July 31,
2000.  Losses are likely to be significant for at least the next year to
possibly two years as we restructure our debt and continue to invest
additional funds into existing projects to bring them to cash flow, as well
as investing in new projects. We may not generate profits in the short term
or at all. If we fail to achieve profitability, that failure could have a
negative effect on the market value of our common stock.

                                   16
<PAGE>
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION

OVERVIEW

The Company was organized to create and realize value by identifying and
making opportunistic real estate investments through the direct
acquisition, rehabilitation, development, financing and management of real
properties and/or participation in these activities through the purchase of
debt instruments or equity interests of entities engaged in such real
estate business.  The Company's business strategy is to maximize
shareholder value, focusing on three priorities: growth, profitability and
liquidity through both domestic and international real estate investments.
The Company's primary source of equity financing has been through private
placement of its securities, including short-term corporate notes
("Notes").  As of July 31, 2001, the Company had roughly $12,000,000
outstanding pursuant to private placement offerings of its Notes, which are
all now due.  The Company intends to repay the principal and interest with
cash flow generated from operations, property specific mortgages and
additional private placements of its securities.

To continue its business strategy, the Company intends to fund its next
round of acquisitions, development and general working capital by
conducting private placements of common stock, preferred stock and
debentures.  In addition to the private placements, the Company is seeking
property specific mortgage financing, as well as joint venture partners and
sale of existing properties.

Following the completion of various private placements and the
restructuring of current mortgages, including Capital Trust and the Notes,
the Company would hope to have sufficient funds to complete development of
several of its current projects, which will produce revenues to the
Company. Once these projects begin producing an income, the Company could
move away from financing its operations through the sale of securities.
However, there is no assurance that the Company will be able to do so.

RESULTS OF OPERATIONS

Three Months Ended July 31, 2001 Compared to Three Months Ended July 31,
2000.  During the three months ended July 31, 2001, the Company had a net
loss of $387,421 or $(0.008) per share compared to net loss of $897,542 or
$(.028) per share for the same period ended July 31, 2000.  This decrease
in net loss is attributable to cessation of the Company's offering of its
nine-month notes and associated legal, accounting and interest, and the
resulting decrease in corporate note expense.

Operating expenses for the three months ended July 31, 2001 was $395,386,
a decrease from $908,690 for the three months ended July 31, 2000.  This
decrease is attributable to cessation of the Company's offering of its
nine-month notes and associated legal, accounting and interest, and the
resulting decrease in corporate note expense to $0 for the three months
ended July 31, 2001, compared to $206,041 for the three months ended July
31, 2000.  For the three months ended July 31, 2000, the Company had no
revenues compared with $11,148 in total revenues for the three months ended
July 31, 2000.

                                   17
<PAGE>
The Company's general and administrative expenses for the three months
ended July 31, 2001 increased to $330,496 from $249,781 for the same period
ending July 31, 2000.

LIQUIDITY AND CAPITAL RESERVES

Net change in cash during the three months ended July 31, 2001 was
$(3,649), compared to a net change in cash of $(2,629,093) for the three
months ended July 31, 2000.  Net cash used by operating activities totaled
$(103,317) for the three months ended July 31, 2001, a decrease from
$(190,325) for the three months ended July 31, 2000.  This difference is
attributable primarily to decrease in interest and associated expenses paid
on corporate Notes during the three months ended July 31, 2001 as compared
to the same period in 2000.

Net cash used by investing activities totaled $(16,580) during the three
months ended July 31, 2001, compared to $(3,213,436) provided during the
same period in 2000.  This difference is primarily attributable to an
increase in expenditures for the acquisition and development of the Plaza
Rosarito and Youngtown Gardens during the three months ended July 31, 2000.

Net cash provided by financing activities totaled $116,248 for the three
months ended July 31, 2001, a decrease from $774,668 for the same period in
2000.  The decrease is primarily attributable to private placements of the
Company's common stock and construction financing and mortgages for the
acquisition and development of the Company's properties, including Alpine
Gardens East, Youngtown Gardens, Temecula Gardens, Carlsbad and San Marcos,
California properties, the Hills of Bajamar, Plaza Rosarito and Portal Del
Mar during the three months ended July 31, 2000.

At July 31, 2001, the Company's cash, which includes cash reserves and cash
available for investment, was $120,012 down from $2,579,080 at July 31,
2000.  This change is primarily attributable to the restricted cash used
for the construction of the Youngtown Gardens during the three months ended
July 31, 2000.

PLAN OF OPERATION

To date, the Company has obtained funds for the acquisition of its
properties from the sale of common stock and 9-month promissory notes
("Notes").  Recently, state and federal securities regulators have begun to
target nine-month note programs, primarily being offered by sham and/or
start-up companies.  The Company has agreed to voluntarily cease sales of
its Notes, although management feels that the program met the requirements
of federal and state exemptions from registration for sales of commercial
paper.  Due to the cessation of its Note sales, the Company has experienced
an immediate need for alternative funding both to service the existing
Notes and for the completion of development on its current projects.

We have been extremely busy in our efforts to achieve our immediate goals
of (1) bringing our various properties to a point where they generate cash
flow, (2) refinancing current debt, and (3) obtaining new financing both to
fund additional acquisitions and further improve our existing properties.
Successful achievement of these goals would virtually insure realization of
the Company's vision of enhancing shareholder value by creating long-term
profitability based on consistent, predictable income streams.

                                   18
<PAGE>
In seeking new capital, the major obstacles the Company has faced have been
the approximately $12,000,000 in unsecured 9-month notes outstanding and
the $8,000,000 judgment against the Company and several of its executive
officers held by Capital Trust, Inc. of New York for the loan the Company
received to complete the acquisition of Plaza Rosarito.  The funds from
these loans and notes were used primarily for the acquisition of portions
of our significant portfolio of properties over the last couple of years.
However, in accordance with Generally Accepted Accounting Principles
("GAAP"), we are required to carry these assets on the Company's books at
cost.  The presence of the two outstanding liabilities effectively offsets
the Company's total assets on our balance sheet specifically because we
cannot reflect the true market value of those assets.  This has made
obtaining new financing on a corporate level virtually impossible.  In
addition, the $8,000,000 judgments against several of the Company's
executive officers by virtue of their personal guarantees on the Capital
Trust loan has made obtaining financing on a personal level for the benefit
of the Company, which the officers were willing to do, also virtually
impossible.

In addition to looking to both the private and public sectors for direct
cash infusions on either a debt and/or equity basis, the Company has been
aggressively searching for appropriate joint venture partners to obtain the
necessary financing and management expertise to accomplish its goals.  To
date, almost all of the potential joint venture candidates with whom the
Company has been engaged in negotiations have yet to make any firm
commitment in the form of the cash we need to address these liabilities.
They are, however, still very interested and have indicated that if we can
find a creative way to resolve or contain one or both of the above
referenced liabilities, then they would be willing to proceed.

The Company is continuing to aggressively pursue several alternatives for
the financing necessary to complete construction of the Plaza Rosarito
shopping center and resolve the $8,000,000 judgment due to Capital Trust.
We believe we are making very significant progress toward a solution that
will restore the liquidity of the Company, address the outstanding
liabilities, and allow rapid and profitable development of both the
Rosarito property and the Hills of Bajamar.  It is our intention that the
rewards of any such success go to the shareholders who have remained with
us through this long and difficult endeavor.  Although the Company is
confident it will resolve this matter with Capital Trust and retain
participation in these properties, we are required to point out that there
can be no assurances that it will be successful in its efforts.



                                   19
<PAGE>
                       PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Citizens Business Bank Lawsuit and Subsequent $5 Million Award

On August 14, 1998, Tri-National and its wholly owned subsidiary, MRI Grand
Terrace, Inc., appeared in the Superior Court of San Bernardino before the
Honorable Barry Plotkin, to hear Chino Valley Bank, now known as Citizens
Business Bank (AMEX:CVB), attempt to attack the judgment of approximately
$5,000,000 signed by Judge Plotkin on June 3, 1998. Tri-National
successfully defeated the bank's motion for a new trial, as well as a
motion for the Judge to set aside the jury's verdicts reached on May 7,
1998. In denying Citizens Business Bank's motions, the court upheld the
jury's respective verdicts of 12 to 0 and 11 to 1, wherein they found the
bank guilty of fraud and negligent misrepresentation in connection with the
sale of the Grand Terrace Retirement Hotel to Tri-National and MRI Grand
Terrace, Inc. in 1992.   On August 17, 1998, the bank posted a $7.5 million
bond to allow time to decide whether or not to start the appeal process.
Post judgment interest against the bank continues at the rate of
approximately $500,000 per year.  Citizens Business Bank has a total net
worth of approximately $100 million.

Additionally, Tri-National's motion for attorney fees and costs was heard
and approved on September 25, 1998.  On December 3, 1998, the court awarded
the Company an additional $185,000.  These costs are in addition to the
existing $5,000,000 judgment for punitive and compensatory damages,
including pre-trial interest.

The bank has filed its appeal on June 16, 1999.  This gave Tri-National the
right to cross appeal on the basis of the additional damages we believed we
could show.  However, we decided not to exercise this right and possibly
open the door for the Appellate Court to return us to court to evaluate
those damages.  Instead, the Company filed its answer to their appeal on
September 16, 1999, held oral arguments on September 6, 200 and will let
the Appellate Court proceed.

Silver Pointe Investments, LLC

Sliver Pointe Investments, LLC provided the remaining $750,000 bridge loan
to complete the acquisition of the Portal Del Mar property.  The six-month
loan was due in January, 2000.  However, there are several issues to be
resolved between the parties, which are now in the hands of local counsel.

Commercial Money Center

This was a loan against the MRI equipment at the Greater San Diego MRI
Center, which the Company has withheld payments due to consequential legal
theories, which will be resolved in court.  It is believed that the Company
could be liable for up to $250,000.

Short Term Corporate Notes

The Company has made private offerings of its securities, including its
common stock and nine-month corporate notes ("Notes"), in reliance on
exemptions from the registration requirements of the Securities Act of 1933
and applicable state securities laws. Recently, the Company became the
subject of a cease and desist order issued by the Wisconsin Securities
Division, based on sales of its Notes to Wisconsin residents.  The nine-
month promissory note program was brought to the Company by the investment
banking firm, Johnson, Richards & Company, Inc., and the Company relied on
representations made by that firm that a federal exemption was available
under the right terms and conditions.  With the proceeds being used for
specific projects etc., the Notes were considered commercial paper and
exempt from securities registration.  Although the Company believes it
properly met the criteria for exemption, because it used the proceeds to
acquire real estate and is arguing that the sales met the requirements of
the Wisconsin private

                                   20
<PAGE>
offering exemption, it has paid off all of the Notes due in Wisconsin.  The
Company has also agreed to a voluntary cease and desist order in California
with respect to sales of those same Notes in that state.  The California
Department of Corporations required the Company to offer rescission to
California investors in that offering and all California investors accepted
that rescission offer.  This requires the Company to repay all California
investors their principal only, which the Company has already started
paying.  The California order does not prohibit future exempt or qualified
sales of the Company's securities in California.

Additionally, the Louisiana Commissioner of Securities is currently
examining the sales of the Notes to Louisiana residents.  In the event that
it is found that the sales did not meet the requirements of applicable
exemptions from registration in Louisiana, it is the position of the State
of Louisiana that the Company must refund all investments in the Notes to
Louisiana purchasers.  The Company issued approximately $1,500,000 in Notes
to Louisiana investors.  The Company has already started to pay off Notes
due in Louisiana and intends to meet the balance of the refund obligation
with a combination of revenues generated by Plaza Rosarito, equity and/or
debt financing and the leveraging of portions of its real estate portfolio.
There can be no absolute assurance, however, that the violations will in
fact be cured in this manner and therefore it is possible that further
remedial action may be required.

Because the Company has relied on federal and state exemptions for
placement of its Notes, it is possible that other states may find that the
Company did not comply with the various blue sky exemptions. The
consequences of any such violations may vary from state to state, but could
include the requirement that the Company rescind some or all of the sales
in such states at the request of the affected subscribers and prepare
formal registration statements and/or other documentation at the request of
the securities regulators. Additionally, the Company and/or its officers
may be subject to civil and/or criminal fines or penalties including, but
not limited to, a sanction with regard to the Company's ability to make any
public offering in the future.  It is believed that the Company can
continue its operations through its development of cash and revenues from
its ongoing operations despite the rescission offer in California and
potential refund to Louisiana investors.

New England International Surety

As stated, to implement its business strategy, the Company initially funded
acquisitions, development and general working capital by issuing a Private
Placement of nine-month Corporate Notes at 10% interest per annum. The
investors principal and interest are guaranteed by the Company and further
bonded by New England International Surety Co., for up to $15 million. The
Company collateralized the $15 million in bonding from New England
International Surety Co. with a portion of its Hills of Bajamar property
and paid over $1,000,000 in bonding fees.  As of July 31, 2001 the Company
had roughly $12,000,000 in Corporate Notes outstanding, of which all are
due.  The Company intends to repay the principal and interest with cash
flow generated from operations, property specific mortgages and the sale of
its Series B Convertible Debentures.  New England International Surety Co.
has not performed and the matter has been turned over to legal counsel to
pursue the recovery of the bonding fees through litigation.

Senior Care Industries, Inc.

On March 28, 2001, Tri-National Development Corp. (the "Company") entered
into agreements with Senior Care Industries, Inc. (OTC BB:SENC), a
publicly-listed Nevada corporation ("Senior Care"), to sell certain real
estate assets of the Company for a combination of cash, assumed debt and
convertible preferred stock for a total of approximately $70,229,055. The
purchase offer became effective and escrow was to close on April 30, 2001.
Closing was subject to a cash down payment at closing of $10,000,000, of
which a $8,000,000 payment was to be made to Capital Trust, Inc. of New
York for the repayment of the loan made on the Company's Plaza Rosarito in
July of 1999.

                                   21
<PAGE>
When Senior Care was unable to make the scheduled $10,000,000 cash down
payment, the Company on May 5, 2001 agreed, at the request of Senior Care,
to revise the agreements to state that the amount of cash consideration as
part of the overall purchase of the various assets would be dictated by
whatever terms and conditions Senior Care could negotiate with Capital
Trust's approval to payoff the $8,000,000 loan and additional obtain Tri-
National's parent company and subsidiaries Board of Directors approval
prior to closing.

As the payoff of this loan has been the most pressing issue facing the
Company and to assure the release of Tri-National's corporate guarantee, as
well as the personal guarantees given by Michael Sunstein and his wife, Dr.
Jerry Parker and his wife and Lic. Bersain Gutierrrez and his wife and the
subsequent judgments secured by Capital Trust in the amount of $8,300,000
held against each of these parties-individually and collectively, the
Contract for Deed for Plaza Rosarito, as stated, was subject to the
approval of Capital Trust.  Capital Trust has not accepted any of the
offers submitted by Senior Care and continues to enforce both the corporate
and personal guarantees and judgments.  In addition, Capital Trust has
requested and been granted a State of California court appointed receiver.
The receiver's sole responsibility was to place a mortgage on Plaza
Rosarito on behalf of Capital Trust, which could replace the corporate and
personal guaranties and subsequent judgments.  As detailed in our last
Annual Report, at the time the loan was made to complete this acquisition,
there was never a mortgage placed on the any of the properties that
comprise Plaza Rosarito primarily the 187,500 square foot shopping center
and the 15 acres of beachfront land, leaving the property free of all liens
and encumbrances and Capital Trust's $8,000,000 loan effectively unsecured
by Plaza Rosarito.  However, Capital Trust acknowledges that the Company
never took advantage of the situation as we could have by securing a
construction loan and placing a subsequent lien on the property in front of
Capital Trust.  This was a moral dilemma for Tri-National management since
the opportunity was obvious, and the need for such funding was paramount,
but Capital Trust was ethically if not legally entitled to a mortgage based
on the original contracts for their $8,000,000 loan.  After consideration,
the Company chose not to abuse the situation and continues to work with
Capital Trust to resolve the situation in a way that serves both parties.

Without a successful resolution to pay off Capital Trust, Senior Care
attempted to have TND accept 100% of the consideration being offered for
the assets be made in shares of their Convertible Preferred stock.  After
careful consideration and extensive due diligence, the Board of Directors
of the Company refused to accept the terms and risks associated with the
last proposal by Senior Care and terminated the entire transaction
effective close of business, July 2, 2001.

In spite of all the facts and documents to the contrary, Senior Care is now
claiming all of the Purchase Agreements that were previously executed were
not subject to either Board of Director or Capital Trust, Inc. approval.
Further, it was of the recent opinion of Judge Strauss of the California
State Court in San Diego that indeed the transaction had not closed and
then issued a restraining order against Senior Care Industries, Inc. and
its officers and directors from making any further actions regarding this
property.

Consequently, Senior Care has since advised Tri-National that it fully
intends to proceed with the Tender Offer it issued on May 22, 2001, wherein
Senior Care Industries, Inc. (OTC BB: SENC) filed an initial Form TO-T with
the U.S. Securities and Exchange Commission making and elaborating an offer
to buy up to 51% of the outstanding common stock of Tri-National
Development Corp. (OTC BB:TNAV).  "Senior Care is offering to buy up to 51%
of the outstanding Common shares of Tri-National Development Corp., or
approximately 20,000,000 common shares.  The terms of the offer are as
follows:  For every three (3) shares of Tri-National common stock that are
tendered, Senior Care is offering one (1) share of Senior Care common stock
plus one (1) warrant giving the holder the right at the holder's option to
purchase one (1) additional share of Senior Care common stock for a period
of one year by the payment of $1.00 to Senior Care".

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The offer states "Shareholders of the Company may tender their Tri-National
common shares at any time after the date of the tender offer, May 22, 2001,
up to and including the new extended date of September 30, 2001.  It is not
anticipated at this time that shareholders will be able to tender their
Tri-National common shares after September 30, 2001.  If a total of 51% of
the common shares of Tri-National are not tendered to Senior Care by
September 30, 2001, then Senior Care may at its option (a) extend the
offering period, (b) accept the shares which have been tendered, or (c) opt
not to accept any tendered shares.  If more than 51% of the common shares
of Tri-National are tendered to Senior Care by September 30, 2001, then
Senior Care may at its option (a) accept the full amount tendered or (b)
accept any amount between 51% and the full amount tendered by accepting a
fixed and equal percentage of all blocks of shares tendered".

Senior Care has announced that it chooses to move forward with the tender
offer regardless of the termination of the sale of assets.  If Senior Care
is successful in acquiring 51% of the Company through the tender offer,
they would acquire controlling interest in the Company, thereby controlling
the assets in the proposed sale without ever closing the escrow or
providing any cash payments to the Company, and without Board of Directors
approval or a shareholders meeting to vote on the transaction.

It is the considered and unequivocal opinion of Management and the Board of
Directors, after considerable due diligence, that this Tender Offer is
absolutely and most clearly not in the best interests of the Company or its
shareholders and should be rejected.  Senior Care has repeatedly not
delivered on commitments it has made which were specific conditions of
their agreements with Tri-National.  They were unable to make any of the
above referenced cash payments to which they had committed in order to
resolve the Capital Trust debt and thereby free the Company to move
forward.  We believe there is no benefit to the transaction and that in the
long run, shareholders will realize no increased value or improvement of
their position at such time as their shares become liquid and tradable, and
that they will in fact have suffered very significant further dilution and
loss.  The Tender Offer has at this point in time become a hostile takeover
attempt, and we do not believe that it serves anyone but the insiders at
Senior Care.

Further, on September 12, 2001 the Company filed an answer to the
involuntary bankruptcy petition filed by Senior Care on August 23, 2001.
Senior Care's filing of the involuntary bankruptcy petition is yet another
deliberate attempt to control the assets of the Company without delivering
on any of the financial commitments previously made.  The Company asserts
in its answer that Senior Care filed the petition in bad faith, knowing
that several of the alleged creditors were not creditors of Tri-National,
and the Company is also asking for a judgment against Senior Care for
costs, attorney fees and punitive damages.  The Company has retained Colin
Wied, a top San Diego attorney and past president of the State Bar of
California and San Diego County Bar Associations with 35 years of law
experience and vast bankruptcy knowledge, to pursue this matter on its
behalf.  The Company intends to take aggressive action to defend itself and
its shareholders and creditors.

Additionally, on September 17, 2001, the Company filed a lawsuit against
Senior Care in the U.S. District Court in the Southern District of
California.  The lawsuit asserts that Senior Care is guilty of fraud,
fraudulent inducement, breach of contract and S.E.C. violations, and seeks
actual, consequential and exemplary damages, an injunction against further
misrepresentations by Senior Care regarding its ownership of Tri-National
assets, and a declaratory judgment adjudicating the rights of the parties
under an agreement entered into by them relating to the sale of certain
assets and property in Baja California, Mexico.  This lawsuit was filed on
behalf of the Company by Gerald Padmore of Cox Padmore Skolnik & Shakarchy,
a partner and head of the firm's Denver, Colorado office.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

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ITEM 3.   DEFAULT OF SENIOR SECURITIES

None.

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

No matters were submitted to the stockholders for a vote during the three
months ended July 31, 2001.

ITEM 5.   OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON Form 8-K

     (a)  REPORTS ON FORM 8-K.  For the three months ended July 31, 2001,
          one report on Form 8-K was filed by the Company on July 9, 2001
          and is incorporated by reference herein.

     (b)  EXHIBITS.  The following exhibits are filed as a part of this
          report:


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, in the
City of San Diego, California, on this 19th day of September, 2001.

Tri-National Development Corp.,
a Wyoming Corporation



/s/ MICHAEL A. SUNSTEIN                 /s/ GILBERT FUENTES
BY:       Michael A. Sunstein           BY:       Gilbert Fuentes
TITLE:    Chief Executive Officer,      TITLE:    Chief Financial Officer,
          President, Director                     Director & Treasurer


                                        /s/ JASON A. SUNSTEIN
                                        BY:       Jason A. Sunstein
                                        TITLE:    Senior V.P.,
                                                  Secretary



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