##### Table of Contents









QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THESECURITIES EXCHANGE ACT OF 1934



Commission file number: 0-22247



|                                                                         |  |                                             
|------------------------------------------------------------------------ |  | --------------------------------------------
|MINNESOTA
(State or Other Jurisdiction
of Incorporation or Organization) |  | 41-1756256
(IRS Employer
Identification No.)





___________________

(Former Name, Former Address and

Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has 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          No

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the last practicable date:

|                                    |  |                                                      
|----------------------------------- |  | -----------------------------------------------------
|Class:
Common Stock, $.04 par value |  | Outstanding as of January 31, 2001:
31,490,600 shares





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TABLE OF CONTENTS



|                                                                                               |                                                           |                                                            |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------- | --------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|Item 1. Consolidated Condensed Financial Statements (Unaudited).                              
|                                                                                               | Consolidated Condensed Statements of Financial Condition:
|                                                                                               |                                                           | December 31, 2000 and March 31, 2000                      
|                                                                                               | Consolidated Condensed Statements of Operations:         
|                                                                                               |                                                           | Three months ended December 31, 2000 and December 31, 1999
|                                                                                               |                                                           | Nine months ended December 31, 2000 and December 31, 1999 
|                                                                                               | Consolidated Condensed Statements of Cash Flows:         
|                                                                                               |                                                           | Nine months ended December 31, 2000 and December 31, 1999 
|                                                                                               | Notes to Consolidated Condensed Financial Statements     
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
|Item 3. Quantitative and Qualitative Disclosures about Market Risk.                           
|Cautionary Statements                                                                         



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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                            |  |     
|PART I -  |  | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|Item 1.   |  | Consolidated Condensed Financial Statements (Unaudited).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|          |  | Consolidated Condensed Statements of Financial Condition:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                            |  | 3    | 
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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | December 31, 2000 and March 31, 2000                      
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|          |  | Consolidated Condensed Statements of Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                            |  | 4    | 
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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Three Months Ended December 31, 2000 and December 31, 1999
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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Nine Months Ended December 31, 2000 and December 31, 1999 
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|          |  | Consolidated Condensed Statements of Cash Flows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                            |  | 5    | 
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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Nine Months Ended December 31, 2000 and December 31, 1999 
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|          |  | Notes to Consolidated Condensed Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                            |  | 6-8  | 
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|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                            |  | 9-12 | 
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|Item 3.   |  | Quantitative and Qualitative Disclosures about Market Risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                            |  | 13   | 
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|PART II - |  | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|Item 1.   |  | Legal Proceedings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|          |  | Many aspects of our business involve substantial risks of liability,
including exposure under federal and state securities laws in
connection with the underwriting and distribution of securities. We do
not presently maintain an errors and omissions insurance policy
insuring us against these risks. At the present time, we are not a
party to, nor is any property subject to, any pending legal
proceedings, other than routine litigation or arbitration proceedings
incidental to our business. We believe that we have good factual and
legal defenses to pending proceedings, and we do not expect that losses
related to any of these proceedings, in the aggregate, will be material.
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|Item 2.   |  | Changes in Securities and Use of Proceeds- None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|Item 3.   |  | Defaults Upon Senior Securities- None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|Item 4.   |  | Submission of Matters to a Vote of Security Holders-None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|Item 5.   |  | Other Information-None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|Item 6.   |  | Exhibits and Report on Form 8-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|          |  | a.) Exhibits Number Description:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 99.1 Cautionary Statements                                
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|          |  | b.) Reports on Form 8-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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##### Table of Contents












|                                                         |                                                                      |  |   |            |                   |            |                |           |             |            | 
|-------------------------------------------------------- | -------------------------------------------------------------------- |  | - | ---------- | ----------------- | ---------- | -------------- | --------- | ----------- | ---------- | 
|                                                         |                                                                      |  |   |            | December 31, 2000 |            | March 31, 2000
|                                                         |                                                                      |  |   |            |                   |            |               
|Assets                                                   |                                                                      | 
|                                                        
|                                                        
|                                                        
|                                                        
|Cash                                                     |                                                                      |  |   | $          | 8,379,600         |            |                | $         | 5,533,500   |           
|                                                        
|                                                        
|                                                        
|                                                        
|Cash and cash equivalents segregated                     |                                                                      |  |   |            | 34,003,900        |            |                |           | 83,009,400  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Receivables from customers                               |                                                                      |  |   |            | 414,861,100       |            |                |           | 216,216,100 |           
|                                                        
|                                                        
|                                                        
|                                                        
|Receivables from brokers and dealers                     |                                                                      |  |   |            | 373,489,600       |            |                |           | 160,230,300 |           
|                                                        
|                                                        
|                                                        
|                                                        
|Deposits at clearing organizations                       |                                                                      |  |   |            | 24,740,500        |            |                |           | 26,234,900  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Trading securities owned, at market                      |                                                                      |  |   | 33,930,400 |                   |            |                | 8,320,100 |            
|                                                        
|                                                        
|                                                        
|                                                        
|Secured demand notes receivable                          |                                                                      |  |   |            | 17,525,000        |            |                |           | 18,575,000  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Goodwill, less accumulated amortization                  |                                                                      |  |   |            |                   |            |                |           |             |           
|                                                         | December  $2,896,500; March  $489,000                              |  |   |            |                   | 72,850,700 |                |           |             | 10,284,900 | 
|Other assets                                             |                                                                      |  |   |            | 28,013,300        |            |                |           | 10,471,100  |           
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           
|Total assets                                             |                                                                      |  |   | $          | 1,007,794,100     |            |                | $         | 538,875,300 |           
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           
|                                                        
|Liabilities                                              |                                                                      | 
|                                                        
|                                                        
|                                                        
|                                                        
|Short-term borrowings                                    |                                                                      |  |   | $          | 57,735,000        |            |                | $         | 29,500,000  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Payables to customers                                    |                                                                      |  |   |            | 345,314,600       |            |                |           | 280,364,200 |           
|                                                        
|                                                        
|                                                        
|                                                        
|Payables to brokers and dealers                          |                                                                      |  |   |            | 437,192,200       |            |                |           | 160,153,400 |           
|                                                        
|                                                        
|                                                        
|                                                        
|Trading securities sold but not yet purchased, at market |                                                                      |  |   |            | 2,686,200         |            |                |           | 1,339,000   |           
|                                                        
|                                                        
|                                                        
|                                                        
|Notes payable                                            |                                                                      |  |   |            | 26,787,100        |            |                |           | 7,544,400   |           
|                                                        
|                                                        
|                                                        
|                                                        
|Liabilities subordinated to claims of general creditors  |                                                                      |  |   |            | 20,525,000        |            |                |           | 18,575,000  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Other liabilities                                        |                                                                      |  |   |            | 39,002,000        |            |                |           | 16,747,000  |           
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           
|Total liabilities                                        |                                                                      |  |   | $          | 929,242,100       |            |                | $         | 514,223,000 |           
|                                                        
|Shareholders equity                                     |                                                                      | 
|                                                        
|                                                        
|                                                        
|                                                        
|Common stock, $.04 par value;                           
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Authorized shares: 50,000,000                                       
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Issued and outstanding
December 31,490,600;
     March - 21,575,300 |  | $ | 1,259,600  |                   |            | $              | 863,000   |            
|                                                        
|                                                        
|                                                        
|                                                        
|Paid-in capital                                          |                                                                      |  |   |            | 86,179,200        |            |                |           | 25,440,900  |           
|                                                        
|                                                        
|                                                        
|                                                        
|Retained earnings                                        |                                                                      |  |   |            | (8,886,800        | )          |                |           | (1,651,600  | )         
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           
|Total shareholders equity                               |                                                                      |  |   | $          | 78,552,000        |            |                | $         | 24,652,300  |           
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           
|Total liabilities & shareholders equity                 |                                                                      |  |   | $          | 1,007,794,100     |            |                | $         | 538,875,300 |           
|                                                         |                                                                      |  |   |            |                   |            |                |           |             |           

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|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |            | 
|---------------------------------- | ------------------------- | - | ------------------ | ---------- | ----------------- | - | ---------- | --------- | ---- | - | ----------- | ---------- |  | - | ---------- | ---------- | 
|                                   |                           |   | Three months ended |            | Nine months ended
|                                   |                           |   | December 31,       |            | December 31,     
|                                   |                           |   |                    |            |                  
|                                   |                           |   | 2000               |            | 1999              |   | 2000       |           | 1999
|                                   |                           |   |                    |            |                   |   |            |           |     
|Revenues                          
|                                  
|                                  
|                                  
|                                  
|                                   | Trading profits           |   | $                  | 9,644,000  |                   |   | $          | 3,949,700 |      |   | $           | 19,898,200 |  |   | $          | 9,146,400  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Interest                  |   |                    | 14,222,900 |                   |   |            | 5,514,900 |      |   |             | 34,392,600 |  |   |            | 13,941,000 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Commissions               |   |                    | 9,302,100  |                   |   |            | 3,494,000 |      |   |             | 21,097,200 |  |   |            | 8,282,100  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Investment banking        |   |                    | 3,648,900  |                   |   |            | 1,844,300 |      |   |             | 10,070,400 |  |   |            | 6,938,100  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Clearing fees             |   |                    | 1,476,800  |                   |   |            | 1,411,100 |      |   |             | 4,219,900  |  |   |            | 3,470,900  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Other income              |   |                    | 1,527,900  |                   |   |            | 1,257,800 |      |   |             | 4,346,400  |  |   |            | 2,789,400  | 
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|Total revenues                     |                           | $ | 39,822,600         |            |                   | $ | 17,471,800 |           |      | $ | 94,024,700  |            |  | $ | 44,567,900 |           
|                                  
|Expenses                          
|                                  
|                                  
|                                  
|                                  
|                                   | Compensation and benefits |   | $                  | 21,001,000 |                   |   | $          | 8,439,200 |      |   | $           | 47,493,500 |  |   | $          | 22,648,800 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Clearing fees             |   |                    | 991,500    |                   |   |            | 869,700   |      |   |             | 2,783,200  |  |   |            | 2,428,300  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Occupancy                 |   |                    | 3,241,700  |                   |   |            | 1,423,700 |      |   |             | 7,000,600  |  |   |            | 3,363,900  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Communication             |   |                    | 4,752,600  |                   |   |            | 2,139,600 |      |   |             | 10,910,300 |  |   |            | 5,321,000  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Interest                  |   |                    | 11,620,900 |                   |   |            | 4,485,400 |      |   |             | 27,968,400 |  |   |            | 10,718,200 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Other expense             |   |                    | 5,319,000  |                   |   |            | 1,897,000 |      |   |             | 10,042,800 |  |   |            | 5,654,300  | 
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|Total expenses                     |                           | $ | 46,926,700         |            |                   | $ | 19,254,600 |           |      | $ | 106,198,800 |            |  | $ | 50,134,500 |           
|                                  
|Loss before income taxes           |                           |   | (7,104,100         | )          |                   |   | (1,782,800 | )         |      |   | (12,174,100 | )          |  |   | (5,566,600 | )         
|                                  
|                                  
|                                  
|                                  
|Income tax benefit                 |                           |   | 2,891,300          |            |                   |   | 786,800    |           |      |   | 4,938,900   |            |  |   | 2,267,000  |           
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|                                  
|Net loss                           |                           | $ | (4,212,800         | )          |                   | $ | (996,000   | )         |      | $ | (7,235,200  | )          |  | $ | (3,299,600 | )         
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|                                  
|Basic loss per common share        |                           | $ | (0.13              | )          |                   | $ | (0.05      | )         |      | $ | (0.27       | )          |  | $ | (0.17      | )         
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|Average shares outstanding-basic   |                           |   | 31,490,600         |            |                   |   | 19,764,400 |           |      |   | 26,587,400  |            |  |   | 19,534,600 |           
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|Diluted loss per common share      |                           | $ | (0.13              | )          |                   | $ | (0.05      | )         |      | $ | (0.27       | )          |  | $ | (0.17      | )         
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           
|Average shares outstanding-diluted |                           |   | 31,497,200         |            |                   |   | 19,905,300 |           |      |   | 26,630,400  |            |  |   | 19,675,300 |           
|                                   |                           |   |                    |            |                   |   |            |           |      |   |             |            |  |   |            |           

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|                                                     |  |                   |             |                   |  |   |            |  
|---------------------------------------------------- |  | ----------------- | ----------- | ----------------- |  | - | ---------- | -
|                                                     |  | Nine Months Ended
|                                                     |  |                  
|                                                     |  | December 31, 2000 |             | December 31, 1999
|                                                     |  |                   |             |                  
|Operating activities                                
|                                                    
|Net cash used for operating activities               |  | $                 | (2,278,700  | )                 |  | $ | (7,569,800 | )
|                                                    
|Investing activities                                
|                                                    
|Acquisition of R. J. Steichen and Company            |  |                   | (18,637,800 | )                 |  |   |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|Acquisition of Kinnard Investments, Inc              |  |                   | (11,842,400 | )                 |  |   |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|(Purchase) sale of furniture and equipment           |  |                   | (5,677,100  | )                 |  |   | 337,600    |  
|                                                    
|                                                    
|                                                    
|                                                    
|Purchase of license agreements                       |  |                   | (269,800    | )                
|                                                     |  |                   |             |                   |  |   |            |  
|Net cash provided by (used for) investing
activities |  | $                 | (36,427,100 | )                 |  | $ | 337,600    |  
|                                                    
|Financing activities                                
|                                                    
|Increase in short-term borrowings                    |  | $                 | 24,235,000  |                   |  | $ |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|Issuance of notes payable                            |  |                   | 19,578,400  |                   |  |   | 514,600    |  
|                                                    
|                                                    
|                                                    
|                                                    
|Payments on notes payable                            |  |                   | (2,481,900  | )                 |  |   |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|Issuance of common stock                             |  |                   | 220,400     |                   |  |   | 4,978,200  |  
|                                                     |  |                   |             |                   |  |   |            |  
|Net cash provided by financing activities            |  | $                 | 41,551,900  |                   |  | $ | 5,292,800  |  
|                                                    
|Net increase (decrease) in cash                      |  | $                 | 2,846,100   |                   |  | $ | (1,739,400 | )
|                                                    
|                                                    
|                                                    
|                                                    
|Cash at beginning of the period                      |  |                   | 5,533,500   |                   |  |   | 5,294,900  |  
|                                                     |  |                   |             |                   |  |   |            |  
|Cash at the end of the period                        |  | $                 | 8,379,600   |                   |  | $ | 3,555,500  |  
|                                                     |  |                   |             |                   |  |   |            |  

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1. Description of Business

Our history began in 1980 with the incorporation of Miller Securities, Inc. a
specialized municipal bond firm. Miller Securities eventually broadened its
business to include a variety of financial services, including securities
clearing, and changed its name to Miller, Johnson & Kuehn, Incorporated. MJK
Holdings, Inc. was formed in June 1997 as a holding company for Miller Johnson
& Kuehn and its clearing division. In July 1999, then privately owned MJK
Holdings and publicly held NM Holdings, Inc. merged. The surviving company is
known as Stockwalk Group, Inc. We completed mergers with R. J. Steichen &
Company in August 2000 and Kinnard Investments, Inc. in September 2000. At
December 31, 2000, Stockwalk Group, Inc. was the holding company of five
broker-dealers: Miller, Johnson & Kuehn, Inc., Stockwalk.com, Inc., Online
Brokerage Solutions, Inc., R. J. Steichen & Company, and John G. Kinnard and
Company. The broker-dealers are registered with the SEC and are members of the
NASD and SIPC. Our stock trades on the NASDAQ National Market System under the
ticker symbol STOK.

On January 1, 2001 the full service operations of Miller, Johnson, & Kuehn,
Inc. merged with R. J. Steichen & Company, and John G. Kinnard, Inc. to form
Miller Johnson Steichen Kinnard, Inc. The Miller, Johnson, & Kuehn, Inc.
clearing operations were renamed to MJK Clearing, Inc.

We are a technologically driven regional securities firm headquartered in
Minneapolis, Minnesota. Through our operating subsidiaries, we provide a broad
range of investment services to individual, corporate and public clients.
These services include both traditional and online securities brokerage,
investment banking, research services and the processing of securities
transactions for correspondent brokerage firms and financial institutions. Our
niche market includes small capitalization, emerging and start-up businesses
and public finance clients located principally in the upper Midwest. Our
Stockwalk.com, Inc. subsidiary offers a secure online brokerage service that
provides order placement, portfolio tracking and related market information,
news and other information to investors 24 hours a day, seven days a week, by
means of the Internet and telephone. These online services are offered to our
customers and through our private label subsidiary, Online Brokerage Solutions,
Inc., to customers and members of small to medium-sized financial institutions,
affinity groups and Internet portals.

2. Managements Interim Financial Statement Representation

The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and in accordance with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all
adjustments (consisting solely of normal recurring accruals) considered
necessary for a fair presentation have been included. Although we believe that
the disclosures are adequate to make the information presented not misleading,
it is suggested that these condensed financial statements be read in
conjunction with the audited financial statements and the notes thereto
included in our latest annual financial statements included in our Annual
Report on Form 10-K.

3. Financing Arrangements

At December 31, 2000, we had discretionary lines of credit totaling $115
million, which were and are secured by firm-owned securities, customer
securities collateralizing liabilities subordinated to claims of general
creditors and unpaid customer securities. These lines are payable on demand.
Borrowings on the lines bear interest at various rates over the banks cost of
funds; such rates generally vary daily. We had outstanding balances of $46.6
million at December 31, 2000, with an average annual interest rate of 7.86%,
and outstanding balances of $29.5 million at March 31, 2000, with and average
annual interest rate of 7.55%.

In August 2000, we completed an offering for $21.5 million of 10% convertible
subordinated bonds due in 2005. At December 31, 2000 we had $11.1 million of
short-term commercial paper outstanding with yields of approximately 8%
maturing between 30 and 270 days from the date of issuance.

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4. Shareholders Equity

On August 1, 2000, we completed our merger agreement with R.J. Steichen &
Company (Steichen). The former shareholders of Steichen received $17.5
million in cash and approximately 4,300,000 shares of our common stock and
five-year warrants to purchase 300,000 shares of our common stock exercisable
at $6.375 per share. The former shareholders of Steichen can earn up to an
additional 2,000,000 shares of our common stock upon the achievement of certain
pre-tax earning levels during the two years following closing of the
transaction

On September 8, 2000, we announced the completion of the Kinnard Investments,
Inc. merger transaction. In this transaction, we issued an aggregate of
3,557,819 registered shares (the equivalent of .7676 shares of the registrants
common stock for each outstanding share of Kinnard common stock) of our common
stock, to the former shareholders of Kinnard. We also paid to such shareholders
an aggregate of $27.8 million in cash ($6.00/share for each outstanding Kinnard
share). Pursuant to the terms of the Kinnard merger, we also paid $4.1 million
to the former holders of Kinnards outstanding options and warrants

Computation of Weighted Average Number of Shares Outstanding

We calculate net income per share by dividing net income by the weighted
average number of shares of common stock outstanding, to arrive at the net
income per common share  basic. We calculate net income per share  dilutive
by dividing net income by the weighted average number of shares of common stock
and dilutive stock equivalents using the treasury stock method. The weighted
average number of shares outstanding includes the 2,000,000 shares issuable
pursuant to the Steichen earn out agreement. Dilutive stock equivalents are
options and warrants which have an exercise price less than the average market
price of our common stock, for the respective period.

|                                                                                             |  |                    |            |                   |  |      |            |      |  |  |            |  |  |  |            | 
|-------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  |  | ---------- |  |  |  | ---------- | 
|                                                                                             |  | Three Months Ended |            | Nine Months Ended
|                                                                                             |  | December 31,       |            | December 31,     
|                                                                                             |  |                    |            |                  
|                                                                                             |  | 2000               |            | 1999              |  | 2000 |            | 1999
|                                                                                             |  |                    |            |                   |  |      |            |     
|Weighted average shares outstanding- basic                                                   |  |                    | 31,490,600 |                   |  |      | 19,764,400 |      |  |  | 26,587,400 |  |  |  | 19,534,600 | 
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Dilutive effect of stock options and warrants
after application of the treasury stock method |  |                    | 6,600      |                   |  |      | 140,900    |      |  |  | 43,000     |  |  |  | 140,700    | 
|                                                                                             |  |                    |            |                   |  |      |            |      |  |  |            |  |  |  |            | 
|Weighted average shares outstanding-dilutive                                                 |  |                    | 31,497,200 |                   |  |      | 19,905,300 |      |  |  | 26,630,400 |  |  |  | 19,675,300 | 
|                                                                                             |  |                    |            |                   |  |      |            |      |  |  |            |  |  |  |            | 

5. Business Combinations

The acquisitions of Steichen and Kinnard were accounted for under the purchase
method of accounting, and accordingly, the respective purchase prices were
allocated to assets acquired and liabilities assumed based on their fair market
values at the dates of acquisition. The excess of the purchase price over the
fair market value of the net assets acquired, $39.8 million and $21.8 million
respectively, was recorded as goodwill and will be amortized over 20 years.
The results of operations of the two entities have been included in the
Consolidated Condensed Statements of Operations since the dates of acquisition.

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The following pro forma operating results assume that the acquisitions had
occurred at the beginning of each period presented. In addition to combining
the historical results of operations, the pro forma results include adjustments
for the estimated effect of purchase accounting.

|                              |  |                    |            |                   |  |      |            |      |  |  |             |   |  |  |             |  
|----------------------------- |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  |  | ----------- | - |  |  | ----------- | -
|                              |  | Three Months Ended |            | Nine Months Ended
|                              |  | December 31,       |            | December 31,     
|                              |  |                    |            |                  
|                              |  | 2000               |            | 1999              |  | 2000 |            | 1999
|                              |  |                    |            |                   |  |      |            |     
|Total revenues                |  |                    | 39,822,600 |                   |  |      | 48,562,500 |      |  |  | 132,510,800 |   |  |  | 121,252,200 |  
|                             
|                             
|                             
|                             
|Net income (loss)             |  |                    | (4,212,800 | )                 |  |      | 2,375,900  |      |  |  | (6,055,700  | ) |  |  | (350,100    | )
|                             
|                             
|                             
|                             
|Diluted loss per common share |  |                    | (0.13      | )                 |  |      | 0.08       |      |  |  | (0.19       | ) |  |  | (0.05       | )

6. Net Capital Requirements and Dividend Restrictions

Our five broker-dealers are subject to the Securities and Exchange Commissions
Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of
certain levels of minimum net capital. Miller, Johnson, & Kuehn, Inc., and R.
J. Steichen & Company have elected to use the alternative method permitted by
Rule 15c3-1, which requires that they maintain minimum net capital equal to the
greater of $250,000 or 2% of aggregate debit balances arising from customer
transactions. The minimum net capital requirement for J. G. Kinnard is the
greater of the aggregate amount of unsecured and customer liabilities divided
by 15 or the product of multiplying the number of markets made for equity
securities by $2,500. The minimum net capital for the Stockwalk and Online
Brokerage Solutions is the greater of the aggregate amount of unsecured and
customer liabilities divided by 15 or $50,000. The net capital rule also
provides that equity capital may not be withdrawn or cash dividends may not be
paid if resulting net capital would be less than 5% of aggregate debits under
the alternative method and less than 120% of the minimum net capital
requirement for the traditional calculation.

The net capital positions for each of the five broker dealers at December 31,
2000 are summarized as follows:

|                                 |  |             |            |        |  |   |            | 
|-------------------------------- |  | ----------- | ---------- | ------ |  | - | ---------- | 
|Broker Dealer                    |  | Net Capital |            | Excess
|                                 |  |             |            |       
|Miller, Johnson, & Kuehn, Inc.   |  | $           | 17,814,094 |        |  | $ | 10,784,104 | 
|                                
|                                
|                                
|                                
|R.J. Steichen & Company          |  |             | 6,879,037  |        |  |   | 4,730,431  | 
|                                
|                                
|                                
|                                
|John G. Kinnard & Company        |  |             | 2,055,922  |        |  |   | 1,238,687  | 
|                                
|                                
|                                
|                                
|Stockwalk.com, Inc.              |  |             | 167,817    |        |  |   | 117,817    | 
|                                
|                                
|                                
|                                
|Online Brokerage Solutions, Inc. |  |             | 1,040,217  |        |  |   | 990,217    | 

8



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General

We are a technologically driven regional securities firm headquartered in
Minneapolis, Minnesota. Through our operating subsidiaries, we provide a broad
range of investment services to individual, corporate and public clients.
These services include both traditional and online securities brokerage,
investment banking, research services and the processing of securities
transactions for correspondent brokerage firms and financial institutions. Our
niche market includes small capitalization, emerging and start-up businesses
and public finance clients located principally in the upper Midwest. Our
Stockwalk.com, Inc. subsidiary offers a secure online brokerage service that
provides order placement, portfolio tracking and related market information,
news and other information to investors 24 hours a day, seven days a week, by
means of the Internet and telephone. These services are offered to our
customers and through our private label subsidiary, Online Brokerage Solutions,
Inc, to customers and members of small to medium-sized financial institutions,
affinity groups and Internet portals.

Recent Developments

We changed the name of our parent company from Stockwalk.com Group, Inc. to
Stockwalk Group, Inc. Our full-service broker dealers of Miller, Johnson, and
Kuehn, Inc., R. J. Steichen & Company, and John G. Kinnard, Inc. merged to form
Miller Johnson Steichen Kinnard, Inc.

In January 2001, $2.5 million of outstanding convertible notes were converted
into 980,400 shares of common stock.

Factors that affect future results

Certain matters set forth in this public dissemination of Form 10-Q, including
managements expectations regarding future growth and profitability, are
forward-looking statements within the context of the Private Securities
Litigation Reform Act of 1995. These statements involve certain risks and
uncertainties, which could cause such statements to differ materially from
actual results. See additional cautionary statements in exhibit 99.1

Segments

Our reportable segments are as follows: full-service brokerage, clearing
services, online brokerage, private label brokerage, and other / eliminations.

Full Service Brokerage

Through our three traditional full-service broker dealers, Miller, Johnson &
Kuehn, Inc., R. J. Steichen & Company and John G. Kinnard and Company, we act
as agents, principals and underwriters for customers seeking to trade
securities or obtain financing. We charge a brokerage commission when acting
as an agent for the purchaser or seller of a security. We recognize income or
loss on inventory sold to customers from inventory maintained for those
securities in which we make a market. We also provide investment-banking
services to our clients by managing or co-managing public offerings of
securities or by arranging private placements of securities with institutional
or individual investors. Our corporate and public capital finance departments
accept invitations to participate in competitive or negotiated underwritings
managed by other investment banking firms and allocate our underwriting
positions to our brokers, institutional clients and other broker dealers.

Clearing Services

Miller, Johnson, & Kuehn, Inc. also serves as a clearing agent providing
transaction execution, account maintenance, including extension of credit, and
record keeping services for its customers as well as customers of its
introducing brokers. We collect a clearing fee and charge interest on the
customers margin accounts and pay interest on cash in customers accounts.
Additionally we charge and pay interest on cash balances resulting from stock
borrowed from or loaned to other broker dealers.

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Online Brokerage

Through our Stockwalk.com, Inc. broker-dealer and our web-site
www.stockwalk.com, we provide automated order placement, portfolio tracking and
related market information, news and other information services 24 hours a day,
seven days a week. This is done by means of the Internet and direct modem
access, which allows our customers the ability to place orders for stock trades
and other investment transactions, directly, and at a lower, more predictable
transaction cost than traditional full-commission brokerage firms. Further, we
expect that our technology will be adapted to provide information and
transaction processing services related to other aspects of electronic
commerce, such as the processing of insurance transactions and electronic cash
transfers.

Private Label Brokerage

Our business plan for growth in the online brokerage business is based on the
development of private label arrangements with small to medium-sized financial
institutions, affinity groups and Internet portals through our Online Brokerage
Solutions, Inc. subsidiary. The program allows customers of these organizations
to open and access an online account through the organizations existing
web-site. We collect a commission similar to those by other online customers
and remit a portion of each transaction to the organization.

Other / Eliminations

Intersegment transactions, including management fees, are measured on the same
basis as if the transactions occurred with external customers. In reviewing
the segment operating results, our operating decision-makers do not distinguish
between inter-segment and external customer transactions. Intersegment
transactions are eliminated to reconcile total segment revenue to consolidated
revenue. We do not provide balance sheet data for segment reporting, as this
data is not measured for its operating segments.

Information concerning operations in these segments of business is as follows:

|                          |                         |  |                    |            |                   |  |            |            |      |  |             |            |   |  |            |            |  
|------------------------- | ----------------------- |  | ------------------ | ---------- | ----------------- |  | ---------- | ---------- | ---- |  | ----------- | ---------- | - |  | ---------- | ---------- | -
|                          |                         |  | Three Months Ended |            | Nine Months Ended
|                          |                         |  | December 31,       |            | December 31,     
|                          |                         |  |                    |            |                  
|                          |                         |  | 2000               |            | 1999              |  | 2000       |            | 1999
|                          |                         |  |                    |            |                   |  |            |            |     
|Revenue                  
|                         
|                         
|                         
|                         
|                          | Full service brokerage  |  |                    | 25,538,700 |                   |  |            | 9,304,700  |      |  |             | 56,189,000 |   |  |            | 25,422,700 |  
|                         
|                         
|                         
|                         
|                          | Clearing services       |  |                    | 13,812,700 |                   |  |            | 7,358,600  |      |  |             | 35,801,600 |   |  |            | 18,426,600 |  
|                         
|                         
|                         
|                         
|                          | Online brokerage        |  |                    | 1,181,200  |                   |  |            | 812,400    |      |  |             | 3,566,100  |   |  |            | 814,200    |  
|                         
|                         
|                         
|                         
|                          | Private label brokerage |  |                    | 42,600     |                   |  |            |           |      |  |             | 40,200     |   |  |            |           |  
|                         
|                         
|                         
|                         
|                          | Other / eliminations    |  |                    | (752,600   | )                 |  |            | (3,900     | )    |  |             | (1,572,200 | ) |  |            | (95,600    | )
|                          |                         |  |                    |            |                   |  |            |            |      |  |             |            |   |  |            |           
|Consolidated revenue      |                         |  | 39,822,600         |            |                   |  | 17,471,800 |            |      |  | 94,024,700  |            |   |  | 44,567,900 |           
|                          |                         |  |                    |            |                   |  |            |            |      |  |             |            |   |  |            |           
|Pre-tax income (loss)    
|                         
|                         
|                         
|                         
|                          | Full service brokerage  |  |                    | (4,898,700 | )                 |  |            | (592,000   | )    |  |             | (6,049,000 | ) |  |            | (3,345,500 | )
|                         
|                         
|                         
|                         
|                          | Clearing services       |  |                    | 508,400    |                   |  |            | 975,400    |      |  |             | 1,321,500  |   |  |            | 2,106,200  |  
|                         
|                         
|                         
|                         
|                          | Online brokerage        |  |                    | (1,300,300 | )                 |  |            | (1,318,400 | )    |  |             | (3,706,700 | ) |  |            | (2,778,200 | )
|                         
|                         
|                         
|                         
|                          | Private label brokerage |  |                    | (1,413,500 | )                 |  |            | (133,800   | )    |  |             | (3,736,500 | ) |  |            | (133,800   | )
|                         
|                         
|                         
|                         
|                          | Other / eliminations    |  |                    |           |                   |  |            | (714,000   | )    |  |             | (3,400     | ) |  |            | (1,415,300 | )
|                          |                         |  |                    |            |                   |  |            |            |      |  |             |            |   |  |            |           
|Consolidated pre-tax loss |                         |  | (7,104,100         | )          |                   |  | (1,782,800 | )          |      |  | (12,174,100 | )          |   |  | (5,566,600 | )         
|                          |                         |  |                    |            |                   |  |            |            |      |  |             |            |   |  |            |           

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Three Months Ended December 31, 2000 and December 31, 1999

Full service brokerage revenues for the quarter ended December 31, 2000 were
$25.5 million representing a $16.2 million or 174.5% increase from the similar
period in 1999. Newly acquired Steichen and Kinnard subsidiaries generated
revenues of $16.5 million during the quarter ended December 31, 2000. The
declining equity markets and investor confidence made for a challenging quarter
for both our firm and our industry. After previous declining quarters the
NASDAQ market index fell 32.7% in the three months ended December 31, 2000.
These conditions led to less new account growth and fewer investment banking
opportunities. Full service brokerage expenses increased $20.5 million to
$30.4 million in the quarter ended December 31, 2000 compared to the similar
period in 1999. Steichen and Kinnard expenditures were $18.1 million, in the
quarter ended December 31, 2000. Regulatory authorities have approved the
combination of our full-service firms. We are continuing our integration of
personnel and systems and will recognize the benefits of these efficiencies
over the next few quarters.

During the quarter ended December 31, 2000, our clearing fee revenue was $13.8
million, an increase of $6.5 million or 87.7% from $7.4 million in the quarter
ended December 31, 1999. Interest income on customer margin accounts increased
$3.1 million as a result of increased customer balances and interest income on
cash positions resulting from securities borrowed from other broker dealers
increased $3.0 million in the quarter ended December 31, 2000. Clearing fee
expenses for the quarter ended December 31, 2000 totaled $13.3 million, an
increase of $6.9 million or 108.5% from the comparable period in 1999. The
increase in clearing expense is primarily due to a $4.1 million increase in
interest expense on increased customer cash balances and cash received in
connection with the stock loaned to other broker dealers in addition to a $1.2
million increase in data processing expenditures as a result of increased
ticket volume. It is anticipated that clearing fee income and fees will grow
as we attract new correspondents, clear trades for our growing online brokerage
business, and perform clearing services for customers of our Kinnard
broker-dealer that were previously cleared through an outside broker-dealer.

The online brokerage commission revenues of $1.2 million in the quarter ended
December 31, 2000 were primarily generated from customers obtained through
acquisitions in October and November 1999. The $1.3 million pre-tax loss in
the quarter ended December 31, 2000 is attributed to staffing, technology and
infrastructure costs. In December 2000, we reduced staffing in our
Stockwalk.com subsidiary and related in an attempt to return these operations
to profitability.

Our private label brokerage operations incurred a pre-tax loss of $1.4 million
in the three months ended December 31, 2000. The loss is attributable to the
staffing and technology required to market our services to financial
institutions and affinity groups. To date, we have agreements in place with
many of the major online banking service providers in the United States and
have agreements in place with 101 financial institutions at December 31, 2000.
Online Brokerage Solutions, Inc. is working with these organizations to promote
the opening of new customer accounts, on which we will generate future
commission income. We have reduced staffing in our private label operations
and as a result of slower than anticipated customer growth.

Nine Months Ended December 31, 2000 and 1999

Full service brokerage revenues for the nine months ended December 31, 2000
were $56.2 million representing a $30.8 million or 121.0% increase from the
similar period in 1999. Revenues from the newly acquired Steichen and Kinnard
subsidiaries generated $27.2 million from their respective acquisition dates of
August 1, 2000 and September 8, 2000. The remaining increase was the result of
commission growth from equity and certificate of deposit transactions. Full
service brokerage expenses increased $33.5 million to $62.2 million in the
first nine months ended December 31, 2000 compared to the similar period in
1999. Steichen and Kinnard expenditures from their respective dates of
acquisition were $28.0 million.

During the nine months ended December 31, 2000, our clearing fee revenue was
$35.8 million, an increase of $17.4 million or 94.3% from $18.4 million in the
nine months ended December 31, 1999. Interest income on customer margin
accounts increased $6.3 million as a result of increased customer balances and
interest income on cash positions resulting from stock borrowed from other
broker dealers increased $8.8 million in the nine months ended December 31,
2000. Ticket fees charged to non-affiliated broker dealers increased $2.4
million to $8.0 million as a result of our average monthly tickets processed
increasing to 119,845 for the nine months ended December 31, 2000 compared to
58,726 in 1999. Clearing fee expenses for the nine months ended December 31,
2000 totaled $34.5 million, an increase of $18.2 million or 111.3% from the
comparable period in 1999. The increase in clearing expense is due to a $12.0
million increase in interest expense on increased customer cash balances and
cash received in connection with the stock loaned to other broker dealers.
Data processing expenses increased $3.2 million as a result of increased ticket
volume and salaries increased $1.4 million in connection with overall growth in
clearing activities. It is anticipated that clearing fee income and fees will
grow as we attract new correspondents.

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The online brokerage commission revenues of $3.6 million in the nine months
ended December 31, 2000 were primarily generated from customers obtained
through prior year acquisitions. The $3.7 million pre-tax loss in the nine
months ended December 31, 2000 is attributed to staffing, technology and
infrastructure costs. In December 2000 we reduced staffing in our
Stockwalk.com subsidiary and related Information Technology departments in an
attempt to return these operations to profitability.

Our private label brokerage operations incurred a pre-tax loss of $3.7 million
in the nine months ended December 31, 2000. The loss is attributable to the
staffing and technology required to market our services to financial
institutions and affinity groups. To date we have agreements in place with
many of the major online banking service providers in the United States and
have agreements in place with 101 financial institutions at December 31, 2000.
Online Brokerage Solutions, Inc. is working with these organizations to promote
the opening of new customer accounts, on which we anticipate generating future
commission income. We have reduced staffing in our private label operations
as a result of slower than anticipated customer growth.

Liquidity and Capital Resources

Our assets consist primarily of cash and assets readily convertible into
cash. Security inventories are stated at market value and are generally readily
marketable. Customer margin loans are collateralized by securities and have
floating interest rates. Other receivables and payables with customers and
other brokers and dealers usually settle transactions within three days
following the date of transaction. Operations are financed by equity capital,
bank lines of credit, proceeds from sales of securities, non-interest bearing
liabilities such as checks and drafts payable, payables to customers and
employee compensation payable.

Our investing activities used $36.4 million in the nine months ended December
31, 2000. The Company paid the former owners of R.J. Steichen & Company
approximately $17.5 million in connection with the merger and incurred merger
related filing fees and professional service costs of $1.1 million. We used
$11.8 million to complete the merger with Kinnard Investments, Inc.

Our financing activities provided cash of $41.6 million in the nine months
ended December 31, 2000 primarily resulting from the increase in short term
borrowings used to fund operations as well as $19.6 million in net proceeds
from the sale of five year 10% convertible subordinated notes, completed in
August 2000.

Our five broker dealers are subject to the Securities and Exchange Commissions
Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of
minimum net capital and also provides that equity capital may not be withdrawn
or cash dividends paid if resulting net capital would be less than 5% of
aggregate debits under the alternative method and less than 120% of the minimum
net capital requirement for the traditional calculation. At December 31, 2000
the five broker dealers had combined net capital of $30.4 million and a
combined minimum net capital requirement of $8.7 million.

At December 31, 2000, we had approximately $115 million in committed credit
agreements, of which $46.6 million was utilized.

We believe that our current cash position, cash generated from future
operations, availability of line of credit borrowings, additional capacity for
subordinated debt, and sale of securities and commercial paper will be adequate
to meet our current and anticipated obligations and operating needs.

12



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Our primary market risk exposure is the impact that equity market pricing and
interest rate fluctuations may have on the value of the securities we hold and
securities our customers hold in margin accounts. We manage this risk exposure
through a process of internal controls and management review. Position limits
for trading and investments are established and monitored on an on-going basis.
The trading inventory is turned over frequently throughout the year.
Management reviews our customers credit standing, and we maintain collateral
to support customer margin loans.

Our equity price risk results from the risk of loss from price movements,
volatility or liquidity over which we have no control. Our corporate equity
holdings on long positions were $6.6 million at December 31, 2000. The
potential loss in fair value, using a hypothetical 25% decline in equity prices
on December 31, 2000 holdings, is estimated to be $1.7 million. A 25%
hypothetical decline was used to represent a significant yet plausible market
change.

Our primary exposure to interest rate risk arises from our interest earning
assets held primarily for deposits at clearing organizations and NASD reserve
requirements. We mitigate this risk by holding high-grade government
obligations with short-term maturities.





SIGNATURES





Pursuant to the requirements 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.

Dated:   February 14, 2001

| |                                  |                      
| | -------------------------------- | ---------------------
| |                                  | STOCKWALK GROUP, INC.
|
|
|
| | By:     /s/ Jeffrey L. Houdek   
|
|
|
|
| | Its:     Chief Financial Officer

13