**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-KSB**

| [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF    1934 |
|---------------------------------------------------------------------------------------------|
| For the fiscal year ended January 31, 2003                                                  |
|                                                                                             |
| [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      |
| For the transition period from to                                                           |

Commission file number 333-52268 

| **Direct Response Financial Services, Inc.**                   |
|----------------------------------------------------------------|
| (Name of small business issuer as specified in its charter)    |
|                                                                |
| 7080 N. Whitney, Suite 101                                     |
| Fresno, California 93720                                       |
| (250) 487-7008                                                 |
| (Address of principal executive office & telephone number) |

| Colorado                 |
|--------------------------|
| (State of incorporation) |

| 84-1547578                      |
|---------------------------------|
| (IRS Employer Identification #) |

| Securities registered under Section 12(b) of the Exchange Act: None                          |
|----------------------------------------------------------------------------------------------|
|                                                                                              |
| Securities registered under Section 12(g) of the Exchange Act: Common Stock, no par    value |

[X] 

Check whether the issuer (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. 

[ ] 

Check if disclosure of delinquent filers in response to Item 405 of Regulation SB isnot contained in this form, and no disclosure will be contained, to the best ofregistrant's knowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB 

State the issuer's revenues for the most recent fiscal year: $219 

The aggregate market value of the voting and non-voting common equity held bynon-affiliates computed by reference to the price at which the common equity was sold is$1,104,450 as of January 31, 2003. Direct Response Financial Services is a publicly tradedcompany on the Over-The Counter Bulletin Board exchange (OTCBB) under the symbol DRFL. 

The number of shares outstanding of the issuer's common stock as of May 13, 2003 is19,512,834. 

**Documents Incorporated by Reference**

Direct Response Financial Services, Inc. incorporates by reference to Part III of thisForm 10-KSB the registrant's: SB-1 Registration Statement, as amended, the exhibitsthereto containing the articles of incorporation and bylaws, filed December 18, 2000 andForm 8k Current Report, as amended, and the exhibits thereto filed on July 12, 2002. 

Transitional Small Business Disclosure Format (check one): [X] Yes [ ]No 

----

|                                                                                           | **Table of Contents** |      |
|-------------------------------------------------------------------------------------------|-----------------------|------|
|                                                                                           |                       |      |
|                                                                                           | Part I                |      |
| *Description of Business*                                                                 |                       | *3*  |
| *Description of Properties*                                                               |                       | *4*  |
| *Directors, Executive Officers, and Significant Employees*                                | *5*                   |
| *Remuneration of Directors and Officers*                                                  | *5*                   |
| *Security Ownership of Certain Beneficial Owners and Management*                          | *6*                   |
| *Interest of Management and Other in Certain Transactions*                                | *7*                   |
|                                                                                           | Part II               |      |
| *Market Price of Dividends on Common Equity and Other Shareholder    Matters*             | *7*                   |
| *Legal Proceedings*                                                                       |                       | *8*  |
| *Changes In and Disagreements With Accountants on Accounting and    Financial Disclosure* | *9*                   |
| *Submission of Matters to a Vote of Security Holders*                                     | *9*                   |
| *Compliance with Section 16(a) of the Exchange Act*                                       | *9*                   |
| *Reports on Form 8-K*                                                                     |                       | *9*  |
|                                                                                           | Part F/S              |      |
| *Financial Statements*                                                                    |                       | *10* |
|                                                                                           |                       |      |
| *Index to Exhibits*                                                                       |                       | *24* |
| *Description of Exhibits*                                                                 |                       | *25* |
|                                                                                           |                       |      |
| *Controls and Procedures*                                                                 |                       | *25* |
| *Signatures*                                                                              |                       | *26* |
| *Certification*                                                                           |                       | *27* |

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Direct Response Financial Services, Inc. 

Annual Report 

**Description of Business**

Business 

The Company was incorporated in the State of Colorado on April 7, 2000 to developsoftware and internet portals. On April 29, 2002 the Company acquired 100% of DirectResponse Financial Services, Inc., a Delaware Corporation and changed the focus to thedevelopment of financial services for the direct response industry. 

In June of 2002, the company changed its name to Direct Response Financial Services,Inc. 

Direct Response Financial Services, Inc. is currently traded on the NASD Over theCounter Bulletin Board under the symbol ”DRFL”. Direct Response FinancialServices, Inc. began trading on the Berlin Exchange under the ticker symbol“DFS” on December 3, 2002. The trading number is 804239. Direct ResponseFinancial Services, Inc. is not traded on any other exchange at this time. 

The Company is in the development stage and has had no significant operations. Prior toApril 29, 2002, the Company was in a development stage relating to its internet portaloperations. Subsequent to that date, the Company is in a new development stage relating tothe development of its financial services business. 

The Company’s primary focus is to enable merchants faster and better means toexpand their business in the electronic age. Direct Response provides merchant bankingsolutions together with innovative technology to its customers. 

The Company’s Products and Services include the following: Merchant BankingServices: 

The Company offers accessible and affordable merchant banking services (credit cardtransaction processing and related services) to the global direct response industry to alllevels and types of online and offline merchants. Direct Card Services, LLC (Master Agentof Chase Merchant Services (CMS) ), the Company is able to offer the competitive rates formerchant banking services. 

Transmitter Business/Cash Cards: 

Optimum Pay USA, Inc. provides stored value cash cards, P2P (person to person)financial services and innovative systems to move money (transmitter solutions). Inconjunction with the Company's payment gateway, Optimum Pay enables the Company's clientsto move money outside of the traditional transmitter system via the Internet without theneed to visit a bank. 

Payment Gateways: 

Merchants of the Company have access to a number of payment gateway solutions. Thepayment gateway from CMS is available for larger merchants. 

Wireless Transaction Processing: 

The Company also offers wireless point of sale devices and payment mechanisms throughits relationship with AMPS Wireless and other providers. 

On May 16, 2002, the Company entered into an agreement to form Direct Card Services,LLC, a Delaware limited liability company, for the purpose of marketing debit and creditcard processing services. 

Direct Card Services, LLC, partially owned by DRFL, began offering card-processingservices for business merchants on October 10, 2002. Direct Card Services, LLC hasinitiated a sales campaign for signup of business merchants for card processing serviceswith limited success to date. On November 14, 2002, Direct Card Services, LLC, reached athree-year agreement with Hughes & Kaye Products and Services, LLC for merchant cardprocessing. Under the terms of the agreement Hughes & Kaye will act as an independentsales organization to Direct Card Services, LLC. Hughes & Kaye will focus on theSouthern California marketplace; to date no significant sales have been generated as aresult of this agreement. 

3 

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Direct Response Financial Services, Inc. 

Annual Report 

Direct Response Financial Services, Inc. currently has limited operations and isreliant on contributions from officers and shareholders. Liquidity demands have been metthrough cash advances and recent financing activities. No formal agreements between anyofficer or shareholder and the company currently exist to continue funding operations. Thecompany has engaged in the following financing activities and requires additional capitalto expand operations to a level where revenues sufficient to sustain operations can begenerated. 

Convertible Debenture 

In January 2003 as amended on May 19, 2003, the Company sold an 8% convertibledebenture for $150,000, due January 2005. Interest on the debenture is payable monthly. Noassets have been pledged as security and the note cannot be prepaid. The agreement has thefollowing additional provisions: The number of shares for which the debenture isconvertible into common stock is equal to the debenture dollar amount being convertedmultiplied by eleven, minus the product of the conversion price, as determined below,multiplied by ten times the dollar amount of the debenture amount being converted, withthe entire foregoing result divided by the conversion price. This is subject to alimitation on the holder not to exceed five percent of the issues and outstanding commonshares. 

The conversion price shall be equal to the lesser of $1.00, or eighty per cent(80%)(the discount multiplier) of the average of the three lowest market prices during thetwenty (20) day period prior to the holder’s election to convert. However, theCompany shall have the option to not accept a debenture conversion for nine monthsfollowing May 14, 2002 if the conversion price is less than $0.50 per share In addition tothe right to convert the debenture, the holder was given, coinciding with the exercisingof the debenture, a warrant until January 9, 2006 to purchase shares of the Company’scommon stock at an exercise price of $1.00 per share equal to ten times the dollar amountof the debentures being converted. 

Direct Response Financial Services, Inc. has not complied with all the terms of theassociated with this debenture, including the payment of interest. 

Private Sale of Stock 

During the year, the Company sold 50,000 shares of its common stock for $25,000 cash,which was an average price per share of $0.50. These common shares were not previouslyregistered with the Securities and Exchange Commission in connection with any otheroffering. All shares outstanding were issued as exempted transactions under Section 4(2)of the Securities Act of 1933 and are subject to Rule 144 of the Securities Act of 1933. 

Exemptions being non-exclusive the following factors are relevant: 

The purchaser was an *accredited investor* as defined by Rule 501 of Regulation Dof the Securities Act of 1933; An aggregate of only $25,000 was sold in the privateoffering and not in connection with any other offerings made by the company; The offeringwas sold to a single investor.; No commissions were paid.; No advertisements were made.;The purchaser had adequate access to company information.; The securities are restrictedpursuant to Rule 144 

Employees 

Direct Response Financial Services, Inc. currently has two (2) employees, the currentofficer and a director of the company. Direct Response Financial Services, Inc. expects toadd additional employees as operations expand. 

**Description of Properties**

Direct Response Financial Services, Inc. rents office space, facilities and services ona month-to-month basis. 

4 

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Direct Response Financial Services, Inc. 

Annual Report 

**Directors, Executive Officers, and Significant Employees**

| Directors and Executive Officers |     |                                                 |
|----------------------------------|-----|-------------------------------------------------|
|                                  |     |                                                 |
| Name                             | Age | Position                                        |
| Ted Kozub                        | 66  | President and Chief Executive Officer, Director |
| Gregory C. Rotelli               | 43  | Director                                        |

**Ted Kozub, President and CEO** - Mr. Kozub is a recently retired Tax Partner withKPMG. He has been in public accounting practice for over 22 years and has held varioussenior positions with Revenue Canada Taxation. He was Tax Manager with Hudson Bay Oil andGas in Calgary, which is a subsidiary of Conoco. Mr. Kozub holds a Certified ManagementAccounting Degree (CMA, 1963) and a Business Management Degree (1960). 

**Gregory C. Rotelli, CFO and Director** - Mr. Rotelli, CFO and Director isPrincipal of Pacific Coast Capital Group, LLC and has over 20 years experience in seniormanagement for public and early-stage private companies, including former Chief OperatingOfficer for Direct Stock Market, an online investment bank for growth venture capitalfinancing. Mr. Rotelli holds a BA degree in Classics from Brown University in Rhode Islandin 1982. He was deemed a Distinguished Scholar at the Regent University in Virginia, wherehe received his MBA in Marketing and Management in 1985. 

**Remuneration of Directors and Officers**

The following lists all remuneration by Direct Response Financial Services, Inc. toofficers and key personnel for the last fiscal year: 

|                        |      |                         |              | **SUMMARY COMPENSATION TABLE** |            |              |
|------------------------|------|-------------------------|--------------|--------------------------------|------------|--------------|
|                        |      | **Annual Compensation** | **Award(s)** | **Payouts**                    |            |
|                        |      |                         |              |                                |            |              |  |  |
|                        |      |                         |              |                                | Restricted | Securities   |  |  |
| Name and               |      |                         |              | Other Annual                   | Stock      | Underlying   | LTIP | All Other |
| Principle              |      | Salary                  | Bonus        | Compensation                   | Award(s)   | Options/SARs | Payouts | Compensation |
| Position               | Year | ($)                     | ($)          | ($)                            | ($)        | (#)          | ($) | ($) |
|                        |      |                         |              |                                |            |              |  |  |
| **Ted Kozub**          | 2002 | 0                       | 0            | 0                              | 0          | 0            | 0 | 0 |
| President and Director |      |                         |              |                                |            |              |  |  |
|                        |      |                         |              |                                |            |              |  |  |
| **Gregory C. Rotelli** | 2002 | 0                       | 0            | 0                              | 0          | 0            | 0 | 0 |
| CFO and Director       |      |                         |              |                                |            |              |  |  |
|                        |      |                         |              |                                |            |              |  |  |
| **Rodney Ray**         | 2002 | 0                       | 20,000       | 0                              | 121,200    | 0            | 0 | 0 |
| Former Officer         |      |                         |              |                                |            |              |  |  |

There are no annuity, pension or retirement benefits proposed to be paid to Officers,Directors, or employees of Direct Response Financial Services, Inc. in the event ofretirement at normal retirement date pursuant to any existing plan provided by DirectResponse Financial Services, Inc. 

Employment agreements were in place for the former President Rodney Ray and the currentPresident Ted Kozub. Rodney Ray’s agreement was effective on April 24, 2002 and wasterminated on April 6, 2003 with his resignation as President. The various terms of hisagreement contained conditions precedent to significant amounts of compensation vesting.The final vested amounts owed Mr. Ray, if any, are being negotiated at this time. Thisagreement has been filed as an exhibit to this report. 

Ted Kozub’s agreement was effective on April 4, 2003 and continues in force todate. Mr. Kozub shall receive compensation consisting of: $1,000.00 per month, 250,000shares of Rule 144 restricted common stock of Company, all of which shall vest and begranted by the Company at the end of the twelve (12) month term of this Agreement and two(2) weeks paid vacation. This agreement has been filed as an exhibit to this report. 

No other employment agreements exist or are currently contemplated. 

There was no compensation paid to any directors of Direct Response Financial Services,Inc. as director’s fees. 

5 

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Direct Response Financial Services, Inc. 

Annual Report 

**Security Ownership of Certain Beneficial Owners and Management**

The following set forth; as of May 13, 2002; the beneficial ownership of DirectResponse Financial Services, Inc. common stock by each person known to the company tobeneficially own more than five percent (5%) of the company's common stock, includingoptions, outstanding as of such date and by the officers and directors of the company as agroup. 

Except as otherwise indicated, all shares are owned directly. 

|                                                                                                | Name and Address                  |                  | Percentage of |
|------------------------------------------------------------------------------------------------|-----------------------------------|------------------|---------------|
| Title of Class                                                                                 | of Beneficial Owner               | Number of Shares | Class         |
| *Common Stock                                                                                  | TRG Marketing Consultants, Inc.   | 1,000,000        | 5.1           |
|                                                                                                | 7080 N. Whitney, Suite 101        |                  |               |
|                                                                                                | Fresno, California 93720          |                  |               |
| Common Stock                                                                                   | Ted Kozub, President and Director | 0                | 0.0           |
|                                                                                                | 2nd Floor , 498 Ellis St.         |                  |               |
|                                                                                                | Penticton, BC , V2A4M2            |                  |               |
| Common Stock                                                                                   | Gregory C. Rotelli                | 0                | 0.0           |
|                                                                                                | 828 14th St., Unit #3             |                  |               |
|                                                                                                | Santa Monica, CA 90403            |                  |               |
|                                                                                                |                                   |                  |               |
| Total Shares of 5% or more Beneficial Ownership                                                | 1,000,000                         | 5.1              |
| Total Shares of Officers and Directors as a Group                                              | 0                                 | 0.0              |
| Total Shares Issued and Outstanding                                                            | 19,512,834                        |                  |
| Direct Response Financial Services, Inc. has authorized 100,000,000 shares    of common stock. |                                   |

* TRG Marketing Consultants, Inc. is an entity controlled by the company’s formerPresident, Rodney Ray. Mr. Ray resigned as CEO and President effective April 6, 2003 andresigned as a board member as of May 7, 2003. These shares are the subject of currentnegotiations between the company and Mr. Ray to have them returned for cancellation. Thecompany contends that the shares were issued without consideration. Should thenegotiations fail to recover the shares; the company will seek other available legalremedies to recover the shares. 

6 

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Direct Response Financial Services, Inc. 

Annual Report 

**Interest of Management and Other in Certain Transactions**

The Company received an advance from a stockholder in the amount of $10,140 asevidenced by a promissory note. The note is unsecured, bears 6% interest, and is due June10, 2004. 

During the year, the Company incurred legal fees with a law firm, in which asignificant stockholder is a partner, in the amount of $47,117, all of which is unpaid atyear end. 

The Company issued 120,000 shares of its stock, valued at $121,200 ($1.01 per share)for consulting services from a significant shareholder of the Company. 

The Company issued 120,000 shares of its stock, valued at $121,200 ($1.01 per share)for services from the Company’s former president. 

The Company issued 1,000,000 shares, valued at $450,000 ($.45 per share) to a Companycontrolled by the former president and sole director of the Company. The current board ofdirectors is of the belief that this stock was issued without consideration. The companyis negotiating for the return of these common shares and has not initiated any formalproceedings. The certificate bears a restrictive legend and is currently subject to anadministrative stop through the transfer agent. 

In March of 2003, the Company enacted a “2003 stock incentive plan” The planauthorizes the board of directors, or its designated committee, to award up to 750,000shares or options for shares, generally under terms and prices determined by the board.Awards may be granted to officers, directors, and employees of and consultants andadvisers to the Company or its subsidiaries. The plan contains additional terms andrestrictions. 749,334 shares have been issued pursuant to the plan through April 30, 2003.A significant portion of these issuances was to a former officer. 

No other transactions have occurred within the past fiscal year resulting in anaggregate obligation exceeding $60,000 between the registrant and any officer, director,nominee, five percent security holder or immediate family member of those persons. 

None of the current officers or directors of Direct Response Financial Services, Inc.are related by blood or marriage. 

**Market Price of Dividends on Common Equity and Other Shareholder Matters**

Market Information 

Direct Response Financial Services, Inc. common stock is listed on the NASDOver-The-Counter Bulletin Board under the symbol "DRFL", prior to September 26,2002 under the symbol “RVLK” and prior to June 16, 2002 under the symbol“RLVL”. The first available quotes on the NASD Over-The-Counter Bulletin Boardappeared in the Company’s 2nd quarter of 2002. 

The quotations provided are for the over the counter market which reflect interdealerprices without retail mark-up, mark-down or commissions, and may not represent actualtransactions. The bid prices included below have been obtained from sources believed to bereliable: 

|                  | High  | Low   |
|------------------|-------|-------|
| Period Ending:   |       |       |
| April 30, 2003   | $0.36 | $0.30 |
| January 31, 2003 | $0.35 | $0.24 |
| October 31, 2002 | $0.99 | $0.85 |
| July 31, 2002    | $2.15 | $2.05 |

Holders 

Direct Response Financial Services has 19,512,834 shares of common stock outstanding asof May 13, 2003 which were held by approximately 92 shareholders. 

7 

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Direct Response Financial Services, Inc. 

Annual Report 

Dividend Policy 

Direct Response Financial Services has never paid cash dividends on its common stockand does not anticipate paying any dividends in the foreseeable future. Managementanticipates that earnings will be retained to fund the company's working capital needs andexpansion of the business. 

**Legal Proceedings**

Direct Response Financial Services, Inc. has never been in bankruptcy, receivership orany similar legal proceeding, and is not subject to any pending legal proceedings. DirectResponse Financial Services is not aware of any threatened legal proceedings. Theforegoing is also true, to the knowledge of the company, with respect to each officer,director and control shareholder as well as any entity owned by any officer, director andcontrol shareholder. 

Share Issuances 

On January 24, 2003 the company’s former president, Rodney Ray, issued 1,000,000common shares to TRG Marketing Consultants, Inc., an entity controlled by him. Theseshares are the subject of current negotiations between the company and Mr. Ray to havethem returned for cancellation. The company contends that the shares were issued withoutconsideration. Should the negotiations fail to recover the shares; the company will seekother available legal remedies to recover the shares. Mr. Ray resigned as presidenteffective April 6, 2003 and resigned as a board member as of May 7, 2003. The outcome ofany legal action initiated by the company is unknown but the company will make allreasonable efforts to recover the shares. The certificate bears a restrictive legend andis currently subject to an administrative stop through the transfer agent. 

Convertible Debenture 

In January 2003 as amended on May 19, 2003, Direct Response Financial Services, Incsold an 8% convertible debenture for $150,000, due January 2005. Interest on the debentureis payable monthly. No assets have been pledged as security and the note cannot beprepaid. 

The Company has not complied with certain provisions of the agreements, including thepayment of interest when due. 

The agreement includes a provision for a registration statement to be filed by theCompany within 90 days of the closing of the agreement. The company has not complied withthese provisions and by the terms of the agreements is subject to acceleration of thedebt, penalties and liquidated damages clauses, which are substantial. 

The debenture holder has retained $50,000 of the proceeds for legal and accounting feesassociated with the debenture its conversion and the registration. 

Direct Response Financial Services, Inc. has not received any notice of default fromthe debenture holder as required by the agreements. The company is in communication withthe debenture holder and expects to resolve any issues amicably. The agreements associatedwith this debenture have been filed as an exhibit to this report. 

8 

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Direct Response Financial Services, Inc. 

Annual Report 

**Changes In and Disagreements with Accountants on Accounting and Financial Disclosure**

Direct Response Financial Services has had no change in or disagreements with itsaccountants since inception. 

**Submission of Matters to a Vote of Security Holders**

None during the year ended January 31, 2003. 

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

Compliance with Section 16(a) of the Securities Exchange Act of 1934 

Section 16(a) of the Securities Exchange Act of 1934 requires the company’sdirectors and officers, and persons who own more than ten-percent (10%) of thecompany’s common stock, to file with the Securities and Exchange Commission reportsof ownership on Form 3 and reports of change in ownership on Forms 4 and 5. Such officers,directors and ten-percent stockholders are also required to furnish the company withcopies of all Section 16(a) reports they file. Based solely on its review of the copies ofsuch forms received by the company and on written representations from certain reportingpersons, the company believes that all Section 16(a) reports applicable to its officers,directors and ten-percent stockholders with respect to the fiscal year ended December 31,2002 were filed. 

**Reports on Form 8-K**

The company filed a current report on form 8-K as amended on July 12, 2002 where itdisclosed the acquisition of Direct Response Financial Services, Inc., a DelawareCorporation. 

No other current reports were filed by the company during this period. 

9 

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Direct Response Financial Services, Inc. 

Annual Report 

| **Financial Statements**          |      |
|-----------------------------------|------|
|                                   |      |
| Contents                          |      |
|                                   | Page |
| Independent Auditor's Report      | 11   |
| Financial Statements              |      |
| Balance Sheet                     | 13   |
| Statement of Operations           | 14   |
| Statement of Stockholder's Equity | 15   |
| Statement of Cash Flows           | 16   |
| Notes to Financial Statements     | 17   |

10 

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Direct Response Financial Services, Inc. 

Annual Report 

| **INDEPENDENT AUDITORS’ REPORT**                    |
|----------------------------------------------------------|
| ***Report of Independent Certified Public Accountants*** |

| Board of Directors                       |
|------------------------------------------|
| Direct Response Financial Services, Inc. |

We have audited the accompanying balance sheet of Direct Response Financial Services,Inc. (A Development Stage Company), as of January 31, 2003, and the related statements ofoperations, stockholders’ equity, and cash flows for the period from inception (April24, 2002) through January 31, 2003. These financial statements are the responsibility ofthe Company’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit. 

We conducted our audit in accordance with generally accepted auditing standards in theUnited States of America. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Direct Response Financial Services, Inc. asof January 31, 2003, and the results of its operations and cash flows for the period frominception (April 24, 2002) through January 31, 2003, in accordance with generally acceptedaccounting principles in the United States of America. 

The accompanying financial statements have been prepared assuming that the Company willcontinue as a going concern. As described in Note 2, the Company has sustained netoperating losses and has insufficient working capital to complete its business plan, whichraise substantial doubts about its ability to continue as a going concern. The financialstatements do not include any adjustments that might result from the outcome of thisuncertainty. 

| /s/ Miller and McCollom             |
|-------------------------------------|
|                                     |
| MILLER AND MCCOLLOM                 |
| Certified Public Accountants        |
| 4350 Wadsworth Boulevard, Suite 300 |
| Wheat Ridge, Colorado 80033         |
| May 15, 2003                        |

11 

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| **Direct Response Financial Services, Inc.**             |
|----------------------------------------------------------|
|                                                          |
|                                                          |
| **Consolidated Balance Sheet**                           |
| **as of**                                                |
| **January 31, 2003**                                     |
|                                                          |
|                                                          |
| **and**                                                  |
|                                                          |
|                                                          |
| **Consolidated Statement of Operations,**                |
| **Consolidated Statement of Stockholders’ Equity,** |
| **Consolidated Statement of Cash Flows**                 |
| **from inception (April 24, 2002)**                      |
| **through January 31, 2003**                             |

12 

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| Direct Response Financial Services, Inc.             |                                |             |
|------------------------------------------------------|--------------------------------|-------------|
|                                                      |                                |             |  |
|                                                      | **Consolidated Balance Sheet** |             |  |
|                                                      |                                |             |  |
|                                                      |                                | January 31, |
|                                                      |                                | 2003        |
|                                                      |                                |             |  |
| **Assets**                                           |                                |             |  |
| Current assets:                                      |                                |             |  |
| Cash                                                 |                                | $           | 4,392 |
| Deposits                                             |                                | 50,000      |
| Total current assets                                 |                                |             | 54,392 |
| Other assets:                                        |                                |             |  |
| Property and equipment, net of $0 depreciation       |                                | 2.233       |
|                                                      |                                |             |
| Total assets                                         |                                | $ 56,625    |
|                                                      |                                |             |  |
|                                                      |                                |             |  |
| **Liabilities and Stockholders' Equity (Deficit)**   |                                |             |
| Current Liabilities:                                 |                                |             |  |
| Accounts payable and accrued expenses                |                                | $           | 147,649 |
| Accrued interest payable                             |                                |             | 1,152 |
| Advances from stockholders                           |                                |             | 10,240 |
| Debenture payable                                    |                                | 150,000     |
| Total current liabilities                            |                                |             | 309,041 |
|                                                      |                                |             |
| Total liabilities                                    |                                |             | 309,041 |
|                                                      |                                |             |  |
| Commitments and contingencies                        |                                |             | - |
|                                                      |                                |             |  |
|                                                      |                                |             |  |
| Stockholders' Equity (Deficit)                       |                                |             |  |
| Common stock, no par value,                          |                                |             |  |
| 100,000,000 shares authorized,                       |                                |             |  |
| 18,057,500 shares issued and outstanding             |                                | 1,104,450   |
| Accumulated (deficit)                                |                                |             | (354,950) |
| (Deficit) accumulated during the development stage   | (1,001,916)                    |
| Total stockholders' equity (deficit)                 |                                | (252,416)   |
|                                                      |                                |             |  |
| Total liabilities and stockholders' equity (deficit) | $ 56,625                       |

The accompanying notes are an integral part of these financialstatements. 

Page 13 

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|                                     | Direct Response Financial Services, Inc. |                  |                |
|-------------------------------------|------------------------------------------|------------------|----------------|
|                                     |                                          |                  |                |
|                                     | **Consolidated Statement of Operations** |                  |                |
|                                     |                                          |                  |                |
|                                     |                                          |                  | April 24, 2002 |
|                                     |                                          |                  | (inception)    |
|                                     |                                          |                  | through        |
|                                     |                                          | January 31, 2003 |
|                                     |                                          |                  |                |
| Revenues                            |                                          | $                | 219            |
| Cost of sales                       |                                          | 221              |
| Gross profit                        |                                          |                  | (2)            |
|                                     |                                          |                  |                |
| Costs and Expenses:                 |                                          |                  |                |
| Consulting expense                  |                                          |                  | 830,591        |
| Professional fees                   |                                          |                  | 106,288        |
| Advertising and marketing           |                                          |                  | 16,145         |
| General and administrative          |                                          |                  | 30,882         |
| Rent expense                        |                                          | 16,856           |
| Total                               |                                          |                  | 1,000,762      |
|                                     |                                          |                  |                |
| Earnings (loss) from operations     |                                          |                  | (1,000,764)    |
|                                     |                                          |                  |                |
| Interest income                     |                                          |                  | -              |
| Interest expense                    |                                          |                  | (1,152)        |
|                                     |                                          |                  |                |
| Net (loss)                          |                                          |                  | $ (1,101,916)  |
|                                     |                                          |                  |                |
| (Loss) per share                    |                                          |                  | $ (0.06)       |
|                                     |                                          |                  |                |
| Weighted average shares outstanding |                                          | 16,907,500       |

The accompanying notes are an integral part of these financialstatements. 

Page 14 

----

|                                 | Direct Response Financial Services, Inc.           |             |             |             |               |
|---------------------------------|----------------------------------------------------|-------------|-------------|-------------|---------------|
|                                 |                                                    |             |             |             |               |  |  |  |  |
|                                 | **Consolidated Statement of Stockholders' Equity** |             |             |             |               |
|                                 |                                                    |             |             |             |               |  |  |  |  |
|                                 |                                                    |             |             |             | (Deficit)     |  |  |  |  |
|                                 |                                                    |             |             |             | Accumulated   |  |  |  |
|                                 |                                                    |             |             |             | During The    |  |  |  |
|                                 | Common Stock                                       | Accumulated | Development |             |               |  |
|                                 | Shares                                             | Amount      | (Deficit)   | Stage       |               |  | Total |  |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Balance April 24, 2002          |                                                    |             |             |             |               |  |  |  |  |
| (Inception)                     | -                                                  | $ -         | $           | -           | $             | - | $ |  | - |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Shares issued for services      | 10,000                                             | 6,000       |             | -           |               | - |  | 6,000 |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Adjustment for recapitalization |                                                    |             |             |             |               |  |  |  |  |
| pursuant to reverse acquisition |                                                    |             |             |             |               |  |  |  |  |
| (Note 4)                        | 16,727,500                                         | 348,950     |             | (354,950)   |               |  |  | (6,000) |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Shares issued for cash          | 50,000                                             | 25,000      |             |             |               |  |  | 25,000 |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Net (loss) for year ended       |                                                    |             |             |             |               |  |  |  |  |
| January 31, 2003                | -                                                  | -           |             | (1,001,916) | (1,001,916)   |
|                                 |                                                    |             |             |             |               |  |  |  |  |
| Balance: January 31, 2003       | 18,057,500                                         | $1,104,450  | $           | (354,950)   | $(1,001,916)) | $ | (252,416) |

The accompanying notes are an integral part of these financialstatements. 

Page 15 

----

| Direct Response Financial Services, Inc.          |                  |             |
|---------------------------------------------------|------------------|-------------|
| **Consolidated Statement of Cash Flows**          |                  |             |
|                                                   |                  |             |
|                                                   | April 24, 2002   |
|                                                   | (inception)      |
|                                                   |                  | through     |
|                                                   | January 31, 2003 |
|                                                   |                  |             |
| **Cash flows from operating activities**          |                  |             |
| Net (loss)                                        | $                | (1,001,916) |
| Adjustments to reconcile net (loss) to            |                  |             |
| net cash used in operating activities:            |                  |             |
| Expenses paid by issuing stock                    |                  | 724,500     |
| Net change in operating assets and liabilities:   |                  |             |
| Accounts payable and accrued liabilities          | 148,801          |
| Net cash (used) by operating activities           |                  | (128,615)   |
|                                                   |                  |             |
| **Cash flows from investing activities**          |                  |             |
| Purchase of property and equipment                | (2,233)          |
| Net cash (used) by investing activities)          |                  | (2,233)     |
|                                                   |                  |             |
| **Cash flows from financing activities**          |                  |             |
| Proceeds from loans - related parties             |                  | 10.240      |
| Proceeds from debenture                           |                  | 100,000     |
| Proceeds from issuance of common stock            | 25,000           |
| Net cash provided by financing activities         | 135,240          |
|                                                   |                  |             |
| Net increase (decrease) in cash                   |                  | 4,392       |
| Cash at beginning of period                       | -                |
| Cash at end of period                             | $ 4,392          |
|                                                   |                  |             |
| Supplemental disclosure of cash flow information: |                  |             |
| Cash paid during the period for:                  |                  |             |
| Interest                                          | $ -              |
| Income taxes                                      | $ -              |

The accompanying notes are an integral part of these financialstatements. 

Page 16 

----

| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

**Note 1 - Summary of Significant Accounting Policies**

| This summary of significant accounting policies of Direct Response Financial Services,    Inc. (Company) is presented         |
|-------------------------------------------------------------------------------------------------------------------------------|
| to assist in understanding the Company’s financial statements. The financial    statements and notes are representations |
| of the Company’s management who is responsible for their integrity and    objectivity. These accounting policies         |
| conform to generally accepted accounting principles in the United States of America    and have been consistently             |
| applied in the preparation of the financial statements. The financial statements are    stated in United States of            |
| America dollars.                                                                                                              |

Organization and Description of Business 

The Company was incorporated in the State of Colorado on April 7, 2000 as RelevantLinks, Inc. 

On April 29, 2002 the Company acquired 100% of Direct Response Financial Services,Inc., a Delaware Corporation (DEL) (Note 4), and changed its focus to the development offinancial services for the direct response industry. 

On May 16, 2002, the Company participated in forming Direct Card Services, LLC (DCS)for the purpose of facilitating the Company’s bankcard processing business. Under theterms of the LLC agreement, the Company has a 50% interest. 

As described in Note 4, comparative financial statements presented are those of thesubsidiary, DEL. Because the subsidiary had been formed on April 24, 2002, no financialinformation is presented before that date. 

In June of 2002, the company changed its name to Direct Response Financial Services,Inc. 

The Company is in the development stage and has had no significant operations. 

Principles of Consolidation 

The accompanying consolidated financial statements include the Company and its’wholly owned and controlled subsidiaries. All inter-company accounts have been eliminatedin the consolidation. 

The Company considers its 50% interest in DCS to be a controlling interest because ofcontrol factors in addition to its profit interest. Because DCS has a deficit equityposition at January 31, 2003, no minority interest has been recorded. 

Revenue Recognition 

Revenues are recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 101,"Revenue Recognition in Financial Statements." Under SAB 101, product revenues(or service revenues) are recognized when persuasive evidence of an arrangement exists,delivery has occurred (or service has been performed), the sales price is fixed anddeterminable and collectibility is reasonably assured. 

The Company offers no warranties on equipment sold beyond those offered by themanufacturer. 

Use of Estimates 

The preparation of the Company’s financial statements in conformity with generallyaccepted accounting principles requires management to make estimates and assumptions thataffect the amounts reported in these financial statements and accompanying notes. Actualresults could differ from those estimates. 

Page 17 

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| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

Earnings (Loss) Per Share 

Earnings (loss) per share of common stock is computed by dividing the net earnings(loss) by the weighted average number of common shares outstanding during the period.Fully diluted earnings per share are not presented because they are anti-dilutive. 

Estimated Fair Value of Financial Instruments 

The carrying value of the Company’s accounts payable, and other financialinstruments reflected in the financial statement approximates fair value due to theshort-term maturity of the instruments. The fair value of the Company’s advances fromstockholders and debentures payable cannot be estimated, because of the unique andproprietary nature of these instruments. 

Comprehensive Income 

The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 130,“Reporting Comprehensive Income”. SFAS 130 requires that the components andtotal amounts of comprehensive income be displayed in the financial statements beginningin 1998. Comprehensive income includes net income and all changes in equity during aperiod that arises from non-owner sources, such as foreign currency items and unrealizedgains and losses on certain investments in equity securities. The company has nocomponents of comprehensive income other than net income (loss). 

Income Taxes 

The Company records deferred taxes in accordance with Statement of Financial AccountingStandards (SFAS) No. 109, "Accounting for Income Taxes." The statement requiresrecognition of deferred tax assets and liabilities for temporary differences between thetax bases of assets and liabilities and the amounts at which they are carried in thefinancial statements, based upon the enacted tax rates in effect for the year in which thedifferences are expected to reverse. A valuation allowance is established when necessaryto reduce deferred tax assets to the amount expected to be realized. 

Valuation of Long-Lived Assets 

The Company periodically analyzes its long-lived assets for potential impairment,assessing the appropriateness of lives and recoverability of unamortized balances throughmeasurement of undiscounted operation cash flows on a basis consistent with accountingprinciples generally accepted in the United States of America. 

Other 

The Company’s fiscal year end is January 31. 

The Company paid no dividends during the periods presented. 

Advertising is expensed as it is incurred. 

The Company consists of one reportable business segment. 

All revenue reported is from external customers in the United States. All of theCompany's assets are located in the United States. 

Page 18 

----

| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

**Note 2 - Basis of Presentation – Going Concern**

The accompanying financial statements have been prepared in conformity with generallyaccepted accounting principles in the United States of America, which contemplatescontinuation of the Company as a going concern. However, the Company has sustained netoperating losses and has insufficient working capital to complete its business plan. Thisfact raises substantial doubt about the Company’s ability to continue as a goingconcern. Management plans to raise additional capital to enable the Company to completeits business plan. 

**Note 3 - Development Stage Company**

Based upon the Company's business plan, it is a development stage enterprise.Accordingly, the Company presents its financial statements in conformity with theaccounting principles generally accepted in the United States of America that apply inestablishing operating enterprises. As a development stage enterprise, the Companydiscloses the deficit accumulated during the development stage and the cumulativestatements of operations and cash flows from inception to the current balance sheet date. 

Prior to April 29, 2002, the Company was in a development stage relating to itsprevious business (Note 4). Subsequent to that date, the Company is in a new developmentstage relating to the development of its financial services business. 

**Note 4 – Acquisition of Subsidiary and Reorganization**

On April 29, 2002, the Company entered into an Agreement and Plan of Reorganizationbetween itself and Direct Response Financial Services, Inc., a Delaware corporation (DEL).Under the agreement, the Company acquired all of the outstanding stock of DEL in exchangefor 6,000,000 shares of the Company’s stock. Prior to the acquisition, DEL had nooperations, assets or liabilities and therefore no value was assigned to the exchange. 

In addition, the Company disposed of its software development and internet portaloperations, along with the related assets (including intangible assets) and liabilities,to two shareholders in exchange for 34,125,000 shares of the Company’s stock. TheCompany assigned an estimated value of $75,000 to the stock. 

Because the surviving shareholders are those of the subsidiary, the Company hasaccounted for the acquisition as a reverse acquisition, which is a capital transaction andnot a business combination. Accordingly, the consolidated statements include only theresults of operations of DEL from the date of acquisition. 

**Note 5 – Direct Card Services, LLC**

On May 16, 2002, the Company was a member in the formation of Direct Card Services,LLC, a Delaware limited liability company. The Company formed the LLC for the purpose offacilitating the Company’s bankcard processing business. Under the terms of the LLCagreement, the Company made an initial capital contribution of $1,500 for a 50% interest. 

Page 19 

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| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

**Note 6 - Property and Equipment**

| Components of property and equipment consist of: |   |       |   |              |   |
|--------------------------------------------------|---|-------|---|--------------|---|
|                                                  |   |       |   |              |   |  | Depreciation |
|                                                  |   |       |   |              |   |  | Rate |
|                                                  |   |       |   | Accumulated  |   | Net | and |
|                                                  |   | Cost  |   | Depreciation |   | Amount | Method |
| January 31, 2003:                                |   |       |   |              |   |  |  |
| Office Equipment                                 | $ | 2,233 | $ | —       | $ | 2,233 | 3 years SL |
|                                                  | $ | 2,233 | $ | —       | $ | 2,233 |  |

Depreciation is provided in amounts sufficient to recover asset costs over theirestimated useful lives. No depreciation was recorded for the year ended January 31, 2003because all property was acquired near the end of the period. 

**Note 7 – Advances from Stockholders**

The Company received an advance from a stockholder in the amount of $10,140 asevidenced by a promissory note. The note is unsecured, bears 6% interest, and is due June10, 2004. 

**Note 8 – Convertible Debentures Payable and Deposit**

In January 2003, the Company sold an 8% convertible debenture for $150,000, due January2005. Interest on the debenture is payable monthly. No assets have been pledged assecurity and the note cannot be prepaid. The agreement, as amended on May 19, 2003, hasthe following additional provisions: The number of shares for which the debenture isconvertible into common stock (in denominations of $1,000 or more in an integral multipleof $500 in excess thereof) is equal to the debenture dollar amount being convertedmultiplied by eleven, minus the product of the conversion price, as determined below,multiplied by ten times the dollar amount of the debenture amount being converted, withthe entire foregoing result divided by the conversion price. To the extent that, on anydate, the holding of common shares results in a holder being deemed to be the beneficialowner of more than five percent (5%) of the then outstanding shares of the Company’scommon stock, the holder shall not have the right and the Company shall not have theobligation to convert any portion of the debenture as shall cause such holder to be deemedthe beneficial owner of more than five percent (5%) of the then outstanding shares ofcommon stock. 

The conversion price shall be equal to the lesser of $1.00, or eighty per cent(80%)(the discount multiplier) of the average of the three lowest market prices during thetwenty (20) day period prior to the holder’s election to convert. However, theCompany shall have the option to not accept a debenture conversion for nine monthsfollowing May 14, 2002 if the conversion price is less than $0.50 per share 

Page 20 

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| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

The agreement includes a provision for a registration statement to be filed by theCompany within 90 days of the closing of the agreement for the stock to be issued byconversion or exercise of warrants related to this debenture. That deadline was April 9,2003. In the event that the registration statement was not declared effective by theSecurities and Exchange Commission before the deadline, or is not thereafter effective,then the eighty per cent (80%)(the discount multiplier) used in the conversion pricecalculation above shall decrease by three percentage points (3%) for each month or partialmonth occurring after the deadline date. In addition to possible damages, the holder ofthe debenture may demand repayment of one hundred fifty percent (150%) of the unpaidprincipal amount, in cash, with all accrued and unpaid interest thereon, at any time priorto the Company’s registration statement becoming effective, such repayment is to bemade within three (3) business days of such demand. In the event that the debenturepayment is so accelerated, the Company, in addition to repayment, shall immediately issueand pay, as the case may be, to the holder 25,000 shares of common stock and $5,000 foreach thirty (30) day period, or portion thereof, during which the principal amount andinterest thereon remains unpaid, with the monthly payment amount to increase to $10,000for each thirty (30) day period, or portions thereof, after the first ninety (90) dayperiod. 

In addition to the right to convert the debenture, the holder was given, coincidingwith the exercising of the debenture, a warrant until January 9, 2006 to purchase sharesof the Company’s common stock at an exercise price of $1.00 per share equal to tentimes the dollar amount of the debentures being converted. 

The Company is in violation of certain provisions of the agreements, including thenon-payment of interest when due. 

The debenture holder has retained $50,000 of the proceeds, recorded by the company as adeposit, for future payment of legal and accounting fees associated with the debenture orits conversion. 

Note 9 – Stockholders’ Equity 

During the year, the Company sold 50,000 shares of its common stock for $25,000 cash,which was an average price per share of $.50. 

The Company also issued 1,270,000 shares of its common stock for services (includingrelated parties – Note 10), which was valued at estimated fair value of $724,500(weighted average $.57 per share) based on quoted market prices on the date of thetransaction. 

**Note 10 – Related Party Transactions**

During the year, the Company incurred legal fees with a law firm, in which asignificant stockholder is a partner, in the amount of $47,117, all of which is unpaid atyear end. 

The Company issued 120,000 shares of its stock, valued at $121,200 ($1.01 per share)for consulting services from a significant shareholder of the Company. 

The Company issued 120,000 shares of its stock, valued at $121,200 ($1.01 per share)for services from the Company’s former president. 

The Company issued 1,000,000 shares, valued at $450,000 ($.45 per share) to a Companycontrolled by the former president and sole director of the Company. The current board ofdirectors is of the belief that this stock was issued without consideration, and theCompany intends to take measures to recover and cancel this stock. The ultimate outcome ofthese measures cannot be determined. 

Page 21 

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| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

**Note 11 – Income Taxes**

As of January 31, 2003, the Company had approximately $990,000 of net operating losscarryover that expires in 2023. A change in the ownership of more than 50% of the Companymay result in the inability of the Company to utilize the carryover. The Company had anestimated deferred tax asset of $91,000 related to the net operating loss carryover,including an addition of $91,000 for the current year. Carryforwards previously incurredby the Company are not available due to restrictions when ownership changes. A valuationallowance has been provided for the total amount of the deferred tax asset, including thecurrent year addition, since the amounts, if any, of future revenues necessary to be ableto utilize the carryover, are uncertain. 

The overall effective tax rate differs from the Federal statutory tax rate for the yearended January 31, 2003 as follows: 

|                                               | % of Pre-tax  |
|-----------------------------------------------|---------------|
|                                               | income (loss) |
| Tax provision based on Federal statutory rate | 34.0%         |
| State tax, net of Federal benefit             | 2.3%          |
| Surtax exemption                              | (27.1%)       |
| Estimated tax rate                            | 9.2%          |
| Valuation allowance                           | (9.2%)        |
| Effective tax rate                            | 0.0%          |

**Note 12 – Concentration of Risk**

Through its subsidiary Direct Card Services, LLC, the Company is dependent on amarketing agreement with a major bank for its future revenue regarding bankcardprocessing. 

**Note 13 – Commitments and Contingencies**

The Company rents its office space on a month-to-month basis. 

**Note 14 – Risks and Uncertainties**

The Company is subject to substantial business risks and uncertainties inherent instarting a new business. There is no assurance that the Company will be able to generatesufficient revenues or obtain sufficient funds necessary for launching a new businessventure. 

Page 22 

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| **Direct Response Financial Services Inc.**    |
|------------------------------------------------|
| **Notes to Consolidated Financial Statements** |

**Note 15 – Subsequent Events**

In March of 2003, the Company enacted a “2003 stock incentive plan.” The planauthorizes the board of directors, or its designated committee, to award up to 750,000shares or options for shares, generally under terms and prices determined by the board.Awards may be granted to officers, directors, and employees of and consultants andadvisers to the Company or its subsidiaries. The plan contains additional terms andrestrictions. 749,334 shares have been issued pursuant to the plan through April 30, 2003.

On May 19, 2003, the Company amended the agreements regarding its debenture payable.See Note 8. 

**Note 16 - Recent Accounting Pronouncements**

On December 31, 2002, the FASB issued FASB Statement No. 148 (SFAS 148), Accounting forStock-Based Compensation Transition and Disclosure, amending FASB Statement No. 123 (SFAS123), Accounting for Stock-Based Compensation. This Statement amends SFAS 123 regardingmethods of transition for entities that voluntarily change to the fair value based methodof accounting for stock-based employee compensation, and to require prominent disclosureabout the effects on reported net income of an entity's accounting policy decisions withrespect to stock-based employee compensation, and also amends APB Opinion No. 28, InterimFinancial Reporting, to require disclosure about those effects in interim financialinformation. For entities that voluntarily change to the fair value based method ofaccounting for stock-based employee compensation, the transition provisions are effectivefor fiscal years ending after December 15, 2002. For all other companies, the disclosureprovisions and the amendment to APB No. 28 are effective for interim periods beginningafter December 15, 2002. The Company does not expect that the provisions of SFAS No. 148will have a material impact on its financial position, its results of operations or itscash flows. 

On November 25, 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),Guarantor's Accounting and Disclosure Requirements for Guarantees, Including IndirectGuarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and107 and Rescission of FASB Interpretation No. 34. FIN 45 clarifies the requirements ofFASB Statement No. 5, Accounting for Contingencies (SFAS 5), relating to the guarantor'saccounting for, and disclosure of, the issuance of certain types of guarantees. 

FIN 45 requires that upon issuance of certain guarantees, the guarantor must recognizea liability for the fair value of the obligation it assumes under that guarantee. FIN 45specifically excludes certain guarantee contracts from its scope. Additionally, certainguarantees are not subject to FIN 45's provisions for initial recognition and measurementbut are subject to its disclosure requirements. The initial recognition and measurementprovisions are effective for guarantees issued or modified after December 31, 2002. TheCompany does not expect that the adoption of FIN 45 will have a material impact on itsfinancial position, its results of operations, or its cash flows and had no effect on itsdisclosures in its financial statements for the year ended January 31, 2003. 

In July 2002, the FASB issued Statement No. 146 "Accounting for Costs Associatedwith Exit or Disposal Activities", which becomes effective January of 2003. SFAS No.146 requires companies to recognize costs associated with exit or disposal activities whenthey are incurred rather than at the date of commitment. The Company does not expect thatthe adoption of SFAS No. 146 will have a material impact on its financial position, itsresults of operations or its cash flows. 

Page 23 

----

Direct Response Financial Services 

Annual Report 

**Index to Exhibits**

(a) 

| The following documents are filed as a part of this report:    |
|----------------------------------------------------------------|
| Independent auditor's report.                                  |
| Direct Response Financial Services, Inc. financial statements: |
| 1.                                                             | Consolidated balance sheets as of January 31 2003 |
| 2.                                                             | Consolidated statements of operations, Consolidated Statements of stockholders'    equity, Consolidated Statement of |
|                                                                | Cash Flows and Consolidated Statement of Operations from inception (April 24, 2002)    through January 31, 2003 |
| 3.                                                             | Notes to consolidated financial statements |

(b) 

Exhibits 

| Direct Response Financial Services, Inc. includes herein, by reference,    the following exhibits: |
|----------------------------------------------------------------------------------------------------|
| Plan of Purchase                                                                                   | Agreement and Plan of Reorganization (filed as exhibit to the registrant's Current    Report on |
|                                                                                                    | Form 8K (Number 333-52268), filed on July 12, 2002, as amended, filed December 18,    2000. |
| Articles of Incorporation                                                                          | Articles of Incorporation of the registrant (filed as Exhibit 3.1 to the registrant's    Registration |
|                                                                                                    | Statement on Form SB-1 (Number 333-52268) as amended, filed December 18, 2000). |
| Bylaws                                                                                             | Bylaws and Amendments of the registrant (filed as Exhibit 3.2 to the registrant's    Registration |
|                                                                                                    | Statement on Form SB-1 (Number 333-52268) as amended, filed December 18, 2000). |
| Direct Response Financial Services, Inc. includes herewith the following    exhibits:              |
| Change of Name                                                                                     | Amendment to Articles of Incorporation, Change of Name of Corporation, filed with the |
|                                                                                                    | Secretary of State, State of Colorado, June 14, 2002. |
| Material Contract                                                                                  | Stock Purchase Agreement (Convertible Debenture) |
| Material Contract                                                                                  | Option to Purchase Agreement (Limited Liability Company Interest) by and between    Direct |
|                                                                                                    | Response Financial Serves, Inc. and T. Randolph Catanese, a California individual    resident. |
| Material Contract                                                                                  | Management Consulting Agreement by and between Direct Response Financial Services,    Inc. |
|                                                                                                    | and Anecius Holding Company, a Colorado LLC. |
| Material Contract                                                                                  | Promissory Note, by and between Direct Response Financial Services, Inc. and RPMJ,    Inc. |
| Material Contract                                                                                  | Employment Agreement by and between Direct Response Financial Services, Inc. and    Rodney |
|                                                                                                    | Ray, dated April 24, 2002. |
| Material Contract                                                                                  | Employment Agreement by and between Direct Response Financial Services, Inc. and Ted |
|                                                                                                    | Kozub, dated April 4, 2003. |
| Certification                                                                                      | Certification of Chief Executive Officer |
| Certification                                                                                      | Certification of Principal Accounting Officer |

Page 24 

----

Direct Response Financial Services 

Annual Report 

**Description of Exhibits**

Direct Response Financial Services, Inc. includes herewith the following: 

| Number | Description                                                                       |
|--------|-----------------------------------------------------------------------------------|
| 3.1    | Amendment to Articles of Incorporation                                            |
| 10.1   | Stock Purchase Agreement (Convertible Debenture)                                  |
| 10.2   | Option to Purchase Agreement                                                      |
| 10.3   | Management Consulting Agreement                                                   |
| 10.4   | Promissory Note                                                                   |
| 10.5   | Employment Agreement, Rodney Ray                                                  |
| 10.6   | Employment Agreement, Ted Kozub                                                   |
| 99.1   | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,      |
|        | as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.             |
| 99.2   | Certification of Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, |
|        | as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.             |

**Controls and Procedures**

Direct Response Financial Services, Inc. management, including the Principal ExecutiveOfficer and Principal Financial Officer, have conducted an evaluation of the effectivenessof disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) and15d-14(c). This evaluation was conducted within 90 days prior to the filing of thisreport. Based on that evaluation, the Principal Executive Officer and Principal FinancialOfficer concluded that the disclosure controls and procedures are effective in ensuringthat all material information required to be filed in this annual report has been madeknown to them in a timely fashion. There have been no significant changes in internalcontrols or in other factors that could significantly affect internal controls subsequentto the date the Principal Executive Officer and Principal Financial Officer completedtheir evaluation. 

Page 25 

----

Direct Response Financial Services 

Annual Report 

**Signatures**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has dully caused this report to be signed on its behalf by theundersigned, thereunto duly authorized. 

| **Direct Response Financial Services, Inc.** |
|----------------------------------------------|
|                                              | Registrant |
|                                              |  |
|                                              |  |
| By:                                          | \s\ Ted Kozub, President |
|                                              | Ted Kozub, President |
|                                              |  |
| Date:                                        | May 20, 2003 |

In accordance with the Exchange Act, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the dates indicated. 

| **Direct Response Financial Services, Inc.**          |
|-------------------------------------------------------|
| Registrant                                            |
|                                                       |
| By: \s\ Ted Kozub, President                          |
| Ted Kozub, President and Director                     |
|                                                       |
| By: \s\ Gregory Rotelli, Principal Accounting Officer |
| Gregory Rotelli, Principal Accounting Officer         |

Date: May 20, 2003 

Page 26 

----

Direct Response Financial Services 

Annual Report 

**CERTIFICATION**

I, Ted Kozub, certify that: 

1. 

I have reviewed this annual report on Form 10-KSB of Direct Response FinancialServices, Inc.; 

2. 

Based on my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading withrespect to the period covered by this annual report; 

3. 

Based on my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, theperiods presented in this annual report; 

4. 

The registrant's other certifying officers and I are responsible for establishing andmaintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14and 15d-14) for the registrant and have: 

a) 

designed such disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which this annualreport is being prepared; 

b) 

evaluated the effectiveness of the registrant's disclosure controls and procedures asof a date within 90 days prior to the filing date of this annual report (the"Evaluation Date"); and 

c) 

presented in this annual report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the Evaluation Date; 

5. 

The registrant's other certifying officer and I have disclosed, based on our mostrecent evaluation, to the registrant's auditors and the audit committee of registrant'sboard of directors (or persons performing the equivalent functions): 

a) 

all significant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant's ability to record, process, summarize and reportfinancial data and have identified for the registrant's auditors any material weaknessesin internal controls; and 

b) 

any fraud, whether or not material, that involves management or other employees whohave a significant role in the registrant's internal controls; and 

6. 

The registrant's other certifying officer and I have indicated in this annual reportwhether there were significant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our most recentevaluation, including any corrective actions with regard to significant deficiencies andmaterial weaknesses. 

| Date: May 20, 2003              |
|---------------------------------|
|                                 |
| /s/ Ted Kozub                   |
| - ----------------------------- |
| Ted Kozub                       |
| Principal Executive Officer     |

Page 27 

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Direct Response Financial Services 

Annual Report 

**CERTIFICATION**

I, Gregory Rotelli, certify that: 

1. 

I have reviewed this annual report on Form 10-KSB of Direct Response FinancialServices, Inc.; 

2. 

Based on my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading withrespect to the period covered by this annual report; 

3. 

Based on my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, theperiods presented in this annual report; 

4. 

The registrant's other certifying officers and I are responsible for establishing andmaintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14and 15d-14) for the registrant and have: 

a) 

designed such disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which this annualreport is being prepared; 

b) 

evaluated the effectiveness of the registrant's disclosure controls and procedures asof a date within 90 days prior to the filing date of this annual report (the"Evaluation Date"); and 

c) 

presented in this annual report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the Evaluation Date; 

5. 

The registrant's other certifying officer and I have disclosed, based on our mostrecent evaluation, to the registrant's auditors and the audit committee of registrant'sboard of directors (or persons performing the equivalent functions): 

a) 

all significant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant's ability to record, process, summarize and reportfinancial data and have identified for the registrant's auditors any material weaknessesin internal controls; and 

b) 

any fraud, whether or not material, that involves management or other employees whohave a significant role in the registrant's internal controls; and 

6. 

The registrant's other certifying officer and I have indicated in this annual reportwhether there were significant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our most recentevaluation, including any corrective actions with regard to significant deficiencies andmaterial weaknesses. 

| Date: May 20, 2003              |
|---------------------------------|
|                                 |
| /s/ Gregory Rotelli             |
| - ----------------------------- |
| Gregory Rotelli                 |
| Principal Accounting Officer    |

Page 28 

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