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:  December 31, 2004

                                    OR

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ________ to ________

                         Commission File No. 333-67174

                         MOUNTAIN STATES HOLDINGS, INC.
            ------------------------------------------------------
               (Name of Small Business Issuer in its Charter)

            Colorado                                     84-1153946
-------------------------------                   ------------------------
(State or Other Jurisdiction of                   (I.R.S. Employer Identi-
Incorporation or Organization)                        fication Number)

            7435 East Peakview Avenue, Englewood, Colorado 80111
         ------------------------------------------------------------
         (Address of Principal Executive Offices, Including Zip Code)

Issuer's telephone number, including area code:  (303) 740-5455

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

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

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

As of March 28, 2005, 4,150,000 Shares of the Registrant's Common Stock were
outstanding.  The aggregate market value of voting stock of the Registrant
held by non-affiliates was approximately $1,016,000.

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $610,042.

Documents incorporated by reference:  None.



                                   PART I

ITEM 1.  DESCRIPTION BUSINESS.

GENERAL

     Mountain States Holdings, Inc. was incorporated in November 1990 as a
Colorado corporation under the name Slam Dunk Enterprises, Inc.  The
corporation was inactive until May 1998 when we started engaging in the
business of providing first and second mortgage financing under the name of
Mountain States Lending, Inc.  During January 2001, we filed articles of
amendment with the Colorado Secretary of State changing the corporation's name
to Mountain States Lending, Inc., and during September 2002 we changed the
name to Mountain States Holdings, Inc.  During September 2002, we formed a
wholly-owned subsidiary named Mountain States Lending, Inc., and on December
31, 2002, we transferred all of our assets and liabilities related to the
mortgage lending business to this new subsidiary.

     We changed our name to Mountain States Holdings, Inc. because our plan is
to attempt to acquire additional businesses in order to increase our asset
base to the level where we can qualify as a wholesale lender.  In accordance
with this plan we signed a letter of intent to acquire Continental Mortgage
Services LLC on March 3, 2003.  One of the conditions to closing this
acquisition was that we raise $1 million of equity financing.  We were unable
to raise this financing and this transaction was never completed.

     During June 2001 we formed a wholly-owned subsidiary named Mountain Eagle
Homes, Inc. for the purpose of engaging in the business of selling pre-
manufactured modular homes.  In connection with the pre-manufactured homes
business, Mountain Eagle Homes entered into a 50/50 partnership named
EagleSpan Homes, LLC on June 21, 2001, for the purpose of purchasing seven
undeveloped lots in Aurora, Colorado.  The lots were purchased for a total
purchase price of $250,000.  Our share of $125,000 was paid using $45,000 from
working capital and borrowing $80,000 from affiliates of Timothy J. Brasel.
When the real estate market improves, we intend to complete the infrastucture
and install pre-manufactured homes on the lots and then sell the homes.

MORTGAGE LOAN BUSINESS

     Our business to date has been providing first and second mortgage
financing for borrowers wishing to purchase or refinance a home.  We act as a
broker to obtain this financing through our network of approximately 100 banks
and wholesale mortgage lending institutions.  In June 1999, we received
approval from the Department of Housing and Urban Development to originate
government insured loans with the Federal Housing Authority.

     We offer a full spectrum of mortgage loan financing options including
conventional loans, FHA loans, VA loans, jumbo loans, construction loans,
non-conforming loans, and sub-prime loans.

     Conventional loans are loans that conform to the underwriting guidelines
set forth by the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation.  FNMA and FHLMC are two of the largest major
secondary market facilities that buy conventional loans.


                                    2

     Jumbo, non-conforming and sub-prime loans are loans that do not conform
to FNMA or FHLMC underwriting guidelines.  Jumbo loans typically involve loan
amounts over $275,000.  Non-conforming loans are, for example, loans for
borrowers who are self-employed and may not be able to verify their income.
Sub-prime loans are generally loans for borrowers with less that perfect
credit.

     FHA loans are insured by HUD and typically allow for a 3% down payment
and generally have less stringent underwriting guidelines than either FNMA or
FHLMC.  During 2004, FHA loans comprised less than 5% of our business.

     VA loans are guaranteed by the Veterans Administration.  These loans are
available to most retired and active duty military personnel and usually allow
for no down payment when purchasing a home.  During 2004, VA loans comprised
less than 27% of our business.

     We generate revenues in the mortgage segment of our business by the
following means:

     1.  We charge the borrowers a loan origination fee at the time of the
loan closing.  The amount of the fee is negotiated between us and the borrower
and depends in part upon the borrower's qualifications, and the circumstances
of the loan.  A loan origination fee is common in the industry and usually
varies between 0% and 2%, with 1% currently being the typical charge.

     2.  Since we do not fund the loans we originate, we pre-sell the loans to
wholesale lenders and we usually receive a premium of approximately 1%, but it
can range from 0% to 4%.  This is sometimes referred to as a yield spread
premium or service release premium.  The service release premium is a payment
for relinquishing the rights to service the loan to someone else.

     3.  We usually charge each borrower a processing fee of $350 at the loan
closing to help offset the expense of having an in-house processing staff.

     4.  Sometimes we charge loan discount points if the borrower desires a
lower interest rate or for other reasons.  These typically range from 0% to 2%
of the loan amount, and we usually share this fee with the actual lender.

     Approximately 70% to 75% of our loans are originated by our one full-time
and three part-time loan officers, and we pay them between 70% to 85% of these
fees as commissions.  Each loan officer signs an agreement with us which
provides the amount of compensation paid and that the loan officer will only
originate loans for Mountain States Holdings.  The agreements also state that
the loan officers are now full-time employees per HUD regulations.  Our
President, who also originates loans, does not receive a commission but his
compensation is based somewhat on his production as described in the
Management section of this Form 10-KSB.  Based on our experience, an
experienced loan officer should originate and close 40 or more loans per year.

MANUFACTURED HOMES BUSINESS

     During June 2001, we established a wholly-owned subsidiary named Mountain
Eagle Homes, Inc. for the purpose of engaging in the business of selling
pre-manufactured modular homes.  We have decided that we will purchase homes
from Heritage Homes of Nebraska, Inc., a manufactured homes builder located in
Wayne, Nebraska.  These homes are built in modern production facilities under

                                    3

strict supervision. A manufactured homes builder is generally able to purchase
materials below the cost of what local builders pay due to the volume of
business they do.  They are also able to work every day regardless of the
weather since they build the homes indoors.  These and other factors allow the
manufactured homes builder to produce homes for a price significantly below
what site-built home builders can, and the quality will meet or exceed the
quality of comparable priced site-built homes.

     Modular homes define the system of building a conventional home in
sections for a specific customer and site.  A new modular home is built with
the latest technology, yet it does have some limitations such as size.  Each
modular section must be transported on roadways, therefore the maximum width
is limited per section.  Some manufacturers also have standardized
construction features and techniques and cannot vary the systems.  We intend
to use Heritage Homes to build the homes for at least our first project.  They
specialize in homes in the 1000 to 2800 square foot range.

     Before the home is delivered to the lot, the foundation and other site-
work must be completed.  When the home is delivered either a crew from the
manufacturer or a crew hired by us will set the sections of the house onto the
foundation and bolt them together. Then a crew will trim out the connections
between the modules, such as carpet seaming at the doorways, siding on the end
of the home, and mating wall doors.  Someone will also hook up the utilities
and install the ductwork, furnace and air conditioner in the basement, finish
outside stoops, steps, concrete work, yard work and the garage.

     We intend to purchase undeveloped lots throughout the Denver metro area
with a focus on Aurora and the Bennett Watkins area about 20 miles east of
Denver.  For our first project, we formed a 50/50 partnership with a
nonaffiliated entity and purchased 7 undeveloped lots in Aurora, Colorado for
$250,000.  Our one-half of the investment was financed with an $80,000 loan
from affiliates of Timothy J. Brasel and $45,000 from working capital.  All
costs and profits will be split 50/50 with our partner.  The $80,000 loan was
repaid during 2002.  The lots have been zoned for single family homes and
manufactured homes are allowed.  Before we can install our first home, we must
first complete the roads, sewer, water and utilities.  We are currently
waiting for the real estate market to improve before commencing with this
work.

EMPLOYEES

     We presently have three full-time employees, including two full-time loan
officers, of which one is our President.  We also have three part-time loan
officers.

RISK FACTORS

     Investors in our shares should carefully evaluate all information in this
Report and, in particular, the following risk factors:

     1.  WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN INVESTMENT
DECISION.  We started operations in May 1998 when Mark Massa, who had
previously spent over 6 years working as an independent mortgage broker,
decided to obtain office space, hire employees and loan officers, and begin
originating loans in the company's name.  We have not commenced any operations

                                    4


in the manufactured homes segment of our business.  Because we have such a
limited operating history, it is difficult to evaluate our business and our
prospects, particularly in the manufactured homes segment.

      2.  WE FACE STRONG COMPETITION, WHICH COULD HARM OUR BUSINESS.   We will
compete with other mortgage bankers, state and national banks, thrift
institutions and insurance companies for loan originations.  The net worths of
these competitors range from approximately $25,000 for small loan brokers to
in excess of $100 million for large mortgage bankers.  Many of these
organizations have more experience in the mortgage origination business and
may be better known and have more customers than we do.  We may also be at a
disadvantage with many of our competitors because we do not have our own
financing for the loans we originate.  Instead we act as a broker for our
network of approximately 100 banks and wholesale mortgage lending
institutions.

     If we are able to enter into the manufactured homes business, we will be
competing with home builders of all sizes.  We may be unable to compete
successfully against current and future competitors, and competitive pressures
may seriously harm our business.

     3.  IF WE LOSE MARK MASSA, OUR MORTGAGE ORIGINATION BUSINESS WILL BE
ADVERSELY AFFECTED.

     The operation and growth of our mortgage origination business will be
substantially dependent on the effective service of our President, Mark Massa,
the person who developed the business to the point where it is today.  We do
not have an employment agreement with Mr. Massa and we do not intend to
purchase "key person" life insurance on Mr. Massa.  The loss of the services
of Mr. Massa would have a material adverse effect upon our planned business,
results of operation and financial condition.

     4.  OUR ABILITY TO OPERATE OUR MORTGAGE FINANCING BUSINESS WILL DEPEND ON
ECONOMIC CONDITIONS OF THE DENVER METROPOLITAN AREA.  The results of our
mortgage financing business will depend primarily upon the ability of our
employees and the independent loan officers to originate mortgage loans.  This
ability, in turn, is substantially dependent upon current interest rate levels
which affect the degree to which consumers obtain new loans and refinance
existing loans. For example, loan origination activity is generally greater in
a period of declining interest rates.  Economic conditions in the Denver
metropolitan area also will have a significant effect on the residential
housing market and, therefore, on our loan origination activity.  The housing
market in the Denver area has been strong for the last ten years.  There can
be no assurance that such favorable economic conditions will continue.

     5.  THE SUCCESS OF OUR MANUFACTURED HOMES BUSINESS WILL DEPEND UPON OUR
ABILITY TO FINANCE THE CONSTRUCTION OF THE HOMES AND THE ABILITY OF CONSUMERS
TO FINANCE THE PURCHASE OF THE HOMES.  We will need to obtain bank financing
for the construction of the homes and our customers will need to obtain
mortgage financing for their purchase of the homes.  The availability,
interest rate and other costs of such financing are dependent on the lending
practices of financial institutions, governmental policies, and economic and
other conditions, all of which are beyond our control.  Interest rates for
manufactured home loans are sometimes higher than loans for site-built homes.
Additionally, manufactured home financing is at times more difficult to obtain

                                    5


than conventional home mortgages.  There can be no assurance that affordable
wholesale or retail financing for manufactured homes will continue to be
available on satisfactory terms.  If such financing were to become
unavailable, such unavailability would have a material adverse effect on our
results of operations.

      6.  WE MAY HAVE TROUBLE OBTAINING LOTS WHERE WE CAN PLACE MANUFACTURED
HOMES.  Manufactured housing communities and individual home placements are
subject to local zoning ordinances, building codes, and other local
regulations relating to utility service and construction of roadways.  In the
past, property owners often have resisted the adoption of zoning ordinances
permitting the location of manufactured homes in residential areas.  There can
be no assurance that we will be able to find an adequate number of lots where
manufactured homes can be built.

     7.  WE MAY BE UNABLE TO OBTAIN MANUFACTURED HOMES FROM THE MANUFACTURER
ON A TIMELY BASIS.  Our business will depend on the ability to obtain delivery
of the manufactured homes on a timely basis.  If we are unable to do so, our
business will be adversely effected and we may lose potential customers.

     8.  NO DIVIDENDS ARE ANTICIPATED TO BE PAID IN THE IMMEDIATE FUTURE.  We
have not paid any dividends on any of our outstanding common stock to date and
do not anticipate paying any dividends on our common stock in the foreseeable
future.  We currently intend to retain all working capital and earnings, if
any, to finance the operations of our business and to expand our business.

     9.  POSSIBLE FUTURE ISSUANCES OF STOCK BY US WOULD HAVE A POTENTIAL
ANTI-TAKEOVER EFFECT.  We have authorized capital stock of 50,000,000 shares
of common stock, no par value per share, and 5,000,000 shares of preferred
stock, no par value per share.  Currently, there are 4,150,000 shares of
common stock issued and outstanding.  Although there are no present plans,
agreements or undertakings with respect to our issuance of any shares of stock
or related convertible securities, the issuance of any such securities by us
could have anti-takeover effects insofar as such securities could be used as a
method of discouraging, delaying or preventing a change in our control.  Such
issuance could also dilute the public ownership of us.  Inasmuch as we may, in
the future, issue authorized shares of common stock or preferred stock without
prior stockholder approval, there may be substantial dilution to the interests
of our stockholders.  However, given that we are authorized to issue more
stock, there can be no assurance that we will not do so.  In addition, a
stockholder's pro rata ownership interest in us may be reduced to the extent
of the issuance and/or exercise of any options or warrants relating to the
common stock or preferred stock.  The issuance of additional shares of common
stock may have the effect of rendering more difficult or discouraging an
acquisition or change in our control.

     10.  CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS
DISCOURAGE A CHANGE IN CONTROL OF OUR COMPANY.  As previously noted, pursuant
to the certificate of incorporation, the board of directors has the authority
to issue up to 5,000,000 shares of preferred stock without action by our
stockholders in one or more series having such preferences, rights and other
provisions as the board of directors may designate in providing for the
issuance of such series.  The preferred stock may have rights or preferences
superior to those of the common stock.  The certificate of incorporation and
bylaws contain provisions which may discourage certain transactions which
involve an actual or threatened change in our control.

                                    6


      11.  OUR CERTIFICATE OF INCORPORATION PROVIDES INDEMNIFICATION AND
LIMITATION OF DIRECTORS' LIABILITY.  We currently do not have officer and
director liability insurance and no assurances can be given that such
insurance will be obtained by us due to the expense of such coverage or, if
applied for, that we will qualify for such insurance.  Our certificate of
incorporation contains a provision eliminating the liability of a director to
us or our stockholders for monetary damages for any breach of duty in such
capacity, except for liability (i) for any breach of the director's duty of
loyalty to us or our stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 7-108-40 of the Colorado Business Corporation Act, or (iv)
for any transaction from which the director derived an improper personal
benefit.  We have been advised that it is the position of the Securities and
Exchange Commission that insofar as the foregoing provisions may be invoked to
disclaim liability for damages arising under the securities laws, that such
provisions are against public policy as expressed in the securities laws and
are therefore unenforceable.

     12.  THE STOCK IS CONSIDERED A PENNY STOCK AND INVESTORS MAY EXPERIENCE
DIFFICULTY IN RESELLING THE SHARES.  Our shares are subject to Rule 15g-9
under the Exchange Act.  That rule imposes additional sales practice
requirements on broker-dealers that sell low-priced securities to persons
other than established customers and institutional accredited investors.  For
transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale.  Consequently, the rule may
affect the ability of broker-dealers to sell our shares and may affect the
ability of holders to sell our shares in the secondary market.  In addition,
many states do not allow or place severe restrictions on the resale of penny
stocks.

     13.  SHARES ELIGIBLE FOR FUTURE SALE.  We currently have 4,150,000 shares
outstanding and the following is a breakdown of these shares:

          Free Trading                                250,000 Shares
          Restricted:
            Eligible for sale under Rule 144        3,550,000 Shares
            Not eligible for sale under Rule 144      350,000 Shares

     We are unable to predict the effect that sales made in this offering or
under Rule 144 may have on the then prevailing market price of our shares.  It
is likely that market sales of large amounts of these or other shares (or the
potential for those sales even if they do not actually occur) will have the
effect of depressing the market price of our shares.

ITEM 2.  DESCRIPTION OF PROPERTY.

     We lease a 2,400 square foot office condominium unit in Englewood,
Colorado from a limited liability company owned by Mark Massa, our President.
The monthly lease payments are $3,500.  The lease expires on November 1, 2008.

ITEM 3.  LEGAL PROCEEDINGS.

     The Company is not a party to any material legal proceeding.

                                    7


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

     No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of the fiscal year ended December 31, 2004.


                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a)  PRINCIPAL MARKET OR MARKETS.  The Company's Common Stock is traded
on the OTC Bulletin Board under the symbol "MSLG."  The following table sets
forth the range for the high and low bid quotations for the Company's
securities as reported by the OTC Bulletin Board.  These prices are believed
to be representative inter-dealer quotations, without retail markup, markdown
or commissions, and may not represent actual transactions.


                                                  Bid
             Quarter Ended                   High     Low
             -------------                   ----     ---

             March 31, 2003                  $1.25    $1.01
             June 30, 2003                   $2.00    $1.15
             September 30, 2003              $1.15    $1.05
             December 31, 2003               $1.05    $1.05

             March 31, 2004                  $1.05    $1.05
             June 30, 2004                   $1.05    $0.51
             September 30, 2004              $0.55    $0.55
             December 31, 2004               $0.55    $0.55


     (b)  APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK.  The number of
holders of record of the Company's common stock at March 28, 2005, was
approximately 76.  This does not include shares held in street name.

     (c)  DIVIDENDS.  The Company has paid no cash dividends on its Common
Stock and has no present intention of paying cash dividends in the foreseeable
future.  It is the present policy of the Board of Directors to retain all
earnings to provide for the growth of the Company.  Payment of cash dividends
in the future will depend, among other things, upon the Company's future
earnings, requirements for capital improvements and financial condition.

     PRIVATE SALES OF UNREGISTERED SECURITIES.  During the three months ended
December 31, 2004, we sold a total of 150,000 shares of common stock to five
accredited investors at a price of $.50 per share.  No commissions were paid
and the shares were sold in reliance on the exemption provided by Section 4(2)
of the Securities Act of 1933, as amended, and the appropriate restrictive
legend was placed on the certificates.





                                    8


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

      The forward-looking statements included in Management's Discussion and
Analysis of Financial Condition and Results of Operations, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in the forward-looking statements. You should not regard their
inclusion as a representation by us that the objectives or plans will be
achieved. Factors that might cause such a difference include, but are not
limited to, competitive, financial and business challenges making it more
difficult than expected to sell our services.  We may be unable to hire and
retain our key sales, and management personnel; there may be other material
adverse changes in our operations or business, and any or all of these factors
may affect our ability to achieve our projected sales growth.  Forward-looking
information provided by Mountain States Holdings, Inc. pursuant to the safe
harbor established by recent securities legislation should be evaluated in the
context of these factors.

RESULTS OF OPERATIONS

     YEAR ENDED DECEMBER 31, 2004 VS. YEAR ENDED DECEMBER 31, 2003

     Revenues were $610,042 for the year ended December 31, 2004 as compared
to $1,025,124 for the year ended December 31, 2003.  The 40.5% decline in
revenue is due to a decreased number of loans closed during the year ended
December 31, 2004, compared to the prior year.  The number of loans closed in
the year ended December 31, 2004 was 186 compared to 258 loans in the prior
year.  The amount received per loan closed decreased slightly.

     The cost of loan activities was $342,002 (56.1% of revenue) for the year
ended December 31, 2004 as compared to $582,466 (56.8% of revenues) for the
year ended December 31, 2003.  The reduction in cost of loan activities was
primarily due to the fewer loan closings in 2004.

     Salaries, payroll taxes and benefits were $225,707 for the year ended
December 31, 2004 as compared to $273,578 for the year ended December 31,
2003.  This decrease is due to a reduction in employees and bonuses paid.

     The Company had a net operating loss of $165,421 during the year ended
December 31, 2004 compared to a net operating loss of $155,272 during the year
ended December 31, 2003.  This was primarily due to the fact that the
Company's business slowed and fewer loans were closed.

     YEAR ENDED DECEMBER 31, 2003 VS. YEAR ENDED DECEMBER 31, 2002

     Revenues were $1,025,124 for the year ended December 31, 2003 as compared
to $1,111,031 for the year ended December 31, 2002.  The 7.7% decline in
revenue is due to a decreased number of loans closed during the year ended
December 31, 2003, compared to the prior year.  The number of loans closed in
the year ended December 31, 2003 was 258 compared to 289 loans in the prior
year.  The amount received per loan closed decreased slightly.

     The cost of loan activities was $582,466 (56.8% of revenue) for the year
ended December 31, 2003 as compared to $593,444 (53.4% of revenues) for the
year ended December 31, 2002.  The reduction in cost of loan activities was
primarily due to the fewer loan closings in 2003.

                                    9

     Salaries, payroll taxes and benefits were $273,578 for the year ended
December 31, 2003 as compared to $329,778 for the year ended December 31,
2002.  This decrease is due to a reduction in bonuses paid.

     The Company had a net operating loss of $155,272 during the year ended
December 31, 2003 compared to a net operating loss of $50,085 during the year
ended December 31, 2002.  This is due to lower margins on loans and higher
operating expenses.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital was $28,480 at December 31, 2004 compared
to $21,135 at December 31, 2003.

      Net cash used in operating activities during the year ended December 31,
2004, was $139,553 compared to $75,060 used in operating activities in the
year ended December 31, 2003.

     During the year ended December 31, 2004, the Company used $1,333 in
investing activities and in the year ended December 31, 2003 the Company used
$1,172 in investing activities.

     Cash was provided from financing activities in the amount of $114,160
during the year ended December 31, 2004 compared to $3,932 used in financing
activities in the year ended December 31, 2003.

ITEM 7.  FINANCIAL STATEMENTS.

     The financial statements are set forth on pages F-1 through F-13 hereto.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES.

     None.

ITEM 8A.  CONTROLS AND PROCEDURES.

     As of December 31, 2004, under the supervision and with the participation
of the Company's Chief Executive Officer, management has evaluated the
effectiveness of the design and operations of the Company's disclosure
controls and procedures.  Based on that evaluation, the Chief Executive
Officer concluded that the Company's disclosure controls and procedures were
effective as of December 31, 2004.  There have been no changes in internal
control over financial reporting that occurred during the fourth quarter of
the fiscal year covered by this report that have materially affected, or are
reasonably likely to affect, the Company's control over financial reporting.

ITEM 8B.  OTHER INFORMATION.

     None.






                                    10


                                 PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

     The Directors and Officers of the Company are as follows:

        Name              Age              Positions and Offices Held
        ----              ---              --------------------------

     Mark E. Massa        46       President and Director of Mountain States
                                   Lending and Director of Mountain Eagle
                                   Homes, Inc.

     Patricia A. Lowe     58       Director


     There is no family relationship between any Director or Executive Officer
of Mountain States Holdings.

     Set forth below are the names of all Directors and Executive Officers of
Mountain States Holdings, all positions and offices with us held by each such
person, the period during which he has served as such, and the principal
occupations and employment of such persons during at least the last five
years:

     MARK E. MASSA - PRESIDENT AND DIRECTOR.  Mr. Massa has served as the
President and as a Director of Mountain States Holdings since May 1998, and as
a Director of Mountain Eagle Homes, Inc. since June 2001.  From December 1991
through 1998, he worked as an independent mortgage broker providing first and
second mortgage loans for borrowers primarily in Colorado.  From 1983 to 1990,
he worked as a stock broker for several firms including J.W. Gant, Kober
Financial, and Private Investors Cartel.

     PATRICIA A. LOWE   DIRECTOR.  Ms. Lowe has served as a director of
Mountain States Holdings since November 2002.  She has served as Vice
President and Branch Manager for Broad Street Mortgage Co., Denver, Colorado
since 2001.  From 2000 until 2001, she was employed as a contract underwriter
for Flagstar in Denver, Colorado.  From 1998 until 2000, she served as Vice
President and Regional Branch Manager for Provident Funding Associates, L.P.
From 1993 until 1998 she served as Senior Vice President, Central Region for
National Mortgage Corporation.  From 1978 until 1993. she was employed by
World Savings, a/k/a World Mortgage Company, where she held several positions
the most recent of which was Vice President, Wholesale Account Executive.

     Our Directors hold office until the next annual meeting of the
shareholders and until their successors have been elected and qualified.

     The Officers of Mountain States Holdings are elected by the board of
directors at the first meeting after each annual meeting of our shareholders,
and hold office until their death, or until they shall resign or have been
removed from office.


                                    11

     We presently have no audit, compensation or nominating committee.

     The date of our next annual meeting will be determined by our board of
directors in accordance with Colorado law.

SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE

     The Company is not currently registered under Section 12 of the Exchange
Act, and so our Officers, Directors and 10% or greater shareholders are not
subject to the reporting requirements of Section 16(a) of the Exchange Act.

ITEM 10.  EXECUTIVE COMPENSATION

     Following tables set forth information regarding executive compensation
for our President and Chief Executive Officer. No other executive officer
received compensation in excess of $100,000 for any of the years ended
December 31, 2004, 2003 or 2002.

<TABLE>
<CAPTION>
                                     SUMMARY COMPENSATION TABLE

                                                             Long-Term Compensation
                                                        -------------------------------
                              Annual Compensation              Awards          Payouts
                           ------------------------    ---------------------   -------
                                                                     Securi-
                                                                      ties
                                                                     Underly-
                                               Other                   ing                 All
                                               Annual   Restricted   Options              Other
Name and Principal                             Compen-    Stock       /SARs      LTIP     Compen-
     Position        Year   Salary   Bonus     sation    Award(s)    (Number)   Payouts   sation
------------------   ----   -------  -----     ------   ----------   --------   -------   -------
<S>                  <C>    <C>      <C>       <C>      <C>          <C>        <C>       <C>
Mark E. Massa        2004   $144,000 $   -0-   $ -0-    $   -0-      $  -0-     $ -0-     $  -0-
 President and Chief 2003   $144,000 $ 23,000  $ -0-    $   -0-      $  -0-     $ -0-     $  -0-
 Executive Officer   2002   $144,000 $ 39,000  $ -0-    $   -0-      $  -0-     $ -0-     $  -0-

 </TABLE>
          OPTION/SAR GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2004

                                  % of Total
                                 Options/SARs
                 Options/         Granted to      Exercise or
                   SARs          Employees in     Base Price     Expiration
    Name         (Number)         Fiscal Year      ($/Share)        Date
    ----         --------        ------------     -----------    ----------

Mark E. Massa      -0-                -0-            -0-             -0-








                                    12


             Aggregated Option/SAR Exercises in Last Fiscal Year
                        and FY-End Option/SAR Values

                                    Securities Under-  Value of Unexer-
                Shares                lying Unexer-    cised-in-the-
               Acquired              cised Options     Money Options/
                  On                 SARs at FY-End    SARs at FY-End
               Exercise    Value     Exercisable/      Exercisable/
     Name      (Number)   Realized   Unexercisable     Unexercisable
     ----      ---------  --------  -----------------  ----------------

Mark E. Massa     -0-       -0-           -0-                -0-


     Mark Massa currently is receiving a monthly salary of $12,000, and if his
commissions from loan originations exceeds $12,000, he receives a monthly
bonus of one-half of the amount of this excess. He also receives a monthly
bonus of 5% of the commissions generated by all other loan officers.  During
2004, Mark Massa waived all of his bonuses due to the Company's cash flow
position.  As of December 31, 2004, no amounts were owed to Mark Massa for
bonuses or other compensation.

2002 EQUITY INCENTIVE PLAN

     In March 2002, the Company's Board of Directors approved the
establishment of the 2002 Equity Incentive Plan (the "Plan"), and the Plan was
approved by the shareholders in September 2002.  The Board of Directors
believes that the Plan advances the interests of the Company by encouraging
and providing for the acquisition of an equity interest in the Company by
employees, officers, directors and consultants, and by providing additional
incentives and motivation toward superior Company performance.  The Board
believes it will also enable the Company to attract and retain the services of
key employees, officers, directors and consultants upon whose judgment,
interest and special effort the successful conduct of its operations is
largely dependent.

     The Plan allows the Board, or a committee established by the Board, to
award restricted stock and stock options from time to time to employees,
officers and directors of the Company and consultants to the Company.  The
Board has the power to determine at the time an option is granted whether the
option will be an Incentive Stock Option (an option which qualifies under
Section 422 of the Internal Revenue Code of 1986) or an option which is not an
Incentive Stock Option.  However, Incentive Stock Options may only be granted
to persons who are employees of the Company.  Vesting provisions are
determined by the Board at the time options are granted.

     The Plan also provides that the Board, or a committee, may issue
restricted stock pursuant to restricted stock right agreements which will
contain such terms and conditions as the Board or committee determines.

     The total number of shares of Common Stock available for grant and
issuance under the Plan may not exceed 2,500,000, subject to adjustment in the
event of certain recapitalizations, reorganizations and similar transactions.
Options may be exercisable by the payment of cash or by other means as
authorized by the committee or the Board of Directors.


                                    13


     As of March 31, 2005, there were no options outstanding under the Plan.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The following table sets forth, as of March 28, 2005, each person known
by the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all Directors and Executive Officers individually and
all Directors and Executive Officers of the Company as a group.  Except as
noted, each person has sole voting and investment power with respect to the
shares shown.

       Name and Address         Amount of Beneficial     Percentage
     of Beneficial Owner             Ownership            of Class
     -------------------        --------------------     ----------

Mark E. Massa                        1,542,000              37.2%
7435 East Peakview Ave.
Englewood, CO  80111

Timothy J. Brasel                    1,447,500 (1)          34.9%
5770 South Beech Court
Greenwood Village, CO
  80121

Susan Brasel                           473,250 (2)          11.4%
5790 South Beech Court
Greenwood Village, CO 80121

Patricia A. Lowe                        10,000               --
7435 East Peakview Ave.
Englewood, CO  80111

All Directors and                    1,552,000              37.4%
Executive Officers as
a Group (2 persons)
__________________

(1)  Includes 775,000 shares held by Brasel Family Partners, Ltd., for which
     Mr. Brasel serves as general partner; 350,000 shares held by Mr.
     Brasel's children; 197,500 shares held by the Charitable Remainder
     Trust of Timothy J. Brasel; and 125,000 shares which represents 50%
     of the shares held by LaMirage Trust.

(2)  Includes 200,000 shares held by Nasus Lesarb Ltd., 250,000 shares
     held by LaMirage Trust, and 23,250 shares held by the Charitable
     Remainder Trust of Susan Anne Brasel.

     There are no known agreements, the operation of which may at a subsequent
date result in a change in control of Mountain States Holdings.




                                    14




<TABLE>
<CAPTION>
                         EQUITY COMPENSATION PLAN INFORMATION

===================================================================================
Plan category   Number of securities    Weighted average      Number of securities
                to be issued upon ex-   exercise price of     remaining available
                cise of outstanding     outstanding options   for future issuance
                options, warrants       warrants and rights
                and rights
--------------  ---------------------   -------------------   --------------------
<S>             <C>                     <C>                   <C>
Equity compen-
sation plans
approved by
securityholders          -0-                   -0-                 2,500,000
----------------------------------------------------------------------------------
Equity compen-
sation plans
not approved by
securityholders          -0-                   -0-                   -0-
----------------------------------------------------------------------------------
Total                    -0-                   -0-                 2,500,000
==================================================================================
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     During November 1990, Mark Massa purchased 1,750,000 shares of our common
stock for a total consideration of $1,000.

     Effective September 1, 1999, we entered into a lease with Mark Massa for
an office condominium which was owned by Mr. Massa.  The initial monthly rent
was $2,500.  On November 1, 2000, a new lease was entered into which requires
us to pay $4,000 per month in rent plus all operating expenses including
utilities, property taxes, maintenance and association fees.  This lease was
amended in August 2004, reducing the monthly rent to $3,500.  This lease
expires November 1, 2008.  Our board of directors is of the opinion that the
terms of this lease are at least as favorable to us as could have been
obtained from unaffiliated parties.

     On January 1, 2001, Timothy J. Brasel and his relatives purchased
1,500,000 shares of our common stock for a total consideration of $30,000.
These shares were issued in the following names and amounts:

         Brasel Family Partners, Ltd.           775,000 Shares
         Nasus Lesarb, LTD                      375,000 Shares
         Tyler Jay Brasel                       100,000 Shares
         Colton Russell Brasel                  100,000 Shares
         Justin Thomas Brasel                   150,000 Shares

     During June 2001, three trusts for Timothy J. Brasel and his relatives
have loaned Mountain States Holdings a total of $80,000 to help fund the
purchase of seven undeveloped lots in Aurora, Colorado.  These loans bear
interest at nine percent (9%) and were paid in full during the year ended
December 31, 2002.


                                    15


     During the year ended December 31, 2003, we paid Tim Brasel a total of
$30,000 in consulting fees for services in connection with evaluating and
negotiating acquisitions - none of which were successfully completed.

      During April 2004, we sold a total of 200,000 shares of our common stock
at a price of $.35 per share to four persons who were employees, officers and
directors and in connection therewith such persons agreed to cancel their
existing stock options.  Included in the shares issued were 70,000 shares
issued to Mark Massa, our President and a director and 10,000 shares issued to
Patricia Lowe, a director.

     During December 2004, we wold 150,000 shares of our common stock to five
accredited investors at a price of $.50 per share.  Included in the investors
were the following persons who are principal shareholders:

          Charitable Remainder Trust of
            Susan Anne Brasel                       23,250 Shares
          Charitable Remainder Trust of
            Timothy J. Brasel                       22,500 Shares




































                                    16



                                     PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits.

EXHIBIT
NUMBER    DESCRIPTION                   LOCATION
-------   -----------                   --------

  3       Articles of Incorporation     Incorporated by reference to Exhibit
          and Bylaws                    3 to the Registrant's Form SB-2
                                        Registration Statement (SEC File
                                        No. 333-67174)

  3.1     Articles of Amendment to      Incorporated by reference to Exhibit
          Articles of Incorporation     3.1 to the Registrant's Form SB-2
                                        Registration Statement (SEC File
                                        No. 333-67174)

  3.2     Articles of Incorporation     Incorporated by reference to Exhibit
          of Mountain Eagle Homes,      3.2 to the Registrant's Form SB-2
          Inc.                          Registration Statement (SEC File
                                        No. 333-67174)

  3.3     Articles of Amendment to      Incorporated by reference to Exhibit
          Articles of Incorporation     3.3 to the Registrant's Form 10-KSB
          changing name to Mountain     for the year ended December 31, 2002
          States Holdings, Inc.

 10.1     Promissory Note for $40,000   Incorporated by reference to Exhibit
          to the Charitable Remainder   10.2 to the Registrant's Form SB-2
          Trust of Timothy J. Brasel    Registration Statement (SEC File
                                        No. 333-67174)

 10.2     Promissory Note for $20,000   Incorporated by reference to Exhibit
          to the Charitable Remainder   10.3 to the Registrant's Form SB-2
          Trust of Susan A. Brasel      Registration Statement (SEC File
                                        No. 333-67174)

 10.3     Promissory Note for $20,000   Incorporated by reference to Exhibit
          to the Charitable Remainder   10.4 to the Registrant's Form SB-2
          Trust of Mary Jane Brasel     Registration Statement (SEC File
                                        No. 333-67174)

 10.4     Office Lease                  Incorporated by reference to Exhibit
                                        10.5 to the Registrant's Form SB-2
                                        Registration Statement (SEC File
                                        No. 333-67174)

 10.5     Agreement with Timothy J.     Incorporated by reference to Exhibit
          Brasel                        10.6 to the Registrant's Form SB-2
                                        Registration Statement (SEC File
                                        No. 333-67174)

                                    17



 10.6     2002 Equity Incentive Plan    Incorporated by reference to Exhibit
                                        10.6 to Registrant's Form 10-KSB
                                        for the year ended December 31,
                                        2002

 21       Subsidiaries of the           Filed herewith electronically
          Registrant

 31       Certification of Chief        Filed herewith electronically
          Executive Officer and
          Principal Financial
          Officer Pursuant to
          Section 302 of the
          Sarbanes-Oxley Act of 2002

 32       Certification of Chief        Filed herewith electronically
          Executive Officer and
          Principal Financial
          Officer Pursuant to
          Section 18 U.S.C.
          Section 1350


     (b)  The Company filed no Reports on Form 8-K during the last quarter of
the period covered by this Report.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

     The aggregate fees billed for each of the last two fiscal years ended
December 31, 2004 and 2003 by Schumacher & Associates, Inc. for professional
services rendered for the audit of the Company's annual financial statements
and review of financial statements included in the Company's quarterly reports
on Form 10-QSB or services that were reasonably related to the performance of
the audit or review of the financial statements were $17,000 and $16,500,
respectively.

AUDIT-RELATED FEES

     None.

ALL OTHER FEES

      The aggregate fees billed for other services rendered by Schumacher &
Associates, Inc. for the two fiscal years ended December 31, 2004 and 2003
were $0 and $0, respectively.

AUDIT COMMITTEE PRE-APPROVAL POLICY

     The Company does not have an audit committee.




                                    18



                         MOUNTAIN STATES HOLDINGS, INC.
                         AND CONSOLIDATED SUBSIDIARY

                         DECEMBER 31, 2004 AND 2003

                                   CONTENTS


                                                                       Page

Report of Independent Registered Public Accounting Firm .............. F-1

Financial statements:

     Balance Sheets .................................................. F-2

     Statements of Operations ........................................ F-3

     Statement of Changes in Shareholders' Equity .................... F-4

     Statements of Cash Flows ........................................ F-5

     Notes to Financial Statements ................................... F-6


































                                    19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Board of Directors
Mountain States Holdings, Inc.
Englewood, Colorado


We have audited the accompanying balance sheet of Mountain States Holdings,
Inc. and Consolidated Subsidiary as of December 31, 2004, and the related
statements of operations, shareholders' equity and cash flows for the two
years ended December 31, 2004 and 2003.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountain States Holdings,
Inc. and Consolidated Subsidiary as of December 31, 2004, and the results of
its operations and its cash flows for the two years ended December 31, 2004
and 2003, in conformity with accounting principles generally accepted in the
United States of America.


/s/ Schumacher & Associates, Inc.

Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, CO  80211

February 3, 2005








                                     F-1



                         MOUNTAIN STATES HOLDINGS, INC.
                         CONSOLIDATED BALANCE SHEETS

                                    ASSETS
                                                December 31,   December 31,
                                                   2004           2003
                                                ------------   ------------
Current Assets
 Cash and Equivalents                            $  25,179      $  51,905
 Stock Subscriptions Receivable                     46,500           -
 Prepaid expenses and other current assets           6,319          9,954
                                                 ---------      ---------
Total Current Assets                                77,998         61,859

Property & Equipment, net of accumulated
 depreciation of $96,264 and $79,924 at
 December 31, 2004 and December 31, 2003
 respectively (Note 6)                              44,005         59,012
Capital Leases, net of accumulated
 amortization of $ 7,191 and $2,397 at
 December 31, 2004 and December 31, 2003            16,778         21,572
Investment                                         138,486        139,539
                                                 ---------      ---------
Total Assets                                     $ 277,267      $ 281,982
                                                 =========      =========

                      LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
 Accounts payable                                $  14,217      $  13,471
 Accounts payable, related party                     7,000           -
 Accrued expenses                                    3,487         22,783
 Line of credit                                     20,062           -
 Obligation under capital lease, current portion     4,752          4,470
                                                 ---------      ---------
Total Current Liabilities                           49,518         40,724
                                                 ---------      ---------
Obligation under capital lease, net of
 current portion                                    10,883         15,567
                                                 ---------      ---------
Total Liabilities                                   60,401         56,291
                                                 ---------      ---------
Commitments and contingencies (Notes 1, 4,
 5, 7, 8, 9 and 10)

Stockholders' Equity
 Preferred stock, no par value, 5,000,000
  share authorized, none issued and outstanding       -              -
 Common stock, no par value, 50,000,000 shares
 authorized, 4,150,000 issued and outstanding
 at December 31, 2004 and 3,800,000 issued and
 outstanding at December 31, 2003                  497,455        337,705
Additional paid-in capital                         126,837        126,837
Accumulated (deficit)                             (407,426)      (238,851)
                                                 ---------      ---------
Total Stockholders' Equity                         216,866        225,691
                                                 ---------      ---------
Total Liabilities & Stockholders' Equity         $ 277,267      $ 281,982
                                                 =========      =========
The accompanying notes are an integral part of the financial statements.

                                     F-2


                         MOUNTAIN STATES HOLDINGS, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                                Year Ended      Year Ended
                                                December 31,    December 31,
                                                   2004            2003
                                                ------------    ------------

Fees from loan activities                       $  610,042      $1,025,124
Cost of loan activities                            342,002         582,466
                                                ----------      ----------
Gross Profit                                       268,040         442,658
                                                ----------      ----------
Operating Expenses
 Salaries, payroll taxes and benefits              225,707         273,578
 Options Granted                                      -             52,000
 Stock issued for services                          14,750            -
 Depreciation                                       21,134          20,554
 Advertising & Promotion                            12,509          18,807
 Rent expense                                       47,200          48,912
 Other operating expense                           112,161         184,079
                                                ----------      ----------
Total Operating Expenses                           433,461         597,930
                                                ----------      ----------
Net Operating Income (Loss)                       (165,421)       (155,272)
                                                ----------      ----------
Other Income (Expenses)
 Interest income                                         2             402
 Interest (expense)                                 (2,103)         (1,183)
 (Loss) from joint venture                          (1,053)           (982)
                                                ----------      ----------
Total Other Income (Expenses)                       (3,154)         (1,763)
                                                ----------      ----------
Net (Loss)                                      $ (168,575)     $ (157,035)
                                                ==========      ==========
Net (Loss) per Common Share                     $    (0.04)     $    (0.04)
                                                ==========      ==========
Weighted Average Number of Shares
 Outstanding                                     3,950,000       3,800,000
                                                ==========      ==========















The accompanying notes are an integral part of the financial statements.

                                     F-3



                         MOUNTAIN STATES HOLDINGS, INC.
                 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                From January 1, 2003 through December 31, 2004
<TABLE>
<CAPTION>

                                                Additional
                                 Common      Stock      Paid-in    Accumulated
                               No./Shares    Amount     Capital      Deficit      Total
                               -----------  ---------  ---------   -----------   --------
<S>                            <C>          <C>        <C>         <C>           <C>
Balance at January 1, 2003      3,800,000   $337,705   $ 74,837    $ (81,816)    $330,726

Issuance of options                  -          -        52,000         -          52,000

Net (loss) for the year
 ended December 31, 2003             -          -          -        (157,035)    (157,035)
                                 ---------   --------  --------   ----------     --------
Balance at December 31, 2003     3,800,000    337,705   126,837     (238,851)     225,691

Issuance of common stock
 at $.42 per share                 200,000     84,750      -            -          84,750

Issuance of common stock
 at $.50 per share                 150,000     75,000      -            -          75,000

Net (loss) for the year
 ended December 31, 2004              -          -         -        (168,575)    (168,575)
                                 ---------   --------  --------   ----------    ---------

Balance at December 31, 2004     4,150,000   $497,455  $126,837   $(407,426)    $ 216,866
                                 =========   ========  ========   =========     =========

</TABLE>




















The accompanying notes are integral part of the financial statements

                                     F-4



                         MOUNTAIN STATES HOLDINGS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  December 31,   December 31,
                                                     2004           2003
                                                  ------------   ------------
Cash flows from Operating Activities:
 Net (Loss)                                       $ (168,575)    $ (157,035)

Adjustments to reconcile net (loss) to net
 cash (used in) operating activities:
  Depreciation and amortization                       21,134         20,554
  Loss on investment                                   1,053            982
  Issuance of stock options                             -            52,000
  Stock issued for services                           14,750           -

(Increase) decrease in:
 Other                                                 3,635         (6,937)

Increase (decrease) in:
 Accounts payable and accrued expenses               (11,550)        15,376
                                                  ----------     ----------
Net cash (used in) Operating Activities             (139,553)       (75,060)

Cash flow from Investing Activities:
 (Acquisition) of property and equipment              (1,333)        (1,172)
 (Acquisition) of capital lease
                                                  ----------     ----------
Net Cash (Used in) Investing Activities               (1,333)        (1,172)
                                                  ----------     ----------
Cash flows from Financing Activities:
 Issuance of capital stock                            98,500           -
 Increase (decrease) in capital lease obligation      (4,402)        (3,932)
 Draws (payments) on line of credit, net              20,062           -
                                                  ----------     ----------
Net Cash Provided by (Used in) Financing
 Activities                                          114,160         (3,932)
                                                  ----------     ----------
Net (Decrease) in Cash                               (26,726)       (80,164)

Cash, beginning of period                             51,905        132,069
                                                  ----------     ----------
Cash, end of period                                   25,179         51,905
                                                  ==========     ==========
Interest paid                                          2,103          1,183
                                                  ==========     ==========
Income tax paid                                         -              -
                                                  ==========     ==========
Non cash - capital lease                                -            23,969
                                                  ==========     ==========


The accompanying notes are an integral part of the financial statements




                                     F-5



                         MOUNTAIN STATES HOLDINGS, INC.
                  Notes to Consolidated Financial Statements
                          December 31, 2004 and 2003

(1)  Summary of Significant Accounting Policies

This summary of significant accounting policies of Mountain States Holdings,
Inc., (Company) and its wholly owned subsidiaries, Mountain States Lending,
Inc. and Mountain Eagle Homes, Inc., and 50% owned Eaglespan Homes, LLC 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.

     (a)  Organization and Principles of Consolidation

     The consolidated financial statements include the accounts of the
companies listed above for the years ended December 31, 2004 and December 31,
2003 or since the date of inception or acquisition. All intercompany account
balances have been eliminated in the consolidation.

     The Company was incorporated under the laws of the State of Colorado on
September 12, 1990. During January 2001, the Company changed its name from
Slam Dunk Enterprises, Inc. to Mountain States Lending Inc. During July 2002,
articles of amendment were filed with the Colorado Secretary of State changing
its name to Mountain States Holding, Inc. and increasing the authorized common
stock from 20,000,000 to 50,000,000 shares. The primary business activity is
loan origination and brokerage. The Company does not customarily service any
of the loans it originates.

     During September 2002, the Company formed a wholly-owned subsidiary named
Mountain States Lending, Inc. On December 31, 2002, the Company transferred
its assets and liabilities to Mountain States Lending, Inc in exchange for
1,000 shares of common stock.

     Mountain Eagle Homes, Inc. (MEH) was incorporated under the laws of the
State of Colorado on June 1, 2001 for the purpose of manufacturing homes.
During June 2001, MEH and another entity formed Eaglespan Homes, LLC and MEH
invested $137,500 in and loaned $50,000 to Eaglespan Homes, LLC to purchase
real estate. During the year ended December 31, 2002, Eaglespan Homes sold an
investment purchased in 2001 resulting in a net gain for the company of
$13,949. Other operations were minimal for Mountain Eagle Homes and Eaglespan
Homes. Eaglespan has been accounted for using the equity method.

     (b)  Per Share Information

Per share information is determined using the weighted average number of
shares and common share equivalents outstanding during the periods indicated.
Stock options outstanding have not been included in the per share computation
because inclusion would be anti-dilutive or immaterial.






                                     F-6


      (c)  Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation.
Depreciation is computed using principally accelerated methods over the useful
lives of the assets ranging from three to ten years. Building improvements
within the Company's office space are being depreciated over 15 years on the
straight-line method, based on the anticipated renewal of its office lease.
Expenditures for maintenance and repairs which do not materially extend the
useful lives of property and equipment are charged to operations.

     (d)  Fair Value of Financial Instruments

The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair
Value of Financial Instruments." SFAS 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate
that value. The carrying amount of the Company's cash, cash equivalents, stock
subscriptions receivable, and payables approximate their estimated fair values
due to their short-term maturities.

     (e)  Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of temporary cash investments and cash
equivalents. As of December 31, 2004, the Company had no amounts of cash or
cash equivalents in financial institutions in excess of amounts insured by
agencies of the U.S. Government.

     (f)  Cash and Cash Equivalents

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

     (g)  Advertising & Promotion

     Advertising expenses including marketing and promotional expenses
associated with its operations are expensed as incurred. During the years
ended December 31, 2004 and 2003, advertising and promotion expenses totaled
$12,509 and $18,807, respectively.

     (h)  Use of Estimates in the Preparation of Financial Statements

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

     (i)  Revenue Recognition

Fees from loan activities are recorded when the loan closing or settlement
occurs. The decision rights of the borrower may extend the settlement date 3-5
days after the closing event. If recission rights apply, fees are recorded
once the recission period ends. Payment of the Company's fees may be at
closing and/or directly from the investor.



                                     F-7


      (j)  Income Taxes

The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) 109, Accounting for Income Taxes.  The statement
requires recognition of deferred tax assets and liabilities for temporary
differences between the tax bases of assets and liabilities and the amounts at
which they are carried in the financial statements, the effect of net
operating losses, based upon the enacted tax rates in effect for the year in
which the differences are expected to reverse.  A valuation allowance is
established when necessary to reduce deferred tax assets to the amount
expected to be realized.

     (k)  Related Party Transactions

The Company leases space in an office condominium complex from its president
who owns the unit. The lease commenced September 1, 1999, and was renewed to
November 1, 2008. At January 1, 2004, the lease required $4,000 per month in
rent plus all operating expenses including utilities, property taxes,
maintenance and association fees. Effective August 1, 2004, the monthly rent
changed to $3,500. At December 31, 2004 the Company owed $7,000 related to the
lease.

      (l)  Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued FAS
123(R) Share-Based Payments that, upon implementation, will impact the
Company's net earnings and earning per share, and change the classification of
certain elements of the statement of cash flows. FAS 123(R) requires stock
options and other share-based payments made to employees to be accounted for
as compensation expense and recorded at fair value, and to reflect the related
tax benefit received upon exercise of the options in the statement of cash
flows as a financing activity inflow rather than an adjustment of operating
activity as currently presented. Consistent with the provisions of the new
standard, the Company intends to adopt FAS 123(R) in the third quarter of
2005, and to implement it on a prospective basis.

There were various other accounting standards and interpretations issued
during 2004 and 2003, none of which are expected to have a material impact on
the Company's financial position, operations or cash flows.

      (m)  Impairment of Long-Lived Assets

The Company performs an assessment for impairment whenever events or changes
in circumstances indicate that the carrying amount of a long-lived asset may
not be recoverable.  If the net carrying value exceeds the estimated
undiscounted future net cash flows, then impairment is recognized to reduce
the carrying value to the estimated fair value.

     (n)  Investment in equity securities

Investments in equity securities include the Company's ownership in affiliated
companies accounted for under the equity method of accounting. Under this
method of accounting, which generally applies to investments that represent a
20% to 50% ownership of the equity securities of the investees, the
Corporation's share of the earnings or losses of the affiliated companies is
included in other income and expenses. If declines in the value of investments
accounted for under either the equity method or FAS 115 are determined to be
other than temporary, a loss is recorded in earnings in the current period.
The Corporation makes such determinations by considering, among other factors,

                                     F-8

the length of time the fair value of the investment has been less than the
carrying value, future business prospects for the investee, information
regarding the market and industry trends for the investee's business, and
investment analyst reports, if available.

      (o)  Stock-based compensation

The Company measures compensation cost for stock-based compensation plans
using the intrinsic value method of accounting as prescribed in Accounting
Principles Board Opinion 25, Accounting for Stock Issued to Employees, and
related interpretations, for the years presented. The Corporation has adopted
those provisions of FAS 123, Accounting for Stock-Based Compensation, which
require disclosure of the pro forma effects on net earnings and earnings per
share as if compensation cost had been recognized based upon the fair
value-based method at the date of grant for options awarded.

In December 2004, the Financial Accounting Standards Board (FASB) issued FAS
123(R) Share-Based Payments, that, upon implementation, will impact the
Company's net earnings and earning per share, and change the classification of
certain elements of the statement of cash flows. FAS 123(R) requires stock
options and other share-based payments made to employees to be accounted for
as compensation expense and recorded at fair value, and to reflect the related
tax benefit received upon exercise of the options in the statement of cash
flows as a financing activity inflow rather than an adjustment of operating
activity as currently presented. Consistent with the provisions of the new
standard, the Company intends to adopt FAS 123(R) in the third quarter of
2005, and to implement it on a prospective basis. Information about the fair
value of stock options under the Black-Scholes model and its pro forma impact
on our net earnings and earnings per share for the year ended December 31,
2004 can be found in Note 4.

     (p)  Reclassifications

Certain amounts in the prior period consolidated financial statements have
been reclassified to conform to the current period presentation, with no
effect on our consolidated financial position or results of operations.

     (q)  Other

The Company has selected December 31, as its fiscal year end.

The Company has paid no dividends during the years ended December 31, 2004 and
2003.

All of the Company's assets are located in the United States.

(2)  Income Taxes

As of December 31, 2004, the Company had an estimated net operating loss carry
forward of $330,000 to offset future taxable income. The net operating loss
carry forward, if not used, will expire in various years through 2024, and may
be restricted if there is a change in ownership. No deferred income taxes have
been recorded because of the uncertainty of future taxable income to be
offset.


                                     F-9


Significant components of the Company's net deferred income tax asset are as
follows:

                                                     December 31,
                                                 2004         2003
                                               ---------    ---------

     Net operating losses carry forward        $  61,000    $  35,000
     Deferred income tax allowance               (61,000)     (35,000)
                                               ---------    ---------
     Net deferred income tax asset                               -
                                               =========    =========

The reconciliation of income tax (benefit) computed at the federal statutory
rate to income tax expense (benefit) is as follows:

     Tax (benefit) at Federal statutory rate            (15.00)%
     State tax (benefit) net of Federal benefit          (3.50)
     Valuation allowance                                 18.50
                                                        ------
     Tax provision (benefit)                             00.00

(3)  Capital Stock

At December 31, 2004, the authorized capital of the Corporation was composed
of 50,000,000 shares of no par common stock and 5,000,000 shares of no par
preferred stock.  At December 31, 2004, 4,150,000 shares of common stock were
outstanding.   During April 2004, the Company sold to certain officers,
directors and employees 200,000 shares of its common stock at an offering
price of $.35 per share for a total of $70,000 cash.  Compensation of $14,750
was recorded related to these shares.  In addition, 100,000 stock options
granted in 2003 were cancelled in connection with this stock issuance.  During
December 2004, the Company sold 150,000 shares of its common stock at an
offering price of $.50 per share, for a total of $75,000.  Cash of $28,500 was
received and $46,500 is included in stock subscriptions receivable at December
31, 2004.  The $46,500 in stock subscriptions receivable was received in
January 2005. No shares of the preferred stock were outstanding at December
31, 2004.

(4)  Stock-Based Compensation

     Equity Incentive Plan

Effective August 30, 2002, shareholders approved the Company's 2002 Equity
Incentive Plan.  The Plan permits the grant of 2,500,000 shares of common
stock in the form of incentive stock options, non-qualified stock options,
restricted stock awards, stock appreciation rights, stock bonuses, and other
stock grants to certain key employees and consultants of the Company.  During
the year ended December 31, 2003, 100,000 options were granted.  There were no
options issued or outstanding for the year ended December 31, 2004.

As permitted by FASB Statement No. 123, Accounting for Stock-Based
Compensation, the Company has elected to follow Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related
interpretations in accounting for its employee option plans. Under APB 25,
compensation expenses are recognized at the time of option grant if the
exercise price of the Company's employee stock option is below the fair market
value of the underlying common stock on the date of the grant.

                                     F-10

The Company's Board of Directors has granted non-qualified stock options and
warrants to officers, employees and a non-employee of the Company.  The
following is a table of outstanding options and changes during 2004 and 2003:

                                                       Weighted
                                            Non-       Average
                                            Employee   Employee   Exercise
                                            Options    Options    Price
                                            --------   --------   --------

Options Outstanding, December 31, 2002         -          -          -
Options granted:
 Employees                                   55,000                 1.00
 Non-employees                                 -        45,000      1.00
Options expired                                -          -          -
Options exercised                              -          -          -
                                            -------    -------     -----
Options Outstanding, December 31, 2003       55,000     45,000      1.00

Options granted                                -          -          -
Options cancelled                           (55,000)   (45,000)     1.00
                                            -------    -------     -----
Options outstanding, December 31, 2004         -          -          -
                                            =======    =======     =====

Pro Forma Stock-Based Compensation Disclosures

The Company applies APB Opinion 25 and related interpretations in accounting
for its stock options and warrants which are granted to employees.
Accordingly, compensation cost has been recognized for grants of options to
employees since the exercise prices were lower than the fair value of the
Company's common stock on the grant dates. Compensation of $38,250 has been
recorded for the estimated fair value of options granted to non-employees.
Had compensation cost for employees been determined based on an estimate of
the fair value consistent with the method of SFAS No. 123 at the grant dates
for awards under those plans, the Company's net loss and loss per share would
have been increased to the pro forma amounts indicated below.

                                                  Year Ended December 31,
                                                     2004          2003
                                                  ---------      ---------
Net (loss) applicable to common stockholders
  As reported                                     $(168,575)     $(157,035)
  Pro forma                                        (168,575)      (190,035)

Net (loss) per share applicable to common
stockholders
  As reported                                     $    (.04)     $    (.04)
  Pro forma                                            (.04)          (.05)








                                    F-11



Options granted during 2003 consist of:

                                  Weighted average fair    Weighted average
    Year and Type                  value at grant date      exercise price
-----------------------------     ---------------------    ----------------

Year ending December 31, 2003:
 Exercise price equals fair value:         -                      -
 Fair value exceeds exercise price:       1.25                   1.00

The fair value of each option was computed using the Black-Scholes method
using the following weighted-average assumptions:

     Expected Volatility:          85%
     Risk-free interest rate:     1.69%
     Expected Dividends:           -
     Expected Term in Years:       5

(5)  Leases

Effective September 1, 1999, the Company entered into an operating lease with
its president for office space facilities. Initial monthly rental payments
were $2,500 plus operating costs. Effective November 1, 2000, the operating
lease was renewed with monthly rental payments increasing to $4,000 per month,
expiring October 2004. Effective August 1, 2004, the operating lease was
amended reducing the monthly payments to $3,500.  Effective November 1, 2004,
the operating lease was renewed with monthly rental payments of $3,500,
expiring November 1, 2008. The Company also has an equipment lease, which
requires monthly payments of $390 for sixty months expiring in 2005. The
Company also entered into a capital lease in January 2003 for certain office
equipment requiring payments of $465 for sixty months expiring in 2007.

Future minimum rentals under all operating leases with terms exceeding twelve
months are follows:

             Year ending
             December 31,
             ------------

                 2005       $ 49,140
                 2006         47,580
                 2009         47,580
                 2010         35,000
                            --------
                 Total      $179,300
                            ========

Rent expenses for the years ended December 31, 2004 and 2003 totaled
approximately $47,200 and $48,912, respectively, of which $45,500 and $48,000,
respectively, was to a related party.





                                    F-12





(6)  Property and Equipment

A summary of the Company's investment in property, equipment accumulated
depreciation is as follows:

                                                     December      December
                                                     31, 2004      31, 2003
                                                    ----------    ----------
Building improvements                               $    9,468    $   9,468
Vehicle                                                 36,000       36,000
Equipment                                               94,801       93,468
Capital Lease                                           23,969       23,969
                                                    ----------    ---------
  Total property and equipment                         164,238      162,905
Less accumulated depreciation                         (103,455)     (82,321)
                                                    ----------    ---------
Net Property and Equipment                          $   60,783    $  80,584
                                                    ==========    =========

(7)  Loan Officer Agreements

The Company has entered into agreements with its loan officers whereby the
loan officers receive commissions, varying from 75% to 85% of loan revenues
remaining after any outstanding due and payable charges by lender at time of
closing. These agreements may de terminated with 15 days notice to the other
party.

(8)  Line of Credit and Notes Payable

The Company maintains a $50,000 line of credit with a financial institution.
At December 31, 2004, the unused portion of the line was $29,938.  The line is
uncollateralized and had an interest rate of 3.75% at December 31, 2004.
Interest is charged monthly and a variable payment is required each month. At
December 31, 2004 and December 31, 2003, the Company owed $20,062 and $0,
respectively, on this line.

(9)  Joint Venture

In June 2001, the Company's subsidiary, Mountain Eagle Homes, Inc. entered
into a joint venture agreement with another entity to purchase, develop and
sell property. Mountain Eagle Homes, Inc. is a 50% partner. At December 31,
2004 and 2003, the company had invested a total of $138,486 and $139,539,
respectively, to this joint venture, primarily for the purpose of investing in
real estate in the Denver area. During the years ended December 31, 2004 and
2003, Mountain Eagle Homes recorded operating losses of $ 1,053 and $982,
respectively, from this investment.

(10) Commitments

Effective October 1, 2001, the Company entered into a two year agreement with
a shareholder to provide management services to the manufacturing home segment
of the business. The shareholder is to be paid 30% of any profits generated
from the sale of manufactured homes. During the years ended December 31, 2004
and 2003, this shareholder was paid consulting fees of $0 and $27,000,
respectively.


                                     F-13



                                   SIGNATURES

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

                                    MOUNTAIN STATES HOLDINGS, INC.


Dated:  March 30, 2004              By:/s/ Mark E. Massa
                                       Mark E. Massa, President

     In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.


       Signature                    Capacity                    Date



/s/ Mark E. Massa              President and Director       March 30, 2005
Mark E. Massa



/s/ Patricia A. Lowe           Director                     March 30, 2005
Patricia A. Lowe