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, 2003

                                    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 1, 2004, 3,800,000 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 $475,000.

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.  $1,025,124.

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.  As of
December 31, 2003, the only revenue generated in EagleSpan was approximately
$14,000 which resulted from the purchase and sale of a townhome that was in
foreclosure.

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 2002, FHA loans comprised approximately 25% 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 2002, VA loans comprised
approximately 2% 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 three full-
time and two 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
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

                                       3

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 five full-time employees, including two full-time loan
officers.  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
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


                                       4


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
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

                                       5

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 3,800,000 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.

     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

                                       6

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 3,800,000 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

     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 $4,000.  The lease expires on September 1,
2004.

ITEM 3.  LEGAL PROCEEDINGS.

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

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, 2003.



                                       7



                                   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, 2002                   --       --
             June 30, 2002                    --       --
             September 30, 2002              $1.00    $ .75
             December 31, 2002               $1.12    $1.05

             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

     (b)  APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK.  The number of
holders of record of the Company's common stock at March 10, 2004, was
approximately 80.  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 SECURITIES. During the quarter ended December 31, 2003,
the Company did not sell any securities which were not registered under the
Securities Act of 1933, as amended.

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.


                                       8


RESULTS OF OPERATIONS

     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.

     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.

     YEAR ENDED DECEMBER 31, 2002 VS. YEAR ENDED DECEMBER 31, 2001

     Our revenues decreased from $1,188,112 in the year ended December 31,
2001 to $1,111,031 in the year ended December 31, 2002, a 6% decrease.  The
decrease was due to the decrease in loan closings which was due to the fact
that we had one less loan officer during 2002.  During the year ended December
31, 2001, we closed 354 loans and during the year ended December 31, 2002, we
closed 289 loans.

     The cost of loan activities increased from $568,807 in the year ended
December 31, 2001, to $593,444 in the year ended December 31, 2002, a 4%
increase.  This cost primarily represents the amounts paid as commissions to
the loan officers.  Mark Massa, our President, originates approximately 25% to
30% of our loans and his salary and bonuses are included under the salaries
line item in operating expenses.  The remaining loans were originated by
independent loan officers.

     Our operating expenses decreased from $625,047 in the year ended December
31, 2001 to $567,672 in the year ended December 31, 2002, a 9% decrease.  This
decrease was due to the lower level of loan activity.  This amount also
includes the compensation paid to our President which decreased from $283,000
in 2001 to $183,000 in 2002.

     We had a net operating loss of $50,085 in the year ended December 31,
2002 compared to a net operating loss of $5,742 in the year ended December 31,
2001.  The larger operating loss in the most recent year was primarily
attributable to the fact that the revenues from loan closings dropped $77,081
while the costs directly associated with the loans increased by approximately
$24,600.  Other operating expenses also increased $29,650 due in part to
expenses incurred in evaluating acquisition candidates and financing
alternatives.

                                       9

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital was $21,135 at December 31, 2003 compared
to $114,208 at December 31, 2002.

     Net cash used in operating activities during the year ended December 31,
2003, was $75,060 compared to $15,870 used in operating activities in the year
ended December 31, 2002.

     During the year ended December 31, 2003, the Company used $25,141 in
investing activities whereas in the year ended December 31, 1002 the Company
was provided $26,131 cash from investing activities.

     Cash was provided from financing activities in the amount of $20,037
during the year ended December 31, 2003 compared to $61,088 provided during
the year ended December 31, 2002.

ITEM 7.  FINANCIAL STATEMENTS.

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

ITEM 8A.  CONTROLS AND PROCEDURES.

     As of December 31, 2003, 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, 2003.  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.





                                       10



<PAGE>
                                   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        45       President and Director of Mountain States
                                   Lending and Director of Mountain Eagle
                                   Homes, Inc.

     Patricia A. Lowe     57       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.

     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.

                                       11


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, 2003, 2002 or 2001.

<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        2003   $144,000 $ 23,000  $ -0-    $   -0-      $  -0-     $ -0-     $  -0-
 President and Chief 2002   $144,000 $ 39,000  $ -0-    $   -0-      $  -0-     $ -0-     $  -0-
 Executive Officer   2001   $144,000 $139,000  $ -0-    $   -0-      $  -0-     $ -0-     $  -0-

______________

(1) Represents S Corporation distributions.

 </TABLE>
         OPTION/SAR GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2003

                                  % 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
2002 and 2003, Mark Massa waived a portion of the bonuses due to the Company's
cash flow position.  As of December 31, 2003, 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.

     As of March 31, 2004, there were options outstanding under the Plan to
purchase an aggregate of 100,000 shares of common stock with an exercise price
of $1.00 per share.

                                       13


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

     The following table sets forth, as of March 15, 2003, 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                        1,472,000              38.7%
7435 East Peakview Ave.
Englewood, CO  80111

Timothy J. Brasel                    1,425,000 (1)          37.5%
5770 South Beech Court
Greenwood Village, CO
  80121

Susan Brasel                           450,000 (2)          11.8%
5790 South Beech Court
Greenwood Village, CO 80121

Patricia A. Lowe                        10,000 (3)           --
7435 East Peakview Ave.
Englewood, CO  80111

All Directors and                    1,482,000              38.7%
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; 175,000 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. and 250,000 shares
     held by LaMirage Trust.

(3)  Represents 10,000 shares underlying currently exercisable options.

     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        100,000                $1.00                2,400,000
----------------------------------------------------------------------------------
Equity compen-
sation plans
not approved by
securityholders          -0-                   -0-                   -0-
----------------------------------------------------------------------------------
Total                  100,000                $1.00                2,400,000
==================================================================================
</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
expires October 31, 2004.  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.

      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.


                                       15




<PAGE>
                                    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)

 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


                                       16

 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, 2003 and 2002 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 $16,500 and $15,200,
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, 2003 and 2002
were $0 and $0, respectively.

AUDIT COMMITTEE PRE-APPROVAL POLICY

     The Company does not have an audit committee.




                                       17



<PAGE>
                        MOUNTAIN STATES HOLDINGS, INC.
                        AND CONSOLIDATED SUBSIDIARIES

                            FINANCIAL STATEMENTS

                                                                     Page

Report of Independent Certified Public Accountants ................  F-2

Consolidated Financial Statements:

   Consolidated Balance Sheets ....................................  F-3

   Consolidated Statements of Operations ..........................  F-4

   Consolidated Statement of Changes in Stockholder's Equity ......  F-5

   Consolidated Statements of Cash Flows ..........................  F-6

   Notes to Consolidated Financial Statements .....................  F-7





































                                       F-1



             REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





Board of Directors
Mountain States Holdings, Inc. &
  Consolidated Subsidiaries
Englewood, Colorado

We have audited the consolidated balance sheets of Mountain States Holdings,
Inc. and Consolidated Subsidiaries, as of December 31, 2003 and 2002 and the
related consolidated statements of operations, changes in stockholder's
equity, and cash flows for the years ended December 31, 2003 and 2002. 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 audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform an audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  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
audits provide 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 Subsidiaries, as of December 31, 2003 and 2002 and the
results of operations, changes in stockholder's equity and cash flows for the
years ended December 31, 2003 and 2002 in conformity with accounting
principles generally accepted in the United States of America.




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

January 30, 2004














                                     F-2


                        MOUNTAIN STATES HOLDINGS, INC.
                         CONSOLIDATED BALANCE SHEETS

                                   ASSETS

                                                December 31,   December 31,
                                                    2003           2002
                                                ------------   ------------
Current Assets
 Cash and equivalents                           $  51,905      $ 132,069
 Prepaid expenses and other current assets          9,954          3,017
                                                ---------      ---------
     Total Current Assets                          61,859        135,086

Property & equipment, net of accumulated
 depreciation of $79,924 and $61,767 at
 December 31, 2003 and December 31, 2002
 respectively (Note 6)                             59,012         75,997
Capital leases less accumulated amortization
 of $2,397 at December 31, 2003                    21,572           -
Investment (Note 9)                               139,539        140,521
                                                ---------      ---------
     Total Assets                               $ 281,982      $ 351,604
                                                =========      =========

                      LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
 Accounts payable and accrued expenses          $  36,254      $  20,878
 Obligation under capital lease                     4,470           -
                                                ---------      ---------
     Total Current Liabilities                     40,724         20,878
                                                ---------      ---------
Obligation under capital lease net of
 current portion                                   15,567           -
                                                ---------      ---------

Total Liabilities                                  56,291         20,878
                                                ---------      ---------

Commitments(Notes 2, 4, 6, 7, 8, 9 and 10)           -              -

Stockholders' Equity
 Preferred stock, no par value, 5,000,000
  shares authorized, none issued and
  outstanding                                        -              -
 Common stock, no par value, 50,000,000
  share authorized, 3,800,000 issued and
  outstanding                                     337,705        337,705
Additional paid-in capital                        126,837         74,837
Accumulated deficit                              (238,851)       (81,816)
                                                ---------      ---------
Total Stockholders' Equity                        225,691        330,726
                                                ---------      ---------
Total Liabilities & Stockholders' Equity        $ 281,982      $ 351,604
                                                =========      =========

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

                                     F-3



<PAGE>
                         MOUNTAIN STATES HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                Year Ended      Year Ended
                                                December 31,    December 31,
                                                    2003            2002
                                                ------------    ------------

Fees from loan activities                       $1,025,124      $1,111,031
Cost of loan activities                            582,466         593,444
                                                ----------      ----------
Gross Profit                                       442,658         517,587
                                                ----------      ----------
Operating Expenses
 Salaries, payroll taxes and benefits              273,578         329,778
 Options granted                                    52,000            -
 Depreciation                                       20,554          14,934
 Advertising & Promotion                            18,807          20,754
 Rent expense                                       48,912          52,940
 Other operating expense                           184,079         149,266
                                                ----------      ----------
Total Operating Expenses                           597,930         567,672
                                                ----------      ----------
Net Operating (Loss)                              (155,272)        (50,085)
                                                ----------      ----------
Other Income (Expenses)
 Interest income                                       402             990
 Interest (expense)                                 (1,183)         (1,751)
 Earnings (loss) from joint venture                   (982)          8,672
                                                ----------      ----------
Total Other Income (Expenses)                       (1,763)          7,911
                                                ----------      ----------

Net (Loss)                                      $ (157,035)     $  (42,174)
                                                ==========      ==========
Basic Net (Loss) per Common Share               $    (0.04)     $    (0.01)
                                                ==========      ==========
Weighted Average Common Shares Outstanding       3,800,000       3,758,333
                                                ==========      ==========
Diluted Net (Loss) per Common Share             $    (0.04)     $    (0.01)
                                                ==========      ==========
Weighted Average Common Shares and Dilutive
  Stock Options Outstanding                      3,900,000       3,758,333
                                                ==========      ==========











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

                                     F-4



<PAGE>
                        MOUNTAIN STATES HOLDINGS, INC.
                 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                From December 31, 2001 through December 31, 2003

<TABLE>
<CAPTION>
                                             Additional    Accumu-
                       Common      Stock      Paid-in      lated
                     No./Shares    Amount     Capital      Deficit       Total
                     ----------   --------   ----------    ----------  ---------
<S>                  <C>          <C>        <C>           <C>         <C>
Balance at
December 31, 2001    3,550,000    $106,000   $ 74,837      $ (39,642)  $ 141,195


Issuance of common
stock at $.93
per share              250,000     231,705       -              -        231,705

Net (loss) for
the year ended
December 31, 2002         -           -          -           (42,174)    (42,174)
                     ---------    --------   --------      ---------   ---------

Balance at
December 31, 2002    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
                     =========    ========   ========      =========   =========
</TABLE>


















The accompanying notes are integral part of the financial statements

                                      F-5




<PAGE>
                         MOUNTAIN STATES HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                 December 31,   December 31,
                                                     2003           2002
                                                 ------------   ------------
Cash flows from Operating Activities:
 Net (Loss)                                      $(157,035)     $ (42,174)

Adjustments to reconcile net (loss) to net
 cash provided by operating activities:
  Depreciation and amortization                     20,554         14,934
  Loss on investment                                   982         (8,672)
Options Issued                                      52,000           -
(Increase) decrease in:
 Account receivable                                   -             2,000
 Other                                              (6,937)        19,219
 Deferred offering costs                              -            12,500
Increase (decrease) in:
 Accounts payable and accrued expenses              15,376        (13,677)
                                                 ---------      ---------

Net cash (used in) Operating Activities            (75,060)       (15,870)

Cash flow from Investing Activities:
 Repayments of notes receivable                       -            50,000
 Investment in subsidiary                             -             5,400
 (Acquisition) of property and equipment            (1,172)       (29,269)
 (Acquisition) of capital lease                    (23,969)          -
                                                 ---------      ---------
Net Cash Provided by (Used in) Investing
 Activities                                        (25,141)        26,131
                                                 ---------      ---------
Cash Flows from Financing Activities:
 Stock issued                                         -           231,705
 Increase in capital lease obligations              20,037           -
 Repayment of note payable, current portion           -           (35,617)
 Repayment of note payable, related party             -          (135,000)
                                                 ---------      ---------
Net Cash Provided by Financing Activities           20,037         61,088
                                                 ---------      ---------
Net Increase (Decrease) in Cash                    (80,164)        71,349
Cash, beginning of period                          132,069         60,720
                                                 ---------      ---------
Cash, end of period                                 51,905        132,069
                                                 =========      =========
Interest paid                                        1,183          6,187
                                                 =========      =========
Income tax paid                                       -              -
                                                 =========      =========







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

                                      F-6


                        MOUNTAIN STATES HOLDINGS, INC.
                   Notes to Consolidated Financial Statements
                           December 31, 2003 and 2002

(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 Mountain States
Holdings, Inc., Mountain States Lending, Inc. and Mountain Eagle Homes, Inc.
for the years ended December 31, 2003 and December 31, 2002 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 Holdings, 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 outstanding during the periods.

     (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.

                                      F-7

<PAGE>
     (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,
accounts payable-related party 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.

     (f)  Cash Equivalents

The Company considers all short-term investments in securities that mature in
90 days or less to be cashed 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, 2003 and 2002, advertising and promotion expenses totaled $18,807 and
$20,754, 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.

     (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.


                                      F-8

<PAGE>
     (k)  Related Party Transactions

The company leases space in an office condominium complex from its president
who owns the unit. The lease commenced in November 1, 2000 and runs through
October 31, 2004. The lease requires $ 4,000 per month in rent plus all
operating expenses including utilities, property taxes, maintenance and
association fees.

     (l)  Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141 "Business Combinations." The Statement is to be adopted for all
business combinations initiated after June 30, 2001. The adoption of this
statement did not impact the Company's financial position, results of
operations, or cash flows.

In June 2001, the FASB issued SFAS No. 142 "Accounting for Goodwill and
Intangible Assets." In accordance with certain provisions of the Statement,
goodwill acquired after June 30, 2001 is not amortized. All provisions of the
Statement are required to be applied in the fiscal year beginning after
December 15, 2001. The adoption of this statement did not impact the Company's
financial position, results of operations, or cash flows.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 establishes accounting standards for recognition
and measurement of a liability for an asset retirement obligation and the
associated asset retirement cost. The Company adopted this statement for the
year ending December 31, 2002. The adoption of this statement did not impact
the Company's financial position, results of operations, or cash flows.

In July 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets which is effective for fiscal years beginning
after December 15, 2001. SFAS 144 addresses financial accounting and reporting
for the impairment or disposal of long-lived assets and establishes a single
accounting model, based on the framework established in SFAS 121, for long
lived assets to be disposed of by sale. The adoption of this statement did not
impact the Company's financial position, results of operations, or cash flows.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
Corrections". SFAS 145, which is effective for fiscal years beginning after
May 15, 2002, provides guidance for income statement classification of gains
and losses on extinguishments of debt and accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. The adoption of this statement did not impact the Company's
financial position, results of operations, or cash flows.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS 146 nullifies the guidance of the
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." SFAS 146 requires that
a liability for a cost that is associated with an exit or disposal activity be
recognized when the liability is incurred. SFAS 146 also establishes that fair
value is the objective for the initial measurement of the liability. The
provisions of SFAS 146 are required for exit or disposal activities that are
initiated after December 31, 2002. The adoption of this statement did not
impact the Company's financial position, results of operations, or cash flows.

                                      F-9

<PAGE>
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". SFAS 148 amends FASB Statement No.
123, "Accounting for Stock-Based Compensation", to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method
of accounting for stock-based employee compensation and the effect of the
method used on the reported results. The provisions of SFAS 148 are effective
for financial statements for fiscal years ending after December 15, 2002. The
adoption of this statement did not impact the Company's financial position,
results of operations, or cash flows.

In November 2002, the FASB issued FIN 45, which expands previously issued
accounting guidance and disclosure requirements for certain guarantees. The
adoption of this statement did not impact the Company's financial position,
results of operations, or cash flows.

In April 2003, the FASB issued SFAS No. 149 "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities", which amends and clarifies the
accounting guidance on certain derivative instruments and hedging activities.
SFAS 149 is generally effective for contracts entered into or modified after
June 30, 2003 and hedging relationships designated after June 30, 2003. The
adoption of this statement did not impact the Company's financial position,
results of operations, or cash flows.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS 150
establishes standards for how an issuer of equity (including the equity shares
of any entity whose financial statements are included in the consolidated
financial statements) classifies and measures on its balance sheet certain
financial instruments with characteristics of both liabilities and equity.
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003 and for existing financial instruments after July 1, 2003. The
adoption of this statement did not impact the Company's financial position,
results of operations, or cash flows.

     (m)  Other

The Company has selected September 30 as its fiscal year end.

The company has paid no dividends during the years ended December 31, 2003 and
2002.

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

(2)  Income Taxes

As of December 31, 2003, the Company had an estimated net operating loss carry
forward of $188,000 to offset future taxable income. The net operating loss
carry forward, if not used, will expire in the year ending December 31, 2023,
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-10


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

     Net operating losses carry forward          $ 65,800
     Deferred income tax allowance                (65,800)
                                                 --------
     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       (35.00)%
     State tax (benefit) net of Federal benefit     (3.50)
     Valuation allowance                            38.50
                                                   ------
     Tax provision                                    -
                                                   ======

(3)  Common Stock

The Articles of Incorporation of the Company authorize issuance of a maximum
of 1,000,000 share of no par value common stock. Effective January 22, 2001
the Articles of Incorporation were amended to increase the number of
authorized shares of common stock to 20,000,000. Effective September 2002, the
Articles of Incorporation were amended to increase the number of authorized
shares of common stock to 50,000,000. At December 31, 2000, there were
1,750,000 shares of common stock issued and outstanding, all of which were
owned by its president. Effective January 1, 2001, the company issued
1,500,000 restricted shares of its common stock to various individuals for
$30,000 cash. During March 2001, the Company sold in a private placement
300,000 shares of its common stock to 8 accredited and 19 non-accredited
investors, at an offering price of $.25 per share, for a total of $75,000 in
cash. During February 2002, the Company sold in a public offering 250,000
shares of its common stock at an offering of $1.00 per share, for cash of
$250,000 less deferred offering costs of $18,295.

(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, 2002.

     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-11

<PAGE>
     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 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
                                       ======     ======      ====

     At December 31, 2003, all outstanding options are 100% vested.

     If not previously exercised or canceled, options outstanding at December
31, 2003 will expire on January 30, 2008.

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 in the amount of $13,750 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,
                                                    2003          2002
                                                  ---------      --------
Net income (loss) applicable to common
stockholders
   As reported                                    $(157,035)     $(42,174)
   Pro forma                                       (190,035)      (42,174)

Net income (loss) per share applicable to
common stockholders
  As reported                                     $    (.04)     $   (.01)
  Pro forma                                            (.05)         (.01)






                                      F-12


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 September 2004. 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.

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

             Year ending
             December 31,
                2004        $40,680
                2005          1,560
                            -------
                Total       $42,240
                            =======

Rent expenses for the year ended December 31, 2003 and 2002 totaled
approximately $48,912 and $52,940 respectively, of which $48,000 was paid to a
related party.















                                      F-13


(6)  Property and Equipment

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

                                                 December      December
                                                 31, 2003      31, 2002
                                                 --------      --------

Building improvements                            $  9,468      $  9,468
Vehicle                                            36,000        36,000
Equipment                                          93,468        92,296
Capital Lease                                      23,969          -
                                                 --------      --------
     Total property and equipment                 162,905       137,764
Less accumulated depreciation                     (82,321)      (61,767)
                                                 --------      --------
Net Property and Equipment                       $ 80,584      $ 75,997
                                                 ========      ========
(7)  Loan Officer Agreements

The company has entered into agreements with its loan officers whereby the
loan officers receive commissions, varying from 70% to 85% of loan revenues
remaining after any outstanding due and payable charges by lender at time of
closing. These agreements may be 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.
The line has an interest rate of prime plus two and one half percent. Interest
is charged monthly and a variable payment is required each month. At December
31, 2003 and December 31, 2002, the Company had no outstanding borrowings 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,
2002 and 2003, the Company had invested a total of $140,521 and $139,539
respectively and loaned $0 and $50,000 respectively to this joint venture
primarily for the purpose of purchasing real state in the Denver area. During
the year ended December 31, 2002 Mountain Eagle Homes recorded income of
$8,672 from this investment. During the year ended December 31, 2003 Mountain
Eagle Homes recorded a loss of $982 from this investment.

(10) Commitments

Effective October 1, 2001, the Company entered into a two year agreement with
a shareholder, who is also president of the company's subsidiary, Mountain
Eagle Homes, Inc., 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 manufactured homes. During the year ended December 31,
2002, this shareholder was paid $2,822 from profits generated from the sale of
an investment.  During 2003, the Company entered into a consulting agreement
with this shareholder, whereby the Company would pay $3,000 per month for
consulting services.  This agreement was cancelled effective October 2003.
During the year ended December 31, 2003, this shareholder was paid $30,000 in
consulting fees.

                                      F-14


                                 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 19, 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 19, 2004
Mark E. Massa



/s/ Patricia A. Lowe           Director                     March 19, 2004
Patricia A. Lowe