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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-KSB
(Mark One)
[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

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

For the transition period from_________to__________

Commission file Number 0-25429

                      DIVERSIFIED PRODUCT INSPECTIONS, INC.
                   -------------------------------------------
                 (Name of small business issuer in its charter)

           Florida                                             65-0877741
------------------------------------                        -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

3 Main  Street, Oak Ridge, TN                                  37830
--------------------------------------                       ------------
(Address of principal executive offices)                    (Zip Code)

Issuer's telephone number: (865) 482-8480

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class                                      Name of exchange on
                                                           which registered

      None                                                        None
--------------------                                     -----------------------

Securities registered pursuant to Section 12(g) of the Exchange Act:

                          Common Stock, $0.01 Par Value
                          -----------------------------
                                (Title of Class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act 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 [ ]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not 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-K [X ]

     State issuer's revenues for its most recent fiscal year:  $2,432,396.

     The  aggregate  market  value of the voting stock held by non-affiliates of
the Company,  computed by reference to the closing price of such stock as of
March 23,  2004, $.29,  was  $1,535,972.50.

     As of March 23, 2004,  there were 14,961,457 shares of common  stock,
$0.01 par value, issued and outstanding.

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

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                                     PART I

Item 1. Description of Business

  This  report  includes  "forward-looking  statements" within the meaning of
Section  27A  of  the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act of 1934. For example, statements included in this report regarding
our  financial  position,  business  strategy and other plans and objectives for
future  operations, and assumptions and predictions about future product demand,
supply,  manufacturing,  costs,  marketing  and  pricing  factors  are  all
forward-looking  statements.  When  we  use  words  like "intend," "anticipate,"
"believe,"  "estimate,"  "plan"  or  "expect,"  we  are  making  forward-looking
statements.  We  believe that the assumptions and expectations reflected in such
forward-looking  statements are reasonable, based on information available to us
on  the  date  hereof,  but  we  cannot  assure  you  that these assumptions and
expectations  will  prove  to  have been correct or that we will take any action
that  we  may presently be planning. We have disclosed certain important factors
that  could  cause  our  actual  results  to  differ materially from our current
expectations  elsewhere  in  this  report.  You  should  understand  that
forward-looking  statements  made  in  this  report are necessarily qualified by
these  factors.  We  are  not  undertaking  to  publicly  update  or  revise any
forward-looking statement if we obtain new information or upon the occurrence of
future  events  or  otherwise.


<PAGE>

(a) Corporate Background

     We were  organized as Fairfax  Group,  Inc.  under the laws of the State of
Florida on April 23, 1998 as a wholly owned subsidiary of Fairfax Group, Inc., a
Nevada  corporation  ("Fairfax  Nevada").  On September  8, 1998,  we became the
successor  corporation  to a merger  between  Fairfax  Nevada and Fairfax Group,
Inc.,  a  Florida  corporation.  Unless  the  context  otherwise  requires,  all
references  to the  "Company"  "we" "our" and other  similar terms means Fairfax
Group, Inc., a Florida corporation.

     Fairfax  Nevada was  incorporated  under the laws of the State of Nevada on
March 9, 1982 as Resorts  Marketing  Unlimited,  Inc. It was authorized to issue
Twenty Five Million (25,000,000) shares of common stock, $0.001 par value. Since
its  inception,  Fairfax  Nevada  never  engaged in any  substantive  commercial
business or other  business  operations.  In June,  1995,  Fairfax  Nevada had a
shareholder base of approximately 500 shareholders with approximately  2,050,000
shares outstanding.

     On July 11, 1995, Mr. Fred Keller, an individual, made his initial purchase
of  an  aggregate of 1,800,000 shares from an aggregate of twelve Fairfax Nevada
shareholders  and, as a result, became the only affiliate shareholder out of the
approximately  500  shareholders  of  Fairfax  Nevada.  In  September 1995, Fred
Keller,  Trustee,  Keller Trust, assigned certain judgments (the "Judgments") to
Fairfax  Nevada  in  Exchange  for  4,000,000 shares of Fairfax Nevada valued at
$100,000  or  $0.025  per  share  issued  to Fred Keller, an individual. Fairfax
Nevada  never successfully collected on the Judgments, and on February 24, 1998,
Fairfax  Nevada  reassigned  the Judgments to Fred Keller in exchange for $1,000
cash  and  Fred  Keller  making  a  $1,000  loan  to  Fairfax  Nevada.

     As described above, on September 8, 1998, we merged with Fairfax Nevada and
we are the  successor  corporation  to the merger.  The primary  purpose of this
merger  was to  redomicile  Fairfax  Nevada to the State of Florida in order for
Fairfax Nevada to become a Florida corporation.  Among other things, the plan of
merger  provided  that each  share of our  Company's  capital  stock  issued and
outstanding  prior to the merger,  and each share of our Company's capital stock
held in treasury  prior to the merger,  would cease to exist;  and each share of
Fairfax Nevada's capital stock issued and outstanding  prior to the merger,  and
each share of the Fairfax  Nevada's  capital stock held in treasury prior to the
merger,  would cease to exist and be converted into an equal number of shares of
our capital stock identical with the Fairfax Nevada shares being exchanged.


<PAGE>



     On  March  6,  2001,  Fairfax  Group,  Inc.,  the  Florida corporation, and
Diversified  Product  Investigations,  Inc.,  a  Florida  corporation,  and  the
individual  holders  of  the  outstanding  capital  stock of Diversified Product
Investigations,  Inc.  (the  "Holders")  consummated  a reverse acquisition (the
"Reorganization")  pursuant  to a certain Share Exchange Agreement ("Agreement")
of  such  date.  Pursuant  to the Agreement, the Holders tendered all issued and
outstanding  shares  of common stock of Diversified Product Investigations, Inc.
in  exchange  for  10,332,420 Shares of common stock of Fairfax Group, Inc., the
Florida  Corporation.  The  reorganization  was  accounted  for  as  a  reverse
acquisition.

     Simultaneously with the closing of the Reorganization, the then officer and
director of the Company tendered his resignation in accordance with the terms of
the  Agreement.  John  Van  Zyll,  Ann M. Furlong, Marvin Stacy, Dean Madden and
David Dowell were elected to serve on the Board of Directors of the Company (the
"Board").  The  Board  subsequently  appointed  John Van Zyll as Chairman of the
Board,  President and Chief Executive Officer; Ann M. Furlong as Secretary; Dean
Madden  as  Chief  Financial  Officer  and  Treasurer; and Marvin Stacy as Chief
Operating  Officer  of  the  Company. The Company also announced approval of the
amendment  of  its  Articles of Incorporation in order to change the name of the
Company  from  Fairfax  Group,  Inc.  to  Diversified  Product Inspections, Inc.

Business

Our Company

     We  specialize  in  conducting investigations and laboratory analysis of a
wide  variety of products to determine the cause and origin of product failures.
Our  primary  customers  consist  of  national  insurance  companies  that  are
interested  in  subrogating  claims  to  recover  losses. Subrogation is a legal
principle,  which  provides  that, to the extent an insurer has paid for a loss,
the  insurer  receives  the policyholder's right to recover from any third party
that  caused  the  loss. We have accumulated a large database of known defective
products  that  includes  photos  and other documentation that are used in their
investigations.  Additionally, we provide for the storage of evidence and derive
revenues  from  the  secure  storage  of  materials.

     We  currently  provide  investigative  services  for over  2,000  insurance
adjusters  in  more  than  40  states.  At  the  present time we do not have any
contractual  agreements  with any particular insurance company. Our services are
provided on a case by case per their requests. Assignments are provided to us by
the individual insurance adjusters who are directed to use our services by their
management.

     We employ five (5) state-licensed  Private Investigators who are trained as
"Cause and Origin"  investigators  and six (6)  laboratory  technicians  and one
engineer.  Also,  we  offer  pre-failure  evaluations  of  structures,  building
materials and appliances.

     Since 1994,  we have been  concentrating  almost  exclusively  on defective
product  investigations  and  we  have accumulated a database of known defective
products.  Our current database has key identifiers for over 300,000 products, a
library  of  over  300,000 photographs and documentation and hundreds of videos.
Generally, we conduct an on-site forensic investigation to identify the products
and  materials  involved  in  a  claim  loss  and  to determine the cause of the
failure.  For  smaller  items,  we  provide  insurance  adjusters  with evidence
collection  kits  and  have  the  items shipped to our laboratories for testing.
Also,  we  provide  in-depth  indoor  air quality analysis to determine airborne
contaminants  that  may  be  the  causes  of  "sick"  buildings.



<PAGE>



     A crucial  element of a subrogation  claim is the  maintenance of "chain of
custody" of the defective item. We maintain secure  facilities and our personnel
are trained in procedures for the proper handling, storing and cataloging of the
evidence so that it is available at time of trial.

Marketing

      We  market  our  product  by  sponsoring  seminars  to over 140  insurance
companies and through our website located at dpi-inc.com.  Our website  provides
information for consumers, the insurance industry and manufacturers.  We provide
our seminars at the offices of numerous  insurance  companies located throughout
the United States. Our seminar  presentations are geared towards insurance claim
adjusters and our seminars include information about our company and information
teaching the adjusters how to locate and obtain faulty  defective  items,  which
have created  damage to the  insured's  residence.  Our seminars  also teach the
adjusters how to best secure a particular item for inspection to be conducted by
our company.  At the time of the seminar  training,  the  adjusters are equipped
with an adjusters  use kit. This kit contains an  instruction  booklet on how to
use our  services  and it also  contains the  necessary  materials  for shipping
pieces of evidence involved in claims, to our Tennessee location.

      In addition to our industry services, for the consumer, we began providing
in 2004 a service  called HomeCheckSafety.com. This is a way for the consumer to
identify  and  remove  recalled  products  from  their  home.  When  a  consumer
registers, items that are entered are monitored continuously. If at any time one
or all of these items are  recalled,  the consumer is notified.  Some  consumers
will have the added  benefit of  qualifying  for a reduction in their  homeowner
rates as several major insurance companies are evaluating our service for future
implementation.

     Also,  we  publish  a  monthly newsletter that appears on our website. Each
newsletter features a particular hazard or defective product reports or official
product  recall  notices.

Subrogation Claims

     Below are samples of some of the actual  cases in which our  investigations
enabled the client to be successful in their subrogation claim.

<PAGE>


*    Masonite Siding Class Action lawsuit. We were an expert witness in this
     lawsuit.  We investigated  and took  samples  from over 2,000 homes in 20
     states.  The lawsuit  covered 13.9 million  homes in the United  States and
     resulted in a $4.3 billion class action settlement. (1995)

*    Louisiana  Pacific Class Action lawsuit  regarding  defective  siding.  We
     inspected  2,000 homes in 19 states.  It was the defense's  contention that
     the siding could not be positively identified once installed. We developed
     a method of positively  identifying the product  through visual  inspection
     and demonstrated  this during  deposition.  The result was a $750,000 class
     action settlement. (1997)

*    Defective Battery Charger. A battery charger in California caused a fire in
     a strip mall causing heavy damage. We were able to positively  identify the
     origin, cause and manufacturer.  Reliance Insurance was able to subrogate a
     $1,000,000 claim.

*    Ply-Gen  (Hoover) vs. Pulte Home.  Defective  siding was  installed in over
     13,000 homes in Florida.  Our investigations and lab analysis resulted in
     a $23.3 million settlement to the homeowners. (1997)

*    Auto accident in Orlando.  Driver stated that she had applied  brakes,  but
     that they did not work. An independent  mechanic inspected the brake system
     and reported  that it was properly  functioning  and that the driver was at
     fault. The insurance company hired us to inspect the brakes. Our lab was
     able to  determine  that  the  brake  pad  material  had  non-uniform  wear
     characteristics  that resulted in high and low spots.  The braking friction
     of the pads was only 30% of  their  design  specifications.  The  insurance
     company successfully  subrogated the claim. The driver was found to be "not
     at fault",  thus  saving her from  points on her license and an increase in
     her insurance premium.


<PAGE>



*    Lamborghini  Automobile in Orlando that burned  because of a failure of the
     rubber fuel lines. Our  laboratory was able to determine that the rubber
     fuel lines were not defective. The owner had installed a high-pressure fuel
     pump  that  delivered  a  hydraulic  pressure  in  excess  of the fuel line
     manufacturer's  recommendations.  It was  determined  that the owner was at
     fault.

*    Home is Kissimmee, Florida that was being consumed by mold. The builder and
     several  engineering  firms had been unable to  determine  the cause.  Upon
     inspecting the home,  we determined  that there was a hidden water leak in
     the walls. The builder  insisted that this was impossible,  as the water to
     the home was turned off at the main. Our  technicians  quickly  located the
     leak using ultrasonic  equipment.  The plumbing contractor had installed an
     unused icemaker line on the city side of the meter.  This line was slightly
     pierced by a nail during drywall  installation,  causing  saturation inside
     the walls and the mold growth  throughout the home. It was determined  that
     the plumbing contractor was at fault.

*    Chevy Silverado burns in Orlando.  We were able to determine that the cause
     and  origin  was  due to a  problem  in the  manufacturing  process  of the
     dipstick for the  transmission.  The dipstick  would eject under  pressure,
     allowing  transmission  fluid to spray on the exhaust and cause fires.  The
     insurance  company was able to successfully  subrogate the claim and GM has
     since corrected the problem.

Financings

     In April 2002, we entered into a subscription agreement with an investor to
sell  up  to  $300,000  of our 6% convertible debentures. Under the terms of the
agreement,  the  investor  was  obligated  to  purchase  three separate $100,000
principal  amount  debentures,  subject to the our satisfying certain conditions
described  in  the  agreement. In connection with the sale of the debentures, we
agreed  to  issue  warrants to purchase 462,963 shares of our common stock at an
exercise  price  of  $.2376 per share. The warrants will be exercisable for four
years  from  the  date  the debenture was funded. During April 2002, the Company
issued its first $100,000 debenture under this agreement which debenture matures
in  April 2005 and is secured by 4,000,000 shares of common stock of the Company
currently  owned  by  our  majority  stockholders.


<PAGE>



     Additionally,  upon  filing  with the Commission our registration statement
and  pursuant  to  the  terms  of  our 6% convertible debenture, we received
$100,000, at which time we issued the debenture holder a warrant to purchase
462,963  shares of our common stock at an exercise price of equal to 110% of the
5 day average closing bid price for the 5 trading days prior to the closing date
of  the  funding.  Finally,  upon  effectiveness  by  the  Commission  of  our
registration  statement  and  pursuant  to  the  terms  of  our  6%  convertible
debenture,  we received $100,000, at which time we   issued the debenture
holder  a  warrant to purchase 462,963 shares of our common stock at an exercise
price  of equal to 110% of the 5 day average closing bid price for the 5 trading
days  prior  to  the  closing  date  of  each  funding.

      Also,  during  April  2002,  we  entered  into an  equity  line of  credit
investment  agreement with the investor which obligates the investor to purchase
up to  $3,000,000  of our common stock at a price of 85% of the average  trading
price,  subject to our fulfillment of certain terms and conditions  contained in
the equity line of credit  investment  agreement.  In connection with our equity
line of credit, we agreed to issue the investor a warrant to purchase  1,388,889
shares of our common  stock  exercisable  at $.2376  per share.  We have filed a
registration statement with the Commission that has been declared effective.  We
have not used the active  equity line of credit and we have  determined  it will
not be used prior to its expiration in April 2004.

Intellectual Property

     We  currently  hold a federal trademark registration from the United States
Patent  and  Trademark  Office  (Reg.  No: 2206610) for our Diversified Products
Inspections,  Inc.  logo.  We  also  maintain  a  registered domain name for our
Internet  Web  site  located  at  http://www.dpi-inc.com  and
http://www.homechecksafety.com.

Recent Activities

In December 2003, we entered into a Use and Consulting  Agreement with GBC, Inc.
The agreement  with GBC, Inc. is a one million  dollar  contract over a ten year
period.  The  GBC  Use and  Consulting  Agreement  provides  GBC  access  to our
extensive database of failed and recalled products.


Employees

     As of March 23, 2004, we have approximately thirty-five full time employees
and two part time  employees.  We have never  experienced a work stoppage and we
believe that our employee  relations  are good.  Our success  depends to a large
extent  upon  the  continued  services  of  our  key  managerial  employees  and
investigators.  The loss of such personnel could have a material  adverse effect
on our business and our results of operations.

Transfer  agent

     Our  transfer  agent is Interwest Transfer Co., 1981 East 4800 South, Salt
Lake City, Utah 84117.


<PAGE>


RISK FACTORS
-------------

     You should carefully consider the following risks and the other information
contained in this report. The price of our common stock could decline due to any
of these  risks,  and you could  lose all or part of your  investment.  You also
should refer to the other  information  included in this report,  including  the
financial statements and related notes thereto. In addition, the risks described
below  are not the only ones  facing  us.  We have  described  only the risks we
consider  material.  However,  there may be additional risks that we view as not
material or of which we are not presently aware.

     If  any of  the  events  described  below  were  to  occur,  our  business,
prospects,  financial  condition or results of  operations or cash flow could be
materially  adversely affected.  When we say that something could or will have a
material adverse effect on it, we mean that it could or will have one or more of
these effects.

Special  note  regarding  forward-looking  statements

     This report may contain certain forward-looking  statements and information
relating  to us  that  are  based  on  beliefs  and  its  principals  as well as
assumptions  made  by  and  information   currently  available  to  them.  These
statements include, among other things, the discussions of our business strategy
and expectations  concerning our market position,  future operations,  expansion
opportunities,  and  profitability.  When  used in these  documents,  the  words
"anticipate," "feel," "believe,"  "estimate," "expect," "plan," and "intend" and
similar  expressions,  as they relate to us or our  principals,  are intended to
identify forward-looking statements. Such statements reflect the current view of
respecting  future events and are subject to certain risks,  uncertainties,  and
assumptions,  including the  meaningful  and important  risks and  uncertainties
noted, particularly those related to our operations,  results of operations, and
growth strategy,  liquidity,  competitive factors and pricing pressures, changes
in legal and regulatory  requirements,  general economic  conditions,  and other
factors described in this report.

The  Loss  Of  Our  Key  Employees  May  Adversely Affect Our Growth Objectives.

     Our success in achieving our growth objectives  depends upon the efforts of
our top management  team  including the efforts of Messrs John Van Zyll,  Marvin
Stacy  and  Ms.Ann  M.  Furlong.  The  loss  of the  services  of  any of  these
individuals  may have a  material  adverse  effect  on our  business,  financial
condition and results of operations.  We do not have employment  agreements with
Messrs.  VanZyll,  Stacy or Ms Furlong. We can give no assurance that we will be
able to maintain and achieve our growth  objectives should we lose one or all of
these individuals' services.

Our  Current  And Potential Competitors, Some Of Whom Have Greater Resources And
Experience  Than  We  Do,  May  Develop Products And Technologies That May Cause
Demand  For,  And  The  Prices  Of,  Our  Products  To  Decline.

     The  product  investigation  industry in regards to subrogation for product
failure  is  a new and growing market. While there may be several companies that
offer  fire  or product investigations which have achieved substantially greater
market  share  than  we  have,  and have longer operating histories, have larger
customer  bases, have substantially greater financial, development and marketing
resources  than  we  do,  to our knowledge there are few, if any, companies that
offer  a full scope of services that are tailored to the insurance industry. Our
service  includes  fire investigation, product failure analysis, engineering and
air  &  mold  contamination  investigations.  Existing or future competitors may
develop  or  offer  products  that are comparable or superior to ours at a lower
price,  which  could  adversely  harm  our  business,  results of operations and
financial  condition.

We  May,  In The Future, Issue Additional Shares Of Our Common Stock Which Would
Reduce  Investors  Percent  Of  Ownership  And  May  Dilute  Our  Share  Value.

     Our  certificate  of  incorporation  authorizes  the issuance of 50,000,000
shares  of  common  stock,  par  value  $.01  per  share.  Our  certificate  of
incorporation  does  not  authorize  us  to issue shares of preferred stock. The
future  issuance  of  all  or  part of our remaining authorized common stock may
result in substantial dilution in the percentage of our common stock held by our
then  existing  shareholders. We may value any common stock issued in the future
on  an  arbitrary  basis.  The  issuance  of common stock for future services or
acquisitions  or  other  corporate  actions  may have the effect of diluting the
value  of  the shares held by our investors, and might have an adverse effect on
any  trading  market  for  our  common  stock.

<PAGE>

Shares Of Our Total Outstanding Shares That Are Restricted From Immediate Resale
But  May  Be  Sold Into The Market In The Future Could Cause The Market Price Of
Our  Common  Stock  To  Drop  Significantly, Even If Our Business Is Doing Well.

     As of March 23, 2004, we had  14,961,457  shares of our common stock issued
and  outstanding.  Of such  shares,  10,477,428  shares  of  common  stock  were
restricted  and  4,484,029  shares  were free  trading.  Rule 144  provides,  in
essence, that a person holding "restricted  securities" for a period of one year
may sell only an amount  every  three  months  equal to the  greater  of (a) one
percent of a company's issued and outstanding  shares, or (b) the average weekly
volume of sales during the four calendar weeks preceding the sale. The amount of
"restricted  securities"  which a person who is not an  affiliate of our company
may  sell is not so  limited,  since  non-affiliates  may  sell  without  volume
limitation  their shares held for two years if there is adequate  current public
information  available  concerning  our company.  In such an event,  "restricted
securities"  would be eligible  for sale to the public at an earlier  date.  The
sale in the public  market of such shares of Common Stock may  adversely  affect
prevailing market prices of our Common Stock.

Our Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
Significantly

     There  has  been a limited public market for our common stock and there can
be no assurance that an active trading market for our common stock will develop.
As  a  result, this could adversely affect our shareholders' ability to sell our
common  stock  in  short  time periods, or possibly at all. Our common stock has
experienced,  and  is  likely to experience in the future, significant price and
volume  fluctuations which could adversely affect the market price of our common
stock  without regard to our operating performance. In addition, we believe that
factors  such  as quarterly fluctuations in our financial results and changes in
the  overall  economy  or the condition of the financial markets could cause the
price  of  our  common  stock  to  fluctuate  substantially.


Since We Have Not Paid Any Dividends On Our Common Stock And Do Not Intend To Do
So  In The Foreseeable Future, A Purchaser Of Our Common Stock Will Only Realize
An  Economic  Gain On His Or Her Investment From An Appreciation, If Any, In The
Market  Price  Of  Our  Common  Stock.

     We have never paid,  and have no  intentions in the  foreseeable  future to
pay, any cash dividends on our common stock. Therefore an investor in our common
stock,  in all  likelihood,  will only realize a profit on his investment if the
market price of our common stock increases in value.

The  Application  Of  The  "Penny  Stock  Regulation" Could Adversely Affect The
Market  Price  Of  Our  Common  Stock

     Our securities are deemed a penny stock.  Penny stocks generally are equity
securities  with a price of less  than  $5.00 per share  other  than  securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
Stock Market, provided that current price and volume information with respect to
transactions  in such  securities  is  provided by the  exchange or system.  Our
securities  may be subject to "penny stock rules" that impose  additional  sales
practice  requirements  on  broker-dealers  who sell such  securities to persons
other than established  customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income  exceeding  $200,000 or $300,000
together  with their  spouse).  For  transactions  covered by these  rules,  the
broker-dealer must make a special suitability  determination for the purchase of
such  securities  and have  received  the  purchaser's  written  consent  to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery,  prior
to the  transaction,  of a  disclosure  schedule  prescribed  by the  Commission
relating to the penny stock  market.  The  broker-dealer  also must disclose the
commissions payable to both the broker-dealer and the registered  representative
and current quotations for the securities.  Finally,  monthly statements must be
sent disclosing  recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell our  securities and may have the effect of reducing the level of trading
activity of our common stock in the secondary  market.  The  foregoing  required
penny stock  restrictions  will not apply to our  securities if such  securities
maintain a market price of $5.00 or greater.  We can give no assurance  that the
price of our securities will reach or maintain such a level.


<PAGE>

Our  6%  debentures are convertible by the debenture holders into shares of our
common  stock  at  any  time.  As  such,  purchasers  of  our common stock could
experience  substantial  dilution  of  their  investment upon conversion of such
securities.

     Our 6% convertible debentures are convertible into such number of shares of
common  stock  equal  to the lesser of (a) 110% of the average closing bid price
for  the  five trading days preceding the closing date or (b) 75% of the average
of  the  five  lowest  closing  bid prices of our common stock during the twenty
trading days preceding the conversion date.

Our Existing Shareholders Will Experience Significant Dilution From Our Sale Of
Shares Under Our Equity Line Of Credit

      The sale of shares pursuant to the Equity Line of Credit,  if used,  would
have a dilutive  impact on our  stockholders  and the market price of our common
stock could decline.  In addition,  the lower our stock price is the more shares
of common  stock we will have to issue  under the Equity  Line of Credit to draw
down  the  full  amount.  If  our  stock  price  is  lower,  then  our  existing
stockholders would experience greater dilution.

<PAGE>

Item 2. Properties.

      We  lease  our  facilities  located  at 3 East  Main  Street,  Oak  Ridge,
Tennessee 37830 for use as our corporate headquarters. We entered into our lease
commencing in December 2000 for a period of sixty months. We currently lease our
office and warehouse under an agreement  classified as an operating lease. Under
the terms of the lease  agreement,  we are  obligated to purchase the office and
warehouse  if we  receive  $3,000,000  in  proceeds  from  a  private  placement
offering.  The purchase price is $1,607,640 and expires on December 31, 2004. We
are currently  negotiating  for lower  monthly  rental fees. We believe that our
leased  properties  are  adequate  for our current and  immediately  foreseeable
operating needs; however we are in the process of evaluating different operating
facilities.  We do not have any policies  regarding  investments in real estate,
securities or other forms of property.


Item 3. Legal Proceedings.

     As  of  the  date  hereof,  we  are  not  a  party  to  any  material legal
proceedings, nor are we aware of any threatened litigation of a material nature.

Item 4. Submission of Matters to a Vote of Security Holders.

There were no matters submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.

<PAGE>

                                     PART II

Item 5. Market for Common Equity and Related Stockholders Matters.

Market Information

     Our  common  stock is quoted on the OTC  Bulletin  Board  under the  symbol
"DPRI".  The following table sets forth the range of high and low bid quotations
of our common  stock,  as reported on the OTC  Bulletin  Board,  for the periods
indicated.  The prices represent inter-dealer  quotations,  which do not include
retail  markups,  markdowns  or  commissions,   and  may  not  represent  actual
transactions.

                                Common Stock
                          High Bid         Low Bid
                         -----------      -----------

First Quarter 2002           $0.45           $0.18
Second Quarter 2002          $0.50           $0.14
Third Quarter 2002           $0.16           $0.09
Fourth Quarter 2002          $0.22           $0.07

First Quarter 2003           $0.17           $0.13
Second Quarter 2003          $0.18           $0.11
Third Quarter 2003           $0.25           $0.14
Fourth Quarter 2003          $0.33           $0.12


SECURITY  HOLDERS

     At March 23, 2004 there were 14,961,457 shares our common stock outstanding
which were held by approximately 523 stockholders of record.

DIVIDEND  POLICY

     We  have  not  paid  any  dividends  on  our  common  stock,  and it is not
anticipated that any dividends will be paid in the foreseeable future. Our Board
of Directors intends to follow a policy of using retained  earnings,  if any, to
finance our growth.  The declaration and payment of dividends in the future will
be determined by our Board of Directors in light of  conditions  then  existing,
including our earnings,  if any, financial  condition,  capital requirements and
other factors.

Recent  Sales  of  Unregistered  Securities

     For  the  fourth quarter of the year ended December 31, 2003, we
did not issue shares  of  our  common  stock.

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

GENERAL

We specialize in conducting  investigations  and  laboratory  analysis of a wide
variety of products to determine the cause and origin of product  failures.  Our
primary customers consist of national insurance companies that are interested in
subrogating  claims to recover losses.  Subrogation is a legal principle,  which
provides  that,  to the  extent  an  insurer  has paid for a loss,  the  insurer
receives  the  policyholder's  right to recover from any third party that caused
the loss. We have accumulated a large database of known defective  products that
includes photos and other  documentation that are used in these  investigations.
Additionally,  we provide for the storage of evidence and derive  revenues  from
secure storage of materials.

CRITICAL ACCOUNTING POLICIES

Our significant  accounting policies are discussed in Note 1 to the consolidated
financial  statements.  We consider the following  accounting policies to be the
most critical:

         o        Revenue  Recognition - We recognize  revenue when the earnings
                  process is completed.  This  typically  occurs after our final
                  written report has been reviewed,  approved and submitted.  We
                  have no further obligation to the customer at this time.
         o        Stock  Options - We account  for our stock  options  under the
                  intrinsic   value  method  in   accordance   with   Accounting
                  Principles
         o        Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
                  Employees"  and related  interpretations.  We have adopted the
                  disclosure-only   provisions  of  the   Financial   Accounting
                  Standards  Board ("FASB")  Statement No. 123,  "Accounting for
                  Stock Based  Compensation"  as amended by FASB  Statement  No.
                  148, "Accounting for Stock-Based Compensation - Transition and
                  Disclosure".
         o        Property  and  Equipment  -  Our  property  and  equipment  is
                  recorded  at cost  and  depreciation  is  computed  using  the
                  straight-line  method over the  estimated  useful lives of the
                  assets.  We charge repairs and maintenance to expense as it is
                  incurred.
         o        Estimates - The preparation of financial  statements  requires
                  us to make  estimates and  judgments  that affect the reported
                  amounts  of  assets  and  liabilities  and the  disclosure  of
                  contingent assets and liabilities at the date of the financial
                  statements  and the reported  amounts of revenues and expenses
                  during  the  reported  periods.  We  base  our  estimates  and
                  judgments  on  historical  experience  and  on  various  other
                  factors   that  we   believe  to  be   reasonable   under  the
                  circumstances,  the results of which form the basis for making
                  judgments  about the carrying values of assets and liabilities
                  that are not readily apparent from other sources. There can be
                  no assurances  that actual  results will not differ from those
                  estimates.  On an ongoing  basis,  we evaluate our  accounting
                  policies  and  disclosure  practices.   In  our  opinion,  the
                  critical accounting estimates which are more complex in nature
                  and  require  a  higher   degree  of   judgment   include  the
                  collectibility of accounts receivable and the valuation of our
                  deferred income tax assets and liabilities.

<PAGE>

RESULTS OF OPERATIONS FOR 2003

Revenues for 2003 increased  $432,421 or 21.6% to $2,432,396  from $1,999,975 in
2002. This increase was mainly attributable to increased market awareness of the
Company's inspection services and the positive result of these services.

Operating  expenses  for 2003  increased by $19,732 or 1.0% to  $2,063,512  from
$2,043,780  in 2002.  Operating  expenses have  remained  relatively  consistent
mainly due to an  offsetting  of an  increase  in  salaries  and a  decrease  in
professional  fees.  Changes in our shipping and handling  vendors allowed us to
decrease these costs even though related revenue increased.

Interest expense for 2003 decreased $76,015 or 71.9% to $29,750 from $105,765 in
2002.  As discussed in the notes to our  financial  statements,  during 2002, we
recognized  $63,955 in  interest  expense as a result of  obtaining  $300,000 in
convertible debt with a conversion rate less than the stock price on the funding
date. We did not incur any interest  expense of this type in 2003.  This,  along
with our  successful  effort to pay off our lines of  credit,  resulted  in this
significant decrease in interest expense in 2003.

During 2002,  the Company  incurred  $191,393 in deferred  stock  issuance costs
associated with the  establishment of an equity line of credit.  This amount was
reported as a  component  of our  stockholders  deficit at  December  31,  2002,
pending future funding under this agreement. During 2003 our financial condition
improved  significantly  and we determined we would not utilize this equity line
of credit. Accordingly, we expensed these deferred stock issuance costs in 2003.

During 2003,  mainly due to the significant  improvement in earnings trend,  the
Company reversed its valuation  allowance for deferred tax assets and recognized
a deferred tax benefit of $420,574.  No deferred tax benefit was  recognized  in
2002.

Net income for 2003 was  $568,315  or $.04 per share  compared to a 2002 loss of
$149,570 or $.01 per share  reflecting  our ability to  increase  2003  revenues
while maintaining 2003 operating  expenses at a level consistent with 2002 along
with the  recognition  of the  deferred  tax  benefit  partially  offset  by the
write-off of deferred stock issuance costs as previously discussed.

RESULTS OF OPERATIONS FOR 2002

Revenues  for the year ended  December  31,  2002 were  $1,999,975,  while total
operating  expenses  were  2,043,780.  This  reflects  an  $819,280  increase in
revenue,  while the Company's  operating expenses increased by $464,778 from the
year ended December 31, 2001. The Company  attributes  this increase in revenues
to its  marketing  efforts.  The Company had a net loss of $149,570 for the year
ended  December  31,  2002 or $.01 per share.  This net loss is a decrease  from
$425,609 from the year ended December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

During  2003,  our cash flow  improved  significantly  over the prior years as a
result of our improved operating results as previously discussed. Prior to 2003,
we were operating at a loss and our operations  were funded through debt and the
sale of securities. During 2003, our operations provided positive cash flow that
allowed for us to pay off previously existing lines of credit, purchase property
and equipment and significantly  increase our cash on hand. This is reflected in
our  statement  of cash flows that shows  that net cash  provided  by  operating
activities  was  $412,883  in 2003  compared to net cash used in  operations  of
$125,856 in 2002.  Additionally,  during 2003, our financing activities resulted
in the use of $89,659 to pay off existing  debt compared to 2002 when we had net
cash provided by financing  activities of $201,792  primarily as a result of new
borrowings.

IMPACT OF INFLATION

Inflationary factors have not had a significant effect on our operations.


<PAGE>


OTHER:

Except  for historical information contained herein, the matters set forth above
are forward-looking statements that involve certain risks and uncertainties that
could  cause  actual  results  to  differ  from  those  in  the  forward-looking
statements.  Potential risks and uncertainties include such factors as the level
of  business  and  consumer  spending,  the  amount  of  sales  of the Company's
products,  the  competitive  environment  within  the  investigative services
industry,  the  ability of the Company to continue to expand its operations, the
level  of  costs  incurred  in  connection with the Company's expansion efforts,
economic  conditions  and  the financial strength of the Company's customers and
suppliers.  Investors  are  directed  to  consider other risks and uncertainties
discussed  in  documents  filed  by the Company with the Securities and Exchange
Commission.


<PAGE>

                      Diversified Product Inspections, Inc.

                        Consolidated Financial Statements

                     Years ended December 31, 2003 and 2002


                                    Contents






Report of Independent Auditors...............................................F-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets..................................................F-2
Consolidated Statements of Operations........................................F-4
Consolidated Statements of Stockholders' (Deficit) Equity....................F-5
Consolidated Statements of Cash Flows........................................F-6
Notes to Consolidated Financial Statements...................................F-7


<PAGE>

                         Report of Independent Auditors



The Board of Directors
Diversified Product Inspections, Inc.


We have audited the  accompanying  consolidated  balance  sheets of  Diversified
Product  Inspections,  Inc. and subsidiary (the  "Company"),  as of December 31,
2003  and  2002,  and  the  related   consolidated   statements  of  operations,
stockholders'  (deficit)  equity and cash flows for the years then ended.  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 the 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 consolidated  financial  statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Diversified  Product  Inspections,  Inc. and subsidiary at December 31, 2003 and
2002, and the consolidated  results of its operations and its cash flows for the
years then ended in conformity with accounting  principles generally accepted in
the United States of America.




                                        /s/Coulter & Justus, P.C.


Knoxville, Tennessee
February 9, 2004


                                      F-1

<PAGE>

                      Diversified Product Inspections, Inc.

                           Consolidated Balance Sheets




                                                             December 31
                                                         2003            2002
                                                     ---------------------------
Assets
Current assets:
  Cash                                               $  296,409       $  115,018
  Accounts receivable, net of
   reserve for doubtful accounts of
   $35,000 in 2003 and $39,000 in 2002                  216,093          259,641
  Other receivable                                      100,000             --
  Current portion of deferred income taxes              143,485             --
  Prepaid expenses and other current assets               1,341            2,221
                                                     ----------       ----------
 Total current assets                                   757,328          376,880

Property and equipment:
  Equipment, furniture and fixtures                     306,788          195,279
  Vehicles                                              128,061           97,737
  Leasehold improvements                                 22,727           22,727
                                                     ----------       ----------
                                                        457,576          315,743
  Less accumulated depreciation and amortization        257,231          189,234
                                                     ----------       ----------
Net property and equipment                              200,345          126,509

Other assets                                              4,400            4,400
Deferred income taxes, less current portion             277,089             --

                                                     ----------       ----------
Total assets                                         $1,239,162       $  507,789
                                                     ==========       ==========


                                      F-2

<PAGE>

                                                             December 31
                                                       2003              2002
                                                   ----------          --------
Liabilities and stockholders' equity (deficit)
 Current liabilities:
  Lines of credit                                    $   --            $ 83,863
  Accounts payable and accrued expenses               147,963           170,190
  Accrued salaries                                     14,445            22,561
  Advance from stockholder                               --              14,000
  Deferred revenue                                     91,667              --
  Current portion of notes payable                     14,607            17,338
  Current portion of capital lease obligations          3,525             3,014
                                                   ----------          --------
Total current liabilities                             272,207           310,966

Notes payable, less current portion                    36,598            22,648
Capital lease obligations, less current
  portion                                               6,842            10,368
Convertible debt, net of discount of $5,000           295,000           295,000
                                                   ----------          --------
Total liabilities                                     610,647           638,982

Stockholders' equity (deficit):
  Common stock:
    Par value--$0.01 per share
    Authorized shares--50,000,000
    Issued and outstanding
     shares--14,961,457                               149,615           149,615
  Additional paid-in capital                        1,620,328         1,620,328
  Accumulated deficit                              (1,141,428)       (1,709,743)
  Deferred stock issuance costs                          --            (191,393)
                                                   ----------          --------
 Net stockholders' equity (deficit)                   628,515          (131,193)
                                                   ----------          --------
Total liabilities and stockholders' equity
 (deficit)                                         $1,239,162          $507,789
                                                   ==========          ========


See accompanying Notes to Consolidated Financial Statements.


                                      F-3

<PAGE>

                      Diversified Product Inspections, Inc.

                      Consolidated Statements of Operations



                                                    Year ended December 31
                                                     2003                2002
                                                  -----------------------------

Revenues                                          $2,432,396         $1,999,975

Operating expenses:
  Salaries and related benefits                    1,153,880            951,520
  Rent                                               212,283            210,269
  Administration                                     129,873            140,320
  Shipping and handling costs                        191,202            214,799
  Utilities and telephone                             55,498             59,120
  Travel and related costs                            29,630             32,686
  Taxes, licenses and permits                          1,920             32,381
  Depreciation and amortization                       67,997             69,875
  Professional fees                                  126,173            196,483
  Vehicle                                             29,458             29,767
  Insurance                                           53,968             58,441
  Advertising                                         11,563             20,055
  Bad debt expense                                        --             22,000
  Miscellaneous                                           67              6,064
                                                  ----------         ----------
Total operating expenses                           2,063,512          2,043,780
                                                  ----------         ----------
Operating income (loss)                              368,884            (43,805)

Other expenses:
  Interest                                            29,750            105,765
  Write-off of deferred stock issuance
   costs                                             191,393                 --
                                                  ----------         ----------
Total other expenses                                 221,143            105,765
                                                  ----------         ----------

Income (loss) before income taxes                    147,741           (149,570)

Deferred income tax benefit                          420,574                 --
                                                  ----------         ----------
Net income (loss)                                   $568,315          $(149,570)
                                                  ==========         ==========

Earnings (loss) per shares:

  Basic                                             $  0.04           $   (0.01)
                                                  ==========         ==========
  Diluted                                           $  0.03           $   (0.01)
                                                  ==========         ==========


See accompanying Notes to Consolidated Financial Statements.


                                      F-4

<PAGE>

<TABLE>
<CAPTION>

                                                              Diversified Product Inspections, Inc.

                                                    Consolidated Statements of Stockholders' (Deficit) Equity

                                            Number of                                                   Deferred         Total
                                              Shares                    Additional                        Stock        Stockholders'
                                            Issued and       Common       Paid-in      Accumulated      Issuance       (Deficit)
                                           Outstanding       Stock        Capital       Deficit           Costs           Equity
                                            ------------------------------------------------------------------------------------

<S>                <C>                      <C>            <C>          <C>            <C>              <C>            <C>
Balance at January 1, 2002                  14,255,709     $142,557     $1,390,038     $(1,560,173)     $      --      $ (27,578)
   Stock issued for cash                        71,429          714         24,286              --             --         25,000
   Issuance of conversion privileges
     related to convertible debt                    --           --         63,955              --             --         63,955
   Discount on convertible debt                     --           --          5,000              --             --          5,000
   Stock issued for costs  associated
      with equity line of credit               634,319        6,344        137,049              --       (143,393)            --
   Professional fees associated with
      equity line of credit                         --           --             --              --        (48,000)       (48,000)
   Net loss for 2002                                --           --             --        (149,570)            --       (149,570)
                                            ----------     --------     ----------     -----------      ---------      ---------
 Balance at December 31, 2002               14,961,457      149,615      1,620,328      (1,709,743)      (191,393)      (131,193)
   Elimination of deferred stock
     issuance costs                                 --           --             --              --        191,393        191,393
   Net income for 2003                              --           --             --         568,315             --        568,315
                                            ----------     --------     ----------     -----------      ---------      ---------
Balance at December 31, 2003                14,961,457     $149,615     $1,620,328     $(1,141,428)     $      --      $ 628,515
                                            ==========     ========     ==========     ===========      =========      =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.


                                      F-5

<PAGE>

                      Diversified Product Inspections, Inc.

                      Consolidated Statements of Cash Flows


                                                        Year ended December 31
                                                        2003             2002
                                                     ---------------------------
OPERATING ACTIVITIES
Net income (loss)                                    $568,315         $(149,570)
Adjustments  to reconcile  net
  income (loss) to net cash
  provided by (used in) operating activities:
    Interest expense recorded from initial
     convertible debt funding                              --            63,955
   Deferred income taxes                             (420,574)               --
   Write-off of deferred stock issuance costs         191,393                --
   Depreciation                                        62,460            58,688
   Amortization                                         5,537            11,187
   Provision for bad debts                                 --            22,000
   Changes in operating assets and liabilities:
     Accounts and other receivables                   (56,452)         (176,800)
     Refundable income taxes                               --             5,214
     Prepaid expenses and other assets                    880               102
     Accounts payable and accrued expenses            (22,227)           30,623
     Accrued salaries                                  (8,116)            8,745
     Deferred revenue                                  91,667                --
                                                     --------          ---------
Net cash provided by (used in) operating
activities                                            412,883          (125,856)

INVESTING ACTIVITIES
Purchases of property and equipment                  (111,509)           (6,934)

FINANCING ACTIVITIES
Repayments to shareholder                             (14,000)           (4,000)
Net payments on lines of credit                       (83,863)          (40,066)
Principal payments on notes payable and
  capital lease obligations                           (22,120)          (31,142)
Professional fees associated with equity line
  of credit                                                --           (48,000)
Proceeds from sale of common stock                         --            25,000
Proceeds from convertible debt                             --           300,000
                                                     --------          ---------
Net cash (used in) provided by financing
activities                                           (119,983)          201,792
                                                     --------          ---------

Net increase in cash                                  181,391            69,002

Cash at beginning of year                             115,018            46,016
                                                     --------          ---------
Cash at end of year                                  $296,409          $115,018
                                                     ========          =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest                               $ 29,750          $ 32,810

SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITY
Equipment purchases financed by seller               $ 30,324          $     --
Equipment purchases financed through capital
  lease obligations                                        --            14,690

See accompanying Notes to Consolidated Financial Statements.


                                      F-6

<PAGE>

                      Diversified Product Inspections, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2003



1.    Significant Accounting Policies

Description of Business

Prior to December 31, 2003, the consolidated  financial  statements included the
accounts  of  Diversified  Product  Inspections,  Inc.  ("Inspections")  and its
wholly-owned    subsidiary,    Diversified    Product    Investigations,    Inc.
("Investigations"),   collectively  referred  to  as  the  "Company".  Effective
December 31, 2003, these companies were merged with the surviving  company being
Diversified  Product  Inspections,  Inc. Prior to this merger,  all intercompany
balances and transactions were eliminated.

The Company specializes in conducting  investigations and laboratory analysis of
a wide  variety of  products  to  determine  the  "cause and  origin" of product
failures.   The  Company's  primary  customers  consist  of  national  insurance
companies  that  are  interested  in  subrogating   claims  to  recover  losses.
Subrogation is a legal  principle  which provides that, to the extent an insurer
has paid for a loss, the insurer  receives the  policyholder's  right to recover
from any third party that caused the loss.  The Company has  accumulated a large
database  of  known   defective   products  that   includes   photos  and  other
documentation that are used in their  investigations.  The Company also provides
storage  of  the  evidence  collected  during  the  investigation,  until  it is
requested by the customer to be disposed.

Major Customers and Credit Concentration

The Company's largest customers are national insurance customers.  Revenues from
the Company's largest individual  customers accounted for approximately 27%, 15%
and 12% in 2003 and 21%, 17% and 16% in 2002 of total revenues.

Change in Fiscal Year-End

Effective  June 26, 2002,  Diversified  Product  Inspections,  Inc.  changed its
fiscal year-end for financial  statement  purposes from the last day in February
to December 31 to be consistent  with  Diversified  Product  Investigations.  As
Inspections was only a holding company and had no significant operations,  there
was no significant effect on the Company's reported operating results.

Revenue Recognition

The Company recognizes  revenue when the earnings process is complete,  which is
typically after an investigation has been completed and the final written report
has been submitted,  reviewed and approved by management.  Once the final report
has been approved, the Company has no further obligation to the customer.

Advertising Costs

Advertising costs are expensed as incurred.


                                      F-7

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



1. Significant Accounting Policies (continued)

Accounts Receivable

Three customers have accounts receivable balances of 10% or greater of the total
at December 31, 2003 and 2002.  These customers  account for 40%, 13% and 10% at
December 31, 2003,  and 26%, 16% and 11% at December 31, 2002, of total accounts
receivable.  The Company performs  ongoing credit  evaluations of its customers'
financial  condition,  but does  not  require  collateral  to  support  customer
receivables.  The  Company  charges  accounts  to bad debt  expense  as they are
determined  to be  uncollectible  based upon a review of aging and  collections.
Credit  losses,  when  realized,  have been  within  the range of the  Company's
expectations and, historically, have not been significant.

Property and Equipment

Property and equipment is carried at cost.  Repairs and  maintenance are charged
to expense as incurred.  Depreciation is computed using the straight-line method
over the estimated useful lives of the assets as follows:

      Equipment, furniture and fixtures                     3-7 years
      Vehicles                                                5 years
      Leasehold improvements                                  3 years

Stock Options

The Company  accounts for its stock options under the intrinsic  value method in
accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to  Employees,  ("APB 25") and related  interpretations.  The Company has
adopted the  disclosure-only  provisions of the Financial  Accounting  Standards
Board ("FASB") Statement No. 123, Accounting for Stock-Based  Compensation ("FAS
123")  as  amended  by  FASB  Statement  No.  148,  Accounting  for  Stock-Based
Compensation - Transition and Disclosure ("FAS 148"). Had the Company elected to
adopt the fair value  recognition  provisions  of FAS 123,  pro forma net income
(loss) and  earnings  (loss) per share  would be as follows  for the years ended
December 31:

                                                 2003                  2002
                                               --------            ------------
Net income (loss), as reported                 $568,315            $   (149,570)
Employee compensation, net of tax                25,861                   4,294
                                               --------            ------------
Pro forma net income (loss)                    $542,454            $   (153,864)
                                               ========            ============

Earnings (loss) per share:

 Basic, as reported                            $  0.04             $      (0.01)
                                               ========            ============
 Diluted, as reported                          $  0.03             $      (0.01)
                                               ========            ============

 Basic, pro forma                              $   0.04            $      (0.01)
                                               ========            ============
 Diluted, pro forma                            $   0.03            $      (0.01)
                                               ========            ============


                                      F-8

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



1.    Significant Accounting Policies (continued)

Fair Value of Financial Instruments

The  fair  value  of the  Company's  financial  instruments  approximates  their
carrying value based upon the type and nature of the financial instruments.

Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates and assumptions  that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

2.    Convertible Debt and Equity Line of Credit Agreement

During April 2002,  the Company  entered into a  subscription  agreement  with a
company (the "Investor") in which the Company  ultimately  received $300,000 (in
$100,000  tranches)  from the Investor in return for a  corresponding  amount of
convertible debentures and related warrants.

Significant terms of the agreement are summarized as follows:

      o  The  debentures  may be  converted  at any time by the  Investor at the
         lesser of (i) 110% of the average  five  closing bid prices  during the
         five trading days prior to the issuance date or (ii) 75% of the average
         of the five lowest  closing bid prices  during the twenty  trading days
         immediately prior to the conversion date.

      o  In the event all or any portion of the  debentures  are  outstanding at
         the end of three years from the date of issuance,  the  debentures  are
         subject to  automatic  conversion  into  Company  stock  based upon the
         conversion rate described above.

      o  The debentures shall pay 6% cumulative interest,  payable in arrears at
         the time of each conversion, in cash or common stock of the Company, at
         the Company's option.

      o  The debentures are secured by 4,000,000  shares of the Company's common
         stock, which is currently owned by the Company's majority stockholders.

      o  Upon funding of the first  tranche,  the Company issued to the Investor
         warrants to purchase the  resulting  number of shares of the  Company's
         stock that equals the total amount being funded in all three  tranches,
         divided by the share price (five day average closing bid price prior to
         closing).  The  warrants  are  exercisable  for  four  years  from  the
         corresponding closing date of that tranche being funded, at 110% of the
         five day average  closing bid price for the five  trading days prior to
         the closing date of each funding tranche and carry a cashless provision
         only at the option of the Company.


                                      F-9

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



2.    Convertible Debt and Equity Line of Credit Agreement (continued)

During April 2002,  the Company  received its first  $100,000  tranche under the
terms of the agreement.  As a result of the  conversion  rates  described  above
which allow for the  conversion at a price less than the stock price at the date
of the funding,  and in accordance with  provisions of the Financial  Accounting
Standards  Board  Emerging  Issues  Task Force  Issue No.  98-5  ("EITF  98-5"),
Accounting for Convertible  Securities with  Beneficial  Conversion  Features or
Contingently  Adjustable  Conversion  Rates,  the  Company  recognized  interest
expense and increased  additional  paid-in  capital by $27,250  related to these
debentures at the date of funding. Additionally, in accordance with the terms of
the agreement  described  above,  the Company issued warrants to the Investor to
purchase an additional  462,963 shares of stock at an exercise price of $0.2376.
The Company estimated the value of these warrants to be $1,666 and, accordingly,
the $100,000  convertible debt was discounted and additional paid-in capital was
increased by this amount.

During June 2002,  the Company  received its second  $100,000  tranche under the
terms of the agreement.  As a result of the  conversion  rates  described  above
which allow for the  conversion at a price less than the stock price at the date
of the funding,  and in accordance  with  provisions  of EITF 98-5,  the Company
recognized interest expense and increased  additional paid-in capital by $22,955
related to these debentures at the date of funding.  Additionally, in accordance
with the terms of the agreement  described above, the Company issued warrants to
the Investor to purchase an  additional  462,963  shares of stock at an exercise
price of $0.23.  The Company  estimated the value of these warrants to be $1,666
and,  accordingly,  the $100,000  convertible debt was discounted and additional
paid-in capital was increased by this amount.

During October 2002, the Company  received its third $100,000  tranche under the
terms of the agreement.  As a result of the  conversion  rates  described  above
which allow for the  conversion at a price less than the stock price at the date
of the funding,  and in accordance  with  provisions  of EITF 98-5,  the Company
recognized interest expense and increased  additional paid-in capital by $13,750
related to these debentures at the date of funding.  Additionally, in accordance
with the terms of the agreement  described above, the Company issued warrants to
the Investor to purchase an  additional  462,963  shares of stock at an exercise
price of $0.088.  The Company estimated the value of these warrants to be $1,668
and,  accordingly,  the $100,000  convertible debt was discounted and additional
paid-in capital was increased by this amount.

Also  during  April  2002,  the  Company  entered  into an equity line of credit
investment agreement with the Investor which provides for the purchase of shares
of the Company's common stock.  Subject to the Company's  fulfillment of certain
terms and conditions  contained in the  agreement,  the Investor is obligated to
purchase up to $3,000,000 of the Company's common stock at a price of 85% of the
average of the four lowest  closing  bid prices of the  Company's  common  stock
during the ten days  subsequent to the date of the put notice.  These  purchases
are to be made via put  notices  issued  at the  Company's  discretion  and each
single put notice  shall not be less than  $15,000 nor more than  $150,000.  The
effective  date of this equity line of credit  agreement was October 2002 and it
expires in April 2004.  Under the terms of the equity line of credit  investment
agreement,  the Company has issued 387,097 shares of the Company's  common stock
to the Investor as a commitment fee. Additionally, under the terms of the equity
line of credit


                                      F-10

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)


2.    Convertible Debt and Equity Line of Credit Agreement (continued)

investment  agreement,  the Company  issued  warrants  enabling  the Investor to
purchase 1,388,889 at an exercise price of $0.2376 per share, which is above the
trading value of the stock at the date the warrants were issued.  These warrants
expire in April 2006.  No such put notices  have been made by the Company  under
this  agreement and management  determined  during 2003 that no such put notices
will be made related to this  agreement.  Accordingly,  no stock (other than the
stock issued related to the  commitment  fee) has been issued under the terms of
the equity line of credit.

3.    Notes Payable

Notes payable are summarized as follows as of December 31:

                                                       2003               2002
                                                     ---------------------------

 Note payable, secured by a vehicle, due in
   monthly installments of $665, including
   interest at 11.21%, through February 2009         $ 30,324           $     --
 Note payable, secured by a vehicle, due in
   monthly installments of $348, including
   interest at 11%, through November 2005               7,188             10,381
 Note payable, secured by a vehicle, due in
   monthly installments of $330,including
   interest at 11%, through November 2005               6,822              9,852
 Note payable, secured by a vehicle, due in
   monthly installments of $333, including
   interest at 11%, through November 2005               6,871              9,923
Note payable repaid in 2003                                --              9,830
                                                     --------           --------
                                                       51,205             39,986
Less portion classified as current                     14,607             17,338
                                                     --------           --------
Long-term portion                                    $ 36,598           $ 22,648
                                                     ========           ========

The vehicles  securing these notes payable have a carrying amount of $53,676 and
$38,877 as of December 31, 2003 and 2002, respectively.

Aggregate maturities of the Company's notes payable as of December 31, 2003, are
as follows:

      2004                                                            $14,607
      2005                                                             15,864
      2006                                                              5,960
      2007                                                              6,664
      2008                                                              7,451
      Thereafter                                                          659
                                                                      -------
                                                                      $51,205
                                                                      =======

The  Company   previously   utilized   numerous   credit  cards  with  financial
institutions  as lines of credit.  These  lines of credit  were fully  repaid in
2003.


                                      F-11

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



4.    Lease Obligations

The Company leases certain equipment under an agreement which is classified as a
capital lease. This agreement expires in 2006.

The  Company  also  leases  their  office  and  warehouse,  along  with  certain
equipment,  under agreements  classified as operating leases. The Company has an
agreement with the office and warehouse lessor in which the Company is obligated
to purchase the office and  warehouse  for  $1,607,640  if the Company  receives
$3,000,000  in  proceeds  from  a  private  placement  offering.  This  purchase
obligation expires on December 31, 2004.

Future minimum payments for leases, by year and in the aggregate, consist of the
following as of December 31, 2003:

                                                     Operating           Capital
                                                     ---------------------------

      2004                                           $219,972            $ 4,911
      2005                                            218,736              4,911
      2006                                                 --              2,866
                                                     --------             ------
      Total minimum lease payments                   $438,708             12,688
                                                     ========            =======
      Amount representing interest                                         2,321
                                                                         -------
      Present value of net minimum
        lease payments (including $3,525
        classified as current)                                           $10,367
                                                                         =======

Property and equipment  includes the following  amounts for capital leases as of
December 31:

                                                        2003           2002
                                                   -----------------------------

      Equipment                                        $58,765       $58,765
      Less accumulated amortization                     48,972        42,211
                                                   -----------------------------
      Net equipment under capital lease               $  9,793       $16,554
                                                   =============================

Amortization  of these  assets,  computed by the  straight-line  method over the
lesser  of the life of the  asset  or the  term of the  lease,  is  included  in
depreciation and amortization expense.

5.    Deferred Revenue

In December 2003, the Company entered into a $1,000,000,  ten-year use agreement
whereby  the user is  allowed  exclusive  use of  certain  research  data of the
Company on product  failure or failure  patterns and  quarterly  updates of such
data. The use agreement calls for ten $100,000  annual payments  starting at the
date of the agreement. Either party can terminate the use agreement with 30 days
written notice. Upon termination, the Company is entitled to any annual payments
received  pro-rated on a quarterly  basis. At December 31, 2003, the Company has
recorded  deferred  revenue of $91,667 and a receivable  of $100,000,  which was
collected subsequent to year-end, related to this use agreement


                                      F-12

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)


6.    Income Taxes

For tax purposes the Company has net operating loss ("NOL") carryovers which are
available  to offset  future  taxable  income.  These NOL  carryovers  expire as
follows:

          Year                      Year of                       NOL
       Generated                  Expiration                   Carryover
      --------------------------------------------------------------------

         1995                         2010                     $10,943
         1996                         2011                       1,704
         1997                         2012                       1,979
         1998                         2018                      99,100
         1999                         2019                     109,805
         2000                         2020                     205,248
         2001                         2021                     436,265
         2002                         2022                     109,525
         2003                         2023                     111,602
                                                        ------------------
                                                            $1,086,171
                                                        ==================

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes.

Significant  components of the Company's deferred tax assets and liabilities are
as follows as of December 31:

                                                       2003              2002
                                                     --------          --------
Deferred tax assets:
  NOL carryovers                                     $415,895          $355,494
  Expenses not currently deductible                        --           172,817
  Reserve for doubtful accounts                        13,402            14,933
  Book over tax depreciation                               --             8,422
  Other                                                   523               523
                                                     --------          --------
                                                      429,820           552,189
  Valuation allowance for deferred tax assets              --          (552,189)
                                                                       --------
Net deferred tax assets                               429,820                --
Deferred tax liability - tax over book
  depreciation                                         (9,246)               --
                                                     --------          --------
Net deferred tax assets (including $143,485
  classified as current)                             $420,574          $     --
                                                     ========          ========

The ultimate  realization  of these assets is dependent  upon the  generation of
future  taxable  income  sufficient  to offset the  related  deductions  and NOL
carryovers  within the  applicable  carryover  periods as previously  described.
During 2003,  it was  determined  that  generation of such income is more likely
than not.  Accordingly,  the  valuation  allowance as of December 31, 2002,  was
reversed.  The valuation  allowance  increased by $64,851 in 2002 as a result of
changes in deferred tax items.


                                      F-13

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



6. Income Taxes (continued)

The reconciliation of income tax attributable to continuing  operations computed
at the U.S. federal statutory tax rates to the income tax benefit recorded is as
follows for the years ended December 31:

                                                    2003                 2002
                                                 ---------            ----------

Tax at U.S. statutory rates of 34%               $  50,232            $ (50,853)
Effect of permanent differences
    (primarily write-off of deferred
     stock issuance costs in 2003)                  75,046                1,743
Reverse prior year valuation allowance            (552,189)                  --
Increase in valuation allowance                         --               64,851
Other                                                6,337              (15,741)
                                                 ---------            ----------
                                                 $(420,574)           $      --
                                                 =========            ==========

7.    Company Stock Transactions

During  January 2002, the Company  received  $25,000 for 71,429 shares of common
stock.

As discussed in Note 2, during 2002 the Company  issued 387,097 shares of common
stock to a company  as a  commitment  fee  related  to an equity  line of credit
agreement. Additionally during 2002, the Company issued 247,222 shares of common
stock to certain attorneys for fees associated with this agreement.  The Company
also paid professional fees of $48,000 associated with this agreement.  As these
represent costs  associated with the potential of raising  capital,  at December
31, 2002 the Company  presented  the $191,393 as a reduction  of equity  pending
future  funding under this  agreement.  During 2003,  management  determined the
Company  would not draw on this  equity  line of credit  and  these  costs  were
expensed.

As a result of the warrants  related to the convertible  debt and equity line of
credit  discussed in Note 2 and the employee stock options  discussed in Note 8,
the Company has reserved 10,805,778 shares of common stock for future issuance.

8.    Employee Stock Options

The Company  follows APB 25 and related  interpretations  in accounting  for its
employee  stock  options.  Under  APB 25,  because  the  exercise  price  of the
Company's employee stock options is equal to or greater than the market price of
the  underlying  stock on the grant date, no  compensation  expense is generally
recognized.

Pro forma information  regarding net income, as presented in Note 1, is required
by FAS 123, as amended by FAS 148, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of FAS 123.
The fair value for these options, which were issued in 2002, was estimated using
a Black-Scholes option pricing model with the following  assumptions:  risk-free
interest rates of 3.05%, expected lives of 5 years, expected volatility of 43.9%
and no expected dividends.


                                      F-14

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



8. Employee Stock Options (continued)

The  Company has no formal  stock  option plan  however in  November  2002,  the
Company issued 8,028,000 options to employees (8,000,000 of which were issued to
five  employees who are also board  members).  These options vest at the rate of
20%  annually  beginning  at the  grant  date and  expire  upon  termination  of
employment.  A summary of the  Company's  stock  option  activity,  and  related
information for the years ended December 31 is as follows:

<TABLE>
<CAPTION>
                                                    2003                        2002
                                           -----------------------     -----------------------
<S>                                        <C>           <C>           <C>               <C>
                                                         Weighted                   Weighted
                                                          Average                   Average
                                                         Exercise                   Exercise
                                             Options       Price       Options       Price
                                           -----------------------     -----------------------

      Outstanding at beginning
        of year                            8,028,000     $    0.11            --         $  --

      Granted                                     --            --     8,028,000          0.11
                                           -----------------------     -----------------------
      Outstanding at end of year           8,028,000     $    0.11     8,028,000         $0.11
                                           =======================     =======================

      Exercisable at end of year           3,228,000                   1,628,000
      Fair value of options
        granted                                  $--                       $0.03
</TABLE>

Exercise  prices for options  outstanding  as of December 31,  2003,  range from
$0.11 (8,000,000 shares) to $0.18 (28,000 shares).

9.    Related Party Transaction

During December 2001, the Company was advanced $18,000 from a stockholder of the
Company.  This  advance  was  noninterest  bearing,  and  there  were no  stated
repayment  terms.  $4,000 was  repaid in 2002,  and the  balance of $14,000  was
repaid in 2003.

10.   Contingencies

Periodically, the Company has cash on deposits with financial institutions which
exceed Federal Deposit Insurance Corporation ("FDIC") limits. Balances in excess
of the insurance  limits are subject to the risk the financial  institution will
not pay upon demand.  At December 31, 2003, the Company's  balances on hand with
financial institutions exceed the FDIC coverage by approximately $177,000.


                                      F-15

<PAGE>

                      Diversified Product Inspections, Inc.

             Notes to Consolidated Financial Statements (continued)



11.   Earnings (Loss) Per Share Data

Basic earnings  (loss) per share assumes no dilution and is computed by dividing
loss available to common  stockholders by the weighted  average number of common
stock  outstanding  during each period.  Diluted earnings per share reflect,  in
periods  in which  they have a  dilutive  effect,  the  effect of common  shares
issuable upon the exercise of stock warrants, using the treasury stock method of
computing such effects and contingent shares, or conversion of convertible debt.
As a result of the  Company's  net loss in 2002,  the effect of the  outstanding
stock warrants and convertible debt had an antidilutive effect.

The following  table sets forth the  computation of basic loss per share for the
years ended December 31:

                                                    2003             2002
                                                 ----------       ----------
Basic:
 Net income (loss)                              $   568,315      $  (149,570)
 Average shares outstanding                      14,961,457       14,749,249
                                                 ----------       ----------
 Basic earnings (loss) per share                $      0.04      $    (0.01)
                                                 ==========       ==========

Diluted:
 Net income (loss)                              $   568,315      $  (149,570)
 Add interest on convertible debt                    18,000               --
                                                 ----------       ----------
 Diluted net income (loss)                      $   586,315      $  (149,570)
                                                 ==========       ==========

 Average shares outstanding                      14,961,457       14,749,249
 Effect of dilutive stock options and
   warrants - based on treasury stock
   method                                         1,734,059               --
 Assumed conversion of 6% convertible debt        1,992,022               --
                                                 ----------       ----------
 Diluted shares outstanding                      18,687,538       14,749,249
                                                 ==========       ==========

 Diluted earnings (loss) per share              $      0.03      $    (0.01)
                                                 ==========       ==========


                                      F-16



<PAGE>

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

         There  were  no  changes  in  or  disagreements  with  accountants  on
accounting  and  financial  disclosure  for  the  period covered by this report.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

(a)  Identity of our current directors and executive officers.

Name                   Age    Positions with the Company
-------                ---    --------------------------

John Van Zyll          62     Chairman of the Board, Chief Executive Officer

Marvin Stacy           69     Chief Operating Officer and Director

Ann M. Furlong         50     Secretary and Director

Warren Wankelman       59     Director

Matt Walters           31     Director


<PAGE>


      John Van Zyll currently serves as the Chairman of the Board and Chief
Executive Officer. Mr. Van Zyll has served in this capacity since March 2001 and
previously served in similar capacities with Diversified Product Investigations,
Inc., the Company's subsidiary since its formation in 1991. Mr. Van Zyll has
over 10 years of construction and investigation experience. He is a member of
the Southern Building Code Congress International and the National Fire
Protection Association and is a licensed Private Investigator. He holds
certificates from the National Association of Investigative Specialists with
specialties in Insurance Claim Investigation and Advanced Fire Investigation
Techniques. Mr. Van Zyll is considered an expert in the field of investigation
and subrogation by the insurance industry and has conducted over 100 training
seminars and trained over 1900 insurance adjusters.

      Marvin Stacy currently serves as a Director and the Company's Chief
Operating Officer. Mr. Stacy has served in these capacities since March 2001 and
previously served in similar capacities with Diversified Product Investigations,
Inc., the Company's subsidiary since 1991. Mr. Stacy has over 40 years of
experience in all aspects of electrical and mechanical engineering and design.
As a licensed private investigator he assists with the operation of the
laboratory and has designed custom testing equipment. Mr. Stacy assists
Engineers with design solutions for manufacturers. Mr. Stacy is a member of
IAMPO, the International Association of Mechanical and Plumbing Officials. Mr.
Stacy assists in the Human Resource Dept., with regards to hiring
qualified-professional personnel.

      Ann M. Furlong currently serves as a Director and the Company's Secretary.
Ms. Furlong has served in these capacities since March 2001 and previously
served in similar capacities with Diversified Product Investigations, Inc., the
Company's subsidiary since 1991. With over 29-years of management experience Ms
.. Furlong has provided administrative and organizations expertise. As a licensed
private investigator she assists with research projects. She has traveled to
assist with Stock promotional shows for the company along with seminar
presentations to the Insurance Industry. Ms. Furlong focuses on special projects
and assists in the operations of the company.

      Warren Wankelman currently serves as a Director and as the Vice President
of Marketing for the Company. Mr. Wankelman has served in these capacities since
March 2001 and previously served in similar capacities with Diversified Product
Investigations, Inc., the Company's subsidiary since 2001. Mr. Wankelman has
over 25 years of experience in Sales/Marketing and Operations Management. A
graduate of Northwestern University, Mr. Wankelman has consistently demonstrated
effective marketing and management ability in a career of leadership positions,
including Executive Vice President of Punta Gorda Isles, Inc., President and
owner of Wankelman- Swen & Associates, Inc. and Director of Marketing for
Saddlebrook, Inc. of Knoxville, TN.

      Matt Walters currently serves as a Director and Chief Information Officer
of the Company. Mr. Walters has served in this capacity since May 2001. Mr.
Walters has over 10 years experience in IT (Information Technology) and
Facilities Management. He is a graduate of Tusculum College with a BS in
Organizational Management and gas recently attended New Horizons Computer
Learning Center. As a Microsoft Certified Professional, his client list includes
TVA, SAIC, Lockheed-Martin, Pfizer Pharmaceuticals, Philips Magnavox, and
BellSouth.Net.

      Mr. Walters has implemented various IT quality controls and security
measures for the company and is responsible for implementation of a new company
service, the HomeCheckSafety.com. He also assisted with designing a custom
database and instituting digital photography and he has enhanced the company's
investigation reports.

<PAGE>


Executive Officers

     All of our  executive officers also serve as our directors.  The
executive officers serve at the pleasure of our board of directors and our chief
executive officer.


Item 10.    Executive Compensation.


     The following Summary  Compensation Table sets forth summary information as
to  compensation  received by the  Company's  Executive  Officers  as  executive
officers of the Company  through  December 31, 2003  (collectively,  the "named
executive  officers")  for  services  rendered to the Company in all  capacities
during the three calendar years ended December 31st.
<TABLE>
<CAPTION>


         Annual  Compensation                Awards               Payouts
         -------------------                 ------               -------
Name  and                                   Restricted
Principal                                   Stock
Position(s)              Year    Salary($)  Bonus($)  Other($)        Awards(#  shares)
                                                    Compensation
<S>                       <C>       <C>                  <C>              <C>
John Van Zyll, Chief
Executive Officer
                          2001   40,646.84              120,977         120,977 shares(2)
                          2002   40,323.01
                          2003   49,000.00

Marvin Stacy, Chief
Operating Officer
                          2001   41,136.55              120,977         120,977 shares(2)
                          2002   41,020.70
                          2003   49,000.00
Ann M. Furlong,
Secretary
                          2001   40,502.00              120,977         120,977 shares(2)
                          2002   40,321.46
                          2003   49,000.00
</TABLE>

     (1) All other compensation  includes  certain  health  and  life  insurance
benefits paid by the Company on behalf of its employee.

     (2) Such shares were issued as shares of Diversified Products
Investigations, Inc., our subsidiary, and were subsequently exchanged for shares
of our common stock as part of the reverse merger.

Compensation of Directors

     During the fiscal year ending  December  31,  2003,  no officer or director
received  any type of  compensation  from our Company  for  serving as such.  No
arrangements  are  presently in place  regarding  compensation  to directors for
their  services  as  directors  or  for  committee   participation   or  special
assignments.

<PAGE>

Employee/Consultant Stock Compensation Plan

     We  maintain  an  employee/consultant  stock compensation plan (the "Plan")
pursuant  to  which  the  maximum  number  of shares of common stock as to which
awards  may  be granted is 1,400,000 shares. Our board of directors may increase
the  maximum  number of shares of common stock as to which awards may be granted
at such time as it deems advisable. Awards under the Plan may be granted only to
our  employees  and  consultants.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.


         The  following  table  sets forth certain information as of the date of
this  Report regarding the beneficial ownership of our common stock held by each
of our executive officers and directors, individually and as a group and by each
person  who  beneficially  owns  in  excess of five percent of the common stock.

                           Number  of  Shares  of             Percent of
                              Common  Stock                   Common Stock
                              Beneficially                    Beneficially
Name  of                     Owned  or  Right                 Owned or Right
Beneficial  Owner            to  Direct  Vote (1)            to Direct Vote
-----------------            ------------------             ------------------

John Van Zyll                    6,183,334(2)                    38.7%

Marvin Stacy                     3,203,333(2)                      20%

Ann M. Furlong                   3,273,333(2)                    20.5%

Warren Wankelman                   100,000(3)                       (*)

Matt Walters                       105,000(3)                       (*)

All Executive Officers and
Directors  as a Group
(Five (5) persons)           12,865,000(2)(3)                    70.8%

----------------
(*)  Represents  less  than  one  percent  (1%) of the outstanding shares of our
common  stock.

     (1) Based upon 14,961,457 shares of our common stock issued and outstanding
as  of  March 23, 2004. The number of shares of common stock beneficially owned
by  each  person or entity is determined under the rules promulgated by the SEC.
Under  such  rules,  beneficial  ownership  includes  any shares as to which the
person  or entity has sole or shared voting power or investment power and shares
which  such  person  or  entity has the right to acquire within sixty days after
March 23,  2004.  The inclusion herein of any shares deemed beneficially owned
does  not constitute an admission by such person of beneficial ownership of such
shares.

     (2)  Includes  options  to  purchase   1,000,000  shares  of  common  stock
          currently exercisable at $.08 per share.

     (3)  Includes  options  to  purchase  100,000  shares of our  common  stock
          currently exercisable at $.08 per share.

<PAGE>


Item 12. Certain Relationships and Related Transactions.

Not Applicable

ITEM 13.  CONTROLS AND PROCEDURES

     (a)     Evaluation of Disclosure Controls and Procedures.
             ------------------------------------------------

     Within  the 90 days  prior to the date of this  Annual  Report for the year
ended December 31, 2003, we carried out an evaluation, under the supervision and
with the participation of our management,  including the company's  Chairman and
Chief  Executive   Officer  and  the  Principal   Financial   Officer,   of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  pursuant to Rule 13a-14 of the Securities  Exchange Act of 1934 (the
"Exchange Act"), which disclosure controls and procedures are designed to insure
that  information  required to be  disclosed by a company in the reports that it
files under the  Exchange Act is recorded,  processed,  summarized  and reported
within required time periods specified by the SEC's rules and forms.  Based upon
that evaluation, the Chairman and the Principal Financial Officer concluded that
our disclosure  controls and procedures are effective in timely alerting them to
material  information  relating  to  the  company  (including  our  consolidated
subsidiaries) required to be included in the company's period SEC filings.

     (b)     Changes in Internal Control.
             ---------------------------

     Subsequent to the date of such evaluation as described in subparagraph  (a)
above,  there were no  significant  changes in our  internal  controls  or other
factors that could significantly affect these controls, including any corrective
action with regard to significant deficiencies and material weaknesses.

Item 14. Exhibits and Reports on Form 8-K.

     (a) Exhibits

Exhibit
Number     Description
-------  ---------------------

2.1  Share Exchange  Agreement  between with  Diversified  Product  Inspections,
     Inc., a Florida  corporation filed with the Commission on Form 8-K on March
     6, 2001 and incorporated herein by reference

3.1  Articles of Incorporation  and Amendment to Articles of  Incorporation  are
     incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB filed with the Commission on February 23, 1999.

3.2  Bylaws of the Company are incorporated herein by reference to the Company's
     Registration  Statement on Form 10-SB filed with the Commission on February
     23, 1999.

<PAGE>


3.3  Articles of Incorporation  and Amendment to Articles of  Incorporation  are
     incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB filed with the Commission on February 23, 1999.

3.4  Bylaws of the Company are incorporated herein by reference to the Company's
     Registration  Statement on Form 10-SB filed with the Commission on February
     23, 1999.

10.1 Articles of Merger and Agreement and Plan of Merger are incorporated herein
     by reference to the  Company's  Registration  Statement on Form 10-SB filed
     with the Commission on February 23, 1999.

10.2 Diversified Product Inspections,  Inc. Year 2001 Employee/Consultant  Stock
     Compensation  Plan  filed  as an  Exhibit  to  the  Company's  registration
     statement  on Form S-8  filed  with  the  Commission  on March 6,  2001 and
     incorporated herein by reference.

31.1 Certification  of  Principal  Executive  Officer  and  Principal  Financial
     Officer  Pursuant to Exchange Act Rule  13a-14(a),  as adopted  pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification  of  Principal  Executive  Officer  and  Principal  Financial
     Officer  Pursuant to 18 U.S.C.  1350, as adopted pursuant to Section 906 of
     the Sarbanes-Oxley Act of 2002.


     (b) Reports on Form 8-K.

The  Company  did  not  file a Current Report on Form 8-K for the fourth quarter
ended  December  31,  2003.



<PAGE>

                                   SIGNATURES



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


Dated March 24, 2004
                            Diversified Product Inspections, Inc.

                            By:       /s/ John Van Zyll
                                      ______________________
                                      John Van Zyll
                                      Chief Executive Officer
                                      (Principal Executive Officer and Principal
                                      Accounting Officer)

     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.

/s/ John Van Zyll
__________________
John Van Zyll         Chairman of the Board                    March 24, 2004

/s/ Marvin Stacy
__________________
Marvin Stacy          Chief Operating Officer and Director     March 24, 2004

/s/ Ann M. Furlong
__________________
Ann M. Furlong        Secretary and Director                   March 24, 2004

/s/ Warren Wankelman
__________________
Warren Wankelman      Director                                 March 24, 2004

/s/ Matt Walters
__________________
Matt Walters          Director                                 March 24, 2004

<PAGE>