<PAGE>
                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2002
                                                 ---------------

                        Commission file number 000-24498
                                              ----------

                       DIAMOND HILL INVESTMENT GROUP, INC
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


                    Ohio                               65-0190407
           -----------------------------------------------------------
           (State or other jurisdiction of          (I.R.S. Employer
           incorporation or organization)          Identification No.)


             375 North Front Street, Suite 300, Columbus, Ohio    43215
           ---------------------------------------------------------------
            (Address of principal executive offices)            (Zip Code)

                    Issuer's telephone number (614) 255-3333
                                              --------------

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
                                                             ----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of April 30, 2002:
          Common Stock: 1,423,466 shares

Transitional Small Business Disclosure Format (check one):

         Yes  X            No
            -----



<PAGE>


              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

                                      INDEX
                                      -----
<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                          <C>
Part I Financial Information:                                                                   3

             Item 1.       Consolidated Statements of Financial                                 4
                           Condition at March 31, 2002 (unaudited) and
                           December 31, 2001 (audited)

                           Consolidated Statements of Operations for                            5
                           the Three Months Ended March 31, 2002 and
                           2001 (unaudited)

                           Consolidated Statement of Changes in                                 6
                           Shareholders' Equity for the Three Months
                           Ended March 31, 2002 (unaudited)

                           Consolidated Statements of Cash Flows for                            7
                           the Three Months Ended March 31, 2002 and
                           2001 (unaudited)

                           Notes to Consolidated Financial Statements                         8-15

             Item 2.       Management's Discussion and Analysis of                           16-19
                           Financial Condition and Results of Operations

Part II Other Information:                                                                     20

             Item 1.       Legal Proceedings

             Item 2.       Changes in Securities; Use of Proceeds

             Item 3.       Defaults Upon Senior Securities

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

             Item 5.       Other Information

             Item 6.       Exhibits and Reports on Form 8-K

Signatures                                                                                     21
</TABLE>
                                       2
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

The accompanying consolidated financial statements, which should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10KSB for the year ended
December 31, 2001, are unaudited (except for the December 31, 2001 consolidated
balance sheet, which was derived from the Company's audited financial
statements), but have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the entire fiscal year ending
December 31, 2002


                                       3
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                   As of March 31, 2002 and December 31, 2001

<TABLE>
<CAPTION>
                                                                               UNAUDITED         AUDITED
                                                                                03/31/02         12/31/01
                                                                              ------------    ------------

                                     ASSETS
                                     ------
<S>                                                                        <C>               <C>
Cash                                                                          $    421,867    $  1,174,026
Investment portfolio:
         Mutual fund shares and limited partnership interests                    4,687,248       4,372,394
         Marketable equity securities, at market value                             265,476         241,710
         Not readily marketable equity securities, at estimated fair value         239,211         316,656
Accounts receivable:
         Affiliates                                                                 37,233          56,968
         Pending settlements and other                                              72,843          34,222
         Refundable income taxes                                                   414,251         414,251
Property and equipment, net of accumulated depreciation of $222,016 and
$207,877, respectively                                                             125,597         139,737
Deposits and other                                                                 114,992         113,783
                                                                              ------------    ------------

                   Total assets                                               $  6,378,718    $  6,863,747
                                                                              ============    ============

                                   LIABILITIES
                                   -----------


Accounts payable to broker-dealers and other                                  $      2,840    $       --
Accrued expenses                                                                   424,771         491,767
                                                                              ------------    ------------

                   Total liabilities                                               427,611         491,767
                                                                              ------------    ------------

                              SHAREHOLDERS' EQUITY
                              --------------------

Common stock: (note 3)
         No par value, 30,000,000 shares authorized,
                   1,821,972 shares issued and 1,437,466 shares outstanding     10,023,703      10,023,703
         Treasury stock, at cost
                   (384,506 shares and 342,206 shares, respectively             (2,271,010)     (2,101,810)
         Deferred compensation                                                     (29,645)        (36,793)
Accumulated deficit                                                             (1,771,941)     (1,513,120)
                                                                              ------------    ------------

                   Total shareholders' equity                                    5,951,107       6,371,980
                                                                              ------------    ------------

                   Total liabilities and shareholders' equity                 $  6,378,718    $  6,863,747
                                                                              ============    ============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       4
<PAGE>


              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                     As of March 31, 2002 and March 31, 2001

                                    UNAUDITED
                                    ---------

                                                       2002         2001
                                                    ---------    ---------
OPERATING REVENUES:
            Management fees and commissions           233,170      306,641
            Market making gains                         1,136       75,054
                                                    ---------    ---------

               Total operating revenues               234,306      381,695
                                                    ---------    ---------

OPERATING EXPENSES:
            Salaries, benefits and payroll taxes      383,398      438,847
            Brokers' commission                        28,568       39,501
            Professional fees                         231,151      147,494
            General and administrative                190,856      232,987
                                                    ---------    ---------

               Total operating expenses               833,973      858,829
                                                    ---------    ---------

OPERATING LOSS                                       (599,667)    (477,134)
                                                    ---------    ---------

OTHER REVENUE AND (EXPENSES):
            Portfolio gains                           326,424      509,242
            Dividend income                            11,577       64,456
            Interest and other income                   2,845       13,627

            Interest expense                             --           (333)
                                                    ---------    ---------

               Total other revenue and (expenses)     340,846      586,992
                                                    ---------    ---------

INCOME (LOSS) BEFORE TAXES                           (258,821)     109,858


INCOME TAX PROVISION (CREDIT)                            --           --
                                                    ---------    ---------

NET INCOME (LOSS)                                   $(258,821)   $ 109,858
                                                    =========    =========




            BASIC EARNINGS (LOSS) PER SHARE         $   (0.18)   $    0.06
                                                    =========    =========

            DILUTED EARNINGS (LOSS) PER SHARE       $   (0.18)   $    0.06
                                                    =========    =========




The accompanying notes are an integral part of these consolidated financial
statements.


                                       5
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGE IN SHAREHOLDERS' EQUITY
                    For the Three Months Ended March 31, 2002


                                    UNAUDITED
                                    ---------

<TABLE>
<CAPTION>

                                               Treasury      Deferred       Retained
                                  Common         Stock     Compensation     Earnings         Total
                               -----------   -----------    -----------    -----------    -----------

<S>                          <C>           <C>            <C>            <C>            <C>
Balance at December 31, 2001   $10,023,703   ($2,101,810)   ($   36,793)   ($1,513,120)   $ 6,371,980

Amortization of deferred
compensation                          --            --            7,148           --            7,148

Purchase of treasury stock            --        (169,200)          --             --         (169,200)

Net loss                              --            --             --         (258,821)      (258,821)

                               -----------   -----------    -----------    -----------    -----------
Balance at March 31, 2002      $10,023,703   ($2,271,010)   ($   29,645)   ($1,771,941)   $ 5,951,107
                               ===========   ===========    ===========    ===========    ===========

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       6
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
               For the Three Months Ended March 31, 2002 and 2001

                                    UNAUDITED
                                    ---------

<TABLE>
<CAPTION>
                                                                   2002           2001
                                                               -----------    -----------
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                         $  (258,821)   $   109,858
     Adjustments to reconcile net income (loss)
     to net cash provided by (used in) operating activities:
         Depreciation and amortization                              14,140          8,160
         Bad debt expense (recovery)                                  --          (14,025)
         Amortization of deferred compensation                       7,148         11,846
         Unrealized (gain) loss                                   (301,850)      (860,629)
         (Increase) decrease in certain assets-
            Investment portfolio                                    40,675        167,600
            Mortgage participation notes                              --          223,500
            Accounts receivable                                     19,735        (33,667)
            Other accounts receivable                              (38,621)        31,407
            Refundable income taxes                                   --            2,937
            Other assets                                            (1,209)        36,239
         Increase (decrease) in certain liabilities-
            Accounts payable to broker-dealers and other             2,840         35,792
            Accrued expenses and other                             (66,996)        77,567
                                                               -----------    -----------
                Net cash used in operating activities             (582,959)      (203,415)
                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                               --          (75,193)
                                                               -----------    -----------
                Net cash used in investing activities                 --          (75,193)
                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Purchase of treasury stock                                   (169,200)      (363,477)
                                                               -----------    -----------
                Net cash used in financing activities             (169,200)      (363,477)
                                                               -----------    -----------

NET INCREASE (DECREASE) IN CASH                                   (752,159)      (642,085)

CASH, BEGINNING OF PERIOD                                        1,174,026      3,443,228
                                                               -----------    -----------

CASH, END OF PERIOD                                            $   421,867    $ 2,801,143
                                                               ===========    ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Cash paid during the period for:
         Interest                                              $       --    $       333
         Income taxes                                                  --             --
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       7
<PAGE>


              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 1   ORGANIZATION AND NATURE OF BUSINESS
         -----------------------------------

         Diamond Hill Investment Group, Inc. (the Company) is an Ohio
         corporation incorporated in May 2002 and previously a Florida
         corporation since April 1990. The Company has two subsidiary operating
         companies.

         Diamond Hill Capital Management, Inc., (DHCM) is a wholly owned
         subsidiary of the Company and a registered investment adviser. DHCM is
         the Investment Adviser to the Diamond Hill Focus Fund, Diamond Hill
         Small Cap Fund and Diamond Hill Large Cap Fund, open-end mutual funds,
         and Diamond Hill Investment Partners, L.P. and offers advisory accounts
         to institutional and individual investors.

         Diamond Hill Securities, Inc. (DHS), an Ohio corporation, is a wholly
         owned subsidiary of DHCM and an NASD registered broker-dealer. DHS is
         registered with the Securities and Exchange Commission, the securities
         commissions of eight states (including Ohio) and the District of
         Columbia. DHS trades securities on a fully-disclosed basis and clears
         customer transactions through an unaffiliated broker-dealer that also
         maintains the customer accounts. DHS is also a registered investment
         adviser and offers advisory accounts to institutional and individual
         investors. DHS is also the Investment Adviser to the Diamond Hill Bank
         & Financial Fund, formerly The Banc Stock Group Fund.

Note 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and the reported amounts of revenues and expenses for the
         periods. Actual results could differ from those estimates. The
         following is a summary of the Company's significant accounting
         policies:

         Limited Partnership Interests
         -----------------------------

         DHCM is the managing member of Diamond Hill General Partner, LLC, the
         General Partner of Diamond Hill Investment Partners (DHIP), L.P., a
         limited partnership whose underlying assets consist of marketable
         securities. DHCM's investment in DHIP is accounted for using the equity
         method, under which DHCM's share of the net earnings or losses of the
         partnership is reflected in income as earned and distributions received
         are reflected as reductions of the investment. The Company is actively
         seeking additional unaffiliated investors for DHIP and, if successful,
         seeks to reduce DHCM's percentage ownership significantly.


                                       8
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
         ------------------------------------------

         Earnings Per Share
         ------------------

         Basic and diluted earnings per common share are computed in accordance
         with Statement of Financial Accounting Standards No. 128, "Earnings per
         Share." A reconciliation of the numerators and denominators used in
         these calculations is shown below:

         For the three months ended March 31, 2002:

                                 Numerator         Denominator       Amount
                                 ---------         -----------    -----------

           Basic Earnings        $(258,821)         1,453,950     $   (0.18)

           Diluted Earnings      $(258,821)         1,453,950     $   (0.18)


         For the three months ended March 31, 2001:

                                 Numerator         Denominator       Amount
                                 ---------         -----------    -----------

           Basic Earnings        $109,858           1,723,622     $      .06

           Diluted Earnings      $109,858           1,794,251     $      .06

         Stock options and warrants have not been included in the denominator of
         the diluted per-share computations because the effect of their
         inclusion would be anti-dilutive.

         Fair Value of Financial Instruments
         -----------------------------------

         Substantially all of the Company's financial instruments are carried at
         fair value or amounts approximating fair value. Assets, including
         accounts receivable, mortgage participation notes, notes and interest
         receivable and securities owned are carried at amounts that approximate
         fair value. Similarly, liabilities, including accounts payable and
         accrued expenses are carried at amounts approximating fair value.

Note 3   CAPITAL STOCK
         -------------

         Stock Split
         -----------

         Effective September 26, 2001, the Company completed a 1 for 5 reverse
         stock split of its common stock. All share amounts have been
         retroactively adjusted to reflect the split.

         Treasury Stock
         --------------

         For the year ended December 31, 2001, the Company purchased 261,136
         shares for $1,553,426. During the three months ended March 31, 2002,
         the Company purchased 42,300 shares for $169,200.


                                       9
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 3   CAPITAL STOCK (Continued)
         -------------

         Authorization of Preference Stock
         ---------------------------------

         The Company's Articles of Incorporation authorize the issuance of
         10,000,000 shares of "blank check" preference stock with such
         designations, rights and preferences, as may be determined from time to
         time by the Company's Board of Directors. The Board of Directors is
         empowered, without shareholder approval, to issue preference stock with
         dividend, liquidation, conversion, voting, or other rights which could
         adversely affect the voting or other rights of the holders of the
         Common Stock. There were no shares of preference stock issued or
         outstanding at March 31, 2002 or December 31, 2001.

Note 4   TRADING PORTFOLIO
         -----------------

         Investment portfolio balances of as March 31, 2002, are comprised of
         the following:
<TABLE>
<CAPTION>

                                                                   Unrealized   Unrealized
                                           Market        Cost        Gains        Losses
                                        ----------   ----------   ----------   ----------
<S>                                     <C>          <C>          <C>          <C>
               Mutual fund shares and
               limited partnership
               interest                 $4,687,248   $4,171,975   $  515,273   $     --

               Marketable equity
               securities                  265,476      320,804        3,161      (58,489)

               Not readily marketable
               equity securities           239,211      342,464        1,095     (104,348)
                                        ----------   ----------   ----------   ----------

               Total                    $5,191,935   $4,835,243   $  519,529   $ (162,837)
                                        ==========   ==========   ==========   ==========
</TABLE>

                                       10
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002

Note 4   TRADING PORTFOLIO
         -----------------

         Investment portfolio balances of as December 31, 2001, are comprised of
         the following:
<TABLE>
<CAPTION>
                                                                  Unrealized   Unrealized
                                          Market        Cost         Gains       Losses
                                        ----------   ----------   ----------   ----------
<S>                                     <C>          <C>          <C>          <C>
               Mutual fund shares and
               limited partnership
               interest                 $4,372,394   $4,171,975   $  200,419   $     --

               Marketable equity
               securities                  241,710      290,948         --        (49,238)

               Not readily marketable
               equity securities           316,656      412,994       11,825     (108,163)
                                        ----------   ----------   ----------   ----------

               Total                    $4,930,760   $4,875,917   $  212,244   $ (157,401)
                                        ==========   ==========   ==========   ==========
</TABLE>

         DHCM is the managing member of the General Partner of Diamond Hill
         Investment Partners, L.P., whose underlying assets consist primarily of
         marketable securities. The General Partner is contingently liable for
         all of the partnership's liabilities.

         Summary financial information, including the Company's carrying value
         and income from this partnership at March 31, 2002 and 2001, and for
         the three months then ended, is as follows:

                                                       2002        2001

               Total assets                        $8,750,366   $1,487,991
               Total liabilities                    2,439,514      318,402
               Net assets                           6,310,852    1,169,589
               Net fair market value of earnings      415,195       39,549

               DHCM's carrying value                3,292,222    1,035,063
               DHCM's income                          227,786       35,063

         DHCM's income from this partnership includes its pro-rata capital
         allocation and its share of an incentive allocation from the limited
         partners. In addition, DHCM earns an administrative fee payable
         quarterly at the rate of .25% of the value of the limited partners'
         capital accounts.

                                       11
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002

Note 5   CONCENTRATIONS OF CREDIT RISK AND FINANCIAL INSTRUMENTS WITH
         ------------------------------------------------------------
         OFF-BALANCE SHEET RISK
         ----------------------

         DHS, under a correspondent agreement with its clearing broker, has
         agreed to indemnify the clearing broker from damages or losses
         resulting from customer transactions. The Company is, therefore,
         exposed to off-balance sheet risk of loss in the event that customers
         are unable to fulfill contractual obligations. The Company manages this
         risk by requiring customers to have sufficient cash in their account
         before a buy order is executed and to have the subject securities in
         their account before a sell order is executed. The Company has not
         incurred any losses from customers unable to fulfill contractual
         obligations.

         In the normal course of business, DHS is a market maker for a limited
         number of community bank stocks, and quotes bid and ask prices for
         those stocks. In the event of sudden price movements, DHS may be
         required to honor a quote at an undesirable price. DHS controls this
         risk by monitoring markets closely and updating quotes as required and
         generally limits its quotes to 100 or 200 shares of a given security.

         In the normal course of business, the Company periodically sells
         securities not yet purchased (short sales) for its own account and
         writes options. The establishment of short positions and option
         contracts exposes the Company to off-balance sheet market risks in the
         event prices change, as the Company may be obligated to cover such
         positions at a loss. At March 31, 2002, the Company had no short
         security positions, had not written any option contracts and did not
         own any options. The Company did not experience any credit losses due
         to the failure of any counterparties to perform during the quarter
         March 31, 2002. Senior management of the Company is responsible for
         reviewing trading positions, exposures, profits and losses, trading
         strategies and hedging strategies on a daily basis.

         The Company's significant industry concentration, primarily through the
         operations of DHS, which arises within its normal course of business
         activities, is with financial institutions for bank securities
         transactions.

                                       12
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 6   SEGMENT INFORMATION
         -------------------

         The Company has three reportable segments: Investment Advisory
         Services, Brokerage Services and Corporate Portfolio. These segments
         have been designed to aid the operating decision makers in deciding how
         to allocate resources and in assessing performance.

         TYPES OF SERVICES FROM WHICH EACH REPORTABLE SEGMENT DERIVES ITS
         ----------------------------------------------------------------
         REVENUES
         --------
         The Investment Advisory Services segment provides investment advisory
         services to the Diamond Hill Focus Fund, the Diamond Hill Small Cap
         Fund, the Diamond Hill Large Cap Fund, and the Diamond Hill Bank &
         Financial Fund, (formerly the Banc Stock Group Fund), open-end mutual
         funds, Diamond Hill Investment Partners, L.P., an investment limited
         partnership, and offers investment advisory services and accounts to
         institutional and individual investors, specializing in diversified,
         domestic securities. The Brokerage Services segment offers brokerage
         services and managed accounts to institutional and individual
         investors, specializing in regional and community bank stocks. The
         Corporate Portfolio segment is represented by revenue generating
         investments unrelated to the other operating segments.

         MEASUREMENT OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS
         --------------------------------------------------------
         The accounting policies of the segments are the same as those described
         in the summary of significant accounting policies. The Company
         evaluates performance based on profit or loss from operations before
         income taxes. The Company focuses its attention on providing services
         to external customers.

         FACTORS MANAGEMENT USED TO IDENTIFY THE ENTERPRISES' REPORTABLE
         ---------------------------------------------------------------
         SEGMENTS
         --------
         The Company's reportable segments are primarily defined by legal
         entities that specialize in different financial products and services.
         Investment Advisory Services are provided by DHCM. Brokerage Services
         are provided primarily by DHS. The Corporate Portfolio segment is
         managed by the Company. These segments are managed separately because
         each entity operates in a different regulatory environment.

         Financial information for each reportable segment is shown below. The
         Company does not operate, or hold assets, in any foreign country. The
         Company does not have any single customer generating 10% or more of
         revenue.

                                       13
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002

Note 6   SEGMENT INFORMATION (Continued)
         -------------------

         Financial information for the quarter ended March 31, 2002
         ----------------------------------------------------------
<TABLE>
<CAPTION>
                                          Investment
                                           Advisory      Brokerage      Corporate
                                           Services       Services      Portfolio      Combined
                                         -----------    -----------    -----------    -----------
<S>                                      <C>            <C>            <C>            <C>
Operating Revenues:
    Management fees & commissions        $   170,517    $    62,653    $      --      $   233,170
    Market making gains                         --            1,136           --            1,136
                                         -----------    -----------    -----------    -----------
      Total operating revenue                170,517         63,789           --          234,306
                                         -----------    -----------    -----------    -----------
Operating Expenses:
    Salaries, benefits & payroll taxes       261,948         99,324         22,126        383,398
    Brokers' commissions                        --           28,568           --           28,568
    Professional fees                        158,967         15,433         56,751        231,151
    General and administrative                73,052         59,099         58,705        190,856
                                         -----------    -----------    -----------    -----------
      Total operating expenses               493,967        202,424        137,582        833,973
                                         -----------    -----------    -----------    -----------
Operating Loss                              (323,450)      (138,635)      (137,582)      (599,667)
                                         -----------    -----------    -----------    -----------
Other Revenue and (Expense):
    Portfolio gains                             --             --          326,424        326,424
    Dividend income                                2          1,222         10,353         11,577
    Interest and other income                     12          2,833           --            2,845
    Interest expense                            --             --             --             --
                                         -----------    -----------    -----------    -----------
      Total other revenue & (expense)             14          4,055        336,777        340,846
                                         -----------    -----------    -----------    -----------
Income (Loss) Before Taxes                  (323,436)      (134,580)       199,195       (258,821)
Income Tax Provision (Credit)                   --             --             --             --
                                         -----------    -----------    -----------    -----------
Net Income (Loss)                        $  (323,436)   $  (134,580)   $   199,195    $  (258,821)
                                         ===========    ===========    ===========    ===========

Total Assets                             $ 4,774,391    $   670,867    $   933,460    $ 6,378,718
                                         ===========    ===========    ===========    ===========

</TABLE>

                                       14
<PAGE>


              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002

Note 6   SEGMENT INFORMATION (Continued)
         -------------------

         Financial information for the quarter ended March 31, 2001
         ----------------------------------------------------------
<TABLE>
<CAPTION>

                                         Investment
                                          Advisory       Brokerage      Corporate
                                          Services        Services      Portfolio      Combined
                                         -----------    -----------    -----------    -----------
<S>                                      <C>            <C>            <C>            <C>
Operating Revenues:
    Management fees & commissions        $   159,984    $   146,657    $      --      $   306,641
    Market making losses                        --           75,054           --           75,054
                                         -----------    -----------    -----------    -----------
      Total operating revenue                159,984        221,711           --          381,695
                                         -----------    -----------    -----------    -----------
Operating Expenses:
    Salaries, benefits & payroll taxes       265,230        124,742         48,875        438,847
    Brokers' commissions                        --           39,501           --           39,501
    Professional fees                        122,506          3,922         21,066        147,494
    General and administrative               130,940         93,658          8,389        232,987
                                         -----------    -----------    -----------    -----------
      Total operating expenses               518,676        261,823         78,330        858,829
                                         -----------    -----------    -----------    -----------
Operating Loss                              (358,692)       (40,112)       (78,330)      (477,134)
                                         -----------    -----------    -----------    -----------
Other Revenue and (Expense):
    Portfolio gains                             --             --          509,242        509,242
    Dividend income                             --           13,714         50,742         64,456
    Interest and other income                      8         12,450          1,169         13,627
    Interest expense                            --             (333)          --             (333)
                                         -----------    -----------    -----------    -----------
      Total other revenue & (expense)              8         25,831        561,153        586,992
                                         -----------    -----------    -----------    -----------
Income (Loss) Before Taxes                  (358,684)       (14,281)       482,823        109,858
Income Tax Provision (Credit)                   --             --             --             --
                                         -----------    -----------    -----------    -----------
Net Loss                                 $  (358,684)   $   (14,281)   $   482,823    $   109,858
                                         ===========    ===========    ===========    ===========

Total Assets                             $ 2,860,941    $ 1,326,926    $ 5,504,336    $ 9,692,203
                                         ===========    ===========    ===========    ===========
</TABLE>

Note 7   SUBSEQUENT EVENT
         ----------------

The Company held its annual meeting of shareholders on May 2, 2002. At that
meeting, shareholders approved a proposal to reincorporate the Company to Ohio
from Florida, by merging the Company with and into its newly-formed,
wholly-owned Ohio subsidiary, DHO, Inc., with DHO, Inc. being the surviving
corporation. Under the new Articles of Incorporation, the number of authorized
shares will decrease from 30,000,000 to 8,000,000, consisting of 7,000,000
common shares and 1,000,000 preferred shares, each without par value.


                                       15
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES


ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Forward-looking Statements
--------------------------

Throughout this discussion, the Company may make forward-looking statements
relating to such matters as anticipated operating results, prospects for
achieving the critical threshold of assets under management, technological
developments, economic trends (including interest rates and market volatility),
expected transactions and acquisitions and similar matters. While the Company
believes that the assumptions underlying its forward-looking statements are
reasonable, any of the assumptions could prove to be inaccurate and accordingly,
the actual results and experiences of the Company could differ materially from
the anticipated results or other expectations expressed by the Company in its
forward-looking statements. Factors that could cause such actual results or
experiences to differ from results discussed in the forward-looking statements
include, but are not limited to: economic conditions; volatility and direction
of interest rates or market values of trading securities; governmental
legislation and regulation; and other risks identified from time-to-time in the
Company's other public documents on file with the SEC. The following discussion
and analysis should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's report on Form 10-KSB for
the year ended December 31, 2001.

General
-------

Since the change in executive management and the shift from traditional
investment related activities through the DHS subsidiary to investment advisory
services provided by the DHCM subsidiary, a great deal of progress has been made
in gathering assets within the Company's investment advisory products. DHCM
manages portfolios of stocks representing interests in entities operating in
various economic sectors. Staffing and costs associated with this shift in
emphasis and the various marketing initiatives at DHCM are expected to
negatively impact the Company in 2002. Management believes that this process is
necessary in order to achieve a critical threshold of assets under management to
support operations in the future. However, there can be no assurance that the
Company will be able to achieve the critical threshold of assets under
management to support future operations.

Three months ended March 31, 2002 compared to Three months ended March 31, 2001
-------------------------------------------------------------------------------

Operating revenues for the three months ended March 31, 2002 decreased to
$234,306 compared to $381,695 for the three months ended March 31, 2001, a 39%
decrease. This decrease results primarily from decreases in revenue from market
making and management fees and commissions.

The Company generated management fees and commissions of $233,170 for the three
months ended March 31, 2002 compared to $306,641 for the three months ended
March 31, 2001 a decrease of 24%. The decrease is primarily attributable to
decreased management fee revenue. Due to changes in personnel and other shifts
in emphasis, a large client terminated their account effective June 30, 2001.
This account, with the State of Ohio, represented assets under management that
produced $47,274 in management fees in the three months ended March 31, 2001. In
conjunction with the shift in emphasis to the investment advisory




                                       16
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

services of DHCM, a program has been initiated to attempt to gather new assets
under management at DHCM. However, there can be no assurance that the Company
will be able to achieve the critical threshold of assets under management at
DHCM to support future operations.

Market making gains and losses were gains of $1,136 for the three months ended
March 31, 2002 compared to gains of $75,054 for the three months ended March 31,
2001 a 98% decrease. This decrease is largely due to the decreased emphasis on
market making activities. The trading portfolios of the Company and its
subsidiaries have been reduced significantly by liquidation, and management is
unable to predict how future fluctuations in market values will impact the
performance of the Company's remaining trading portfolios.

Operating expenses for the three months ended March 31, 2002 decreased to
$833,973 compared to $858,829 for the three months ended March 31, 2001, a
decrease of 3%. Generally, the decrease is due to a drop in all operating
expenses, excluding professional fees. Salaries, benefits and payroll taxes
decreased to $383,398 for the three months ended March 31, 2002 from $438,847
for the three months ended March 31, 2001, a decrease of 13%. This decrease
reflects changes in personnel. Brokers' commission expense decreased to $28,568
for the three months ended March 31, 2002 compared to $39,501 for the three
months ended March 31, 2001 a decrease of 28%. In conjunction with the Company's
shift in emphasis from its traditional investment related activities through
DHS, to the investment advisory services of DHCM, the Company's former retail
broker representatives are now employed by unaffiliated broker-dealers. As a
result, a reduced number of retail accounts exist which had produced the
majority of the commission expense. Professional fees increased to $231,151 for
the three months ended March 31, 2002 compared to $147,494 for the three months
ended March 31, 2001, an increase of 57%. The increase results from expenses
related to special corporate projects and new products. General and
administrative expenses decreased to $190,856 for the three months ended March
31, 2002 compared to $232,987 for the three months ended March 31, 2001, a
decrease of 18%. This resulted from decreases in a number of expenses including
marketing and brokerage expenses.

Other revenue and expenses for the three months ended March 31, 2002 decreased
to net other revenue of $340,846 compared to $586,992 for the three months ended
March 31, 2001, a decrease of 42%. This decrease results primarily from
decreases in revenue from portfolio gains and dividend income.

Portfolio gains and losses were gains of $326,424 for the three months ended
March 31, 2002, compared to gains of $509,242 for the three months ended March
31, 2001, a decrease of 36%. These trading gains result primarily from increases
in market values of the Company's trading portfolio investments in mutual funds
and limited partnership interests. Management is unable to predict how future
fluctuations in market values will impact the performance of the Company's
trading and investment portfolios. Dividend income declined for the three months
ended March 31, 2002 to $11,577 compared to $64,456, a decrease of $52,879 or
82%, this is due to a significant reduction in the Company's portfolio of bank
stocks (many of which pay dividends) and lower interest rates on money market
balances.





                                       17
<PAGE>

              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

Liquidity and Capital Resources
-------------------------------

Approximately 5% of the value of the Company's trading portfolio is comprised of
small capitalization bank stocks which are thinly traded and there can be no
assurance that active markets will develop. The failure of such markets to
develop could negatively affect the Company's operations and financial
condition. Approximately 95% of the Company's trading portfolio is readily
marketable. Investments in securities traded on national securities markets and
securities not traded on national securities markets, but with readily
ascertainable market values, are valued at market value. Other securities, for
which market quotations are not readily available, due to infrequency of
transactions, are valued at fair value as determined in good faith by management
of the Company. While management employs objective criteria to ascertain these
values, there is no independent benchmark by which the values assigned by
management can be judged. Accordingly, the value of these securities may be
overstated.

As of March 31, 2002, the Company had working capital of approximately
$5,700,000 compared to approximately$6,100,000 at December 31, 2001. The
decrease is due to operating activities and using working capital to purchase
Company common stock. Working capital includes cash, securities owned and
accounts and notes receivable, net of all liabilities. The Company has no
long-term debt.

DHS, under a correspondent agreement with its clearing broker, has agreed to
indemnify the clearing broker from damages or losses resulting from customers'
transactions. The Company is, therefore, exposed to off-balance sheet risk of
loss in the event that customers are unable to fulfill contractual obligations.
The Company manages this risk by requiring customers to have sufficient cash in
their account before a buy order is executed and to have the subject securities
in their account before a sell order is executed. The Company has not incurred
any losses from customers being unable to fulfill contractual obligations.

In the normal course of business, DHS is a market maker for a limited number of
community bank stocks and quotes bid and ask prices for those stocks. In the
event of sudden price movements, DHS may be required to honor a quote at an
undesirable price. DHS attempts to control this risk by monitoring markets
closely and updating quotes as required, and generally limits its quotes to 100
or 200 shares of a given bank stock.

In the normal course of business, the Company may sell securities it has not yet
purchased (short sales) for its own account, and may write options. The
establishment of short positions and option contracts exposes the Company to
off-balance sheet market risks in the event prices change, as the Company may be
obligated to cover such positions at a loss.

At March 31, 2002, the Company had no short security positions, had not written
any option contracts, and did not own any options. The Company did not
experience any credit losses due to the failure of any counter parties to
perform during the three months ended March 31, 2002. Senior management of the
Company is responsible for reviewing trading positions, exposures, profits and
losses, trading strategies and hedging strategies on a daily basis.

The Company's most significant industry concentration, which arises primarily
through the operation of DHS within its normal course of business activities, is
with banks and financial institutions.


                                       18
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

The operations of the Company are funded primarily by investment management fees
and revenue from the trading portfolio. Management believes that the Company's
existing resources, including available cash and cash provided by operating
activities, will be sufficient to satisfy its working capital requirements in
the foreseeable future. However, no assurance can be given that additional funds
will not be required. To the extent that returns on investments are less than
anticipated, or expenses are greater than anticipated, the Company may be
required to reduce its activities, liquidate the trading portfolio or seek
additional financing. Further, this additional financing may not be available on
acceptable terms, if at all. No significant capital expenditures are expected in
the foreseeable future.

Impact of Inflation and Other Factors
-------------------------------------

The Company's operations have not been significantly affected by inflation. The
Company's trading portfolios of equity securities, primarily in the
community-banking sector, are carried at current market values. Therefore,
general economic and market conditions, including volatility in the banking
sector, the volume of securities trading and fluctuations in interest rates,
affect the Company's profitability.

The Company's business is also subject to government regulation and changes in
legal, accounting, tax and other compliance requirements. Changes in these
regulations may have a significant effect on the Company's operations.


                                       19
<PAGE>


              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

                                     PART II

                                OTHER INFORMATION
                                -----------------

Item 1.          Legal Proceedings

                          None

Item 2.          Change in Securities; Use of Proceeds

                          None

Item 3.          Defaults Upon Senior Securities

                          None

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

                          None

Item 5.          Other Information

                          None

Item 6.          Exhibits and Reports on Form 8-K

                          None



                                       20
<PAGE>
              DIAMOND HILL INVESTMENT GROUP, INC. AND SUBSIDIARIES

                                   SIGNATURES

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Signature                  Title                              Date
------------------------------------------------------------------------------

/S/R. H. Dillon            President and Director             May 2, 2002
---------------
R. H. Dillon

/S/James F. Laird          Chief Financial Officer            May 2, 2002
-----------------
James F. Laird



                                       21