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:  February 28, 2002

[_]  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..........$1,180,695

     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
May 24,  2002,  was  approximately  $1,025,492.

     As of May 24, 2002,  there were  14,112,852 shares of common  stock,
$0.01 par value, issued and outstanding.

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

<PAGE>
                                     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.


(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.  We employ  six (6)  state-licensed  Private
Investigators  who are trained as "Cause and Origin"  investigators  and six (6)
laboratory  technicians.  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  200,000 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.

     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.
<PAGE>
Marketing

     We market our product by sponsoring  seminars for major insurance companies
and through our website located at dpi-inc.com.  Our website  provides
information for consumers,  the insurance industry and manufacturers.

     In  addition  to our  industry  services,  for the  consumer,  we provide 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 be successful in their subrogation claim.

*    Masonite Siding Class Action lawsuit. We were a key 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 on over
     13,000 homes in Florida.  Our investigations and lab analysis resulted in
     a $23.3 million settlement to the homeowners. (1997)

*    GE  Dishwasher.  A GE  dishwasher  caused  $80,000  in  flood  damage  in a
     Heathrow,  Florida home.  This was an ongoing  problem with this particular
     model that we reported to the manufacturer 3 years prior to the damage. GE
     sent  their  own  technicians  to the home to  determine  the  cause of the
     problem.  We were  finally  called in and showed GE the cause - an insecure
     float  mechanism;  and a remedy - installation  of a small  stainless steel
     clip to hold the float mechanism in place. GE has since  incorporated  this
     fix in  future  models.  The  insurance  company  was able to  successfully
     subrogate the claim.

*    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 DPI 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. In addition, she was refunded her deductible.
<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 a defect in the design 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.

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.

Employees

     As  of  May 25, 2002, we have approximately twenty-five full time employees
and  four  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.

Recent Events

     On  February  14,  2002,  we  entered  into  a joint venture agreement with
Internet Marketing Consortium ("IMC"), a company located in Pennsylvania. IMC is
a  multimedia  marketing  and  network  company  and  maintains  a consortium of
internet companies. Pursuant to the terms of the joint venture agreement, we and
IMC  agreed  to share equally in a new venture to be named IMC-HC of which Beryl
Wolk  and  John  Van  Zyll will serve as its directors. We intend to utilize the
joint  venture  to  market  our  services  and products through IMC's network of
internet  members  which Internet web sites will present our information and may
create  a  co-branded  series  of pages or Internet banners. On April 1, 2002 we
forwarded  our  letter of termination notice to IMC stating our decision that we
will  not  move  forward  with  the  joint  venture and no joint venture entity
was ever formed.

<PAGE>
    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  is  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 is 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.

     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 are not able to
put  shares  to the investor pursuant to our equity line of credit until we have
filed  a  registration  statement  with  the  Commission  that has been declared
effective.  We  have  not  yet  filed  a  registration  statement  on Form SB-2.


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

         An investment in our common stock is speculative in nature and involves
a high degree of risk. 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.


We  Had  a  Net loss for the Year Ended February 28, 2002 of $438,914. We Expect
Losses  To  Continue  In  The  Future  And  There  Is A Risk We May Never Become
Profitable.
<PAGE>
     We  had  a  net  loss  of $438,914 for the year ended February 28, 2002. We
incurred net losses of $590,519 for the fiscal year ended December 31, 2000. Our
future  operations  may  not  be  profitable. Revenues and profits, if any, will
depend upon various factors, including whether we will be able to receive
funding to promote our services via seminars. We may not achieve our business
objectives and  the  failure  to  achieve  such  goals  would have an adverse
impact on us.


We  Will  Need To Raise Additional Funds In The Future For Our Operations And If
We  Are  Unable  To  Secure  Such  Financing,  We May Not Be Able To Support Our
Operations.

     Future  events,  including  the problems, delays, expenses and difficulties
frequently  encountered by companies, may lead to cost increases that could make
our  funds,  if  any,  insufficient  to  support  our  operations.  We  may seek
additional  capital, including an offering of our equity securities, an offering
of  debt  securities  or  obtaining financing through a bank or other entity. We
have  not  established a limit as to the amount of debt we may incur nor have we
adopted  a  ratio  of  our  equity  to  a  debt  allowance. If we need to obtain
additional  financing,  there  is  no assurance that financing will be available
from  any  source,  that it will be available on terms acceptable to us, or that
any  future  offering  of securities will be successful. If additional funds are
raised  through  the  issuance  of equity securities, there may be a significant
dilution  in  the value of our outstanding common stock. We could suffer adverse
consequences  if  we  are  unable  to  obtain  additional  capital  when needed.

The  Events  Of September 11th Have Resulted In Increased Uncertainty Regarding
The  Economic  Outlook.

     The  terrorist  attacks  on  September  11, 2001 have resulted in increased
uncertainty  regarding  the economic outlook. It is not possible at this time to
project  the  economic impact of these events, although past experience suggests
there  may  be a loss in consumer and business confidence and a reduction in the
rate  of economic growth or an economic recession. With the U.S. economy already
on the edge of recession before the attacks, any further deterioration in either
the  U.S.  or  international  economies  would  adversely  affect  our financial
condition  and  results  of  operations.

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. Zyll, 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 service that is 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.

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 May 24, 2002, we had 14,112,852 shares of our common stock issued and
outstanding.  Of  such shares, 10,832,420 shares of common stock were restricted
and  3,280,432  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 may be 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.

There is Uncertainty As To Our Continuation As A Going Concern.

     Our  audited  financial  statements  for the fiscal year ended February 28,
2002,  reflect  a net loss of $428,914. These conditions raise substantial doubt
about  our  ability  to  continue  as  a  going concern if sufficient additional
funding  is not acquired or alternative sources of capital developed to meet our
working  capital  needs.

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. If an aggregated principal amount of
$300,000  of  our  convertible  debentures  were  converted on May 28, 2002, the
debentures  would  have  been  convertible at a price of $.18375 and convertible
into  approximately  1,632,653  shares  of  our common stock. If an aggregate of
$300,000  in  the  principal amount of our debentures were converted and 462,963
warrants  were  exercised  on  May  28,  2002, they would have equaled 2,095,616
shares  of  our common stock. Pursuant to the terms of the transaction, however,
the  number of convertible debentures could prove to be significantly greater in
the  event of a decrease in the trading price of our common stock. The following
table  presents  the  number  of  shares  of  our  common stock that we would be
required  to  issue  as  of  May  28,  2002 and the number of shares we would be
required  to  issue  if  our  common  stock  declined  by  50%  or  75%:

<TABLE>
<CAPTION>
<S>                           <C>                       <C>                <C>
If Debentures were
Converted On May      50%                   75%
28, 2002              Decline               Decline
                              -----------------     -----------------   ----------------

Conversion price per share:    $.18375                   $.0918            $.0459

Total shares issuable(1):      1,632,635                 3,265,270         6,535,948
</TABLE>
------------

(1)  Such  figure does not include the issuance of common stock upon exercise of
     four  year  warrants  to  purchase 462,963 shares of our common stock at an
     exercise  price  of  $.2376  per  share.


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 will 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.


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  on  March  14,  2000 for a period of thirty six months and currently
pays  a  monthly  rental  fee  of  $17,500.00. 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  will range from between $1,450,000 and $1,607,640, depending on
the  year the purchase takes place. This purchase obligation 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. 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.

     The Company held its annual meeting of shareholders on February 19, 2002 to
vote  upon two matters (i) to appoint Coulter & Justus, P.C., independent public
accountants,  to  audit  the  financial statements of the Company for the fiscal
year  ending  February 28, 2002 and (ii) to elect seven (7) members to the Board
of  Directors  to serve for a term of one (1) year until the next annual meeting
and  until  their  successors  are  duly  elected  and  qualified. Approximately
10,600,000  shares  were  voted  in favor of the proposals. Subsequently Messrs.
Durland  and  Dowell  resigned  from  their  positions.

Our stockholders ratified to elect seven (7) members to the Board of
Directors as follows:

John Van Zyll           Marvin  Stacy          Ann M.  Furlong
Stephen H. Durland      Warren Wankelman       Matt Walters
David Dowell

     B.  Our  stockholders ratified the appointment of Coulter & Justus, P.C. as
the Company's independent public accountants for the fiscal year ending February
28,  2002  by  a  majority  vote.

<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 2001           $1.50           $1.37
Second Quarter 2001          $1.75           $0.75
Third Quarter 2001           $1.50           $0.25
Fourth Quarter 2001          $1.23           $0.40

From January 1, 2002         $0.70           $0.30
 through February 28,
 2002

From February 28, 2002       $0.50           $0.16
 through May 24, 2002



SECURITY  HOLDERS

     At  May  24, 2002 there were 14,112,852 shares our common stock outstanding
which  were  held  by approximately 523 stockholders of record. Such figure does
not  include 214,286 shares which have been authorized for issuance by our board
of  directors,  but  which  have  not  yet  been  physically  delivered.

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 February 28, 2002, we sold 71,429
shares  of our common stock to one entity for a purchase price of $.35 per share
for  an  aggregate  purchase price of $25,000; however, such shares have not yet
been  physically delivered to the purchaser. We believe such issuance was exempt
from  registration  pursuant  to  Section  4(2)  of  the Securities Act of 1933.



Item 6. Management's Discussion and Analysis or Plan of Operation.


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 their investigations.
Additionally,  we  provide  for the storage of evidence and derive revenues from
the  secure  storage  of  materials.

For the Year Ended February 28, 2002

Revenues  for  the  year  ended  February  28, 2002 were $1,180,695, while total
operating  expenses  were $1,592,307. This reflects a twenty percent increase in
revenue,  while  the  Company's operating expenses increased by only 3% from the
year  ended  December 31, 2000. The Company attributes this increase in revenues
to  its  marketing  efforts. The Company had a net loss of $438,914 for the year
ended  February  28,  2002  or  $.03 per share. This net loss is a decrease from
$540,519  from  the year ended December 31, 2000. There have been no significant
changes  in  the  Company's  accounting  policies.

At  February  28,  2002,  the Company had cash of $46,016 principally due to the
injection  of  private  placement  funds  from  the sale of the Company's common
stock.  Historically,  the  Company issued its common stock to provide financing
for  the  Company.  This  trend is expected to continue in the second quarter of
2002.

At  February  28,  2002  the  Company  had  an accumulated deficit of $1,573,478
and total  liabilities and stockholders' (deficit)  of  $362,554.

The  Company  believes that the net proceeds of the Company's private placements
will  meet  its  working capital obligations and fund further development of its
business  for  the next twelve months. However, in order to execute our business
plans  to expand product offerings and revenue generating opportunities, we will
likely  require  additional  working capital. There can be no assurance that any
additional financing will be available to the Company on acceptable terms, or at
all.

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  is  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
exercisable at $.2376 per share. The warrants will be exercisable for four years
from the date the debenture is 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.

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  certain terms and conditions contained in the equity line of credit
investment  agreement.  In  connection  with the Company's equity credit line it
issued  a  four year warrant to purchase 1,388,889 shares of its common stock at
an  exercise  price of $.2376 per share. As of May 25, 2002, no such put notices
have  been  made by the Company and, accordingly, no stock has been issued under
the  terms  of  this  agreement

Management  believes  that  the above-described actions will provide the Company
with  its  immediate  financial requirements to enable it to continue as a going
concern. In the event that the Company is unable to raise additional funds, the
Company  could  be  required  to  either  substantially  reduce or terminate its
operations.

The  Company  is  not  aware of any material trend, event or capital commitment,
which  would  potentially  adversely affect liquidity. In the event such a trend
develops,  the  Company believes that it will have sufficient funds available to
satisfy  working  capital  needs  through lines of credit and the funds expected
from  equity  sales.
<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.

Item 7. Financial Statements

     Our  Financial Statements for the year ended February 28, 2002 are included
as  part  of  this  Form  10-KSB  Report  and  are  after  the  signature  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          61     Chairman of the Board, Chief Executive Officer

Marvin Stacy           68     Chief Operating Officer and Director

Ann M. Furlong         49     Secretary and Director

Warren Wankelman       58     Director

Matt Walters           30     Director

     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.
<PAGE>
     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.
Mr. Stacy is also gifted as an investigator and is responsible for the operation
of  the  laboratory.  He has  designed  custom  testing  equipment  and  designs
solutions for manufacturers to correct design flaws and shortcomings.

     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. Ms. Furlong has over 29 years of experience as
a  professional  manager  and  the  owner  and  founder  of  several  successful
businesses.  Ms.  Furlong has provided  the  administrative  and  organizational
expertise  that has greatly  contributed  to DPI's success since its founding in
1991, including the compilation of the Company's proprietary database.

     Warren  Wankelman  currently  serves as a Director  and as the  Director 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.  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 the  HomeCheckSafety.com  project  as well  as the  company's
Customer Relationship Management initiative.

<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  February  28, 2002  (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      1999   21,599.63
Executive Officer         2000   34,505.00
                          2001   40,646.84              120,977         120,977 shares(2)
                          2002*   6,400.00


Marvin Stacy, Chief       1999   21,599.63
Operating Officer         2000   29,079.00
                          2001   41,136.55              120,977         120,977 shares(2)
                          2002*   6,400.00

Ann M. Furlong,           1999   21,599.63
Secretary                 2000   27,906.00
                          2001   40,502.00              120,977         120,977 shares(2)
                          2002*   6,400.00

* Such figure represents payments made through February 28, 2002.

     (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.

</TABLE>

Compensation of Directors

     During the fiscal year ending  February 28,  2002,  other than as described
herein,  no other 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 (2)
----------------            ------------------             ------------------

John Van Zyll                    5,436,811                        38.5%

Marvin Stacy                     2,436,110                       17.25%


Ann M. Furlong                   2,436,811                       17.25%

Warren Wankelman                      -0-                           0

Matt Walters                        5,000                          (*)

All Executive Officers and
Directors  as a Group          10,314,732                           73%
(Five (5) persons)

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

(1)  Based  upon 14,112,852 shares of our common stock issued and outstanding as
     of May 24 ,2002. 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  May 24,  2002.  The  inclusion  herein of any shares deemed
     beneficially  owned  does  not  constitute  an  admission by such person of
     beneficial  ownership  of  such  shares.

<PAGE>
Item 12. Certain Relationships and Related Transactions.

     During  December  2001,  we  were  advanced  an  aggregate of $18,000 from,
Ann M. Furlong, one of our stockholders. This advance is non-interest bearing,
and there  are  no  stated  repayment  terms.


Item 13. Exhibits and Reports on Form 8-K.

     (a) Exhibits

Exhibit
Number    Description
--------  ---------------------
<TABLE>
<CAPTION>
<S>             <C>

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.

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

10.3      Form of Subscription Agreement between Sofcon Limited and the Company dated
          April 25, 2002

10.4      Form of Security Agreement dated April 25, 2002

10.5      Form of Warrant related to debentures dated April 25, 2002

10.6      Form of 6% Convertible Debenture dated April 25, 2002

10.7      Form of Registration Rights Agreement related to the Company's convertible
          debenture dated April 25, 2002 between Sofcon Limited and the Company

10.8      Form of escrow agreement related to the Company's 6% convertible debenture
          dated April 25, 2002.

10.9      Investment Agreement dated  April 25, 2002 between Sofcon Limited and the
          Company

10.10     Form of Registration Rights Agreement related to the Company's equity line of
          credit dated April 25, 2002 between Sofcon Limited and the Company
<PAGE>
10.11     Form of escrow agreement related to the Company's equity line of credit
          dated April 25, 2002.

10.12     Form of Warrant related to the Company's equity line of credit.

23.1      Consent of Michaelson & Co. PA

     (b) Reports on Form 8-K.

    The Company did not file a Current Report on Form 8-K for the fourth quarter ended February 28, 2002.

</TABLE>
<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 May 30, 2002
                            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                       May 30, 2002

/s/ Marvin Stacy
__________________
Marvin Stacy          Chief Operating Officer and Director        May 30, 2002

/s/ Ann M. Furlong
__________________
Ann M. Furlong        Secretary and Director                      May 30, 2002

/s/ Warren Wankelman
__________________
Warren Wankelman      Director                                    May 30, 2002

/s/ Matt Walters
__________________
Matt Walters          Director                                    May 30, 2002

<PAGE>

                      Diversified Product Inspections, Inc.

                              Financial Statements

                          Year ended February 28, 2002



                                    CONTENTS


Report  of  Independent  Auditors                    F-1

Audited  Financial  Statements

Balance  Sheets                                      F-3
Statements  of  Operations                           F-5
Statements  of  Stockholders'  (Deficit)  Equity     F-6
Statements  of  Cash  Flows                          F-7
Notes  to  Financial  Statements                     F-9


<PAGE>

                         Report of Independent Auditors



The  Board  of  Directors
Diversified  Product  Inspections,  Inc.


We  have  audited  the  accompanying  consolidated  balance sheet of Diversified
Product  Inspections, Inc. ("Inspections", formerly Fairfax Group, Inc.) and its
wholly-owned  subsidiary,  Diversified  Product  Investigations,  Inc.
("Investigations")  as  of  February  28,  2002,  and  the  related consolidated
statements  of operations, stockholders' (deficit) equity and cash flows for the
year  then  ended.  We  have  also  audited  the  accompanying  balance sheet of
Diversified  Product  Investigations,  Inc.  as  of  December  31, 2000, and the
related  statements  of operations and cash flows for the year 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.  As  discussed  in  Notes  1 and 2, the Company underwent a reverse
merger  during March 2001, resulting in the statement of stockholders' (deficit)
equity  including  only  the  parent company for the period prior to the reverse
merger. We did not audit the parent company's (deficit) equity as of and for the
year  ended  February  28,  2001, as presented in the statement of stockholders'
(deficit)  equity.  These  amounts  were  audited by other auditors whose report
dated May 30, 2001, expressed an unqualified opinion on the financial statements
taken as a whole, and our opinion, insofar as it relates to the parent company's
(deficit) equity as of and for the year ended February 28, 2001, is based solely
on  the  report  of  the  other  auditors.

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,  based  on  our  audit  and  the report of other auditors, 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  February 28, 2002, and the consolidated
results  of  its  operations  and  its  cash  flows  for  the year then ended in
conformity with accounting principles generally accepted in the United States of
America.  Additionally,  in  our  opinion,  the financial statements referred to
above  present  fairly,  in  all  material  respects,  the financial position of
Diversified  Product  Investigations, Inc. at December 31, 2000, and the results
of  its operations and its cash flows for the year then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

                                      F-1
<PAGE>

The  Board  of  Directors
Diversified  Product  Inspections,  Inc.



The  accompanying  consolidated financial statements have been prepared assuming
the  Company  will  continue  as  a going concern.  As discussed in Note 10, the
Company's recurring losses and limited capital resources raise substantial doubt
about  its ability to continue as a going concern.  Management's plans in regard
to  these  matters  are  also  described in Note 10.  The consolidated financial
statements  do not include any adjustments that might result from the outcome of
this  uncertainty.







Knoxville,  Tennessee
May  9,  2002

                                      F-2
<PAGE>


                      Diversified Product Inspections, Inc.

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                      FEBRUARY 28     DECEMBER 31
                                                         2002           2000
                                                     --------------------------------
                                                      (INSPECTIONS-
                                                      CONSOLIDATED)  (INVESTIGATIONS)

<S>                                                       <C>                <C>
ASSETS
Current assets:
Cash                                                 $        46,016  $154,573
Accounts receivable, net of reserve for doubtful
accounts of $17,000 at February 28, 2002 and
 December 31, 2000                                           104,841   101,349
Intercompany receivable                                       25,000
Refundable income taxes                                        5,214     5,214
Prepaid expenses and other current assets                      2,323     6,379
                                                     --------------------------------
Total current assets                                         183,394   267,515

Property and equipment:
Equipment, furniture & fixtures                              173,655   116,587
Vehicles                                                      97,737    94,435
Leasehold improvements                                        22,727    22,727
                                                     --------------------------------

                                                             294,119   233,749
Less accumulated depreciation and amortization               119,359    49,957
                                                     --------------------------------

Net property and equipment                                   174,760   183,792

Other assets                                                   4,400     4,400



Total assets                                         $       362,554  $455,707
                                                     ================================
</TABLE>
                                   F-3
<PAGE>

<TABLE>
<CAPTION>
                                                           FEBRUARY 28       DECEMBER 31
                                                             2002              2000
                                                         --------------------------------
                                                          (INSPECTIONS-
                                                          CONSOLIDATED)    (INVESTIGATIONS)
<S>                                                            <C>                <C>
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Lines of credit                                        $        123,929   $    73,092
Accounts payable and accrued expenses                           139,567        69,772
Accrued salaries                                                 13,816        10,839
Advance from stockholder                                         18,000             -
Current portion of long-term debt                                16,517        15,717
Current portion of capital lease obligations                     14,545        14,602
Other current liabilities                                             -         4,634
                                                         --------------------------------
Total current liabilities                                       326,374       188,656

Long-term debt, less current portion                             38,758        54,489
Capital lease obligations, less current portion                       -        14,546
                                                         --------------------------------
Total liabilities                                               365,132       257,691

Stockholders' (deficit) equity:
Common stock of Inspections - Consolidated:
Par value--$0.01 per share
Authorized shares--50,000,000
Issued and outstanding shares--14,327,138                       143,271     9,712,601
Additional paid-in capital (excess of par
value over amount paid-in)                                    1,427,629    (8,380,021)
Accumulated deficit                                          (1,573,478)   (1,134,564)
                                                         --------------------------------
Net stockholders' (deficit) equity                               (2,578)      198,016
                                                         --------------------------------
Total liabilities and stockholders' (deficit) equity     $      362,554   $   455,707
                                                         ================================
</TABLE>

See  accompanying  Notes  to  Financial  Statements.


                                      F-4
<PAGE>
                      Diversified Product Inspections, Inc.

                            Statements of Operations
<TABLE>
<CAPTION>
                                                     YEAR ENDED       YEAR ENDED
                                                     FEBRUARY 28      DECEMBER 31
                                                        2002             2000
                                                    -------------------------------
                                                     (INSPECTIONS-
                                                     CONSOLIDATED)  (INVESTIGATIONS)

<S>                                                      <C>                <C>
Revenues                                          $      1,180,695   $    984,459

Operating expenses:
Salaries and related benefits                              704,193        694,328
Rent                                                       212,855        266,659
Administration                                              93,253        155,288
Postage and shipping costs                                  95,165         69,880
Utilities and telephone                                     71,885         64,902
Travel and related costs                                    31,658         64,078
Taxes, licenses and permits                                 52,796         40,793
Depreciation and amortization                               69,401         38,843
Professional fees                                          119,335         33,712
Vehicle                                                     33,393         32,149
Insurance                                                   56,318         29,537
Advertising                                                 24,935         25,945
Miscellaneous                                               27,120         23,330
                                                  --------------------------------
Total operating expenses                                 1,592,307      1,539,444
                                                  --------------------------------
Operating loss                                            (411,612)      (554,985)

Other expense:
Interest expense                                            27,302         14,777
Loss on disposal of equipment                                    -          8,593
                                                  --------------------------------
Total other expenses                                        27,302         23,370
                                                  ---------------------------------
Loss before income taxes                                  (438,914)      (578,355)

Income tax expense (benefit):
Current                                                          -         (5,214)
Deferred                                                         -         17,378
                                                  --------------------------------
Net income tax expense                                           -         12,164
                                                  --------------------------------
Net loss                                          $       (438,914)  $   (590,519)
                                                  ================================
Basic and diluted loss per common share           $          (0.03)  $      (0.04)
                                                  ================================
See accompanying Notes to Financial Statements.

                                      F-5
</TABLE>
<PAGE>

                      Diversified Product Inspections, Inc.

                  Statements of Stockholders' (Deficit) Equity
<TABLE>
<CAPTION>

                                             NUMBER OF                                                   TOTAL
                                              SHARES                     ADDITIONAL                    STOCKHOLDERS'
                                            ISSUED AND      COMMON         PAID-IN       ACCUMULATED     EQUITY
                                           OUTSTANDING      STOCK          CAPITAL         DEFICIT     (DEFICIT)
                                           ------------  ------------  ---------------  -------------  ----------
<S>                                            <C>           <C>           <C>              <C>            <C>
Balance at March 1, 2000                     6,150,000   $    61,500   $            -   $   (282,497)  $(220,997)
Shares issued for services                  10,000,000       100,000                -              -     100,000
Debt forgiveness                                     -             -          321,784              -     321,784

Net loss for year ended February 28, 2001            -             -                -       (108,787)   (108,787)
                                           ------------  ------------  ---------------  -------------  ----------
Balance at February 28, 2001                16,150,000       161,500          321,784       (391,284)     92,000
Shares relinquished to Company             (14,200,000)     (142,000)        (321,784)       371,784     (92,000)
Reverse merger                              10,332,420       103,323        1,209,757     (1,115,064)    198,016
Shares issued for services                   1,330,432        13,305                -              -      13,305
Shares issued for cash                         714,286         7,143          217,872              -     225,015

Net loss for year ended February 28, 2002            -             -                -       (438,914)   (438,914)
                                           ------------  ------------  ---------------  -------------  ----------
Balance at February 28, 2002                14,327,138   $   143,271   $    1,427,629   $ (1,573,478)  $  (2,578)
                                           ============  ============  ===============  =============  ==========
</TABLE>
See  accompanying  Notes  to  Financial  Statements.

                                      F-6

<PAGE>
                      Diversified Product Inspections, Inc.

                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                        YEAR ENDED       YEAR ENDED
                                                                        FEBRUARY 28      DECEMBER 31
                                                                           2002             2000
                                                                      --------------------------------
                                                                       (INSPECTIONS-
                                                                        CONSOLIDATED) (INVESTIGATIONS)
<S>                                                                        <C>                <C>
OPERATING ACTIVITIES
Net loss                                                             $       (438,914)  $   (590,519)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization                                                  69,401         38,843
Provision for bad debts                                                             -         26,543
Loss on disposal of equipment                                                       -          8,593
Deferred income taxes                                                               -         17,378
Issuance of stock for services                                                 13,305              -
Changes in operating assets and liabilities:
 Accounts receivable                                                           (3,492)       (58,666)
 Intercompany receivable                                                      (25,000)             -
 Refundable income taxes                                                            -         (5,214)
 Prepaid expenses and other assets                                              4,056        (10,779)
 Accounts payable and accrued expenses                                         69,795         59,642
 Accrued salaries                                                               2,977         99,245
 Other liabilities                                                             (4,634)       (10,792)
                                                                      --------------------------------
 Net cash used in operating activities                                       (312,506)      (425,726)

INVESTING ACTIVITIES
Purchases of property and equipment                                           (60,369)       (79,314)

FINANCING ACTIVITIES
Advance from shareholder                                                       18,000              -
Net proceeds from line of credit                                               50,837         45,702

Principal payments on long-term debt and capital lease obligations            (29,534)       (25,223)
Proceeds from sale of common stock                                            225,015        585,799
                                                                      --------------------------------
Net cash provided by financing activities                                     264,318        606,278
                                                                      --------------------------------

Net (decrease) increase in cash                                              (108,557)       101,238

Cash at beginning of year                                                     154,573         53,335
                                                                      --------------------------------
Cash at end of year                                                    $       46,016   $    154,573
                                                                       ================================
</TABLE>
See  accompanying  Notes  to  Financial  Statements.

F-7
<PAGE>

                      Diversified Product Inspections, Inc.

                      Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
                                                                        YEAR ENDED       YEAR ENDED
                                                                        FEBRUARY 28      DECEMBER 31
                                                                           2002             2000
                                                                      --------------------------------
                                                                       (INSPECTIONS-
                                                                       CONSOLIDATED) (INVESTIGATIONS)
<S>                                                                          <C>                <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest                                                    $ 27,302       $ 14,777

SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITY

Equipment purchases financed with financial institutions                         -         48,550

Equipment purchases financed through capital lease obligations                   -         33,561
Issuance of common stock for accrued salaries                                    -        386,681
</TABLE>

See  accompanying  Notes  to  Financial  Statements.


                                      F-8
<PAGE>

                      Diversified Product Inspections, Inc.

                          Notes to Financial Statements

                                February 28, 2002


1.     ACCOUNTING  POLICIES

DESCRIPTION  OF  BUSINESS

Diversified  Product  Inspections,  Inc.  ("Inspections")  and  its wholly-owned
subsidiary,  Diversified  Product Investigations, Inc. (collectively referred to
as  the  "Company")  specialize  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.  Additionally, the Company
provides  for the storage of evidence and derives revenues from the safe storage
of  materials.  Approximately  57%  of  fiscal  year  2002  revenues  and 61% of
calendar  year  2000  revenues  were  derived  from  the Company's three largest
customers.

REPORTING  ENTITY

The  accompanying  February 28, 2002, balance sheet includes Diversified Product
Inspections,  Inc.  and  its  wholly-owned  subsidiary,  Diversified  Product
Investigations,  Inc.  ("Investigations").  As  a  result  of the reverse merger
discussed  in  Note 2, the accompanying December 31, 2000 balance sheet includes
only  the accounts of Investigations.  The accompanying statements of operations
and  cash  flows  include  the  consolidated  accounts subsequent to the reverse
merger  in  March  2001  and  only Investigation's accounts prior to the reverse
merger.  The  accompanying statements of stockholders' equity include the parent
only  historical  activity  up  to  the  date  of  the  reverse  merger  and the
consolidated  activity  thereafter.

FISCAL  YEAR-ENDS

Inspections  (the reporting parent company) operates on a fiscal year ending the
last day of February, and Investigations (the subsidiary) operates on a calendar
year  ending  December  31.  As  prescribed  by  existing  standards,  since the
subsidiary  has a year-end within 90 days of the parent's fiscal year-end, it is
acceptable  to  consolidate  using  each  company's  fiscal  year-end  financial
statements.  Accordingly, except for the differences described above as a result
of  the reverse merger, the accompanying consolidated financial statements as of
and for the year ended February 28, 2002, include the accounts of Inspections as
of  and for the year ended February 28, 2002, and the accounts of Investigations
as  of  and  for  the  year ended December 31, 2001.  The accompanying financial
statements  as  of  and  for  the year ended December 31, 2000, include only the
accounts  of  Investigations.

                                      F-9
<PAGE>
                      Diversified Product Inspections, Inc.

                    Notes to Financial Statements (continued)



1.     ACCOUNTING  POLICIES  (CONTINUED)

PRINCIPLES  OF  CONSOLIDATION

The  consolidated financial statements as of and for the year ended February 28,
2002  include  the  accounts  of  Diversified  Product Inspections, Inc. and its
wholly-owned subsidiary, Investigations.  Intercompany balances and transactions
have  been  eliminated  with  the exception of a $25,000 intercompany receivable
which  results from the parent and subsidiary being consolidated using different
year-ends.

REVENUE  RECOGNITION

The  Company  recognizes  revenue  at  the time the investigation and laboratory
analysis  is  completed.

ACCOUNTS  RECEIVABLE

Two  customers  account  for approximately 39% and 53% of accounts receivable at
February  28,  2002,  and  December 31, 2000, respectively.  It is the Company's
policy  not  to  require  collateral  on  accounts  receivable.

PROPERTY  AND  EQUIPMENT

Property  and  equipment is carried at cost.  Depreciation is computed using the
straight-line  method  over  the  estimated  useful  lives  of  the  assets.

ESTIMATES

The preparation of financial statements in conformity with accounting principals
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.

ADVERTISING  COSTS

Advertising  costs  are  expensed  as  incurred.

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.
                                      F-10
<PAGE>
                      Diversified Product Inspections, Inc.

                     Notes Financial Statements (continued)



2.     REORGANIZATION  AND  COMPANY  STOCK  TRANSACTIONS

During  December  2000,  the  Company,  then  named  Fairfax Group, Inc., issued
10,000,000  shares  of  common  stock  to  the  then new majority stockholder in
exchange  for  consulting  services.  At  this  same time, the then new majority
stockholder  agreed  to  assume and discharge $321,784 in related party debts of
the  Company.  This  amount  was  recorded  as  a reduction of stockholder notes
payable  and  an  increase  in  additional  paid-in  capital.

In  March  2001, the Company issued 10,332,420 shares of restricted common stock
to acquire all of the issued and outstanding common stock of Investigations in a
reverse  merger which was accounted for as a recapitalization of Investigations.
Immediately  thereafter,  Fairfax  Group,  Inc.  changed its name to Diversified
Product Inspections, Inc.  As part of this reorganization, the then new majority
stockholder  relinquished  his  14,200,000  shares  of  common  stock  owned.

During  March  2001,  the  Company  established  an  Employee/Consultant  Stock
Compensation  Plan  (the  "Plan")  under  which a maximum of 1,400,000 shares of
common  stock  may  be  granted  to  employees or consultants of the Company for
services.  Under  the  terms  of  the Plan, the Company's board of directors may
increase  the  maximum  number  of shares of common stock that may be granted at
such  time  as  it  deems  advisable.  During  March  2001,  the  Company issued
1,330,432 shares of common stock valued at $13,305 to certain consultants of the
Company  in  accordance  with  the  Plan.

During April 2001, the Company issued 450,000 shares of common stock in exchange
for  $150,000  in  cash.  As part of this stock purchase agreement, the investor
obtained stock warrants which allow for the purchase of 375,000 shares of common
stock  at  an  exercise  price  of $1 per share.  These warrants expire in April
2003.  Additionally,  during  April  2001,  an  existing stockholder exercised a
warrant  to  purchase  an  additional  50,000  shares  of  stock  for  $15.

Between  September  2001  and  January  2002,  the  Company received $75,000 for
214,286  shares  of  common  stock. These  shares  have  been  authorized  for
issuance  but  not  yet  delivered.


3.  LONG-TERM  DEBT  AND  LINES  OF  CREDIT

Long-term  debt  of  Investigations  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                                     FEBRUARY 28   DECEMBER 31
                                                         2002          2000
                                                    ------------  -------------
<S>                                                    <C>           <C>
Note payable, secured by a vehicle, due in monthly
 installments of $597, including interest at 5.9%,
 through February 2003                               $     16,807  $     21,127

Note payable, secured by a vehicle, due in monthly
 installments of $330, including interest at 11%
  through November 2005                                    12,568        15,002
Note payable, secured by a vehicle, due in monthly
 installments of $333, including interest at 11%,
 through November 2005                                     12,658        15,109
Note payable, secured by a vehicle, due in monthly
 installments of $348, including interest at 11%,
 through November 2005                                     13,242        15,806
Long-term debt repaid                                           -         3,162
                                                     ------------  ------------
                                                           55,275        70,206
Less portion classified as current                         16,517        15,717
                                                     ------------  ------------
Long-term portion                                    $     38,758  $     54,489
                                                      ============  ============

</TABLE>
                                      F-11
<PAGE>
                      Diversified Product Inspections, Inc.

                    Notes to Financial Statements (continued)



3.  LONG-TERM  DEBT  AND  LINES  OF  CREDIT  (CONTINUED)

Aggregate  maturities of long-term debt as of February 28, 2002, are as follows:

2003                                       $16,517
2004                                        16,111
2005                                        12,115
2006                                        10,532
                                          -----------
                                           $55,275
                                          ===========

The  Company utilizes numerous credit cards with financial institutions as lines
of  credit.  These credit cards accrue interest at varying rates of between 8.5%
and  25.49%  as  of  February  28, 2002.  Maximum borrowings available under the
existing  credit  cards  as  of February 28, 2002 was $148,100 ($24,171 unused).
All  of  these  credit cards are unsecured and require minimum monthly payments.

4.  LEASE  OBLIGATIONS

The  Company  leases  certain equipment under agreements which are classified as
capital  leases.  These  agreements  expire  in  fiscal  year  2003.

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  if the Company receives $3,000,000 in
proceeds  from a private placement offering.  The purchase price will range from
$1,500,750  to $1,607,640, depending on the year the purchase takes place.  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  February  28,  2002:


                                      Operating     Capital
                                      ---------------------
2003                                   $213,624    $15,004
2004                                    210,604          -
2005                                    217,500          -
2006                                    217,500          -
                                       --------------------
Total minimum lease payments           $859,228     15,004
Amount representing interest                           459
                                                   --------
Present value of net minimum lease payments        $14,545
                                                   ========

Property  and  equipment  includes  the  following  amounts  for capital leases:

                                   FEBRUARY 28   DECEMBER 31
                                      2002          2000
                             --------------------------------
Equipment                      $     44,075  $     44,075
Less accumulated amortization        31,024        14,580
                             --------------------------------
                               $     13,051  $     29,495
                             ================================

                                      F-12
<PAGE>

                      Diversified Product Inspections, Inc.

                    Notes to Financial Statements (continued)

4.  LEASE  OBLIGATIONS  (CONTINUED)

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.      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:

<TABLE>
<CAPTION>

                                       NOL CARRYOVER
                            --------------------------------
YEAR           YEAR OF
GENERATED     EXPIRATION     PARENT   SUBSIDIARY    TOTAL
------------------------------------------------------------
<S>         <C>             <C>       <C>          <C>
1996             2011    $ 10,943  $       -      $ 10,943
1997             2012       1,704          -         1,704
1998             2013       1,979          -         1,979
1999             2019      99,100          -        99,100
2000             2020     109,818          -       109,818
2001             2021     108,787      184,868     293,655
2002             2022      13,305      308,897     322,202
                          ------------------------------------
                          345,636     $493,765    $839,401
                          ------------------------------------
</TABLE>
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:

<TABLE>
<CAPTION>
                                                      FEBRUARY 28    DECEMBER 31
                                                          2002           2000
                                                     ----------------------------
<S>                                                        <C>            <C>
Deferred tax assets:
NOL carryovers                                       $    318,637   $    173,222
Expenses not currently deductible                         171,328         33,559
Reserve for doubtful accounts                               6,453          6,453
Other                                                         437            437
                                                     ----------------------------
                                                          496,855        213,671
Valuation allowance for deferred tax assets              (492,389)      (201,981)
                                                     ----------------------------

Net deferred tax assets                                     4,466         11,690
Deferred tax liability - tax over book depreciation         4,466         11,690
                                                     ----------------------------
Net deferred tax assets                              $          -   $          -
                                                     ============================

</TABLE>
The  valuation  allowance  was  increased  by  $163,947  in fiscal year 2002 and
$167,238 in calendar year 2000 due to increases in deferred tax assets for which
realization  was  not  assured.

                                      F-13
<PAGE>

                      Diversified Product Inspections, Inc.

                    Notes to Financial Statements (continued)

6.     LOSS  PER  SHARE  DATA

Basic  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.  As the exercise price of the outstanding stock
warrants is equal to or greater than the latest market price of $0.35 per share,
the warrants have an antidilutive effect.  Accordingly, there is no diluted loss
per  share.  Weighted  average number of common shares outstanding were computed
as  if  the reverse merger and all related stock transactions had taken place at
the  beginning  of  the  earliest  period  presented.

The  following  table sets forth the computation of basic loss per share for the
periods  indicated:

<TABLE>
<CAPTION>
                             YEAR ENDED     YEAR ENDED
                             FEBRUARY 28    DECEMBER 31
                                2002           2000
                            -----------------------------
<S>                             <C>            <C>
Net loss                    $   (438,914)  $   (590,519)
Average shares outstanding    14,088,127     13,612,852
                            -----------------------------
Basic loss per share        $      (0.03)  $      (0.04)
                            =============================
</TABLE>

7.     RELATED  PARTY  TRANSACTION

During December 2001, the Company was advanced $18,000 from a stockholder of the
Company.  This advance is noninterest bearing, and there are no stated repayment
terms.

8.     CONTINGENCIES

The  Company  is  currently  in dispute with an attorney regarding approximately
$40,000 in billed professional fees, which the Company contends it does not owe.
The  ultimate  outcome  of  this  matter  is  not  presently  determinable  and
accordingly,  no  amounts  have  been  recorded  in  the  accompanying financial
statements.

9.     SUBSEQUENT  EVENTS

During  April  2002,  the  Company  entered into a subscription agreement with a
company  (the  "Investor")  to  issue  up to $300,000 in convertible debentures.
Under  the  terms  of the agreement, the Investor is obligated to purchase three
separate  $100,000  debentures of the Company, subject to the Company satisfying
certain  conditions  described  in  the agreement. These 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. During April 2002, the
Company issued its first $100,000 debenture under this agreement. This debenture
matures in April 2005 and is secured by 4,000,000 shares of the Company's common
stock,  which  is  currently  owned  by  the Company's majority stockholders. In
connection with this issuance, the Company issued warrants enabling the Investor
to  purchase  462,963  shares  of  common stock at an exercise price of $0.2376.
These  warrants  expire  in  April  2006.


                                      F-14
<PAGE>
                      Diversified Product Inspections, Inc.

                    Notes to Financial Statements (continued)



9.  SUBSEQUENT  EVENTS  (CONTINUED)

Also,  during  April  2002, the Company entered into a second agreement with the
Investor  which  provides  for  the  sale of the Company's 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 trading price, as
defined.  These  purchases  will be made via put notices issued at the Company's
discretion  and  each  single put notice shall be not less than $15,000 nor more
than  $150,000.  Under  the terms of this agreement, the Company issued warrants
enabling  the  Investor  to  purchase  1,388,889  shares  of  common stock at an
exercise  price  of  $0.2376.  These warrants expire in April 2006. As of May 9,
2002,  no  such  put  notices have been made by the Company and, accordingly, no
stock  has  been  issued  under  the  terms  of  this  agreement.

10.     GOING  CONCERN

The  accompanying  financial  statements  have  been prepared on a going concern
basis,  which  contemplates  the  realization  of assets and the satisfaction of
liabilities  in  the  normal  course  of  business.  As  shown  in the financial
statements,  the  Company  had  net  losses  of $438,914 in fiscal year 2002 and
$590,519  in  calendar  year  2000.  This factor, among others, may indicate the
Company will be unable to continue as a going concern for a reasonable period of
time.  Management  recognizes the Company must achieve profitable operations and
generate  additional funds in order to continue as a going concern.  The Company
has  previously  successfully  raised  capital  to  fund  its operations and the
Company  anticipates  raising  additional  capital  as  discussed  in  Note  9.

                                      F-15