SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM 10-KSB**

**Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange act of 1934**

Date of Report: December 31, 2000

Commission file number 000-29937

Prime Equipment, Inc.

a Nevada corporation

Suite 200 - 8275 South Eastern Avenue,

Las Vegas, NV 89123

(702) 990 8387

IRS Tax ID #: 88-0412653

Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December
31, 2000.

Securities Registered Under Section 12(g) of the Exchange Act:

Common

The issuer has 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 has been subject to filing requirements
for the past 90 days.

There is no disclosure of delinquent filers in response to item 405 of Regulation S-B contained in this Form, and no
disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements,
incorporated by reference in part III of this Form 10-KSB or any amendment to this Form 10-KSB.

There have been no revenues for fiscal year ended December 31, 2000.

Aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which
the common stock was last sold, as of December 17, 1999, was $4,021,000. The Company's common stock is not currently
traded on any market.

As of December 31, 2000, there were 4,046,000 shares issued and outstanding of the Company's Common Stock.

******PART I.**

Item 1. Description of Business**.**

Prime Equipment, Inc., a Nevada corporation (the "Company", "Issuer" or "Registrant"), was incorporated on December,
1998. The Company has never been involved in any bankruptcy, receivership or similar proceeding. The Company has not
been involved in any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets
not in the ordinary course of business.

The Company originally intended to utilize both the areas of expertise of the President: Telecommunications equipment,
and construction equipment. However, over the past six months, especially since the initial contract with Datico S.p.A.,
dated September 15th 2000, it has become apparent that the profitable areas of operation for the company will be both
telecommunications and telecommunications equipment. These areas will be the main areas of Company activity for the
next year.

The Company has active plans to identify and do business with several manufacturers of telecommunications equipment.
The President and his business associates will promote the growth of the business through personal contacts and
attendance at trade conventions.

The first distribution contract entered into with DATICO S.P.A. of Italy manufacturer of telecommunications equipment,
providing exclusive distribution rights for all of North America on a DSL modem for use by Internet service providers and
end users.

The first product is a high-speed modem for DSL Internet connection, which allows the subscriber to surf at a speed of
1.5Mb to 4Mb. The Company is also looking at equipment for the wireless Internet, which would fill a market need in
remote areas were DSL is not available.

With the implementation of broadband (fiber-optics) more and more services will be available on the Internet.

Looking to the future of the company, it is clear that the market to concentrate on will be the telecommunications
equipment, to be utilized by end-users, carriers, ISP, TV cable companies for example. High-speed ADSL modems will be
in greater demand, as the speed will be crucial in determining future use. The Company will benefit from our association
with Datico Spa whom, as a distributor for NOKIA products, as well as, manufacturing their own modems, can also use
the latest technology from NOKIA to be implemented into their equipment.

The focus will be to use Datico's know-how to install private network into office building, hotels, banks etc., an integrated
installed private network to provide broad-band connection to all tenants, with substantial saving over having to supply
them individually.

Another product the Company is looking too is Voice Over IP Telephone Sets that will change the way we use the phone
in the near future. Contact have be made with Messer's Circa Telecom (www.circa.ca) for distribution in Italy of Circa's
telephone sets through Messer's Datico. Prime in this case will be the exporter.

Management continues to search for new equipment to be added to its current product list, which we believe will increase
yearly.

The Company's products will be marketed over the Internet, through its web site www.primeequipmentinc.com.
Management of the Company believe that there is a high demand for these type of products due to rapid increase demand
for high speed internet service and specifically DSL connection.

Item 2. Description of Property.

The Company's principal executive and administrative offices are located in Nevada at 
Suite 200 - 8275 South Eastern Avenue, Las Vegas NV. 89123, in which it shares leased premises under a month-to-month
agreement with an executive office center. The Company intends to stay at this premise until it gets economically viable or
until the Company has made other plans or found suitable space. The Company rents on a per month basis, a shared office
for economic reasons until the Company has adequate financing to develop its business. The Company considers its
executive and administrative offices to be adequate and suitable for its current needs. The Company does not own or lease
any other real estate.

Item 3. Legal Proceedings.

The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened. The Company's officers and directors are not adverse parties to the Company
nor do they have any material interests adverse to the Company.

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

No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.

**PART II**

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

MARKET INFORMATION

The Company has no public trading market for its common stock. Although the Company intends to seek a quotation for
its common shares on the Over-the-Counter Bulletin Board in the future, there is no assurance the Company will do so, nor
is there any assurance that should the Company succeed in obtaining a listing for its securities on the OTC Bulletin Board
or on some other exchange, that a trading market for the Company's stock will develop. There are no outstanding options,
warrants to purchase, or securities convertible into common equity of the Company outstanding. The Company has not
agreed to register any shares of its common stock for any shareholder. There are presently 4,046,000 shares of common
stock which were issued as follows: 100,000 shares of common stock for cash subject to Rule 144 in December 1998;
100,000 issued pursuant to Regulation D, Rule 504 on March 1999, 3,800,000 following a 20 for 1 forward split in
October of 1999, and further the following stock was issued pursuant to Rule 144 by private placements in November of
1999 1,000 shares and in December of 1999 20,000 shares. The Company issued 25,000 shares of stock to Giovanni
Iachelli on November 1, 2000, for services rendered.

STOCKHOLDERS

The are 51 shareholders of record for the Company's common stock.

Item 6. Plan of Operation.

PLAN OF OPERATION

The Company plans to engage in the sale of telecommunications equipment. Additional funding through private placement
will be necessary to enable the Company to lease a suitable office warehouse facility in Las Vegas and to enable the
Company to complete its Web Page and to secure contracts with suppliers and users.

The Company intends to raise adequate funds from interested local parties to provide adequate working capital of up to
$2,250,000 for the next 12 months. This will be used to develop Internet business, pay professionals and for advertising in
the Yellow Pages and media and purchase the telecommunications equipment. No product research or development is
considered necessary; no plant is required, but the Company expects to add employees over the next 12 months as
additional orders increase.

Revenue

The Company has not received revenues from operations during the two-year period preceding the filing of this form. The
Company has not yet achieved any revenue from operations to date. Since the Company is still in the development stage,
its expenses were nominal.

Liquidity

The Company will have to raise additional capital in the next twelve months. As of December 31, 2000, the Company had
nominal working capital and results. In order to satisfy the liquidity needs of the Company for the following twelve
months, the Company will be primarily dependent upon loans from management, proceeds from the sale of the Company's
common and/or preferred stock through one or more private placements and future cash flow from operations. Since the
Company is in its development stage and has not entered into any contracts, attracted clientele or otherwise engaged in any
activity that would generate revenue at this time, the Company does not currently have the revenue necessary to fund
future operations of the Company. If the Company is unable to obtain adequate funds from loans, the sale of its stock in
public offerings, private placements, or alternative financing arrangements, it may be necessary to postpone the planned
business of the Company or the Company's ability to obtain Letters of Credit. The Company, under such circumstances,
would resort to using cash flow for internal growth.

The Company has issued shares of its Common Stock from time to time in the past to satisfy certain obligations and
expects in the future to also acquire certain services, satisfy indebtedness and/or make acquisitions utilizing authorized
shares of the capital stock of the Company. If operations and cash flow can be improved through these efforts,
management believes that the Company's liquidity problems will be resolved and that the Company can continue to
operate. However, no assurance can be given that management's actions will result in profitable operations.

The plan of the Company is to raise more financing through loans and the sale of the Company's common and preferred
stock to enable the Company to purchase equipment, hire employees and execute additional contracts with equipment
manufacturers. An overall budget of $2,250,000 for the first year should achieve the Company's goals.

Potential Uncertainties

As the Company expects eventually to obtain equipment from overseas manufacturers and such expenditures are generated
in foreign currencies, fluctuations in the value of currencies relative to the United States dollar could adversely affect the
Company's profitability. Royalty payments, if any, paid by the Company relating to foreign licensing arrangements would
be converted to U.S. dollars based on the exchange rate at the time of payment.

Item 7. Financial Statements**.******

Following are the audited financial statements of the Company for the year ended December 31, 2000.



---

PRIME EQUIPMENT, INC.

( A DEVELOPMENT STAGE COMPANY )

FINANCIAL STATEMENTS

DECEMBER 31, 2000, AND DECEMBER 31, 1999



---

TABLE OF CONTENTS

Page Number

INDEPENDENT ACCOUNTANT'S REPORT 1

FINANCIAL STATEMENT

Balance Sheets 2

Statements of Operations and Deficit

Accumulated During the Development Stage 3

Statements of Changes in Stockholders' Equity 4

Statement of Cash flows 5

Notes to the Financial Statements 6-7



---

__________________________________________________________________________________

Certified Public Accountant

INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Stockholders

of Prime Equipment, Inc.

Las Vegas, Nevada

I have audited the accompanying balance sheets of Prime Equipment, Inc. (a development stage company) as of December 31, 2000, and
December 31, 1999, and the related statements of operations, cash flows, and changes in stockholders' equity for the years then ended, as
well as the cumulative period from December 18, 1998 (date of inception) to December 31, 2000. These statements are the responsibility of
Prime Equipment, Inc.'s management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe
that my audit provides a reasonable basis for my opinion.

In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Prime Equipment, Inc.
as of December 31, 2000, and December 31, 1999, and the results of operations, cash flows, and changes in stockholders' equity for the
years then ended, as well as the cumulative period from December 18, 1998 in conformity with generally accepted accounting principles.

David E. Coffey, C. P. A.

Las Vegas, Nevada

February 8, 2001



---

( A DEVELOPMENT STAGE COMPANY )

BALANCE SHEETS

<table>

<tc>

|       |  |  |  |   |                    |  |   |                   
|------ |  |  |  | - | ------------------ |  | - | ------------------
|       |  |  |  |   | December 31,       |  |   | December 31,      
|       |  |  |  |   | 2000               |  |   | 1999              
|       |  |  |  |   | ------------------ |  |   | ------------------
|ASSETS |  |  |  |   |                    |  |   |                   
|       |  |  |  |   |                    |  |   |                   
|Cash   |  |  |  | $ | 3,604              |  | $ | 20,041            

|Notes receivable    |  | 10,000 |  | 10,000
|------------------- |  | ------ |  | ------
|Interest receivable |  | 1,416  |  | 617   

| |  |  |  |  | ------------------ |  |  | ------------------
| |  |  |  |  | ------------------ |  |  | ------------------

|Total Assets | $ | 15,020 | $ | 30,658
|------------ | - | ------ | - | ------

| |  |  |  |  | =========== |  |  | ===========
| |  |  |  |  | ----------- |  |  | -----------
| |  |  |  |  |             |  |  |            

|LIABILITIES & STOCKHOLDERS' EQUITY |  |  | 
|---------------------------------- |  |  | 

| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 

|Accounts payable        | $ | 27,554 | $ | 29,800
|----------------------- | - | ------ | - | ------
|Note payable            |   | 25,000 |   | 0     
|Interest payable        |   | 1,298  |   | 0     
|Loans from stockholders |   | 11,437 |   | 0     

| |  |  |  |  | ------------------ |  |  | ------------------
| |  |  |  |  | ------------------ |  |  | ------------------

|Total Liabilities |  | 65,289 | 29,800
|----------------- |  | ------ | ------

| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 

|Stockholders' Equity |                                                            |           |  |         
|-------------------- | ---------------------------------------------------------- | --------- |  | --------
|                     | Common stock, authorized 500,000,000                       |           |  |         
|                     | shares at $.001 par value, issued and                      |           |  |         
|                     | outstanding 4,046,000 shares and                           |           |  |         
|                     | 4,021,000 shares, respectively, after                      |           |  |         
|                     | giving effect to a 20:1 stock split effective              |           |  |         
|                     | October 22, 1999                                           | 4,046     |  | 4,021   
|                     | Preferred stock, authorized 100,000,000                    |           |  |         
|                     | shares at $.001 par value, none issued                     |           |  |         
|                     | or outstanding                                             | 0         |  | 0       
|                     | Additional paid-in capital

Deficit accumulated during the | 46,304    |  | 21,329  
|                     |                                                            |           |  |         
|                     | development stage                                          | (100,619) |  | (24,492)

| |  |  |  |  | ------------------ |  |  | ------------------
| |  |  |  |  | ------------------ |  |  | ------------------

| | Total Stockholders' Equity | (50,269) |  |  | 858
| | -------------------------- | -------- |  |  | ---

| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 

|Total Liabilities and Stockholders' Equity | $ | 15,020 |  | $ | 30,658
|------------------------------------------ | - | ------ |  | - | ------

| |  |  |  |  | =========== |  |  | ===========
| |  |  |  |  | ----------- |  |  | -----------

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

</table>

-2 -



---

( A DEVELOPMENT STAGE COMPANY )

STATEMENTS OF OPERATIONS AND DEFICIT

ACCUMULATED DURING THE DEVELOPMENT STAGE

( With Cumulative Figures From Inception )

<table>

<tc>

| |  | Three months ended Dec. 31,               | Year ended December 31,             | From Inception   
| |  | ----------------------------------------- | ----------------------------------- | -----------------
| |  | ----------------------------------------- | ----------------------------------- | Dec. 13, 1998, to

|         |   | 2000           |   | 1999             |   | 2000        |   | 1999           |   | Dec. 31,
2000          
|-------- | - | -------------- | - | ---------------- | - | ----------- | - | -------------- | - | -----------------------
|         |   | -------------- |   | ---------------- |   | ----------- |   | -------------- |   | -----------------------
|Income   | $ | 200            | $ | 200              | $ | 800         | $ | 617            | $ | 1,417                  
|         |   |                |   |                  |   |             |   |                |   |                        
|Expenses |   |                |   |                  |   |             |   |                |   |                        

|Organizational expense     | 0                |  | 0                |  | 0            |  | 0                 |   | 400                   
|-------------------------- | ---------------- |  | ---------------- |  | ------------ |  | ----------------- | - | ----------------------
|Consulting                 | 25,000           |  | 23,250           |  | 50,000       |  | 23,650            |   | 73,650                
|Office expenses            | 890              |  | 0                |  | 890          |  | 59                |   | 949                   
|Fees                       | 450              |  | 0                |  | 887          |  | 0                 |   | 887                   
|Rent                       | 1,495            |  | 0                |  | 1,495        |  | 0                 |   | 1,495                 
|Professional fees          | 12,141           |  | 1,000            |  | 16,960       |  | 1,000             |   | 17,960                
|Travel expenses            | 5,397            |  | 0                |  | 5,397        |  | 0                 |   | 5,397                 
|Interest expense           | 625              |  | 0                |  | 1,298        |  | 0                 |   | 1,298                 
|                           | ---------------- |  | ---------------- |  | ------------ |  | ----------------  |   | ----------------------
|Total expenses             | 45,998           |  | 24,250           |  | 76,927       |  | 24,709            |   | 102,036               
|                           |                  |  |                  |  |              |  |                   |   |                       
|Net income (loss)          | (45,798)         |  | (24,050)         |  | (76,127)     |  | (24,092)          | $ | (100,619)             
|                           |                  |  |                  |  |              |  |                   |   | =============         
|Retained earnings,         |                  |  |                  |  |              |  |                   |   |                       
|Beginning of period        | (54,821)         |  | (442)            |  | (24,492)     |  | (400)             |   |                       
|                           | ---------------- |  | ---------------- |  | ------------ |  | ----------------- |   |                       
|Deficit accumulated during |                  |  |                  |  |              |  |                   |   |                       

|The development stage | $ | (100,619) | $ | (24,492)  | $ | (100,619) | $ | (24,492)  |  | 
|--------------------- | - | --------- | - | --------- | - | --------- | - | --------- |  | 
|                      |   | =======   |   | ========= |   | =======   |   | ========= |  | 
|                      |   |           |   |           |   |           |   |           |  | 

|Earnings (loss) per
share |  |  |  |  | 
|------------------------- |  |  |  |  | 

|assuming dilution, after
giving  |  |  |  | 
|-------------------------------- |  |  |  | 
|effect to a 20 for 2 stock split |  |  |  | 
|effective October 22, 1999       |  |  |  | 

|Net loss | $ | (0.01)   | $ | (0.01)    | $ | (0.02)  | $ | (0.13)    | $ | (0.03)   
|-------- | - | -------- | - | --------- | - | ------- | - | --------- | - | ---------
|         |   | ======== |   | ========= |   | ======= |   | ========= |   | =========

|Weighted average
shares |  |  |  |  | 
|----------------------- |  |  |  |  | 

|outstanding |  | 4,037,667 |  | 4,007,333 | 4,025,170 |  | 185,167 |  | 3,772,960
|----------- |  | --------- |  | --------- | --------- |  | ------- |  | ---------

| |  | ========= |  | ========= |  | ======= |  | ========= |  | =========
| |  | --------- |  | --------- |  | ------- |  | --------- |  | ---------

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

</table>

-3-



---

( A DEVELOPMENT STAGE COMPANY )

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FROM DECEMBER 18, 1998, ( Date of Inception ) TO DECEMBER 31, 2000

<TABLE>

<TC>

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

| |  |  |  | Common Stock | Additional | Deficit accumul- | Total
| |  |  |  | ------------ | ---------- | ---------------- | -----

| |  |  |  | Shares         |   | Amount         |   | Paid-in        |   | ated during the       |   |               
| |  |  |  | -------------- | - | -------------- | - | -------------- | - | --------------------- | - | --------------
| |  |  |  |                |   |                |   | Capital        |   | development           |   |               
| |  |  |  |                |   |                |   |                |   | stage                 |   |               
| |  |  |  | -------------- |   | -------------- |   | -------------- |   | --------------------- |   | --------------
| |  |  |  |                | $ |                | $ |                | $ |                       | $ |               

|Balance, December 18, 1998 |  |  | ---- |  | ---- |  | ---- |  | ---- |  | ----
|-------------------------- |  |  | ---- |  | ---- |  | ---- |  | ---- |  | ----

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

|Issuance of common stock for cash |  |  |  |  |  |  |  |  |  | 
|--------------------------------- |  |  |  |  |  |  |  |  |  | 

|December, 1998 |  |  |  | 100,000       |  | 100           |  | 0             |  | 0                   |  | 100          
|-------------- |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------------- |  | -------------
|               |  |  |  |               |  |               |  |               |  |                     |  |              
|Less net loss  |  |  |  | 0             |  | 0             |  | 0             |  | (400)               |  | (400)        
|               |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------------- |  | -------------

|Balance,
December 31,
1998 | 100,000 | 100 | 0 | (400) | (300)
|-------------------------- | ------- | --- | - | ----- | -----

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

|Issuance of common stock for cash |  |  |  | 
|--------------------------------- |  |  |  | 

|March, 1999          | 100,000   | 100   |  | 9,900   |  | 0 |  | 10,000
|-------------------- | --------- | ----- |  | ------- |  | - |  | ------
|                     |           |       |  |         |  |   |  |       
|Stock split 20 for 1 |           |       |  |         |  |   |  |       
|October 22, 1999     | 3,800,000 | 3,800 |  | (3,800) |  | 0 |  | 0     
|                     |           |       |  |         |  |   |  |       

|Issuance of common stock for cash |  |  |  |  |  | 
|--------------------------------- |  |  |  |  |  | 

|November, 1999 |  |  |  | 1,000 |  | 1 |  | 999 |  | 0 |  | 1,000
|-------------- |  |  |  | ----- |  | - |  | --- |  | - |  | -----
|               |  |  |  |       |  |   |  |     |  |   |  |      

|Issuance of common stock for cash |  |  |  |  |  |  |  |  |  | 
|--------------------------------- |  |  |  |  |  |  |  |  |  | 

|December, 1999      |  |  |  | 20,000        |  | 20            |  | 19,980        |  | 0             |  | 20,000       
|------------------- |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | -------------
|                    |  |  |  |               |  |               |  |               |  |               |  |              
|Less offering costs |  |  |  | 0             |  | 0             |  | (5,750)       |  | 0             |  | (5,750)      
|                    |  |  |  |               |  |               |  |               |  |               |  |              
|Less net loss       |  |  |  | 0             |  | 0             |  | 0             |  | (24,092)      |  | (24,093)     
|                    |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | -------------

|Balance, December 31,
1999 |  | 4,021,000 |  | 4,021 |  | 21,329 |  | (24,492) |  | 857
|-------------------------- |  | --------- |  | ----- |  | ------ |  | -------- |  | ---

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

|Issuance of common stock for services | 25,000 |  | 25 |  | 24,975 |  | 0 |  | 25,000
|------------------------------------- | ------ |  | -- |  | ------ |  | - |  | ------

|                  |  |  |  |               |  |               |  |               |  |                     |  |              
|----------------- |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------------- |  | -------------
|Net income (loss) |  |  |  | 0             |  | 0             |  | 0             |  | (76,127)            |  | (76,126)     
|                  |  |  |  | ------------- |  | ------------- |  | ------------- |  | ------------------- |  | -------------

|Balance, December 31, 2000 |  | 4,046,000 | $ | 4,046 | $ | 46,304 | $ | (100,619) | $ | (50,269)
|-------------------------- |  | --------- | - | ----- | - | ------ | - | --------- | - | --------

| |  |  |  | ======== |  | ======= |  | ====== |  | ========== |  | =======
| |  |  |  | -------- |  | ------- |  | ------ |  | ---------- |  | -------
| |  |  |  |          |  |         |  |        |  |            |  |        

|The accompanying notes are an integral part of |  |  |  |  |  |  |  | 
|---------------------------------------------- |  |  |  |  |  |  |  | 
|these financial statements                     |  |  |  |  |  |  |  | 

</table>

-4-



( A DEVELOPMENT STAGE COMPANY )

STATEMENTS OF CASH FLOWS

( With Cumulative Figures From Inception )

<TABLE>

<TC>Three months ended Dec. 31,
Year ended December 31,
From Inception,----------------------------------------
----------------------------------
Dec. 18, 1998, to2000
1999
2000
1999
Dec. 31, 2000-----------------
--------------
-----------------
--------------
-----------------------CASH FLOWS PROVIDED BYOPERATING ACTIVITIESNet income or (loss)
$
(45,799)
$
(24,050)
$
(76,126)
$
(24,092)
$
(100,619)Non-cash items included in net loss
0

0

0

0

0Adjustments to reconcile net loss tocash used by operating activityNote receivable

0

0

0

(10,000)

(10,000)Interest receivable

(200)

(200)

(800)

(617)

(1,416)Accounts payable increase

10,437

29,000

(2,246)

29,400

27,554Loans from stockholders

9,937

0

11,437

0

11,437----------------

----------------

----------------

--------------

------------------NET CASH PROVIDED BYOPERATING ACTIVITIES

(25,625)

4,750

(67,735)

(5,309)

(73,044)CASH FLOWS USED BYINVESTING ACTIVITIES

0

0

0

0

0----------------

----------------

----------------

--------------

------------------NET CASH USED BYINVESTING ACTIVITIES

0

0

0

0

0CASH FLOWS FROM FINANCINGACTIVITIESNote payable



0

0

25,000

0

25,000Interest payable

625

0

1,298

0

1,298Sale of common stock

0

3,821

0

3,921

4,021Issue of common stock for services
25

0

25

0

25Paid-in capital

24,975

17,179

24,975

27,079

52,054Less offering costs

0

(5,750)

0

(5,750)

(5,750)----------------

----------------

----------------

--------------

------------------NET CASH PROVIDED BYFINANCING ACTIVITIES

25,625

15,250

51,298

25,250

76,648----------------

----------------

----------------

--------------

------------------NET INCREASE IN CASH

0

20,000

(16,437)

19,941
$
3,604===========CASH AT BEGINNING OF PERIOD
3,604

41

20,041

100----------------

----------------

----------------

--------------CASH AT END OF PERIOD
$
3,604
$
20,041
$
3,604
$
20,041=========

=========

=========

=======The accompanying notes are an integral part of these financial statements.</TABLE>

-5-

( A DEVELOPMENT STAGE COMPANY )

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2000, AND DECEMBER 31, 1999

NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was incorporated on December 18, 1998, under

the laws of the State of Nevada. The business purpose of

the Company was then to start a chain of equipment rental services.

In October of 2000, the Company modified its business purpose to

that of selling telecommunication equipment and services.

The Company will adopt accounting policies and procedures

based upon the nature of future transactions.

NOTE B SALE OF COMMON STOCK

In March of 1999, the Company completed the sale of 100,000

shares of its common stock at $.10 per share or $10,000,

1,000 shares of its common stock at $1.00 per share for $1,000 in

November of 1999 and 20,000 shares of its common stock at

$1.00 for $20,000 in December of 1999.

All of the above shares were issued pursuant to an exemption from

registration requirements under Section 4 (2) of the Securities Act.

NOTE C NAME CHANGE AND INCREASE IN AUTHORIZED CAPITAL

On October 28, 1999, the Company changed its name from

"Prime Equipment Corp." to "Prime Equipment, Inc." and

increased its authorized capital stock to 74,000,000 shares

of $.001 per share par value from 50,000,000 shares of $.001

per share par value. Of the 74,000,000 authorized shares,

50,000,000 are common stock and 24,000,000 are preferred stock.

On July 20, 2000, the Board of Directors approved a resolution to

increase the authorized number of common shares from 50,000,000

to 500,000,000 and increase the number of preferred shares from

24,000,000 to 100,000,000.

NOTE D STOCK SPLIT

On October 22, 1999, the Company approved a twenty to one

stock split. Prior to the stock split there were 200,000 shares

of common stock outstanding and after the stock split there were

4,000,000 shares of common stock outstanding.

- 6 -



---

( A DEVELOPMENT STAGE COMPANY )

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2000, AND DECEMBER 31, 1999

(continued)

NOTE E EARNINGS (LOSS) PER SHARE

Basic EPS is determined using net income divided by the

weighted average shares outstanding during the period.

Diluted EPS is computed by dividing net income by the

weighted average shares outstanding, assuming all dilutive

potential common shares were issued. Since the Company

has no common shares that are potentially issuable, such as

stock options, convertible securities or warrants, basic and

diluted EPS are the same.

NOTE F NOTE PAYABLE

On May 23, 2000, the Company received $25,000 cash and issued

its Note maturing April 30, 2001 with simple annual interest at the

rate of 10% per annum. The note is unsecured.

NOTE G EXCHANGE OF COMMON STOCK FOR SERVICES

On November 1, 2000 the Company issued 25,000 shares of its

common stock in exchange for consulting services valued at

$25,000, or $1.00 per share.

NOTE H RELATED PARTY TRANSACTIONS

Effective October 1, 2000 the Board of Directors approved as

necessary and reimbursable the travel expenses of two of its

stockholders actively engaged in development of the Company.

NOTE I RENTAL AND OFFICE SERVICES AGREEMENT

Effective October 1, 2000 the Board of Directors approved monthly

payments of $300 for rental of office space and reimbursement

for actual office expenses incurred on behalf of the Company.

- 7 -



---

None. Not applicable.

**PART III**

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

The following table sets forth the directors and executive officers of the Company, their ages, and all positions held with
the Company.

<table>

<tc>

|Name                  | Age | Positions          
|--------------------- | --- | -------------------
|Giovanni Iachelli     | 53  | President, Director
|Alex Martyniak        | 36  | Director           
|Piero Dante Guglielmi | 35  | Secretary          

</table>

Mr. Giovanni Iachelli has been the President and Director of the Company since January 1st 2000. Mr. Iachelli is a civil
engineer and has been involved in huge construction contracts in the Middle East and telecommunications both in Europe
and North America. From 1998-1999, he was the Merger and Acquisition Manager, Italian Market for Primus Telecom
Corp UK, in London. From 1995 to 1998, he was President of North American Telephone Company in Vancouver. Mr.
Iachelli held the position of Development Manager for Italian Market for UGN, Inc. in Carlson, CA from 1990 to 1995.
From 1980 to 1990, he was Vice President of Export & Marketing in the Food & Wine sector of EAGLE SAS. in
Vancouver.

Mr. Martyniak attended the University of Mining and Metallurgy in Kracow, Poland, from 1984 until 1987. He attended
the British Columbia Institute of Technology from 1992 until 1993. He received a diploma in International Business from
Langara College in Vancouver, British Columbia in 1998. Between 1984 and 1990, he was involved in various businesses
in Poland and Italy, including Fiat, Fenici Import Export Company and Stecaro. Between 1990 and the present he has been
involved in various businesses in Vancouver, British Columbia, including Industry Canada and the Italian Chamber of
Commerce, acting for the latter as Commercial Attache.

Mr. Guglielmi received training in international marketing from Simon Fraser University in Vancouver, British Columbia.
Between 1989 and 1996, he was in charge of research and development corporate filing for North American Fire Guardian
Technology, Inc. From 1996 until the present, he has been in charge of technical marketing and a director of North
American Fire Guardian Technology, Inc.

Currently there are no agreements or understanding for any officer or director to resign at the request of another person and
that none of the officers or directors are acting on behalf of or will act at the direction of any other person.

Item 10. Executive Compensation.

There has been no executive compensation in any form to date with the exception of the issuance of 25,000 shares to
Giovanni Iachelli for services rendered to date. It is anticipated that the officers and directors will receive compensation as
sales of equipment are completed, including salaries and stock compensation.

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

As of December 31, 2000, Giovanni Iachelli owned 25,000 shares of common stock, which was received as compensation
for services performed to date. No other officer or member of the Board of Directors owns any securities or the right to
acquire any securities of the Company. Further, as of December 31, 2000, management of the Company is not aware of
any person or group who owns 5% or more of the securities of the Company. However, it is anticipated that from time to
time the Company will issue shares of stock to management or directors for services rendered, although there are no
specific agreements at this time.

CHANGES IN CONTROL

The Company has no arrangements which might result in a change in control of the Company. Company's management are
expected to remain in their respective positions indefinitely. There are no agreements or understandings, verbal or written,
in which any of the Company's management has or will agree to resign at the request of another person, nor are any of the
officers or directors acting at the direction of another person. However, in the future the Company may consider strategic
alliances with other companies that might provide additional products that would be sold by the Company.

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

<table>

<tc>

|Exhibit No. | Document                  | Location                                                 
|----------- | ------------------------- | ---------------------------------------------------------
|3(i)        | Articles of Incorporation | Incorporated by reference

Filed 3/13/200 on Form 10SB12G
|3(ii)       | Bylaws                    | Incorporated by reference

Filed 3/13/200 on Form 10SB12G

</table>

No reports have been filed on Form 8-K during the last quarter of the year ended December 31, 2000.

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.

PRIME EQUIPMENT, INC.

___________________________________

President, Director

Date: ____________________________

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.

___________________________________

President, Director

Date: ____________________________

___________________________________

Principal Financial Officer

Date:______________________________

___________________________________

Director

Date: ____________________________