SEC File No. 33-85044-d


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB
                 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE  SECURITIES  EXCHANGE ACT OF 1934
                     For the  quarterly period ended February 28, 2003

 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 Commission file number 33-85044-d

                              NACO Industries, Inc.
-------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

        Utah                                          48-0836971
        ----                                          ----------
(State of Incorporation)                     (IRS Employer Identification

                     395 West 1400 North, Logan, Utah 84341
                     --------------------------------------
                    (Address of principal executive offices)


                     Issuer's telephone number 435-753-8020
                   ------------------------------------------


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 [ ]

As of February 28,  2003,  the issuer had  1,974,455  shares of Common Stock and
165,412 shares of Preferred Stock outstanding.


Transitional Small Business Disclosure Format   Yes   [ ]   No   [X]
-------------------------------------------------------------------------------





<PAGE>


PART 1 - FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

NACO INDUSTRIES, INC.
BALANCE SHEETS

                                                                           February 28,    November 30,
ASSETS                                                                        2003            2002
------                                                                     -----------     -----------
                                                                          (Unaudited)       (Audited)
<S>                                                                        <C>             <C>
Current assets:
  Cash                                                                     $   83,120      $  234,964
  Accounts receivable, net of allowances
    Of $43,279 / $37,710                                                    1,107,179         699,482
  Current portion of related party receivables                                 30,000          30,000
  Inventories                                                                 781,118         722,753
  Other current assets                                                         23,573          64,188
  Deferred income tax asset                                                   105,000          89,000
                                                                           ----------      ----------
       Total current assets                                                 2,129,990       1,840,387

Property and equipment, net                                                   865,495         807,714
Related party receivables                                                     267,682         275,182
Other assets, net                                                             187,923         193,306
                                                                           ----------      ----------
Total assets                                                               $3,451,090      $3,116,589
                                                                           ==========      ==========
</TABLE>

                       See Notes to Financial Statements.


                                       2
<PAGE>



<TABLE>
<CAPTION>

NACO INDUSTRIES, INC.
BALANCE SHEETS

                                                                          February 28,      November 30,
LIABILITIES:                                                                  2003               2002
------------
                                                                          (Unaudited)        (Audited)
<S>                                                                       <C>               <C>
Current liabilities:
  Accounts payable                                                        $  470,224        $  209,886
  Accrued expenses                                                           236,823           364,622
  Bank Line of Credit                                                        177,011                 0
  Current portion of long-term obligations                                    58,767            58,525
                                                                          ----------        ----------
       Total current liabilities                                             942,825           633,033
                                                                          ----------        ----------

Long-term liabilities:
  Long-term obligations, less current portion                                862,130           876,007
  Deferred income tax liability                                               67,000            67,000
                                                                          ----------        ----------
       Total long-term liabilities                                           929,130           943,007
                                                                          ----------        ----------
       Total liabilities                                                   1,871,955         1,576,040
                                                                          ----------        ----------

Stockholders' equity:
   Preferred Stock, 7% Cumulative, convertible $3.00 par value, 330,000      496,236           496,236
shares authorized and 165,412 shares issued and outstanding. (Aggregate
liquidation preference $1,304,815 and $1,270,364 respectively)
  Common stock, $.01 par value, 10,000,000 shares authorized; 1,974,455       19,745            19,745
shares issued and outstanding
  Additional paid-in capital                                               1,017,562         1,017,562
  Retained Earnings                                                           45,592             7,006
                                                                          ----------        ----------
       Total stockholders' equity                                          1,579,135         1,540,549
                                                                          ----------        ----------

       Total liabilities and
         Stockholders' equity                                             $3,451,090        $3,116,589
                                                                          ==========        ==========
</TABLE>

                       See Notes to Financial Statements


                                       3
<PAGE>


<TABLE>
<CAPTION>

NACO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
                                                    Three months ended
                                                February 28,   February 28,
                                                -----------    -----------
                                                     2003          2002
                                                -----------    -----------

<S>                                             <C>              <C>
Sales, net                                      $ 1,853,822      1,819,374

Cost of goods sold                                1,135,735      1,108,417
                                                -----------    -----------
       Gross profit                                 718,087        710,957

Operating expenses:
  Selling expenses                                  388,393        398,126
  General and administrative expenses               242,985        252,630
                                                -----------    -----------
       Total operating expenses                     631,378        650,756
                                                -----------    -----------

       Income from operations                        86,709         60,201

Other income (expense):
  Interest income                                       590            733
  Interest expense                                  (25,712)       (33,783)
                                                -----------    -----------
       Total other income (expense)                 (25,122)       (33,050)
                                                -----------    -----------

Income before income taxes                      $    61,587         27,151

Income tax expense                                   23,000         10,800
                                                -----------    -----------

       Net income                               $    38,587         16,351
                                                ===========    ===========

Adjustment for preferred dividends in arrears       (34,451)       (34,451)

                                                -----------    -----------
Adjusted net income (loss) to common            $     4,136        (18,100)
stockholders
                                                ===========    ===========

Earnings (loss) per common share:
                                                -----------    -----------
 Basic:                                         $       .00           (.01)
                                                ===========    ===========

                                                -----------    -----------
 Diluted:                                       $       .00           (.01)
                                                ===========    ===========
Weighted average number of common
  Shares outstanding:
    Basic                                         1,974,000      1,950,000
                                                ===========    ===========
    Diluted                                       1,974,000      1,950,000
                                                ===========    ===========
</TABLE>

                        See Notes to Financial Statements


                                       4
<PAGE>

<TABLE>
<CAPTION>
NACO INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                                Three months ended
                                                          ------------------------------
                                                          February 28,       February 28
                                                          ------------       -----------
                                                             2003               2002
<S>                                                       <C>                <C>
Cash flows from operating activities
  Net income                                              $  38,587          $  16,351
  Adjustments to reconcile net income to
   net cash provided by (used in) operating activities:
     Depreciation                                            42,416             49,833
     Amortization                                             2,103              2,103
     Deferred income taxes                                  (16,000)            10,800
   (Increase) decrease in:
     Accounts receivable, net                              (407,697)          (186,533)
     Receivable from related parties                          7,500                907
     Inventory                                              (58,365)           (31,843)
     Other                                                   (3,360)             2,444
   Increase (decrease) in:
     Accounts payable                                       216,363            128,119
     Accrued expenses                                      (127,799)          (148,031)
                                                          ---------          ---------
 Net cash used in operating activities                     (306,252)          (155,850)
                                                          ---------          ---------

Cash flows from investing activities
  Purchase of  property and equipment                       (12,248)           (24,473)
  Other Assets                                                3,280               --
                                                          ---------          ---------
        Net cash used in investing activities                (8,968)           (24,473)
                                                          ---------          ---------

Cash flows from financing activities
  Net change in line of credit                              177,011            170,750
  Payments on long-term debt                                (13,635)           (14,028)
                                                          ---------          ---------

        Net cash provided by financing activities           163,376            156,722
                                                          ---------          ---------

Decrease in cash                                           (151,844)           (23,601)

        Cash, beginning of period                           234,964            137,355
                                                          ---------          ---------

        Cash, end of period                               $  83,120          $ 113,754
                                                          =========          =========

See Notes to Financial Statements
Supplemental disclosures:
    Income taxes paid                                     $  41,571          $       0
    Interest Paid                                         $  25,816          $  33,783

</TABLE>


                                       5
<PAGE>



NACO INDUSTRIES, INC.
Notes to Financial Statements (Unaudited)
February 28, 2003



NOTE A - BASIS OF PRESENTATION

In the opinion of  management of NACO  Industries,  Inc.  (the  "Company"),  all
adjustments  (consisting only of normal recurring accruals) considered necessary
for  a  fair  presentation  have  been  included.   Operating  results  for  the
three-month period ended February 28, 2003 are not necessarily indicative of the
results that may be expected for the fiscal year ending November 30, 2003. These
statements  should be read in  conjunction  with the  financial  statements  and
related notes in the  Company's  Annual Report on Form 10-KSB for the year ended
November 30, 2002.


NOTE B - DIVIDENDS

Dividends on the Company's preferred stock are cumulative at 7%. At February 28,
2003,  dividends in the amount of $312,343  were in arrears.  No dividends  were
declared or paid during the quarter.

NOTE C - RELATED PARTY OPERATING LEASES

The Company leases its Logan, Utah  manufacturing and sales facility and certain
equipment  from  P.V.C.,  Inc.  (PVC),  a  corporation  owned 100 percent by the
Company's majority  shareholder,  Verne Bray. The lease agreement requires rents
in the amount of approximately $24,737 per month. The Company has guaranteed the
mortgage on the  facilities  it leases from PVC. At November  30, 2002 and 2001,
the  outstanding  mortgage  balance was  approximately  $700,000  and  $720,000,
respectively.  At February 28, 2003, the Company had a lease deposit with PVC of
$23,000, which is included in "Other Assets" on the balance sheet.


In  addition,  Verne Bray has signed an  indemnification  agreement  to hold the
Company  harmless  for  funds  paid by the  Company  on behalf  of  Rimshot  LLC
("Rimshot"), an inactive limited liability company owned by a son of Verne Bray.
The Board of Directors approved the Company's  execution of the  indemnification
agreement.   The  agreement  covers  costs  advanced  to  Rimshot  for  start-up
operations and principal and interest  payments made on leased machinery used by
Rimshot. The agreement calls for monthly payments of $2,500 beginning October 1,
2000.  Pursuant to the  indemnification  agreement,  Verne Bray  conveyed to the
Company a security interest in all PVC lease  receivables from the Company.  The
Company has also signed a security agreement with PVC that allows the Company to
offset  payments  due to PVC in the  event  of  default  on the  indemnification
agreement.


At February 28, 2003 and November 30, 2002, Verne Bray and related entities owed
the Company $297,682 and $305,182, respectively.


NOTE D - SUPPLEMENTAL CASH FLOW INFORMATION

During the quarter ended February 28, 2003, the Company acquired  property,  and
equipment  of $87,950 in  exchange  for a decrease  in other  current  assets of
$43,975 and an increase in accounts payable of $43,975.


                                       6
<PAGE>




<PAGE>


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

Introduction

NACO Industries, Inc. ("NACO" or the "Company") manufactures and sells polyvinyl
chloride ("PVC")  products.  The Company's  primary line of business consists of
manufacturing PVC pipe fittings and valves, which are sold throughout the United
States through wholesale  distributors to irrigation,  industrial,  construction
and utility industries.  The Company  manufactures and sells fabricated fittings
(4"  through  30" in  diameter),  as well as molded  fittings  (4" though 10" in
diameter).  Pipefittings produced by the Company include tees, reducers, elbows,
couplers, end caps, and bolted repair couplers. NACO also manufactures and sells
PVC valves (4" through 12" in diameter).


Results of Operations
     The following  discussion relates to the three-month periods ended February
28,  2003  and  February  28,  2002,  respectively.   For  comparison  purposes,
percentages  of  sales  will be  used  rather  than  dollars.  In the  following
discussion,  the three months ended  February 28, 2003 and February 28, 2002 are
referred to as 1Q03 and 1Q02,  respectively.  Readers are cautioned that results
of operations for the three months ended  February 28, 2003 are not  necessarily
indicative  of the  results  that may be  expected  for the fiscal  year  ending
November 30, 2003.

     Overview.  The Company  obtained a net profit  before  taxes of $61,587 for
1Q03, compared to a net profit before taxes of $27,151 for 1Q02. Gross margin as
a percentage of sales for 1Q03 and 1Q02 was 38.7% and 39.1%,  respectively.  The
increase in the  Company's net profit before taxes for 1Q03 from 1Q02 was mainly
due to several factors as explained below.

     Net Sales: Net sales for 1Q03 increased by 1.9% to $1,853,822,  compared to
net sales of $1,819,374 for 1Q02.  Management  believes that the increase in net
sales from 1Q02 to 1Q03 was due primarily to an increase in sales in the utility
market. Sales in the utility market increased 6.9% from 1Q02 to 1Q03. Management
believes  the  increase  in the  utility  market was mainly due to one large OEM
customer that was awarded  several  domestic and foreign  construction  projects
during the quarter.  Sales in the agricultural  market were relatively flat with
sales  increasing a minimal $1,977,  or.14% from 1Q02 to 1Q03.  Agricultural and
utility sales as a percentage of total sales were 76.2% and 23.8% for 1Q03,  and
77.4% and 22.6% for 1Q02, respectively.

     Gross  Margin:  Gross margin as a percentage of sales for 1Q03 and 1Q02 was
38.7% and 39.1%, respectively. Gross margin for 1Q03 decreased from 1Q02, mainly
due to an  increase in raw  material  costs.  Variable  cost of  materials  as a
percentage  of net sales  was  33.3% and 28.6% for 1Q03 and 1Q02,  respectively.
Management  believes the 18.4%  increase in raw material costs from 1Q02 to 1Q03
was due primarily to sharp increases in pipe prices since early 2002.  Labor and
related expenses decreased $55,952, or 14.4%, from 1Q02 to 1Q03, mainly due to a
decrease in the size of the Company's  production labor force. With the increase
in raw material  costs and the decrease in labor costs the decrease in the gross
margin was a minimal .03% from 1Q02 to 1Q03.

     Selling:  Selling  expenses  were 21.0% of net sales for 1Q03,  compared to
21.9% for 1Q02.  The decrease in selling  expenses as a percentage  of sales was
due to several principal factors. In actual dollars,  selling expenses decreased
$9,732,  or 2.4%,  from 1Q02 to 1Q03.  Salaries and related  expenses  increased
$2,882,  or 1.7% from 1Q02 to 1Q03,  mainly due to  reassigning an employee from
administrative to selling responsibilities. Advertising expense increased 47.5%,
or $3,160,  from 1Q02 to 1Q03,  mainly due to the  publication  of a new product
catalog. Freight out decreased 9.9%, or $13,124, from 1Q02 to 1Q03 and decreased
as a  percentage  of net sales from 7.3% in 1Q02 to 6.4% in 1Q03,  mainly due to
decreased  sales  volume of larger  shipments,  on which  the  Company  pays the
freight.

     General and administrative: General and administrative expenses represented
13.1% of net sales for 1Q03,  compared to 13.9% for 1Q02.  Overall,  general and
administrative  expenses  remained  relatively even at $242,985 and $252,630 for
1Q03 and 1Q02, respectively.

     Other: Other expenses/revenues were 1.4% of net sales for 1Q03, compared to
1.8% for 1Q02,  mainly  due to  decreased  interest  expense.  Interest  expense
decreased  from  1.9% of net  sales  for  1Q02 to 1.4% of net  sales  for  1Q03.
Interest expense decreased $8,071 from 1Q02 to 1Q03, mainly due to improved cash
flow and lower borrowings  during the quarter,  as well as lower interest rates.
The Company's  effective interest rates (interest expense divided by the average
debt balance for the applicable period) for 1Q03 and 1Q02 were 10.00% and 9.43%,
respectively.


                                       7
<PAGE>

Liquidity and Capital Resources
     The Company's  principal  sources of liquidity have  historically been cash
from operations,  credit facilities and equity financing. Cash used in operating
activities was $306,252 in 1Q03. Cash as of February 28, 2003 was $83,120,  down
$151,844 from November 30, 2002. The Company's working capital decreased $20,189
from  November 30, 2002 to February 28,  2003,  due  primarily to an increase in
current  liabilities.  The increase in current  liabilities  is partly due to an
increase in accounts  payable and the Company's line of credit.  The increase in
accounts  payable was  partially  due to purchases of raw  materials to increase
inventories in preparation  for the Company's busy season,  which  traditionally
runs from March through June each year. The Company  increased trade payables by
$216,363  from  November 30, 2002 to February 28,  2003.  The Company  increased
current assets partly due to longer terms for accounts  receivable.  The Company
has an "Early Order" program which  encourages  customers to place orders during
the traditional slow winter months.  For placing an "Early Order",  the customer
is granted  extended  payment terms and some special  discounts.  Traditionally,
most early orders are paid in March to take  advantage  of the largest  discount
available. All early orders are due by mid May. Borrowings on the Company's line
of credit financed the increase in current assets

     At February 28, 2003, the  outstanding  balance of the Company's  revolving
line of credit was $177,011,  compared to $0 at November 30, 2002. On October 1,
2001,  the Company  entered  into a line of credit with Zions Bank.  The amounts
available  under the facility are based on a percentage  of accounts  receivable
and inventories.  Subsequent to the quarter end, February 28, 2003, the facility
matured  March 31, 2003 and was  renewed for a  twenty-four  month  period.  The
interest rate on the facility is variable and is equal to 1.75 percentage points
over the prime rate.  Prime rate means an index which is determined daily by the
published  commercial  loan variable rate index held by any two of the following
banks: J.P. Morgan Chase & Co., Wells Fargo Bank N.A. and Bank of America N.A.

     On February 28, 2003, the Company was in compliance with all loan covenants
with  Zions  Bank.  The  maximum  line is  $1,200,000,  of  which,  based on the
"Borrowing  Base  Certificate"  prepared by the  Company,  there was  $1,022,989
available to borrow as of February 28, 2003.

     Also, the Company has a note with WebBank Corporation.  The note is secured
by land,  buildings and equipment owned by the Company.  The note has a variable
interest  rate  equal to prime  interest  rate as  reported  by The Wall  Street
Journal,  plus one and one-half percent (1.5%) provided  however,  that the rate
shall never exceed 14.75% nor be less than 9.75%.  The rate on February 28, 2003
was 9.75%.  The term of the note is fifteen  (15) years from the date of closing
(April 1999) and the note requires monthly  payments.  On February 28, 2003, the
monthly  payment  required was $11,972.  On February 28, 2003,  the  outstanding
balance of the note was $913,417 and the Company was in compliance with all loan
covenants  with  WebBank.  This note is  subordinated  to the Zions Bank line of
credit.

     Management  believes  that its capital  resources  on hand at February  28,
2003,  revenues from sales and bank  resources will be sufficient to satisfy its
working  capital  requirements  for  the  foreseeable  future.  There  can be no
assurance, however, that additional debt or equity financing may not be required
or that, if such financing is required,  it will be available on terms favorable
to the  Company,  if at  all.  The  Company's  inability  to  secure  additional
financing  or raise  additional  capital  would  likely have a material  adverse
effect on the  Company's  operations,  financial  condition,  and its ability to
continue to grow and expand its operations.


Critical Accounting Policies

NACO's  significant  accounting  policies  are  described  in  Note 1 to  NACO's
Consolidated  Financial  Statements for the year ended November 30, 2002.  These
financial  statements  were prepared in accordance  with  accounting  principles
generally accepted in the United States and are included in NACO's Annual Report
on Form 10-KSB which has been filed with the Securities and Exchange Commission.
Included within these policies are the Company's "critical accounting policies."
Critical  accounting  policies are those policies that are most important to the
preparation  of the  Company's  consolidated  financial  statements  and require
management's  subjective and complex  judgment due to the need to make estimates
about  the  effect of  matters  that are  inherently  uncertain.  The  Company's
critical   accounting  policies  relate  to  allowance  for  doubtful  accounts,
inventory  valuation,  product  warranties and  allowances  for deferred  income
taxes.  The application of these  accounting  policies  involves the exercise of
judgment and the use of assumptions as to future uncertainties and, as a result,
actual results could differ materially from these estimates.

     Allowance for Doubtful  Accounts:  The Company has established an allowance
for estimated bad debts by applying a historical  percentage of bad debts to net
sales each month. In addition, all accounts over 90 days are evaluated as to the
collectibility  of each  account  and a  specific  reserve  is  established  for
specific  customer  accounts  identified  as  doubtful or  non-collectible.  The
Company's customer base is such that changes in either the customer's  financial
position  or the  economy as a whole could  cause  actual  write-offs  to differ
materially from the estimated  reserve.  The allowance for doubtful  accounts at
February 28, 2003 was  $43,279,  compared to $37,710 at fiscal year end November
30, 2002.

     Inventories:  The  Company  evaluates  inventory  on  an  annual  basis  to
determine obsolete and slow moving inventory.  All inventory that has not moved,
been used in manufacturing or sold in the past year is reserved against. Also an
additional reserve is made for slow moving inventory.  Based on usage during the

                                       8
<PAGE>


past year, a reserve is  calculated by taking the  prevailing  interest rate for
money  borrowed  multiplied  by the value of  inventory in excess of a six-month
supply.  Inventory in excess of a  three-year  supply is reserved at 100% of the
value of that  excess  inventory.  The  reserve  for  obsolete  and slow  moving
inventories at February 28, 2003 was $60,000 compared to $60,000 at November 30,
2002.

     The Company takes a complete physical  inventory once a year and a physical
inventory of the top 80% of the dollars in inventory every month.  This helps to
offset any  inventory  adjustments  at year-end.  Any year-end  adjustments  are
reflected  during the fourth  quarter after the year-end  physical  inventory is
completed. Since only 80% of the dollars in inventory are counted each quarter a
"quantity reserve" is made each quarter for the parts not counted.  The quantity
reserve at February 28, 2003 was $10,000 compared to $0 at November 30, 2002..

     Product Warranties:  The Company's current liabilities  included an accrued
warranty  account for anticipated  product warranty claims based on a historical
percentage of sales plus any specific claims that have been  identified.  Actual
claims could be materially  different than the historical  estimates made by the
Company.  The  accrual  for  warranty  claims at  February  28, 2003 was $96,971
compared to $83,274 at November 30, 2002.

     Deferred Income Tax Valuation  Allowances:  The Company's current assets at
February 28, 2003 include an entry for deferred taxes in the amount of $105,000.
The Company  evaluates  the  realizability  of its net  deferred  tax asset on a
quarterly  basis and a  valuation  allowance  is  provided.  In the  opinion  of
management, the total asset value at February 28, 2003 is realizable,  therefore
no allowance was provided.  However, the Company's operating results are subject
to certain risks that could adversely affect the Company's operating results and
its ability to operate  profitably.  The  Company's  operating  results could be
adversely  affected  by  increased  competition  in the  markets  in  which  the
Company's products compete,  manufacturing delays and inefficiencies  associated
with expanding the Company's manufacturing capacity, adverse weather conditions,
increases in labor or raw materials  expenses,  changes in economic  conditions,
unanticipated  expenses or events and other factors that could materially change
the need for an allowance.

Factors Affecting Future Results
     Statements  contained in this Quarterly  Report on Form 10-QSB that are not
purely historical are "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All forward-looking statements involve various
risks and  uncertainties.  Forward-looking  statements  contained in this Report
include  statements  regarding the Company's  plans,  market  opportunities  and
acceptance,  expectations,  goals, revenues, financial performance,  strategies,
mission and  intentions  for the future.  Such  forward-looking  statements  are
included under. "Management's Discussion and Analysis of Financial Condition and
Results of Operations"  and encompass  NACO's  beliefs,  expectations,  hopes or
intentions  regarding  future  events.  Words  such  as  "expects,"  "believes,"
"anticipates," "should," and "likely" also identify forward-looking  statements.
All  forward-looking  statements included in this Report are made as of the date
hereof,  based on information  available to the Company as of such date, and the
Company  assumes no obligation to update any  forward-looking  statement.  It is
important to note that such statements may not prove to be accurate and that the
Company's  actual results and future events could differ  materially  from those
anticipated in such statements.  All subsequent written and oral forward-looking
statements  attributable  to the  Company  or  persons  acting on its behalf are
expressly qualified in their entirety by this section and other factors included
elsewhere in this Report.


Item 3 - Controls and Procedures

         Under  the  supervision  and with the  participation  of the  Company's
management,  including the Company's  principal  executive officer and principal
financial  officer,  the  Company  conducted  an  evaluation  of its  disclosure
controls and procedures,  as defined under Rule 13a-14(c)  promulgated under the
Exchange  Act within 90 days of the filing  date of this  Report.  Based on this
evaluation,  the Company's principal executive officer and principal  accounting
officer  concluded  that the Company's  disclosure  controls and  procedures are
effective in alerting them on a timely basis to material information relating to
the Company required to be included in the Company's  reports filed or submitted
under the Exchange Act.

         There have been no significant  changes  (including  corrective actions
with regard to significant deficiencies or material weaknesses) in the Company's
internal  controls or in other  factors  that could  significantly  affect these
controls  subsequent to the date of the  evaluation  referenced in the preceding
paragraph.





                                       9
<PAGE>




PART II - OTHER INFORMATION

Item  3 - Defaults  Upon  Senior  Securities(b)  During  the  fiscal  year ended
      November 30,  2002,  the Company paid $69,473 in dividends on its Series 1
      Class A 7% Cumulative Convertible Preferred Stock (the "Preferred Stock").
      During the prior two years ended  November  30, 2001 and 2000 no dividends
      were paid.  As of February  28, 2003,  the total  dividend in arrears with
      respect to the Preferred Stock was $312,343.

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

         None

Item 6 - Exhibits and Reports on Form 8-K


         (a)  Exhibit 99.1  Certification by Verne E. Bray pursuant to 18 U.S.C.
              Section  1350,   as  adopted   pursuant  to  Section  906  of  the
              Sarbanes-Oxley Act of 2002



              Exhibit  99.2  Certification  by Jeffrey J. Kirby  pursuant  to 18
              U.S.C.  Section  1350,  as adopted  pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002


         (b)  Reports on form 8-K. None








                                       10
<PAGE>



SIGNATURES

In accordance with the  requirements of the Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

Naco Industries, Inc.
Registrant


By       /s/ VERNE E. BRAY                                  April 10, 2003
   -----------------------------------------                ---------------
         Verne E. Bray                                      Date
         CEO, Secretary, Chairman

         (Principal Executive Officer)

By       /s/ W. MICHAEL HOPKINS                             April 10, 2003
   -----------------------------------------                ---------------
         W. Michael Hopkins Date President                  Date


By       /s/ JEFFREY J. KIRBY                               April 10, 2003
   -----------------------------------------                ---------------
         Jeffrey J. Kirby                                   Date
         Executive Vice President/
         Chief Financial Officer/Treasurer
        (Principal Financial and Accounting Officer)




                                       11
<PAGE>



CERTIFICATIONS *
--------------
I, Verne E. Bray, certify that:

         1.   I have  reviewed  this  quarterly  report  on Form  10-QSB of NACO
              Industries,  Inc.; 2. Based on my knowledge, this quarterly report
              does not contain any untrue  statement of a material  fact or omit
              to state a material fact necessary to make the statements made, in
              light of the circumstances  under which such statements were made,
              not  misleading  with  respect  to  the  period  covered  by  this
              quarterly  report;  3.  Based  on  my  knowledge,   the  financial
              statements,  and  other  financial  information  included  in this
              quarterly  report,  fairly  present in all  material  respects the
              financial  condition,  results of operations and cash flows of the
              registrant as of, and for, the periods presented in this quarterly
              report;  4. The registrant's  other  certifying  officer and I are
              responsible for establishing and maintaining  disclosure  controls
              and  procedures  (as  defined  in  Exchange  Act Rules  13a-14 and
              15d-14) for the registrant and we have:

                   a)   designed  such  disclosure  controls and  procedures  to
                        ensure  that  material   information   relating  to  the
                        registrant,  including its consolidated subsidiaries, is
                        made  known  to  us by  others  within  those  entities,
                        particularly  during the period in which this  quarterly
                        report is being prepared;

                   b)   evaluated   the   effectiveness   of  the   registrant's
                        disclosure  controls and  procedures as of a date within
                        90 days  prior  to the  filing  date  of this  quarterly
                        report (the "Evaluation Date"); and


                   c)   presented in this quarterly report our conclusions about
                        the   effectiveness  of  the  disclosure   controls  and
                        procedures  based on our evaluation as of the Evaluation
                        Date;

         5.   The registrant's  other  certifying  officer and I have disclosed,
              based on our most recent evaluation,  to the registrant's auditors
              and the registrant's board of directors (or persons performing the
              equivalent function):

                   a)   all significant  deficiencies in the design or operation
                        of internal  controls which could  adversely  affect the
                        registrant's ability to record,  process,  summarize and
                        report  financial  data  and  have  identified  for  the
                        registrant's   auditors  any  material   weaknesses   in
                        internal controls; and

                   b)   any  fraud,  whether  or  not  material,  that  involves
                        management  or other  employees  who have a  significant
                        role in the registrant's internal controls; and

         6.   The registrant's  other certifying officer and I have indicated in
              this  quarterly  report  whether  or not  there  were  significant
              changes  in  internal  controls  or in other  factors  that  could
              significantly  affect internal controls  subsequent to the date of
              our most recent evaluation,  including any corrective actions with
              regard to significant deficiencies and material weaknesses.

Date:  April 11, 2003

                                 /s/ Verne E. Bray
                                 --------------------------
                                     Verne E. Bray
                                     Chief Executive Officer and Secretary



                                       12
<PAGE>




I, Jeffrey J. Kirby, certify that:

          1.  I have  reviewed  this  quarterly  report  on Form  10-QSB of NACO
              Industries,  Inc.; 2. Based on my knowledge, this quarterly report
              does not contain any untrue  statement of a material  fact or omit
              to state a material fact necessary to make the statements made, in
              light of the circumstances  under which such statements were made,
              not  misleading  with  respect  to  the  period  covered  by  this
              quarterly  report;  3.  Based  on  my  knowledge,   the  financial
              statements,  and  other  financial  information  included  in this
              quarterly  report,  fairly  present in all  material  respects the
              financial  condition,  results of operations and cash flows of the
              registrant as of, and for, the periods presented in this quarterly
              report;  4. The registrant's  other  certifying  officer and I are
              responsible for establishing and maintaining  disclosure  controls
              and  procedures  (as  defined  in  Exchange  Act Rules  13a-14 and
              15d-14) for the registrant and we have:

                   a)   designed  such  disclosure  controls and  procedures  to
                        ensure  that  material   information   relating  to  the
                        registrant,  including its consolidated subsidiaries, is
                        made  known  to  us by  others  within  those  entities,
                        particularly  during the period in which this  quarterly
                        report is being prepared;

                   b)   evaluated   the   effectiveness   of  the   registrant's
                        disclosure  controls and  procedures as of a date within
                        90 days  prior  to the  filing  date  of this  quarterly
                        report (the "Evaluation Date"); and


                   c)   presented in this quarterly report our conclusions about
                        the   effectiveness  of  the  disclosure   controls  and
                        procedures  based on our evaluation as of the Evaluation
                        Date;

         5.   The registrant's  other  certifying  officer and I have disclosed,
              based on our most recent evaluation,  to the registrant's auditors
              and the registrant's board of directors (or persons performing the
              equivalent function):

                   a)   all significant  deficiencies in the design or operation
                        of internal  controls which could  adversely  affect the
                        registrant's ability to record,  process,  summarize and
                        report  financial  data  and  have  identified  for  the
                        registrant's   auditors  any  material   weaknesses   in
                        internal controls; and

                   b)   any  fraud,  whether  or  not  material,  that  involves
                        management  or other  employees  who have a  significant
                        role in the registrant's internal controls; and

         6.   The registrant's  other certifying officer and I have indicated in
              this  quarterly  report  whether  or not  there  were  significant
              changes  in  internal  controls  or in other  factors  that  could
              significantly  affect internal controls  subsequent to the date of
              our most recent evaluation,  including any corrective actions with
              regard to significant deficiencies and material weaknesses.

Date:  April 11, 2003

                                         /s/ Jeffrey J. Kirby
                                         -----------------------------
                                             Jeffrey J. Kirby
                                             Chief Financial Officer


                                       13