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 August 31,2001

                 [ ] 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)(Zip Code)


                   Registrant'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 September 30, 2001, the  Registrant  had 1,926,330  shares of Common Stock
and 165,412 shares of Preferred Stock outstanding.


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



                                       1
<PAGE>


PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             NACO INDUSTRIES, INC.
                                 BALANCE SHEETS



                                              August 31,    November 30,
ASSETS                                        ----------    ------------
------                                            2001         2000
                                             -----------    -----------
Current assets:                               (Unaudited)
  Cash                                       $   113,403    $    32,576
  Accounts receivable,
    net of allowances
    Of $55,713 / $38,838                         698,031        740,344
  Related parties                                 38,223         19,597
  Inventory                                      557,431        646,469
  Other current assets                            38,780         27,468
  Deferred income taxes                           51,000         51,000
                                             -----------    -----------
       Total current assets                    1,496,868      1,517,454
                                             -----------    -----------

Property and equipment:
  Land                                            40,700         40,700
  Buildings and improvements                     607,658        607,658
  Equipment and vehicles                       2,388,472      2,366,387
  Equipment construction in process                2,090           --
                                             -----------    -----------
       Total property and equipment            3,038,920      3,014,745

  Accumulated depreciation                    (2,133,380)    (1,986,203)
                                             -----------    -----------
       Net property and equipment                905,540      1,028,542
                                             -----------    -----------

Other assets:
  Accounts receivable from related parties       326,637        346,665
  Intangible and other assets                    134,152        143,773
  Deferred income taxes,
    net of allowance of $80,000                   83,900        300,000
                                             -----------    -----------
       Total other assets                        544,689        790,438
                                             -----------    -----------

       Total assets                          $ 2,947,097    $ 3,336,434
                                             ===========    ===========

                        See Notes to Financial Statements


                                       2
<PAGE>


                             NACO INDUSTRIES, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                 August                    November 30,
                                                                                   31,
                                                                            -----------------             ----------------
LIABILITIES:                                                                      2001                         2000
------------
                                                                            -----------------             ----------------
                                                                              (Unaudited)
<S>                                                                       <C>                           <C>
Current liabilities:
  Accounts payable                                                        $          361,352            $         440,372
  Accrued expenses                                                                   288,622                      312,291
  Due to related parties                                                                   0                       10,028
  Current portion of long-term obligations                                            55,568                       49,691
                                                                            -----------------             ----------------
       Total current liabilities                                                     705,542                      812,382
                                                                            -----------------             ----------------

Long-term liabilities:
  Long-term obligations, less current portion                                        939,650                      985,635
  Note Payable                                                                        91,928                      685,428
                                                                            -----------------             ----------------
       Total long-term liabilities                                                 1,031,578                    1,671,063
                                                                            -----------------             ----------------
       Total liabilities                                                           1,737,120                    2,483,445
                                                                            -----------------             ----------------

Stockholders' equity:
   Preferred Stock, 7% Cumulative, convertible $3.00 par value, 330,000              496,236                      496,236
shares authorized, 165,412 shares issued and outstanding. (Aggregate
liquidation preference $1,270,364 and $1,200,891 respectively)
  Common stock, $.01 par value, 10,000,000 shares authorized; 1,926,330               19,263                       19,263
shares issued and outstanding.
  Additional paid-in capital                                                       1,018,044                    1,018,044
  Accumulated deficit                                                              (323,566)                    (680,554)
                                                                            -----------------             ----------------
       Total stockholders' equity                                                 1,209,977                       852,989
                                                                            -----------------             ----------------

       Total liabilities and
         stockholders' equity                                             $        2,947,097            $       3,336,434
                                                                            =================             ================
</TABLE>

                       See Notes to Financial Statements

                                       3
<PAGE>

<TABLE>
<CAPTION>
                              NACO INDUSTRIES, INC.
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                                                         Three Months Ended             Nine Months Ended
                                                    ----------------------------   --------------------------
                                                      August 31,     August 31,     August 31,    August 31,
                                                         2001           2000           2001          2000
                                                     -----------    -----------    -----------    -----------
<S>                                                 <C>              <C>            <C>            <C>
Sales, net                                          $ 1,886,383      1,554,361      5,942,297      6,112,023

Cost of good sold                                     1,102,793        983,490      3,281,835      3,623,994
                                                    -----------    -----------    -----------    -----------

Gross Profit                                            783,590        570,871      2,660,462      2,488,029

Operating expenses:
Selling expenses                                        389,147        382,354      1,178,946      1,186,604
General and administrative expenses                     239,018        297,562        734,548        852,748
                                                    -----------    -----------    -----------    -----------
    Total operating expenses                            628,165        679,916      1,913,494      2,039,352
                                                    -----------    -----------    -----------    -----------

    Income from operations                              155,425       (109,045)       746,968        448,677

Other income (expenses):
Interest income                                           1,270          1,211          2,863          2,053
Other income                                                600          3,977          1,400         28,434
Interest expense                                        (51,338)       (67,051)      (178,143)      (240,305)

                                                    -----------    -----------    -----------    -----------
    Total other income (expense)                        (49,468)       (61,863)      (173,880)      (209,818)

                                                    -----------    -----------    -----------    -----------
Income before income taxes                              105,957       (170,908)       573,088        238,859

Income tax (expense) benefit                            (40,000)        64,650       (216,100)       (90,050)
                                                    -----------    -----------    -----------    -----------
    Net income (loss)                               $    65,957       (106,258)       356,988        148,809
                                                    ===========    ===========    ===========    ===========

Adjustment for preferred dividends in arrears            35,022         35,022         69,473         69,473
                                                    -----------    -----------    -----------    -----------
Adjusted net income (loss) to Common Stockholders   $    30,935       (141,280)       287,515         79,336
                                                    ===========    ===========    ===========    ===========

Earnings (loss) per common share:
  Basic
                                                    -----------    -----------    -----------    -----------
    Net Earnings (loss)                             $       .02           (.07)           .15            .04
                                                    ===========    ===========    ===========    ===========
  Diluted:
                                                    -----------    -----------    -----------    -----------
    Earnings (loss) from net income                 $       .01           (.07)           .13            .04
                                                    ===========    ===========    ===========    ===========
Weighted average number of common shares
outstanding:
  Basic                                               1,926,330      1,902,268      1,926,330      1,902,268
                                                    ===========    ===========    ===========    ===========
  Diluted                                             2,257,154      2,233,092      2,257,154      2,233,092
                                                    ===========    ===========    ===========    ===========

                        See Notes to Financial Statements
</TABLE>
                                        4
<PAGE>

                             NACO INDUSTRIES, INC.
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 Six months ended
                                                              August 31,   August 31,
                                                                2001        2000
                                                              ---------    ---------
<S>                                                           <C>          <C>
Cash flows from operating activities
  Net income                                                  $ 356,988    $ 148,809
  Adjustments to reconcile net income to
   net cash provided by (used in) operating activities:
     Depreciation                                               167,551      208,028
     Amortization                                                14,434       14,432
     Deferred income taxes                                      216,100       89,250
   (Increase) decrease in:
     Accounts receivable, net                                    42,313      294,567
     Inventory                                                   89,038      (20,805)
     Other                                                      (11,312)       4,893
   Increase (decrease) in:
     Accounts payable                                           (79,020)    (372,046)
     Accrued expenses                                           (23,669)     (35,986)

                                                              ---------    ---------
 Net cash provided by (used in) operating activities            772,423      331,142
                                                              ---------    ---------

Cash flows from investing activities
  Purchase of  property and equipment                           (44,549)     (20,518)
  Change in related party accounts                               (8,626)     (24,832)
  Investment in intangible and other assets                      (4,813)           0
                                                              ---------    ---------
        Net cash provided by (used in) investing activities     (57,988)     (45,350)
                                                              ---------    ---------

Cash flows from financing activities
  Net change in line of credit                                 (593,500)    (205,498)
  Payments on long-term debt                                    (40,108)     (91,653)
                                                              ---------    ---------
        Net cash provided by (used in) financing activities    (633,608)    (297,151)
                                                              ---------    ---------

Increase (decrease) in cash                                      80,827      (11,359)

        Cash, beginning of period                                32,576       58,073
                                                              ---------    ---------

        Cash, end of period                                   $ 113,403    $  46,714
                                                              =========    =========

See Notes to Financial Statements
Supplemental disclosures:
    Income taxes paid                                         $     900    $     900
    Interest Paid                                             $ 140,248    $ 158,297

</TABLE>
                        See Notes to Financial Statements

                                       5
<PAGE>

                              NACO INDUSTRIES, INC.
                    Notes to Financial Statements (Unaudited)
                                 August 31, 2001



NOTE A - BASIS OF PRESENTATION

         In the  opinion of  management,  all  adjustments  (consisting  only of
normal recurring  accruals)  considered  necessary for a fair  presentation have
been included. Operating results for the nine-month period ended August 31, 2001
are not  necessarily  indicative  of the results  that may be  expected  for the
fiscal  year  ending  November  30,  2001.  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, 2000.


NOTE B - DIVIDENDS

         Dividends on the  preferred  stock are  cumulative at 7%. At August 31,
2001, dividends in the amount of $277,892 were in arrears.

NOTE C - RELATED PARTY OPERATING LEASES

         In  December  1999 the Company  entered  into two  related-party  lease
agreements  with PVC,  Inc., a company owned by Verne Bray,  the Chairman of the
Board,  Chief  Executive  Officer and majority  stockholder of the Company.  The
Leases  provide for monthly  payments of $13,500 for the land and building,  and
$9,500  for  various  pieces of  equipment  subject  to  adjustment  based  upon
fluctuations  in the consumer  price index.  The terms of the leases are ten and
five years  respectively,  commencing in December  1999.  The lease amounts were
negotiated at the  fair-market  rental value and approved by Company's  Board of
Directors.

NOTE D - RELATED PARTY NOTE

In March 2000,  Mr. Verne Bray signed an  indemnification  agreement to hold the
Company harmless for funds paid on behalf of Rimshot,  LLC, a limited  liability
company  owned by a son of Mr.  Bray.  The  agreement  covers  $259,144 of costs
advanced to Rimshot  for startup  operations,  and  $52,087  for  principal  and
interest  payments made on leased machinery used by Rimshot through November 30,
1999. The agreement calls for monthly  payments of $2,500  beginning  October 1,
2000. As of October 1, 2001, the note began accruing  interest at the applicable
federal rate.  Pursuant to the indemnification  agreement,  Mr. Bray conveyed to
the Company a security  interest in all PVC.  Inc.  lease  receivables  from the
Company.  The Company's Board of Directors  approved the Company's  execution of
the indemnification agreement. The Company also signed a security agreement with
PVC,  Inc.  which allows the Company to offset  payments due to PVC, Inc. in the
event of default on the  indemnification  agreement.  At August 31, 2001 Rimshot
owed the Company $326,637.

                                       6
<PAGE>

Item 2 - Management's Discussion and Analysis or Plan of Operation


Introduction

NACO  Industries,  Inc.  ("NACO" or the "Company") is a  manufacturing  company,
which  produces and sells  polyvinyl  chloride  "PVC"  products.  The  Company's
primary  line of  business  consists of  manufacturing  and  marketing  PVC pipe
fittings  and  valves,  which are sold  throughout  the  United  States  through
wholesale  distributors  to  irrigation,  industrial,  construction  and utility
industries.  The Company also sells to other  manufacturers on an OEM basis. The
Company manufactures and sells fabricated fittings (4" through 30" in diameter),
as well as molded fittings (4" through 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 and nine-month periods ended
August 31,  2001 and August 31,  2000  respectively.  For  comparison  purposes,
percentages  of  sales  will be  used  rather  than  dollars.  In the  following
discussion,  the three  months  ended  August 31,  2001 and August 31,  2000 are
referred to as 3Q01 and 3Q00,  respectively.  The nine months  ended  August 31,
2001 and August 31, 2000 are referred to as 9M01 and 9M00, respectively. Readers
are  cautioned  that results of  operations  for the three and nine months ended
August  31,  2001 are not  necessarily  indicative  of the  results  that may be
expected for the fiscal year ending November 30, 2001.

     Overview. The Company achieved net income before taxes of $105,957 for 3Q01
compared to a net loss before taxes of $(170,044) for 3Q00. The Company achieved
net income  before  taxes of $573,088  for 9M01,  compared to net income  before
taxes of $238,859 for 9M00.  Gross margin as a percentage  of sales for 3Q01 and
3Q00 was 41.5% and 36.7%,  respectively.  Gross margin as a percentage  of sales
for 9M01 and 9M00  was  44.8%  and  40.7%,  respectively.  The  increase  in the
Company's  net  income and gross  margins  from 3Q00 to 3Q01 was mainly due to a
21.4%  increase in sales and only a 12.1% increase in cost of sales from 3Q00 to
3Q01 as  discussed  below.  The increase in the  Company's  net income and gross
margins  from  9M00 to 9M01 was  mainly  due to the  fact  that  although  sales
decreased  from 9M00 to 9M01 by 2.8%,  cost of sales  decrease 9.4% as discussed
below.

     Net Sales: Net sales for 3Q01 increased by 21.4% to $1,886,383, compared to
net sales of  $1,554,361  for 3Q00.  Management  feels that the main factor that
contributed to increased  sales from 3Q00 to 3Q01 was a 311.1% increase in sales
in the utility market from 3Q00 to 3Q01.  Utility sales  increased from $118,361
in 3Q00 to $486,524 in 3Q01 mainly due to increases in OEM sales.  Utility sales
increased  from  7.6% of net  sales  in 3Q00 to  25.8%  of net  sales  in  3Q01.
Agricultural  sales  decreased  $59,959 or .4% from 3Q00 to 3Q01.  Net sales for
9M01  decreased by 2.8% to  $5,942,297,  compared to net sales of $6,112,023 for
9M00.  Several  factors  contributed to the decrease in sales from 9M00 to 9M01.
First, the agricultural market has weakened during the past year mainly due to a
general  decline  in the U.S.  farm  economy.  Second,  many parts of the United
States  experienced  a  cold  and  wet  winter,   which  resulted  in  decreased
construction  and fewer water projects  during the winter months.  This cold and
wet weather compressed the spring  construction  season into a shorter period of
time.  Utility sales  increased from $515,253 in 9M00 to $989,550 in 9M01 mainly
due to increases in OEM sales. Utility sales increased from 8.4% of net sales in
9M00 to 16.7% of net sales in 9M01.  Agricultural  sales  decreased  $506,309 or
8.3% from 9M00 to 9M01.

     Gross  Margin.  Gross margin as a percentage of net sales for 3Q01 and 3Q00
was 41.5% and 36.7%, respectively. Gross margin as a percentage of net sales for
9M01 and 9M00 was 44.8% and 40.7%,  respectively.  Gross  margins  increased  in
part, due to increased  sales.  While sales  increased  21.4% from 3Q00 to 3Q01,
cost of sales  increased only 12.1% for the same period due in part to increased
sales  -relatively- to fixed costs, such as depreciation,  rent and labor. Labor
and related  expenses as a percentage  of net sales for 3Q01 and 3Q00 were 18.5%
and 22.8%,  respectively.  Labor and related  expenses  decreased $5,901 or 1.7%
from 3Q00 to 3Q01 mainly due to a reduction in force in non-production personnel
during the past year.  Raw  materials as a percentage of sales for 3Q01 and 3Q00
were  29.9% and 28.6%  respectively.  Raw  materials  as a  percentage  of sales
increased  slightly  primarily  as a  result  of the  shift  in  sales  mix from
agricultural sales to utility sales.  Utility sales increased from 7.6% of sales
in 3Q00 to 25.8% of sales in 3Q00.  Utility  sales  generally  have lower  gross
margins than  agricultural  sales.  Gross margins increased from 9M00 to 9M01 in
part due to decreases in raw material costs and labor and related expenses.  Raw
material  expenses  as a  percentage  of sales for 9M01 and 9M00 were  27.8% and
29.3%  respectively.  The decrease in raw material  costs was partially due to a
slight  decrease  in raw  material  prices  generally  and  improvements  in the
Company's  raw material  purchasing  practices  during  9M01.  Labor and related
expenses  as a  percentage  of sales  for 9M01 and 9M00  were  14.9%  and  17.3%
respectively.  Labor and related expenses  decreased $170,513 or 16.2% from 9M00
to 9M01  mainly due to a reduction  in force in  production  and  non-production
personnel  during the past year due  primarily  in increased  efficiency  in the
production process.  The Company takes a complete physical inventory once a year
and a  physical  inventory  of the top 80% of the  dollars  in  inventory  every
quarter.

     Selling:  Selling  expenses  were 20.6% of net sales for 3Q01,  compared to
24.6% for 3Q00.  Selling expenses were 19.8% of net sales for 9M01,  compared to
19.4% for 9M00.  The decrease in selling  expenses as a percentage of sales from

                                       7
<PAGE>

3Q00 to 3Q01 was  mainly  due to  increased  sales  volume.  In actual  dollars,
selling  expenses  increased  $6,793,  or 1.8%,  from 3Q00 to 3Q01.  Salary  and
commission expenses decreased $23,547, or 14.4%, from 3Q00 to 3Q01 mainly due to
the  increase  in  non-commissioned  sales in the utility  markets as  explained
above. Shipping supplies increased as a percentage of sales from 2.1% in 3Q00 to
2.7% in 3Q01 mainly due to the timing on the  purchases  of  supplies.  Shipping
supplies  as a  percentage  of net  sales  for 9M01 and 9M00 was 1.75% and 1.79%
respectively.  Freight out  decreased as a percentage  of net sales from 7.4% in
3Q00 to 7.0% in 3Q01 mainly due to higher sales volume.  The increase in selling
expenses  as a  percentage  of net sales  from 9M00 to 9M01 was  mainly due to a
decrease in sales volume. In actual dollars selling expenses decreased $7,658 or
 .6% from 9M00 to 9M01.

     General and administrative: General and administrative expenses represented
12.7% of net sales for 3Q01, compared to 19.1% for 3Q00. The decrease was mainly
due  to  decreased  legal,   accounting  and  outside  service  expense.  Legal,
accounting  and outside  service  expense  decreased  $50,274  from 3Q00 to 3Q01
mainly due to the timing of payments for the annual audit,  and defense expenses
for  two  lawsuits.   These   lawsuits   were  settled  in  2000.   General  and
administrative  expenses  represented  12.4% of net sales for 9M01  compared  to
14.0% for 9M00. The decrease was mainly due to decreased  legal,  accounting and
outside service expense. Legal, accounting and outside service expense decreased
$105,868  from  9M00 to 9M01.  During  9M00  the  Company's  management  hired a
consulting firm to identify opportunities to reduce operating expenses, increase
efficiencies  and  improve  management  training.  Theses  costs  were  one-time
expenses  incurred  during 9M00 that were not repeated in 9M01.  The decrease in
legal, accounting and outside service expense also reflected the defense expense
of the two lawsuits in 9M00 mentioned above.

     Other: Other expenses/revenues were 2.6% of net sales for 3Q01, compared to
3.9% for 3Q00. Other expenses/revenues were 2.9% of net sales for 9M01, compared
to 3.4% for 3Q00.  The reduction was mainly due to decreased  interest  expense.
Interest  expense  declined  from  4.3% of net  sales  in 3Q00 to 2.7% in  3Q01.
Interest  expense  declined  from  3.9% of net  sales  in 9M00 to 3.0% in  9M01.
Interest  expense  decreased  $15,713 from 3Q00 to 3Q01 and $62,162 from 9M00 to
9M01,  mainly due to  improved  cash flow that  resulted  in  decreased  finance
charges from vendors and decreased  borrowing on the  Company's  line of credit.
The average  decrease in the operating  line of credit was $567,255 from 3Q00 to
3Q01 and $318,307 from 9M00 to 9M01.  The  effective  interest  rates  (interest
expense  divided by the average  debt  balance for the period) for 9M01 and 9M00
were 12.37% and 11.87%, respectively.




Liquidity and Capital Resources

     The  Company's   principal   sources  of  liquidity  have  been  cash  from
operations,  credit facilities and equity financing.  Cash provided by operating
activities was $772,296 during 9M01. Cash as of August 31, 2001 was $113,403, up
$80,827 from November 30, 2000. The Company's  working capital increased $86,254
from November 30, 2000 to August 31, 2001,  due primarily to an increase in cash
and a decrease in accounts payable and accrued expenses.

     At August 31, 2001, the outstanding balance of the Company's revolving line
of credit was $91,928  compared  to $582,299 at August 31, 2000 and  $685,428 at
November 30, 2000. The amount of unused credit available for borrowing at August
31, 2001 was  $629,064.  This line of credit was entered  into on April 22, 1999
with Wells Fargo Business Credit ("Wells  Fargo").  The amounts  available under
the facility are based on a percentage of accounts  receivable and  inventories.
As of  August  31,  2001  the  Company  was in  compliance  will all of the loan
covenants with Wells Fargo.

     On September 28, 2001,  the Company  notified  Wells Fargo of the Company's
intention  to  terminate  the line of credit  effective  October  31,  2001.  On
September  28,  2001 the  Company  signed a  commitment  letter with Zions First
National  Bank  with  respect  to an  operating  revolving  line  of  credit  of
$1,200,000  with the  amounts  available  under the  facility  being  based on a
percentage of accounts receivable and inventories. The commitment is not binding
unless loan  documents are  negotiated and executed by both parties on or before
October 31, 2001.  Terms and conditions are subject to negotiation and there can
be no assurance  that the loan  documents  will be negotiated and executed on or
before October 31, 2001.

     Also,  on April  22,  1999,  a second  facility  was  closed  with  WebBank
Corporation  ("WebBank")  to  restructure  the Company's  long-term  debt.  This
facility was for  $1,100,000,  and the proceeds of the facility were used to pay
off long-term debt of the Company with Nations Bank and other lenders. A portion
of the revolving  line that was  previously  with Nations Bank was also paid off
with the proceeds  provided by this  facility.  The  outstanding  balance of the
facility was $986,749 as of August 31, 2001  compared to  $1,019,401 at November
30, 2000.  As of August 31, 2001 the Company was in  compliance  with all to the
loan covenants with WebBank.

     Management  believes that its capital resources on hand at August 31, 2001,
revenues  from sales and existing bank  resources  will be sufficient to satisfy
its working capital  requirements  for the foreseeable  future.  There can be no

                                       8
<PAGE>

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.

Factors Affecting Future Results

     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, changes in economic conditions in its markets, unanticipated expenses
or events and other  factors  discussed in this report and the  Company's  other
filings with the Securities and Exchange Commission.



                                       9
<PAGE>

                           PART II - OTHER INFORMATION

Item 2 - Changes in Securities and Use of Proceeds   None

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

         None

Item 6 - Exhibits and Reports on Form 8-K


(a)      Exhibits.  The following are filed as exhibits to this Report.

         Exhibit No.                     Description
         -----------                     -----------

         (a)   None



(b)      Reports on Form 8-K.  None



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<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                                    October 12, 2001
---------------------                                    ----------------
        Verne E. Bray                                    Date
        CEO, Secretary, Chairman
        (Principal Executive Officer)

By: /s/ W. MICHAEL HOPKINS                               October 12, 2001
--------------------------                               ----------------
        W. Michael Hopkins                               Date
        President


By: /s/ JEFFREY J. KIRBY                                 October 12, 2001
------------------------                                 ----------------
        Jeffrey J. Kirby                                 Date
        Executive Vice President/
        Chief Financial Officer/Treasurer
        (Principal Financial and Accounting Officer)



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