<PAGE> 1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
(Mark One)
[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
      For the fiscal year ended December 31, 2000
                                       OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
      For the transition period from __________ to __________

                      Commission File number:  0-10147

                     DIATECT INTERNATIONAL CORPORATION
                -------------------------------------------
            (Exact name of registrant as specified in charter)

             California                                   95-355578
             ----------                                   ---------
(State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

  1134 North Orchard, Suite 206, Boise, Idaho                      83706
----------------------------------------------------               -----
(Address of principal executive offices)                         (Zip Code)

        Issuer's telephone number, including area code:  (208) 342-2273

          Securities registered pursuant to section 12(b) of the Act:
     Title of each class            Name of each exchange on which registered
               None                                    N/A
               ----                                    ---
          Securities registered pursuant to section 12(g) of the Act:
                        Common Stock, No Par Value
                         -------------------------
                               (Title of class)

     Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. (1) Yes [X]
No [ ] (2) Yes [X] No [ ]

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the 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. [  ]



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     State the issuer's revenues for its most recent fiscal year:  $161,364

     State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. At March 28, 2001, the aggregate market value
of the voting stock held by nonaffiliates was $2,653,112  The average of the
bid and asked price of such stock on March 28, 2001, was $0.11 per share.

     At March 29, 2001, the registrant had 34,716,073 shares of common stock,
no par value, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933:  None

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                                  PART I
                             ITEM 1.  BUSINESS
General
-------
We are Diatect International Corporation and were incorporated in California
in May 19, 1979. We produce a variety of insecticides which utilize so called
"natural-killing agents" which are non-toxic to the environment as well as
humans and other warm-blooded animal life. Whereas widely used conventional
chemical synthesized insecticides are composed of highly dangerous, toxic
chemicals that seep into the water table and are washed into rivers and lakes,
contaminating water and soil for decades, our products are composed of
diatomaceous earth ("DE") and Pyrethrin that degrade after application leaving
the environment unharmed.  DE and Pyrethrin have been used separately for
years as adequate alternatives to hazardous chemical insecticides.  By putting
these two natural insecticides together in our products, we have created a
powerful synergy that leads to more effective insect control than either DE or
Pyrethrin can provide individually.

We have obtained EPA registrations and labels necessary for the production and
marketing of five insecticides.  The approval by the EPA of our labels is
significant since EPA approval can be a lengthy and expensive process. Due to
the long time it took to obtain EPA approval for our labels, we did not
actually begin commercial marketing of our products until late 1993.


Industry
--------
According to information published in the U.S. Department of Agriculture
"Agriculture Statistics (1993)" and the U.S. Department of Commerce
Statistical Abstract (119th ed.), over the previous ten years the worldwide
market for pesticides grew by 30% as the total amount of acreage planted
continued to increase in the United States and the world.  Pesticide
consumption in dollar terms is expected to grow 4.4% per year through 2003,
compared with 3% during 1983-93.  Agriculture is the largest end-user sector
for insecticides, followed by commercial, industrial, home, garden and
government applications.  The United States spent approximately $3.3 billion
in 1980 for agricultural pesticides and estimated $320 billion in 2000,
representing an growing increase over a 17-year period.

Four markets---corn, cotton, vegetables, and fruit and nuts---account for 78%
of the U.S. insecticide market.  Japan is the second-largest market for
pesticides in the world, by sales.  Insecticides are the leading product
category in the pesticide market, with 34% of the Japanese market.  Western
European insecticide sales amount to approximately 15% of total world
insecticide sales.  France, Spain and Italy are key markets for insecticides
in Western Europe.  Export demand for insecticide products take 59% of U.S.
insecticide production.  Export demand is expected to remain strong.

A 1996 Gallup poll reported that 92% of farmers want to use safer pesticides
and 66% favored tougher enforcement of pesticide misapplication penalties.

The nature of synthesized chemical pesticides has caused concern among the
public and regulators particularly over the pesticides persisting in the
environment, accumulating in soil and ground water and affecting surrounding
wildlife such as fowl and fish.  These concerns have led the EPA to require
stricter guidelines on new pesticides.  Additionally, the EPA has, in many
instances, ordered new tests for previously approved products which must now


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meet the newer, more stringent standards. The additional testing is resulting
in some companies electing to remove existing products from the market rather
than subject the products to the newer standards.

Over the past several years, chemical companies have voluntarily dropped the
registration of approximately 28 active ingredients and 5,000 pesticide
products that were in use at the time of cancellation.  Additionally, since
insecticides were first used in the 1940's, more than 600 insect species have
developed resistance to many synthetic pesticides, leading the industry to
constantly search for new products.  Insecticide resistance has cost an
estimated $1.4 billion a year in crop losses in the United States alone.

Products
--------
We recognize the future demands for environmentally acceptable insecticide
products in all agriculture-related industries worldwide.  Our business plan
calls for formulations which are natural in composition; components which, as
stand-alone insecticides, are efficient, non-toxic, user and environmentally
friendly, yet cost-effective.

The active ingredients used in our products are diatomaceous earth ("DE"),
pyrethrin and piperonyl butoxide.  DE is a naturally occurring mineral deposit
resulting from microscopic single-celled plants called diatoms which took the
minerals from the water and created protective shells for themselves.  As they
died and their shells drifted to the bottom of the sea beds, vast deposits
were created.  One of the numerous uses for DE is as a natural insecticide,
since it causes severe mechanical cutting damage to insects akin to the damage
of broken glass swallowed by humans.

DE is mined from the earth and ground into usable particles.  There are many
varieties of diatoms, and the preponderance of the type in any given deposit
gives that deposit certain characteristics.  In the case of nontoxic
insecticides, certain qualities make it possible to kill insects without
harming animals, plants or humans.  These rare deposits furnish a material
that has two very important characteristics (1) when fractured, the particle
edges are very sharp and (2) each tiny particle has the ability to absorb
liquid.  In addition to cutting the covering of an insect's shell to cause
dehydration, DE also absorbs the insect's covering and bodily fluids further
causing dehydration and eventual death.  Moreover, DE causes extensive trauma
to insects, both internally and externally.  In order to be effective as an
insecticide, DE must be free of significant impurities.  Additionally, DE is
generally slow to reduce insect populations and thus has limited
effectiveness, especially against fast-breeding insects.  For this reason, our
products combine DE with pyrethrin.

Pyrethrins are oily liquid esters extracted from the pyrethrum flower, the
"African Daisy."  The extract is a "botanical insecticide" and acts on insects
with phenomenal speed, causing paralysis.  Research has determined that
Pyrethrin is virtually harmless to mammals.  Pyrethrin affects both the
peripheral and central nervous system of the insect.  Initially, it stimulates
nerve cells to produce repetitive discharges, quickly leading to paralysis.

Piperonyl Butoxide ("PBO"), the third ingredient in our insecticides, is an
extract originally discovered in a variety of sassafras, which has since been
synthesized and made available in quantities greater than possible from
plants.  While early studies suggested that PBO is itself a natural
insecticide, it is its use as a synergist that is particularly exciting.  A
synergist is not generally considered toxic or insecticidal, but
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is a material used to enhance the activity of the insecticides.  PBO is the
synergist used in our products.  Basically, PBO binds oxidative enzymes and
prevents them from degrading the pyrethrin.  Combined with small amounts of
pyrethrin, it affords a rapid knockdown, a greater mortality, and a longer
residual action than pyrethrin by itself.   PBO has been found to be safe and
free of any normal hazards of toxicity.  It is well tolerated in large
quantities by warm-blooded animals.  Because PBO is substantially less
expensive than pyrethrin, its use allows us to offer more competitively priced
products.

We combine DE, pyrethrin and PBO by using surfactants to ensure a good mix and
greatly increase effectiveness and persistence.  The combination of these
active ingredients results in a compound much more effective than each
ingredient individually.  When using the ingredients together, DE breaks down
the chitin, allowing the pyrethrin to act on an insect's nerve cells directly.
The pyrethrin does not evaporate as quickly and is released for hours rather
than minutes.  PBO increase's the effectiveness of the pyrethrin by as much as
ten times.

Our products consist of five fully registered EPA Labels:

1.  Diatect D-20 Insecticide, EPA Registration No. 42850-1, Indoor
Insecticide.  Controls roaches, fleas, ants, silverfish, crickets, bedbugs,
box elder bugs, and other insects.  For use under sinks, behind furniture, in
air vents, under tile, stairwells, and basements.

2.  Diatect Multi-Purpose Insecticide, EPA Registration No. 42850-2.
Distributed in the agriculture market, the largest end-user market for
insecticides; commercial; industrial; and government markets as "Diatect
Multi-Purpose Insecticide."  This insecticide is approved by the EPA for use
in a wide variety of areas, e.g., edible growing crops, animal quarters,
livestock, ornamentals, etc., under the least hazardous classification and is
effective on a wide variety of insects.  This insecticide can be applied as a
dust or sprayed in solution with water and can be used on crops and fruits up
to and including the day of harvest.

3.  Diatect Pet Powder, EPA Registration No. 42850-3.  Marketed on a retail
basis under the trade name "Results."

4.  Diatect II Multi-Purpose Insecticide, EPA Registration No. 42850-4.  The
Diatect II product is formulated using a larger measure of pyrethrin (.2%)
which provides a quicker, more positive knockdown.  Designed and approved for
use in the same applications as the No. 42850-2 formulation (which contains
 .1% pyrethrin), the user receives a significantly better return on their
insecticide dollar using Diatect II because of its added knockdown strength.
This insecticide can be applied as a dust or sprayed in solution with water
and can be used on crops and fruits up to and including the day of harvest.

The above product is distributed in the retail market for use in the home and
garden markets under the trade name "Results" under the following retail
labels:

 - Results Fire Ant Insecticide.  Applying the insecticide directly to fire
ant mounds provides quick, effective control in eliminating these aggressive,
dangerous pests.  Each year 65,000 Americans seek hospital treatment for
venomous fire ant stings and two of those people die.  Unlike bees, fire ants
can sting repeatedly and have a very aggressive behavior.

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<PAGE> 6

 - Results Ant and Insect.  Controls ants, aphids, caterpillars, leafhoppers,
lice, mites, mosquitoes, ticks, and other insects.

 - Results Tomato and Garden.  Protects garden plants from many varieties of
worms, beetles, leafhoppers, stink bugs, squash vine borers, and other
insects.

 - Results Rose and Floral.  Protects azaleas, begonias, African violets,
chrysanthemums, dogwood, elm, roses, tulips, and many other plants.  Destroys
insects such as mealybugs, fruit flies, white flies, and caterpillars that
ruin the beauty of garden flowers and plants.

5. Diatect V Insecticide, EPA Registration No. 42850-5.  The Diatect V product
was designed and formulated to meet the needs of the organic food industry
which requires insecticides with no synthetic ingredients.  Using a powerful
bug-killing measure of pyrethrin (.5%) blended with DE, one of Nature's best
known insecticides, Diatect V becomes the product of choice for those users
requiring an organic certification.

We believe the Diatect and Results products are far more effective than major
competitive synthetic chemical products.

Regulatory Approval
-------------------
In general all insecticides, purchased in stores today must, have EPA-approved
labels that disclose various required information about the product.  These
insecticide labels provide an extensive amount of information and indicate
that the insecticide has been tested, evaluated, and regulated by the EPA.  In
fact, no insecticides can be legally registered, much less sold, without going
through these procedures.

Toxicity
--------
Toxicity is the quality, state or degree of being poisonous.  All too often
people think of toxicity as poisoning that is caused by ingesting a small
amount of some substance.  However, almost any chemical is potentially toxic
given enough of it and the right circumstances.  In fact, every homeowner has
cabinets in their bathroom, kitchen, or garage that contain bottles of
substances which, if ingested, inhaled, or spread on the skin, may cause harm.
Even something as seemingly innocuous as table salt is toxic, if sufficiently
large quantities are ingested.

Toxicity is usually expressed as the lethal dose or LD50.  The LD50 denotes
the amount (single dosage of the substance by mouth) in milligrams per
kilogram of body weight required to kill 50% of a group of test animals.  LD50
denotes the potency of a substance; the lower the number, the less of that
substance is required to kill an animal.  Conversely, the higher the number,
the more of that substance is required.  For example, the LD50 for table salt
is 3,300 (mg/kg) and for aspirin the LD50 is 750 (mg/kg).  The LD50's of
different substances can be easily compared and are represented on insecticide
labels by the signal words DANGER or POISON, WARNING, or CAUTION.  These
signal words are associated with different ranges of LD50's and hence
different degrees of toxicity as listed in the table below.

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<TABLE>
<CAPTION>

Toxicity Category       Signal Words (required on             Oral LD50          Probable Lethal
                        an insecticide label by EPA)            (mg/kg)           Adult Human Dose (1)
-----------------       ----------------------------           ----------        -------------------------
<S>                    <C>                                  <C>                 <C>
I--Highly Toxic         DANGER or POISON, plus skull             0 to 50         A few drops to 1 teaspoon
                        and crossbones symbol
II--Moderately Toxic    WARNING                                 50 to 500        1 teaspoon to 2 teaspoons
III--Slightly Toxic     CAUTION                                500 to 5,000      1 ounce to 1 pint (1 pound)
IV--Almost non-toxic    CAUTION                               more than 5,000    1 ounce to 1 pint (1 pound)

(1)  Toxicity of Insecticides and Determining the LD50,"  Kenneth J. Stein and F. William Ravlin, Department of
Entomology, Virginia Polytechnic Institute and State University, 1995


</TABLE>

Oral toxicity testing on our Products resulted in an LD50 of more than 5,000
mg/kg.  The oral toxicity for the product is less than that for table salt or
aspirin.  (Because the product was mildly irritating to the eyes of New
Zealand rabbits, the product does carry the Level III Signal Word "Caution"
with the appropriate wording.  However, it is of importance to note that this
wording is because of the irritation to the eyes of the rabbits, not the oral
or dermal toxicity of the product.)

As previously stated, all new insecticides must be "registered" with the EPA,
which specifies the conditions of their use as part of its mandate under the
Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA").  An insecticide
user or manufacturer who fails to comply with FIFRA restrictions risks
enforcement actions from both the EPA and state authorities, including, but
not limited to, suspended product sales and fines.  Our products comply with
FIFRA restrictions and are registered with the EPA.

The pesticide regulatory program instituted by Congress and implemented by the
EPA is having a profound effect on the availability of old as well as new
synthetic chemical pesticides.  Many of the old pesticides were registered
before their long-term health and environmental effects were fully understood.
In 1972, Congress decreed that the EPA should reexamine the risks of all
active ingredients in pesticides registered before modern testing methods
became available.  In 1988, impatient with the slow pace of the registration
program, Congress imposed timetables on the EPA and levied fees on chemical
companies wishing to re-register their products.

Although the EPA has banned many unsafe pesticides in recent years, we believe
the impact of Congress' action has been significant.  As stated above,
chemical companies have voluntarily dropped registration of 68 active
ingredients and 12,000 pesticide products that were in use at the time of
cancellation over the past 2 years.  The cost of developing a new chemical for
registration has also risen enormously in recent years, partially because of
expensive tests required to show that the chemical poses low environmental and
human health risks.  The typical pesticide is put through more than 6000 tests
and approval can take more than eight to ten years.  Once approved, labeling
instructions must be followed for proper use, handling, storage and disposal.
The effect of these tighter restrictions and the removal of these active
ingredients is to open the door for our products.

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<PAGE> 8

Competition in the Insecticide Industry
-----------
The principal players in the U.S. plant care industry, particularly the
insecticide industry, are major companies such as Dow, duPont, Monsanto, Shell
Oil and Chevron.  Those companies all have more extensive resources than we do
and have established product recognition and loyalty. We believe, however,
that by focusing on the non-synthetic insecticides, we are able to acquire
market niches which have not been a focus of the larger, better established
companies. We believe we have an advantage in the products and market niche we
have identified in that we have already obtained EPA approval of our products
and labels.  The EPA approval is important due to the time and cost associated
with receiving such approval which can take years and be extremely costly.

Management Changes
------------------
In February 2000 David J Black resigned from the Board of Directors.  In April
2000 Larry D. Anderson and Robert Corrigan were elected to the Board of
Directors.  In November 2000 Michael McQuade, Larry D. Anderson and Robert
Corrigan resigned from the board of Directors.  In December 2000, Lamar N.
Jensen, Sherman B. Jensen, Douglas K. Goff and Jeff Bates were elected to the
Board as Directors.

Currently, our Board of Directors is made up of:
George H. Henderson, Chairman & Director
John L. Runft, Secretary & Director (Corporate Counsel)
Robert B. Crouch, Director
Jay W. Downs, Director
M. Stewart Hyndman, Director
Lamar N. Jensen, Director
Sherman B. Jensen, Director
Jeff R. Bates, Director
Douglas K. Goff, Director

Offices, Employees and Subsidiaries
-----------------------------------
The Company's executive offices are located at 1134 North Orchard, Suite 206,
Boise, Idaho 83706.  Our officers are:
George H. Henderson, CEO & President, Boise, ID.
Jean Montgomery, Office Manager, Smith Center, KS.
Rydal Tuxhorn, Plant Manager, Lebanon, KS.

We have the following operating subsidiaries:
Diatect International, Inc., a Kansas corporation, is a wholly-owned
subsidiary through which our production operations are conducted.  Its
administrative offices are located at Highway 36 East, Smith Center, Kansas.
The plant facility is located at 108 East Schoolhouse Road in Lebanon, Kansas.


Magic International, Inc., a wholly-owned subsidiary, was acquired by us for
the purposes of conducting our marketing operations. Its executive offices are
located at 1134 North Orchard, Suite 206, Boise, Idaho 83706.  As of this
filing, Magic International, Inc. has no employees.
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                            ITEM 2.  PROPERTIES

Diatect International Corporation, 1134 North Orchard, Suite 206 Boise, Idaho.
Executive Offices - 1,800 sq. ft. - Lease.  The lease on this property is for
3 years at a monthly rate of $820 in year 1, $838 in year 2, and $857 in year
3.

Diatect International, Inc., East Hwy 36, Smith Center, Kansas.  Production
Offices - 750 sq. ft. - Month to month rent.  Monthly rent of $200.

Lebanon Production Plant, 108 E. Schoolhouse Rd., Lebanon, Kansas.  25,000 sq.
ft. - Brick.  We own this facility outright.  See Note 4 to the financial
statements.



                      ITEM 3.  LEGAL PROCEEDINGS

Ogilvy, Adams & Rinehart
------------------------
Ogilvy, Adams & Rinehart (Ogilvy) obtained a judgment against us on November
1, 1995 in the sum of $24,346.  The entire judgment amount plus attorney's
fees and interest thereon is approximately $36,000 and has been included in
commitments and contingencies at December 31, 1998 and 1999.  Since mid-1996,
there has been no communication with Ogilvy or its attorneys, nor has Ogilvy
made any attempt to satisfy or settle this case.

L. Craig Hunt
-------------
L. Craig Hunt brought action on January 14, 1998 against us for damages and
breach of contract on a promissory note for the sum of $42,750 plus interest,
penalties and attorney's fees.  Mr. Hunt received a judgment against us on
February 1, 1999 in the sum of $61,543.  This judgment is presently
outstanding and unpaid.  At December 31, 1999 and 1998, $61,543 and $55,543
are included respectively in commitments and contingencies in these financial
statements.  To date, Mr. Hunt has made no attempt to collect on this
judgment.

Mid-America Venture Capital Fund, Inc.
--------------------------------------
Mid-America Venture Capital Funds, Inc. ("Mid America") brought action on July
23, 1997 against us for failure to pay loans on two promissory notes totaling
$35,000.  Mid America was awarded a judgment against us on August 4, 1997 for
a total of $39,336 including principal, interest, and attorney's fees and
costs.  Since that time, we have paid a total of $4,000, but we are currently
in arrears on the payment schedule.  The balance owing is included in
commitments and contingencies in the financial statements attached to this
report.

Mike Glazer
-----------
A consultant allegedly rendered services to one of our subsidiaries during
1996 in the amount of $17,230 and has brought an action to recover that
amount.  We have chosen not to contest this case.  Settlement efforts are
expected to be undertaken after entry of judgment and demonstration that the
assets of our subsidiary, Diatect International, Inc., are fully encumbered.
The amount of $17,230 is included in commitments and contingencies in the
financial statements attached to this report.

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<PAGE> 10

Danny Wirken
------------
We are considering litigation against Danny Wirkin, (one of the brokers
involved in the selling of our stock (which gave rise to the previously
reported litigation with Gruntal & Co.), with the objective of obtaining a
judgment for damages and foreclosing on our obligation under our note to Mr.
Wirkin.  This note is reflected at December 31, 2000 and 1999 in the principal
amount of $386,581 with accrued interest included in interest payable for the
amounts of $216,570 and $185,644, respectively.  See Note 7 to the financial
statements attached to this report.

Sloan, Listrom, Eisenbarth, Sloan & Glassman,LLC
------------------------------------------------
An action, commenced on November 17, 1998 by our former legal counsel to
collect legal fees and costs, was not contested.  In November 1999, the
plaintiff was awarded a default judgment against us in the amount of $42,166
plus post-judgment interest.  This judgment remains outstanding and unpaid and
is included as a liability in commitments and contingencies at December 31,
1999 and 2000.

George Brinks
-------------
George Brinks filed suit against us in the year 2000 to collect on a
promissory note in the amount of $ 37,500.  We have chosen not to contest this
case. Settlement efforts are expected to be undertaken after entry of judgment
and demonstration that the assets of our subsidiary, Diatect International,
Inc. are fully encumbered.  The amount of $37,500 is included in commitments
and contingencies in the financial statements attached to this report.

Creditors' Judgments
--------------------
During 1994 and 1995, we were sued by a number of creditors, which actions we
allowed to go to judgment.  These actions and the consequential judgments
arose as a direct result of our inability to fund our operations and make
payments to our creditors.  The collection judgments, which are substantially
unpaid at December 31, 2000, total approximately $52,000, and are included in
our accounts payable and other obligations.

Environmental Protection Agency
-------------------------------
During October 2000, we joined other plaintiffs represented by a public
interest law firm in filing action against the Environmental Protection Agency
(EPA).  The action seeks relief from EPA's practice of using certain
guidelines as a basis for hazard classification and risk assessments pursuant
to the Federal Insecticide, Fungicide and Rodenticide Act.  Plaintiffs claim
that the EPA must use final guidelines promulgated for such reviews.  The
outcome of the case is uncertain as of the date of these financial statements.

We are not aware of any other threatened litigation against us or our
subsidiaries.  On the other hand, there remains a tangible possibility of
litigation against us and/or our subsidiaries being brought by our creditors,
particularly those, which are holding delinquent accounts.  We are working
with these creditors and, at this time, all creditors who have not already
filed litigation appear to be forbearing and accepting the measures taken by
us in addressing the indebtedness.


        ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

     None.

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                                 PART II

      ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following table sets forth, for the respective periods indicated, the
prices for our common stock in the over-the-counter market as reported by a
weekly reporting service and according to the OTC Bulletin Board.  The bid
prices represent inter-dealer quotations, without adjustments for retail
mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions.  At March 28, 2001, our common stock was quoted under the symbol
"DTCT" and had a high of $0.12 and a low of $0.08.  All bid prices below have
been rounded to the nearest whole cent.

                                                         Bid Prices
                                                       ---------------
     Fiscal Year Ended December 31, 2000
     -----------------------------------
     First Quarter                                    $ 0.10    $ 0.04
     Second Quarter                                   $ 0.13    $ 0.06
     Third Quarter                                    $ 0.24    $ 0.08
     Fourth Quarter                                   $ 0.18    $ 0.08

     Fiscal Year Ended December 31, 1999
     -----------------------------------
     First Quarter                                    $ 0.15    $ 0.07
     Second Quarter                                   $ 0.15    $ 0.10
     Third Quarter                                    $ 0.12    $ 0.08
     Fourth Quarter                                   $ 0.10    $ 0.06

     Fiscal Year Ended December 31, 1998
     -----------------------------------
     First Quarter                                    $ 0.08    $ 0.07
     Second Quarter                                   $ 0.31    $ 0.08
     Third Quarter                                    $ 0.18    $ 0.06
     Fourth Quarter                                   $ 0.10    $ 0.05

We have not paid any dividends on our Common Stock, and we do not anticipate
that we will pay dividends in the foreseeable future.  The future payment of
dividends, if any, on the common stock is within the discretion of the Board
of Directors and will depend on our earnings, if any, our capital requirements
and financial condition, and other relevant factors.

At March 28, 2001, we had approximately 1,080 shareholders of record based on
information provided by our transfer agent.



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               ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                                PLAN OF OPERATION

Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements.  Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of the Company or its management or Board of Directors; (c) statements of
future economic performance; (d) statements of assumptions underlying other
statements and statements about us and our business relating to the future;
and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.

General
-------
Our founders envisioned establishing a business venture built upon the
creation, development, production and marketing of a quality line of natural,
environmentally-friendly insecticide products.  From those early times, work
was undertaken to research the markets, to acquire the formulations and obtain
related EPA labels covering those products, then set about to form a company
based upon those concepts.  A great deal of time and effort was expended
endeavoring to raise the funding to acquire the physical assets between the
years 1991-1995.  We acquired most of the physical assets required to operate
but the limited markets, legal battles and the continued lack of financial
resources placed us under adverse operating conditions.  In early 1997, the
Board of Directors set forth a new business plan and made a number of changes
in the management team.  That new business plan called for several substantial
actions to be initiated:

     -Focusing efforts and resources on the primary business of designing,
developing, producing and marketing state-of-the-art environmentally-friendly
insecticide products;

     -Divesting/spinning off of unrelated business ventures;

     -Creating and registering new products aimed at filling the needs of the
ever broadening and growing agriculture industry;

     -Upgrading the insecticide plant facilities (capacity: 50,000 lbs. of
product per day) and laboratory to be able to produce larger volumes of
product per day;

     -Reducing corporate indebtedness and liabilities;

     -Streamlining operations and reducing operating costs;

     -Re-establishing our credibility in the business community and financial
markets;

     -Resolving outstanding litigation;

     -Forming up and maintaining a solid, knowledgeable management team;

     -Continuing to develop market strategies for our various products.

<PAGE>
<PAGE> 13

Results of Operations
---------------------
Year ended December 31, 2000 compared to year ended December 31, 1999
---------------------------------------------------------------------
Revenues.  We had revenues of $161,364 and cost of sales of $91,938 with a
gross profit of $69,426 for the period ending December 31, 2000, compared with
revenues of $207,912 and cost of sales of $110,385 with a gross profit of
$97,527 for the period ending December 31, 1999.  The decrease in revenues was
directly attributable to decreased sales.  Our decrease in sales in fiscal
2000 from 1999 was a result of the lack of financial resources to mount and
pursue an aggressive marketing program.  The small increase in cost of sales
as a percent of revenues, from 53.1% in 1999 to 56.9% in 2000 was attributable
to relative increases in the costs of labor and marketing.

Operating Expenses.  For the year ended December 31, 2000, we had total
operating expenses of $1,138,196, compared to $671,835 for the same period
ending December 31, 1999. The significant increase in operating expenses is
attributable to a increases in executive compensation of $115,120, consulting
fees of $203,243, and legal and professional fees of $161,776.  The increase
in executive compensation, consulting, and legal and professional fees is a
result of our entering into an employment agreement with our President and his
related signing bonus, option grants to key executives and legal counsel, as
well as the increased cost of regulatory compliance during the period. (See
the Executive Compensation section in this report). Management expects
operating expenses for the next twelve months to be significantly greater
because of increased corporate activity and the cost of the marketing program.

Other Income and Expense.  Other expense for the year ended December 31, 2000
totaled $321,697, consisting primarily of interest expense of $234,284, loan
incentive and guarantee fees of $80,625, and litigation settlement expense of
$8,750.  Other expense for the year ended December 31, 1999 totaled $305,545,
consisting primarily of interest expense of $210,962 and litigation settlement
expense of $96,711.

We experienced a net loss of $1,390,467 for the year ended December 31, 2000
and a net loss of $879,853 for the year ended December 31, 1999. The basic
loss per share for the year ended December 31, 2000 was $0.06, based on the
weighted average number of shares outstanding of 22,950,545 shares, compared
to $0.05 based on weighted average number of shares outstanding of 19,535,231
at December 31, 1999.

Lack of working capital and equity funding continued to severely hamper our
ability rapidly implement our business plan, however, we believe that we still
made significant progress during the fiscal year ended December 31, 2000.

     -One new registered EPA label was created and approved (Diatect V
insecticide), providing us with larger potentially profitable Organic markets.

     -We spun off or divested ourselves of all unrelated businesses, to let us
focus on our core insecticide business.

     -Our more modern updated plant and lab facility has the capability of
producing 20,000 pounds of quality insecticide products during each 24-hour
period.

     -We believe we are on a solid operational footing with streamlined and
effective production procedures in place, which we hope will result in well
controlled operating costs.

     -Our Product inventories are maintained for immediate shipment.

<PAGE>
<PAGE> 14

     -While work has been done in an effort to launch an effective marketing
campaign, only modest success has been achieved at this point in time.  A
radical change in marketing strategy has been prepared and will be implemented
when funding becomes available.

The strategy which is being implemented is to expand into every aspect of the
marketplace worldwide through the establishment of a network of dealers.
Through this system, every consuming entity will be identified, contacted, and
introduced to the benefits of the Results and our other insecticide products.

Currently, we have agreements with non-exclusive dealers.  Our ultimate
objective is to eliminate the role of the exclusive distributors, removing one
additional price break consideration, enhancing our overall profitability.

In the immediate foreseeable future, we intend to implement a plan which will
see all of our marketing/sales activities being handled by one of our wholly-
owned subsidiaries.  Through this new strategy, additional local dealers will
be identified and signed on in each of the identified non-exclusive market
areas, ensuring that our products are represented worldwide through a solid
distribution network.

We believe our future success will be dictated by our ability to run a cost-
effective and environmentally-friendly company.  Our industry is rapidly
developing new chemical compounds, many of them bio-engineered from natural
raw materials.  Manufacturers are racing to keep pace with advancements and
older generation insecticide labels have begun to decline in sales.  We
believe our future will be strong because many elements necessary to compete
are under contract and in place.  We believe we are in a strong position to
compete in future markets.  With further development of product lines, based
on these resources, we hope that the Results and our other insecticide product
lines will be assured of a continued and growing presence in the market.

Liquidity and Capital Resources
-------------------------------
At December 31, 2000, we had current assets of $265,423, consisting of cash of
$3,384, accounts receivable of $58,014, prepaid interest of $42,550, prepaid
royalties of $37,500, and inventories of $123,975, and current liabilities of
$2,485,263 for a working capital deficit of $2,219,840. At December 31, 2000,
we had property, plant and equipment assets totaling $47,123, net of
depreciation, and other assets of $2,196,584, consisting primarily of our
investment in EPA labels, net of amortization of $2,019,534, plus deposits of
$150,000 and goodwill, net of amortization of $27,050.

Cash used in our operations for the year ended December 31, 2000 was $292,243
compared to $196,750 for the same period ended December 31, 1999.  In 2000 and
1999, our operations were funded primarily by funds received from loans and
sales of our products.

Our cash flows used by investing activities during the year ended December 31,
2000, was $2,444.  Our cash flows from financing activities during the year
ended December 31, 2000 was $292,911.

In December 2000, we signed and ratified an acquisition agreement with
International Technologies and Minerals, Inc. (ITM).  In exchange for
6,000,000 shares of our common stock, we will receive a $20,000 cash loan, a
corporate bond having a face value of $5,000,000 and all issued and
outstanding stock of ITM.  The corporate bond is to be capable of
collateralizing a commercial business loan in the amount of $2,500,000.


<PAGE>
<PAGE> 15

Subsequent to the date of these financial statements, we have received the
initial $20,000 loan and are seeking to complete the collateralization of the
corporate bond.  Until the collateralization is successful, no closing date
will be set and we cannot guarantee when of if the additional capital will be
available to us. (See ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
and Note 15 to the attached financial statements).

During fiscal year 2001, we may seek working capital from several sources,
including the equity markets and private investors.  In February 2000, we
increased our authorized capital to allow for the issuance of additional
shares of common stock.  There is no assurance, however, that any fund raising
efforts will be successful.  We believe that we will increase revenues from
operations as we continue to move from the development stage of our products
to a full marketing and sales program.  With our products in the marketplace,
we anticipate revenues to offset ongoing expenses.  We are uncertain, however,
as to whether there will be sufficient revenue to cover past obligations,
therefore, we will continue to attempt to make offers in settlement and
compromise on such obligations in an effort to reduce our contingent and other
liabilities.

We lack working capital and that affects our ability to effectively market our
products.  We believe two of the largest and most important markets for our
products are the agricultural and home and garden markets.  When we obtain
sufficient working capital, we plan to conduct affordable advertising and
maintain a sales force that can effectively reach these markets.  Accordingly,
although we anticipate more revenue from the sale of our products than we have
received in the past, we will not be as profitable without additional cash to
fund our advertising and marketing campaign.


                      ITEM 7. FINANCIAL STATEMENTS

Our financial statements are set forth immediately following the signature
page to this Form 10-KSB.  (See ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K for
Index to Financial Statements.)


           ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                      ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no disagreements with our certified public accountants with
respect to accounting practices or procedures or financial disclosure.


<PAGE>
<PAGE> 16

                               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 as of March 28, 2001, the name, age and
position of each of our executive officers and directors and their respective
terms of office.
                                                               Director and/or
Name                     Age      Position                     Officer Since
-------------------      ---      --------                     ---------------
George H. Henderson       72      Director                      February 1995
                                  President                     May 1997
                                  Treasurer                     August 1997
                                  Chairman of the Board         December 1997
John L. Runft             63      Director                      February 1995
                                  Secretary                     August 1997
Robert B. Crouch          76      Director                      October 1993
M. Stewart Hyndman        45      Director                      December 1997
Jay W. Downs              54      Director                      March 1999
Lamar N. Jensen           45      Director                      December 2000
Sherman B. Jensen         51      Director                      December 2000
Jeff R. Bates             48      Director                      December 2000
Douglas K. Goff           52      Director                      December 2000

Our directors serve for a term of one year or until his or her successor is
elected at our annual shareholders meeting, subject to removal by our
Company's shareholders.  All officers serve at the pleasure of the Board of
Directors or until his or her successor is elected at the annual meeting of
the Board of Directors.

Set forth below is certain biographical information regarding each of our
executive officers and directors.

George H. (Herb) Henderson joined the Board of Directors in 1995 and was
appointed to the posts of President and CEO in May, 1997.  He was asked to
assume the position of Chairman of the Board when Elwynn S. Hewlett passed
away in December, 1997.  Broadly skilled, Herb brings us over forty years of
senior management experience in domestic and international business.  Our
Chairman, President and CEO offers shareholders the benefits of his hands-on
management in numerous important mining and processing posts which include:

     An Tai Bao Mine/Plant Operation, Ping Shuo, China - Operations Manager
     Coal Valley Mine, Edson, Alberta, Canada - General Manager
     Marcona Mining Co., San Juan, Peru - Mine/Maintenance Superintendent
     Morrison-Knudsen Co., Canada and U.S.A. - Director, Mining Group
     Kaiser Resources, Ltd., Sparwood, B.C., Canada - General Superintendent

He also played an important role in the development of the State of Idaho's
expanded presence in the global marketplace by his efforts on behalf of Idaho
commerce, agriculture and industry as Senior International Trade Specialist
with the Idaho Department of Commerce.

<PAGE>
<PAGE> 17

John L. Runft has been practicing law since 1965, emphasizing business
organizations and contracts, administrative law and business litigation.  He
received his BA from Albertson's College of Idaho in 1962, and his J.D. from
the University of Chicago School of Law in 1965 (Justice Jackson Award in
Constitutional Law, 1965). John is a member of the Idaho Bar, is admitted to,
and has appeared as lead counsel in litigation or appeals before the U.S.
District Court of Idaho, the Court of Appeals for the Ninth Circuit, and the
United States Claims Court, the United States Court of Appeals for the Federal
Circuit, and the United States Supreme Court.  He is a member of the Board of
Litigation of the Mountain States Legal Foundation, is a member of the Idaho
Law Foundation, served as a Director of the Idaho Community Foundation (1989-
1996), and has served as Civilian Aide to the Secretary of the Army of the
United States for the State of Idaho (1988-1996).

Robert B. Crouch been an Officer and Director for seven years.  Bob received
his BSCE degree from the University of Idaho in 1949 and his LL.B. degree from
George Washington University in 1953.  He has extensive experience in patent
law with the U.S. Naval Bureau of Aeronautics, General Electric, IBM
Corporation and Information Storage Systems. He now maintains a private law
practice in the state of Utah.

M. Stewart Hyndman is the President of Magic Miles Ltd; Inc., Meridan, Idaho,
an export trading company established in 1995 specializing in the export of
agricultural commodities and industrial products.  Following his graduation
from the University of Idaho, Stewart has continued to play an active role in
industry, agriculture, marketing and business development.

Jay W. Downs, since 1995, has been the President of J.D. Hutton & Company, a
well established mortgage company located in Salt Lake City, Utah which serves
all of the Intermountain states. For 17 years, Jay has been closely associated
with the Diatect product lines through his extensive knowledge of pyrethrin
production and supply worldwide.

Lamar N. Jensen has a wide range of business experience encompassing over 20
years of national and international leadership positions in both public and
private companies.  His work includes consulting companies throughout the
United States and internationally including Australia, Thailand, China,
Myanmar and Singapore, Korea, Laos and South America.  Lamar has been
President of Pacific Nakon International Corporation since 1995.  He holds a
Master of Business Administration and has extensive experience in securities,
real estate and insurance.

Sherman B. Jensen has been President of Alpine Enterprises Inc., a general
contracting firm, since 1988.  With over 20 years of business experience,
Sherman's marketing, construction and planning expertise are expected to be of
significant importance to the future of the company. Sherman holds an
undergraduate degree in marketing with a Master's Degree in Communications.

Jeff R. Bates has been the president of Castle Corp., a privately owned
Vancouver, Washington company, since 1989.  Jeff has a long career in the
business of finance, commercial banking, real estate, insurance and
construction.  In addition to holding a general contractors license, Jeff
holds a real estate broker's license and owns a real estate appraisal firm.
He has over 20 years of hands on experience following his post-graduate
studies in banking and finance.  His knowledge and expertise relating to
corporate business and operations is extensive.
<PAGE>
<PAGE> 18

Douglas K. Goff brings over 25 years of hands-on experience to the company in
the areas of securities, mergers, acquisitions, real estate, mortgage and
business operations.  Since 1994, Doug has been a corporate officer in J.D.
Hutton and Company, a Salt Lake City based mortgage company.  Doug holds a
degree in business, finance and marketing.  He has extensive knowledge about
Diatect, its products and operations.


Involvement in Certain Legal Proceedings
----------------------------------------
See ITEM 3. LEGAL PROCEEDINGS of this Form 10-KSB.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Other than those disclosed below, we know of no person, who at any time during
the subsequent fiscal years, was a director, officer, beneficial owner of more
than 10 percent of any class of our equity securities registered pursuant to
Section 12 ("Reporting Person"), that failed to file on a timely basis any
reports required to be furnished pursuant to Section 16(a).

None.

                  ITEM 10. EXECUTIVE COMPENSATION

The following tables set forth certain summary information concerning the
compensation paid or accrued for each of our last three completed fiscal years
to our chief executive officer and each of our other executive officers that
received compensation in excess of $100,000 during such period (as determined
at December 31, 2000, the end of our last completed fiscal year):

<TABLE>
<CAPTION>
                                                         Long Term Compensation
                                                        ----------------------
                     Annual Compensation               Awards       Payouts
                                            Other      Restricted
Name and                                    Annual      Stock     Options  LTIP     All other
Principal Position Year  Salary   Bonus($) Compensation Awards   /SARs    Payout  Compensation
------------------ ----  ------   -------- ------------ ------   -------  ------  ------------
<S>              <C>     <C>     <C>      <C>          <C>      <C>      <C>     <C>
George H Henderson  2000  $ -0-     -0-       -0-         -0-      -0-      -0-      19,000

President (1)       1999  $ -0-     -0-       -0-         -0-      -0-      -0-      14,400
                    1998  $ -0-     -0-       -0-         -0-      -0-      -0-       6,815

</TABLE>

(1) George Henderson was appointed as President in April 1997.

On April 15, 2000, George H. Henderson became a full-time employee in his
capacity as President and CEO.  His employment contract is for a term of three
years and included a salary of $90,000 per year, which was increased to
$120,000 per year effective January 1, 2001, a signing bonus of 500,000
options for the purchase of shares of common stock at $0.06 per share, 50,000
incentive stock options under a to-be-formulated Incentive Stock Option Plan,
and provisions for bonus pay based on 1% of our gross sales receipts as
determined on a quarterly basis.  Mr. Henderson had been serving on a part-
time consulting basis prior to the execution of the employment agreement.  At
December 31, 2000, Mr. Henderson had exercised all his outstanding options.

<PAGE>
<PAGE> 19

On April 25, 2000, John L. Runft signed a new retainer to act as our legal
counsel.  Mr. Runft received a signing bonus of 500,000 options for the
purchase of shares of common stock at $0.06 per share.  The options vest over
a three year period.  At December 31, 2000, the 166,666 options have been
exercised, 166,666 options are exercisable in 2001, and 166,667 options will
be exercisable in 2002.

At such time as sufficient funding and/or income is being generated to carry
on our business, pay our bills, and pay our employees and agents, we will
attempt to put additional Employment Agreements into place with our key
executives.

Subsequent Event
----------------
On January 1, 2001, Jay Downs became a full-time employee in his capacity as
Executive Vice-president.  His employment contract is for a term of three
years and includes a salary of $120,000 per year, a signing bonus of 350,000
options for the purchase of shares of common stock at $0.10 per share, 50,000
incentive stock options under a to-be-formulated Incentive Stock Option Plan,
and provisions for bonus pay based on 1% of our gross sales receipts as
determined on a quarterly basis.  Mr. Downs had been serving on a part-time
consulting basis prior to the execution of the employment agreement.

Board Compensation
------------------
In June 2000, the Board proposed a plan for the annual compensation of
directors.  This plan provided for seven directors to be compensated at the
rate of $50,000 or 50,000 shares of our common stock, whichever is less.
Subsequently, the Board agreed to abandon the proposed plan.  No shares were
issued or amounts ever paid or accrued pursuant to this plan.  As of the date
of this report, our Board members are not compensated for services performed
in connection with their duties as Board members.

<PAGE>
<PAGE> 20

    ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth as of March 28, 2001, the name and address and
the number of shares of our Common Stock, held of record or beneficially by
each person who held of record, or was known by us to own beneficially, more
than 5% of the 34,716,073 issued and outstanding shares, and the name and
share holdings of all officers and directors as a group.

Security Ownership of Certain Beneficial Owners
-----------------------------------------------
Title of     Name and Address of           Amount and Nature of     Percent
Class         Beneficial Owner             Beneficial Ownership     of Class
--------     -------------------           --------------------     --------
Common       Jeff Bates                      4,100,000 shares (1)     11.81
             10800 NW 13th Place.
             Vancouver, WA  98685

Common       CMS Management LLC              3,300,000 shares (1)      9.51
             10800 NW 13th Place.
             Vancouver, WA  98685

Common       George H. Henderson              1,995,096 shares         5.75
             1134 North Orchard, Suite 206
             Boise, Idaho 83706

Common       John L. Runft                    2,047,039 shares (2)     5.87
             1134 North Orchard, Suite 206      and options
             Boise, Idaho 83706

Security Ownership of Officers and Directors
--------------------------------------------
Title of     Name and Position of          Amount and Nature of     Percent
Class        Officer and Director          Beneficial Ownership     of Class
--------     --------------------          --------------------     --------
Common       George H. Henderson                     -see above-
             Director/President/Treasurer/
             Chairman of the Board

Common       John L. Runft, Director/Secretary       -see above-

Common       Lamar N. Jensen, Director          800,000 shares (3)     2.30

Common       Jeff Bates, Director                    -see above-

Common       Robert B. Crouch, Director         776,801 shares         2.24

Common       Jay W. Downs, Director           1,093,806 shares (4)     3.12
                                                and options

Common       M. Stewart Hyndman, Director       300,800 shares         0.87

Common       Douglas Goff, Director                   0 shares

Common       Sherman Jensen, Director                 0 shares
                                              ----------------
All Officers/Directors as a Group (9 persons)    11,113,542           31.54
                                              shares and options
                                              ================        ======
Notes on the above table appear on the next page
<PAGE>
<PAGE> 21

In the preceding table:

- beneficial ownership share numbers assume the exercise of any options;

- % of Class assumes the exercise of any options and is  calculated based on
the concomitant increase in the number of issued and outstanding shares.

In addition, the following numbered notes referenced in the table apply:

(1) Represents 800,000 shares held of record by Jeff Bates and 3,300,000
shares held of record by CMS Management LLC, a limited liability company of
which Mr. Bates is the principal.  All of the above shares have been issued
but are being held in escrow pending the successful closing of the Acquisition
Agreement.  See ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION, and ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

(2) Represents 1,880,373 shares held of record by John Runft and 166,666
options currently exercisable under a retainer agreement.  See ITEM 10.
EXECUTIVE COMPENSATION.

(3) Represents shares issued but held in escrow pending the successful closing
of the Acquisition Agreement.  See ITEM 6.  MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION, and ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.

(4) Represents 743,806 shares held of record by Jay Downs and 350,000 options
currently exercisable under an employment agreement.  See ITEM 10. EXECUTIVE
COMPENSATION.
<PAGE>
<PAGE> 22

           ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management
----------------------------
Except as indicated below, and for the periods indicted, there were no
material transactions, or series of similar transactions, since the beginning
of our last fiscal year, or any currently proposed transactions, or series of
similar transactions, to which we are a party, in which the amount involved
exceeds $60,000, and in which any director or executive officer, or any
security holder who is known by us to own of record or beneficially more than
5% of any class of our common stock, or any member of the immediate family of
any of the foregoing persons, has an interest.

In December 2000, we signed an agreement with the principals of International
Technologies & Minerals Inc., a Utah corporation ("ITM").  ITM is a privately
held Utah corporation, primarily engaged in natural resources development,
including, but not limited to, mining, refining, manufacturing, sales and
marketing of natural resource products.

We and ITM desired to combine and expand our respective businesses by and
through certain business combinations, investments and acquisitions.
The Agreement encompasses two parts or stages.  According to the Agreement, in
part one we are to be funded by approximately $2,500,000 of private placement
investment by certain designated shareholders of ITM, in the form of a loan
against an asset backed bond.  In part two, following mutual asset evaluation,
ITM will be acquired by us and become a wholly-owned subsidiary.  The
following summary of the two parts of the Agreement is qualified in its
entirety by reference to the text of the complete Agreement and the Addendum
thereto which is included as an exhibit to this filing.

Part 1. STOCK PURCHASE. We will issue and deliver at closing 6,000,000 shares
of our restricted common stock for consideration of the following:

(1) A $20,000 cash loan to us to be repaid as follows:

  (a) If closing of the purchase of our stock occurs on or before April 1,
2001, then, in that event, said $20,000 shall be repaid, without interest,
from the proceeds of the contemplated loan against the above mentioned asset
backed bond; or,

  (b) If closing of the purchase of our stock does not occur on or before
April 1, 2001, then the $20,000 loan shall be reduced to a one year promissory
note payable to ITM and will bear interest from that date at the rate of ten
percent (10%) per annum and any other funds loaned or advanced to us by ITM or
ITM's associates, shall as of April 1, 2001 be reduced to one year promissory
notes for the repayment of said loans or advances and shall bear interest from
that date at the rate of ten percent (10%) per annum.

(2) A corporate bond issued to us by Quantum Trust, of Phoenix, Arizona,
having a face value of $5,000,000 shall be delivered to us at closing, which
bond shall be capable of immediately collateralizing a commercial business
loan in the amount of approximately $2,500,000 with a national bank, insurance
company or other financial institution acceptable to us.  ITM will assist us
in obtaining a written commitment for said financing from the subject
financial institution.

<PAGE>
<PAGE> 23

(3) Four ITM nominees will be appointed to our Board of Directors, namely,
Lamar N. Jensen, Douglas Goff, Jeff Bates, and Sherman Jensen.

At the date of this filing, we have received the $20,000 loan, appointed the
ITM nominees to our board, and received the corporate bond.  Now we are
involved in securing the loan against the bond.

Part 2.  ACQUISITION OF ITM.  Upon the successful completion of the loan and
the closing described in Part 1 above, the parties will proceed as follows:

(1) ITM will finalize its acquisition of certain assets including, but not
limited to, the exclusive, long-term lease on the Dry Creek and Salt Creek
Gypsum Mines property near Cedar City, Utah; title to the Dry Creek and Salt
Creek Gypsum Mines; and the total, exclusive right, title and interest in and
to the proprietary knowledge, plans, specifications, agreements, and all other
aspects of the entrepreneurial opportunity in any way relating to the
development, construction, operation and ownership of a wallboard plant
proposed to be constructed near Cedar City, Utah, to utilize, inter alia,
gypsum produced by the Dry Creek and Salt Creek Gypsum Mines.

(2) We will be advised of and have the right to know all facts relating to the
acquisition of the assets, both before and after said acquisition.  It is the
express intent of the parties that we will acquire ITM upon ITM's acquisition
of title to the assets described above and any other assets the parties
mutually agree should be acquired, subject to the following conditions:

  (a) Approval by the boards of directors and the stockholders of both
parties;

  (b) All acquisitions of assets by ITM shall be subject to the written
approval of our Board of Directors;

  (c) All assets acquired by ITM shall be independently audited by Value NetX
of Salt Lake City, Utah, in accordance with the applicable rules and
regulations for U.S. reporting companies;

  (d) At such time as the parties mutually desire to proceed with the
acquisition of ITM, the assets of both corporations shall be evaluated by
Value NetX in accordance with NACVA (National Association of Certified
Valuation Analysts) at least thirty (30) days prior to closing said
acquisition. Said evaluation of both parties shall form the final ratio for
stock issuance of our stock to the shareholders of ITM for the acquisition of
ITM, as set forth in the following subsection;

  (e) Upon the completion of the valuation of the assets of ITM, we will issue
to ITM shareholders additional shares of our restricted, common shares, if
any, so that the total shares (including the above referenced 6,000,000
shares) issued to ITM shareholders bears the same ratio to our total shares
issued and outstanding immediately prior to closing, that the value of the ITM
assets acquired pursuant to this Agreement bears to the value of our assets
per an evaluation performed Value NetX of Salt Lake City using NACVA
standards.

At the date of this filing, no action has been taken on Part 2 of the
Agreement, pending the completion of Part 1 and the successful closing.
If Part 1 is not completed, i.e., we fail to secure the loan against the bond
and complete the closing, the Agreement will be canceled.  If Part 1 is
completed but Part 2 is not completed, ITM will have an opportunity to acquire
other assets acceptable to our Board in lieu of the assets contemplated by the
current Agreement.
<PAGE>
<PAGE> 24

Certain Business Relationships
------------------------------
Except as indicated, and for the periods indicated, there were no material
relationships regarding directors that exist, or have existed during our last
fiscal year.

Indebtedness of Management
--------------------------
Except as indicated below, and for the periods indicated, there were no
material transactions, or series of similar transactions, since the beginning
of our last fiscal year, or any currently proposed transactions, or series of
similar transactions, to which we are a party, in which the amount involved
exceeds $60,000 and in which any director or executive officer, or any
security holder who is known to us to own of record or beneficially more than
5% of any class of our common stock, or any member of the immediate family of
any of the foregoing persons, has an interest.

At December 31, 2000, our President and Chairman/Director Herb Henderson is
owed the sum of $57,665 for services rendered to us during the fiscal year
2000, and our Secretary/Director John Runft is owed $28,167 for services
rendered to us during the same period


<PAGE>
<PAGE> 25

Loans from Shareholders
-----------------------
In November 1993, we gave a promissory note in the amount of $400,000 to Danny
F.A.B. Wirken, a shareholder and consultant, for funds advanced to us to pay
ongoing operating expenses. The promissory note bears interest at 8% annually,
is unsecured, and payable on demand. At December 31, 1995, the principle and
accrued interest totaled $449,508.  However, we have a claim against Mr.
Wirken which we plan to pursue to judgment with the objective of foreclosing
on said note. See Item 3. Litigation.

Other shareholders have made loans to us which are still outstanding and for
all of which promissory notes have been issued:

Stockholder               Amount of Note        Date of Note
--------------------      --------------        -------------
Robert B. Crouch          $     1,000           November 7, 2000
                                4,000           November 17, 2000
John L. Runft                  50,000           January 15, 1999
                               20,000           February 11,2000
                               22,554           December 15, 1997
George H. Henderson            42,590           October 1, 2000
David J. Black                 10,000           August 5, 1997
David N. Sim                    6,500           Oct. 1, 1999
                                2,500           January 4, 2000
Jack S. Stites                  3,000           December 1, 2000
Cloward & Associates            3,000           January 4, 2000

During the quarter ended December 31, 2000, the Board of Directors implemented
a program to reduce our debt through a debt-for-stock exchange.  To that end
the following transactions occurred where in certain qualified debt holders
requested to convert all or part of the debt owed to them at a conversion rate
of .25 per share of our restricted common stock.

Notes converted to stock
Stockholder               Total Amount of Notes   Shares common stock issued
--------------------      --------------        -------------
Jay W. Downs              $    41,700              257,986
Delyan Heaps                   10,000               65,864
Dennis Nielson                 38,250              205,876
Hopper Asset Management       193,424              773,696
John Runft                    182,563              730,252
Andrew Dicharia                50,000              268,000
Jerry Isdore                   25,000              134,360
George H. Henderson           106,580              426,323
Dennis Miller                  30,000              120,000
Lowell Hahn                    28,224              112,897
Ross Wolfley                  165,529            1,009,138
David Black                    10,000               96,000
Robert Crouch                  54,500              248,789
Stewart Hyndman                12,700               50,800
Michael McQuade                40,584              162,334
Ross Wolfley                   22,500               90,000
George Reeve                   50,000              200,000
Steve Abboud                    5,239               90,000

<PAGE>
<PAGE> 26

                                 PART IV
                 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) Financial Statements. The following financial statements are included
in this report:

Title of Document                                                       Page
-----------------                                                       ----
Independent Auditors Report of Williams & Webster, P.S.,
 Certified Public Accountant                                             28
Consolidated Balance Sheets as of
 December 31, 2000 and 1999                                              29
Consolidated Statement of Operations for the years ended
 December 31, 2000 and 1999                                              31
Consolidated Statement of Stockholders' Equity
 for the years ended December 31, 2000 and 1999                          32
Consolidated Statement of Cash Flows for the years ended
 December 31, 2000 and 1999                                              33
Notes to Financial Statements                                            35

(a)(2) Financial Statement Schedules.
     Not applicable

(a)(3)Financial Statements.  The following exhibits are included in this
report:

             SEC
Exhibit    Reference
Number     Number     Title of Document                    Location
-------    ---------  -----------------           --------------------
10.1          10      Acquisition Agreement       This Filing
                       and Addendum

(b) Reports on Form 8-K. The following reports on Form 8-K were filed with the
Commission during the quarter ended December 31, 2000

     None.




<PAGE>
<PAGE> 27

                                 SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:

     DIATECT INTERNATIONAL CORPORATION

Date: March 29, 2001

/s/ George H. Henderson, President/Treasurer

/s/ John L. Runft, Secretary

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated

Date: March 29, 2001

/s/ George H. Henderson, Director

/s/ John L. Runft, Director

/s/ Robert B. Crouch, Director

/s/ Jay W. Downs, Director

/s/ M. Stewart Hyndman, Director

/s/ Lamar N. Jensen, Director

/s/ Sherman B. Jensen, Director

/s/ Jeff Bates, Director

/s/ Douglas W. Goff, Director

<PAGE>
<PAGE> 28

Board of Directors
Diatect International Corp.
Boise, ID  83714

                   Independent Auditor's Report

We have audited the accompanying consolidated balance sheets of Diatect
International Corp. as of December 31, 2000 and 1999, and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for years then ended.  These financial statements are the responsibility
of the Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Diatect
International Corp. as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 14, the
Company has significant operating losses, negative equity, unsatisfied
collection judgments and delinquencies in repaying its debt obligations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern.  Management's plans regarding those matters also
are described in Note 13.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

As discussed in Note 16 to the financial statements, certain errors were made
on the 1999 audited financial statement, which resulted in the understatement
of prepaid royalties and notes payable in the amount of $37,500.  These
financial statements have been restated correcting the errors.



Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
March 20, 2001

<PAGE>
<PAGE> 29


                          DIATECT INTERNATIONAL CORP.
                         CONSOLIDATED BALANCE SHEETS
                          December 31, 2000 and 1999

                                    ASSETS

                                                       2000           1999
                                                    -----------   -----------
Current Assets
  Cash                                              $     3,384   $     2,160
  Accounts receivable                                    58,014         9,050
  Prepaid interest                                       42,550          -
  Prepaid royalties                                      37,500        37,500
  Inventories                                           123,975       181,283
                                                    -----------   -----------
       Total Current Assets                             265,423       229,993
                                                    -----------   -----------

Property, Plant and Equipment
  Building                                               23,501        23,501
  Equipment                                              49,195        46,751
  Less accumulated depreciation                         (25,573)      (15,470)
                                                    -----------   -----------
      Total Property, Plant and Equipment                47,123        54,782
                                                    -----------   -----------
Other Assets
  Deposits                                              150,000         3,000
  Goodwill, net of amortization                          27,050          -
  Investment in EPA labels, net of amortization       2,019,534     2,315,321
                                                    -----------   -----------
    Total Other Assets                                2,196,584     2,318,321
                                                    -----------   -----------
TOTAL ASSETS                                        $ 2,509,130   $ 2,603,096
                                                    ===========   ===========






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




<PAGE>
<PAGE> 30
                          DIATECT INTERNATIONAL CORP.
                 CONSOLIDATED BALANCE SHEETS (Continued)
                         December 31, 2000 and 1999

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                       2000           1999
                                                    -----------   -----------
Current Liabilities
  Accounts payable                                  $   234,871   $   196,397
  Accounts payable - related parties                     30,795       232,865
  Advances from officers                                   -            5,168
  Deposit payable                                        20,000          -
  Line of credit                                         97,000          -
  Interest payable                                      725,465       751,690
  Other accrued liabilities                               1,021         1,641
  Notes payable                                       1,376,111     1,804,803
                                                    -----------   -----------
     Total Current Liabilities                        2,485,263     2,992,564
                                                    ===========   ===========

Commitments and Contingencies                           263,923       192,272
                                                    -----------   -----------

Stockholders' Equity (Deficit)
 Common stock, no par value, 28,716,231
  shares authorized and 19,535,231 shares
  issued and outstanding, respectively               12,260,630    10,366,608
 Common stock subscribed                                   -          186,238
 Stock options                                           51,370          -
 Accumulated deficit                                (12,525,056)  (11,134,589)
                                                    -----------   -----------
    Total Stockholders' Equity (Deficit)               (213,056)     (581,743)
                                                    -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 2,509,130   $ 2,603,096
 (Deficit)                                          ===========   ===========






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

<PAGE>
<PAGE> 31
                          DIATECT INTERNATIONAL CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2000 and 1999

                                               2000                1999
                                           -------------     ----------------
REVENUES                                   $     161,364     $        207,912

COST OF SALES                                     91,938              110,385
                                           -------------     ----------------
GROSS PROFIT                                      69,426               97,527
                                           -------------     ----------------

OPERATING EXPENSES
 Salaries, wages and benefits                     46,014               52,307
 Executive compensation                          115,120                 -
 Consulting                                      261,556               58,313
 Depreciation and amortization                   316,890              314,843
 Legal and professional fees                     294,283              132,507
 Other operating expense                         104,333              113,865
                                           -------------     ----------------
   Total Operating Expenses                  1,138,196              671,835
                                           -------------     ----------------
OPERATING LOSS                             $  (1,068,770)    $       (574,308)
                                           -------------     ----------------
OTHER INCOME (EXPENSES)
 Interest expense                               (234,284)            (210,962)
 Loan incentive and guarantee fees               (80,625)                -
 Litigation settlement                            (8,750)             (96,711)
 Miscellaneous                                     1,962                2,128
                                           -------------     ----------------
   Total Other Income (Expenses)                (321,697)            (305,545)
                                           -------------     ----------------
LOSS BEFORE INCOME TAXES                      (1,390,467)            (879,853)

INCOME TAXES                                        -                    -
                                           -------------     ----------------
NET LOSS                                   $  (1,390,467)    $       (879,853)
                                           =============     ================
BASIC AND DILUTED
 NET LOSS PER SHARE                        $       (0.06)    $          (0.05)
                                           =============     ================
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING,
 BASIC AND DILUTED                            22,950,545           19,535,231
                                           =============     ================


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


<PAGE>
<PAGE> 32
                          DIATECT INTERNATIONAL CORP.
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                         Common
                                        Common Stock       Stock         Stock       Accumulated
                                     Shares     Amount    Options      Subscribed      Deficit           Total
                                     ------     ------    -------     ------------   ------------        -----


<S>                               <C>        <C>                 <C>            <C>            <C>
                                     ----------   ----------   -------   ---------   ------------  ------------
Balances as of December 31, 1998     19,535,231   $10,366,608      -     $ 186,238   $(10,254,736) $    298,110

Net loss for the year ended
  December 31, 1999                        -             -         -          -          (879,853)     (879,853)
                                     ----------   ----------   -------   ---------   ------------  ------------

Balances as of December 31, 1999     19,535,231    10,366,608      -       186,238    (11,134,589      (581,743)

Issuance of shares for guarantee
of line of credit at $0.10 per share    500,000        50,000      -          -              -           50,000

Issuance of shares to contractors,
directors and others for services
at $0.25 per share                    1,399,591       342,398      -          -              -          342,398

Issuance of shares of purchase of
investment at $0.20 per share           600,000        60,000      -          -              -           60,000

Issuance of shares for purchase of
rights to EPA labels at $0.10
per share                               110,000        11,000      -          -              -           11,000

Issuance of shares for forbearance
of notes payable at $0.25 per share     122,500        30,625      -          -              -           30,625

Issuance of shares to officers
for exercise of options at
$0.06 per share                       1,517,667        91,049      -          -              -           91,049

Issuance of shares subscribed           290,000       186,238      -      (186,238)          -             -

Issuance of shares for debt
at $0.25 per share                    4,291,084     1,072,712      -          -              -        1,072,712

Issuance of shares for loan
incentive at prices ranging from
$0.10 to $0.25 per share                350,000        50,000      -          -              -           50,000

Options granted to officers as
bonus for new contracts                    -             -       51,370       -              -           51,370

Net loss for the year ended,
December 31, 2000                          -             -         -          -        (1,390,467)   (1,390,467)
                                     ----------   -----------  -------   ---------   ------------  ------------
Balances as of December 31, 2000     28,716,073   $12,260,630  $51,370   $    -      $(12,525,056) $   (213,056)

</TABLE>




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


<PAGE>
<PAGE> 33
                            DIATECT INTERNATIONAL CORP.
                         CONSOLIDATED CASH FLOW STATEMENTS
                  For the Years Ended December 31, 2000 and 1999

                                               2000                1999
                                           -------------     ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                 $  (1,390,467)   $        (879,853)
  Adjustment to reconcile net loss to
   net cash used by operating
   activities:
    Depreciation and amortization                316,890              314,843
    Issuance of stock for services               316,058                 -
    Issuance of stock options for services        51,370                 -
    Issuance of stock for finance charges
    and interest                                 400,096                 -
    Prepaid finance charges paid by
    issuance of stock                             50,000                 -
    Stock issued for payment of accrued
    expenses                                     170,527                 -
  Changes in assets and liabilities:
    Accounts receivable                          (53,014)              (9,050)
    Prepaid finance charges                      (42,550)                -
    Inventories                                   57,308              (81,283)
    Accounts payable                              38,474              269,490
    Accounts payable - related parties          (202,070)                -
    Advances from officers                        (5,168)               3,000
    Deposit received                              20,000                 -
    Interest payable                             (26,225)             210,962
    Other accrued liabilities                       (620)             (20,859)
    Commitments and contingencies                  7,148               (4,000)
                                           -------------     ----------------
NET CASH USED BY OPERATING
  ACTIVITIES                                    (292,243)            (196,750)
                                           -------------     ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, plant and
   equipment                                      (2,443)              (7,470)
  Investment in EPA label                           -                 (15,768)
                                           -------------     ----------------
Disposal of property, plant and
   equipment                                        -                 134,731
                                           -------------     ----------------
NET CASH PROVIDED BY (USED BY) INVESTING
  ACTIVITIES                               $      (2,444)    $        (23,238)
                                           -------------     ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from line of credit             $      97,000     $           -
  Net proceeds from notes payable                195,911              223,060
                                           -------------     ----------------
NET CASH FLOWS PROVIDED BY
 FINANCING ACTIVITIES                            292,911              223,060
                                           -------------     ----------------
NET INCREASE (DECREASE)IN CASH                    (1,776)               3,072

CASH AT BEGINNING OF YEAR                          5,160                2,088
                                           -------------     ----------------
CASH AT END OF YEAR                        $       3,384     $          5,160
                                           =============     ================

<PAGE>
<PAGE> 34
                           DIATECT INTERNATIONAL CORP.
                 CONSOLIDATED CASH FLOW STATEMENTS (Continued)
                For the Years Ended December 31, 2000 and 1999





                                                         2000          1999
                                                         ----          ----
SUPPLEMENTAL CASH FLOW DISCLOSURES:


  Interest paid                                        $   -          $ 1,374
                                                       ========       =======
  Income Tax Paid                                      $   -          $  -
                                                       ========       =======


NON-CASH FINANCING ACTIVITIES:
Issuance of common stock for prepaid finance charges   $ 50,000       $  -
Issuance of common stock for services                  $316,058       $  -
Issuance of common stock for investment                $ 60,000       $  -
Issuance of common stock for rights to EPA labels      $ 11,000       $  -
Issuance of common stock for payment of accrued
  expenses                                             $170,527       $  -
Issuance of common stock for forbearance of
  notes payable, finance charges and interest          $400,096       $  -
Issuance of stock options for services                 $ 51,370       $  -
Issuance of common stock for debt                      $724,971       $  -
Issuance of note payable for investment deposit        $110,000       $  -
Issuance of note payable for prepaid royalties         $   -          $37,500

























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

<PAGE>
<PAGE> 35
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 1   ORGANIZATION AND DESCRIPTION OF BUSINESS

Diatect International Corp. (formerly Applied Earth Technologies, Inc.)
(formerly San Diego Bancorp) (SDBC) was incorporated in California in 1979, as
a bank holding corporation.  During 1986, the Company liquidated its
subsidiaries and became a dormant shell corporation.

On August 22, 1996, the Company changed its name from San Diego Bancorp to
Applied Earth Technologies, Inc. to better reflect the business activities of
the Company, which primarily consist of developing and marketing pesticide
products.  The Company later became informed that another corporation already
had the name Applied Earth Technologies, Inc. and approval of this name had
been granted in error.  In response to this information, the Company changed
its name to Diatect International Corp. on June 5, 1998.

Enviro-Guard Corporation
------------------------
On September 21, 1993, SDBC acquired 100% of the outstanding common stock
(4,438,400 shares) of Enviro-Guard Corporation (a Utah corporation) in
exchange for 3,594,953 shares of SDBC common stock valued at $1.75 per share.
This transaction was accounted for as a reverse acquisition whereby Enviro-
Guard Holding Corporation, (Holding) as the former parent of the acquired
corporation (Enviro-Guard) gained a controlling stockholder interest in the
acquiring corporation (SDBC).  Immediately prior to the reverse acquisition,
Holding transferred all of its assets to Enviro-Guard including White Mountain
stock owned by Holding.

In August 1992, Enviro-Guard acquired Diatect International, Inc. (Diatect)
(incorporated in Kansas) for 120,000 shares of common stock of Enviro-Guard
valued at $5 per share and $100,000 in notes payable.  The transaction was
valued at $700,000 and accounted for as a purchase.  Diatect has developed and
owns the rights to three EPA registered insecticides.  Also in August 1992,
Enviro-Guard acquired D.S.D., Inc. ("DSD") (incorporated in Kansas) in
exchange for 520,000 shares of the common stock of Enviro-Guard valued at $5
per share and the assumption by Enviro-Guard of a $448,360 note payable due to
DSD from a shareholder of DSD.  This transaction was valued at $3,048,360 and
accounted for as a purchase.

On May 2, 1998, the Company's board of directors abandoned Enviro-Guard and
its wholly owned subsidiary, D.S.D., Inc., following the transfer of all
Enviro-Guard assets to the Company.  In consideration for payment of the
transferred assets, the Company assumed all indebtedness of the subsidiary
corporations and any indemnification against the liabilities of the
subsidiaries.  Transfer of D.S.D.'s assets included the transfer of all stock
of D.S.D.'s wholly owned subsidiary, Doctor Scratch, Inc., a Kansas
corporation.  As the sole shareholder of Doctor Scratch, the Company sold all
the assets of Doctor Scratch and allowed it to become dormant.

White Mountain Mining & Manufacturing, Inc.
-------------------------------------------
On December 18, 1992, Holding entered into a contract to acquire 89.125% of
the outstanding common stock (891,250 shares) of White Mountain Mining in
exchange for 260,375 shares of common stock (at a value of $6 per share) of
Holding, at that time the parent company of Enviro-Guard, plus $25,000 in cash

<PAGE>
<PAGE> 36
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 1   ORGANIZATION AND DESCRIPTION OF BUSINESS (Continued)

and $346,616 in notes payable.  As a result of the transaction, a total of
705,873 shares of White Mountain common stock was transferred to Holding with
the remaining 185,377 shares remaining in escrow against payment of the
promissory notes.  In August 1993, all of Holding's stock in White Mountain
was transferred along with other assets to Enviro-Guard preparatory to the
reverse acquisition by SDBC on September 21, 1993.

This acquisition, accounted for as a purchase and valued at $3,458,400, was
intended to provide the Company with a source of diatomaceous earth, an
important organic ingredient for its pesticide products sold by its
subsidiaries.

Pursuant to a promissory note dated March 12, 1995, Enviro-Guard pledged its
shares of White Mountain Stock.  On June 1, 1998, the holder of the promissory
note foreclosed on the stock for failure to pay the indebtedness (Note 8).
This transaction resulted in a gain of $215,692.

Magic International, Inc.
-------------------------
On May 24, 1999, the Company entered into an agreement to purchase Magic
International, Inc. in exchange for $3,000 cash and 200,000 shares of Diatect
International Corporation's common stock.  At the time of the transaction, the
authorized level of the Company's capitalization did not permit an issuance of
200,000 shares of stock.  The Company increased its authorized capital, issued
the aforementioned stock and finalized the acquisition in March 2000.

National Diatect, Inc.
----------------------
In July 2000, the Company signed a letter of intent to purchase National
Diatect, Inc. in exchange for 400,000 shares of its common stock, royalties in
the amount of $120,000 payable at the rate of $0.10 per pound of products
produced through the plant as Results or Diatect products and a note payable
in the amount of $110,000 bearing interest at 12% for inventory and equipment.
The agreement is subject to ratification by the board of directors and has not
been finalized as of the date of these financial statements.  See Note 13.

International Technologies and Minerals, Inc.
---------------------------------------------
In December 2000, the Company signed and ratified an acquisition agreement
with International Technologies and Minerals, Inc. (ITM).  Terms of the
agreement have not been completed as of December 31, 2000.  See Note 15

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Diatect International Corp.
is presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management, which is responsible for their integrity and objectivity.  These
accounting policies conform to generally accepted accounting principles and
have been consistently applied in the preparation of the financial statements.


<PAGE>
<PAGE> 37
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounting Method
-----------------
The Company's financial statements are prepared using the accrual method of
accounting.

Principles of Consolidation
---------------------------
The accompanying consolidated financial statements include the accounts of the
Company and all of its wholly owned and majority-owned subsidiaries.
Intercompany transactions and balances have been eliminated in consolidation.

Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all short-
term debt securities purchased with a maturity of three months or less to be
cash equivalents.

Allowance for Doubtful Accounts
-------------------------------
Provision for losses on trade accounts receivable is made in amounts required
to maintain an adequate allowance to cover anticipated bad debts.  Accounts
receivable are charged against the allowance when it is determined by the
Company that payment will not be received.

Inventories
----------
Inventories consist primarily of raw materials and finished product and are
valued at the lower of cost (first in, first out) or market.

Property and Equipment
----------------------
Property, plant and equipment are stated at cost including the allocable
purchase price applicable to the respective assets of purchased subsidiaries.
All expenditures for improvements, replacements and additions are added to the
asset accounts at cost.

Expenditures for normal repairs and maintenance are charged against earnings
as incurred.  The cost and related accumulated depreciation are eliminated
from the accounts and the resulting gain or loss is reflected in the
statements of operations when depreciable assets are retired or otherwise
disposed.  Depreciation is provided for by the use of straight-line and
accelerated methods over the estimated useful lives of the assets.  Depletion
is computed using the unit-of-production method, for any mining property
placed in production.  Depreciation expense for the period ended September 30,
2000 and the year ended December 31, 1999 was $7,649 and $9,433, respectively.

Intangible Assets
-----------------
Intangible assets are amortized over the remaining useful life on a straight-
line basis which ranges from 15 to 17 years.  EPA labels are amortized on a
straight-line basis over a 15-year life, commencing with the beginning of
product sales.  Goodwill is amortized on a straight-line basis over a fifteen-
year life.  Amortization expense for the periods ending September 30, 2000 and
December 31, 1999 were $210,872 and $305,410, respectively.

<PAGE>
<PAGE> 38
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
------------
At December 31, 2000, the Company had net operating loss carryforwards of
approximately $12,525,056 that may be offset against future taxable income
through 2020.  The Company believes that is a chance that all or part of the
net operating loss carryforwards will expire unused.  Accordingly, the tax
benefit has been fully offset by an allowance of equal amount.

Basic and Diluted Loss Per Share
--------------------------------
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the year.  The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time they were outstanding.  Outstanding options were
not included in the computation of loss per share because the exercise price
of the outstanding options is higher than the market price of the stock,
thereby causing the options to be antidilutive.

Revenue Recognition Policy
--------------------------
Revenues from sales of product are recognized when the product is shipped.

Compensated Absences
--------------------
Employees of the Company are entitled to paid vacation, paid sick days and
personal days off, depending on job classification, length of service, and
other factors. Due to the existence of a relatively high employee turnover
rate, it is impractical to estimate the amount of compensation for future
absences.  Accordingly, no liability has been recorded in the accompanying
financial statements.  The Company's policy is to recognize the costs of
compensated absences when actually paid to employees.

Estimates
---------
The preparation of financial statements, in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.

Impaired Asset Policy
---------------------
The Company reviews its long-lived assets quarterly to determine if any events
or changes in circumstances have transpired which indicate that the carrying
value of its assets may not be recoverable.  The Company does not believe any
adjustments are needed to the carrying value of its assets at December 31,
2000 and 1999.

Fair Value of Financial Instruments
-----------------------------------
The Company has adopted the fair value accounting rules to record all
transactions in equity instruments for goods or services.

<PAGE>
<PAGE> 39
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivative Instruments
----------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities."  This standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities.  It
requires that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value.

At December 31, 2000, the Company has not engaged in any transactions that
would be considered derivative instruments or hedging activities.

NOTE 3   INVENTORIES

Inventories at December 31, 2000 and 1999 consist of the following:


                                 2000                  1999
                          ------------------    -----------------

   Raw Materials          $      26,171          $         52,978
   Finished Goods                97,804                   128,305
                          -------------            --------------
     Total                $     123,975          $        181,283
                          =============            ==============

NOTE 4   INVESTMENT IN EPA LABELS

The Company has acquired five product registrations or ("labels") approved by
the U.S. Environmental Protection Agency granting federal clearance to
manufacture, market and sell specified insecticide products.  Included are:
No. 42850-1 for use against flies, roaches, ants, etc., in and around homes
and commercial buildings; No. 42850-2 for use in grain storage; No. 42850-3
for use against fleas, ticks and lice on pets; and No. 42850-4 for use against
over 60 insects on over 130 edible crops and plants; and No. 42850-5 (approved
November 23, 1999) for use in the organic market to control all major pest
problems.

NOTE 5   NOTES PAYABLE

Short-term notes payable consist of the following at December 31, 2000 and
1999:

Creditor and Conditions                               2000          1999
-----------------------                            ---------    ------------

Ross S. Wolfley, (a shareholder of the Company),
unsecured, variable interest, due on demand.       $    -      $     165,529

DeLynn Heaps, unsecured, interest at 10%, due on
July 15, 1999.                                          -             10,000
                                                   ---------   -------------
Subtotal carried forward                           $    -      $     175,000
                                                   ---------   -------------

<PAGE>
<PAGE> 40
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31,2000

NOTE 5   NOTES PAYABLE (Continued)

Creditor and Conditions                              2000          1999
---------------------------------                -----------   -------------
Subtotal (brought forward)                       $      -      $     175,000

Jeffrey Linabery, unsecured, interest at 14%, due
on demand.                                             7,500           7,500

David Russell (a shareholder of the Company),
unsecured, interest at 10%, due on demand.            15,000          15,000

David Russell, (a shareholder of the Company),
unsecured, interest at 8%, due on demand.             25,000          25,000

Danny Wirken (a shareholder of the Company),
unsecured, interest at 8%, dated December 31, 1993
due on demand (See Note 8).                          386,581         386,581

George Henderson (a shareholder and officer
of the Company), unsecured, interest at 9%,
dated January 30, 1995, delinquent.                     -              5,000

J. D. Hutton, unsecured, interest at 10%, dated
March 10, 1996, due on October 10, 1999,
delinquent                                              -             22,500

John Runft, (a shareholder and officer of the
Company), unsecured, interest at 10%, dated
December 15, 1997, due on December 15, 1999,
delinquent                                              -             16,500

Max Burdick, unsecured, interest at 18%, dated
November 6, 1996, due February 15, 1997,
delinquent.                                           40,000          40,000

Shining Star Investment, Inc., a Nevada corporation,
(a shareholder of the Company), unsecured, interest
at 14%, dated July 14, 1995, due December 31, 1995,
delinquent.                                            5,239           5,239

David J. Black, (a shareholder of the Company),
unsecured, interest at 10%, dated August 5, 1997,
due on demand.                                        20,000          20,000

Jay Downs, (a shareholder of the Company),
unsecured, interest at 12%, dated November 26,
1997, due on July 18, 1998, delinquent.                 -             19,200

Greg Cloward, (a shareholder of the Company),
unsecured, interest at 15%, dated January 6, 1997,
due on demand.                                       251,000         250,000
                                                 -----------   -------------
Subtotal (carried forward)                       $   750,320   $     965,020
                                                 -----------   -------------

<PAGE>
<PAGE> 41
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 5   NOTES PAYABLE (Continued)
Creditor and Conditions                             2000            1999
---------------------------------                -----------   -------------
Subtotal (Brought forward)                       $   750,320   $     965,020

Dennis Nielsen, (a shareholder of the Company),
interest at 10%, unsecured, dated May 20,
1997, delinquent.                                       -             31,750

Dennis Nielsen, (a shareholder of the Company),
interest at 12%, unsecured, dated December 12,
1997, due December 12, 1998, delinquent.                -              6,500


Andrew Dicharia, conditionally secured by
100,000 shares Diatect International Corp.
common stock, interest at 15%, dated June 8,
1998, due June 8, 1999, delinquent.                     -             50,000

Jerry Isdore, conditionally secured by 50,000
shares Diatect International Corp. common
stock. Interest at 15%, dated May 22, 1998,
due May 22, 1999, delinquent.                           -             25,000

George H. Henderson, (a shareholder and
officer of the Company), unsecured, interest
at 12%, dated August 2, 1998, due on demand.            -             35,000

George H. Henderson, (a shareholder and
officer of the Company), unsecured, interest
at 12%, dated October 1, 1998, due on demand.           -             65,000

Hopper Asset Management Company,
unsecured, interest at 15%, dated
August 20, 1998, due on December 20, 1998,
delinquent.                                             -            100,000

Hopper Asset Management Company,
conditionally secured by 50,000 shares
Diatect International Corporation common
stock, interest at 15%, dated May 22, 1998,
due May 5, 1999, delinquent.                          25,000          25,000

Robert B. Crouch (a shareholder of the
Company), unsecured, interest at 10%, dated
November 18, 1999, due on November 18, 1999.            -              5,500

Robert B. Crouch, (a shareholder of the
Company), unsecured, interest at 15%, dated
July 21, 1999, due on December 31, 1999.                -             36,000

Robert B. Crouch, (a shareholder of the
Company), unsecured, interest at 15%, dated
September 16, 1999, due on May 16, 2000.                -              3,500
                                                 -----------   -------------
Subtotal (carried forward)                       $   775,320   $   1,348,270
                                                 -----------   -------------

<PAGE>
<PAGE> 42
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 5   NOTES PAYABLE (Continued)
Creditor and Conditions                              2000            1999
---------------------------------                -----------   -------------
Subtotal (Brought forward)                       $   775,320   $   1,348,270

John L. Runft, (an officer and shareholder of
The Company), unsecured, interest at 10%,
Dated January 15, 1999, due on January 15, 2000.        -             50,000

David N. Sim, (a shareholder of the
Company), unsecured, interest at 15%,
dated October 1, 1999, due on December
31,1999, delinquent.                                   6,500           6,500

Jack S. Stites, (a shareholder of the
Company), unsecured, interest at 15%,
dated September 1, 1999, due on
December 31, 1999, delinquent.                         8,800           8,800

Hopper Asset Management Company,
unsecured, interest at 15%, dated
June 19, 1999, due on December 31,
1999, delinquent.                                       -             50,000

Hopper Asset Management Company,
unsecured, interest at 15%, dated
January 11, 1999, due on December 31,
1999, delinquent.                                     50,000          50,000

David N. Sim, (a shareholder of the
Company), unsecured, interest at 10%,
dated January 4, 1999, due on May 4, 2000,
delinquent.                                            2,500            -

Johnny and Jack Stites (a shareholder of the
Company) unsecured, interest at 10%, dated
February 25, 2000, due on May 1, 2000,
delinquent.                                           20,000            -

Toxikon Corporation, unsecured, interest at
15%, dated June 19, 1999, due on December 31, 1999.     -             21,260

George H. Henderson, (a shareholder and
officer of the Company), unsecured, interest
at 10%, dated April 14, 2000, due on
December 31, 2000.                                    72,957            -

Futura Title Corporation dba Alliance Title
& Escrow,Former shareholders of White
Mountain Mining and Manufacturing, Inc.,
monthly payments of $18,000,18% interest
with a one-time compounding of interest

                                                  ----------      -----------
Subtotal (carried forward)                        $  986,077      $ 1,534,830
                                                  ----------      -----------

<PAGE>
<PAGE> 43
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 5   NOTES PAYABLE  (Continued)

                                                 -----------    ------------
Creditor and Conditions                              2000            1999
---------------------------------                -----------    ------------
Subtotal (Brought forward)                        $  986,077    $  1,534,830

effective June 21, 1995, secured by mining
property, (later foreclosed)due September
1994.  Delinquent. (See Note 8).                     209,444         209,444

George Brink (shareholder of the
Company), unsecured, interest at 10%
$10,000 due on August 1, 1999, balance
due on August 1, 2000, delinquent                       -             37,500

Robert L. Drake and Sandra K. Drake,
(shareholders of the Company), secured by
sale of inventory, interest at 12%, dated
July 12, 2000, due on July 12, 2001.                 110,000            -

K&R "Stuff" LC, unsecured, interest at
12%, dated August 22, 2000, due on August
22, 2001.                                             50,000            -

Joseph E. Pigg, Jr., unsecured, interest at
10%, dated September 8, 2000, due on
September 8, 2001.                                    10,000            -

Joseph E. Pigg, Jr., unsecured, interest at
10%, dated September 25, 2000, due on
September 25, 2001.                                   10,000            -

George H. Henderson, (shareholder and
officer of the Company), unsecured,
interest at 12%, dated October 1, 2000,
due on October 1, 2001.                               42,590            -

Robert B. Crouch, (shareholder of the
Company), unsecured, interest at 12%,
dated November 7, 2000, due on demand                  1,000            -

Robert B. Crouch, (shareholder of the
Company), unsecured, interest at 12%,
dated November 16, 2000, due on demand.                4,000            -

Jack Stites, (shareholder of the
Company), unsecured, interest at 12%,
dated December 22, 2000, due on demand.                3,000            -

                                                  ----------      ----------
Totals                                            $1,376,111      $1,804,803
                                                  ==========      ==========


<PAGE>
<PAGE> 44
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 6 - LINE OF CREDIT
At December 31, 2000, the Company had $97,000 borrowed on an outstanding line
of credit.  The line of credit was extended to the Company by a director
utilizing his personal line of credit.  This credit facility is unsecured, has
no stated maturity, and bears interest at 12%.

NOTE 7   LITIGATION

John Wilding Lawsuit
--------------------
On July 19, 1996, John Wilding sued the Company for collection on a delinquent
promissory note, which was secured by stock of White Mountain Mining and
Manufacturing, Inc.  As of December 31, 1997, the balance owed was $142,323
plus accrued interest in the amount of $63,885.  Subsequent negotiations
resulted in foreclosure on June 1, 1998 on the White Mountain collateral in
full payment of the note to Mr. Wilding.  The foreclosed stock represents a
majority of the total outstanding shares of White Mountain.  Wilding
subsequently sold all shares of the White Mountain stock to an affiliate of
Environmental Products & Technology, Inc. (EP&T), a Utah corporation which
signed an agreement calling for EP&T to enter into a joint venture with
Diatect for purposes of mining the White Mountain mineral claims of
diatomaceous earth.

EP&T was contractually obligated to convey the White Mountain stock back to
Diatect subject to a security interest for the purchase price of said stock
paid by EP&T (or its affiliates) to Wilding.  In 1998, it became apparent that
EP&T would not honor its agreement with Diatect.  The possibility exists that
Diatect will bring a breach of contract action against Environmental Products
and Technology, Inc. and its affiliates for its failure to transfer the shares
of White Mountain stock to Diatect pursuant to agreement.

Sloan, Listrom, Eisenbarth, Sloan & Glassman,LLC
------------------------------------------------
An action, commenced on November 17, 1998 by the Company's former legal
counsel to collect legal fees and costs, was not contested.  In November 1999,
the plaintiff was awarded a default judgment against the Company in the amount
of $42,166 plus post-judgment interest.  This judgment remains outstanding and
unpaid and is included as a liability in commitments and contingencies at
December 31, 1999 and 2000.

Ogilvy, Adams & Rinehart
------------------------
Ogilvy, Adams & Rinehart (Ogilvy) obtained a judgment against Diatect on
November 1, 1995 in the sum of $24,346.  The entire judgment amount plus
attorney's fees and interest thereon is approximately $36,000 and has been
included in commitments and contingencies at  December 31, 2000 and 1999.
Since mid-1996, there has been no communication with the plaintiff or its
attorneys, nor has the plaintiff made any attempt to satisfy or settle this
case.


<PAGE>
<PAGE> 45
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

L. Craig Hunt
-------------
L. Craig Hunt brought action on January 14, 1998 against Diatect for damages
and breach of contract on a promissory note for the sum of $42,750 plus
interest, penalties and attorney's fees.  Judgment against Diatect
International Corp. was rendered on February 1, 1999 in the sum of $61,543.
This judgment is presently outstanding and unpaid.  At September 30, 2000 and
December 31, 1999, $61,543 is included in commitments and contingencies in
these financial statements.  To date, plaintiffs have made no attempt to
collect on this judgment.

Mid-America Venture Capital Fund, Inc.
--------------------------------------
Mid-America Venture Capital Funds, Inc. brought action on July 23, 1997
against the Company for failure to pay loans on two promissory notes totaling
$35,000.  Judgment was awarded on August 4, 1997 for a total of $39,336
including principal, interest, and attorney's fees and costs.  Since that
time, Diatect has paid a total of $4,000 and is currently in arrears on the
payment schedule.  The balance owing is included in commitments and
contingencies in these financial statements.

Mike Glazer
-----------
A consultant allegedly rendered services to a Company subsidiary during 1996
in the amount of $17,230 and has brought action for this amount.  The Company
has chosen not to contest this case.  Settlement efforts are expected to be
undertaken after entry of judgment and demonstration that the assets of the
subsidiary, Diatect International, Inc. are fully encumbered.  The amount of
$17,230 is included in commitments and contingencies in these financial
statements.

Danny Wirken
------------
The Company is considering litigation against Danny Wirkin, (one of the
brokers involved in the selling of Diatect stock, which gave rise to the
above-reported litigation with Gruntal & Co.) with the objective of obtaining
a judgment for damages and foreclosing on the Company's obligation under its
note to Mr. Wirkin.  This note is reflected at September 30, 2000 and December
31, 1999 in the principal amount of $386,581 with accrued interest included in
interest payable for the amounts of $208,839 and $185,644, respectively.  (See
Note 7).

International School of Kenya
-----------------------------
The International School of Kenya was awarded a judgment against the Company
in the amount of $20,143 on October 13, 1995.  During 1997, this was paid down
to $19,200.  The balance was fully paid by director Jay Downs on July 18,
1997.  In order to reimburse Mr. Downs, the Company executed an
uncollateralized promissory note in 1997 in the sum of $19,200.  The note
bears interest at 12%. (Note 7).

Toxikon, Inc.
-------------
Toxikon, Inc. filed suit to collect on an unpaid trade account.  In March
2000, the debt was paid in full and the case was dismissed.  The amount of
$21,260 is included in the notes payable and $355 is included in accrued
interest in these financial statements at December 31, 1999.

<PAGE>
<PAGE> 46
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

Terrance Dunne
--------------
Subsequent to the date of these financial statements, Terrance Dunne, the
Company's former auditor initiated action against the Company for payment of
unpaid fees.  In response to the allegations, the Company has countersued for
reimbursement of fees paid for work not performed.  The outcome of this action
is uncertain and, accordingly, no amounts have been accrued in these financial
statements.

George Brinks
-------------
During December 2000, George Brinks was awarded a default judgment in the
total amount of $44,648, including interest and legal fees, for the balance
due on a promissory note.  At this time, active collection on the judgment has
not been pursued.  The outstanding and unpaid amount is included as a
liability on the Company's balance sheet in commitments and contingencies at
December 31, 2000.

Creditors' Judgments
--------------------
During 1994 and 1995, the Company was sued by a number of creditors, which
actions the Company allowed to go to judgment.  These judgments arose as a
direct result of the inability of the Company to fund the operations and
payments to all the Company's creditors.  The collection judgments, which are
substantially unpaid at December 31, 2000, total approximately $52,000, and
are included in the Company's accounts payable.

Environmental Protection Agency
-------------------------------
During October 2000, the Company joined other plaintiffs represented by a
public interest law firm in filing action against the Environmental Protection
Agency (EPA).  The action seeks relief from EPA's practice of using certain
guidelines as a basis for hazard classification and risk assessments pursuant
to the Federal Insecticide, Fungicide and Rodenticide Act.  Plaintiffs claim
that the EPA must use final guidelines promulgated for such reviews.  The
outcome of the case is uncertain as of the date of these financial statements.

Former Officers and Consultant
------------------------------
In September 2000, the Company received notice from three former officers that
they intend to bring action for nonpayment of back wages.  The amount in
dispute totals $111,095 and the Company plans to contest the claims.  These
amounts are not recorded in the accompanying financial statements.

The Company is not aware of any other threatened litigation against it or its
subsidiaries. However, there remains a possibility of litigation against
Diatect and/or its subsidiaries by creditors.

NOTE 8 - COMMON STOCK

In February 2000, the Company increased its authorized capital to 50,000,000
shares.  During the nine months ended September 30, 2000, the Company issued
500,000 shares of its common stock valued at $50,000 for the guarantee of a
line of credit; 122,500 shares of its common stock valued at $30,625 for
forbearance on notes payable; 200,000 shares of its common stock valued at
$20,000 for purchase of all outstanding stock of Magic International, Inc.;
400,000 shares of its common stock valued at $40,000 for partial purchase of


<PAGE>
<PAGE> 47
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 8   COMMON STOCK continued

National Diatect, Inc.; and 110,000 shares of its common stock valued at
$11,000 for rights to EPA labels at $0.10 per share.  The Company also issued
1,244,231 shares of its common stock valued at $311,058 for services, and
2,585,302 shares of its common stock valued at $646,326 for debt at $0.25 per
share.  The stock was issued at its market value on the transaction date. Two
officers also exercised options to purchase 1,517,667 shares of the Company's
common stock valued at $91,049 at $0.06 per share for partial payment of
accrued consulting and legal fees.

During the year ended December 31, 1999, the Company had no stock issuances.

NOTE 9   COMMON STOCK SUBSCRIBED

In 1996, the Company agreed to convert outstanding debt to the following
individuals into common stock.  This common stock was not issued until August
2000 and has been treated as common stock subscribed but not issued.  The
following individuals were owed common stock to satisfy the amount of these
debts:

          Ross S. Wolfley                         $    22,500
          G. Reeve                                    163,738
                                                  -----------
          Total                                   $   186,238
                                                  ===========
During August 2000, the Company issued 200,000 shares of its common stock to
G. Reeve and 90,000 shares of its common stock to Ross S. Wolfley.

NOTE 10   STOCK OPTIONS

The Company has a 1995 Stock Option Plan, which was initiated in order to aid
the Company in maintaining and developing a management team, attracting
qualified officers and employees.  A total of 3,000,000 shares of stock may be
subject to, or issued pursuant to the terms of the plan.

Following is a summary of the status of these performance-based options during
the nine months ended December 31, 2000:

                                                            Weighted Average
                                   Number of Shares          Price per Share
                                   ----------------          ---------------
  Outstanding at December 31,1998        494,634                 $0.06

  Granted                                400,002                 $0.06

  Expired                                     -                      -
                                       ---------                 -----
  Outstanding at December 31, 1999       894,636                 $0.06

  Granted                              1,122,335                 $0.06

  Exercised                           (1,517,667)                $0.06

  Expired or forfeited                      -                      -
                                       ---------                 -----
  Outstanding at June 30, 1999           499,304                 $0.06
                                       =========                 =====

<PAGE>
<PAGE> 48
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 10   STOCK OPTIONS continued

                                   Weighted Average
  Exercise Date                    Number of Shares          Price per Share
  -------------                    ----------------          ---------------

  On or before October 25, 2000            13,738                $0.06
  On or before April 25, 2003             152,233                $0.06
  April 25, 2001 through April 25, 2003   166,666                $0.06
  April 25, 2002 through April 25, 2003   166,667                $0.06

SFAS No. 123 requires the Company to provide pro forma information regarding
net loss and loss per share as if compensation cost for the Company's stock
option plan had been determined in accordance with the fair value based method
prescribed by SFAS No. 123.  The Company estimates the fair value of each
stock option at the grant date by using the Black Scholes option-pricing model
with the following weighted-average assumptions used: dividend yield of zero
percent; expected volatility of thirty percent; risk free interest rate of 6
percent.  The weighted average fair value at date of grant for options granted
to employees in the period ended September 30, 2000 was $0.05 per option.
Compensation cost charged to operations was $51,370 during the period ended
December 31, 2000.

NOTE 11   CONCENTRATION OF RISK

Credit
------
The Company is a wholesale supplier of products and grants credit to its
customers, a substantial portion of which are retailers of agricultural
products throughout the country.

Raw Materials
-------------
The Company uses pyrethrum as a main ingredient in its production process.
Pyrethrum is a plant by-product primarily imported from Africa.  Africa in the
past has experienced severe drought, thus causing the pyrethurm supply to
greatly diminish.  Due to these circumstances, the Company now has one
supplier whose pyrethrum is primarily obtained from non-African sources.

NOTE 12   COMMITMENTS AND CONTINGENCIES

The Company is obligated to pay certain settlements under judgments awarded to
outside parties.  (Note 8.)  These amounts are included in commitments and
contingencies as of December 31, 2000 and 1999, are as follows:

                                           2000               1999
                                           ----               ----
     L. Craig Hunt                      $ 61,543          $ 61,543
     Mid-America Venture
     Capital Fund, Inc.                37,336            37,336
     Sloan, Listrom, Eisenbarth,
        Sloan & Glassman, LLC             40,166            40,166
     Ogilvy, Adams & Rinehart             36,000            36,000
     Mike Glazer                          17,230            17,230
     George Brink                         44,648                 0
                                        ---------         --------
                                        $236,923          $192,275
                                        ========          ========

<PAGE>
<PAGE> 49
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

Lease Commitments
-----------------
The Company leased office facilities in Boise, Idaho from an individual
through March 2000.  The lease is a month-to-month handshake agreement, which
called for monthly payments of $550.  In April 2000, the Company entered into
a lease agreement for new office facilities in Boise, Idaho.  The agreement is
a three-year lease and calls for monthly payments of $820 during the first
year, $838 during the second year and $857 during the third year.  The Company
occupied these facilities on May 1, 2000.

The Company also leases operating facilities in Smith Center, KS from an
individual.  The lease is a month-to-month handshake agreement, which calls
for monthly payments of $273.

National Diatect, Inc.
----------------------
In July 2000, the Company signed a letter of intent to purchase National
Diatect, Inc. The agreement is subject to ratification by the board of
directors and has not been finalized as of the date of these financial
statements.  See Note 1.

Other Contingencies
-------------------
The production of pesticides is subject to complex environmental regulations.
As of the date of these financial statements and the date of this report, the
Company is unaware of any pending environmentally related litigation or of any
specific past or prospective matters involving environmental concerns, which
could impair the marketing of its products.

NOTE 13   RELATED PARTY TRANSACTIONS

Diatect International Corp. has notes payable to sixteen shareholders
(including two officers) totaling $981,027 and $1,235,799 as of September 30,
2000 and December 31, 1999, respectively.

The Company's secretary performs services as the Company's main legal counsel.
Legal services performed by this officer totaled $70,807 and $60,060 for the
periods ended December 31, 2000 and 1999,respectively, of which $28,167 and
$146,923 are included in accounts payable-related party at December 31, 2000
and 1999, respectively.

The Company's president performs consulting services for the Company.
Consulting services by this officer totaled $20,560 and $73,772 for the
periods ending December 31, 2000 and 1999,respectively.  Included in accounts
payable-related party is $2,628 and $85,942 at December 31, 2000 and 1999,
respectively.

NOTE 14   GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of
$1,390,697 for the nine months ended December 31,2000, and has an accumulated
deficit of $12,525,056 at December 31, 2000.  The Company has negative working
capital, unsatisfied collection judgments, and is delinquent in repaying its
debt obligations.

These factors indicate that the Company may be unable to continue in
existence.  The financial statements do not include any adjustments related to
the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company

<PAGE>
<PAGE> 50
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 14   GOING CONCERN (Continued)

cannot continue existence.  Management's plans for ensuring the Company's
continued viability are as follows:

Management's plans are the sale of new stock issuances, which are expected to
raise the capital needed to satisfy collection judgments and repay debt
obligations.  Through the acquisition of Magic International, Inc., management
has taken measures to increase product markets.

NOTE 15 - BUSINESS SEGMENT AND GEOGRAPHICAL AREA DATA

The Company's operations are classified into two principal reporting segments
based upon geographical location.  Separate accounting for each segment is
required due to varying strategies used by the Company in each location.

The table below presents information about the Company's reportable segments:


                                   Year December 31, 2000
                  ------------------------------------------------------
                    Kansas          Idaho        Eliminations     Consolidated
                  ---------     ----------     ------------      -------------
External revenue  $158,770      $  120,772     $   (118,178)    $      161,364
                  =========     ==========     ============     ==============
Operating income
    (loss)        $  (6,563)    $(1,185,397)   $    118,178     $  (1,073,782)
                  =========     ==========     ============
Corporate expenses                                                   (316,685)
  Total operating                                              --------------
  income (loss)                                                   $(1,390,467)
                                                                ==============
Depreciation and
Amortization        $     903     $  315,987     $       -      $      316,890
                    =========     ==========     ============   ==============
Interest expense
and finance
charges             $   1,209     $  308,688     $       -      $      309,897
                    =========     ==========     ============   ==============
Identifiable
assets              $ 307,295     $2,377,645     $   (175,810)  $    2,509,130
                    =========     ==========     ============
General corporate
assets                                                                  -
                                                                --------------
   Total assets                                                 $  2,509,130
                                                                ==============


<PAGE>
<PAGE> 51
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

NOTE 15 - BUSINESS SEGMENT AND GEOGRAPHICAL AREA DATA (Continued)

                                   Year December 31, 1999
                  ------------------------------------------------------
                    Kansas       Idaho     Eliminations     Consolidated
                    ---------   --------   ------------    -------------
External revenue    $ 207,912  $    -      $       -       $     207,912
                    =========   ========   ============    =============
Operating income
    (loss)          $ (18,667) $(555,641)  $       -       $    (574,308)
                    =========  =========   ============
Corporate expenses                                                  -
  Total operating                                           ------------
  income (loss)                                            $    (574,308)
                                                           =============
Depreciation and
Amortization        $     137  $ 314,526   $        -      $     314,843
                    =========  =========   =============   =============
Interest expense
and finance
charges             $    -     $  210,962   $       -       $    210,962
                    =========  ==========   ============   =============
Identifiable
assets              $ 347,953  $2,402,929   $   (147,786)   $  2,603,069
                    =========  ==========   ============
General corporate
assets                                                              -
                                                           -------------
   Total assets                                            $   2,603,096
                                                           =============
Kansas operations, the first reportable segment, derives revenues from its
mixing and distribution of pesticide products.  Idaho operations, the second
reportable segment, presently generates no revenues and is dependent on
revenues generated from the Kansas segment.

Note 16 - SUBSEQUENT EVENTS
---------------------------
International Technologies and Minerals, Inc.
---------------------------------------------
In December 2000, the Company signed and ratified an acquisition agreement
with International Technologies and Minerals, Inc. (ITM).  In exchange for
6,000,000 shares of its common stock, Diatect will receive $25,000, a
corporate bond having a face value of $5,000,000 and all issued and
outstanding stock of ITM.  The bond is to be capable of immediately
collateralizing a commercial business loan in the amount of $2,500,000.
Further terms of the agreement call for the replacement of four directors to
the Diatect board of directors by ITM and the acquisition of certain assets by
ITM including a long-term lease agreement on gypsum mines properties in Utah,
and a wallpaper plant to be constructed in Utah to utilize the gypsum produced
by the mines.  Terms of the agreement have not been completed as of December
31, 2000.  Subsequent to the date of these financial statements, the Company
is actively seeking finalization of the acquisition and no closing date has
been set.  See Note 1.

<PAGE>
<PAGE> 52
DIATECT INTERNATIONAL CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000

Note 17 - CORRECTION OF AN ERROR
--------------------------------
The accompanying financial statements for 1999 have been restated to correct
an error, conversion of an ongoing royalty agreement to a promissory note for
final prepayment of future royalties, made in 1998.  This resulted in
understatement of prepaid royalties and notes payable in the amount of
$37,500.  The restatement involved balance sheet accounts only and had no
effect on net income for 1999.