SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
    1934 for the fiscal year ended December 31, 2003

[ ] Transition Report Under Section 13 or 15(d) of Securities Exchange Act
    of 1934

                For the transition period from ______ to ______

                         Commission File Number: 0-22373

                   Diversified Financial Resources Corporation
      (Exact Name of Small Business Registrant as Specified in its Charter)



          DELAWARE                                   58-2027283
          --------                                   ----------
(State or other jurisdiction of         (IRS Employer Identification Number)
       Incorporation)

                     1771 Wolviston Way, San Diego, CA 92154
                    (Address of Principal Executive Offices)

                  Registrant's Telephone Number: (619) 575-7041

           Securities registered pursuant to Section 12(b) of the Act: None

  Securities registered pursuant to Section 12(g) of the Act:
  Common Stock, $.001 par value

Indicate by check mark whether the Registrant (1) has filed all documents and
reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X]
NO [ ]

Indicate by check mark if no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State Registrant's revenues for its most recent fiscal year: $64,967

The aggregate market value of the common equity held by non-affiliates computed
by reference to the average bid and asked prices of such stock as of April 12,
2004, was $ 312,080 ($0.00535 per share for 58,332,671 shares).

The number of shares outstanding of the Registrant's sole class of Common Stock
as of April 12, 2004, was 92,708,171.



<PAGE>



                                TABLE OF CONTENTS


                                     Part I

Item 1.  Description of Business.............................................3

Item 2.  Description of Property.............................................9

Item 3.  Legal Proceedings...................................................11

Item 4.  Submission of Matters to Vote of Security Holders...................12

                                     Part II

Item 5.  Market for Common Equity and Related Stockholder Matters............12

Item 6.  Management's Discussion and Analysis or Plan of Operation...........15

Item 7.  Financial Statements................................................18

Item 8.  Changes in and Disagreements with
 Accountants on Accounting and Financial Disclosure..........................19

Item 8A.  Controls and Procedures............................................19

                                    Part III

Item 9.  Directors and Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act............................19

Item 10.  Executive Compensation.............................................21

Item 11.  Security Ownership of Certain Beneficial Owners and Management.....21

Item 12.  Certain Relationships and Related Transactions.....................22

Item 13.  Exhibits, List and Reports on Form 8-K.............................24

Item 14.  Principal Accountant Fees and Service .............................25

               Signatures....................................................26


                                     Page 2

<PAGE>



                                     PART I

ITEM 1.        DESCRIPTION OF BUSINESS

Business Development

As used herein the terms the "Company," "DFRC," the "Registrant," or the
"Issuer" refers to Diversified Financial Resources Corporation, its subsidiaries
and predecessors, unless indicated otherwise. DFRC was incorporated in the State
of Delaware on January 6, 1993, as Vaxcel, Inc. On December 19, 2000, DFRC
changed its name to eLocity Networks Corporation. On August 6, 2002, DFRC
changed its name to Diversified Financial Resources Corporation.

In 1999 DFRC sold all the rights to its technologies for cash and discontinued
all of its operations. DFRC continues to hold rights to develop and
commercialize a certain cancer antigen under a license agreement from University
College London, but no longer has any employees or other ability to develop its
technologies further without assistance.

In April of 2002, DFRC implemented a plan of reorganization, which resulted in a
change in management and the direction of DFRC. Pursuant to the plan of
reorganization, DFRC acquired new operations in the real estate investment
sector, and is currently in the process of entering the land and natural
resources sector.

As part of the plan of reorganization, DFRC transferred ownership and control of
a subsidiary, Value Plus Marketing, to its other subsidiary, eLocity, Inc.. DFRC
also announced a "spin-off" to its shareholders of eLocity, Inc. stock through a
stock dividend. The spin-off resulted in DFRC's shareholders acquiring direct
ownership of eLocity, Inc.'s common stock.

Shareholders of record, as of April 30, 2002, will receive one-share of eLocity,
Inc.'s common stock for each share of DFRC's common stock owned on that date.
eLocity, Inc. is a fully reporting public company, which, prior to the
completion of the spin-off must (1) file with the Securities and Exchange
Commission documents to register its common stock and then (2) apply for trading
status for its common stock on a public market. The responsibility for
completing these necessary steps of the described registered spin-off rests with
eLocity, Inc. Through the date of this filing, only Thomas Clay and Mark
Schellenberger, former officers of DFRC had received their shares in the form of
restricted common stock equal to approximately 65% of the common stock of
eLocity, Inc., the balance of the spin-off has not been distributed as of the
date of this filing. Those shareholders of record as of April 30, 2002, are
still entitled to their pro rata portion of the eLocity, Inc. registered shares.
eLocity, Inc. is still holding those shares in escrow for the shareholders of
record as of April 30, 2002. The delivery date for those shares has not been
disclosed to DFRC at this time.

Business of Issuer

DFRC is currently a holding company with real estate investment operations.
DFRC's plan is to create and manage a diverse comprehensive portfolio of
companies operating in several industries. Currently, DFRC is focusing its
resources on two industry sectors including Land and Natural Resources and Real
Estate Investments. DFRC, subsequent to December 31, 2003, entered into an
agreement to acquire Impact Beverages, Inc., as more fully described in
Subsequent Events below. DFRC is currently in the process of fully developing
its business plan.


                                     Page 3

<PAGE>



Real Estate Investments

DFRC's real estate operations primarily involve the acquisition, management,
lease and sale of real estate through is subsidiaries, Wichita Development
Corporation (Wichita) and Diversified Holdings XIX, Inc. (DHX). During the last
quarter of 2002, DFRC acquired DHX which owns 4 residential properties located
in Utah. In the second quarter of 2003, DFRC acquired Wichita which owned three
buildings. DFRC will continue to locate and acquire undervalued real estate with
little or no cash down. Once acquired, DFRC will most likely lease such
properties. Though DFRC seeks to generate and maximize rental income through the
management and lease of the property, DFRC also intends to acquire real estate
which will substantially appreciate in value and for which DFRC can realize a
substantial gain upon disposition. Nonetheless, there is a risk that the
properties acquired may decline in value rather than appreciate.

DFRC acquired DHX in a related party transaction on November 8, 2002, pursuant
to a Stock Exchange Agreement with John Chapman whereby DFRC acquired a 100%
interest in DHX in exchange for 255,500 restricted shares of DFRC's common
stock. DHX is a development stage company incorporated in the State of Nevada
whose assets consist of four income producing residential properties. For more
information on this transaction, see "Item 2 Description of Properties" and
"Item 12 Certain Relationships and Related Transactions" below.

On June 30, 2003, DFRC entered into a Stock Purchase Agreement with Nexia
Holdings, Inc., Wichita Development Corporation, and Diversified Holdings I,
Inc. to acquire not less than an 83% ownership interest in Wichita. Wichita
either directly or through its ownership of a subsidiary owned three parcels of
real estate, one located in Wichita, Kansas, a second located in Ogden, Utah and
a third located in Salt Lake City, Utah. In October of 2003, the Company's
building located in Ogden, Utah, was sold at a public auction through a
trustee's sale, the Company maintains title to four of the condominium units
located in that building that were not subject to the trustee's sale. The
agreement provides that Nexia transfer to DFRC 100% of all shares that Nexia
held in Wichita (86,795,794) in exchange for a promissory note in the sum of
$150,000 and 1,148,251 restricted shares of the common stock of DFRC with a
guaranteed resale value of $1.00 per share, whereby, within 36 months of the
sale, DFRC is bound to issue sufficient additional shares such that the total
value at liquidation of the shares will equal $1,000,000. The convertible note
could have a substantive dilutive effect based upon DFRC's current trading price
of less than $0.01.

Land and Natural Resources

DFRC intended to enter the coal reclamation business. On March 24, 2003, DFRC
entered into a Stock Purchase Agreement with John Chapman, Norman Mullins, and
Dennis Thompson, shareholders of MT & C Diversified Land and Natural Resources
Corporation (MT&C) wherein DFRC agreed to purchase Six Million (6,000,000)
shares or 100% of the total issued and outstanding shares of MT & C in exchange
for Six Million (6,000,000) shares of DFRC's newly issued common shares.

MT & C is a development stage company incorporated in the State of Nevada, whose
sole asset is a Coal Slurry Impoundment, Plant Site and Mine Waste Lease
Agreement. DFRC's wholly owned subsidiary MT&C Diversified Land & Natural
Resources Corp. was not able to close on the purchase of these assets and carry
the requirements of the said lease agreement with Headwaters Inc. This failure
prevented MT&C from starting the operation of a coal reclamation business.

DFRC is currently seeking out other natural resource companies or opportunities.

                                     Page 4

<PAGE>



For more information of this transaction, see "Item 2.  Description of
Properties" and "Item 12. Certain Relationships and Related Transactions" below.

Subsequent Event

In February of 2004 DFRC signed an agreement to acquire a controlling interest
in Impact Beverages Inc. ("Impact"). The Agreement provides that DFRC will
acquire 722,500 shares of Impact's common stock equal to 72.25% of the issued
and outstanding shares in exchange for DFRC issuing 20,000,000 shares of its
common stock. The closing is expected to take place on or before May 1, 2004.
 Impact uses a proprietary patented manufacturing process to produce "functional
bottled waters" under the Impact label. These beverages are intended to taste
like water but have added beneficial nutrients and natural supplements. This
segment of the world wide beverage industry known as "functional beverages" have
grown over the last three years, outpacing other beverage categories.

Competition

DFRC will be involved in intense competition with other business entities, many
of which will have a competitive edge over DFRC by virtue of their stronger
financial resources and prior experience in business. There is no assurance that
DFRC will be successful with its current business opportunities.

Governmental Regulation

DFRC's anticipates being subject to federal, state and local regulations which
may have a material impact upon its operations.

Employees

As of March 30, 2004, DFRC has three full time employees and four part-time
employee.

Risk Factors

You should carefully consider the following risks before making an investment in
our Company. In addition, you should keep in mind that the risks described below
are not the only risks that DFRC faces. The risks described below are all the
risks that DFRC currently believes are material to our business. However,
additional risks not presently know to us, or risks that we currently believe
are not material, may also impair our business operations. You should also refer
to the other information set forth in this Annual Report on Form 10-KSB,
including the discussions set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," as well as our
financial statements and the related notes.

DFRC's business, financial condition, or results of operations could be
adversely affected by any of the following risks. If we are adversely affected
by such risks, then the trading of our common stock could decline, and you could
lose all or part of your investment.

DFRC's auditor's report on our financial statements includes an explanatory
paragraph with respect to substantial doubt existing about its ability to
continue as a going concern

As of December 30, 2003, DFRC had incurred a loss from operations and had an
accumulated deficit. As a result, its financial statements include a note
stating that these conditions raise substantial doubt about

                                     Page 5

<PAGE>



its ability to continue as a going concern, but the financial statements do not
include any adjustments that might result from this uncertainty.

DFRC is subject to compliance with securities law, which expose it to potential
liabilities, including potential rescission rights.

DFRC has periodically offered and sold our common stock to investors pursuant to
certain exemptions from the registration requirements of the Securities Act of
1933, as well as those of various state securities laws. The basis for relying
on such exemptions is factual; that is, the applicability of such exemptions
depends upon DFRC's conduct and that of those persons contacting prospective
investors and making the offering. DFRC has not received a legal opinion to the
effect that any of our prior offerings were exempt from registration under any
federal or state law. Instead, it has relied upon the operative facts as the
basis for such exemptions, including information provided by investors
themselves.

If any prior offering did not qualify for such exemption, an investor would have
the right to rescind its purchase of the securities if it so desired. It is
possible that if an investor should seek rescission, such investor would
succeed. A similar situation prevails under state law in those states where the
securities may be offered without registration in reliance on the partial
preemption from the registration or qualification provisions of such state
statutes under the National Securities Markets Improvement Act of 1996. If
investors were successful in seeking rescission, we would face severe financial
demands that could adversely affect our business and operations. Additionally,
if we did not in fact qualify for the exemptions upon which we have relied, we
may become subject to significant fines and penalties imposed by the SEC and
state securities agencies.

Additional Capital is Necessary to Implement DFRC's Business Plan

DFRC does not believes that it has sufficient cash, cash equivalents and
operating income to maintain its business at its existing level in 2003. DFRC
will require significant new capital in order to execute its strategic plan and
believes that this capital will only be available through an offering of shares
of its common stock. DFRC's success in raising this capital will depend upon its
ability to access equity capital markets and we may not be able to do so or to
do so on acceptable terms. If it fails to obtain funds on acceptable terms, it
will not be able to execute its strategic plan and would have to delay or
abandon some or all of its plans for growth. If it is able to obtain funds, it
believes that the terms of such arrangement will result in an offering that is
highly dilutive to existing holders of shares of our common stock because of the
price at which it would have to issue those shares and the large number of
shares it would have to issue at those prices.

Management beneficially owns approximately 35% of our common stock and their
interests could conflict with other stockholders.

Our current directors and executive officers beneficially own approximately 35%
of our outstanding common stock. As a result, the directors and executive
officers collectively may be able to substantially influence all matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions. Such concentration of ownership may also
have the effect of delaying or preventing a change in control.



                                     Page 6

<PAGE>



There is no established, stable market for DFRC's common stock.

DFRC's common stock is quoted on the Over-the-Counter Electronic Bulletin Board
("OTCBB") and traded sporadically. A large number of shares of outstanding
common stock are restricted and are not freely-tradeable. An established public
trading market for our common stock may never develop or, if developed, it may
not be able to be sustained. The OTCBB is an unorganized, inter-dealer,
over-the- counter market that provides significantly less liquidity than other
markets. Purchasers of DFRC's common stock may therefore have difficulty selling
their shares should they desire to do so.

Volatility of Stock Price

The trading price of DFRC's Common Stock has in the past and may in the future
be subject to significant fluctuations. In addition, the stock market in general
has experienced extreme price and volume fluctuations that have affected the
market price for many companies in industries similar to or related to that of
DFRC and which have been unrelated to the operating performance of these
companies. These market fluctuations may adversely affect the market price of
DFRC's Common Stock.

Penny stock regulations may impair DFRC's shareholders' ability to sell their
stock.

DFRC's shares of common stock may be deemed "penny stock." Penny stocks
generally are equity securities with a price of less than $5.00 per share, other
than securities registered on certain national securities exchanges. Penny
stocks are subject to rules and regulations that impose additional sales
practice requirements on broker-dealers who sell the securities to persons other
than established customers and accredited investors, and these additional
requirements may restrict the ability of broker- dealers to sell a penny stock.

Any acquisitions that the Company undertakes could be difficult to integrate,
disrupt its business, dilute shareholder value and significantly harm its
operating results.

The Company expects to review opportunities to buy other business or
technologies that would complement our current business, expand the breadth of
our markets, or that may otherwise offer growth opportunities. If we make any
future acquisitions, we could issue stock that would dilute existing
stockholders' percentage ownership, incur substantial debt or assume contingent
liabilities. Potential acquisitions also involve numerous risks, including:


        problems assimilating the purchased operations, technologies or
        products; unanticipated costs associated with the acquisition; diversion
        of management's attention from our core business; adverse effects on
        existing business relationships with suppliers and customers; risks
        associated with entering markets in which we have no or limited prior
        experience; and potential loss of the purchased organization's or our
        own key employees.

The Company cannot assure that it would be successful in overcoming problems
encountered in connection with such acquisitions and its inability to do so
could significantly harm its business.

DFRC is subject to various risks connected to the ownership of real property.

DFRC's investments are subject to varying degrees of risk generally incident to
the ownership of real


                                     Page 7

<PAGE>



property. Real estate values and income from DFRC's current properties may be
adversely affected by changes in national or local economic conditions and
neighborhood characteristics, changes in interest rates and in the availability,
cost and terms of mortgage funds, occupancy rates in DFRC's properties, the
impact of present or future environmental legislation and compliance with
environmental laws, the ongoing need for capital improvements, changes in
governmental rules and fiscal policies, civil unrest, acts of God, including
earthquakes and other natural disasters which may result in uninsured losses,
acts of war, adverse changes in zoning laws, and other factors which are beyond
the control of DFRC.

In addition, real estate investments are relatively illiquid. The ability of
DFRC to vary its ownership of real estate property in response to changes in
economic and other conditions is limited. If DFRC must sell an investment, there
can be no assurance that DFRC will be able to dispose of it in the time period
it desires or that the sales price of any investment will recoup the amount of
DFRC's investment.

DFRC's real property is also subject to real property taxes. The real property
taxes on the real property may increase or decrease as property tax rates change
and as the property is assessed or reassessed by taxing authorities. If property
taxes increase, DFRC's operations could be adversely affected.

Reports to Security Holders

DFRC is not required to deliver an annual report to security holders and will
not voluntarily deliver a copy of the annual report to the security holders. If
DFRC should choose to create an annual report, it will contain audited financial
statements. DFRC intends to file all of its required information with the SEC.
DFRC plans to file its 10-KSB, 10-QSB and all other forms that are or may become
applicable with the SEC.


The public may read and copy any materials that are filed by DFRC with the SEC
at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549. The Public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The statements and forms
filed by DFRC with the SEC have been filed electronically and are available for
viewing or copy on the SEC maintained Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC. The internet address for this site can by found at
http://www.sec.gov.




                                     Page 8

<PAGE>



ITEM 2. DESCRIPTION OF PROPERTY

Location and Description

DFRC's subsidiary, DHX owns four residential properties located in Utah. Three
of the properties are encumbered two with long-term lines of credit and one with
a 30 year mortgage. The fourth property is owned by DHX without any
encumbrances. All properties are currently leased.

Wichita Development Corporation, DFRC's subsidiary, owned three buildings at the
time of its acquisition. One located in Wichita, Kansas, a second building in
Salt Lake City, Utah and the third in Ogden, Utah. The building in Ogden, Utah
has been sold at public auction and the Wichita, Kansas building is currently
the subject of a judicial foreclosure proceeding.

Investment Policies

DFRC's policy is to actively pursue the acquisition of real estate for
investment income and appreciation in property value. DFRC has plans to expand
into commercial and industrial properties in the near future. DFRC policy is to
focus on terms of financing and potential return on Capital. DFRC generally
looks for properties that can be purchased by assuming the existing financing or
by paying the balance of the purchase price with a nominal cash expenditure.

DFRC currently has no limitations on the percentage of assets which may be
invested in any one investment or the type of securities and investments in
which it may invest. However, the board of directors in its discretion may set
policies without a vote of DFRC securities holders regarding the percentage of
assets which may be invested in any one investment or type of investment. DFRC's
current policy is to evaluate each investment based upon its potential capital
to DFRC.

Under a future subsidiary, DFRC may enter the business of originating,
servicing, or warehousing mortgages or deeds or trust. However, DFRC's current
primary purpose is acquiring residential and commercial real estate.

There is a risk that DFRC may lose control of its properties through foreclosure
if enough funds are not derived from the rental income for both the financing
and operation of its properties. Currently, DFRC does not have sufficient rental
revenues to cover the debt service and operating costs of all properties. DFRC
currently has to use capital from other sources to fund this deficit. Although
management hopes to increase the rental income so that such income will cover
both operations and debt service, no such assurances can be made. There is also
a risk that the properties acquired may decline in value, no assurances can be
made that this will not happen.

Description of Real Estate and Operating Data

Office Location

DFRC has a lease for its approximate 1600 sq. ft. office located at 1771
Wolviston Way, San Diego, CA 92154 from Mr. Chapman, the president of DFRC. The
office space is subleased in a related party transaction in Mr. Chapman's
residence. The term of the lease is from May 2002 through May of 2005, monthly
rental is in the amount of $6,500. The lease has a three year extension
available for a monthly rental of $8,500. DFRC is liable for all utilities for
the premises.



                                     Page 9

<PAGE>



Residential Properties

Below is a listing of the four residential properties owned by DFRC's
consolidated subsidiary, Diversified Holdings XIX, Inc. ("DHX") as of December
31, 2003. Also included are any changes in ownership status of such properties
which have occurred between the end of 2002 and the filing of this Form 10- KSB.
All reference to current principal balances of encumbrances against the
properties are as of December 31, 2003, only. DHX competes with other
residential property available for lease in the Salt Lake City area.

Property located at 3961 South 565 East, Salt Lake City, Utah 84107, 1,100
square feet, three bedroom duplex, estimated current value $196,000, approximate
debt as of December 31, 2003 $109,263, estimated equity $86,737. Financing for
this property carries an interest rate of 10.75% on a 30-year fixed rate, with
final payment due in the year 2031. The property consists of two units, the
monthly rental for one unit is $500 and is leased on a month to month basis, the
second unit was damaged as a result of fire in the fourth quarter of 2003.
Repair to that unit are ongoing and it is expected to be ready for occupancy in
the next 30 to 60 days. The tenants are responsible for the payment of all
utilities for the property.

Property located at 5721 South 1080 East Murray, Utah 84107, value of $100,000,
there is no debt on this building as of December 31, 2003, estimated equity
$100,000. The property is currently leased to one tenant for a term through
March 31, 2004, with a monthly rental of $500. The tenant is responsible for the
payment of all utilities on the property.

Property located at 44 West 300 South, Salt Lake City, Utah 84101, 900 square
feet, 1 bedroom condominium, estimate current value of $125,000, debt as of
December 31, 2003 is $109,263, estimated equity $15,737. The property is
currently leased to a tenant on a month to month basis, with a monthly rental of
$900. The tenant is responsible for the payment of all utilities on the
property.

Property located at 315 East 920 South Layton, Utah 84041, 3,500 square feet, 5
bedroom, two story residence, estimate current value of $195,000, debt as of
December 31, 2003 is $151,687, estimated equity $43,313. The property is
currently leased to a tenant on a month to month basis, with a monthly rental of
$800. The tenant is responsible for the payment of all utilities on the
property.

DFRC believes that each of the four residential properties is adequately
insured.

Commercial Properties

Salt Lake Development, Inc. ("SLD")

SLD is a majority owned subsidiary of the Company, acquired on June 30, 2003 by
the Company. SLD purchased a two-story 18 unit apartment building, located at
2402 Wall Avenue in Ogden, Utah, on July 23, 1998. The property included an
additional 7,500 square feet of commercial space. The total purchase price was
$850,000. SLD put $5,000 down and financed the balance. The $670,000 balance was
being financed by the seller on a promissory note dated July 23, 1998, with
payments based upon a 20-year amortization with an interest rate of 7% for the
first two years, which escalated to 9% beginning with the September 1, 2000. The
holder of the note foreclosed on the property in October of 2003 taking 14 unit
of the building and the commercial space, SLD retains title to four units in the
buildings and is attempting to rent those units, two of the units are vacant as
of March 30, 2003.


                                     Page 10

<PAGE>



SLD, a majority owned subsidiary of the Company also owns a building located at
268 West 400 South in Salt Lake City, Utah. The building is two stories with
14,347 net rentable square feet of office space. SLD purchased the property on
March 6, 1998, by exercising its option to purchase the property through the
payment of $418,762. SLD financed the purchase price and borrowed an additional
sum of $222,489, which is secured by the property. At December 31, 2003, the
outstanding debt on the property was $ 563,872 with monthly payments of $5,934.
SLD is of the opinion that this property is adequately covered by insurance.
Hudson Consulting Group, Inc. currently occupies approximately 36% of the
building. As of March 30, 2004 there are no other tenants currently occupying
the building. There is approximately 9,200 square feet of office space currently
available for lease as office space. The office space in the building competes
for tenants with other available office space in the downtown area of Salt Lake
City. SLD is currently in default under the terms of its loan. SLD intends to
cure the default in April of 2004.

Wichita Development Corporation ("Wichita")

Wichita was acquired by the Company on June 30, 2003. Wichita holds title to The
Trade Center Building. The building was purchased for $540,554 on August 30,
2000. The Trade Center Building, which opened in 1921, is located in the
downtown business district of Wichita, Kansas, at 120 South Market Street. The
building is a 48,500 square foot, seven story office building. Wichita holds
title to the property subject to a mortgage of $ 268,452 at December 31, 2003.
The taxed assessed value of the building is $600,000. Mortgage payments are not
current on the building and an action has been filed by the lien holder seeking
judicial foreclosure on the property. Wichita currently plans to allow the
foreclosure of the building to proceed.

Land and Natural Resources

On March 24, 2003 DFRC acquired MT&C, which is a development stage company
incorporated in the State of Nevada, whose sole asset was a Coal Slurry
Impoundment, Plant Site and Mine Waste Lease Agreement.

The Lease Agreement became effective on August 1, 2002, and continued until
October of 2003 when it was terminated according its provisions by the agreement
of the parties. MT&C was unable to obtain the necessary funding to acquire the
necessary equipment to operate the plant and begin operations to recover the
available coal products on the site.

ITEM 3. LEGAL PROCEEDINGS

Securities and Exchange Commission v. David M. Wolfson, et al.
--------------------------------------------------------------
On October 16, 2003 a civil complaint was filed by the Securities and Exchange
Commission in which DFRC was named as a respondent.  The Company's president
John Chapman was also named as a respondent.  The suit was filed in the United
States District Court for the District of Utah and bears the docket number
2:03CV00914DAK and the style of the case is: "Securities and Exchange Commission
v. David M. Wolfson; NuWay Holdings, Inc., a Nevada corporation; Momentous
Group, LLC, a Utah limited liability company; Leeward Consulting Group, LLC, a
Utah limited liability company; Sukumo Limited, a company incorporated in the
British Virgin Islands (a.k.a. Sukumo Group, Ltd., Fujiwara Group, First
Chartered Capital Corporation, First Colonial Trust, First China Capital and
International Investment Holding); Michael Sydney Newman (A.K.A. Marcus Wiseman)
; Stem Genetics, Inc., a Utah corporation; Howard H. Robertson; Gino Carlucci;
G & G Capital, LLC an Arizona and Utah limited liability company; F10 Oil and
Gas Properties, Inc.; Jon H. Marple; Mary E. Blake; Jon R. Marple; Grateful
Internent Associates, LLC, a Colorado limited liability company; Diversified
Financial Resources Corporation, a Delaware


                                     Page 11

<PAGE>



corporation; John Chapman; Valesc Holdings, Inc., a New Jersey corporation;
Jeremy D. Kraus; Samuel Cohen; NCI Holdings, Inc., a Nevada corporation." The
complaint alleges that the Company failed to accurately and fully disclose the
nature of the Company's relationship to The Sukumo Group, Inc., including the
failure of Sukumo to complete the purchase of the shares and alleges that Sukumo
acted as a selling agent for the Company. The complaint alleges that the Company
and Mr. Chapman failed to accurately and fully disclose the nature of the
Company's relationship to The Sukumo Group, Inc. and timely disclosure of the
execution of the Offshore Purchase Agreement. The complaint further alleges that
Mr. Chapman took actions during 2003 to manipulate the price of the Company's
stock in the marketplace. The complaint also faults The Sukumo Group Inc.'s
actions with regard to the sale of common stock to off shore purchasers for
failing to disclose the interest that Sukumo had in each sale, reporting that it
was taking a 1-2% commission on the re-sale rather than disclosing that it was
keeping 70% of the proceeds of each transaction. The Company has obtained an
extension of time until April 15, 2004 in which to file its response to the
complaint.

Interbay Funding LLC v. Wichita Development Corporation, et al. Suit was filed
in the District Court of Sedgwick County, Kansas, case No. 03CV2074. The case
seeks to foreclose on the mortgage that is secured by The Trade Center Building,
located in Wichita, Kansas. Occupancy of the building has been reduced due to
operating costs of the building and competition from other buildings in the
Wichita business district and has resulted in cash flow difficulties in making
payments on the building. The Company is attempting to negotiate a resolution of
the suit with the lender and allow for the foreclosure on the building to
proceed.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

DFRC's common stock is quoted on the Electronic Bulletin Board under the symbol,
DFRC.OB (formerly ELOC.OB). Trading in the common stock in the over-the-counter
market has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions. Further, these prices
reflect inter-dealer prices without retail mark-up, mark-down, or commission,
and may not necessarily reflect actual transactions. The high and low bid prices
for the common stock for each quarter of the fiscal years ended December 31,
2003 and 2002 and the quarter ended March 31, 2004.


                     PERIOD                                   BID PRICES
                                                 -------------------------------
                                                      HIGH                LOW
                                               -----------------    ------------
Quarter Ended March 31, 2004                          $0.17               $0.005
Quarter Ended December 31, 2003                       1.01                  0.16
Quarter Ended September 30, 2003                      2.70                  1.01
Quarter Ended June 30, 2003                           1.75                  1.50
Quarter Ended March 31, 2003                         2.50(1)                0.01
Quarter Ended December 31, 2002                       0.02                 0.001
Quarter Ended September 30, 2002                      0.035                 0.01
Quarter Ended June 30, 2002                           0.075                0.025
Quarter Ended March 31, 2002                          0.05                 0.013
(1) The board of directors of DFRC authorized a reverse split of the common
stock of DFRC on February 7, 2003. The reverse split was carried out on a 1 for
200 basis, the low for the quarter ended March 31, 2003 took place prior to the
reverse and the high occurred subsequent.


                                     Page 12

<PAGE>




Such quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission. Such quotes are not necessarily representative of actual
transactions or of the value of DFRC's securities, and are in all likelihood not
based upon any recognized criteria of securities valuation as used in the
investment banking community.

Shareholders

As of March 30, 2004, there were an estimated 356 holders of record of DFRC's
common stock. Certain of the shares of common stock are held in street name and
may, therefore, be held by several beneficial owners.

Dividends

Since the year end December 31, 2003, DFRC has not declared any cash dividends.

On April 30, 2002, shareholders of record on that date became entitled to
receive a stock dividend of one share of eLocity, Inc., for every share of DFRC
held. The spin-off shares are being held in escrow with eLocity, Inc.,and will
not be distributed until eLocity, Inc. completes a registration statement.

DFRC has never paid a cash dividend on its common stock. The payment of
dividends may be made at the discretion of the Board of Directors of DFRC and
will depend upon, among other things, DFRC's operations, its capital
requirements, and its overall financial condition.

Description of Securities

As of March 30, 2004, there were 75,708,171 shares of common stock, par value
$0.001, issued and outstanding. Of those shares at least 38,706,663 shares are
restricted securities of DFRC within the meaning of Rule 144(a)(3) promulgated
under the Securities Act of 1933, as amended, because such shares were issued
and sold by DFRC in private transactions not involving a public offering. These
38,706,663 restricted securities are held by affiliates and may only be sold
pursuant to a registration statement or pursuant to Rule 144.

In general, under Rule 144, as currently in effect, subject to the satisfaction
of certain other conditions, a person, including an affiliate of DFRC (in
general, a person who has a control relationship with DFRC) who has owned
restricted securities of common stock beneficially for at least one year is
entitled to sell, within any three-month period, that number of shares of a
class of securities that does not exceed the greater of (i) one percent (1%) of
the shares of that class then outstanding or, if the common stock is quoted on
NASDAQ, (ii) the average weekly trading volume of that class during the four
calendar weeks preceding such sale. A person who has not been an affiliate of
DFRC for at least the three months immediately preceding the sale and has
beneficially owned shares of common stock for at least two (2) years is entitled
to sell such shares under Rule 144 without regard to any of the limitations
described above.

No prediction can be made as to the effect, if any, that future sales of shares
of common stock or the availability of common stock for future sale will have on
the market price of the common stock prevailing from time-to-time. Sales of
substantial amounts of common stock on the public market could adversely affect
the prevailing market price of the common stock.



                                     Page 13

<PAGE>



On February 24, 2004, the board of directors approved an amendment to the
Certificate of Incorporation of the Company to increase the number of authorized
common shares from 200,000,000 to 10,000,000,000. The increase was approved by a
holder of the majority of the issued and outstanding shares of common stock,
notice of the increase has been provided to all shareholders of record in
anticipation of filing a Certificate of Amendment with the State of Delaware.

200 to 1 Reverse Split

On February 7, 2003, DFRC purported to effect a 1 for 200 reverse split of its
common stock, but failed to give proper notice to its shareholders. To rectify
this, DFRC furnished an information statement dated May 29, 2003 to all holders
of the common stock of DFRC. The information statement disclosed that DFRC's
Board of Directors had authorized the reverse stock split and that shareholders
holding in excess of 50% of the outstanding common stock of DFRC had provided a
written consent, approving the reverse stock split for all shareholders of
record on May 29, 2003, with fractional shares being rounded up to the next
whole share. The reverse stock split was accordingly effected as of July 7,
2003. All fractional shares have been rounded up to the nearest whole share.
DFRC's is now trading on the OTC Bulletin Board under the symbol"DFRC.OB" The
number of authorized shares will remain the same at Two Hundred Million
(200,000,000). The Board of Director effected the reverse split in compliance
with Rule 10b-17.

Preferred Stock

DFRC has authorized 2,000,000 shares of preferred stock with a par value of
$.001, and established a series of preferred shares designated as Series A
Convertible Preferred Stock, consisting of 1,000,000 shares. The Series A
Convertible Preferred Stock has the following rights and privileges:

        1. The shares are convertible at the option of the holder at any time
           into common shares, at a conversion rate of one share of Series A
           Convertible Preferred Stock for 100 shares of common stock for a
           period of 10 years from the issuance date.
        2. Requires two-thirds voting majority to authorize changes to equity.
        3. Redemption provision at option of directors for $10 per share plus
           the greater of $3
           per share or 50% of market capitalization divided by 2,000,000.
        4. The holders of the shares are entitled to one hundred (100) votes for
           each share held.
        5. Upon the liquidation of the Company, the holders of the shares will
           be entitled to receive $10 per share plus redemption provision before
           assets distributed to other shareholders.
        6. The holders of the shares are entitled to dividends equal to common
           share dividends.

Recent Sales of Unregistered Securities

There are no recent sales of unregistered securities by DFRC during the period
covered by this report, which have not been previously disclosed in Form 10-QSB
filings.






                                     Page 14

<PAGE>



Regulation S Sales

ON May 20, 2003, DFRC entered into an Offshore Stock Purchase Agreement with a
company known as The Sukumo Group, Inc., a British Virgin Islands corporation.
The terms of the agreement provided that Sukumo had the right to purchase up to
10,000,000 shares of DFRC's common stock in accordance with the provisions of
Regulation S of the Securities Act of 1933. Sukumo's purchase price was set at
15% of the bid price per share on the day that DFRC received payment. All
10,000,000 shares were deposited with an escrow agent pending transfer upon
receipt of payment. The agreement specified that in the event Sukumo acted as a
selling agent with respect to reselling the DFRC shares, then Sukumo was
responsible for disclosing any mark ups, commissions or other consideration that
Sukumo or its representatives received, directly or indirectly, as a result of
reselling the DFRC shares. On August 29, 2003, DFRC place Sukumo on notice that
as a result of allegations regarding its violation of the terms and conditions
of the agreement, DFRC was terminating the relationship. All transactions
pending at that time were concluded and all remaining shares in the escrow
account were returned to the treasury of DFRC. On October 16, 2003, the
Securities and Exchange Commission filed a civil complaint asserting that Sukumo
had failed to comply with the requirements of the agreement, the provisions of
Regulation S and naming DFRC as a party to those violations in failing to
adequately disclose the nature of Sukumo's actions in the transfer of the
securities. See Legal Proceedings, Part I, Item 3.

On January 21, 2004, the board of directors of the Company approved the issuance
to John Chapman, the president of the Company, of 30,000,000 shares of
restricted common stock of the Company, pursuant to Section 4(2) of the
Securities Act of 1933 as compensation for his services with regard to the
acquisitions being explored by the Company.

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

General

DFRC operates as a holding company. DFRC primary operations involve creating and
managing a diverse comprehensive portfolio of companies operating in key
industry sectors. DFRC's primary operations consist primarily of two areas of
focus which include real estate holdings and land and natural resources.

Real Estate Operations

DFRC's objective with respect to its real property operations is to acquire,
through its subsidiaries, properties which management believes to be undervalued
and which DFRC is able to acquire through the limited expenditure of cash or
other consideration. DFRC through its subsidiaries will attempt to acquire such
properties by assuming existing favorable financing and paying the balance of
the purchase price with the delivery of common stock of either DFRC or the
subsidiary. DFRC will make investments in improvements to the acquired
properties with the objective of increasing occupancy, rental rates and thus
improving the cash flows of the properties. Currently DFRC has negative cash
flows from its rental operations for the year ended December 31, 2003. As the
properties were acquired during the past year DRFC will seek to minimize and
reverse the cash flow deficit through the efforts stated above.







                                     Page 15

<PAGE>



RESULTS OF OPERATIONS

Revenues

DFRC had revenues of $64,967 for the year ended December 31, 2003, compared to
revenues of $13,295 for 2002. DFRC's expenses were $709,260 in the year ended
December 31, 2003, an increase from $139,523 for 2002. Accordingly, DFRC's
suffered a net loss for the year ended 2003 in the amount of $1,020,908 as
compared to a net loss in the year 2002 of $170,094, this change is as a result
of the increase in expenses from the acquisition of the residential real estate
properties and the activities of management in acquiring the property and assets
held by Wichita Development Corporation during the year ended December 31, 2003.

Cash Flow

Cash flow used in operations was $466,846 for the year ended December 31, 2003,
compared to cash flow used in operations of $61,450 for the year ended December
31, 2002. Cash flows used in operating activities for the year ended December
31, 2003, are primarily attributable to the operating expenses related to the
investigation and due diligence review of the property and real estate interests
that DFRC acquired during the year ended December 31, 2003 and represent an
increase from the prior year due to the change in the nature of DFRC's
operations. Cash flow used in investing activities increased to $67,813 for the
year ended December 31, 2003 from $24,335 provided by investing activities for
the year ended December 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2003, DFRC had current assets of $ 131,721 and current
liabilities of $628,894. A substantial portion of DFRC's current liabilities as
of December 31, 2003, consisted of accounts and related party payables. DFRC's
accounts payable were $ 93,629 at December 31, 2003 and DFRC was indebted to the
officers of DFRC in the sum of $55,776 for loans and advances made to DFRC.

During the year ended 2003 DFRC entered into an agreement that lead to the
issuance of shares of its common stock to investors outside the United States
pursuant to the provisions of Regulation S under the Securities Act of 1933. The
common stock that was issued in the offering was not registered under United
States or state securities laws and was not offered or sold in the United States
or to a U.S. Person, as that term is defined by Regulation S, absent a
registration or an applicable exemption from the registration requirements of
the Securities Act of 1933. The total amount received by DFRC from this offering
in cash was $539,804. The Company has subsequently been named in a lawsuit filed
by the SEC with regard to the offering of this stock and the actions of the
other party to the Agreement as more fully set forth in Legal Matters, Part I,
Item 3.

On January 6, 2004, the board of directors of the Company authorized the
issuance of 500,000 shares of common stock to Francis Zubrowski for services he
provided to the Company, the shares were issued pursuant to the S-8 Registration
Statement of the Company and its employee benefit plan.

On February 9, 2004, the board of directors of the Company authorized the
issuance of options to purchase up to 6,000,000 shares of the common's common
stock, pursuant to the S-8 Registration Statement of the Company, at an option
price equal to 85% of the stock's market price on the date of exercise. The
options were granted to three employees of the Company.



                                     Page 16

<PAGE>



On February 19, 2004, the board of directors authorized the issuance of
1,500,000 shares of the Company's common stock to Richard Surber, in
satisfaction of contract services provided to the Company through Hudson
Consulting Group, Inc., the shares were issued pursuant to the S-8 Registration
Statement of the Company.

On February 26, 2004, the Company's board of directors authorized the issuance
of 12,000,000 options for the Company's common stock to 6 employees of the
Company, pursuant to the S-8 Registration Statement of the Company in the forms
of options, good for the purchase of shares at 85% of the market price on the
date of exercise.

On March 15, 2004, the board of directors authorized the issuance of 1,500,000
shares of the Company's common stock to Richard Surber, in satisfaction of
contract services provided to the Company through Hudson Consulting Group, Inc.,
the shares were issued pursuant to the S-8 Registration Statement of the
Company.

On March 15, 2004, the Company's board of directors authorized the issuance of
4,000,000 options for the Company's common stock to 2 employees of the Company,
pursuant to the S-8 Registration Statement of the Company in the forms of
options, good for the purchase of shares at 85% of the market price on the date
of exercise.

On April 2, 2004 the board of directors of the Company authorized the issuance
of 1,000,000 shares of common stock to Francis Zubrowski for services he
provided to the Company, the shares were issued pursuant to the S-8 Registration
Statement of the Company and its employee benefit plan.

On April 2, 2004, the Company's board of directors authorized the issuance of
14,000,000 options for the Company's common stock to 7 employees of the Company,
pursuant to the S-8 Registration Statement of the Company in the forms of
options, good for the purchase of shares at 85% of the market price on the date
of exercise.

DFRC believes that it does not have sufficient cash, cash equivalents and
operating income to maintain its business at its existing level in 2004. DFRC
will require significant new capital in order to execute its strategic plan and
believes that this capital will only be available through an offering of shares
of its common stock. Our success in raising this capital will depend upon our
ability to access equity capital markets and we may not be able to do so or to
do so on acceptable terms. If we fail to obtain funds on acceptable terms we
will not be able to execute our strategic plan and would have to delay or
abandon some or all of our plans for growth. If we are able to obtain funds we
believe that the terms of such arrangement will result in an offering that is
highly dilutive to existing holders of shares of our common stock because of the
price at which we would have to issue those shares and the large number of
shares we would have to issue at those prices.

ABILITY TO CONTINUE AS A GOING CONCERN

DFRC's ability to continue as a going concern is in doubt. As DFRC has incurred
a loss from its operations during the calendar year 2003 and has had losses in
prior years as well. DFRC will need to substantially decrease its operating
expenses, increase its operating income, and raise significant additional
capital. There is no assurance that DFRC will be able to accomplish all or any
of these items. In the event that these events do not take place DFRC will in
all probability not be able to continue as a going concern in calendar year
2004.



                                     Page 17

<PAGE>



Impact of Inflation

DFRC believes that inflation has had a negligible effect on operations over the
past three years. DFRC believes that it can offset inflationary increases in the
cost of material and labor by increasing and improving operating efficiencies.

General Real Estate Investment Risks

DFRC's investments are subject to varying degrees of risk generally incident to
the ownership of real property. Real estate values and income from DFRC's
current properties may be adversely affected by changes in national or local
economic conditions and neighborhood characteristics, changes in interest rates
and in the availability, cost and terms of mortgage funds, occupancy rates in
DFRC's properties, the impact of present or future environmental legislation and
compliance with environmental laws, the ongoing need for capital improvements,
changes in governmental rules and fiscal policies, civil unrest, acts of God,
including earthquakes and other natural disasters which may result in uninsured
losses, acts of war, adverse changes in zoning laws, and other factors which are
beyond the control of DFRC.

Value and Illiquidity of Real Estate

Real estate investments are relatively illiquid. The ability of DFRC to vary its
ownership of real estate property in response to changes in economic and other
conditions is limited. If DFRC must sell an investment, there can be no
assurance that DFRC will be able to dispose of it in the time period it desires
or that the sales price of any investment will recoup the amount of DFRC's
investment.

Property Taxes

DFRC's real property is subject to real property taxes. The real property taxes
on the real property may increase or decrease as property tax rates change and
as the property is assessed or reassessed by taxing authorities. If property
taxes increase, DFRC's operations could be adversely affected.

ITEM 7. FINANCIAL STATEMENTS

             See the Financial Statements that begin on page F-1 of this Report.


                                     Page 18

<PAGE>


















                         DIVERSIFIED FINANCIAL RESOURCES
                                   CORPORATION

                        CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2003 and 2002


















                                     Page 19

<PAGE>








                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION

                        CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2003 and 2002






























                                     Page 20

<PAGE>





                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION

                                      INDEX



                                                                     Page

Independent Auditors' Report                                          F-2

Consolidated Balance Sheet                                            F-3

Consolidated Statements of Operations                                 F-4

Consolidated Statements of Stockholders' Equity (Deficit)             F-5

Consolidated Statements of Cash Flows                                 F-6

Notes to Consolidated Financial Statements                            F-7


                                       F-1

<PAGE>




                          INDEPENDENT AUDITORS' REPORT


To the Stockholders' and
Board of Directors of
Diversified Financial Resources Corporation

We have audited the accompanying consolidated balance sheet of Diversified
Financial Resources Corporation as of December 31, 2003 and the related
consolidated statements of operations, stockholders' equity (deficit), and cash
flows for the years ended December 31, 2003 and 2002. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Diversified
Financial Resources Corporation as of December 31, 2003 and the results of its
operations and its cash for the years ended December 31, 2003 and 2002, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred a loss and has a
stockholders' deficit. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.



JONES SIMKINS, P.C.
Logan, Utah
April 2, 2004



                                       F-2

<PAGE>




                     DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                              CONSOLIDATED BALANCE SHEET
                                  December 31, 2003

                        ASSETS
<TABLE>
<S>                                                                   <C>
Current assets:
  Cash                                                                 $         8,006
  Investments, available-for-sale                                               19,548
  Notes receivable                                                              91,952
  Deposits                                                                      12,215
                                                                        --------------

          Total current assets                                                 131,721

Property and equipment, net                                                  1,332,338
                                                                        --------------

          Total assets                                                 $     1,464,059
                                                                        ==============

         LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                                                     $        93,629
  Accrued expenses                                                              48,268
  Related party payables                                                        55,776
  Current portion of notes payable                                             987,893
                                                                        --------------

          Total current liabilities                                          1,185,566

Lines-of-credit                                                                260,950
Notes payable                                                                  107,637
                                                                        --------------

          Total liabilities                                                  1,554,153
                                                                        --------------

  Minority interest                                                                  -
                                                                        --------------

Commitments and contingencies

Stockholders' deficit:
    Preferred stock, $.001 par value, 2,000,000 shares
      authorized, 13,150 shares issued and outstanding                              13
    Common stock, $.001 par value, 200,000,000 shares
      authorized, 11,207,949 shares issued and outstanding                      11,208
    Additional paid-in capital                                              13,681,540
    Accumulated other comprehensive loss                                      (45,453)
    Accumulated deficit                                                   (13,737,402)
                                                                        --------------

          Total stockholders' deficit                                         (90,094)
                                                                        --------------
          Total liabilities and stockholders' deficit                  $     1,464,059
                                                                        ==============
</TABLE>
                      See accompanying notes to financial statements

                                            F-3

<PAGE>




                         DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                           CONSOLIDATED STATEMENTS OF OPERATIONS
                           Years Ended December 31, 2003 and 2002
<TABLE>
<S>                                                         <C>               <C>

                                                                  2003              2002
                                                             --------------   ----------------

Revenues                                                    $        64,967             13,295


General and administrative expenses                                 709,260            139,523
                                                             --------------   ----------------

          Loss from operations                                     (664,293)           (126,228)

Gain on sale of securities                                            2,405                  -
Impairment loss                                                    (22,602)                  -
Loss on foreclosure of property                                   (339,697)                  -
Interest expense                                                   (59,370)           (19,704)
                                                             --------------   ----------------

          Loss from continuing operations                       (1,063,557)          (145,932)

Loss from discontinued operations of
   subsidiary, net of income taxes                                        -           (24,162)
                                                             --------------   ----------------

          Loss before minority interest and                     (1,063,557)          (170,094)
              provision for income taxes

Provision for income taxes                                               -                   -
                                                             --------------   ----------------

     Loss before minority interest                              (1,063,557)          (170,094)

Minority interest in net loss of subsidiaries                        42,649                  -
                                                             --------------   ----------------

          Net loss                                          $   (1,020,908)          (170.094)
                                                             ==============   ================


Net loss per common share - basic and diluted:
     Continuing operations                                  $         (.13)              (.45)
     Discontinued operations of subsidiary                                -              (.07)
                                                             --------------   ----------------

                                                            $         (.13)              (.52)
                                                             ==============   ================

Weighted average common shares - basic and diluted                7,647,000            324,000
                                                             ==============   ================
</TABLE>

                 See accompanying notes to financial statements

                                            F-4

<PAGE>



<TABLE>
                                                      DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                                               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                                         Years Ended December 31, 2003 and 2002

                                                                                                  Accumulated
                                                                                Additional           Other
                              Preferred Stock     Common Stock              Paid-In        Comprehensive     Accumulated
                              ------------------ ------------
                              Shares     Amount  Shares        Amount   Capital        Loss      Deficit           Total
                              -------    ------  -------       ------   -------        ----      -------           -----
<S>                           <C>        <C>     <C>           <C>    <C>           <C>          <C>               <C>
Balance at January 1, 2002         -   $       -  177,573      $ 178  $12,531,584   $     -      $ (12,546,400)    $ (14,638)

Issuance of common stock for
   Services                        -           -   130,000       130      127,670         -             -             127,800
   Cash                            -           -   50,000         50        9,950         -             -             10,000
   Exercise of stock options       -           -   2,500          2        19,998         -             -             20,000
   Acquisition of subsidiary       -           -   255,500       256       57,471         -             -             57,727

Net Loss                           -           -        -         -             -         -           (170,094)        (170,094)
                              ----------   ------  ---------  ------- ------------  --------       -----------       -------------
Balance at December 31, 2002       -           -    615,573      616   12,746,673         -        (12,716,494)          30,795

Comprehensive loss:
  Net loss                         -           -         -         -            -         -          (1,020,908)       (1,020,908)
  Other comprehensive loss-
  Unrealized loss on
investments, available-for-sale    -           -         -         -            -    (45,453)               -           (45,453)
                                                                                                                      -------------
      Total comprehensive loss                                                                                         (1,066,361)
                                                                                                                      =============

Issuance of preferred stock for
services                         13,150        13      -           -      131,487         -                 -           131,500
Issuance of common stock for:
   Cash                             -           -    3,044,125   3,044    536,760         -                 -           539,804
   Services                         -           -      400,000     400     49,600         -                 -           50,000
   Acquisition of subsidiaries      -           -    7,148,251   7,148    217,020         -                 -           224,168
                              ----------   ------   -----------  -----    --------   ----------     -----------        -------------
Balance at December 31, 2003     13,150  $       13  11,207,949 $11,208 $13,681,540  $ (45,453)     $  (13,737,402)  $  (90,094)
                              ----------   --------- ----------  ------ -----------  -----------    --------------     -------------
</TABLE>
                                  See accompanying notes to financial statements

                                                   F-5

<PAGE>




                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years Ended December 31, 2003 and 2002
<TABLE>
                                                                        2003              2002
                                                               -------------   ---------------
<S>                                                            <C>             <C>
Cash flows from operating activities:
Net loss                                                      $  (1,020,908)           (170,094)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
       Stock compensation expense                                    181,500             127,800
       Depreciation                                                   28,174               4,229
       Gain on sale of investments, available-for-sale               (2,405)                 -
       Loss on foreclosure of property                               339,697                 -
       Loss on impairment of assets                                   22,602                 -
       Change in net assets of discontinued operations                     -            (49,379)
     Increase (decrease) in:
        Other assets                                                (12,215)                 -
     Increase (decrease) in:
         Accounts payable                                             26,587               5,717
         Accrued expenses                                             48,268                 -
         Related party payables                                       13,797              20,277
         Minority interest                                          (91,943)                 -
                                                               -------------   ---------------
          Net cash used in operating activities                     (466,846)           (61,450)
                                                               -------------   ---------------

Cash flows from investing activities:
Increase in notes receivable                                        (90,437)                 -
Net cash received in acquisitions                                     20,451                 -
Proceeds from sale of investments, available-for-sale, net             2,173                 -
Change in net assets of discontinued operations                            -            24,335
                                                               -------------   ---------------

      Net cash (used in) provided by investing activities           (67,813)            24,335
                                                               -------------   ---------------

Cash flows from financing activities:
Decrease in lines-of-credit                                          (1,847)                 -
Principal payments on note payable                                   (1,501)            (1,551)
Proceeds from notes payable                                            4,469                 -
Issuance of common stock                                             539,804             30,000
                                                               -------------   ---------------

          Net cash provided by financing activities                  540,925             28,449
                                                               -------------   ---------------

          Net increase (decrease) in cash                              6,266            (8,666)

Cash, beginning of year                                                1,740             10,406
                                                               -------------   ---------------

Cash, end of year                                             $        8,006              1,740
                                                               =============   ===============
</TABLE>


                 See accompanying notes to financial statements

                                           F-6

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 1 - Organization and Summary of Significant Accounting Policies

Organization

Diversified Financial Resources Corporation (DFRC) was organized under the laws
of the State of Delaware on January 6, 1993. DFRC and its subsidiaries (the
Company) are primarily engaged in the rental of commercial and residential real
estate.

On June 30, 2003, the Company acquired approximately 83% of Wichita Development
Corporation (Wichita), in exchange for 1,148,251 common shares of the Company.
The shares issued in the acquisition were valued at $218,168 ($.19 per share).
This value was determined based on the net price per share realized on the
issuance of the Company's common shares issued for cash, to other entities,
during the same period.

In addition, as part of the acquisition agreement, the Company guaranteed that
1,000,000 of the shares issued would have an aggregate liquidation value of not
less than $1.00 per share within 36 months from the date of the agreement. If
the liquidation value is not satisfied the Company would be required to issue
additional common shares sufficient to satisfy the guaranteed value.

Wichita and it's 83% owned subsidiary, Salt Lake Development, Inc., own three
commercial and residential buildings. Wichita also has a wholly owned
subsidiary, Wichita Properties Corporation, which has no significant assets or
liabilities.

On March 24, 2003, the Company entered into an agreement to purchase all of the
issued and outstanding shares of MT&C Diversified Land and Natural Resources
Corporation (MT&C) in exchange for the issuance of 6,000,000 common shares of
the Company. John Chapman is one of the shareholders of MT&C and is the current
president and major shareholder of the Company.

The value of the common shares issued was valued at $6,000 (par value) and the
net deficit of MT&C was $16,602, which resulted in the purchase price being in
excess of the assets by $22,602. At March 31, 2003, the Company determined that
the goodwill of $22,602 was impaired and, therefore, recognized a loss equal to
this amount.

On June 5, 2002, the Company entered into a Stock Exchange Agreement to acquire
100% of the common stock of Diversified Holdings-XIX, Inc. (Diversified), a
real-estate holding company, in exchange for common stock of the Company. The
common stock issued as a result of this transaction was valued at the historical
cost of the net assets of Diversified.




                                            F-7

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

A wholly owned subsidiary, eLocity, Inc (eLocity), was engaged in building and
maintaining websites. Effective April 30, 2002, all of the outstanding shares of
eLocity's common stock were distributed as a stock dividend to the shareholders
of the Company and, as a result, eLocity ceased to be a subsidiary of the
Company. eLocity's net assets, results of operations and cash flows are
presented as discontinued operations as of December 31, 2002 and for the year
then ended.

Principles of Consolidation

The consolidated financial statements include the accounts of the Diversified
Financial Resources Corporation and its subsidiaries. All significant
intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.

Investments

The Company classifies its investments as "available for sale." Securities
classified as "available for sale" are carried in the financial statements at
fair value. Realized gains and losses, determined using the specific
identification method, are included in operations; unrealized holding gains and
losses are reported as a separate component of accumulated other comprehensive
income. Declines in fair value below cost that are other than temporary are
included in operations.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is determined using the straight-line method over the estimated
useful lives of the assets. Expenditures for maintenance and repairs are
expensed when incurred and betterments are capitalized. Gains and losses on sale
of property and equipment are reflected in operations.









                                            F-8

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Long-Lived Assets

The Company evaluates its long-lived assets in accordance with SFAS No. 144,
"Accounting for the Impairment of Long-Lived Assets". Long-lived assets held and
used by the Company are reviewed for impairment whenever events or changes in
circumstances indicate that their net book value may not be recoverable. When
such factors and circumstances exist, the Company compares the projected
undiscounted future cash flows associated with the related asset or group of
assets over their estimated useful lives against their respective carrying
amounts. Impairment, if any, is based on the excess of the carrying amount over
the fair value of those assets and is recorded in the period in which the
determination was made.

Income Taxes

Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, principally related
to net operating loss carryforwards.

Revenue Recognition

Rental revenue is generally recognized at the time rents are invoiced and
collectibility is reasonably assured. This policy meets the criteria of Staff
Accounting Bulletin 101 in that there is persuasive evidence of an existing
contract or arrangement, services have been provided, the price is fixed and
determinable and the collectibility is reasonably assured.

Earnings Per Share

The computation of basic earnings per common share is based on the weighted
average number of shares outstanding during the year.

The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the year plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the year.

Common stock equivalents are not included in the diluted earnings per share
calculation when their effect is antidilutive. The Company does not have any
stock options or warrants outstanding at December 30, 2003 and 2002.






                                            F-9

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Stock-Based Compensation

At December 31, 2003, the Company has stock-based employee compensation plans,
which are described more fully in Note 12. The Company accounts for those plans
under the recognition and measurement principles of APB Opinion 25, "Accounting
for Stock Issued to Employees", and related Interpretations, and has adopted the
disclosure-only provisions of SFAS 123, "Accounting for Stock-Based
Compensation." Had compensation cost for the Company's stock option plan been
determined based on the fair value at the grant date for awards consistent with
the provisions of SFAS 123, there would be no effect on the Company's net losses
and losses per share at December 31, 2003 and 2002. The options granted during
2002 were to non-employees.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.

Use of Estimates in the Preparation of Financial Statements

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

Note 2 - Going Concern

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As of December 30, 2003, the Company
had incurred a loss from operations and had a stockholders' deficit. These
conditions raise substantial doubt about the ability of the Company to continue
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

The Company's ability to continue as a going concern is subject to the Company's
ability to obtain profitable operations or to obtain necessary funding from
outside sources. Management anticipates that operations will begin to provide
positive cash flows during the next fiscal year or that funding will be
available to the Company at acceptable terms. However, there can be no assurance
they will be successful.






                                      F-10

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 3 -  Investments

The Company's investments, classified as available-for-sale consist of the
following:
                                                          December 31,
                                                          ------------
                                                       2003          2002
                                                       ----          ----
         Investments, at
           cost                                    $  65,001     $    -
                                                     (45,453)         -
                                                     --------       --------


         Investments, at fair value              $     19,548    $    -
                                                  ===========       ======

Changes in the unrealized holding loss on investment securities
available-for-sale and reported as a separate component of accumulated other
comprehensive income are as follows:

                                                              December 31,
                                                            2003          2002
                                                           ----           ----

         Balance, beginning of year                  $      -           $  -
         Unrealized holding loss                          45,453           -
                                                          ------         ------

         Balance, end of year                       $     45,453       $   -
                                                          ======          =====


Note 4 - Notes Receivable

At December 31, 2003, notes receivable consist of the following:

Note receivable from Creative Marketing Group, Inc,
  bearing interest at 2% and due on September 4, 2004      $      56,891

Note receivable from Valley Air, Inc., the note is
  Non-interest bearing and is due on demand                       26,300

Note receivable from unrelated parties, the notes
  are non-interest bearing and are due on demand                   8,761
                                                                 -------

                                                           $      91,952









                                      F-11

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 5 - Property and Equipment

Property and equipment consists of the following at December 31, 2003:

      Land                                                 $     276,100
      Buildings and improvements                               1,206,627
                                                               ---------

                                                               1,482,727
      Less accumulated depreciation                             (150,389)
                                                             ------------

                                                           $   1,332,338

Note 6 - Related Party Payables

Related party payables consist of loans from John Chapman and entities owned by
him. The loans are unsecured, non-interest bearing and due on demand.

Note 7 - Lines-of-Credit

The Company has two separate lines-of-credit with a bank, each secured by real
estate, bearing interest at a variable rate (currently 10%). The lines-of-credit
mature in December 2005 and require monthly interest only payments. At December
31, 2003, the maximum amounts available under the lines-of-credit have been
fully drawn by the Company.



                                      F-12

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 8 - Notes Payable

Notes payable consist of the following at December 31, 2003:

        Note payable to Wilshire, secured by real estate,
        payable in monthly installments of $4,222, including
        interest at 7.7%. Subsequent to the year ended
        December 31, 2003, this note went into default           $     563,872

        Note payable to Interbay Funding, LLC, secured by
        real estate, payable in monthly installments of $2,689
        including interest at 10.97%,currently in foreclosure          268,452

        Note payable to Nexia, non-interest bearing, due
        on demand                                                      150,000

        Note payable to IndyMac Bank, secured by real
        estate, payable in monthly installments of $851
        including interest at 8.5%.                                    108,737

        Note payable to Nexia, non-interest bearing, due
        on demand.                                                       4,469
                                                                      --------

          Total                                                      1,095,530
          Less current portion                                        (987,893)
                                                                    -----------

          Long-term portion                                      $     664,309
                                                                     =========

Future maturities of the notes payable are as follows:

      Year ending                                                     Amount

        2004                                                     $     987,893
        2005                                                             8,400
        2006                                                             8,500
        2007                                                             8,600
        2008                                                             8,700
        Thereafter                                                      73,437
                                                                   -----------

        Total                                                    $   1,095,530
                                                                     =========



                                      F-13

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 9 -  Income Taxes

The difference between income taxes at statutory rates and the amount presented
in the financial statements is a result of the following:

                                                           Years Ended
                                                            December 31,
                                                       2003             2002
                                                       ----             ----

        Income tax benefit at statutory rate       $  (345,000)         (49,000)
        Change in valuation allowance                   345,000           49,000
                                                      -------           ------

                                                   $       -                -
                                                     ============       ========

Deferred tax assets are as follows at December 31, 2003:


        Net operating loss carryforwards           $      394,000
        Valuation allowance                              (394,000)
                                                         ---------

                                                   $            -
                                                         =========

The Company has a net operating loss carryforwards of approximately $1,160,000,
which begin to expire in the year 2022. The amount of net operating loss
carryforwards that can be used in any one year will be limited by significant
changes in the ownership of the Company and by the applicable tax laws which are
in effect at the time such carryforwards can be utilized.

Note 10 - Supplemental Cash Flow Information

For the years ended December 31, 2003 and 2002, the Company paid interest of
approximately $59,000 and $20,000, respectively.

No amounts were paid for income taxes during the years ended December 31, 2003
and 2002.



                                      F-14

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 10 - Supplemental Cash Flow Information (continued)
--------------------------------------------

During the year ended December 31, 2003:

o        The Company acquired approximately 83% of the common stock of Wichita
         Development Corporation. The Company recorded net assets from the
         acquisition as follows:

                        Marketable securities                           $ 64,769
                        Receivables, net                                   1,515
                        Property and equipment, net                    1,873,230
                        Accounts payable                                (73,370)
                        Notes payable                                (1,571,384)
                        Minority interest                               (91,943)

                                                                         202,817
                        Less common stock issued                       (218,168)
                                                                      ----------

                 Net cash received                                  $     15,351
                                                                     ===========

o        The Company acquired 100% of the common stock of MT&C. The Company
         recorded net assets from the acquisition as follows:


                              Goodwill                              $     22,602
                              Related party payable                     (21,702)

                                                                             900
                              Less common stock issu                     (6,000)
                                                                    ------------

                              Net cash received                    $       5,100



o        The Company's building located in Ogden, Utah was sold at a trustee's
         sale. The sale resulted in the Company reducing the following assets
         and liabilities:

                  Property and equipment, net                      $   (939,949)
                  Accounts payable                                        12,045
                  Notes payable                                          588,207
                                                                         -------

                  Loss on foreclosure of property               $      (339,697)
                                                                       =========




                                      F-15

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 10 - Supplemental Cash Flow Information (continued)
--------------------------------------------

During the year ended December 31, 2002, the Company acquired the common stock
of Diversified in exchange for 255,500 shares of common stock. The significant
assets and liabilities acquired in the exchange were real estate of
approximately $431,000 and lines of credit of approximately $263,000 and a note
payable of approximately $111,000.


Note 11 - Preferred Stock

The Company has authorized 2,000,000 shares of preferred stock with a par value
of $.001, and established a series of preferred shares designated as Series A
Convertible Preferred Stock, consisting of 1,000,000 shares. The Series A
Convertible Preferred Stock has the following rights and privileges:

        o The shares are convertible at the option of the holder at any time
          into common shares, at a conversion rate of one share of Series A
          Convertible Preferred Stock for 100 shares of common stock for a
          period of 10 years from the issuance date.
        o Requires two-thirds voting majority to authorize changes to equity.
        o Redemption provision at option of directors for $10 per share plus the
          greater of $3 per share or 50% of market capitalization divided
          by 2,000,000.
        o The holders of the shares are entitled to one hundred (100) votes for
          each share held. o Upon the liquidation of the Company, the holders of
          the shares will be entitled to receive $10 per share plus redemption
          provision before assets distributed to other shareholders.
        o The holders of the shares are entitled to dividends equal to common
          share dividends.



                                      F-16

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 12 - Common Stock Options

The Company has a stock option plan which authorizes the grant of stock options
to eligible employees, directors, and other individuals to purchase up to an
aggregate of 2,000,000 shares of common stock. Options granted under the plan
have an exercise price and term established by the plan administrator at the
date of grant. The plan is intended to advance the interest of the Company by
attracting the ensuring retention of competent directors, employees, and
consultants, and to provide incentives to those individuals to devote their
utmost efforts to the advancement of the Company.

A schedule of the options at December 31, 2003 and 2002 is as follows:
<TABLE>


                                                                  Number            Exercise
                                                                   of               Price Per
                                                                 Options              Share
         <S>                                                     <C>                <C>
         Outstanding at January 1, 2002                             -                $   -
         Granted                                                 500,000               .04
         Exercised                                              (500,000)              .04
                                                                ---------

        Outstanding at December 31, 2003 and 2002                    -
                                                              ==============
</TABLE>


The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation,"
as described in Note 1.

The fair value of each option granted during 2002 was estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions:

        Expected dividend yield                                       -
        Expected stock price volatility                               -
        Risk-free interest rate                                       3%
        Expected life of options                                 10 days


The weighted average fair value of options granted during 2002 was $0.




                                      F-17

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 13 - Distribution of eLocity, Inc.

Pursuant to the terms of a Stock Exchange Agreement between the Company and
eLocity, entered into on April 30, 2002, the common stock of eLocity was
distributed on a one-for-one basis to the Company's shareholders of record as of
April 30, 2002 (the Distribution). The Distribution was effective April 30, 2002
on which date eLocity ceased to be a subsidiary of the Company. The accompanying
consolidated financial statements present the results of operations of eLocity
as discontinued operations. For the years ended December 31, 2002, revenues from
eLocity's operations totaled $50,048.

Note 14 - Fair Value of Financial Instruments

The Company's financial instruments consist of cash, receivables, payables,
lines-of-credit and notes payable. The carrying amount of cash, receivables and
payables approximates fair value because of the short-term nature of these
items. The carrying amount of the lines-of-credit and the notes payable
approximates fair value as the instruments bear interest at market interest
rates.

Note 15 - Related Party Transactions

During the year ended December 31, 2003, the Company issued 13,150 shares of
preferred stock to John Chapman for consulting services and rent of $131,500.

During 2002, the Company acquired Diversified which was owned by John Chapman.

During 2002, the Company entered into an agreement to lease office space from
John Chapman. The office lease requires monthly payments of $6,500 and expires
in May 2005. Rental expense of approximately $78,000 and $39,000 was recorded
during 2003 and 2002, respectively.

Note 16 - Reverse Common Stock Split

On February 7, 2003, the Company's Board of Directors approved a 1-for-200
reverse common stock split. All common stock amounts and per share information
have been retroactively adjusted to reflect this reverse common stock split in
the accompanying consolidated financial statements.



                                      F-18

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 17 - Recent Accounting Pronouncements

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This new
statement changes the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity or classifications
between liabilities and equity in a section that has been known as "mezzanine
capital." It requires that those certain instruments be classified as
liabilities in balance sheets. Most of the guidance in SFAS 150 is effective for
all financial instruments entered into or modified after May 31, 2003. The
adoption of SFAS 150 did not have any impact on the Company's financial
statements.

In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities". This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging relationships designated after June 30, 2003, with certain
exceptions. The adoption of SFAS did not have any effect on the Company's
financial statements.

In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46), which addresses consolidation by business
enterprises of variable interest entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not identified and does not
expect to identify any variable interest entities that must be consolidated.

In December 2002, the Financial Accounting Standards Board issued SFAS 148
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
amendment of FASB Statement 123," which is effective for all fiscal years ending
after December 15, 2002. SFAS 148 provides alternative methods of transition for
a voluntary change to fair value based method of accounting for stock-based
employee compensation under SFAS 123 from intrinsic value based method of
accounting prescribed by Accounting Principles Board Opinion 25. SFAS 148 also
changes the disclosure requirement of SFAS 123, requiring a more prominent
disclosure of the pro-forma effect of the fair value based method of accounting
for stock-based compensation. The adoption of SFAS 148 by the Company did not
have any impact on the Company's financial statements and is not expected to
have any impact on future operations.


                                      F-19

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


Note 18 - Subsequent Events

Subsequent to the year ended December 31, 2003:

o   The Company entered into an agreement with Francis Zubrowski for consulting
    services. The Company agreed to issue 500,000 shares of common stock for
    these services.

o   The Company agreed to issue 30,000,000 shares of common stock to John
    Chapman for services in locating a potential acquisition for the Company.

o   The Company agreed to increase the number of authorized shares of common
    stock to 10,000,000,000 and change the par value to "no par value".

o   The Company adopted the 2004 Employee Benefit Plan. The plan authorizes the
    Company to issue up to 100,000,000 shares of stock to individuals as
    determined by the Company.

o   The Company agreed to issue 1,500,000 shares of common stock to Hudson
    Consulting Group, which is controlled by Richard Surber to settle accounts
    payable.

o   The Company issued options to consultants in exchange for accounts payable
    and services. The options have an exercise price of 85% of the market price
    and if exercised would result in the issuance of 52,000,000 shares.

o   The Company entered into a "Stock Purchase Agreement and Plan of
    Reorganization" (the Agreement) with Impact Beverage Inc. (IBI). Under the
    terms of the Agreement the Company will acquire 72% of IBI in exchange for
    20,000,000 shares of the Company's common stock. The closing date of the
    Agreement is May 1, 2004.


                                      F-20

<PAGE>


                   DIVERSIFIED FINANCIAL RESOURCES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

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

The Company has had no disagreements with its independent accountants. and has
made no changes during the year ended December 31, 2003.

ITEM 8A.   CONTROLS AND PROCEDURES

The Company's president acts both as the Company's chief executive officer and
chief financial officer ("Certifying Officer") and is responsible for
establishing and maintaining disclosure controls and procedures for the Company.
The Certifying Officer has concluded (based on his evaluation of these controls
and procedures as of a date within 90 days of the filing of this report) that
the design and operation of the Company's disclosure controls and procedures (as
defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) are
effective. No significant changes were made in the Company's internal controls
or in other factors that could significantly affect those controls subsequent to
the date of the evaluation, including any corrective actions with regard to
slight deficiencies and material weaknesses. Due to the Certifying Officer's
dual role as chief executive officer and chief financial officer, the Company
has no segregation of duties related to internal controls.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors, Executive Officers and Control Persons

NAME                  AGE    POSITION
-------------------------------------------------------------------------------

John Chapman          61     President, CFO and Director

Dennis Thompson       50     Director

John Casey            30     Director

John R. Chapman was appointed to DFRC's Board of Directors and as the Company's
President on March 23, 2003. Over the last five years, Mr. Chapman has been
primarily involved in the business of real estate development and mortgage
banking. He will serve as a director until the next annual shareholders meeting.

Dennis Thompson was appointed to DFRC's Board of Directors on May 30, 2002. Mr.
Thompson has been an consultant who provides expert advice concerning equipment,
construction, and mining operations. He develops and implements construction
plans for gold and coal mining operations. Prior to that time, Mr. Thompson was
involved in manufacturing industry and construction field. He attended the Iron
Workers Apprentice School in West Virginia from 1972-1975. He will serve as a
director until the next annual shareholders meeting.


                                     Page 19

<PAGE>



John Casey was appointed to DFRC's Board of Directors on October 30, 2002. Mr.
Casey has over five years experience as a Site Manager supervising and directing
numerous on-site craft and salaried personnel as well as various subcontractors.
He also has 4 additional years of environmental remedial experience as a Site
Safety Officer, Operations Foreman, and heavy equipment operator. He served as
the Operations Foreman ans Site Safety Officer for a crew of twelve on a 125
acre precious metal mining operations from 1996 through 1998. He served in the
United States Air Force for four years assigned to a fire fighting/hazardous
materials handling unit. He has worked on buried drum recovery projects as well
as landfill construction barrier/ cut-off trench installations, low level
radiological decommissioning and demolition projects, and the construction of
landfill capping systems. He will serve as a director until the next annual
shareholders meeting.

Involvement in Certain Legal Proceedings.

John R. Chapman has been named as a defendant in a civil injunctive action filed
on September 30, 2002, by the Securities and Exchange Commission in the United
States District Court in the State of Utah, Civil Action No. 2:02CV-1086. The
action alleges that the named defendants were involved in a scheme to manipulate
the stock of Freedom Surf, Inc. from July 2000 through November 2000. The
complaint seeks injunctive relief as to Mr. Chapman that could prevent him from
serving as an officer or a director for the Company in the future, or other
relief that could impact Mr. Chapman's ability to serve the Company.

The President of DFRC has been named individually as a defendant in a civil
action filed on October 16, 2003 by the Securities and Exchange Commission in
the United States District Court for the State of Utah, Civil Action No.
2:03CV00914. The action alleges that Mr. Chapman engaged in manipulation of the
share price of DFRC and failed to adequately disclose the role of The Sukumo
Group, Inc. in the sale of securities of DFRC to off shore investors. Relief
sought by the complaint includes penalties, fines and injunctive relief against
Mr. Chapman.

Compliance with Section 16(a) of the Exchange Act

Based solely on a review of Forms 4 and 5 furnished to DFRC and filed with the
Securities and Exchange Commission under Rule 16a-3(e) promulgated under the
Securities Exchange Act of 1934, DFRC believes that all directors, officers and
beneficial owners of more than 10% of any class of equity securities filed on a
timely basis the reports required by Section 16(a) of the Exchange Act during
the most recent fiscal year.

Code of Ethics

Due to the small group of employees and management, DFRC has not adopted a code
of ethics that apply to its officers and employees. The board of directors is in
direct contact with management on a regular basis and believes that all conduct
is under sufficient supervision to protect DFRC and its shareholders from any
unethical activity.



                                     Page 20

<PAGE>



ITEM 10. EXECUTIVE COMPENSATION

The following tables and notes present for the three years ended December 31,
2003, the compensation paid by DFRC to DFRC's President and Vice President. No
other executive officer of DFRC received compensation which exceeded $100,000
during any of the three years ended December 31, 2003.


                           SUMMARY COMPENSATION TABLE
<TABLE>
                                                            Long Term Compensation
Annual Compensation                                    Awards               Payouts
                                          Restricted Stock   Securities       LTIP      All Other
Name and Principal             Salary        Award(s)    Underlying Options  payouts   Compensation
Position             Year        ($)                          SARs(#)          ($)         ($)
------------------ -------- ------------- -------------- ------------------ --------- --------------
<S>                <C>      <C>           <C>            <C>                <C>       <C>
John Chapman,        2003      $80,000(1)      (3)               -
President,
Director(4)
Sandra Jorgensen                   $7,500   15,000(2)            -                          -
Thomas Clay                       $55,000       -                -              -           -
President, Director

Mark
Schellenberger      2001       $55,000          -                -              -           -
Vice President,                                 -                -              -           -
Treasurer, Director
</TABLE>
(1) Cash compensation paid to Mr. Chapman
(2) 3,000,000 shares issued November 1, 2002 were reduced to 15,000 by the 1 for
200 reverse split.
(3) Mr. Chapman received 13,150 shares of Class A preferred shares from the
company on December 11, 2003; 7,150 shares for rent on the office space he
provided to the Company and 6,000 shares as compensation for the months October,
November and Decemberof 2003.
(4) On January 21, 2004 Mr. Chapman received 30,000,000 as compensationfor
services he provided with regard to the acquisitions being explored by DFRC.

DFRC entered into an Employment Agreement dated June 5, 2003 with John Chapman,
pursuant to which Mr. Chapman has agreed to serve as the Company's President,
Chief Executive Office and Chief Financial Officer. The agreement provides for a
base salary of $20,000 per month, payable in cash, common or preferred stock of
the Company, the form to be at the election of Mr. Chapman.

Compensation of Directors

There are no committees of the Board, which acts as the full Board with respect
to any matter. No director receives any compensation for serving as a member of
the Board of Directors.

No compensation is paid to any director, as such, for his or her services, but,
by resolution of the Board of Directors, a fixed sum or expense for actual
attendance at each regular or special meeting by the Board may be authorized.



                                     Page 21

<PAGE>



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The table below sets forth information with respect to the beneficial ownership
of the Common Stock by (i) each of the directors of DFRC, (ii) each person known
by DFRC to be the beneficial owner of five percent or more of the outstanding
Common Stock, and (iii) all executive officers and directors as a group, as of
April 12, 2004. The total number of shares of common stock issued and
outstanding on April 12, 2004 is 92,708,171. Unless otherwise indicated, DFRC
believes that the beneficial owner has sole voting and investment power over
such shares.

<TABLE>
          NAME AND ADDRESS OF                  NUMBER OF SHARES             PERCENTAGE OF
            BENEFICIAL OWNER                     BENEFICIALLY                 OWNERSHIP
                                                    OWNED
----------------------------------------  -------------------------- ----------------------------
<S>                                       <C>                        <C>
Dennis Thompson                                   2,005,000                     2.16%
1771 Wolviston Way.
San Diego, CA 92154

John Chapman, President & Director                32,370,500                    34.92%
1771 Wolviston Way.
San Diego, CA 92154

John Casey, Director                                  0                           0%
1771 Wolviston Way.
San Diego, CA 92154

Officers and Directors                            34,375,500                    37.08%
as a group (2 persons)
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

All statements of a number of shares have been modified to reflect the 1 for 200
reverse split that was effective as of February 7, 2003.

On April 16, 2002, DFRC entered into an agreement wherein DFRC transferred all
of its assets and business to its subsidiary, eLocity, Inc. ("eLocity"), in a
tax free exchange. Following the closing of the transaction, eLocity intends to
file a Form SB-2 Registration Statement with the Securities and Exchange
Commission ("SEC") to register a spin-off of its shares held by eLocity, Inc. in
trust for the shareholders of DFRC on the record date of April 30, 2002. The
current plan is subject to the Registration Statement clearing SEC comments. The
plan is to deliver one (1) eLocity share for each share of DFRC owned by DFRC
shareholders on the record date, upon the registration statement clearing
comments. The distribution of spin-off shares to shareholders has not yet
occurred, these shares are being held in escrow by eLocity, Inc.

Effective May 1, 2002, DFRC entered into a lease agreement with John Chapman,
currently president, CEO and a director of DFRC, for the lease of an
approximately 1,600 square foot office space located at 1771 Wolviston Way, San
Diego, California 92154 where the offices of DFRC are located. The leased space
is Mr. Chapman's residence. The lease is for a term of 3 years, with an option
to extend for three addition years. Monthly rent for the space is $6,500 and
DFRC is responsible for all utilities in the space.



                                     Page 22

<PAGE>



On June 5, 2002, DFRC acquired 100% of the issued and outstanding shares of
Diversified XIX, Inc. (DHX) (12,000,000 shares) a Nevada corporation by issuing
255,500 shares of eLocity Networks Corporation to John Chapman. Mr. Chapman, is
currently the CEO, president and a director of DFRC and is the father of Sandra
Jorgensen who was President of the Company at the time of the transaction. On
July 18, 2002, DFRC amended the Stock Exchange Agreement with Mr. Chapman, to
acquire the controlling interest in DHX, which is held as a subsidiary of DFRC
and according to the addendum of November 8, 2002 owns four residential
properties. These properties will be used to generate income for the subsidiary.

On November 1, 2002, DFRC issued in an additional 115,000 shares of DFRC's
common stock to John Chapman, currently the CEO, president and a director of
DFRC, in exchange for leasing fees, loans and cash advances made to the Company
valued at $49,000.

On November 1, 2002, the Company issued 45,000 shares to 4 individuals for
services rendered. Those individuals are Sandra Jorgensen, former president and
director of DFRC (15,000 shares), Dennis Thompson, a director of DFRC, (15,000
shares) and Norman Mullins, a former holder of more than 10% of DFRC's common
stock, (15,000 shares). The services provided by the individuals were valued at
$13,500.

On March 24, 2003, DFRC entered into a Stock Purchase Agreement with John
Chapman, Norman Mullins, and Dennis Thompson shareholders of MT & C Diversified
Land and Natural Resources Corporation (MT &C) wherein DFRC agreed to purchase
Six Million (6,000,000) shares or 100% of the total issued and outstanding share
of MT & C in exchange for Six Million (6,000,000) (post-reverse) shares of
DFRC's newly issued common shares. MT & C is a development stage company
incorporated in the State of Nevada, whose sole asset is a Coal Slurry
Impoundment, Plant Site and Mine Waste Lease Agreement. John Chapman is the
President of DFRC and Dennis Thompson serves on the Board of Directors of DFRC,
this transaction made each of the three individuals a holder of more than 10% of
DFRC's issued and outstanding common stock.

DFRC entered into an Employment Agreement dated June 5, 2003 with John Chapman,
pursuant to which Mr. Chapman has agreed to serve as the Company's President,
Chief Executive Office and Chief Financial Officer. The agreement provides for a
base salary of $20,000 per month, payable in cash, common or preferred stock of
the Company, the form to be at the election of Mr. Chapman.

Subsequent events to December 31, 2003


On January 21, 2004, the board of directors of the Company approved the issuance
to John Chapman, the president of the Company, of 30,000,000 shares of
restricted common stock of the Company, pursuant to Section 4(2) of the
Securities Act of 1933 as compensation for his services with regard to the
acquisitions being explored by the Company.



                                     Page 23

<PAGE>



ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits beginning on page 24 of this form 10-KSB, which
is incorporated herein by reference.

(b) Reports on Form 8-K.

        (1) On January 17, 2003 DFRC filed a Form 8-K/A setting forth that DFRC
        had determined that it was not required to provide a pro forma condensed
        balance sheet or pro forma condensed statements of income based on prior
        disclosures.

        (2) On February 7, 2003 DFRC filed a Form 8-K disclosing a 1 for 200
        reverse-split of its common stock, such that every current shareholder
        of DFRC's common stock will hold 1 share for every 200 shares they held
        prior to the reverse split.

        (3) On March 26, 2003 DFRC filed a Form 8-K disclosing a Stock Purchase
        Agreement with John Chapman, Norman Mullins and Dennis Thompson
        shareholders of MT&C Diversified Land and Natural Resources Corporation
        wherein DFRC agreed to purchase 6,000,000 shares or 100% of the total
        issued and outstanding shares of MT&C in exchange for 6,000,000 shares
        of DFRC's newly issued common shares.

        (4) On May 23, 2003 DFRC filed a Form 8-K disclosing that DFRC had
        entered into an Offshore Stock Purchase Agreement (the "Agreement") with
        The Sukumo Group, Inc. Pursuant to the Agreement Sukumo has the right to
        purchase up to 10,000,000 shares of DFRC pursuant to Regulation S of the
        Securities Act of 1933.

        (5) On July 8, 2003, DFRC filed a Form 8-K disclosing that it had
        entered into a Stock Purchase Agreement with Nexia Holdings, Inc.,
        Diversified Holdings I, Inc., Wichita Development Corporation and Salt
        Lake Development Corporation wherein the Company agreed to purchase not
        less then 83% of the total issued and outstanding shares of Wichita
        Development Corporation.

        (6). On July 22, 2003, DFRC filed an 8-K report that on July 11, 2003,
        the Company's wholly owned subsidiary MT&C Diversified Land And Natural
        Resources Corporation (MT&C),had entered into a an Asset Purchase
        Agreement with Headwaters Incorporated to purchase a mining property
        known as the Wellington Coal tailings Preparation Plant.

        (7) On September 2, 2003, DFRC filed an 8-K report that on August 29,
        2003 it terminated its May 20, 2003, Offshore Stock Purchase Agreement
        with The Sukumo Group, Inc.

        (8) On October 15, 2003, DFRC filed an 8-K report that DFRC's wholly
        owned subsidiary MT&C Diversified Land & Natural Resources Corp. was not
        able to close on the purchase of certain assets from Headwaters Inc.
        consisting primarily of the Wellington Coal Tailings Preparation Plant,
        located in Wellington, Utah. This failure prevents MT&C from starting
        the operation of a coal reclamation business.

Subsequent to the end of the year the following reports on Form 8-K were filed:

        (1) On February 6, 2004, DFRC filed an 8-K report DFRC has issued
        30,000,000 shares of its restricted common stock to the Company's
        president, John Chapman as compensation for services rendered in
        connection with various acquisition candidates of DFRC. DFRC further

                                     Page 24

<PAGE>



        reported that it had in December of 2003 issued to Mr. Chapman 13,150
        shares of its Class A preferred shares, 6,000 shares for compensation
        and 7,150 shares in payment of rent due to him.


ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Audit fees are for professional services for the audit of DFRC's annual
financial statements, and for the review of the financial statements included in
the Company's filing on Form 10-QSB and for services that are normally provided
in connection with statutory and regulatory filings or engagements. DFRC has
paid to Jones Simkins, PC, audit fees of approximately $35,000 for 2003 and
$23,000 for 2002.

Audit Related Fees

Audit related fees are funds paid for the assurance and related services
reasonably related to the performance of the audit or the review of DFRC's
financial statements. DFRC has paid to Jones Simkins, PC, audit related fees of
approximately $ 2,000 for 2003 and $ 2,000 for 2002.

Tax Fees

The tax fees are those funds paid for professional services with respect to tax
compliance, tax advice, and tax planning. DFRC has paid to Jones Simkins, PC,
tax fees of approximately $ 0 for 2003 and $ 0 for 2002.

All Other Fees

Fees paid for permissible work that does not fall within any of the three other
fees categories set forth above. No other fees paid.

Pre-approved Policy for Audit and Non-Audit Services

DFRC does not have a standing audit committee and the full board of directors
performs all functions of an audit committee, including the pre-approval of all
audit and non-audit services prior to DFRC engaging an accountant. All of the
services rendered for DFRC by Jones Simkins, PC, were pre-approved by the board
of directors of DFRC.

                                     Page 25

<PAGE>



                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this Annual Report and any subsequent amendments thereto
to be signed on its behalf by the undersigned, thereunto duly authorized.

                   Diversified Financial Resources Corporation


Dated: April 12, 2004                    By: /s/ John Chapman
                                            -------------------------------
                                            John Chapman, CEO, President and CFO


Pursuant to the requirements of the Securities Act of 1934, this Annual Report
has been signed below by the following persons in their respective capacities
with the Registrant and on the dates indicated.



SIGNATURE                                         TITLE               DATE

/s/ John Chapman                                CEO, Pres.       April  14, 2004
-------------------------------------
John Chapman

/s/ Dennis Thompson                              Director        April    , 2004
--------------------------------------
Dennis Thompson

/s/ John Casey                                   Director         April   , 2004
--------------------------------------
John Casey

                                     Page 26

<PAGE>



                                INDEX OF EXHIBITS
Exhibit       Page
No.            No.  Description
--------------------------------------------------------------------------------


3(i)(a)          * Articles of Incorporation of DFRC (note that these were
                   amended by the Articles of Merger constituting Exhibit 2 to
                   this Form 10-KSB)(incorporated herein by reference from
                   Exhibit No.3(i) to DFRC's Form 10-KSB forthe year ended
                   December 31, 1993).

3(i)(b)          * Amendment to Certificate of Incorporation dated February
                   16, 2000 to change name of DFRC from Vaxcel, Inc. to
                   Chattown.com Networks, Inc.(Incorporated by reference
                   from Exhibit 3(i)(b) of DFRC's Form 10QSB for the
                   six months ended June 30,2002)

3(i)(c)          * Amendment to Certificate of Incorporation dated December
                   19, 2000 to change name of DFRC from Chattown.com Networks,
                   Inc.to eLocity Networks Corporation (incorporated herein by
                   reference from Exhibit 3(iii)of DFRC's Form 10-KSB for the
                   year ended December 31, 2000).

3(i)d            * Amendment to Certificate of Incorporation dated December
                   23, 2002 to change name of DFRC from eLocity Networks
                   Corporation to Diversified Financial Resources Corporation
                   (incorporated herein by reference from Schedule 14(c) filed
                   August 8, 2002).

3(ii)            * Bylaws of DFRC, as amended (incorporated herein by
                   reference from Exhibit 3(ii) of DFRC's Form 10 KSB for the
                   year ended December 31, 1995).

10(x)            * Stock Exchange Agreement dated March 24, 2003 between DFRC
                   and John Chapman, Norman Mullins and Dennis Thompson in which
                   Diversified Financial Resources Corporation exchanged
                   6,000,000 restricted shares of the common stock of
                   Diversified Financial Resources Corporation for 6,000,000
                   restricted shares of the common stock of MT & C Diversified
                   Land and Natural Resources Corp. (Incorporated herein by
                   reference from the Form 8-K filed March 26, 2003).

10(xi)           * Commercial Lease Agreement dated May 1, 2002 between
                   Diversified Financial Resources Corporation and John
                   Chapman, as landlord, for lease of office space located at
                   1771 Wolviston Way, San Diego, CA, 92154 for a period of
                   three years. (Incorporated herein by reference from the
                   10-KSB for the year ended December 31, 2002.)

10(xii)          * Offshore Stock Purchase Agreement dated May 20, 2003, by and
                   between Diversified Financial Resources Corporation, a
                   Delaware corporation  ("DFRC") and The Sukumo Group, Inc.
                   ("Sukumo"), a Japanese corporation  whereas, Sukumo desires
                   to purchase up to Ten Million (10,000,000) shares of
                   restricted common stock of Diversified (the "Shares").
                   Incorporated herein by reference from Form 8-K filed May 20,
                   2003.

10(xiii)         * June 5, 2003 Employment Agreement with John Chapman for
                   compensation to serve as President, Chief Executive Officer
                   and Chief Financial Officer of the Company, for a term of
                   five years.  Incorporated herein by reference from the Form
                   10-QSB for the quarter ended June 30, 2003.

                                     Page 27

<PAGE>




10(xiv)         *   Stock Purchase Agreement dated June 30, 2003 between DFRC
                    and Diversified Holdings I, Inc., Wichita Development
                    Corporation , Salt Lake Development Corporation and Nexia
                    Holdings, Inc.  Incorporated herein by reference from Form
                    8-K filed June 30, 2003.

10(xv)          *   July 11, 2003 Asset Purchase Agreement between MT & C
                    Diversified Land & Natural Resources Corporation and
                    Headwaters Incorporated for the purchase of a mining
                    property located in Price, Utah.  Incorporated herein by
                    reference from the Form 8-K filed July 22, 2003.

10(xvi)      30     May 2003, Consulting Agreement with Hudson Consulting Group,
                    Inc.

31(i)        28     Certification As Adopted Pursuant To Section 302 Of The
                    Sarbanes-Oxley Act Of 2002

32(i)        29     Certification of Chief Executive Officer and Chief
                    Financial Officer


* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by DFRC.

                                     Page 28

<PAGE>



Exhibit 31(i)        CERTIFICATIONS

    I, John Chapman, certify that:

    1. I have reviewed this annual Report on Form 10-KSB of Diversified
Financial Resources Corporation;

    2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

    3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

    4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

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

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

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

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

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

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


Date: April 14, 2004  /s/ John Chapman
                      ------------------------------------
                      John Chapman, CEO and CFO


                                        Page 29

<PAGE>



Exhibit 32(i)

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Diversified Financial Resources
Corporation (the "Company") on Form 10-KSB for the period ending December 31,
2003 as filed with the Securities and Exchange Commission on the date hereof
(the"Report"), I, John Chapman, Chief Executive and Sole Executive Officer of
the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.
906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and
belief:

        I have reviewed this annual report on Form 10-KSB of Diversified
Financial Resources Corporation and:

            (a) The Annual Report on Form 10-KSB of the Company to which this
            certification is attached as an exhibit, fully complies with the
            requirements of section 13(a) or 15(d) of the Securities Exchange
            Act of 1934; and

            (b) The financial information contained in the Report fairly
            presents, in all material respects, the financial condition and
            result of operations of the Company.



        /s/ John Chapman
        ----------------
        John Chapman
        CEO and CFO
        April 14   , 2004




                                      Page 30

<PAGE>



Exhibit 10(xvi)
                              CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT ( the "Agreement") is made effective this day of May
2003, by and between Hudson Consulting Group, Inc. ("Consultant") whose address
is 268 West 400 South, Salt Lake City, Utah 84101 and Diversified Financial
Resources Corporation, a corporation with its offices located at 1771 Wolviston
Way, San Diego, CA 92154 (the "Company").

WHEREAS, Consultant has experience in writing press releases, preparing public
registration statements, drafting public reporting filings, evaluating business
opportunities, effecting mergers and acquisitions, advising corporate
management, implementing corporate governance and in performing general
administrative duties for publicly-held companies and development stage
investment ventures; and

WHEREAS, the Company desires to retain Consultant to assist the Company in its
development on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Consultant agree as follows:

1.      Engagement

        The Company hereby retains Consultant, effective as of the date hereof (
        the "Effective Date") and continuing until termination, as provided
        herein, to assist the Company in writing press releases, preparing
        public registration statements, drafting public reporting filings, real
        estate management services, evaluating business opportunities, providing
        advice with regard to mergers and acquisitions, implementing corporate
        governance, advising corporate management on general business or
        financial issues and performing general administrative duties in order
        to assist the Company in its plans and future (the "Services"). The
        Services are to be provided on a "best efforts" basis by Consultant;
        provided, however, that the Services will expressly exclude all legal
        advice, accounting services or other services which require licenses or
        certification which Consultant may not have.

2.      Term

        This Agreement will have a term of twelve (12) months (the "Term"),
        commencing with the Effective Date. Any notice to terminate given
        hereunder will be in writing and will be delivered at least thirty (30)
        days prior to the end of the Term.

3.      Time and Effort of Consultant

                                     Page 31

<PAGE>



        Consultant will allocate time as he deems necessary to provide the
        Services. The particular amount of time may vary from day to day or week
        to week. Except as otherwise agreed, Consultant's monthly statement
        identifying, in general, tasks performed for the Company will be
        conclusive evidence that the Services have been performed. Additionally,
        in the absence of willful misfeasance, bad faith, negligence or reckless
        disregard for the obligations or duties hereunder by Consultant,
        Consultant will not be liable to the Company or any of its shareholders
        for any act or omission in the course of or connected with rendering the
        Services.

4.      Compensation

        The Company agrees to pay to Consultant, a total of $7,500 in cash or
        the total amount of hourly billings reported by Consultant on a monthly
        basis, whichever is greater. All services provided by Consultant to be
        billed at the usual hourly rates for services provided by Consultant and
        its employees as set forth in Exhibit "A" hereto and as subsequently
        amended.

5.      Costs and Expenses

        All third party and out-of-pocket expenses incurred by Consultant in the
        performance of the Services will be paid by the Company, or Consultant
        will be reimbursed if paid by Consultant on behalf of the Company,
        within ten (10) days of receipt of written notice by Consultant,
        provided that the Company must approve in advance all such expenses in
        excess of $500 per month.

6.      Place of Services

        The Services provided by Consultant hereunder will be performed at
        Consultant's offices except as otherwise mutually agreed by Consultant
        and the Company.

7.      Independent Contractor

        Consultant will act as an independent contractor in the performance of
        its duties under this Agreement. Accordingly, Consultant will be
        responsible for the payment of all federal, state, and local taxes on
        compensation paid under this Agreement, including income and social
        security taxes, unemployment insurance, and any other taxes due, and any
        and all business license fees as may be required. This Agreement neither
        expressly nor implicitly creates a relationship of principal and agent,
        or employee and employer, between Consultant and the Company. Consultant
        is not authorized to enter into any agreements on behalf of the Company.

8.      No Agency Express or Implied

        This Agreement neither expressly nor impliedly creates a relationship
        of principal and

                                     Page 32

<PAGE>



        agent between the Company and Consultant, or employee and employer.

9.      Termination

        The Company and Consultant may terminate this Agreement prior to the
        expiration of the Term upon thirty (30) days written notice with mutual
        written consent. Failing to have mutual consent, without prejudice to
        any other remedy to which the terminating party may be entitled, if any,
        either party may terminate this Agreement with thirty (30) days written
        notice under the following conditions:

        (A) By the Company.

               (i)    If during the Term of this Agreement, Consultant is unable
                      to provide the Services as set forth herein for thirty
                      (30) consecutive business days because of illness,
                      accident, or other incapacity of Consultant; or,

        (B)    By Consultant.

               (i)    If the Company breaches this Agreement by failing to pay
                      the Consulting Fee or provide information required
                      hereunder; or,

               (ii)   If the Company ceases business or, other than in an
                      initial merger, sells a controlling interest to a third
                      party, or agrees to a consolidation or merger of itself
                      with or into another corporation, or enters into such a
                      transaction outside of the scope of this Agreement, or
                      sells substantially all of its assets to another
                      corporation, entity or individual outside of the scope of
                      this Agreement; or,

               (iii)  If the Company subsequent to the execution hereof has a
                      receiver appointed for its business or assets, or
                      otherwise becomes insolvent or unable to timely satisfy
                      its obligations in the ordinary course of business,
                      including but not limited to the obligation to pay the
                      Consulting Fee; or,

               (iv)   If the Company subsequent to the execution hereof
                      institutes, makes a general assignment for the benefit of
                      creditors, has instituted against it any bankruptcy
                      proceeding for reorganization for rearrangement of its
                      financial affairs, files a petition in a court of
                      bankruptcy, or is adjudicated a bankrupt; or,

               (v)    If any of the disclosures made herein or subsequent hereto
                      by the Company to Consultant are determined to be
                      materially false or misleading.


                                     Page 33

<PAGE>



        In the event Consultant elects to terminate without cause or this
        Agreement is terminated prior to the expiration of the Term by mutual
        written agreement, the Company will only be responsible to pay
        Consultant for unreimbursed expenses up to the effective date of
        termination and the Consulting Fee. If this Agreement is terminated by
        the Company for any other reason, or by Consultant for reasons set forth
        in B(i) through (v) above, Consultant will be entitled to any
        outstanding unpaid portion of the Consulting Fee.

10.     Indemnification

        Subject to the provisions herein, the Company and Consultant agree to
        indemnify, defend and hold each other harmless from and against all
        demands, claims, actions, losses, damages, liabilities, costs and
        expenses, including without limitation, interest, penalties and
        attorneys' fees and expenses asserted against or imposed or incurred by
        either party by reason of or resulting from any action or a breach of
        any representation, warranty, covenant, condition, or agreement of the
        other party.

11.     Remedies

        Consultant and the Company acknowledge that in the event of a breach of
        this Agreement by either party, money damages might be inadequate and
        the non-breaching party might have no adequate remedy at law.
        Accordingly, in the event of any controversy concerning the rights or
        obligations under this Agreement, such rights or obligations will be
        enforceable in a court of equity by a decree of specific performance.
        Such remedy, however, will be cumulative and nonexclusive and will be in
        addition to any other remedy to which the parties may be entitled.

12.     Services Provided by Consultant

        The parties hereto agree and stipulate that the Services provided by
        Consultant will expressly exclude all legal advice, accounting services
        or other services which require licenses or certification for providing
        those services. Consultants employees in providing services to the
        Company have not agreed to and have not entered into a client
        relationship with the Company. No advice provided by Consultant is
        considered to be professional, legal or accounting advice to the
        Company. The Company is advised herein by Consultant to seek independent
        professional, legal and accounting advice of its own for all matters and
        decisions reached or to be taken by the Company.

13.     Miscellaneous

        (A)    Subsequent Events. Consultant and the Company each agree to
               notify the other party if, subsequent to the date of this
               Agreement, either party incurs obligations which could compromise
               its efforts and obligations under this Agreement.

        (B) Amendment. This Agreement may be amended or modified at any time and
in

                                     Page 34

<PAGE>



               any manner only by an instrument in writing executed by the
               parties hereto.

        (C)    Further Actions and Assurances. At any time and from time to
               time, each party agrees, at its or their expense, to take actions
               and to execute and deliver documents as may be reasonably
               necessary to effectuate the purposes of this Agreement.

        (D)    Waiver.  Any failure of any party to this Agreement to comply
               with any of its obligations, agreements, or conditions hereunder
               may be waived in writing by the party to whom such compliance is
               owed.  The failure of any party to this Agreement to enforce at
               any time any of the provisions of this Agreement will in no way
               be construed to be a waiver of any such provision or a waiver of
               the right of such party thereafter to enforce each and every
               such provision.  No waiver of any breach of or noncompliance
               with this Agreement will be held to be a waiver of any other or
               subsequent breach or noncompliance.

        (E)    Assignment. Neither this Agreement nor any right created by it
               will be assignable by either party without the prior written
               consent of the other.

        (F)    Notices. Any notice or other communication required or permitted
               by this Agreement must be in writing and will be deemed to be
               properly given when delivered in person to an officer of the
               other party, when deposited in the United States mails for
               transmittal by certified or registered mail, postage prepaid, or
               when deposited with a public telegraph company for transmittal,
               or when sent by facsimile transmission charges prepared, provided
               that the communication is addressed:

               (i)                                 In the case of the Company:
                                                   Diversified Financial
                                                   Resources Corporation 1771
                                                   Wolviston Way San Diego, CA
                                                   29154 Telephone: 619-575-7041
                                                   Telefax: 619-934-5709
                                                   Attention: Pres. & CEO

               (ii)                                In the case of Consultant:
                                                   Hudson Consulting Group, Inc.
                                                   268 West 400 South Salt Lake
                                                   City, Utah 84101 Telephone:
                                                   (801) 575 8073
                                                   Telefax: (801) 575 8092

        or to such other person or address designated in writing by the Company
        or Consultant to receive notice.

        (G)    Headings. The section and subsection headings in this Agreement
               are inserted for convenience only and will not affect in any way
               the meaning or interpretation of this Agreement.

                                     Page 35

<PAGE>



        (H)    Governing Law. This Agreement was negotiated and is being
               contracted for in Utah, and will be governed by the laws of the
               State of Utah, and the United States of America, notwithstanding
               any conflict-of-law provision to the contrary.


        (I)    Binding Effect. This Agreement will be binding upon the parties
               hereto and inure to the benefit of the parties, their respective
               heirs, administrators, executors, successors, and assigns.

        (J)    Entire Agreement. This Agreement contains the entire agreement
               between the parties hereto and supersedes any and all prior
               agreements, arrangements, or understandings between the parties
               relating to the subject matter of this Agreement. No oral
               understandings, statements, promises, or inducements contrary to
               the terms of this Agreement exist. No representations,
               warranties, covenants, or conditions, express or implied, other
               than as set forth herein, have been made by any party.

        (K)    Severability. If any part of this Agreement is deemed to be
               unenforceable the balance of the Agreement will remain in full
               force and effect.

        (L)    Counterparts.  A facsimile, telecopy, or other reproduction of
               this Agreement may be executed simultaneously in two or more
               counterparts, each of which will be deemed an original, but all
               of which together will constitute one and the same instrument,
               by one or more parties hereto and such executed copy may be
               delivered by facsimile or similar instantaneous electronic
               transmission device pursuant to which the signature of or on
               behalf of such party can be seen.  In this event, such execution
               and delivery will be considered valid, binding and effective
               for all purposes.  At the request of any party hereto, all
               parties agree to execute an original of this Agreement as well
               as any facsimile, telecopy or other reproduction hereof.

        (M)    Time is of the Essence. Time is of the essence of this Agreement
               and of each and every provision hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date above
written.




The "Company"                                   "Consultant"
Diversified Financial Resources Corporation     Hudson Consulting Group, Inc.
/s/ John Chapman                                Richard Surber
---------------------------------------------   -------------------------------
John Chapman, President                         Richard Surber, President


                                     Page 36

<PAGE>








Exhibit A to Advisory Agreement

Method of Calculating Hourly Fees

The fees for services provided by Hudson will be based on the time expended by
Hudson's staff at the following hourly rates: Richard Surber $300; Gerald
Einhorn, $175; Michael Golightly, $175; Shane Stone, $120; Nathalie Fuller,
$100; Paul Crow, $80, other support staff, $45. Billing will be calculated on
quarters of an hour, with invoices for services mailed monthly. Payment policy
is that all invoices are payable within seven (7) day of receipt unless other
financial arrangements are agreed to by Hudson.

Assignment of work responsibilities will be based on Hudson's sole judgment and
decision, work division and assignments will be handled internally by Hudson and
under it's direction at all times. Mr. Surber as president of Hudson should be
consulted with regard to time frames, deadlines and requests for emergency or
immediate needs, with respect to services that may be requested by the client.

Additional services that may result in additional charges include but are not
limited to, copy services, long distance telephone calls, travel and lodging
expenses. All third party and out-of- pocket expenses incurred by Hudson in the
performance of the Services, provided for in the contract or for the settlement
of debts shall be paid by the Company, or Hudson shall be reimbursed if paid by
Hudson on behalf of the Company, within ten (10) days of receipt of written
notice by Hudson, provided that the Company must approve in advance all such
expenses in excess of $500 per month.


<PAGE>