<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10K-SB

         [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

         [ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                     FOR THE TRANSITION PERIOD FROM________TO __________


                        COMMISSION FILE NUMBER 000-29211

                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


             Florida                                           65-0847852
 -------------------------------                           -------------------
 (State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                   1601 Westpark Dr. #4C Little Rock, AR 72204
               --------------------------------------------------
               (address of principal executive offices)(zip code)

                                 (501) 661-9100
                           (Issuer's telephone number)
              Securities registered under Section 12(b) of the act:

                                      None

                    Name of each exchange on which registered

                                 Not applicable


              Securities registered under Section 12(g) of the Act:

                         Common Stock, par value $0.001

<PAGE>
         CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2)
HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

YES [X]  NO [ ]

         CHECK IF THERE IS NO DISCLOSURE OF DELINQUENT FILERS IN RESPONSE
TO ITEM 405 OF REGULATION S-B IS NOT CONTAINED IN THIS FORM, AND NO
DISCLOSURE WILL BE CONTAINED, TO THE BEST OF THE REGISTRANT'S
KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-KSB OR ANY
AMENDMENT TO THIS FORM 10-KSB. [X]


         STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR. $1,984,692

         STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NON-AFFILIATES COMPUTED BY REFERENCE TO THE PRICE AT WHICH THE STOCK WAS SOLD,
OR THE AVERAGE BID AND ASKED PRICES OF SUCH STOCK, AS OF A SPECIFIED DATE WITHIN
THE PAST 60 DAYS. THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NON-AFFILIATES AS OF APRIL 10, 2002 WAS APPROXIMATELY $2,970,732.00.

         STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS OF
COMMON EQUITY, AS OF THE LATEST PRACTICABLE DATE. AS OF APRIL 10, 2002,
5,763,956 SHARES OF COMMON STOCK ARE ISSUED AND OUTSTANDING.

                       DOCUMENTS INCORPORATED BY REFERENCE

         IF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE, BRIEFLY
DESCRIBE THEM AND IDENTIFY THE PART OF THE FORM 10-KSB INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY PROXY OR
INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OF
THE SECURITIES ACT OF 1933 ("SECURITIES ACT"). NOT APPLICABLE.


<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                          <C>
FORWARD-LOOKING STATEMENTS....................................................................3

PART I   .....................................................................................3
         ITEM 1.  DESCRIPTION OF BUSINESS.....................................................6
                  CORE BUSINESS...............................................................7
         ITEM 2.  DESCRIPTION OF PROPERTY....................................................14
         ITEM 3.  LEGAL PROCEEDINGS..........................................................14
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................14

PART II  ....................................................................................15
         ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS....................................................................15
         ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION..................................................................16
                  YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDE
                           DECEMBER 31, 2000.................................................16
         ITEM 7.  FINANCIAL STATEMENTS.......................................................19
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS..............................19

PART III ....................................................................................19
         ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS; COMPLIANCE WITH  SECTION 16(a) OF THE EXCHANGE
                  ACT........................................................................19
                  COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF
                           1934 .............................................................20
                           Section 16(a) Beneficial Ownership Reporting Compliance ..........20
         ITEM 10.  EXECUTIVE COMPENSATION....................................................21
                           SUMMARY COMPENSATION TABLE........................................21
                           BOARD COMPENSATION................................................21
         Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.................................................................21
                           Security Ownership of Certain Beneficial Owners...................21
                           Security Ownership of Management..................................22
         ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................22
         ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K..........................................23


</TABLE>




                                       2
<PAGE>



                           FORWARD-LOOKING STATEMENTS

         This discussion in this Annual Report regarding our company and its
business and operations contains "forward-looking statements." Such statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward-looking terminology such as "may," "expect,"
"anticipate," "estimate," or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. We do not
have a policy of updating or revising forward- looking statements and thus it
should not be assumed that silence by our management over time means that actual
events are bearing out as estimated in such forward-looking statements.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a)      History and Business Development.

         We were incorporated as a Florida corporation in July 1998, under the
name DAC Technologies of America, Inc. for the purpose of succeeding to the
interest of DAC Technologies of America, Inc., an Arkansas corporation ("DAC
Arkansas"). In September 1998, we purchased substantially all of the assets of
DAC Arkansas. DAC Arkansas, formed as an Arkansas corporation in 1993, may be
deemed to be a predecessor of our company. DAC Arkansas commenced operations
with the manufacture of various safety products, which were eventually acquired
by us. Our principal owners and management held similar positions with DAC
Arkansas. We have continued the operations of DAC Arkansas without any
significant changes. In July 1999, we changed our name to DAC Technologies Group
International, Inc.

         Between July 1998 and March 2002, we sold an aggregate of 5,763,956
shares of our Common Stock to approximately 42 accredited or otherwise
sophisticated investors with whom we had pre-existing relationships and who had
access to relevant information concerning the Company in a series of
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"). We received gross proceeds of approximately
$724,400 from these transactions. The funds have been used to fund our business
plan and we anticipate needing additional capital to complete the plan.

         We have not been involved in any bankruptcy, receivership or similar
proceeding. Except as set forth herein, we have not been involved in any
material reclassification, merger, consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of business.




                                       3
<PAGE>
(b)      Business Plan

         It is appropriate in this annual report to provide information on the
status of the Company in the last year and our vision for the future. This has
been a challenging year for our nation and the business community. Nevertheless,
DAC Technologies has positioned itself for growth in the coming year.

         o        We moved beyond our line of gun locks to significantly
                  diversify our product offerings.
         o        We developed a new line of security safes.
         o        These security safes accounted for 16% of the Company's
                  revenue for 2001.
         o        We developed California compliant gun locks and safes.
         o        We moved beyond our previous business model of serving
                  primarily mass merchants to broaden our customer base.
         o        We have significantly more customers today than we did one
                  year ago.
         o        We have productive relationships with the largest
                  distributors, retailers and buying groups in the U.S.
         o        We raised $415,000 in our private placement offering, of which
                  $150,000 was used to retire short-term debt and the remainder
                  was used to develop new products, prepare marketing and sales
                  materials and satisfy other developmental expenses.

         One year ago, at the beginning of 2001, the Company's primary product
were gun locks, which were marketed through several of the largest mass
merchants. While this was a profitable business, the potential for growth was
limited and the reliance on a very few large customers for the majority of the
Company's revenue was not a desirable situation.

         Today, the Company has developed a full line of security safes and has
significantly increased its distribution channels due to the increase in
wholesale customers and buying groups. Attractive, professional sales and
marketing materials have been developed and are in place, resulting in more
effective marketing of our products to customers. We now have not only the mass
merchant customers, but hundreds of new customers who are wholesale distributors
and retailers selling sporting goods, jewelry and other types of products in
various markets. We also have sales programs for two of the largest sporting
goods buying groups, Nations Best Sports and Worldwide Distributors, and are
increasing our customer base within these groups. In addition, we are actively
targeting additional markets as outlets for our products. We developed and are
now actively working with a nationwide cadre of commissioned sales
representatives who are adding new customers and increasing DAC's "footprint"
across the United States.

         Our Agreement with Nations Best Sports and Worldwide Distributors
provides for the distribution of our floor safes, wall safes, gun locks and
accessories, with payment terms of Net 30 days on standard orders and Net 60
days from orders at Trade Shows.

         Legislation in the state of California, effective January 1, 2002, set
performance standards for gun locks sold with firearms in that state, which
caused many dealers and distributors to be reluctant to purchase gun locks that
they were not sure would be able to be sold in California. The Company has
developed a number of new gun locks to meet mandatory standards established by
legislation in the State of California. We have begun shipping these new locks
to our mass merchant customers, firearm manufacturers and in a general
distribution to the sporting goods industry. We have several other
California-compliant gun locks under development which we will market through
similar channels as well as to gun manufacturers.

         The Company believes its products are compliant with the regulations of
all 50 states. The Company makes a practice of continuing to monitor these
regulations in order to update its practices and products. Currently DAC's
firearm safety devices may be sold in all 50 states.

                                       4
<PAGE>

         In summary, we have many more opportunities today than we did one year
ago.

         In August 2001, we began a private placement of the Company's common
stock to raise $1.5 million in capital to finance and accelerate this
development. Unfortunately, the recession and the tragic events of September
11th had a devastating effect on the nation's economy and capital markets. As a
result, the Company has raised $415,000 of the planned $1.5 million in an
offering period that was extended until March 31, 2002. These proceeds were used
to retire some short-term debt, to fund the research and development of new
products, the development of sales and marketing materials and attendance at
trade shows.

         In spite of the inability to raise the full $1.5 million, the Company's
Board of Directors unanimously agreed to continue our aggressive efforts to
position the Company for growth and to increase our market share. Thus, it was
necessary to fund these increased expenses to the extent that our cash flow and
receivables would allow. This situation continues to provide challenges for
management to develop new products and maintain adequate levels of inventory.

         In February 2001, the Company formed a subsidiary, Summit Training
International (STI), to provide training services for law enforcement and
corrections officers. Such training activities were complimentary to DAC's core
business and were intended to provide access to more customers for the Company's
products. As a result of the recessionary environment and the terrorist attacks
of September 11th, law enforcement travel and training activities effectively
came to a dead stop and seminars and conferences scheduled by STI had to be
cancelled. The Company has invested a substantial amount of money in this effort
that has not generated the desired results. STI has submitted bids for several
specific training opportunities with major law enforcement agencies that could
generate substantial revenue if we are selected to conduct this training. If we
win these bids or if the environment for general training seminars improves, STI
may resume full operations.

         In the fourth quarter of 2001, the Company's core business of safety
and security products strengthened its competitive position in a challenging
market and revenue increased by 7% over the comparable period of the prior year.
Aggressive efforts to increase our "footprint" and availability of our products
to consumers resulted in an increase in the number of wholesale distributors and
retail dealers who sell these items. Through our field representatives and our
own marketing efforts, we identified and sold products to a number of new
customers. In particular, the number of new distributors is encouraging, since
these distributors already have established retail dealer networks to whom they
sell their products. We believe that this strategy will result in faster growth
and demand for our products.

         Also in the fourth quarter, we completed the development of a new
product, the DAC SportSafe. This is an exciting new item that has generated
significant interest in the sporting goods community. This product was first
displayed at the Shooting, Hunting and Outdoor Trade (SHOT) Show in Las Vegas in
February 2002. We received a substantial number of orders for the SportSafe and
currently have a backlog of orders awaiting delivery of additional inventory.

         The Company sustained a net operating loss in 2001 that is attributable
to a decrease in revenue and increased expenses in the following areas:
salaries, product development, trade shows,



                                       5
<PAGE>
interest, freight, marketing and printing. In addition, STI incurred a net
operating loss in 2001, its first year of operation.

         The Company has implemented an aggressive cost cutting program which
targets expenses across the board. Commencing in February 2002, Management
agreed to reduce its compensation by approximately 60% and has discontinued
certain personnel benefits. Management may, in its discretion, recoup these
reductions in the future, should the Company achieve higher revenue levels.

         CORE BUSINESS

         We are in the business of developing, marketing and outsourcing the
manufacture of various consumer products, patented and non-patented, designed to
enhance and provide security for the consumer and for his property. We have
placed particular emphasis on gun safety because it has become a prominent
national issue due to the recent rash of school and workplace violence. In
particular, our products consist of gun locks, trigger locks, security safes,
specialty safes, personal protection devices and items for the health care
industry. A significant portion of our business is with mass market retailers
such as WalMart, Walgreens and Kmart. However, initiatives to develop a
nationwide cadre of manufacturer's representatives will allow us to penetrate
the entire sporting goods market, which consists of thousands of smaller gun
shops and sporting goods stores. We have also begun selling our products into
many other markets consisting of safe retailers, jewelry stores, truck stops,
alarm companies, RV retailers and computer retailers. Developing these markets
and continuing to focus attention on potential new ones will allow us to reduce
our dependence on our mass merchant customers.

         The majority of our products are manufactured and imported from
mainland China and shipped to a central location in Little Rock, Arkansas for
distribution. We have also entered into relationships with two companies to
provide fulfillment services on the East coast and West coast to reduce freight
costs and increase our ability to service our customers. The terms of the
contracts provide for the storage, safekeeping, shipping, receiving and other
services related to the distribution of DAC products to their customers. The
contracts are for a period of one and two years respectively and provide for
termination upon written notice to either party.

         The Company's business plan and strategy for growth focuses on:

                  o        increased penetration of our existing markets
                  o        aggressive targeting and penetration of other
                           markets, e.g. sporting goods retailers, jewelry
                           stores, truck stops and alarm companies
                  o        diversification of products and services to provide a
                           base for continued growth
                  o        adoption of new technologies for safety and security
                           products
                  o        adoption of new product lines
                  o        identification and recruitment of effective
                           manufacturer's representatives to actively market
                           these products on a national and international basis
                  o        aggressive cost containment



                                       6
<PAGE>

The principal key to increasing the rate of the Company's growth is the
availability of capital to maintain additional inventory, develop or acquire new
products and secure motivated professional employees. In this regard, the
Company began efforts in August 2001 to raise $1.5 million in capital through
the private placement of its common stock. Funds generated from this offering
were to be used for the reduction of debt and increase inventory, marketing
activities, research and development and for operating capital. As of March 31,
2002, this offering has raised $415,000.

Management believes that continued growth will require the Company to
continually innovate and improve its existing line of products and services to
meet consumer, industry and governmental demands. In addition, we must continue
to develop or acquire new and unique products that will appeal to gun owners. To
that end, we have developed a line of security safes that we believe will
provide the Company with a favorable niche in the marketplace. These safes are
of strong, all-steel construction for the storage of handguns, long-guns or
valuables. The line consists of floor safes, wall safes and one specialty safe
(SportSafe). These safes are high-quality items offered at reasonable prices.

In addition to our traditional products, our management is actively pursuing
initiatives which may add complementary businesses, products and services. These
initiatives include STI and the Company's continuous efforts to locate and
develop new products. These initiatives are intended to broaden the base of
revenues to make us less dependent on particular products. By developing
businesses which focus on products and services which complement our current
line of products, management hopes to leverage these opportunities to not only
develop new sources or revenue, but to strengthen the demand for our existing
products.

On July 11, 2001, David A. Collins who had been our Chairman and Chief Executive
Officer since the inception of the Company, resigned. Our President, Mr. James
R. Pledger, was elected to serve in these capacities. Mr. Collins continues to
handle key customers and provide other services for the Company on a consulting
basis.

(c)      Products

         Our products can be grouped into four main categories: (a) gun safety
locks, (b) security safes, (c) automotive and personal security, and (d)
non-security products. In developing these products, we focus on developing
features, establishing patents, and formulating pricing to obtain a competitive
edge. We currently design and engineer our safety products with the assistance
of our Chinese and domestic manufacturers, who are responsible for the tooling,
manufacture and packaging of our products.

(1)      Security Products

         (A)      Gun Safety Locks. We currently market 18 different gun safety
                  locks, most of which are available in retail packaging (as
                  singles and value packs) or in bulk packaging. These locks
                  range from metal or steel, keyed trigger locks to cable locks.
                  We market a patented gun lock designed specifically for use
                  with Glock handguns. Five of our gun locks have been approved
                  for sale in the State of California and more are expected to
                  be approved in 2002.



                                       7
<PAGE>

         (B)      Security Safes. We currently market seven security safes and
                  have two others developed and awaiting production. These safes
                  are of heavy duty all-steel construction and are perfect for
                  firearms, jewelry and other valuables. Most have electronic
                  keypads for easy access. Four of our safes have been approved
                  for sale in the State of California.

         (C)      Automotive and Personal Security. We currently market over 12
                  different electronic security devices designed to protect your
                  automobile or yourself. We also market non-electronic security
                  devices such as pepper spray and tear gas.

         (D)      Non-security Products. We currently market two licensed
                  products, the Clampit Cupholder and Plateholder.

(d)      Manufacturing and Distribution.

         Through our foreign and domestic manufacturing agents, we manufacture,
design and build our tooling, molds and products. Our administrative offices and
warehouse facilities are located in Little Rock, Arkansas. We contract our
manufacturing for tooling and production primarily in Shanghai, China, and to a
lesser extent, in Little Rock, Arkansas and Sandwich, Illinois. We distribute
the majority of our domestic and certain of our international business out of
our Little Rock facility. We have established relationships with fulfillment
facilities on the East coast and West coast to distribute some of our domestic
business, thereby reducing freight costs Most of our international business is
shipped directly to our customers from the Shanghai, China location. Products
are delivered to our Little Rock facility complete and ready for delivery to our
customers.

         We currently utilize both internal sales personnel and commissioned
independent sales representatives. We have increased our sales promotions and
sales development activities to provide assistance to the independent sales
representatives through the use of brochures, product samples and demonstration
products. We have redesigned our web site WWW.DACTEC.COM which will serve both
as a marketing tool and a platform from which we will be able to provide various
support services for our independent sales representatives. We have also added
e-commerce capability to our web site. We also utilize trade shows, both on a
regional and national level, to promote our products and to attract qualified
sales representatives.

Our management attempts to maintain sufficient inventory levels to meet
customer's demands, but there can be no assurance that we will be successful in
doing so. Turnaround time from the date we place an order with our manufacturers
until the product is received in our distribution center is normally between
four to six weeks. This quick turnaround time allows us to maintain minimum
inventory levels. However, since we out source our manufacturing, a good portion
of which is done in China, it is difficult to predict the efficiency of our
vendors.





                                       8
<PAGE>

(e)      Competition

         We operate in a very competitive industry, dominated by national and
international companies with well-established brands, some of whom may be better
capitalized, have more experience in our industry and have established varying
degrees of consumer loyalty. There are no assurances we will ever be successful
in establishing our brands or penetrating our target markets. Some of our
competitors in the business sectors which we operate in are:

         o        Gun Safety - Master Lock (which presently controls 60%-70% of
                  the market), Noble Security and Shot Lock.
         o        Security Safes - Sentry Safes, GunLocker and Gun Vault.
         o        Automotive security - Bulldog, Rally and Code Alarm.
         o        Personal security - competitors are varied and mostly smaller
                  vendors.
         o        Non-security products - competitors are various small and
                  large vendors.

         We are subject to competition that is expected to intensify in the
future because we believe that the number of competitors is increasing. There
are no significant barriers to entry into our markets. We feel our greatest
difficulties in competing come in areas such as gun safety and security safes
where our competitors are bigger, better known, and have greater resources
including capital and personnel. We realize it is important to achieve brand
name recognition in establishing market share, which, in turn generates
additional market share giving consumers preferences for brand names. We believe
that while brand names operate effectively in mainstream product distribution,
there is significant opportunity for lesser known names with specific products
and solutions that appeal to consumers. The keys to our maintaining a
competitive position are product design, pricing, quality of product and the
maintenance of favorable relationships with various mass merchandisers.

(f)      Principal Suppliers and Manufacturers

         Since most of our products, in particular our gun locks and security
safes, are manufactured in mainland China, we customarily develop our
manufacturing through trading companies located in China. Our principal agents
are Nimax and MDD Trading, Ltd., which are trading companies/agents who are
responsible for locating manufacturers for our gun safety, security safes and
electronics products. These companies facilitate the manufacturing and tooling
of our products and are paid directly by us; they, in turn, compensate the
manufacturers.

         Domestically, Personal Security Products, a Little Rock, Arkansas
company, manufactures our pepper spray and tear gas products, and Taico Design
Products, located in Sandwich, Illinois, manufactures our Clampit Cupholder and
Plateholder.

         We believe our relationships with our suppliers and manufacturers is
satisfactory; however, should any of them cease providing for us, we believe
they can be replaced within 30 days, without difficulty and at competitive cost.

(g)      Customers.

         Although we have numerous customers, we sell on the basis of purchase
orders, primarily to national retail chains such as Wal Mart, Kmart and
Walgreens. In 2001, Wal Mart accounted for



                                       9
<PAGE>
23% of our gross revenues, Kmart 13% and Walgreens 11%. On January 2, 2002, K
Mart filed for reorganization under the United States Bankruptcy Act. Thus far
it has had no adverse effect on the Company's business from this retailer or its
ability to collect its receivables.

         During 2001, we added a number of sporting goods distributors and
retailers to our customer base, and continue to focus our marketing efforts
through our independent sales representatives in this area. Demand for our
security safes has also presented opportunities in other markets consisting of
safe retailers, jewelry stores, truck stops, alarm companies, RV retailers,
computer retailers and many more. By developing these new markets we will be
able to be less dependent on our primary customers.

(h)      Intellectual Property.

         We believe that protection of proprietary rights to our products is
important because, as we are in a highly competitive market, a patent provides
us with a competitive advantage by limiting or eliminating similarly designed
competitive products. To this end, we have obtained U.S. patents on certain of
our products as follows:

<TABLE>
<CAPTION>

                  Model                                       Patent No.                    Expiration
                  -----                                       ----------                    ----------
         <S>                                                 <C>                           <C>
         TVP 095 Trigger Lock                                 Des. 375,342                       2009
         SWA 03 SWAT Steering Wheel Alarm                     Des. 365,774                       2009
         KAL 201 Personal Safety Alarm                        Des. 355,863                       2008
         Key Chain Alarm                                      5,475,368                          2008
         GWA 001 Glass/Window Alarm                           Des. 371,086                       2009
         Defense Spray and Flashlight                         Des. 375,994                       2009

</TABLE>

         In addition, we have entered into licensing agreements giving us the
exclusive right to sell the patented DAC Lok, a gun lock designed specifically
for Glock handguns, and the Clampit Cupholder and Plateholder in the U.S., with
certain minor exceptions.

         We intend to register our product names, although we may not be
successful in doing so particularly because of their generic character. As we
develop trademarks, trade names, copyrights or other intellectual property
rights, we may seek to protect these, as well as those related to the products
listed above, by registration in the United States and other countries where
these products may be marketed.

         Depending upon the development of our business, we may also wish to
develop and market products which incorporate patented or patent-pending
formulations, as well as products covered by design patents or other patent
applications.

         While we may seek to protect our intellectual property, in general,
there can be no assurance that our efforts to protect our intellectual property
rights through copyright, trademark and trade secret laws will be effective to
prevent misappropriation of our products. Our failure or inability to



                                       10
<PAGE>
protect our proprietary rights could have a material adverse affect on our
business, financial condition and results of operations. Moreover, inasmuch as
we will often seek to out source manufacture products which are similar to those
manufactured by others, it is critical for us to insure that our manufactured
products do not infringe upon existing patents of others.

(i)      Governmental Regulations.

         Several federal laws regulate the ownership, purchase and use of
handguns, including the 1968 Gun Control Act and the Brady Bill. There is not,
however, any federal law which requires the use of gunlocks. A minority of
states have adopted laws which in varying degrees have gunlock legislation. Some
examples are as follows:


         CALIFORNIA:       Passed legislation requiring gun safety devices to be
                           sold with every firearm sold within the state, and
                           established quality standards for those devices.

         CONNECTICUT:      Passed Child Access Prevention Act.

         MASSACHUSETTS:    Passed a Child Access Prevention law which requires
                           firearms be safely stored and inaccessible to
                           children; a requirement for the sale of child safety
                           locking devices with all firearms.

         In the event of federal governmental regulation requiring trigger locks
on guns, such regulations presumably will serve to increase the demand for our
products and sales in the gun safety area. Such regulations may, however, also
be promulgated to regulate the specifications of the devices.

         We have obtained the required approvals from the Federal Communications
Commission for the Rf signals emitted by our remote control units used with our
car alarms. We are not aware of any other required governmental approvals on any
of our products.

(j)      Research and Development.

         Research and development costs are expensed as incurred. We develop our
products internally, utilizing the expertise of our manufacturers, input from an
engineering consulting firm and input from our customers. Any R & D cost
incurred by our manufacturers is passed on to us in the pricing of the tooling,
molds and products. We do not pass such costs on to our customers. Because of
our close relationships with our customers, we are able to determine the level
of interest in a particular product before investing significant time or capital
in its development. Once a potential new product is identified, we utilize the
services of a patent attorney to assure that we do not infringe upon anyone's
patent rights. We also design our own packaging internally.

         Working closely with our manufacturers' engineers, a final design for a
product and cost estimations are completed. If management determines that a
product can be produced at competitive



                                       11
<PAGE>
prices, and the interest level justifies production, we proceed with having
tooling made. We own the molds and tooling for all of our gunlock products.
After pre-production samples are approved, full production begins.

(k)      Environmental Laws.

         We incur no costs and suffer no adverse effects by complying with
environmental laws (federal, state and local).

(l)      Employees.

         We currently employ seven employees, all of whom are full-time:
President & Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, Head of Manufacturing, salesman, receptionist/clerk and shipping clerk.
There are no collective bargaining agreements or contracts.

         We also employ, through a Consulting Agreement, David A. Collins, our
Company founder and former Chairman and CEO. Under the terms of this consulting
agreement, Mr. Collins provides the Company with assistance in product
development and marketing, as well as acting as our sales agent for most of our
large mass merchant and gun manufacturer customers.

(m)      Reports to Security Holders.

         Copies of this report, including exhibits to the Report and other
materials filed with the SEC that are not included herein, may be inspected and
copied, without charge, at the Public Reference Room, 450 Fifth Street, N.W.,
Washington, DC 20549. Information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-800-SEC-0330. In addition, the
Commission maintains an Internet site on the World Wide Web at
HTTP://WWW.SEC.GOV that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.

(n)      Risk Factors.

         We have a history of moderate operating profits, and our growth program
and future profitability remains uncertain. Our future profitability may depend
on corresponding increases in capital or revenues from our expanded business
operations. We believe that operating results will be adversely effected if
start-up expenses associated with our new product lines are incurred without
sufficient offsetting capital or revenues. Moreover, future events, including
unanticipated expenses or increased competition could have an adverse effect on
our long-term operating margins and results of operations. There can be no
assurance that our Company's growth program will result in an increase in the
profitability of our operations.

         We expect to encounter risks associated with developing companies. We
are in an early stage of development and we expect to encounter risks associated
with early-stage companies. There is no assurance that our operations will be
profitable or that profitability will increase to the level that



                                       12
<PAGE>
will provide shareholders a reasonable return on their investment. If we fail to
adequately address these risks, our business, financial condition and results of
operations may be materially adversely affected.

         Our success depends on maintaining relationships with key customers.
Although we have expanded our customer base, we continue to have several
customers upon which we depend on for the sale of a large percentage of our gun
lock and security products. Customer orders are dependent upon their markets and
may vary significantly in the future based upon the demand for our products. The
loss of one or more of such customers, or a declining market in which such
customers reduce orders or request reduced prices, could have a material adverse
effect on our business.

         We depend on contract manufacturers for substantially all of our
manufacturing requirements. The inability of our contract manufacturers to
provide us with adequate supplies of high quality products or the loss of any of
our contract manufacturers would have an adverse effect on our business. We have
developed a highly outsourced contract manufacturing capability for the
production of our products. Our primary relationship with our foreign contract
manufacturers has been accomplished through our agents located in Shanghai,
China. We rely on contract manufacturers to procure components, assemble, and
package our products. We believe there are alternative manufacturing companies
available at competitive prices, any interruption in the operations of one or
more of these contract manufacturers or delays in their shipment of products
would adversely affect our ability to meet scheduled product deliveries to our
customers.

         We may be unable to compete favorably in the highly competitive
security products and gun lock industry. The manufacture and sale of security
safes and gun lock products is highly competitive and there are no substantial
barriers to entry into the market. Most of our competitors are large,
well-established companies with considerably greater financial, marketing, sales
and technical resources than those available to us. Additionally, many of our
present and potential competitors have research and development capabilities
that may allow such competitors to develop new or improved products that may
compete with our product lines. These companies may succeed in developing
proposed products that are more effective or less costly than our proposed
products or such companies may be more successful in manufacturing and marketing
their proposed products. An increase in competition could result in a loss of
market share.

         We may not be able to attract and retain the qualified personnel we
need to succeed in the future. Our future success will depend in part on our
ability to attract and retain qualified personnel to manage the development and
future growth of our company. While we believe we have a reliable and effective
core team, there can be no assurance that we will be successful in attracting
and retaining such personnel.

         We anticipate eventual state and federal gun lock legislation and
regulation. While gun locking devices are currently not regulated under federal
or most state statutes or regulations, it is likely that such devices will be
regulated in the future. At the present time, the state of California has
established standards for gun locks which must accompany the sale of any
firearm. This law does not address the aftermarket sale of gun locks, which is
one of our principal markets. Other states are considering such legislation. In
an effort to develop a national standard, the firearms




                                       13
<PAGE>
industry is working with the U.S. Consumer Products Safety Commission to develop
reasonable performance standards for gun locks. There can be no assurances that
our devices will meet the requirements of such future regulations, in which
case, sales of such devices by us would be adversely affected.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our corporate headquarters are located to 1601 Westpark Drive, Suite
4C, Little Rock, Arkansas 72204. This location consists of approximately 1,500
square feet of office space and 3,500 square feet of warehouse space. All of the
administrative, accounting and shipping functions are performed at this
location, as well as some sales. This space is leased for one year, expiring
February 1, 2003, at a monthly rent of $2,625. There are no renewal options. We
believe there are adequate alternative facilities at reasonably competitive
prices in the event this lease is terminated.

ITEM 3.  LEGAL PROCEEDINGS

         We are the subject of a suit instituted by us against our former
manufacturer SKIT International, Ltd. and Uni-Skit Technologies, Inc. The suit,
commenced in August 2000, alleges breach of a manufacturing contract which
required defendants to manufacture certain of our products with the range of
"competitive pricing," a defined term. We are seeking damages and rescission of
165,000 shares of our common stock as part of the compensation paid to the
defendants. The defendants have denied the allegations and have counterclaimed
for an outstanding balance of $182, 625, for rescission of the manufacturing
agreement and for damage to its business reputation. We have denied, and believe
there is no merit to the counterclaim's material allegations. This suit is
presently in its discovery stage. We have replaced the defendants as
manufacturers of our products.

         We instituted suit along with The Collins Family Trust, our affiliate
in which David Collins, our prior Chairman claims a beneficial interest, and DAC
Technologies of America, Inc., our predecessor, against Larry Legel, our former
CPA, Director and the Trustee of The Collins Family Trust. The suit, commenced
in March 2001 alleges we transferred 180,000 shares of our common stock for
services which the Defendant did not provide. The suit also alleges that the
Defendant breached an agreement not to sell his shares before certain private
investors had recouped their investment. We are seeking equitable recission,
damages, and injunctive relief.

         The defendant filed a Motion to Dismiss based on lack of personal
Jurisdiction which Motion was denied by the Court. Thereafter, the Defendant had
thirty days (30) to submit a statement as to why a Default Judgment should not
be entered against him. The Defendant has not yet submitted this Statement. The
Court has not yet scheduled the hearing on the Company's Motion for Default
Judgment.

         Our former CPA, officer and director, instituted suit against the
Company in August 2001, alleging the failure by the Company and its officers to
permit the sale of his shares of the Company. A Motion to Dismiss was filed and
granted, as of December 31, 2001, an Amended Complaint was not filed.

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

         There are no matters submitted during the fourth quarter of the fiscal
year covered by this report to a vote of security holders, through the
solicitation of proxies or otherwise.





                                       14
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         On June 19, 2000, our common stock began trading on the Nasdaq
Over-the-Counter Bulletin Board market under the trading symbol DAAT. The high
and low bid information for each quarter is presented below. These prices
reflect inter-dealer prices, without retail markup, markdown or commission and
may not represent actual transactions.

         Quarter Ended                      High              Low
         -------------                      ----              -----

         June 30, 2000                      $6.00             $2.00
         September 30, 2000                 $4.50             $1.50
         December 31, 2000                  $2.05             $0.68
         March 31, 2001                     $1.58             $0.41
         June 30, 2001                      $1.80             $0.48
         September 30, 2001                 $2.10             $1.42
         December 31, 2001                  $2.10             $1.20

As of April 12, 2002, there were approximately 82 holders of record, including
those in street name, of our 5,767,956 shares of common stock outstanding.

         We have not paid a cash dividend on the common stock since inception.
The payment of dividends may be made at the discretion of our Board of Directors
and will depend upon, among other things, our operations, our capital
requirements and our overall financial condition. Although there is no
restriction to pay dividend, as of the date of this registration statement, we
have no intention to declare dividends.

         During 2001, 41,956 shares of our restricted common stock were issued
to James R. Pledger, our company President, as compensation under the terms of
an employment agreement. Because Mr. Pledger had a preexisting relationship with
us and access to relevant information concerning us, the issuance of such
securities was exempt from the registration requirements of the Securities Act
pursuant to the exemption set forth in Section 4(2) of the Securities Act..

         During 2001, 5,000 shares of our restricted common stock were issued to
various independent sales representatives as compensation for services. Because
these individuals had a preexisting relationship with us and access to relevant
information concerning us, the issuance of such securities was exempt from the
registration requirements of the Securities Act pursuant to the exemption set
forth in Section 4(2) of the Securities Act..

         On April 4, 2001, 75,000 shares of our restricted common stock were
issued as payment on the licensing agreement for the use of a patent for our
DACLok. Because this individual had a preexisting relationship with us and
access to relevant information concerning us, the issuance of such securities
was exempt from the registration requirements of the Securities Act pursuant to
the exemption set forth in Section 4(2) of the Securities Act..



                                       15
<PAGE>
         On June 1, 2001, 34,000 shares of our restricted common stock were
issued to our attorney for services to be provided in connection with the
company's lawsuit against its former manufacturer. Because Mr. Shemin had a
preexisting relationship with us and access to relevant information concerning
us, the issuance of such securities was exempt from the registration
requirements of the Securities Act pursuant to the exemption set forth in
Section 4(2) of the Securities Act..

         On June 27, 2001, 55,000 shares of our common stock were cancelled.
These shares were previously issued pursuant to a consulting agreement with
International Equities Group. The consulting agreement was mutually terminated,
and a portion of the previously issued shares were returned to the company.

         Pursuant to a Private Offering Memorandum dated August 27, 2001, the
company sold an aggregate of 415,000 shares of restricted common stock at a
price of $1.00 per share, to 12 individual investors who were either accredited
or otherwise sophisticated investors and who had access to all material
information. The transaction was exempt under Rule 506 of Regulation D of the
Securities Act.

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

         The following Management Discussion and Analysis of Financial Condition
is qualified by reference to and should be read in conjunction with, our
Financial Statements and the Notes thereto as set forth at the end of this
document. We include the following cautionary statement in this Form 10K-SB for
any forward-looking statements made by, or on behalf of, the Company. Forward-
looking statements include statements concerning plans, objectives, goals,
strategies, expectations, future events or performances and underlying
assumptions and other statements which are other than statements of historical
facts. Certain statements contained herein are forward-looking statements and
accordingly, involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those expressed in the forward-looking
statements. The Company's expectations, beliefs and projections are expressed in
good faith and are believed by the Company to have a reasonable basis, including
without limitations, management's examination of historical operating trends,
data contained in the Company's records and other data available from third
parties, but there can be no assurance that management's expectations, beliefs
or projections will result or be achieved or accomplished.

(b)      YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED
         DECEMBER 31, 2000.

         For the year ended December 31, 2001, the Company had a net loss of
$404,665 on sales revenues of $1,984,692, as compared to net income of $74,781
on sales revenues of $2,149,195 for the year ended December 31, 2000. Of this
net loss, $190,721 was incurred by our wholly-owned subsidiary, Summit Training
International, Inc., which began operations in 2001.

         Net sales revenues decreased $164,503 during 2001 as compared to 2000.
Sales revenues from electronic security products and gun locks decreased
$400,207 and $117,590, respectively.



                                       16
<PAGE>
These decreased were offset by the sales of our line of safes introduced in 2001
in the amount of $325,386.

         The decrease in our electronic security products is primarily related
to our two SWAT car alarms. Due to production delays in 2000 from moving to a
new manufacturer for these products, several large customers were lost for these
products. We continued to feel the effect of these losses in 2001. Our emphasis
on our gun safety products also affected sales in the electronic security area.
We intend to refocus our sales efforts in this area.

         The decrease in sales of our gun lock products from $1,314,456 in 2000
to $1,196,866 in 2001 was due to a number of factors. Pending legislation in the
state of California (which became effective January 1, 2002) which set
performance standards for gun locks sold with firearms in that state, caused
many dealers and distributors to be reluctant to purchase gun locks that they
were not sure would be able to be sold in California. The Company currently has
five gun locks approved for sale in the state of California, and three more that
should be approved early in the second quarter of 2002. In addition, during
2000, our two largest mass-merchant customers placed three of our gun locks in
their gun accessory modules. Initial orders to stock their entire chain of
stores had a substantial impact on sales in 2000. Giving affect to these initial
orders, sales of gun lock products actually increased slightly in 2001 over 2000
in the amount of $15,135.

         Much of the Company's product development, sales and marketing emphasis
in 2001 was directed towards our new line of security safes. Sales began in the
second quarter of 2001 and totaled $325,386 for the year. We continue our
efforts in increasing the markets for this line of products. Sales of our
security safe products continue to grow and were $172,000 in the first quarter
of 2002.

         Operating expenses in 2001 were $1,434,243 as compared to $848,285 for
2000. This increase of $585,958 was due mainly to increases in salaries, freight
costs, product development, marketing and the operating expenses of Summit
Training International. Operating expenses of Summit Training accounted for
$242,734 of this increase.

         Salaries and other compensation (such as commissions) increased
approximately $194,279. These increases were due in part, to additional
personnel and our efforts to penetrate new markets by the use of commissioned
manufacturing representatives.

         Freight costs increased $51,238 over the prior year. This increase is
directly related to our new line of security safes, which are more expensive to
ship than our other product lines.

         We also incurred additional expenses in 2001 related to the development
of our new line of security safes, as well as the testing and development of
California compliant gun locks. In our efforts to reach new markets, additional
expenses were incurred in attending various trade shows throughout the country.
Expenses related to being a publicly owned company also increased as we incurred
a full year of these expenses in 2001 as compared to only a half year in 2000.
In addition, we experienced increases in normal recurring items such as health
benefits for employees, telephone, liability insurance, payroll taxes, etc.



                                       17
<PAGE>
         During the first quarter of 2002, management has initiated across the
board cuts in expenses. Compensation to management has been cut by 60%. Much of
the increase in operating expenses in 2001 was related to the Company's
aggressive marketing and product development efforts, which the Company had
hoped to fund through the $1.5 million private placement offering. Due to
economic conditions and the tragic events of September 11th, this offering was
not as successful as anticipated. Management has thus initiated these budget
cuts to bring the Company's expenses back in line with projected sales revenues
for 2002. We believe we will be successful in marketing some of our new products
to our mass merchant customers in 2002. The rollout of our new DAC SportSafe
should gain momentum as the year progresses. These efforts should result in
increased sales revenues in the second half of 2002.

         o         Liquidity and Capital Resources

         Our primarily source of cash is funds from our operations. We believe
that external sources of liquidity could be obtained in the form of bank loans,
letters of credit, etc. We maintain an account receivable factoring arrangement
in order to insure an immediate cash flow. The factor may also, at its
discretion, advance funds prior to the collection of our accounts. Advances are
payable to the factor on demand. Should our sales revenues significantly
decline, it could effect our short term liquidity. For the period ending
December 31, 2001, we owed our factor approximately $277,112, pursuant to our
account receivable factoring arrangement.

         On June 14, 2001, the Company refinanced its $250,000 line of credit
with a local bank. The loan was refinanced as two loans, one an installment loan
for $70,000 which matures April 30, 2003, and the second as a $180,000 line of
credit that matures April 30, 2002. We believe our revenues will be sufficient
to pay these obligations. If not, we will seek to refinance them or request our
shareholders to pay their guarantees.

         o         Trends

         Ongoing publicity involving firearms has caused gun safety to continue
as a prominent national issue. Gun violence, especially in schools has prompted
the President, as well as national and state legislators, to debate legislation
requiring gun safety locks on all firearms. Threatened litigation against gun
manufacturers has caused them to begin supplying gun safety locks with the guns
they manufacture.

         The tragic terrorist attack against the United States on September 11,
2001, caused many Americans to become concerned about their personal security.
As a result, many people are purchasing firearms to maintain for home defense
purposes. While they are purchasing handguns, many are also concerned with the
safe storage of the firearm in the home and want to purchase affordable gun
safes to increase security. As a result, we have seen an increase in sales of
safes.

         The State of California enacted legislation to establish performance
standards for "firearm Safety devices," "lock-boxes," and "safes". These
standards require that the "Firearm Safety devices, " "lock-boxes" and "safes"
withstand an attack with hand tools, such as hammers, screwdrivers, electric
drills, screws and hack saws in order to satisfy California law. This
legislation



                                       18
<PAGE>
requires manufacturers to have their products tested by an independent testing
laboratory in order to be listed as an approved device. This testing has
resulted in significant expenditures to the company in the past year. We
anticipate that similar standards will be adopted throughout the United States
in the next few years.

ITEM 7.  FINANCIAL STATEMENTS

         Our financial statements are contained in pages F-1 through F-
following.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         None

                                    PART III

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

         The following sets forth the names and ages of our executive officers
and directors. Directors are elected annually at our annual meeting of
stockholders, and serve for the one year term for which they are elected and
until their successors are duly elected and qualified. Our officers are
appointed by the board of directors and serve at the board's discretion.

<TABLE>
<CAPTION>

Name                                Age              Position                           Term
----                                ---              --------                           ----
<S>                                 <C>              <C>                                <C>
James R. Pledger                    54               President, CEO, Director           2001-2002

Robert C. Goodwin                   45               CFO/Director                       2001-2002

Ford Overton                        35               Director                           2001-2002

Walter G. Howard                    30               COO/Director                       2002-2003

</TABLE>

         James R. Pledger is a 30 year veteran of the FBI, having retired in
1996. From 1996 until July 2000, Mr. Pledger was the National Sales manager and
Chief Sales Officer for Glock, Inc., the Austrian-based manufacturer of
semi-automatic pistols and equipment for police, military and civilian markets,
and as such, was responsible for all sales and marketing in North America. In
July 2000, Mr. Pledger terminated his relationship with Glock to become a
consultant to the Company. On September 15, 2000, Mr. Pledger and the Company
mutually concluded his consulting affiliation and he thereafter became the
Company's President. On July 11, 2001, upon the resignation of David A. Collins
as Chairman and Chief Executive Officer, Mr. Pledger was named to serve in those
capacities as well.

         Robert C. Goodwin has served as the Company's CFO since its inception
in July 1998, as well as DAC Arkansas continuously since 1993. In July 1998, Mr.
Goodwin was elected to the Company's board.



                                       19
<PAGE>

         Walter G. Howard joined the Company in February 2002. From October 1996
until joining DAC, he was Vice President of Commodity Risk Management in Little
Rock, Arkansas. At Commodity Risk Management, Mr. Howard was in charge of the
daily operations and oversaw the financial aspects of the company. CRM is an
introducing broker of Cargill Investor Services of Chicago.

         Ford Overton joined the Board of Directors of the Company in August
2001. Mr. Overton is currently an Executive Vice President and COO of Rineco,
Inc., a hazardous waste and management company. Mr. Overton brings a wealth of
business, marketing and executive experience to the Company.


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934

Section 16(a) Beneficial Ownership Reporting Compliance.

Based upon the Company's review of forms filed by directors, officers and
certain beneficial owners of the Company's common stock (the "Section 16
Reporting Persons") pursuant to Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company has identified the following
Form 5 filings that were filed late by the Section 16 Reporting Persons during
fiscal 2001 James R. Pledger, David A. Collins, Collins Family Trust, Dan R.
Lasater, Robert C. Goodwin and William Ford Overton. The Company is not aware of
any failures by the Section 16 Reporting Persons to file the forms required to
be filed by them pursuant to Section 16 of the Exchange Act.




                                       20
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

         The following table sets forth summary information concerning the
compensation received for services rendered to us during the fiscal year ended
December 31, 2001.


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                              Annual Compensation                                Long-term  Compensation
                             -----------------------------------------------------    -------------------------------------------
                                                                                       Awards            Payouts
                                                                                      ---------          -------
                                                                                      Securities
                                                                                      Underlying
                                                 Other Annual     Restricted Stock     Options/            LTIP       All Other
Name & Principal Position     Year     Bonus     Compensation          Awards            SAR's            Payouts    Compensation
-------------------------    -----     -----     ------------     ----------------    ----------          -------    ------------
<S>                          <C>         <C>        <C>           <C>                <C>                 <C>        <C>
James R. Pledger,            2001                    60,000            41,956
CEO/ PRES

Robert C.                    2001                    54,000
Goodwin, CFO

David A. Collins             2001                   $47,923
Pres. CEO(1)

</TABLE>
(1)      David A. Collins resigned as President and CEO on July 11, 2001.

                           BOARD COMPENSATION

         Our directors do not receive cash compensation for their services as
Directors.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
beneficial ownership of our common stock as of December 31, 2001 by (a) each
person known by us to be the beneficial owner of five percent or more of the
outstanding common stock and (b) all executive officers and directors both
individually and as a group. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, we believe that
each of the shareholders named in this table has sole or shared voting and
investment power with respect to the shares indicated as beneficially owned.
Applicable percentages are based upon 5,723,956 shares of common stock
outstanding.

(b)      Security Ownership of Certain Beneficial Owners.

<TABLE>
<CAPTION>

                       Name and Address of                         Number of Shares                   Percent
Title of Class         Beneficial Owner                            Beneficially Owned                 of Class
--------------         ----------------                            ------------------                 --------
<S>                    <C>                                             <C>                              <C>
Common Stock           Dan R. Lasater                                  1,223,765                        21.4%
                          Little Rock, AR

Common Stock           Collins Family Trust                              609,250(1)                     10.6%
                          c/o David A. Collins
                          Aventura, FL
</TABLE>



                                       21
<PAGE>

<TABLE>
<CAPTION>

<S>                    <C>                                             <C>                              <C>
Common Stock           David A. Collins                                  266,750(1)                      4.7%
                          Aventura, FL

Common Stock           Collins Childrens Trust                           390,300                         6.8%
                          c/o Kimberly Talley
                          Little Rock, AR

Common Stock           James R. Pledger                                  394,856                         6.9%
                          Little Rock, AR

Common Stock           Warren Overton                                    404,750                         7.1%
                           Little Rock, AR

</TABLE>

(1)      David A. Collins is the Trustee of the Collins Family Trust with full
         voting power. David Collins acknowledges beneficial ownership and
         control of the shares held in this Trust. The beneficiaries of the
         Collins Family Trust are Payton P. Collins and David A. Collins, Jr.

(b)      Security Ownership of Management

<TABLE>
<CAPTION>

                           Name and Address of                Number of Shares                   Percent
Title of Class             Beneficial Owner                   Beneficially Owned                 of Class
--------------             ----------------                   ------------------                 --------
<S>                        <C>                                <C>                                 <C>
Common Stock               James R. Pledger                   394,856                             6.9%
                           Little Rock, AR

Common Stock               Robert C. Goodwin                  5,000                               0.09%
                           Sherwood, AR

Common Stock               William Ford Overton               45,000                              0.79%
                           Little Rock, AR

</TABLE>

         There are no arrangements which may result in a change in control of
the Company.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the year ended December 31, 2001, the Company entered into notes
payable with certain affiliated stockholders of the Company. Borrowings under
these notes, which totaled $175,000 bear interest at rates ranging from 8% to
10% and are payable on demand. At December 31, 2001, outstanding borrowing under
these notes totaled $125,000. During the year ended December 31, 2001, the
Company recognized interest expense of approximately $7,600 on these notes.





                                       22
<PAGE>

         On April 4, 2001, the Company issued a total of 75,700 shares of
restricted common stock valued at $30,280 in connection with the establishment
of consulting agreements with certain individuals. On June 1, 2001, the Company
issued additional shares of restricted common stock totaling 38,300 which were
valued at $32,555 to certain individuals in connection with the establishment of
service agreements. The value of these restricted common shares was based on
two-thirds of the value of unrestricted shares on that date.

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

         The following documents are incorporated by reference from the
Registrant's Form 10- SB filed with the Securities and Exchange Commission (the
"Commission") file #000-29211, on January 28, 2000.

Exhibit           Description
-------           -----------

 2                Asset Purchase Agreement
 3.1              Articles of Incorporation
 3.2              Bylaws
 10.1             Consulting Agreement
 10.2             Lease
 10.3             Factoring Agreement

The following documents are filed as a part of this Report.

 23.1             Consent of Moore, Stephens & Frost, CPA's
 23.2             Consent of Allan M. Lerner, P.A.






                                       23
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                     DAC Technologies Group International, Inc.



                                     By: /s/ James R. Pledger
                                         --------------------------------------
                                             James R. Pledger
                                             President


Date: April 16, 2002
<PAGE>





                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                           DECEMBER 31, 2001 AND 2000

                        CONSOLIDATED FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITOR'S REPORT







                                      F-1
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


Board of Directors and Stockholders
DAC Technologies Group International, Inc.
Ft. Lauderdale, Florida

       We have audited the accompanying consolidated balance sheets of DAC
Technologies Group International, Inc. and subsidiary as of December 31, 2001
and 2000, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years then ended. 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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

       In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of DAC Technologies
Group International, Inc. and subsidiary as of December 31, 2001 and 2000, and
the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.


                                                  Certified Public Accountants





Little Rock, Arkansas
February 15, 2002





                                      F-2
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2001 AND 2000


<TABLE>
<CAPTION>
                             Assets                                                                2001                   2000
                                                                                               ------------            ------------
<S>                                                                                            <C>                     <C>
Current assets
   Cash                                                                                        $     72,633            $     26,433
   Accounts receivable, less allowance for doubtful
     accounts of  $21,951 and $-0- in 2001 and
     2000, respectively                                                                             411,657                 464,196
   Inventories                                                                                      415,116                 363,269
   Advances to related parties                                                                      103,404                  62,573
   Prepaid expenses                                                                                  79,206                  29,992
   Current deferred income tax benefit                                                               15,150                      --
                                                                                                -----------            ------------
Total current assets                                                                              1,097,166                 946,463
                                                                                                -----------            ------------
Property and equipment

   Furniture and fixtures                                                                           118,107                 108,731
   Molds, dies, and artwork                                                                         438,011                 388,519
   Vehicles                                                                                              --                  34,709
                                                                                               ------------            ------------
                                                                                                    556,118                 531,959
   Accumulated depreciation                                                                        (263,699)               (225,975)
                                                                                                -----------            ------------
Net property and equipment                                                                          292,419                 305,984
                                                                                                -----------            ------------

Other assets
   Patents and trademarks, net of accumulated
     amortization of $18,937 and $10,262 in 2001
     and 2000, respectively                                                                         129,561                 104,406
   Deferred income tax benefit                                                                      233,450                      --
   Other                                                                                                 --                  21,402
                                                                                                -----------            ------------
Total other assets                                                                                  363,011                 125,808
                                                                                               ------------            ------------
Total assets                                                                                   $  1,752,596            $  1,378,255
                                                                                               ------------            ------------
</TABLE>





                                      F-3
<PAGE>


                  DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.


                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
              Liabilities and Stockholders' Equity                                                 2001                    2000
                                                                                               ------------            ------------
<S>                                                                                            <C>                     <C>
Current liabilities
   Due to factor                                                                               $    277,112            $    281,866
   Notes payable                                                                                    473,328                 267,645
   Notes payable - stockholders                                                                     125,000                      --
   Accounts payable - trade                                                                          80,955                  85,817
   Accrued payroll tax withholdings                                                                 168,487                 105,539
   Accrued expenses other                                                                            50,026                  17,683
   Income taxes payable                                                                                  --                   2,283
   Current maturities of long-term debt                                                                  --                  24,966
                                                                                               ------------            ------------
Total current liabilities                                                                         1,174,908                 785,799
                                                                                               ------------            ------------
Stockholders' equity
   Common stock, $.001 par value; authorized
     50,000,000 shares; issued and outstanding
     5,723,956 and 5,248,000 shares at December 31,
     2001 and 2000, respectively                                                                      5,724                   5,248
   Preferred stock, $.001 par value; authorized
     10,000,000 shares; none issued and
     outstanding                                                                                         --                      --
   Additional paid-in capital                                                                     1,163,444                 749,023
   Retained earnings (deficit)                                                                     (566,480)               (161,815)
                                                                                               ------------            ------------
                                                                                                    602,688                 592,456
   Less stock subscription receivable                                                               (25,000)                     --
                                                                                               ------------            ------------
Total stockholders' equity                                                                          577,688                 592,456
                                                                                               ------------            ------------

Total liabilities and stockholders' equity                                                     $  1,752,596            $  1,378,255
                                                                                               ------------            ------------
</TABLE>


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




                                      F-4
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.


                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000



<TABLE>
<CAPTION>
                                                                                                   2001                    2000
                                                                                               ------------            ------------
<S>                                                                                            <C>                     <C>
Net sales                                                                                      $  1,984,692            $  2,149,195
Cost of sales                                                                                     1,104,962               1,140,944
                                                                                               ------------            ------------

Gross profit                                                                                        879,730               1,008,251
                                                                                               ------------            ------------
Operating expenses
    Selling                                                                                         455,782                 303,868
    General and administrative                                                                      978,461                 544,417
                                                                                               ------------            ------------
Total operating expenses                                                                          1,434,243                 848,285
                                                                                               ------------            ------------
Income (loss) from operations                                                                      (554,513)                159,966
                                                                                               ------------            ------------

Other income (expense)
    Interest expense                                                                               (104,057)                (82,902)
    Other income                                                                                      3,022                      --
                                                                                               ------------            ------------
Total other income (expense)                                                                       (101,035)                (82,902)
                                                                                               ------------            ------------
Income (loss) before income tax expense (benefit)                                                  (655,548)                 77,064

Provision for income taxes (benefit)                                                               (250,883)                  2,283
                                                                                               ------------            ------------

Net income (loss)                                                                              $   (404,665)           $     74,781
                                                                                               ============            ============
Earnings (loss) per share:

    Numerator - net income (loss)                                                              $   (404,665)           $     74,781

    Denominator - weighted average number of
     shares outstanding                                                                           5,389,532               5,169,626
                                                                                               ------------            ------------
Basic earnings (loss) per share                                                                $      (0.08)           $       0.01
                                                                                               ============            ============
</TABLE>


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




                                      F-5
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                  FOR THE YEAR ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                         Common stock      Additional    Retained        Stock
                                                    -------------------     paid-in      earnings     subscription
                                                      Shares     Amount     capital      (deficit)     receivable        Total
                                                    ---------    ------    ----------    ---------    ------------     ---------
<S>                                                 <C>          <C>       <C>           <C>          <C>              <C>
Balances - December 31, 1999                        5,024,500    $5,024    $  633,821    $(236,596)   $     (2,632)    $ 399,617

    Issuance of stock for cash                         75,000        75        74,925           --              --        75,000

    Issuance of stock for services                    148,500       149        40,277           --              --        40,426

    Payments on subscription
      receivable                                           --        --            --           --           2,632         2,632

    Net income                                             --        --            --       74,781              --        74,781
                                                    ---------    ------    ----------    ---------    ------------     ---------

Balances - December 31, 2000                        5,248,000     5,248       749,023     (161,815)             --       592,456

    Issuance of stock for cash                        375,000       375       348,923           --         (25,000)      324,298

    Issuance of stock for services                    100,956       101        65,498           --              --        65,599

    Net loss                                               --        --            --     (404,665)             --      (404,665)
                                                    ---------    ------    ----------    ---------    ------------     ---------

Balances - December 31, 2001                        5,723,956    $5,724    $1,163,444    $(566,480)    $   (25,000)    $ 577,688
                                                    ---------    ------    ----------    ---------    ------------     ---------
</TABLE>


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



                                      F-6
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                                   2001                    2000
                                                                                               ------------            ------------
<S>                                                                                            <C>                     <C>
Cash flows from operating activities
   Net income (loss)                                                                           $   (404,665)           $     74,781
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities
       Issuance of common stock for services                                                         65,599                  40,426
       Depreciation                                                                                  52,683                  52,338
       Amortization                                                                                   8,675                   2,821
       Deferred income tax benefit                                                                 (248,600)                     --
       Gain on sale of assets                                                                        (2,931)                  1,561
       Changes in assets and liabilities
         Accounts receivable                                                                         52,539                 (10,812)
         Inventories                                                                                (51,847)                 20,170
         Advances to employees                                                                      (40,831)                (50,865)
         Prepaid expenses                                                                           (49,214)                (17,175)
         Other assets                                                                                21,402                 (15,702)
         Accounts payable - trade                                                                    (4,862)                (42,303)
         Accounts payable - related party                                                                --                 (52,582)
         Accrued payroll tax withholdings                                                            62,948                  29,392
         Accrued expenses other                                                                      32,343                  (9,417)
         Income taxes payable                                                                        (2,283)                  2,283
                                                                                               ------------            ------------
Net cash provided by (used in) operating activities                                                (509,044)                 24,916
                                                                                               ------------            ------------

Cash flows from investing activities
   Purchases of property and equipment                                                              (58,869)                (62,821)
   Proceeds from sale of property and equipment                                                      22,682                      --
   Purchases of patents and trademarks                                                              (33,830)                (74,711)
                                                                                               ------------            ------------
Net cash provided by (used in) investing activities                                                 (70,017)               (137,532)
                                                                                               ------------            ------------
Cash flows from financing activities
   Net change in due to factor                                                                       (4,754)                (16,843)
   Net change in notes payable                                                                      205,683                 267,645
   Net change in notes payable - related party                                                      125,000                      --
   Payments on long-term debt                                                                       (24,966)               (203,819)
   Proceeds from issuance of common stock                                                           324,298                  75,000
   Payments on stock subscription receivable                                                             --                   2,632
                                                                                               ------------            ------------
Net cash provided by (used in) financing activities                                                 625,261                 124,615
                                                                                               ------------            ------------

Increase (decrease) in cash                                                                          46,200                  11,999

Cash - beginning of year                                                                             26,433                  14,434
                                                                                               ------------            ------------

Cash - end of year                                                                             $     72,633            $     26,433
                                                                                               ------------            ------------
</TABLE>

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




                                      F-7
<PAGE>


                  DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


1.       ORGANIZATION AND NATURE OF BUSINESS

                  DAC Technologies Group International, Inc. ("DAC"), a Florida
         corporation, was incorporated as a Florida corporation under the name
         DAC Technologies of America, Inc. In July 1999, the Company changed its
         name to DAC Technologies Group International, Inc. DAC is in the
         business of developing, manufacturing and marketing various patented
         and unpatented consumer products that are designed to provide security
         for the consumer and their property. In addition, DAC has developed a
         wide range of security and non-security products for the home,
         automobile and individual. The majority of DAC's products are
         manufactured and imported from mainland China and are shipped to DAC's
         central warehouse facility in Little Rock, Arkansas. These products,
         along with other items manufactured in the United States, are sold
         primarily to major retail chains in the United States.

                  In February 2001, DAC formed a wholly owned subsidiary, Summit
         Training International ("STI"), an Arkansas corporation. STI's primary
         objective is to provide training to law enforcement agencies through
         courses, seminars and conferences. In connection with the formation of
         STI, DAC incurred start-up costs consisting principally of direct
         personnel costs and advertising and marketing expenses. These start-up
         costs, which totaled approximately $107,700, have been expensed and are
         included in general and administrative expenses in the accompanying
         consolidated financial statements for the year ended December 31, 2001.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.       BASIS OF PRESENTATION - The accompanying consolidated
                  financial statements include the accounts of DAC Technologies
                  Group International, Inc. and its wholly owned subsidiary,
                  Summit Training International (collectively the "Company").
                  All material intercompany accounts and transactions have been
                  eliminated in the consolidation.

         b.       ESTIMATES - The preparation of financial statements in
                  conformity with accounting principles generally accepted in
                  the United States of America requires management to make
                  estimates and assumptions that affect the reported amounts of
                  assets and liabilities as of the dates of the financial
                  statements and the reported amounts of revenues and expenses
                  during the reporting periods. Actual results could differ from
                  those estimates.

         c.       CASH EQUIVALENTS - The Company considers all highly liquid
                  investments with original maturities of three months or less
                  at the time of purchase to be cash equivalents. At December
                  31, 2001 and 2000, the Company had no cash equivalents.

         d.       INVENTORIES - Inventories are stated at the lower of average
                  cost or market. Costs include freight and applicable customs
                  fees.




                                      F-8
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

         e.       PROPERTY AND EQUIPMENT - Property and equipment are stated at
                  cost. Depreciation is provided using the straight-line method
                  over the estimated useful lives of the assets, which range
                  from five to ten years.

         f.       PATENTS AND TRADEMARKS - Costs incurred in connection with the
                  acquisition of patents and trademarks are capitalized and
                  amortized over their estimated useful lives, which range from
                  five to seventeen years.

         g.       INCOME TAXES - The Company utilizes the liability method of
                  accounting for deferred income taxes. The liability method
                  requires the recognition of deferred tax liabilities and
                  assets for the expected future tax consequences of temporary
                  differences between tax basis and financial reporting basis of
                  assets and liabilities. A valuation allowance is established
                  when necessary to reduce deferred tax assets to the amount
                  that is expected to be realized.

         h.       REVENUE RECOGNITION - The Company records sales when
                  merchandise is shipped to the customer. Allowances are
                  provided when merchandise is returned. Revenue from courses,
                  conferences and seminars is recognized when provided.

         i.       EARNINGS PER SHARE - Earnings per share have been calculated
                  using the weighted average number of shares outstanding for
                  each year. The Company has no dilutive shares or options
                  outstanding.

         j.       ADVERTISING - Advertising costs are expensed as incurred.
                  Total advertising expenses were approximately $1,800 and
                  $9,100 for the years ended December 31, 2001 and 2000,
                  respectively.

         k.       SHIPPING AND HANDLING - All shipping and handling costs are
                  included in selling expense in the accompanying consolidated
                  statement of operations. These costs totaled $131,931 and
                  $78,605, respectively, for the years ended December 31, 2001
                  and 2000.

         l.       FAIR VALUE OF FINANCIAL INSTRUMENTS - The fair values of cash
                  and cash equivalents, accounts receivables and note payable
                  approximates their carrying values due to the short-term
                  nature of the instruments. The fair value of the Company's
                  long-term debt approximates its carrying value.




                                      F-9
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

3.       INVENTORIES

           Inventories consist of:

<TABLE>
<CAPTION>
                                                           2001           2000
                                                        ---------      ---------
<S>                                                     <C>            <C>
                Finished goods                          $ 372,970      $ 315,955
                  Inventory in transit                     19,178         34,776
                  Parts                                    22,968         12,538
                                                        ---------      ---------
                                                        $ 415,116      $ 363,269
                                                        ---------      ---------
</TABLE>


4.       FACTORING AGREEMENT

                  The Company factors a majority of its receivables under a
         factoring agreement, which is renewable annually. This agreement
         provides for factoring fees of .65% to 1.8% monthly depending on the
         creditworthiness and location of an account (domestic or foreign). An
         additional fee of 1/4 of 1% is charged for each thirty-day period, or
         part thereof, when the terms of sale exceed ninety-days. Fees are
         calculated on the gross face value of each invoice. In addition to
         factoring fees, interest is also charged on the outstanding funds in
         use. The interest rate is the greater of 7% or 1.25% above prime (5.0%
         at December 31, 2001). The amounts borrowed are collateralized by the
         Company's accounts receivable.

5.       NOTES PAYABLE

                  On March 12, 2001, the Company obtained a $150,000 line of
         credit from a bank to fund the start-up costs associated with STI.
         Borrowings under this agreement had effective interest rates averaging
         9.15%. At December 31, 2001, outstanding borrowings under this
         agreement were $149,500. This agreement matures March 12, 2002 and is
         collateralized by the Company's receivables and inventories and
         personal guarantees of the Company's major stockholders.

                  On June 14, 2001, the Company entered into a note payable with
         a bank. This note bears interest at 8.5% and is secured by the
         Company's inventories and personal guarantees of the Company's major
         stockholders. The note is payable on demand or if no demand is made on
         April 30, 2002. At December 31, 2001, the outstanding principal balance
         on this note was $64,284.

                  On July 21, 2000, the Company entered into a note payable with
         a bank. This note bears interest at the Wall Street Journal Prime Rate
         (5% at December 31, 2001) and is secured by the Company's inventories
         and personal guarantees of the Company's major stockholders. The note
         is payable on demand or if no demand is made in thirty-six monthly
         payments of principal and interest of $4,659 through its




                                      F-10
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

5.       NOTES PAYABLE (CONT.)

         maturity date of July 2, 2003. At December 31, 2001, the outstanding
         principal balance on this note was $79,544.

                  In addition, during the year ended December 31, 2000, the
         Company entered into a $250,000 line of credit agreement with a bank.
         Borrowings under this agreement had effective interest rates averaging
         8.5%. At December 31, 2001, outstanding borrowings under this agreement
         were $180,000. This agreement matures April 30, 2002 and is
         collateralized by the Company's receivables and personal guarantees of
         the Company's major stockholders.

6.       NOTES PAYABLE - STOCKHOLDERS

                  During the year ended December 31, 2001, the Company entered
         into note payable agreements with certain stockholders of the Company.
         Borrowings under these agreements, which totaled $175,000, bear
         interest at rates ranging from 8% to 10% and are payable on demand. At
         December 31, 2001, outstanding borrowings under these agreements
         totaled $125,000. During the year ended December 31, 2001, the Company
         recognized interest expense of approximately $7,600 on these notes.

7.       Long-Term Debt

             Long-term debt consists of:

<TABLE>
<CAPTION>
                                                                2001      2000
                                                              -------   --------
                <S>                                           <C>       <C>
                Note payable to a financing company;
                  payable in monthly installments of
                  $524, including interest at 9.75%,
                  with remaining balance due November
                  2001; secured by certain vehicles.          $    --   $ 24,966
                                                              -------   --------
                Less current maturities                            --     24,966
                                                              -------   --------
                Long-term debt, less current maturities       $    --   $ 24,966
                                                              -------   --------
</TABLE>




                                      F-11
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


7.       LONG-TERM DEBT (CONT.)

                  The Company made interest payments under its financing
         arrangements totaling approximately $99,200 and $86,700 during the
         years ended December 31, 2001 and 2000, respectively.

8.       EQUITY

                  On March 15, 2000, the Company authorized the issuance of
         75,000 shares of restricted common stock for $75,000. Additionally, on
         that date, the Company authorized the issuance of 6,000 shares of
         restricted common stock for services valued at $1,800. These shares
         were subsequently issued on June 5, 2000.

                  On May 15, 2000, the Company issued 37,500 shares of
         restricted common stock valued at $12,376 in connection with the
         establishment of a consulting agreement with a individual. In addition,
         the Company committed to grant this individual options to purchase
         18,750 shares of restricted common stock on November 1, 2000 and an
         additional 18,750 shares of restricted common stock on May 1, 2001,
         with both options to be exercisable within five years. This agreement
         and the option commitments were terminated on September 15, 2000, when
         this individual became an officer and employee of the Company.

                  On June 12, 2000, the Company entered into a one year
         agreement with a consulting firm for services relating to strategic
         planning and operational assistance. As compensation for these
         services, the Company issued 100,000 shares of restricted common stock
         valued at $20,000. As of that date, 25,000 of these shares were
         released and the remainder have been placed in escrow and will be
         released when the services have been provided.

                  Effective November 27, 2000, the Company's articles of
         incorporation were amended to increase its authorized shares of
         restricted common stock to 50,000,000 shares and to create a class of
         preferred stock with 10,000,000 shares of $.001 per value stock
         authorized. The rights and preferences of these shares are to be
         determined by the Company's Board of Directors.

                  On December 15, 2000, the Company issued 5,000 shares of
         restricted common stock for services valued at $6,250.

                  On March 29, 2001, the Company issued 19,815 shares of
         restricted common stock valued at $5,350 to an individual pursuant to
         the terms of an employment agreement with the Company. Subsequently, on
         April 23, 2001, the Company issued 22,141 additional shares of common
         stock valued at $8,414 to this individual pursuant to this agreement.
         The value of these restricted common shares was based on two-thirds of
         the value of unrestricted shares on that date.




                                      F-12
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


8.       EQUITY (CONT).

                  On April 4, 2001, the Company issued a total of 75,700 shares
         of restricted common stock valued at $30,280 in connection with the
         establishment of consulting agreements with certain individuals. On
         June 1, 2001, the Company issued additional shares of restricted common
         stock totaling 38,300 which were valued at $32,555 to certain
         individuals in connection with the establishment of service agreements.
         The value of these restricted common shares was based on two-thirds of
         the value of unrestricted shares on that date.

                  On June 27, 2001, the Company retired 55,000 shares of
         restricted common stock that had previously been issued in connection
         with an agreement with a consulting firm. The consulting agreement was
         mutually terminated and the unearned portion of the shares were
         returned to the Company.

                  During the fourth quarter of the year ended December 31, 2001,
         the Company initiated a private placement offering of the Company's
         common stock. In connection with this offering, the Company issued a
         total of 375,000 shares of restricted common stock at $1.00 per share.
         Proceeds from this offering, net of offering costs, were $348,923.

9.       STOCK OPTION PLAN

                  Effective November 27, 2000 the Company adopted the 2000
         Equity Incentive Plan (the "Plan"), a non-qualified stock option plan.
         Under the terms of the Plan, officers, directors, employees and other
         individuals may be granted options to purchase the Company's common
         stock at exercise prices determined by the Company's Board of
         Directors. The terms and conditions of any options granted under the
         Plan, to include vesting period and restrictions or limitations on the
         options, will be determined by the Board of Directors. The maximum
         number of shares that can be granted under this Plan is one million
         shares of stock. At December 31, 2001, the Company had granted no
         options pursuant to this Plan.


10.      INCOME TAXES

                  The provision for income taxes (benefit) consists of:

<TABLE>
<CAPTION>
                                                              2001         2000
                                                          ----------     -------
<S>                                                       <C>            <C>
                   Current provision (benefit)            $   (2,283)    $ 2,283
                   Deferred provision (benefit)             (248,600)         --
                                                          ----------     -------
                                                          $ (250,883)    $ 2,283
                                                          ----------     -------
</TABLE>




                                      F-13
<PAGE>

                  DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

10.      INCOME TAXES (CONT.)

                  Reconciliations of the differences between income taxes
         (benefit) computed at the federal statutory tax rates and the provision
         for income taxes (benefit) is as follows:

<TABLE>
<CAPTION>
                                                                                   2001         2000
                                                                                   ----         ----
                  <S>                                                           <C>           <C>
                  Income taxes computed at federal
                    statutory tax rate                                          $ (222,886)   $ 25,426
                  State tax provision, net of federal benefits                     (28,123)      3,208
                  Change in valuation allowance                                         --     (29,122)
                  Other                                                                 26       2,771
                                                                                ----------    --------
                  Provision for income taxes (benefit)                          $ (250,983)   $  2,283
                                                                                ==========    ========
</TABLE>

                  Temporary differences that give rise to significant deferred
         tax assets (liabilities) are as follows:


<TABLE>
<CAPTION>
                                                                                   2001         2000
                                                                                   ----         ----
                  <S>                                                           <C>           <C>
                  Net operating loss carryforward                               $ (233,415)   $     --
                  Allowance for doubtful accounts                                   (8,405)         --
                  Allowance for excess inventory                                    (6,744)         --
                  Contribution carryforward                                            (96)         --
                                                                                ----------
                  Net deferred tax asset                                        $ (248,660)   $     --
                                                                                ==========    ========
</TABLE>

                  At December 31, 2001, the Company has a net operating loss
         carryforward available for federal and state income tax purposes of
         approximately $652,000. Unless utilized, this carryforward will expire
         in 2021.

11.      RELATED PARTY TRANSACTIONS

                  On September 30, 1998, as amended on September 27, 1999, the
         Company entered into an asset purchase agreement, wherein it acquired
         certain assets and assumed certain liabilities of DAC Technologies of
         Arkansas, Inc. ("DAC Arkansas") in combination which was accounted for
         in a manner similar to a pooling of interest. Assets and liabilities
         that were not covered by this transaction included a receivable from a
         major stockholder and President, certain bridge loans, stockholder
         advances, an automobile, certain accounts payable, accrued commissions
         and accrued payroll totaling $200,488.




                                      F-14
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


11.      RELATED PARTY TRANSACTIONS (CONT.)

                  During the years ended December 31, 2001 and 2000, the Company
         made advances to a stockholder and certain employees of the Company.
         These advances totalled $40,831 and $50,865, respectively. At December
         31, 2001 and 2000, the outstanding balances of advances to these
         individuals were $103,404 and $62,573, respectively.

12.      COMMITMENTS AND CONTINGENCIES

                  On September 11, 2000, the Company entered into a letter of
         intent with Solid ISG Capital Markets, LLC ("Solid ISG") to underwrite
         a public offering of the Company's stock, and to act as financial
         advisors to the Company. On January 18, 2001, the Company filed a
         definitive information statement with the Securities and Exchange
         Commission covering this proposed transaction. On February 7, 2001, the
         Company was informally advised by Solid ISG that they desired to
         terminate this letter of intent. Effective February 7, 2001, this
         agreement was mutually terminated by the parties.

                  STI has entered into an affiliation with a non-profit
         corporation, The Center for Law Enforcement Learning ("CLEL"), an
         Arkansas Corporation. CLEL will service clients who can only engage
         non-profit entities to provide training. STI will conduct the training
         seminars and programs for CLEL. For these services, CLEL will pay a fee
         equal to 75%- 90% of the per student fee for the training event.

                  The Company currently leases office and warehouse space under
         a lease hat expires on January 31, 2003. Minimum future rental payments
         under these non-cancellable leases as of December 31, 2001 are as
         follows:

<TABLE>
<CAPTION>
                        <S>                    <C>
                        2002                   $ 31,425
                        2003                      2,625
                                               --------
                                               $ 34,050
                                               ========
</TABLE>



                  Rent expense for the years ended December 31, 2001 and 2000
         was approximately $47,500 and $48,400, respectively.




                                      F-15
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

12.      COMMITMENTS AND CONTINGENCIES (CONT.)

                  In connection with the asset purchase transaction discussed in
         Note 10, the Company could be held liable in the event of litigation,
         for the outstanding balances of certain unsecured liabilities of DAC
         Arkansas totaling approximately $119,000. No accrual has been made for
         this contingency.

13.      MAJOR CUSTOMERS AND SUPPLIERS

                  During the year ended December 31, 2001, the Company had
         aggregate sales to three customers that exceeded ten percent of total
         net sales. Sales to these individual customers were 22.6%, 13.5% and
         11.0% of net sales. During the year ended December 31, 2000, the
         Company had aggregate sales to two customers that exceeded ten percent
         of total net sales. Sales to these individual customers were 32.6% and
         15.7% of net sales.

                  During the year ended December 31, 2001, the Company purchased
         61%, 22% and 11%, respectively, of its products from three major
         suppliers. During the year ended December 31, 2000, the Company
         purchased 44%, 35% and 12%, respectively, of its products from three
         major suppliers. The Company is dependent upon these suppliers
         continuing in business and their ability to ship to the United States,
         but believes that they could replace these suppliers, if required to,
         at similar quality and terms.

14.      CONCENTRATION OF CREDIT RISK

                  Financial instruments which potentially subject the Company to
         concentrations of credit risk consist primarily of trade accounts
         receivable with a variety of customers. As discussed in Note 4, the
         Company factors a majority of its receivables under a factoring
         agreement. These accounts are factored on a non-recourse basis which
         reduces the Company's exposure to credit risk. Approximately 59% and
         56%, respectively, of the Company's accounts receivable at December 31,
         2001 and 2000 were represented by three customers. The Company provides
         credit in the normal course of business to its customers and performs
         ongoing credit evaluations of its customers. It maintains allowances
         for doubtful accounts and provisions for returns and credits based on
         factors surrounding the specific customers and circumstances. The
         Company generally does not require collateral from its customers.
         Credit risk is considered by management to be limited due to the
         Company's customer base and its customer's financial resources.

15.      FINANCIAL INFORMATION BY BUSINESS SEGMENT

                  The Company operates in four primary business segments
         delineated by products. The four segments are security products, gun
         locks, safes and non-security




                                      F-16
<PAGE>


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

15.      FINANCIAL INFORMATION BY BUSINESS SEGMENT (CONT.)

         products. The accounting policies of the Company's segments are the
         same as those described in Note 2. The Company's long-lived assets are
         located in the United States and China.


                  Information concerning operations in these segments of
         business is as follows:


<TABLE>
<CAPTION>
                                                                     2001                2000
                                                                 ------------         ------------
Revenues
  Security products
<S>                                                              <C>                  <C>
    United States                                                $    396,552         $    668,981
    Germany                                                                --              127,778
  Gun-locks                                                         1,196,866            1,314,456
  Safes                                                               325,386                   --
  Non-security products                                                14,027               37,980
  Training                                                             51,861                   --
                                                                 ------------         ------------

Total                                                            $  1,984,692         $  2,149,195
                                                                 ============         ============

Income (loss) before income tax expense (benefit)
  Security products
    United States                                                $   (174,889)        $    (51,382)
    Germany                                                                --               (5,063)
  Gun-locks                                                          (228,776)             128,206
  Safes                                                               (61,773)                  --
  Non-security products                                                   611                5,303
  Training                                                           (190,721)                  --
                                                                 ------------         ------------

Total                                                            $   (655,548)        $     77,064
                                                                 ============         ============

Identifiable assets
  Security products

    United States                                                $    234,548         $    416,282
    China                                                              94,385              208,735
  Gun-locks
    United States                                                     250,854              581,985
    China                                                              63,623               87,220
  Safes
    United States                                                      60,359                   --
    China                                                              18,290                   --
  Non-security products

    United States                                                      25,218               31,719
  Corporate                                                         1,005,319               52,314
                                                                 ------------         ------------

Total                                                            $  1,752,596         $  1,378,255
                                                                 ============         ============
</TABLE>


                  Molds used to manufacture the Company's security products and
         gun locks are located in China (See Note 1).




                                      F-17