<PAGE>   1
                                  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, 2000


        [ ] 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.)


                     19955 NE 38th Court, Aventura, FL 33180
                 ----------------------------------------------
               (address of principal executive offices)(zip code)

                                 (305) 932-4441
                           (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



         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 [ ]


<PAGE>   2



         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.   $2,149,195


         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 MARCH 31, 2001 WAS APPROXIMATELY $847,841.

         STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS OF
COMMON EQUITY, AS OF THE LATEST PRACTICABLE DATE. AS OF MARCH 31, 2001,
5,248,000 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.



                                       ii


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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

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

PART I   ...............................................................................1
         ITEM 1.  DESCRIPTION OF BUSINESS...............................................1
                  History and Business Development......................................1
                  Business Plan.........................................................1
                  Products .............................................................3
                  Security Products.....................................................3
                  Non Security Products.................................................4
                  Manufacturing and Distribution........................................5
                  Competition...........................................................5
                  Principal Suppliers and Manufacturers.................................6
                  Customers.............................................................6
                  Intellectual Property.................................................7
                  Governmental Regulations..............................................7
                  Research and Development..............................................8
                  Environmental Laws....................................................8
                  Employees. ...........................................................8
                  Reports to Security Holders ..........................................8
         ITEM 2.  DESCRIPTION OF PROPERTY...............................................8
         ITEM 3.  LEGAL PROCEEDINGS.....................................................8
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................9

PART II  ...............................................................................9
         ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...............9
         ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............10
                           Financial Condition and Results of Operations...............11
         ITEM 7. FINANCIAL STATEMENTS..................................................13
         ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.........................13

PART III...............................................................................13
         ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT....................13
         ITEM 10. EXECUTIVE COMPENSATION...............................................14
         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......15
                  Security Ownership of Certain Beneficial Owners......................15
                  Security Ownership of Management ....................................16
         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................16
         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.....................................17

PART F/S ..............................................................................18

SIGNATURES.............................................................................18
</TABLE>


                                       iii


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                           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 December 2000, we sold an aggregate of 5,248,000
shares of our Common Stock to approximately 30 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
$309,400 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.

(b) Business Plan

         We are in the business of developing, marketing and outsourcing the
manufacture of various consumer products, patented and un-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. We
believe that there will be a continued public mandate for federal, state and
local governments to pass gun safety legislation on all guns manufactured. With
an estimated 220 million firearms in the U.S. alone, we believe we will be a
major presence in the gun lock market. With respect to all our products we:

     o   develop and design
     o   outsource the manufacturing to unaffiliated third parties
     o   distribute and market
     o   use our private label




                                        1


<PAGE>   5



         We have also developed a wide range of security and non-security
products for the home, automobile, and person including various plastic
injection and leather products. We primarily sell to mass market retailers such
as Wal-Mart, Walgreens and K-Mart. The majority of our products are manufactured
and imported from mainland China and shipped to a central location in Little
Rock, Arkansas for distribution.

         In our continuing efforts to provide high quality, low cost products
for consumers, we hired Mr. James Buie in April, 2000, as Head of Manufacturing.
Mr. Buie has extensive manufacturing experience in China, having lived and
worked in China for several years with previous employers, and speaks fluent
Chinese. Through Mr. Buie's efforts, we have established relationships with new
suppliers, at prices for our products significantly lower than our previous
suppliers. Initial efforts in this area concentrated on our gun safety products.
The effect of these lower costs on our gross profit were first realized late in
the 3rd quarter of 2000, and continue into 2001. We have just begun production
of our electronic products with our new suppliers in the 1st quarter of 2001,
again at significantly lower costs than with previous suppliers. By retooling
almost our entire product line, we will not only continue to realize
significant increases in our gross margins, but we have positioned ourself so
that we can easily and quickly change suppliers when future cost savings become
available with other suppliers.

         In July, 2000, we entered into a consulting agreement with James R.
Pledger. In September, 2000, this agreement was mutually terminated and Mr.
Pledger joined us as our President. Immediately prior to joining us, Mr. Pledger
was the National Sales Manager and Chief Sales Officer for Glock, Inc., a
leading manufacturer of semi-automatic pistols. Mr. Pledger is also a 30 year
veteran with the FBI. Mr. Pledger's efforts with us will be concentrated in
sales and product development. The development of a national sales force has
begun. Mr. Pledger has already been instrumental in the development of our new
DAC Lok and DAC Safes, as well as developing our new subsidiary to provide
training and consultation services to law enforcement. We believe the addition
of Mr. Pledger, with his expertise and contacts in law enforcement will greatly
benefit us in terms of sales and product development.

         In order to build a database from which we might select products to
market and distribute, we presently anticipate that we will solicit proposals
from inventors who have substantially completed their product development but
lack the expertise or capital to market or distribute it. We expect that we will
utilize advertisements in trade and other publications, networking, referrals
from persons with whom we may have pre-existing relationships and our Web site
as methods of soliciting these proposals. We may also acquire existing
businesses with complimentary operations as a method of expanding our business
and operations.

         In addition to our traditional products, our management is actively
pursuing initiatives which may add complementary businesses, products and
services. 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
of revenue, but to strengthen the demand for our existing products.

         In particular, we plan to enter into the business of providing training
and consulting services primarily to law enforcement, but also to corporate
clients. To implement this new business in February 2001 we formed a
wholly-owned subsidiary, Summit Training International (STI) an Arkansas
corporation. STI's objective is to provide quality, affordable training on
contemporary issues facing the law enforcement and corporate communities, with a
particular focus on crime in the workplace. Instructional content, communicated
through vehicles such as courses, seminars and conferences, will address issues
such as Recruiting and Retention of Employees, Ethics and Integrity, Racial
Profiling, Hate Crimes, Police and Community Joint Partnerships and Violence in
the Workplace. Other courses and consulting activities will address issues
related to Assessment Centers in Law Enforcement Promotions, and will provide
training for both attendees and assessors of law enforcement assessment centers.




                                       2
<PAGE>   6
         We also plan to affiliate STI with a non-profit corporation, The Center
for Law Enforcement Learning (CLEL), also incorporated in Arkansas in February
2001. CLEL will service clients, typically law enforcement agencies, who can
only engage non-profit entities to provide training. STI will conduct the
seminars and training programs for CLEL. For these services, CLEL agrees to pay
a fee equal to 75-90% of the per student fee for the training event. STI entered
into a memorandum of understanding with CLEL on April 9, 2001. STI will also
enlist corporate "sponsors", who will pay a fee to exhibit their products at the
various seminars. These "sponsors" see great value in the ability to exhibit
their products to a large group of law enforcement management officials, many of
whom may be decision makers for purchasing matters.

         We are also in the process of developing certain items of police
equipment. We believe that our association with law enforcement through the
presentation of courses, seminars and conferences will provide us with unique
opportunities to present our law enforcement products to a select group of law
enforcement professionals. The synergy to be developed between the training
opportunities and the presentation of our products may provide increased sales
of new and existing products.

         We believe that our strategic business plan provides a comprehensive
approach to varied market opportunities and will increase revenues, profits and
shareholder value.

(c)  Products

(1)  Security Products

         Our products can be grouped into three main categories (a) home, auto
and personal security, (b) gun safety locks, and (c) non-security devices. 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 also responsible for the tooling, manufacture
and packaging of the products.

                  (A)  Gun Safety. We currently market seven gun safety
        products:

                           o        "Plastic Trigger Lock," a patented plastic
                                    product, with a metal locking device and
                                    keys. This lock fits virtually all handguns
                                    and prevents unwanted or accidental
                                    discharge of the firearm.

                           o        "Lever Hammer Lock," constructed of ABS
                                    plastic with a metal locking device and key,
                                    is designed to prevent cocking of lever
                                    action rifles.

                           o        "Steel Gun Lock," a steel lock with keyed
                                    locking device, that fits over the entire
                                    trigger guard of virtually all handguns.

                           o        "Metal Trigger Lock," is similar to our
                                    Plastic Trigger Lock, but is made of metal
                                    instead of plastic with a more secure
                                    locking system. The lock is available at the
                                    retail level in a three-piece value pack and
                                    as a single unit. It is also available in
                                    bulk without retail packaging for gun
                                    manufacturers. We have patent pending on
                                    this product.

                           o        "Cable Lock," a 15 inch cable and steel lock
                                    made to fit all firearms.

                           o        "DAC Lok" for Glock pistols, a patented lock
                                    made for semi-automatic pistols which we
                                    have obtained pursuant to an exclusive
                                    license which fits over the slide taking it
                                    out of battery. Currently, its application
                                    is for Glock handguns, but we expect to
                                    expand its application to other popular
                                    semi-automatic handguns in 2001. We are in
                                    the process of tooling the molds for this
                                    product, and has not yet begun its marketing
                                    of the product.

                           o        "DAC Safes" for firearms and valuables. We
                                    are presently completing the tooling of four
                                    gun safes and have begun distribution of two
                                    other models. These include two floor safes,
                                    three wall safes and one other safe intended
                                    specifically for quick access to a handgun.
                                    The initial response to these items from
                                    customers has been most positive and we
                                    believe that these items will provide a
                                    significant revenue stream in the future.




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<PAGE>   7

                  (B) Personal Security. We carry a wide range of electronic
         alarms designed to protect the consumer and personal property.

                           o        "Body Alarm," a 130-decibel alarm, is
                                    designed to be carried or worn whenever the
                                    user faces the possibility of attack. An
                                    original product of DAC Arkansas, it has
                                    been redesigned to include a built-in
                                    flashlight and accessories so it can be used
                                    as a door or window alarm.

                           o        "Key Alert," a patented product, is a small,
                                    120 decibel alarm with key chain and
                                    built-in flashlight. This unit, easily
                                    activated by a push button, will enhance
                                    protection any time its user feels
                                    threatened.

                           o        "Pepper Spray," packaged in an attractive
                                    leather holster with key ring, this canister
                                    contains 14 grams of 5% oleoresin capsicum
                                    red pepper, and will debilitate an attacker
                                    on contact with his eyes.

                           o        "Patient Alert," designed specifically for
                                    the health care industry, this alarm is
                                    similar to our Body Alarm, but with
                                    attachments to mount the unit onto a bed or
                                    wheelchair and the pull strap to the
                                    patient. Decibel level of this alarm is only
                                    100-105, as its intended use is not to scare
                                    off an attacker but to alert nursing staff
                                    when a patient attempts to get out of bed or
                                    wheelchair.

                           o        "Tear Gas" An aerosol canister contained in
                                    a leather pouch containing tear gas for
                                    personal protection.

                  (C) Automotive Safety. We currently offer the following car
         alarms:

                           o        "SWAT Steering Wheel Alarm," a patented
                                    product, is a 130-decibel alarm which mounts
                                    to virtually any vehicle steering wheel.
                                    Locking the alarm to the steering wheel arms
                                    the alarm, and a delay timer allows the
                                    driver 15 seconds to exit the vehicle
                                    without activating the alarm. Vibration
                                    activated, this alarm has an automatic
                                    reset, sensitivity settings, and a blinding
                                    strobe light. Selling for $25-$30 at the
                                    retail level, this alarm is perfect for
                                    consumers who do not want to invest in more
                                    expensive vehicle alarms. The SWAT Steering
                                    Wheel Alarm is also manufactured with remote
                                    control for arming and disarming.

                           o        "SWAT II Talking Car Alarm," a more
                                    traditional, under the hood car alarm, can
                                    easily be installed by the consumer. The
                                    alarm can be mounted under the hood by
                                    screws, tape, or simply strapped to the car
                                    battery, all provided. Alligator clips allow
                                    for easy attachment to battery for power.
                                    Two remote controls come with the unit,
                                    which are used to arm and disarm the alarm,
                                    as well as set sensitivity levels and spoken
                                    warnings in English, French, German and
                                    Spanish. Alarm has seven voice commands
                                    programmed, car finder, and a panic button.
                                    Retailing in the $80-$100 range, this alarm
                                    is less expensive than most competitors
                                    models, and does not require professional
                                    installation.

                           o        "Warning Module," is a simple battery
                                    operated device that mounts on the
                                    dashboard, with two red LED lights that
                                    flash when activated. Sold separately, it is
                                    also included in the packaging with the SWAT
                                    II Talking Car Alarm.




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(2) Non Security Products.

                  We out source the manufacture and market the following
         non-security consumer products:

                           o        "Clampit Cupholder", a licensed product,
                                    designed as a plastic, adjustable cupholder,
                                    with a unique clamping arm that allows the
                                    user to attach to virtually anything.
                                    Perfect for lawn chairs. The cupholder clamp
                                    can be adjusted so that the holder is always
                                    upright.

                           o        "Clampit Plateholder", a licensed product,
                                    designed as a plastic holder for paper or
                                    plastic plates, has the same patented clamp
                                    as the Cupholder, allowing user to attach to
                                    almost anything and at any angle. Perfect
                                    for lawn chairs so you no longer have to
                                    hold your plate in your lap.

                           o        "Horizontal Phone Case", patent pending, is
                                    a uniquely designed, leather cell phone case
                                    that attaches to a user's belt horizontally.
                                    User no longer has to worry about getting
                                    jabbed in the side by cell phone when
                                    sitting down. Available in three sizes.

(d) Manufacturing and Distribution.

         Through our foreign and domestic manufacturing agents, we manufacture,
design and build our tooling, molds and products. Our administrative offices are
located in Little Rock, Arkansas and Aventura, Florida. We contract our
manufacturing for tooling and production primarily in Shanghai, China, and to a
lesser extent, in Little Rock, Arkansas, Istanbul, Turkey and Sandwich,
Illinois. We distribute all of the domestic and certain of our international
business out of our Little Rock facility, most international business is shipped
directly to the customer from the Shanghai, China location. We believe we can
provide low-cost quality products because labor-intensive products are
manufactured in China, where labor costs are lower. Our plastic injection and
gun lock products can be manufactured competitively in the U.S. due to
automation. Our central warehouse facility is in Little Rock where following
manufacture, with the exception of our international business as previously
noted, products are delivered 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 promotion and
sales development activities to provide assistance to the independent sales
representatives through the use of brochures, product samples and demonstration
products. We have established a Web site WWW.DACTEC.COM which will serve both as
an additional marketing tool, and will provide a platform from which we will be
able to provide various support services to our independent sales
representatives. We also anticipate that we will seek to motivate our
independent sales representatives through the use of special incentive programs
that reward superior sales performance. We also anticipate utilizing trade
shows, both on a local and national level to promote our products and to attract
qualified sales representatives.

         Our management will attempt 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 an order is placed until received in
our distribution center normally is 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.

(e) Competition.

         We operate in a very competitive industry, dominated by national and
international companies with well-established brands all of whom are 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 will be operating in are:



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<PAGE>   9

                           o        Gun safety competitors include Master Lock
                                    (which presently controls 60-70% of the
                                    market) Noble Security and Shot Lock.

                           o        Automotive security competitors include:
                                    Bulldog Rally and Code Alarm.

                           o        Personal security competitors are varied and
                                    mostly smaller vendors.

                           o        Non-security product competitors include:
                                    various small and large vendors participate
                                    in this field.

         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 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.

         It is critical for us to be selective in the products we select to
bring to market, and management has been effective in developing products that
can be priced advantageously and obtain consumer acceptance as well as approval
from the mass merchandisers whose relationships we have, over the years,
cultivated. In addition, we believe that impulse buying is more prominent when
products are sold below the $20 threshold. We believe that consumers have
responded favorably to our lower priced products. Accordingly, 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, 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 that are responsible for
locating manufacturers for our gun safety and electronics products. These
companies typically provide us with price lists for the manufacture and tooling
of our products, which we may or may not negotiate. These agents are, in turn,
compensated by the manufacturer.

         Our only other foreign manufactured product is the horizontal phone
case, which is manufactured by Emsal Tekin, located in Istanbul, Turkey.
Domestically, Personal Security Products, a Little Rock, Arkansas company,
manufactures the Pepper Spray and Tear Gas products, and Taico Design Products,
a company located in Chicago, Illinois manufactures the Clampit Plateholder and
Cupholder.

         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, K-Mart, Walgreens,
Pep Boys, Discount Auto, Advance Auto Sales. In 2000, Wal-Mart accounted for 33%
of our gross revenues, Walgreens 16% and K-Mart 10%.

         In addition, our customer base also includes numerous regional and
national distributors and smaller retailers. We are actively seeking to increase
our exposure in the sporting goods market and believe that focused marketing and
the use




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<PAGE>   10

of the independent sales representatives can provide significant progress in
this area. We also sell to distributors in Europe, Asia, South and Central
America and the Far East, including the following:

                           o        Germany - SWAT II Talking Car Alarm (speaks
                                    German), SWAT Steering Wheel Alarm w/remote,
                                    Warning Module and Key Alert.

                           o        England - SWAT II Talking Car Alarm, both
                                    SWAT Steering Wheel Alarms.

                           o        Japan - SWAT Steering Wheel Alarm,
                                    Glass/Window Alarm.


(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 patents pending on our steel trigger gun lock and
horizontal phone case products. We have entered into a licensing agreement
giving us the exclusive right to sell the patented DAC Lok, Clampit Cup and
Plate Holder 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 protect
our proprietary rights could materially adversely affect 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 being manufactured by
others, it is also critical for us to insure that our manufactured products do
not infringe upon existing patents of others.




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(i)  Governmental Regulations.

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

         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 child safety locking 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.

(j) Research and Development.

         We incur minimal research and development costs. 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
and molds. 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 prices, and the interest level justifies
production, we proceed with having a mold made. We own the molds for all of our
gun-lock products. After pre-production samples are made and 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 Financial Officer, Head of
Manufacturing, salesman, receptionist/clerk, & shipping clerk. There are no
collective bargaining agreements or contracts.

(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




                                       8
<PAGE>   12

contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.

ITEM 2. DESCRIPTION OF PROPERTY

         Our corporate headquarters are located at 19955 NE 38th Court,
Aventura, FL 33180 consisting of 500 square feet, with telephone number (305)
932-4441. The lease term is month to month at a $1,700 per month rent.

         We have a 5,000 square foot office/warehouse at 1601 Westpark Dr.,
Suite 4C, Little Rock, AR 72204. Approximately 1,500 square feet is office and
3,500 square feet is warehouse. All of the accounting and shipping functions are
performed out of this location, as well as some sales. This space is leased for
one year, expiring February 1, 2002, with monthly rent of $2,550. There are no
renewal options. We believe there are adequate alternative facilities at
reasonably competitive prices in the event these leases terminate.

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 the defendants to manufacture certain of our products within the range
of "competitive pricing", a defined term. We are seeking damages and recission
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 recission 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. 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 Chairman claims a beneficial interest, and DAC
Technologies of America, Inc., our predecessor, against Larry Legel, our former
Certified Public Accountant, Director and the Trustee of The Collins Family
Trust. The suit, commenced in March 2001 alleges we transferred 180,000 of our
shares 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.

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

         There were 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.

                                     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. 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.

                                                     High               Low
                                                     -----             -----

         Quarter ended June 30, 2000                 $6.00             $2.00
         Quarter ended September 30, 2000            $4.50             $1.50
         Quarter ended December 31, 2000             $2.05             $0.68





                                       9
<PAGE>   13

As of March 21, 2001, there were approximately 75 holders of record of our
5,248,000 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.

         On March 15, 2000, pursuant to a private placement offering, we issued
75,000 shares of restricted common stock for $75,000 or $1.00 per share to 5
investors who were either accredited or otherwise sophisticated and with whom we
had a pre-existing relationship and who had access to all material information.
The transaction was exempt under Rule 504 of Regulation D of the Securities Act.

         On May 15, 2000, pursuant to a consulting agreement entered into by us
with Jim Pledger, the Company issued 37,500 shares of common stock as
consideration for Mr. Pledger's services under the terms of the agreement. More
detailed information concerning this transaction is available in the Form S-8
filed with the Securities and Exchange Commission, which is incorporated herein
by reference.

         On June 5, 2000 and December 15, 2000, we issued to Allan M. Lerner,
P.A., our securities counsel, 1,000 and 5,000 shares respectively of restricted
common stock as payment for services rendered to the Company. The shares were
issued in reliance on Section 4(2) of the Securities Act of 1933.

         On June 5, 2000, we issued to Robert Goodwin, our Chief Financial
Officer, 5,000 shares of restricted common stock as payment for services
rendered to the Company. The shares were issued in reliance on Section 4(2) of
the Securities Act of 1933.

         On June 12, 2000, we entered into a consulting agreement with
International Equities Group to develop strategic plans and find candidates for
acquisitions and mergers and increase sales. On June 16, 2000, as payment for
services to be rendered to us, 100,000 shares of restricted common stock were
issued to International Equity's President, Joseph Safina. Twenty-five thousand
of the shares were delivered to Joseph Safina and the remaining seventy-five
thousand shares are held in escrow pending completion of the services to be
performed.

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.






                                       10
<PAGE>   14
(b) Financial Condition and Results of Operations.

         YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31,
         1999.

         For the year ended December 31, 2000, the Company had net income of
$74,781 on sales revenues of $2,149,195, as compared to net income of $121,405
and sales revenues of $2,136,887 for the year ended December 31, 1999.

         Net sales only increased $12,308 for the year ended December 31, 2000,
as compared to the previous year. While sales of the Company's gun safety
products increased $392, 409, sales of the Company's security products and
non-security products decreased $229,862 and $150,239, respectively. The
decrease in security product sales is primarily related to sales of the
Company's electronic alarms, i.e. SWAT Car Alarms, Key Alert and Patient Alert.
As discussed in greater detail under Item 1(b) of this Report, the Company
obtained new suppliers for its products in 2000. Because retooling and
production efforts were first directed on gun safety products, production of
these electronic alarms did not occur until the 1st quarter of 2001. This caused
the Company to miss sales opportunities during the 3rd and 4th quarters of 2000
on these electronic alarms. Sales of these electronic alarms decreased $162,219
for the 3rd and 4th quarters of 2000 as compared to the same six month period in
1999; and decreased $174,656 as compared to the first six months of 2000.



                                        11


<PAGE>   15



Despite sales increasing only $12,308, gross profit increased $115,059 over the
previous year, an increase in gross profit of over 12%. This increase is due to
the Company's efforts in obtaining new suppliers for its products at
significantly lower costs than with previous suppliers. The Company did not
begin to realize the effects of these lower costs until the later part of the
3rd quarter of 2000.

         Operating expenses for the year ended December 31, 2000 were $848,285
as compared to $715,137 for the year ended December 31, 1999, an increase of
$133,148. This increase was due to an increase in General and Administrative
expenses of $110,495. The increase in General and Administrative expenses was
primarily due to two items:

         (1) An increase in Administrative salaries of $71,460 due to the
addition of Mr. James Buie as Head of Manufacturing and Mr. James Pledger as
President. The Company believes these additional costs are more than justified.
Mr. Buie is directly responsible for the increased gross profits as discussed
above, the benefits of which will continue to be increasingly realized in the
future. The Company also believes Mr. Pledger will bring significant revenues to
the Company in increased sales and products.

         (2) In 2000, the Company had legal expenses and other filing and
registration expenses totaling $57,354 directly related to being a public
company. The Company did not have these expenses in the prior year, as it did
not become public until 2000. The increase in legal expenses is directly related
to the required filings with the Securities and Exchange Commission which the
Company did not have to file in 1999.

         o Liquidity and Capital Resources

         Our primary source of cash is funds from our operations. We believe
that external sources of liquidity could easily 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, 2000, we owed our factor approximately $281,866. In 1994, DAC
Arkansas' shareholders and the Company obtained a $500,000 line of credit. On
July 21, 2000, we refinanced this loan in the principal amount of $145,473 with
a local bank. Monthly payments on this note are $4,660 with a variable interest
rate, currently at 9%. The note matures July 20, 2003, and is collateralized by
our inventory and personal guarantees of our major shareholders. On October 30,
2000, we obtained a $250,000 working capital line of credit with a local bank.
Interest only is due each month on any funds borrowed, with principal due April
30, 2001. As of December 31, 2000, we had been advanced $140,000 on this line of
credit. 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.





                                       12
<PAGE>   16
         o   Trends

         The recent flurry of publicity involving firearms has caused gun safety
to become a prominent issue nationally. Gun violence, especially in schools had
prompted former President Clinton, 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 seriously consider
placing gun safety locks on the guns they manufacture. We believe sales revenues
in this area will grow significantly. Sales of our gun locks products for the
fiscal year ending December 31, 2000, totaled $1,314,456 as compared to $922,047
for the fiscal year ending December 31, 1999.

         There is also increased emphasis in the professional community, both in
law enforcement and at the corporate level, toward the training of personnel in
contemporary management and socially related issues. Law enforcement and
corporate executives seek to improve the performance of their employees and
reduce liability to the organization by providing relevant training on sensitive
issues. We plan to address this market need through the creation of our training
company, STI, and foster its affiliation with a non-profit company, CLEL.

ITEM 7. FINANCIAL STATEMENTS

         Our financial statements are contained in pages F-1 through F-15
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.

Name                           Age      Position                     Term
----                           ---      --------                   ---------

David A. Collins               55       CEO/Director               2000-2001

James R. Pledger               53       President/Director         2000-2001

Robert C. Goodwin              45       CFO/Director               2000-2001


         David A. Collins has served as the Company's President and CEO since
its inception in July 1998. In September 2000, he resigned as President, a
position thereafter taken by James R. Pledger. Mr. Collins continues as the CEO
and Chairman of the Company. From 1992 continuously until September 1998, Mr.
Collins was President and CEO of DAC Arkansas.

         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




                                       13
<PAGE>   17

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. Mr. Pledger currently serves on the Firearms
Committee of the International Association of Chiefs of Police and was a former
member of the Metropolitan Atlanta Crime Commission.

         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.

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 3 filings that
were filed late by the Section 16 Reporting Persons during fiscal 2000

         o        David A. Collins

         o        Larry Legal

         o        Collins Family Trust

         o        Dan R. Lasater

         o        Gerald E. Hannahs, Jr.

         o        Robert C. Goodwin

         o        Collins Children's Trust

         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.

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, 2000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                   Annual Compensation                             Long-Term Compensation
                  -----------------------                   ------------------------------------
                                                              Awards       Payouts
    (a)            (b)      (c)      (d)        (e)            (f)          (g)            (h)          (i)
Name &                                         Other        Restricted   Securities
Principal                                      Annual         Stock      Underlying       LTIP       All other
Position          Year     Salary   Bonus   Compensation      Awards       Options       Payouts    Compensation
---------         ----     ------   -----   ------------    ----------   ----------      --------   -------------
<S>               <C>      <C>       <C>      <C>            <C>           <C>            <C>         <C>
David A.
Collins, CEO      2000     52,000

James R.
Pledger, Pres.    2000     17,500                             37,500

Robert C.
Goodwin, CFO      2000     54,000                              5,000

</TABLE>






                                       14
<PAGE>   18

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, 2000 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 5,248,000 shares of common stock
outstanding.

(a) 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               Gerald E. Hannahs, Jr.              1,107,500 (1)               21%
                           17710 Leatha Lane
                           Little Rock, AR  72211

Common Stock               Dan R. Lasater                      1,107,500 (1)(2)            21%
                           13917 Hinson Rd.
                           Little Rock, AR  72212

Common Stock               David A. Collins                      316,750 (3)                6%
                           19955 NE 38th Court
                           Aventura, FL  33180

Common Stock               Collins Family Trust                  815,750(3)              15.5%
                           c/o David A. Collins
                           19955 NE 38th Court
                           Aventura, FL  33180

Common Stock               Collins Children's Trust              486,000(4)               9.3%
                           c/o Kimberly D. Talley
                           23923 Mashburn Trail
                           Little Rock, AR  72210

</TABLE>

(1)      88,390 and 205,640 shares are held respectively by H & L Holdings and
         Phoenix Mortgage, companies jointly controlled by Gerald Hannahs, Jr.
         and Dan Lasater, each has been allocated 1/2 the combined shares or
         197,525 shares.

(2)      Dan Lasater has beneficial ownership of the shares owned by the Leah
         Lasater Trust, the Lasater Family Limited Partnership and Leah Lasater
         of 317,625 shares, 245,388 shares and 136,125 shares, respectively.

(3)      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.

(4)      The beneficiaries of the Collins Children's Trust are Payton P. Collins
         and David A. Collins, Jr.





                                       15
<PAGE>   19

(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               David A. Collins                      1,132,500 (1)            21.6%
                           19955 NE 38th Court
                           Aventura, FL  33180

Common Stock               James R. Pledger                         87,000                 1.7%
                           68 Duclair Ct.
                           Little Rock, AR 72223

Common Stock               Robert C. Goodwin                         5,000                0.09%

Common Stock               Total Officers & Directors            1,224,500                23.3%

</TABLE>

(1)      Includes 316,750 shares of Common Stock held individually by David A.
         Collins and 815,750 owned by the Collins Family Trust, of which Mr.
         Collins is the Trustee with full voting power.

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On July 20, 2000, the Company refinanced a previous line of credit with
One Bank & Trust, Little Rock, Arkansas in the principal amount of $145,473. On
October 30, 2000, the Company obtained a $250,000 working capital line of credit
with One Bank and Trust. Both of these loans are collateralized by the Company's
inventory and the personal guarantees of David A. Collins, Dan R. Lasater and
Gerald E. Hannahs, Jr.

         On September 11, 2000, the Company entered into a letter of intent with
Solid ISG Capital Markets, LLC to underwrite a public offering of the Company's
stock on a "firm commitment" basis 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. As of December 31,
2000, the Company had incurred no cost associated with this agreement. The
Company is currently evaluating other possible investment advisors and sources
of capital.

         On March 12, 2001, the Company borrowed $150,000 from One Bank & Trust,
Little Rock, Arkansas. This loan was taken for the purpose of financing the
start up costs of Summit Training International. "STI", our wholly owned
subsidiary, and The Center for Law Enforcement Learning "CLEL." The note is
collaterilized by inventory, furniture, fixtures and equipment. The note is
guaranteed by CLEL. an Arkansas non-profit corporation also organized in
February 2001. STI's objective is to provide quality, affordable training on
contemporary issues facing the law enforcement and corporate communities, with a
particular focus on crime in the workplace It is our intention to employ CLEL to
serve clients who can only engage non-profit entities to provide training. STI
will conduct the seminars and training programs for CLEL, also incorporated in
Arkansas in February 2001.





                                       16
<PAGE>   20

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.

21               Subsidiaries of the Small Business Issuer
23.1             Consent of Moore, Stephens & Frost, CPA's






                                       17
<PAGE>   21
                                    PART F/S

                                   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.

Dated: April 16, 2001

                                   DAC Technologies Group International, Inc.

                                   By: /s/ David A. Collins
                                       -----------------------------------------
                                       Chairman and CEO






                                       18
<PAGE>   22
                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                           DECEMBER 31, 2000 AND 1999

                              FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITOR'S REPORT








<PAGE>   23



                          INDEPENDENT AUDITOR'S REPORT



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


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

         We conducted our audits in accordance with 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. as of December 31, 2000 and 1999, and the results of
its operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.





                                               Certified Public Accountants


Little Rock, Arkansas
February 9, 2001



                                      F-1
<PAGE>   24


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                       Assets                    2000                  1999
                                       ------                    ----                  ----

<S>                                                           <C>                   <C>
Current assets
    Cash                                                      $    26,433           $    14,434
    Accounts receivable, less allowance for doubtful
      accounts of  $-0- and $19,649 in 2000 and
      1999, respectively                                          464,196               453,384
    Inventories                                                   363,269               383,439
    Advances to employees                                          62,573                11,708
    Prepaid expenses                                               29,992                12,817
                                                              -----------           -----------
Total current assets                                              946,463               875,782
                                                              -----------           -----------

Property and equipment
    Furniture and fixtures                                        108,731                99,197
    Molds, dies, and artwork                                      388,519               336,937
    Vehicles                                                       34,709                34,709
                                                              -----------           -----------
                                                                  531,959               470,843
    Accumulated depreciation                                     (225,975)             (173,781)
                                                              -----------           -----------
Net property and equipment                                        305,984               297,062
                                                              -----------           -----------

Other assets
  Patents and trademarks, net of accumulated
    amortization of $10,262 and $7,441 in 2000
    and 1999, respectively                                        104,406                32,516
  Other                                                            21,402                 5,700
                                                              -----------           -----------
Total other assets                                                125,808                38,216
                                                              -----------           -----------


Total assets                                                  $ 1,378,255           $ 1,211,060
                                                              ===========           ===========
</TABLE>


                                      F-2
<PAGE>   25


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
              Liabilities and Stockholders' Equity                2000                  1999
              ------------------------------------                ----                  ----

<S>                                                           <C>                   <C>
Current liabilities
    Due to factor                                             $   281,866           $   298,709
    Notes payable                                                 267,645                    --
    Accounts payable - trade                                       85,817               128,120
    Accounts payable - related parties                                 --                52,582
    Accrued payroll tax withholdings                              105,539                76,147
    Accrued expenses other                                         17,683                27,100
    Income taxes payable                                            2,283                    --
    Current maturities of long-term debt                           24,966               168,652
                                                              -----------           -----------
Total current liabilities                                         785,799               751,310
                                                              -----------           -----------

Long-term debt, less current maturities                                --                60,133
                                                              -----------           -----------

Stockholders' equity
    Common stock, $.001 par value; authorized
      50,000,000 shares; issued and outstanding
      5,248,000 and 5,024,500 shares at December 31,
      2000 and 1999, respectively                                   5,248                 5,024
    Preferred stock, $.001 par value; authorized
      10,000,000 shares; none issued and
      outstanding                                                      --                    --
    Additional paid-in capital                                    749,023               633,821
    Stock subscription receivable                                      --                (2,632)
    Retained earnings (deficit)                                  (161,815)             (236,596)
                                                              -----------           -----------
Total stockholders' equity                                        592,456               399,617
                                                              -----------           -----------

Total liabilities and stockholders' equity                    $ 1,378,255           $ 1,211,060
                                                              ===========           ===========
</TABLE>


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



                                      F-3
<PAGE>   26


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                          2000                  1999
                                                      -----------           -----------

<S>                                                   <C>                   <C>
Net sales                                             $ 2,149,195           $ 2,136,887

Cost of sales                                           1,140,944             1,243,695
                                                      -----------           -----------

Gross profit                                            1,008,251               893,192
                                                      -----------           -----------

Operating expenses
    Selling                                               303,868               281,215
    General and administrative                            544,417               433,922
                                                      -----------           -----------
Total operating expenses                                  848,285               715,137
                                                      -----------           -----------

Income from operations                                    159,966               178,055
                                                      -----------           -----------

Other income (expense)
    Interest expense                                      (82,902)              (82,255)
    Other income                                               --                25,605
                                                      -----------           -----------
Total other income (expense)                              (82,902)              (56,650)
                                                      -----------           -----------

Income before income tax expense                           77,064               121,405

Provision for income taxes                                  2,283                    --
                                                      -----------           -----------

Net income                                            $    74,781           $   121,405
                                                      ===========           ===========

Earnings per share:
    Numerator - net income                            $    74,781           $   121,405

    Denominator - weighted average number of
      shares outstanding                                5,169,626             4,975,308
                                                      -----------           -----------

Basic earnings per share                              $      0.01           $      0.02
                                                      ===========           ===========
</TABLE>



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



                                      F-4
<PAGE>   27


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                  FOR THE YEAR ENDED DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>
                                           Common stock       Additional      Stock       Retained
                                           ------------         paid-in    subscription   earnings
                                        Shares       Amount     capital     receivable    (deficit)       Total
                                        ------       ------     -------     ----------    ---------       -----
<S>                                    <C>           <C>      <C>          <C>            <C>            <C>


Balances - December 31, 1998           4,825,000     $4,825     $594,120     $(3,630)     $(358,001)     $237,314

    Issuance of stock for cash           199,500        199       39,701          --             --        39,900

    Payments on subscription
      receivable                              --         --           --         998             --           998

    Net income                                --         --           --          --        121,405       121,405
                                       ---------     ------     --------     -------      ---------      --------

Balances - December 31, 1999           5,024,500      5,024      633,821      (2,632)      (236,596)      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
                                       =========     ======     ========     =======      =========      ========
</TABLE>


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




                                      F-5
<PAGE>   28


                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                  2000                1999
                                                               ---------           ---------
<S>                                                            <C>                 <C>
Cash flows from operating activities
  Net income                                                   $  74,781           $ 121,405
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities
      Issuance of common stock for services                       40,426                  --
      Depreciation                                                52,338              49,718
      Amortization                                                 2,821               1,939
      Gain on sale of assets                                       1,561                  --
      Changes in assets and liabilities
        Accounts receivable                                      (10,812)           (248,579)
        Inventories                                               20,170             (77,515)
        Advances to employees                                    (50,865)            (11,708)
        Prepaid expenses                                         (17,175)             (6,457)
        Other assets                                             (15,702)             (5,700)
        Accounts payable - trade                                 (42,303)             41,358
        Accounts payable - related party                         (52,582)            (45,604)
        Accrued payroll tax withholdings                          29,392              19,795
        Accrued expenses other                                    (9,417)            (17,462)
        Income taxes payable                                       2,283                  --
                                                               ---------           ---------
  Net cash provided by (used in) operating activities             24,916            (178,810)
                                                               ---------           ---------

  Cash flows from investing activities
      Purchases of property and equipment                        (62,821)            (22,085)
      Purchases of patents and trademarks                        (74,711)             (6,986)
                                                               ---------           ---------
  Net cash provided by (used in) investing activities           (137,532)            (29,071)
                                                               ---------           ---------

  Cash flows from financing activities
      Net change in due to factor                                (16,843)            146,562
      Net change in notes payable                                267,645                  --
      Proceeds from issuance of long-term debt                        --               3,000
      Payments on long-term debt                                (203,819)            (36,187)
      Proceeds from issuance of common stock                      75,000              39,900
      Payments on stock subscription receivable                    2,632                 998
                                                               ---------           ---------
  Net cash provided by (used in) financing activities            124,615             154,273
                                                               ---------           ---------

  Increase (decrease) in cash                                     11,999             (53,608)

  Cash - beginning of year                                        14,434              68,042
                                                               ---------           ---------
  Cash - end of year                                           $  26,433           $  14,434
                                                               =========           =========
</TABLE>


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



                                      F-6
<PAGE>   29



                   DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999

1.       NATURE OF BUSINESS

                  DAC Technologies Group International, Inc. (the "Company"), a
         Florida corporation, is in the business of developing, manufacturing
         and marketing various consumer products, patented and unpatented, which
         are designed to provide security for the consumer and their property.
         In addition, the Company has developed a wide range of security and
         non-security products for the home, automobile and individual. The
         majority of the Company's products are manufactured and imported from
         mainland China and are shipped to the Company'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 and Germany.


2.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.       ORGANIZATION AND BASIS OF PRESENTATION - The Company was
                  originally 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.

         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, 2000 and 1999, 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.

         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 eleven 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
                  fifteen to seventeen years.



                                      F-7
<PAGE>   30


2.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

         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.

         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 $9,100 and
                  $3,300 for the years ended December 31, 2000 and 1999,
                  respectively.

         k.       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.


3.       INVENTORIES

              Inventories consist of:

<TABLE>
<CAPTION>
                                               2000              1999
                                             --------          --------

               <S>                           <C>               <C>
               Finished goods                $315,955          $251,288
               Inventory in transit            34,776           113,882
               Parts                           12,538            18,269
                                             --------          --------

                                             $363,269          $383,439
                                             ========          ========
</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



                                      F-8
<PAGE>   31


4.       FACTORING AGREEMENT (CONT.)

         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 (9.5% at December 31,
         2000). The amounts borrowed are collateralized by the Company's
         accounts receivable.


5.       NOTES PAYABLE

                  On July 21, 2000, the Company entered into a $145,473 note
         payable with a bank. This note bears interest at the Wall Street
         Journal Prime Rate (9.5% at December 31, 2000) 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 maturity date of July 2, 2003. At December 31, 2000, the
         outstanding principal balance on this note was $127,645.

                  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
         9.75%. At December 31, 2000, outstanding borrowings under this
         agreement were $140,000. This agreement matures April 30, 2001 and is
         collateralized by the Company's receivables and personal guarantees of
         the Company's major stockholders.


6.       LONG-TERM DEBT

              Long-term debt consists of:

<TABLE>
<CAPTION>
                                                                      2000                1999
                                                                      ----                ----
                       <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           $ 28,626

                       Note payable to bank; payable $10,000
                         monthly, including interest at 9.5%,
                         with remaining balance due February
                         2000, secured by inventories and by
                         personal guarantees of the Company's
                         stockholders.                                     --            155,492
</TABLE>




                                      F-9
<PAGE>   32


6.       LONG-TERM DEBT (CONT.)

<TABLE>
<CAPTION>
                                                                    2000               1999
                                                                  --------           --------
                  <S>                                             <C>                <C>
                  Note payable to a financing company;
                     payable in monthly installments of
                     $9,000, including interest at 16%,
                     with the remaining balance due June
                     2000; secured by equity in factored
                     receivables.                                 $     --           $ 41,667

                  Note payable to shareholder; payable on
                    demand, unsecured.                                  --              3,000
                                                                  --------           --------
                                                                    24,966            228,785
                  Less current maturities                           24,966            168,652
                                                                  --------           --------

                  Long-term debt, less current maturities         $     --           $ 60,133
                                                                  ========           ========
</TABLE>

              Aggregate maturities of long-term debt are as follows:


<TABLE>
<CAPTION>
                                 Year ended
                                 ----------
                                 <S>                              <C>

                                    2001                          $ 24,966
                                                                  ========
</TABLE>



                  The Company made total interest payments under its financing
         arrangements totaling approximately $86,700 and $100,600 during the
         years ended December 31, 2000 and 1999, respectively.


7.       EQUITY

                  In April 1999, pursuant to a private placement offering, the
         Company issued 199,500 shares of common stock for $39,900 to certain
         existing shareholders.

                  On March 15, 2000, the Company authorized the issuance of
         75,000 shares of common stock for $75,000. Additionally, on that date,
         the Company authorized the issuance of 6,000 shares of 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 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
         stock on November 1, 2000 and an additional 18,750



                                      F-10
<PAGE>   33


7.       EQUITY (CONT.)

         shares of 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 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 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
         common stock for services valued at $6,250.


8.       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, 2000, the Company had granted no
         options pursuant to this Plan.


9.       INCOME TAXES

              The provision for income taxes consists of:

<TABLE>
<CAPTION>
                                                                 2000              1999
                                                                 ----              ----

                  <S>                                           <C>               <C>
                  Current provision                             $ 2,283           $   --
                                                                =======           ======
</TABLE>




                                      F-11
<PAGE>   34

9.       INCOME TAXES (CONT.)

                  Reconciliations of the differences between income taxes
         computed at the Federal statutory tax rates and the provision for
         income taxes is as follows:



<TABLE>
<CAPTION>
                                                                        2000               1999
                                                                     --------           --------

               <S>                                                   <C>                <C>
               Income taxes computed at Federal
                   statutory tax rate                                $ 25,426           $ 41,277
               State tax provision, net of Federal benefits             3,208              5,208
               Change in valuation allowance                          (29,122)           (50,950)
               Other                                                    2,771              4,465
                                                                     --------           --------

               Provision for income taxes                            $  2,283           $     --
                                                                     ========           ========
</TABLE>

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


<TABLE>
<CAPTION>
                                                         2000            1999
                                                        -----          --------

               <S>                                      <C>            <C>
               Net operating loss carryforward          $  --          $ 29,122
               Valuation allowance                         --           (29,122)
                                                        -----          --------

               Net deferred tax asset                   $  --          $     --
                                                        =====          ========
</TABLE>


                  At December 31, 1999, the Company had net operating loss carry
         forwards available for Federal and state income tax purposes of
         approximately $76,000. Based upon the uncertainty of the realization of
         this deferred tax asset, a valuation allowance of $29,122 was reflected
         in the accompanying financial statements for the year ended December
         31, 1999. During the year ended December 31, 2000, this net operating
         loss carryforward was utilized to reduce taxable income.


10.      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



                                      F-12
<PAGE>   35


10.      RELATED PARTY TRANSACTIONS (CONT.)

         from a major stockholder and President, certain bridge loans,
         stockholder advances, an automobile, certain accounts payable, accrued
         commissions and accrued payroll totaling $200,488.

                  Consulting fees of $52,000 were paid to Telephone Connections
         Network, Inc., a company owned by the Company's majority stockholder,
         during the year ended December 31,1999, under the terms of a consulting
         agreement which expired March 1, 2000 and was not renewed. The Company
         incurred no expense under this agreement during the year ended December
         31, 2000.

                  During the years ended December 31, 2000 and 1999, the Company
         made advances to a stockholder and certain employees of the Company.
         These advances totalled $50,865 and $11,708, respectively. At December
         31, 2000 and 1999, the outstanding balances of advances to these
         individuals were $62,573 and $11,708, respectively. In addition, during
         the year ended December 31, 2000, the Company repaid a note payable to
         a shareholder of $3,000.


11.      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. As of December 31, 2000, the Company
         had incurred no cost associated with this agreement.

                  The Company currently leases office and warehouse space under
         a lease that expires on January 31, 2002. Minimum future rental
         payments under this non-cancellable lease as of December 31, 2000 are
         as follows:


<TABLE>
                                    <S>                      <C>
                                    2001                     $ 30,600
                                    2002                        2,550
                                                             --------

                                                             $ 33,150
                                                             ========
</TABLE>


                  Rent expense for the years ended December 31, 2000 and 1999
         was approximately $48,400 and $41,000, respectively.



                                      F-13
<PAGE>   36


11.      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.


12.      MAJOR CUSTOMERS AND SUPPLIERS

                  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, 1999, the Company had
         aggregate sales to four customers that exceeded ten percent of total
         net sales. Sales to these individual customers were 26.4%, 20.9%, 11.2%
         and 11.1% of net sales.

                  During the year ended December 31, 2000, the Company purchased
         44%, 35% and 12%, respectively, of its products from three major
         suppliers. During the year ended December 31, 1999, the Company
         purchased 46% and 42%, respectively, of its products from two 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.


13.      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. Approximately 56% and 70%,
         respectively, of the Company's accounts receivable at December 31, 2000
         and 1999 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.


14.      FINANCIAL INFORMATION BY BUSINESS SEGMENT

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



                                      F-14
<PAGE>   37


14.      FINANCIAL INFORMATION BY BUSINESS SEGMENT (CONT.)

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


<TABLE>
<CAPTION>
                                                             2000                 1999
                                                         -----------           ----------

               <S>                                       <C>                   <C>
               Revenues
                 Security products
                   United States                         $   668,981           $  786,596
                   Germany                                   127,778              240,025
                   Gun-locks                               1,314,456              922,047
                   Non-security products                      37,980              188,219
                                                         -----------           ----------

               Total                                     $ 2,149,195           $2,136,887
                                                         ===========           ==========

               Income before income tax expense
                 Security products
                   United States                         $   (51,382)          $      589
                   Germany                                    (5,063)                 240
                 Gun-locks                                   128,206               92,360
                 Non-security products                         5,303               28,216
                                                         -----------           ----------

               Total                                     $    77,064           $  121,405
                                                         ===========           ==========

               Identifiable assets
                 Security products
                   United States                         $   416,282           $  586,298
                   China                                     208,735              120,718
                 Gun-locks
                   United States                             581,985              340,682
                   China                                      87,220               45,897
                 Non-security products                        31,719               72,806
                 Corporate                                    67,314               44,659
                                                         -----------           ----------

               Total                                     $ 1,393,255           $1,211,060
                                                         ===========           ==========
</TABLE>


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



                                      F-15