EXHIBIT 10.38

                 2000 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
                                       OF
                           TELSCAPE INTERNATIONAL, INC

                          (Effective January 31, 2000)

1.    PURPOSE OF THE PLAN.

      This Nonemployee Director Stock Option Plan (the "PLAN") is intended as an
incentive to retain as independent directors on the Board of Directors of
Telscape International, Inc. (the "COMPANY"), persons of training, experience
and ability, to attract new directors whose services are considered unusually
valuable, to encourage the sense of proprietorship of such persons, and to
stimulate the active interest of such persons in the development and financial
success of the Company. It is further intended that the options issued pursuant
to this Plan NOT qualify as incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986 (the "CODE").

2.    SHAREHOLDER APPROVAL.

      All Options granted under this Plan are subject to, and may not be
exercised before, the approval of the Plan by the affirmative votes of the
holders of a majority of the outstanding shares of the Company entitled to vote
thereon; and, FURTHER PROVIDED, that if such shareholder approval is not
forthcoming within one year of the date of adoption of this Plan, all Options
previously granted shall be void.

3.    DESIGNATION OF PARTICIPANTS; GRANT OF OPTIONS.

      Each Director of the Company ("DIRECTOR") who is not otherwise an employee
of the Company or of any Parent or Subsidiary ("OPTIONEE") shall be granted
Options as described hereunder. Provided there are then sufficient shares of
Stock available for grant hereunder, each Optionee shall automatically be
granted Options to purchase 100,000 shares (subject to adjustment as provided in
Paragraph 9) of the Company's common stock, $.00001 par value per share
("STOCK") on the date the Director becomes a Director of the Company. Such
grants shall vest in equal installments on each of four anniversaries of the
grant date thereof if the Optionee has served as director of the Company for the
entire preceding fiscal year.

4.    STOCK RESERVED FOR THE PLAN.

      Subject to adjustment as provided in Paragraph 9 hereof, a total of
500,000 shares of Stock of the Company shall be subject to the Plan. The shares
of Stock subject to the Plan shall consist of unissued shares or previously
issued shares reacquired and held by the Company, or any Parent or Subsidiary of
the Company, and such amount of shares shall be and is hereby reserved for sale
for such purpose. Any of such shares which may remain unsold and which are not
subject to outstanding Options at the termination of the Plan shall cease to be
reserved for the purpose of the Plan, but until termination of the Plan the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of the Plan. Should any Option expire or be canceled prior to its
exercise in full, the shares theretofore subject to such Option, to the extent
it had not been exercised, may again be subjected to an Option under the Plan.
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5.    OPTION PRICE.

      (a) The purchase price of each share of Stock subject to an Option under
this Plan shall be 100% of the fair market value of such share on the date the
Option is granted.

      (b) The fair market value of a share on a particular date shall be deemed
to be (i) in the event the Stock is listed on the New York Stock Exchange, the
mean between the highest and lowest sales prices per share of the Stock on the
New York Stock Exchange (Composite Tape) on the date, or, if there shall have
been no sale on that date, on the last preceding date on which such a sale or
sales were so reported (the "SALE DATE"), or (ii) if the Stock is traded in the
over-the-counter market, the mean between the highest closing bid and lowest
closing asked price for the Stock as reported by the National Association of
Securities Dealers NASDAQ System on the Sale Date, or if not reported by such
System the mean between the closing bid and asked price on the Sale Date as
quoted by such quotation source as shall be designated by the Committee.

6.    OPTION PERIOD.

      Options granted under this Plan shall terminate and be of no force and
effect with respect to any shares not previously taken up by the Optionee upon
the earliest to occur of the following: (a) the expiration of ten (10) years
from the date of granting of each Option; (b) one year after the Optionee ceases
to be a Director by reason of death or disability of the Optionee; or (c) three
months after the Optionee ceases to be a Director for any reason other than
death or disability.

7.    EXERCISE OF OPTIONS.

      (a) The Options granted hereunder shall not be exercisable by the Optionee
until the completion of one (1) year of service as a Director following the date
of grant of such Option. Once available for purchase in accordance with the
foregoing, unpurchased shares shall remain subject to purchase until the Option
terminates in accordance with Paragraph 6 hereof.

      (b) Options may be exercised solely by the Optionee during his lifetime
or, after his death, by the person or persons entitled thereto under his will or
the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder.

      (c) In the event of cessation of service as a Director for any reason
other than death or disability, Options may be exercised only with respect to
the number of shares vested and purchasable at the time of such cessation.

      (d) In the event or of the death or disability of the an Optionee while in
service as a Director and while Options granted hereunder to such Optionee are
still in force and unexpired under the terms of Paragraph 6 hereof, any unvested
installments of the Options shall be accelerated. Such acceleration shall be
effective as of the date of such Optionee's death or disability. The Options
outstanding in the name of a deceased Optionee shall thereupon be exercisable in
full without regard to any installment vesting provisions.

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      (e) The purchase price of the shares as to which an option is exercised
shall be paid in full at the time of the exercises. Such purchase price shall be
payable in cash, or at the option of the holder of such Option, in Stock
theretofore owned by such holder (or any combination of cash and such Stock).
For purposes of determining the amount, if any, of the purchase price satisfied
by payment in Stock, such Stock shall be valued at its fair market value on the
date of exercise in accordance with subparagraph (b) of Paragraph 5. Any Stock
delivered in satisfaction of all or a portion of the purchase price shall be
appropriately endorsed for transfer and assignment to the Company. No holder of
an Option shall be, or have any of the rights or privileges of, a shareholder of
the Company in respect of any shares purchasable upon the exercise of any part
of an option unless and until certificates representing such shares shall have
been issued by the Company to such holders.

8.    ASSIGNABILITY.

      No Option shall be assignable or otherwise transferable except by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder.

9.    CAPITAL CHANGE OF THE COMPANY; CERTAIN CORPORATE TRANSACTIONS.

      (a) The existence of this Plan and Options granted hereunder shall not
affect in any way the right or power of the Company or its shareholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's Stock or the rights
thereof, or the dissolution or liquidation or the Company, or any sale or
transfer of all or any part or its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

      (b) The shares with respect to which Options may be granted hereunder are
shares of the Stock of the Company as presently constituted. If, and whenever,
prior to the delivery by the Company of all of the shares of the Stock which are
subject to Options granted hereunder, the Company shall effect a subdivision or
consolidation or shares or other capital readjustment, the payment of a stock
dividend, a stock split, combination of shares or recapitalization or other
increase or reduction or the number of shares or the Stock outstanding without
receiving compensation therefor in money, services or property, the number of
shares of Stock available under the Plan and the number of shares of Stock with
respect to which Options granted hereunder may thereafter be exercised shall (i)
in the event of an increase in the number of outstanding shares, be
proportionately increased and the cash consideration payable per share shall be
proportionately reduced; and (ii) in the event of a reduction in the number of
outstanding shares, be proportionately reduced, and the cash consideration
payable per share shall be proportionately increased.

      (c) If the Company is reorganized, or merged or consolidated or party to a
plan of exchange with another corporation pursuant to which reorganization,
merger, consolidation, or plan of exchange, stockholders of the Company receive
any shares of Stock or other securities or if the Company shall distribute
("SPIN OFF") securities of another corporation or entity to its shareholders,

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there shall be substituted for the shares subject to the unexercised portions of
outstanding Options an appropriate number of shares of (i) each class of stock
or other securities which were distributed to the shareholders of the Company in
respect of such shares in the case of a reorganization, merger, consolidation,
or plan of exchange, or (ii) in the case of a Spin Off, the securities
distributed to shareholders of the Company together with shares of Stock;
provided, however, that all such Options may be canceled by the Company as of
the effective date of (x) a reorganization, merger, consolidation, plan of
exchange or Spin Off or (v) any dissolution or liquidation of the Company, by
giving notice to each holder thereof or his personal representative of its
intention to do so and by permitting the purchase for a period of approximately
thirty days during the sixty days next preceding such effective date of all of
the shares subject to such outstanding Options, without regard to the
installment provisions set forth in the option agreement.

      (d) Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock or
any class, or cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Stock subject to Options
granted hereunder.

10.   TAXES.

      The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
Options granted under the Plan.

11.   EFFECTIVE DATE OF PLAN.

      The Plan shall be effective as of January 31, 2000. This Plan and any
options granted pursuant hereto shall be subject to the approval of the
stockholders of the Company in accordance with the provisions of Rule 16b-3 and
the applicable rules and regulations of the National Securities Dealers
Association, Inc., or any national exchange which are applicable to the Stock of
the Company.

12.   AMENDMENTS OR TERMINATION.

      The Board of Directors may amend, alter or discontinue the Plan, except
that no amendment or alteration shall be made which would impair the rights of
any Optionee under any Option theretofore granted, without his consent, and
except that no amendment or alteration shall be made which, without the approval
of the shareholders, would:

            (a) Increase the total number of shares reserved for the purposes of
      the Plan, except as is provided in Paragraph 9 of the Plan, or decrease
      the option price provided for in Paragraph 5, or change the designation of
      the class or persons eligible to participate in the Plan as provided in
      Paragraph 3; or

            (b) Increase or decrease the number of shares subject to Option or
      the schedule of grants provided for in Paragraph 3; or


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            (c) Extend the option period provided for in Paragraph 6; or

            (d) Materially increase the benefits accruing to Optionee under the
                Plan;

and; provided further, that provisions hereof relating to the amount of
securities to be awarded, the exercise price of Options awarded hereunder, the
timing of awards of Options and the exercise thereof or any formula incorporated
herein which relates to any of the foregoing shall not be amended more than once
every six months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act, or the rules thereunder.

13.   GOVERNMENT REGULATIONS.

      The Plan, and the granting and exercise of Options thereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

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