UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington D. C. 20549

                                   FORM 10-QSB

(X) Quarterly  report  pursuant to Section 13 or 15(d) of the  Securities  and
Exchange Act of 1934.

                     For the quarterly period ended September 30, 2000.

( ) Transition report pursuant to Section 13 or 15(d) of the Exchange Act for
the transition period from  _________________ to ____________ .



                         Commission File Number: 0-30492

                        DIVERSIFIED RESOURCES GROUP, INC.
                        ---------------------------------
               (Exact name of registrant as specified in charter)

          Utah                                          84-0771180
          ----                                          ----------
(State of Incorporation)                               (I.R.S. Employer I.D. No)

                    355 Interstate Blvd., Sarasota, FL 34240

                    (Address of Principal Executive Offices)

                                 (941) 923-1949
                                 --------------
              (Registrant's Telephone Number, Including Area Code)



Check whether the registrant:  (1) has filed all reports required to be filed by
Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 ( )

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock as of December 14, 2000.

                            94,437,391 Common Shares

Transitional Small Business Disclosure Format:

                                 YES ( ) NO (X)



                                       1
<PAGE>



                        DIVERSIFIED RESOURCES GROUP, INC.

                              INDEX TO FORM 10-QSB

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements (unaudited)

           Balance Sheet as of December 31, 2000 and September 30, 2000 .......3

           Statements of Operations for the three aand nine months
             ended September 30, 2000 and 1999 ................................5

           Statement of Stockholders' Equity (Deficit) for the nine
             months ended September 30, 2000...................................6

           Statements of Cash Flows for three and nine months ended
             September 30, 2000 and 1999 ......................................8

           Notes to Financial Statements .....................................10


Item 2.    Management's Discussion and Analysis of Financial Condition and
             Results of Operations ...........................................21


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings..................................................24
Item 2.    Changes in Securities..............................................24
Item 3.    Defaults Upon Senior Securities....................................24
Item 4.    Submission of Matters to a Vote of Securities Holders..............24
Item 5.    Other Information..................................................24
Item 6.    Exhibits and Reports on Form 8-K...................................24

Signatures....................................................................25




                                       2
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                           Consolidated Balance Sheets

ASSETS

                                       September 30,        December 31,
                                           2000                1999
                                       -------------        ------------
                                       (Unaudited)

CURRENT ASSETS

  Cash                                 $      1,129         $      3,565
  Inventory, net                                  -               14,891
  Accounts receivable                            14                5,571
  Prepaid expenses                          186,954                8,433
  Undeposited funds                               -                1,080
                                        ------------         ------------

     Total Current Assets                   188,097               33,540
                                        ------------         ------------

FIXED ASSETS (Note 2)

  Computers                                  41,238               41,238
  Test equipment                              1,569                1,569
  Office equipment                           20,380               20,380
  Software                                   32,475               32,475
  Accumulated depreciation                  (90,504)             (83,145)
                                         ------------        ------------

     Net Fixed Assets                         5,158               12,517
                                         ------------        ------------

OTHER ASSETS

  Deposits on land, net (Note 3)                  -                    -
                                         ------------        ------------

     Total Other Assets                           -                    -
                                         ------------        ------------

     TOTAL ASSETS                      $    193,255         $     46,057
                                         ============        ============



See Notes to Financial Statements

                                       3
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                     Consolidated Balance Sheets (Continued)


                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                  September 30,  December 31,
                                                       2000          1999
                                                  ------------   ------------
                                                    (Unaudited)

CURRENT LIABILITIES

  Cash overdraft                                   $         -   $        987
  Accounts payable - trade                              37,783         75,446
  Accounts payable - related party (Note 8)                  -         58,078
  Accrued expenses (Note 4)                             83,841         94,308
  Current portion of long-term debt (Note 7)            19,858         19,858
  Notes payable - related party (Note 8)             1,250,829        375,991
                                                   ------------  ------------

     Total Current Liabilities                       1,392,311        624,668
                                                   ------------  ------------

LONG-TERM DEBT (Note 7)                                 33,114         48,018
                                                   ------------  ------------

     Total Liabilities                               1,425,425        672,686
                                                   ------------  ------------

COMMITMENTS AND CONTINGENCIES (Note 3)

STOCKHOLDERS' EQUITY (DEFICIT)

  Preferred stock, $0.001 par value, 1,000,000 shares
   authorized, -0- shares issued and outstanding             -              -
  Common stock, $0.001 par value, 100,000,000 shares
    authorized; 94,437,391 and 92,075,831 issued and
   outstanding, respectively                            94,437         92,076
  Additional paid-in capital                         6,632,515      6,326,798
  Accumulated deficit prior to development stage    (4,512,614)    (4,512,614)
  Accumulated deficit from inception of the
    development stage on December 31, 1998          (3,446,508)    (2,532,889)
                                                   ------------  ------------

     Total Stockholders' Equity (Deficit)           (1,232,170)      (626,629)
                                                   ------------  ------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
    EQUITY (DEFICIT)                               $   193,255   $     46,057
                                                   ============  ============

See Notes to Financial Statements


                                       4
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                    From
                                                                                              Inception of the
                                                                                                 Development
                                                                                                   Stage on
                                           For the                       For the                  December 31,
                                      Nine Months Ended            Three Months Ended             1998 Through
                                        September 30,                  September 30,              September 30,
                                 2000                 1999          2000          1999               2000
                             ------------         ------------   ---------     ----------        -------------
<S>                         <C>                   <C>            <C>           <C>               <C>
REVENUES

  Sales, net                 $         -          $          -   $       -     $        -        $          -
  Cost of sales                        -                     -           -              -                   -
                             ------------         ------------   ---------     ----------        -------------

     Gross Margin                      -                     -           -              -                   -
                             ------------         ------------   ---------     ----------        -------------

OPERATING EXPENSES

General and administrative        82,924                     -       4,567              -             543,470
Depreciation and amortization     14,815                     -       3,459              -              14,815
                             ------------         ------------   ---------     ----------        -------------

   Total Operating Expenses       97,739                     -       8,026              -             558,285
                             ------------         ------------   ---------     ----------        -------------

LOSS FROM OPERATIONS             (97,739)                    -      (8,026)             -            (558,285)
                             ------------         ------------   ---------     ----------        -------------
OTHER INCOME (EXPENSE)

  Allowance - land              (701,694)             (459,372)   (209,754)      (229,686)         (1,161,066)
  Interest expense               (81,644)                    -     (41,776)             -             (88,394)
  Other income                    13,975                     -      13,975              -              13,975
                             ------------         ------------   ---------     ----------        -------------

Total Other Income (Expense)    (769,363)             (459,372)   (237,555)      (229,686)         (1,235,485)
                             ------------         ------------   ---------     ----------        -------------

LOSS BEFORE DISCONTINUED
 OPERATIONS                     (867,102)                    -    (245,581)            -           (1,793,770)


LOSS FROM DISCONTINUED
 OPERATIONS                      (46,517)             (730,905)     (8,122)     (542,805)          (1,652,738)
                             ------------         ------------   ---------     ----------        -------------

LOSS BEFORE INCOME TAXES        (913,619)             (730,905)   (253,703)     (542,805)          (3,446,508)

INCOME TAX EXPENSE                     -                     -           -             -                    -
                             ------------         ------------   ---------     ----------        -------------

NET LOSS                      $ (913,619)         $ (1,190,277)  $(253,703)    $(772,491)         $(3,446,508)
                             ============         ============   =========     ==========        =============

BASIC LOSS PER SHARE
  Loss before discontinued
   operations                 $    (0.01)         $      (0.01)  $   (0.00)    $   (0.00)
  Discontinued operations          (0.00)                (0.01)      (0.00)        (0.01)
                             ------------         ------------   ---------     ----------

BASIC LOSS PER SHARE          $    (0.01)         $      (0.02)  $   (0.00)    $   (0.01)
                             ============         ============   =========     ==========

WEIGHTED AVERAGE SHARES
 OUTSTANDING                  92,889,820            71,589,263  93,328,695    79,544,660
                             ============         ============   =========     ==========
</TABLE>


See Notes to Financial Statements


                                       5
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)


<TABLE>
<CAPTION>
                                                              Additional    Stock
                                           Common Stock       Paid-in       Subscription      Accumulated
                                    Shares           Amount   Capital       Receivable        Deficit
                                 ------------      ---------  -----------   ------------      -----------
<S>                              <C>               <C>        <C>           <C>               <C>
Balance, December 31, 1997        19,091,973       $  19,092  $3,332,971    $  (115,000)      $(9,779,570)

Adjustment for reduction of
 subscription price                        -               -    (103,500)       103,500                 -

Common stock issued for cash
 at $0.05 per share                4,707,504           4,708     230,667              -                 -

Common stock issued for settlement
 of debt at $0.05 per share       11,952,380          11,952     585,666              -                 -

Common stock issued for
 subscriptions receivable at
 $0.05 per share                   5,292,496           5,292     259,333       (264,625)                -

Net income for the year
 ended December 31, 1998                   -               -           -              -         5,266,956
                                 ------------      ---------  -----------   ------------      -----------

Balance, December 31, 1998        41,044,353       $  41,044  $4,305,137    $  (276,125)      $(4,512,614)
                                 ------------      ---------  -----------   ------------      -----------
</TABLE>

                                       6
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)



<TABLE>
<CAPTION>
                                                               Additional    Stock
                                         Common Stock          Paid-in       Subscription      Accumulated
                                    Shares           Amount    Capital       Receivable        Deficit
                                 ------------      ---------  -----------   ------------      -----------
<S>                              <C>               <C>        <C>           <C>               <C>
Balance, December 31, 1998        41,044,353       $  41,044  $ 4,305,137   $  (276,125)      $(4,512,614)

Receipt of stock subscription
 receivable                                -               -            -       276,125                 -

Common stock issued for services
 at $0.031 per share               2,208,400           2,208       66,252             -                 -

Common stock issued for services
 at $0.03 per share                4,390,000           4,390      127,310             -                 -

Common stock issued for services
 at $0.044 per share                 242,000             242       10,406             -                 -

Common stock issued for services
 at $0.35 per share                2,031,478           2,032       69,070             -                 -

Common stock issued for services
 at $0.035 per share                 840,000             840       28,560             -                 -

Common stock issued for services
 at $0.033 per share               1,880,000           1,880       60,160             -                 -

Common stock issued for cash,
 services and forgiveness of debt
 at $0.044 per share              30,439,600          30,440    1,308,903             -                 -

Common stock issued for services
 at $0.04 per share                9,000,000           9,000      351,000             -                 -

Net (loss) for the year
 ended December 31, 1999                   -               -            -             -        (2,532,889)
                                 ------------      ---------  -----------   ------------      -----------

Balance, December 31, 1999        92,075,831          92,076    6,326,798             -        (7,045,503)

Common stock issued for debt at
 $0.05 per share (unaudited)       1,161,560           1,161       56,917             -                 -

Common stock issued for cash at
 $0.21 per share (unaudited)       1,200,000           1,200      248,800             -                 -

Net loss for the period
 ended September 30, 2000
 (unaudited)                               -               -            -             -          (913,619)
                                 ------------      ---------  -----------   ------------      -----------

Balance, September 30, 2000
 (unaudited)                      94,437,391       $  94,437  $ 6,632,515   $         -       $(7,959,122)
                                 ============      =========  ===========   ============      ===========
</TABLE>

See Notes to Financial Statements


                                       7
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                        From
                                                                                                    Inception of the
                                                                                                    Development
                                                                                                     Stage on
                                                  For the                     For the               December 31,
                                             Nine Months Ended          Three Months Ended          1998 Through
                                                September 30,              September 30,            September 30,
                                            2000             1999          2000        1999               2000
                                         ----------       ----------   -----------   ----------     ---------------
<S>                                     <C>               <C>           <C>          <C>            <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES:

Net loss                                $ (913,619)     $(1,190,277)   $  (253,703)   $(772,491)     $(3,446,508)
   Adjustments to reconcile net loss
    to net cash (used) in operating
    activities:
      Depreciation and amortization         14,679           21,710          3,458        7,237           37,546
      Stock issued for services                  -          691,408              -      566,921        1,425,300
      Stock issued for employment
         settlement                              -           67,039              -            -                -
      Stock issued for debt                 58,078                -              -            -           58,078
      Allowance of deposits on land        701,694                -        209,754            -        1,161,066
      Stock subscription received by
         services and forgiveness                -                -              -            -          276,125
   Changes in assets and liabilities:
      (Increase) decrease in inventory      14,891           (6,881)        12,098       (7,081)             200
      (Increase) decrease in accounts
         receivable                          5,557                -          2,311            -              (14)
      (Increase) decrease in prepaid
         expenses                         (178,521)           7,329       (186,954)           -         (190,765)
      (Increase) decrease in other
         assets                              1,080                -              -       (5,054)           5,045
      Increase (decrease) in cash
         overdraft                            (987)         (17,481)             -      (26,667)         (17,481)
      Increase (decrease) in accounts
         payable                           (95,740)         (38,138)       (55,020)      27,345          (46,085)
      Increase (decrease) in accrued
         expenses                          (10,467)         (57,264)        23,828      (47,490)        (105,548)
                                         ----------       ----------   -----------   ----------     ---------------

       Net Cash (Used) by Operating
         Activities                       (403,355)        (522,555)      (244,228)    (257,271)        (843,041)
                                         ----------       ----------   -----------   ----------     ---------------

CASH FLOWS FROM INVESTING
 ACTIVITIES:

   Purchase of fixed assets                      -           (5,500)             -         (500)          (5,500)
   (Increase) in deposits on land         (701,694)        (229,686)      (209,754)    (229,686)      (1,161,066)
                                         ----------       ----------   -----------   ----------     ---------------

Net Cash (Used) by Investing Activities   (701,694)        (235,186)      (209,754)    (230,186)      (1,166,566)
                                         ----------       ----------   -----------   ----------     ---------------

CASH FLOWS FROM FINANCING
 ACTIVITIES:

   Payments on notes payable -
    related parties                     (1,292,300)               -     (1,277,039)           -       (1,272,303)
   Proceeds from notes payable -
    related parties                        917,138                -        239,538            -        1,293,129
   Proceeds from notes payable           1,250,000                -      1,250,000            -        1,250,000
   Payments on notes payable               (22,225)        (121,445)        (7,416)    (106,145)         (65,200)
   Collections from related parties              -            6,984              -            -            6,984
   Issuance of common stock for cash       250,000          918,518        250,000      642,393          793,393
                                         ----------       ----------   -----------   ----------     ---------------
      Net Cash Provided by Financing
       Activities                        $1,102,613       $ 804,057    $   455,083   $  536,248     $  2,006,003
                                         ----------       ----------   -----------   ----------     ---------------
See Notes to Financial Statements

                                       8
<PAGE>





               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)

                                                                                                         From
                                                                                                   Inception of the
                                                                                                     Development
                                                                                                       Stage on
                                                    For the                  For the                 December 31,
                                               Nine Months Ended        Three Months Ended           1998 Through
                                                 September 30,             September 30,             September 30,
                                            2000             1999          2000         1999             2000
                                         ----------       ----------   -----------   ----------     ---------------
<S>                                      <C>              <C>          <C>           <C>            <C>
Net Increase (Decrease) in Cash          $   (2,436)      $   46,316   $    1,101    $   48,791     $    (3,604)

CASH AT BEGINNING OF PERIOD                   3,565            2,475           28             -           2,475
                                         ----------       ----------   -----------   ----------     ---------------

CASH AT END OF PERIOD                    $    1,129       $   48,791   $    1,129    $   48,791     $     1,129
                                         ==========       ==========   ===========   ==========     ===============

CASH PAID FOR:

  Interest expense                       $   43,158       $        -   $   43,158    $        -     $    43,158
  Income taxes                           $        -       $        -   $        -    $        -     $         -

NON CASH FINANCING ACTIVITIES:

  Common stock issued in settlement
   of debt                               $   58,078       $        -   $        -    $        -     $   148,078
  Common stock issued for fixed asset    $        -       $        -   $        -    $        -     $     5,000
  Common stock issued for services       $        -       $  691,408   $        -    $  331,846     $ 1,425,300
  Common stock issued in settlement of
   of employment agreement               $        -       $   67,039   $        -    $        -     $         -
</TABLE>

See Notes to Financial Statements


                                       9
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

         The  Company  was  incorporated  under the laws of the State of Utah on
         July 31,  1984.  The Company has a  wholly-owned  Delaware  subsidiary,
         named Data 1, Inc., a wholly-owned subsidiary named Memory 1, Inc., and
         a wholly-owned subsidiary named Cordless Power Corporation. The Company
         changed its name to Diversified  Resources Group, Inc. in May 1999. The
         Company  has not  paid  dividends.  Dividends  that  may be paid in the
         future will  depend on the  financial  requirements  of the Company and
         other relevant  factors.  The Company is considered a development stage
         company  per  SFAS  No.  7  because  it  has  not  substantially  began
         operations.

         Memory 1, Inc. (Mem 1) was organized February 6, 1996 under the laws of
         the State of  Florida  to engage in the  business  which  includes  the
         manufacturing  and marketing of computer memory  devices.  During 1999,
         the Company  discontinued  the computer  memory  business and Mem 1 was
         dissolved.

         Cordless Power Corporation (CPC) was organized April 19, 1999 under the
         laws of the State of Florida  to engage in any  lawful act or  activity
         for which  corporations may be organized under the General  Corporation
         Law of Florida.  CPC was engaging in the business of retailing cellular
         telephone  batteries  and  accessories.  During July 2000,  the Company
         discontinued  the  retailing  of  cellular   telephone   batteries  and
         accessories and CPC was dissolved.

         On May 17, 1999, the  shareholders of the Company  approved and amended
         the  Articles of  Incorporation  to increase the  Company's  authorized
         common shares to 100,000,000.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a. Accounting Method

         The Company's  consolidated financial statements are prepared using the
         accrual method of  accounting.  The Company has adopted a calendar year
         end.



                                       10
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         b. Basic Income (Loss) Per Share

         The  computation  of basic  income  (loss) per share of common stock is
         based on the weighted average number of shares  outstanding at the date
         of the consolidated financial statements as follows:


<TABLE>
<CAPTION>
                                                For the                              For the
                                          Nine Months Ended                    Three Months Ended
                                             September 30,                         September 30,
                                       2000                1999                2000            1999
                                   -------------      --------------       -----------      ------------
<S>                                <C>                 <C>                 <C>              <C>
Numerator:
 Loss before discontinued
  operations                       $  (867,102)        $   (459,372)       $  (245,581)     $  (229,686)
 Discontinued operations           $   (46,517)        $   (730,905)       $    (8,122)     $  (542,805)

Denominator (weighted
 average number
 of shares outstanding)             92,889,820           71,589,263         93,328,695       79,544,660

Income (loss) per share
 Net loss before
  discontinued operations          $     (0.01)        $      (0.01)       $     (0.00)    $      (0.00)
 Net income (loss)
  discontinued operations          $     (0.00)        $      (0.01)       $     (0.00)    $      (0.01)

                                   $     (0.01)        $      (0.02)       $     (0.00)    $      (0.01)
                                   =============      ==============       ===========     ==============
</TABLE>

         Dilutive  loss per share is not  presented as there are no  potentially
         dilutive items outstanding.

         c.                      Income Taxes

         At  September  30,  2000,   the  Company  had  a  net  operating   loss
         carryforward  of  approximately  $7,960,000  that may be offset against
         future taxable income in various years through 2020. No tax benefit has
         been reported in the financial  statements because the Company believes
         there is a 50% or greater chance the  carryforward  will expire unused.
         Accordingly,  the potential tax benefits of the loss  carryforward  are
         offset by a valuation allowance of the same amount.

         d.  Cash Equivalents

         The Company considers all highly liquid investments and deposits with a
         maturity of three months or less when purchased to be cash equivalents.



                                       11
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         e.  Revenue Recognition

         Revenue is recognized  upon  shipment of goods to the  customer.  Sales
         primarily require immediate payment or cash on delivery.

         f.  Restated Consolidated Financial Statements

         Prior period  consolidated  financial  statements have been restated to
         conform with current consolidated financial statement presentation.

         g.  Fixed Assets

         Property and equipment are stated at cost. Depreciation of property and
         equipment is computed using the straight-line method over the estimated
         useful  lives of the  related  assets,  primarily  from  three to seven
         years.

         h.  Principles of Consolidation

         The September 30, 2000 consolidated  financial statements include those
         of  the  Company  and  its  wholly-owned  subsidiary,   Cordless  Power
         Corporation.  All significant  intercompany  accounts and  transactions
         have been eliminated.

         i.  Estimates

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

         j.  Advertising

         The Company  follows the policy of charging the costs of advertising to
         expense as incurred.

         k.  Recent Accounting Pronouncements

         In June 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
         Instruments and Hedging  Activities" which addresses the accounting for
         derivative   instruments,   including  certain  derivative  instruments
         embedded in other contracts,  and hedging  activities.  SFAS No. 133 is
         effective for all fiscal  quarters of all fiscal years  beginning after
         June 15,  1999 and is not  required  to be applied  retroactively.  The
         adoption  of this  statement  had no material  impact on the  Company's
         financial statements.



                                       12
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         l.  Inventory

         Inventory  is  stated  at the lower of cost  (computed  on a  first-in,
         first-out  basis)  or  market.   The  inventory  consists  of  cellular
         telephone batteries and accessories.

         m.  Long-Lived Assets

         All long-lived  assets are evaluated yearly for impairment per SFAS No.
         121,  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
         Long-Lived  Assets  to be  Disposed  of."  Any  impairment  in value is
         recognized as an expense in the period when the impairment occurs.

         n.  Unaudited Consolidated Financial Statements

         The accompanying  unaudited  consolidated  financial statements include
         all  of the  adjustments  which,  in the  opinion  of  management,  are
         necessary for a fair  presentation.  Such  adjustments  are of a normal
         recurring nature.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

         a. Leases

         Effective  June  30,  1999,  the  Company   terminated  its  lease  for
         facilities in Sarasota, Florida it had been leasing on a month-to-month
         basis.  Lease  payments  were  $1,551 per month.  The Company has since
         relocated to a facility  leased by an  affiliate  company and pays rent
         under a consulting agreement with this company.

         b. Employment Contracts

         Effective  August  11,  1996,  the  Company  has  entered  into  5 year
         employment  agreements with the President and Chief Financial  Officer.
         These contracts were terminated in 1999.

         On May 31,  1999,  the Company and the  President  and Chief  Executive
         Officer  of  the  Company  entered  into  a  settlement  of  employment
         agreement,   wherein,   for  certain   considerations,   including  his
         resignation,  he would receive  $100,000 plus continued health benefits
         payable  over a 54 week period.  On July 12, 1999,  the Company and the
         Vice President - Finance and Chief  Financial  Officer  entered into an
         identical agreement (Note 4).

         c.  Real Estate

         On July 31, 1999, the Company entered into an agreement  whereby it was
         assigned the rights to acquire a 607.74 acre tract of undeveloped  land
         in Wake County, North Carolina from Matheny Development, LLC, ("Matheny
         Development"),  a North Carolina limited liability  controlled by James
         M.  Matheny,  one of the  Company's  directors,  for  $21,000,000.  The
         agreement calls for a $100,000  earnest money deposit on signing,  with
         75% of the $21,000,000 purchase price due in cash at July 31, 1999, and
         the  remaining  25%  balance  due in the  form of an  interest  bearing
         promissory  note. As part of the assignment,  the Company agreed to pay
         Matheny Development $2,100,000 as liquidated damages if the purchase is
         not  closed by the due date plus  extensions,  unless the  contract  is
         breached by Matheny



                                       13
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)

         Development.  If Matheny Development breaches the contract, the Company
         has the option of pursuing  all  necessary  actions to obtain  specific
         performance by Matheny Development or to assign the contract to Matheny
         Development  and pay liquidated  damages of $2,100,000.  The assignment
         also  provides that the Company pay a  non-refundable  extension fee of
         $76,562  per month to extend  the  contract  beyond  the July 31,  1999
         closing date. The Company has paid $1,161,066 in extension  payments as
         of September 30, 2000 and has extended the agreement  through  November
         2000.

         An allowance of  $1,161,066  has been set up against these land deposit
         payments due to  uncertainty  of the Company  being able to finance the
         transaction by the November 2, 2000 due date.

         d.  Consulting Fee Agreement

         On July 7, 1999, the Company's  wholly-owned  subsidiary,  CPC, entered
         into a consulting  fee agreement with United  Funding  Solutions,  Inc.
         (United)  wherein the Company would pay United  $100,000 per year for 5
         years.  Additionally,  the Company issued United  10,000,000  shares of
         common  stock  valued at the  trading  price of $0.032  per  share,  or
         $32,000.  Pursuant to the  agreement,  the Company could be required to
         issue up to 90,000,000  additional  shares of common  stock.  The stock
         would be  issued at a  formula  of one  share for each  dollar of gross
         profit earned by the Company.

         During July 2000, the Company  discontinued the operations of CPC. As a
         result, the Company has ceased paying consulting fees to United and has
         issued  a  letter  terminating  the  consulting  agreement.  Management
         believes this will effectively  terminate the agreement and absolve the
         Company of any further obligation.

NOTE 4 - ACCRUED EXPENSES

         The Company's accrued expenses is comprised of the following items:

                                                    September 30,   December 31,
                                                        2000            1999
                                                    -------------   ------------
         Accrued directors fees                         $13,000       $ 4,000
         Settlement agreement - former CFO                    -        48,402
         Settlement agreement - former President              -        34,615
         Accrued interest payable                        40,358         7,150
         Accrued finance fees                            31,500             -
         Other                                                4           141
                                                    -------------   ------------

              Total                                     $84,862       $94,308
                                                    =============   ============

         The  settlement  agreements  for the former  President and CFO call for
         bi-weekly  payments  of $3,462 to be made to each  party  until paid in
         full. During the nine months ended September 30, 2000, the Company paid
         all amounts due to its former President and CFO.



                                       14
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999

NOTE 4 - ACCRUED EXPENSES (continued)

         During July 2000,  the Company issued a note payable for $1,250,000 and
         as  consideration  is required  to present to the holder a  certificate
         evidencing a prepaid  hotel suite at the Charlotte  Motor  Speedway for
         three  Winston  Cup  events  for  each of the  next  five  years  after
         completion of the building of a hotel.  Management  estimates the value
         of the suite to be $300 per night for seven nights,  for 3 events,  for
         five years,  or $31,500.  Due to the uncertainty of the building of the
         hotel, the entire $31,500 has been expensed in the current period.

NOTE 5 - GOING CONCERN

         The Company's  consolidated  financial  statements  are prepared  using
         generally accepted accounting  principles applicable to a going concern
         which  contemplates  the  realization  of  assets  and  liquidation  of
         liabilities in the normal course of business.  The Company has incurred
         losses from its inception  through September 2000. The Company does not
         have  an  established  source  of  revenues  sufficient  to  cover  its
         operating costs and to allow it to continue as a going concern.

         The company's  cellular  telephone  battery and  accessory  project has
         proven  to  lack  significant   enough  profit  margins  to  support  a
         distribution  system  and as a result has been  discontinued.  The most
         promising area is real estate operations.  The Company has entered into
         discussions  to  sell  its  interest  in  property  (see  Note  3c) and
         37,500,000  shares of common  stock to Matheny  Development,  a related
         party,  for  forgiveness  of  $1,250,000 in debt due under the original
         assignment,  the  authorization  of  forgiveness  of  one-third  of the
         $1,250,000  in  debt  due  Sagedale  Farms,   LLC,   $1,000,000   cash,
         reimbursement  for $1,161,066 in amounts  advanced for the property and
         waiver of all future fees.  These  amounts are expected to be collected
         in November 2000. The proceeds will be used pay off  liabilities and to
         cover operating expenses for the next 12 months.

         The ability of the Company to continue as a going  concern is dependent
         upon its ability to  successfully  accomplish the plan described  above
         and eventually entice acquisition candidates.  The financial statements
         do not include any  adjustments  that might be necessary if the Company
         is unable to continue as a going concern.

NOTE 6 - LOSS FROM DISCONTINUED OPERATIONS

         During September 1999, the Board of Directors of the Company decided to
         discontinue the business that includes the  manufacturing and marketing
         of  computer  memory  devices due to falling  margins in the  industry.
         During July 2000,  the Board of Directors  decided to  discontinue  the
         business of its wholly-owned  subsidiary,  Cordless Power  Corporation,
         due to lack  of  sufficient  profit  margins  to  cover  expenses.  The
         following is a summary of the loss from  discontinued  operations  from
         each of these events:



                                       15
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999



<TABLE>
<CAPTION>
                                                                                                    From
                                                                                               Inception of the
                                                                                                 Development
                                                                                                   Stage on
                                              For the                       For the              December 31,
                                          Nine Months Ended           Three Months Ended         1998 Through
                                           September 30,                 September 30,           September 30,
                                        2000             1999         2000          1999             2000
                                     ----------       ----------   -----------   ----------     ---------------
<S>                                      <C>              <C>          <C>           <C>            <C>
REVENUES

  Sales, net                        $   42,954        $   20,378   $      317    $      783      $     62,549
  Cost of sales                         13,432            20,613          219           257            33,724
                                     ----------       ----------   -----------   ----------     ---------------

     Gross Margin                       29,522              (235)          98           526            28,825
                                     ----------       ----------   -----------   ----------     ---------------

EXPENSES

  General and administrative            56,908           498,091        8,220       532,729         1,559,313
  Depreciation and amortization              -            21,710            -         7,237                 -
                                     ----------       ----------   -----------   ----------     ---------------

     Total Expenses                     56,908           519,801        8,220       539,966         1,530,488
                                     ----------       ----------   -----------   ----------     ---------------

LOSS FROM OPERATIONS                   (27,386)         (520,036)      (8,122)     (539,440)       (1,501,663)
                                     ----------       ----------   -----------   ----------     ---------------
OTHER INCOME (EXPENSE)

  Interest expense                      (1,021)          (10,094)           -        (3,365)           (6,715)
  Other income                               -             5,400            -             -                 -
  Other expense                        (18,110)         (206,175)           -             -          (244,360)
                                     ----------       ----------   -----------   ----------     ---------------

     Total Other Income (Expense)      (19,131)         (210,869)           -        (3,365)         (251,075)

LOSS BEFORE REORGANIZATION ITEMS       (46,517)         (730,905)      (8,122)     (542,805)       (1,752,738)
                                     ----------       ----------   -----------   ----------     ---------------
REORGANIZATION ITEMS

  Gain on restructuring of debt              -                 -            -             -           100,000
                                     ----------       ----------   -----------   ----------     ---------------
Total Income from Reorganization Items       -                 -            -             -           100,000
                                     ----------       ----------   -----------   ----------     ---------------

LOSS BEFORE INCOME TAXES               (46,517)         (730,905)      (8,122)     (542,805)       (1,652,738)

INCOME TAX EXPENSE                           -                 -            -             -                 -
                                     ----------       ----------   -----------   ----------     ---------------

NET LOSS                            $  (46,517)       $ (730,905)  $   (8,122)   $ (542,805)    $  (1,652,738)
                                     ==========       ==========   ===========   ==========     ===============
</TABLE>

         No income tax benefit has been attributed to the loss from discontinued
operations.



                                       16
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 7 - LONG-TERM DEBT

         Long term debt at September 30, 2000 and December 31, 1999 consisted of
         the following:

                                                   September 30,   December 31,
                                                       2000           1999
                                                  ------------   ------------
   Various notes payable given in settlement
   of accounts payable, non-interest bearing,
   quarterly payments of $7,405, unsecured.           $52,972         $67,876

   Less current maturities                            (19,858)        (19,858)
                                                  ------------   ------------

   Long-term debt                                 $    33,114    $     48,018
                                                  ============   ============

         Aggregate  maturities  required on long-term debt at September 30, 2000
         and December 31, 1999 are as follows:

                 Year                                  Amount         Amount

              2000                                $      4,965   $     19,858
              2001                                      19,858         19,858
              2002                                      19,858         19,858
              2003                                       8,291          8,302
                                                  ------------   ------------

               Total                              $     52,972   $     67,876
                                                  ============   ============

         Various notes were issued under the bankruptcy proceedings discussed in
         Note 10 as payment  for  certain  amounts  due as  provided  for in the
         Company's Plan of Reorganization.  The notes are non-interest  bearing,
         interest has been imputed at 8% per annum.

         The  balances are shown net of a discount of $28,469.  Amortization  of
         the discount  amounted to $13,014 and $5,694 at, September 30, 2000 and
         December 31, 1999, respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

         Notes Payable

         During July 2000, the Company issued a note payable to Sagedale  Farms,
         LLC, a related  party,  for $1,250,000  bearing  interest at a variable
         rate based on the  Wachovia  Bank rate,  interest is due  monthly.  The
         Company was also  required to issue  1,200,000  shares of common  stock
         upon  receipt.  The note is due in one year and is  payable  by cash of
         $1,250,000 or at the option of the Company,  may be converted to shares
         of the  Company's  common stock so that the market value of such shares
         on the  date of  issue  equals  the sum of  $1,250,000.  As  additional
         consideration,  the  Company  agreed to prepay a hotel  suite for seven
         nights for three major Winston Cup events at a yet to be built hotel at
         the Charlotte  Motor Speedway for each of the five years  following the
         hotel's completion.  This amount has been accrued at September 30, 2000
         (see Note 4).

         Interest expense amounted to $39,337 at September 30, 2000.



                                       17
<PAGE>

               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


         Tampa Bay Financial, Inc., a related party, loaned the Company $909,679
         and $375,791  during the nine months ended  September  30, 2000 and the
         year ended  December 31, 1999,  respectively.  The notes are payable on
         demand  and  accrue  interest  at 10% per  annum,  unsecured.  Interest
         expense  amounted  to $35,609  and  $7,150 at  September  30,  2000 and
         December 31, 1999, respectively.

         During July 2000, the Company repaid its loan and accrued interest from
         Tampa Bay Financial, Inc.

         Common Stock

         the Company  issued  1,161,560  shares of common stock on April 7, 2000
         for repayment of $58,058 due to Tampa Bay  Financial,  a related party,
         for  professional  fees and expense  paid on behalf of the Company that
         were incurred and accrued during the year ended December 31, 1999.

NOTE 9 -  STOCK SUBSCRIPTION RECEIVABLE

         Stock subscriptions receivable at December 31, 1998 included amounts of
         $6,250 and  $5,250  which  represented  notes  given to the  Company as
         consideration  for stock  options  exercised by the President and Chief
         Executive Officer, and the Vice President - Finance and Chief Financial
         Officer,  respectively.  The balance of $264,625  represented an amount
         subscribed  to by a related  party to  provide  working  capital to the
         Company while the Company was emerging from the bankruptcy  proceedings
         discussed  in Note  10.  The  notes  due  from  the two  officers  were
         liquidated in the  settlement of employment  contracts,  and the amount
         subscribed to by the related party was received in the form of services
         performed during 1999.

NOTE 10 -REORGANIZATION ITEMS

         On September 24, 1997, Data 1, Inc. (the "Debtor") filed a petition for
         relief under  Chapter 11 of the federal  bankruptcy  laws in the United
         States  Bankruptcy  Court for the Middle  District  of  Florida,  Tampa
         Division,  Case No.:  97-15827-8P1.  Under Chapter 11,  certain  claims
         against the Debtor in  existence  prior to the filing of the  petitions
         for relief  under the  federal  bankruptcy  laws are  stayed  while the
         Debtor continues  business  operations as  debtor-in-possession.  These
         claims  are  reported  in  the  December  31,  1997  balance  sheet  as
         "liabilities   subject  to  compromise."  Claims  secured  against  the
         Debtor's  assets  ("secured  claims")  also are  stayed,  although  the
         holders of such claims have the right to move the Court for relief from
         the stay. There are no secured claims.

         On June 19, 1998, the bankruptcy court entered a final order confirming
         the plan of reorganization. The order provided that the creditors could
         settle their  pre-petition  claims pursuant to three options.  Option 1
         provided for a note payable of 10% of the allowed  claim  payable in 17
         quarterly  payments  beginning  May 1, 1999.  Option 2  provided  for a
         combination of a note payable for 5% of the allowed claim and shares of
         common stock for 5% of the allowed claim.  Option 3 provided for shares
         of common stock for 10% of the allowed claim.


                                       18
<PAGE>

               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


         Pursuant to the  confirmed  plan,  the  Company  issued  notes  payable
         totaling  $235,879  with a net present  value of  $194,395,  and issued
         11,952,380  shares valued at $597,618 pursuant to the options available
         to the creditors.

         The Company recognized a gain on restructuring of debt of $5,956,183 in
         1998.

NOTE 11 -DEVELOPMENT STAGE COMPANY

         The Company essentially has reverted to the status of a startup company
         as it emerged from the bankruptcy  proceedings discussed in Note 10 and
         will be  considered  to be a  development  stage  company  until it can
         establish significant operations.

NOTE 12 -STOCK ISSUANCES

         During  March  1999,  the  Company  issued   2,208,400  shares  of  its
         previously authorized,  but unissued,  common stock for services valued
         at $68,460, or $0.031 per share.

         During  April  1999,  the  Company  issued   4,390,000  shares  of  its
         previously  authorized but unissued common stock for services valued at
         $131,700, or $0.03 per share.

         During May 1999,  the Company  issued  242,000 shares of its previously
         authorized,  but unissued, common stock for services valued at $10,648,
         or $0.044 per share.

         During June 1999, the Company issued 2,871,478 shares of its previously
         authorized, but unissued, common stock for services valued at $100,502,
         or $0.035 per share.

         During June 1999,  the Company  issued 840,000 shares of its previously
         authorized,  but unissued,  common stock for services valued at $29,400
         or $0.035 per share.

         During June 1999, the Company issued 1,880,000 shares of its previously
         authorized,  but unissued, common stock for services valued at $62,040,
         or $0.033 per share.

         During  July  1999,  the  Company  issued   30,439,600  shares  of  its
         previously authorized,  but unissued,  common stock for services valued
         at $691,949, cash of $543,393,  property of $5,000 and debt of $99,000,
         or $0.044 per share.

         During  December  1999,  the  Company  issued  9,000,000  shares of its
         previously authorized,  but unissued,  common stock for services valued
         at $360,000, or $0.04 per share.

         During  April  2000,  the  Company  issued   1,161,560  shares  of  its
         previously  authorized,  but  unissued,  common  stock for services and
         expenses valued at $58,058, or $0.05 per share.

         During July 2000, the Company issued  1,200,000  shares of common stock
         for cash of $250,000,  or $0.21 per share,  in conjunction  with a note
         payable (see Note 7).

         Stock  issuances for services and debt during 2000 and 1999 were valued
         at the trading price on the dates of issue.



                                       19
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                    September 30, 2000 and December 31, 1999


NOTE 13 -LEGAL PROCEEDINGS

         The United  States  Securities  and  Exchange  Commission  ("SEC")  has
         entered a formal  order of  investigation  styled as "In the  matter of
         Diversified Resources Group, Inc. (NY/6573)." On or about September 30,
         1999, the Company  received a subpoena duces teum  requesting  that the
         Company  provide the Northeast  Regional Office of the SEC with various
         documents  regarding past,  present and intended  business  operations,
         financial  statements  and  underlying  financial  records,  prior news
         releases,  and  other  documentation.  The  Company  has  provided  the
         documentation  requested  and has and  intends  to  continue  to  fully
         cooperate with this formal order of investigation.

NOTE 14 -SUBSEQUENT EVENTS

During November 2000, the Company entered into an agreement to assign its rights
to acquire  certain real estate (see Note 3c) obtained from Matheny  Development
back to  Matheny  Development  and issue  37,500,000  shares of common  stock to
Matheny  Development.  In exchange for assigning  these rights and  transferring
these shares,  Matheny  Development has agreed to forgive $1,250,000 in debt due
from  the  Company  as  outlined  in  the  original  assignment,  authorize  the
forgiveness  of  one-third  of the debt due  Sagedale  Farms,  LLC (see Note 8),
reimburse all amounts expended to extend the original assignment, or $1,161,066,
and pay the Company $1,000,000 in cash.



                                       20
<PAGE>




Item 2.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATION

OVERVIEW

The following  discussion and analysis  should be read in  conjunction  with the
balance  sheet as of September  30, 2000 and December 31, 1999 and the financial
statements as of and for the three and nine months ended  September 30, 1999 and
December 31, 1999 included with this Form 10- QSB.

We are  considered  to be in the  development  stage  as  defined  in  Financial
Accounting  Standards Board Statement No. 7, and we are currently in the process
of  creating  strategic  relationships  and  acquiring  complementary  operating
companies  within  the  electronics   components   (including  computer  memory,
batteries  and other  components)  industry  that  have  proven  management  and
state-of-the-art technologies.

Readers   are   referred   to  the   cautionary   statement,   which   addresses
forward-looking statements made by the Company.

RESULTS OF OPERATIONS

The results of operations  for the three months and nine months ended  September
30, 2000 are not  necessarily  indicative of the results for any future  interim
period or for the year ending  December 31, 2000. In particular,  we have closed
two different  Company  operations in the past couple of years - Cordless Power,
our rechargeable battery sales operation,  was closed in the summer of 2000, and
Data One, our computer  memory  operation  was closed in the summer of 1999.  We
expect to reinvigorate the Company by upon obtaining  capital,  selling off real
estate  operations to raise  additional  cash and financing for our  acqusitions
currently under review.  We anticipate that operating  expenses will continue to
increase as our business is expanded in the future,  and further anticipate that
these expenses will continue to be incurred in advance of projected revenue.

Quarter Ended September 30, 2000 and 1999

We  incurred  a net  loss of  approximately  $(253,703)  for the  quarter  ended
September  30, 2000 as compared  with a net loss of  $(772,491)  for the quarter
ended September 30, 1999.  This  difference was caused  primarily from the costs
from the  termination of our memory business in the prior year. For the quarters
ended  September  30,  2000  and  1999 we did not  generate  any  revenues  from
continuing  operations.  Our operating expenses consist primarily of general and
administrative expenses. General and administrative expenses increased to $8,026
for the  quarter  ended  September  30,  2000  from $-0- for the  quarter  ended
September 30, 1999, where all general and  administrative  expenses were charged
to loss from continuing  operations and principally  include payroll and related
taxes;  professional  fees  for  consulting,  business  development,  legal  and
accounting;  office supplies expense;  travel expense and organizational  costs.
Depreciation and amortization  expense was $-0- for the three month period ended
September  30,  2000,  compared  with  $7,237 for the three month  period  ended
September  30,  1999,  both  of  which  were  included  in  income  (loss)  from
discontinued  operations.  Interest  expense was $41,776  during the three month
period ended September 30, 2000 compared to $-0- in the corresponding  period of
the prior fiscal year.  This  increase  came from the  borrowing  cost of a note
entered  into by the  Company  during the  quarter to fund the Falls  River Land
Development.

                                       21
<PAGE>

Nine Months Ended September 30, 2000 and 1999

We incurred a net loss of  approximately  $(913,619)  for the nine months  ended
September  30, 2000 as  compared  with a net loss of  $(1,190,277)  for the nine
months ended September 30, 1999.  This difference was caused  primarily from the
costs from the  termination  of our memory  business in the prior year.  For the
nine months ended  September  30, 2000 and 1999 we did not generate any revenues
from continuing  operations.  General and administrative expense was $82,924 and
$4,567 for the nine months and three months ended  September  30, 1999.  Most of
these  expense  are   attributable   to  overhead  costs   associated  with  our
headquarters and operations center, and the additional  expenses related to real
estate consultant  services,  and expenses incurred in the due diligence process
of evaluating the now terminated Virotest potential acquisition.

Other Expenses

The allowance  for loss on real estate  increased to $ 1,161,066 as of September
30, 2000, which represents the entire amounts invested. This increase was due to
the increased expenditures into the Falls River Land Development, which is being
reserved  for  since  there  is no  assurance  as to the  recoverability  of our
investment. We have made all required payments under the contract.

Depreciation and Amortization

Depreciation and amortization  expense includes charges relating to depreciation
of property and equipment,  which consist principally of shipping equipment such
as  switches  and  points  of  presence,  furniture  and  equipment,   leasehold
improvements,  and  amortization  of  intangible  assets  should they arise.  We
depreciate our equipment  over periods  ranging from five (5) to seven (7) years
and  amortize  our  intangible  assets over  periods  ranging  from three (3) to
twentyfive (25) years. Depreciation and amortization expense was $14,815 for the
nine month period ended  September 30, 2000,  compared with $21,710 for the nine
month  period ended  September  30,  1999.  Prior year amounts were  included in
income (loss) from discontinued operations.

Interest

Interest  expense was $81,664  during the nine month period ended  September 30,
2000  compared to $10,094 in the  corresponding  period of the prior fiscal year
charged to loss from discontinued operations. Interest expense related primarily
to debt undertook to settle with creditors  arising from our bankruptcy and debt
incurred  to fund real  estate  operations.  We did not  incur  any  significant
interest income and did not capitalize any interest.

Discontinued Operations

Our sales and cost of sales in our  discontinued  battery  division for the nine
months ended September 30, 2000,  were $42,954 and $13,432.  Although there were
improvements resulting from a change in suppliers that increased  profitability,
this  improvement  was not  sufficient  to bring us to  profitability  without a
significant increase in sales. No advertising amounts were expended in the prior
year  since our  operations  did not  commence  until the  second  half of 1999.
Although we  demonstrated  progress in  purchasing  more  effective  advertising
during  the  quarter,  we were  never  able to  purchase  enough  cost-effective
advertising to bring Cordless Power to profitability, and we were unable to work
out alternative  arrangements  such as a sale of the division and thus shut down
our operation to avoid further losses.

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Inflation and Deflation

We do not believe that either  inflation or  deflation  will have a  significant
effect on operations for the foreseeable future.

Market Risk Exposure

With the cessation of the Cordless Power  business,  We are no longer subject to
indirect foreign currency  exchange rate risk relating to payments to suppliers.
We does not  consider  the market risk  exposure  relating  to foreign  currency
exchange to he or to have been material.

Financial Position, Liquidity and Capital Resources

Our operating  requirements  have  exceeded our cash flow from  operations as we
struggle to build a successful  operating business.  Operating activities during
the nine  months  ended  September  30,  2000 used cash of  $403,355.  Operating
activities were primarily  funded through proceeds from the sale of common stock
of $250,000 and proceeds from the issuance of debt of $1,250,000. In addition to
our  operating  requirements  we have  invested over $700,000 in the Falls River
land Development during 2000.

Due to the need for working  capital,  we will continue to seek  additional debt
and/or equity financing from existing  shareholders and other investment capital
resources,  however,  no  assurance  can he given that we will be able to obtain
other commitments. We will require the proceeds of this and subsequent offerings
to expand our operations and finance our future  working  capital  requirements.
Based upon our current plans and  assumptions  relating to our business plan, we
anticipate  that we may need to seek  additional  financing to fund our proposed
acquisition  strategy.  Having sold the Falls River project after the end of the
quarter, we believe we will be able to pay off existing debts and have a capital
base to begin pursuing acquisitions in early 2001.

CAUTIONARY STATEMENT

This Form 10-QSB, press releases and certain information  provided  periodically
in writing or orally by the Company's  officers or its agents contain statements
which constitute  forward- looking  statements within the meaning of Section 27A
of the Securities  Act, as amended and Section 21 E of the  Securities  Exchange
Act of 934. the words expect, anticipate,  believe, goal, plan, intend, estimate
and  similar  expressions  and  variations  thereof  if  used  arc  intended  to
specifically identify forward-looking  statements.  Those statements appear in a
number  of  places  in this  Form  10-QSB  and in  other  places,  particularly,
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  and include  statements  regarding  the  intent,  belief or current
expectations  of the Company,  its  directors  or its officers  with respect to.
among other things: (i) the Company's liquidity and capital resources;  (ii) the
Company's  financing  opportunities  and plans and  (iii) the  Company's  future
performance  and  operating  results.  Investors and  prospective  investors are
cautioned that any such forward-looking  statements are not guarantees of future
performance  and involve risks and  uncertainties,  and that actual  results may
differ  materially from those projected in the  forward-looking  statements as a
result of  various  factors.  The  factors  that might  cause  such  differences
include. among others, the following:  (i) any material inability of the Company
to successfully identify, consummate and integrate the acquisition of electronic
components  operations at reasonable and anticipated costs to the Company:  (ii)
any material  inability of the Company to  successfully  internally  develop its
products:  (iii) any  adverse  effect  or  limitations  caused  by  Governmental
regulations:  (iv) any adverse effect on the Company's  continued  positive cash


                                       23
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flow and abilities to obtain acceptable  financing in connection with its growth
plans;  (v) any  increased  competition  in business:  (vi) any inability of the
Company to  successfully  conduct its business in new  markets;  and (vii) other
risks  including those  identified in the Company's  filings with the Securities
and Exchange Commission. The Company undertakes no obligation to publicly update
or revise the  forward  looking  statements  made in this Form 10-QSB to reflect
events or  circumstances  after the date of this Form  10-QSB or to reflect  the
occurrence of unanticipated events.

                                OTHER INFORMATION

Item I - Legal Proceedings

       NONE

Item 2. Changes in Securities

       NONE

Item 3. Defaults Upon Senior Securities

       NONE

Item 4. Submission of Matters to a Vote of Securities Holders

       NONE

Item 5. Other Information

       NONE

Item 6. Exhibits and Reports on Form 8-K

       (a)   Exhibits

             0. -- Assignment Agreement
             0.  Satisfaction Agreement

       (b)   Form 8-K
             none



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                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

February 20, 2001                      /s/ Carl Smith
----------------                      ---------------------------------------
      Date                            Carl Smith, Chief Executive Officer




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