SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                  FIRST AMENDED
                                   FORM 10-KSB/A

[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 O-27319

                                   E-REX, INC.
             (Exact name of registrant as specified in its charter)

                        NEVADA                       88-0292890
           (State or other jurisdiction of        (I.R.S. Employer
           incorporation or organization)        Identification No.)

                   11645 BISCAYNE BOULEVARD, SUITE 210
                            MIAMI, FLORIDA                  33181
             (Address of principal executive offices)     (Zip Code)


      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE    (305) 895-3350


     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed 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     No     X.
                                                                 -----

     Check  if  there is no disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-B  is  not  contained  in this form, and no disclosure will be
contained,  to  the  best  of  registrant's  knowledge,  in  definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [X]

     State  issuer's  revenues  for  its most recent fiscal year.       $35,976.

     State  the  aggregate  market  value of voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity  was  sold, or the average bid and asked prices of such common equity, as
of  a  specified  date within the past 60 days.  (See definition of affiliate in
rule  12b-2  of  the  Exchange  Act.)  $4,076,484, based on the closing price of
$0.18  for  the  common  stock  on  May  8,  2001.

     Indicate  the  number of shares outstanding of each of the issuer's classes
of  common  stock,  as of the latest practicable date.  As of May 8, 2001, there
were  25,069,331  shares  of  common  stock,  par  value  $0.001,  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 (e.g., Part I, Part II, etc.) 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) or (c) of the Securities Act of 1933 ("Securities Act").  The listed
documents  should be clearly described for identification purposes (e.g., annual
report  to  security  holders  for  fiscal year ended December 24, 1990).  None.

                     Transitional Small Business Disclosure
                               Format (check one):

                             Yes _____     No __X__


<PAGE>
                                   E-REX, INC.

                                TABLE OF CONTENTS
                                -----------------


                                     PART I

Item  1          Description  of  Business

Item  2          Description  of  Property

Item  3          Legal  Proceedings

Item  4          Submission  of  Matters  to  a  Vote  of  Security  Holders


                                     PART II

Item  5          Market  for  Common  Equity  and  Related  Stockholder  Matters

Item  6          Management's  Discussion  and  Analysis  or  Plan of Operations

Item  7          Financial  Statements

Item  8          Changes In and Disagreements With Accountants on Accounting and
                 Financial Disclosure


                                    PART III

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

Item  10         Executive  Compensation

Item  11         Security Ownership of Certain Beneficial Owners and Management.

Item  12         Certain  Relationships  and  Related  Transactions.

Item  13         Exhibits  and  Reports  on  Form  8-K.

                                        2
<PAGE>

                                     PART I

EXPLANATORY  NOTE

In  response  to  comments  from  the  United  States  Securities  and  Exchange
Commission, E-Rex, Inc. has restated its Annual Statement on Form 10-KSB.   This
Annual  Statement  is  for  the year ended December 31, 2000, and was originally
filed  with  the  Commission on May 18, 2001.  References throughout this Annual
Statement  are  accurate  as  of the date originally filed.  The Company has not
undertaken  to  update all of the information in this Annual Report, but instead
has  updated  only  those areas requested by the Commission.  Please read all of
the  Company's  filings  with  the  Commission  in  conjunction with this Annual
Report.

This Annual Report includes forward-looking statements within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act"). These statements are based
on  management's beliefs and assumptions, and on information currently available
to  management.  Forward-looking  statements  include the information concerning
possible  or assumed future results of operations of the Company set forth under
the  heading  "Management's  Discussion  and  Analysis of Financial Condition or
Plan  of Operation." Forward-looking statements also include statements in which
words  such as "expect," "anticipate,"  "intend," "plan," "believe," "estimate,"
"consider"  or  similar  expressions  are  used.

Forward-looking  statements  are  not  guarantees  of  future performance.  They
involve  risks, uncertainties and assumptions.  The Company's future results and
shareholder  values  may  differ  materially  from  those  expressed  in  these
forward-looking  statements.  Readers are cautioned not to put undue reliance on
any  forward-looking  statements.

ITEM  1  -  DESCRIPTION  OF  BUSINESS

HISTORICAL  BACKGROUND

     The  Company  was  incorporated  under  the  laws of the State of Nevada on
August  26, 1986 as P.R. Stocks, Inc.  On February 26, 1992, the Company changed
its  name  to  National  Health & Safety Corporation.  On November 12, 1992, the
Company  changed  its  name  to  Medgain International Corporation.  On June 20,
1994,  the  Company  changed  its name to E-Rex, Inc.  On February 20, 1999, the
Company  merged  with  Plantech  Communications  Systems, Inc., a privately held
British  Columbia,  Canada,  corporation.  Plantech  was  a  development  stage
enterprise  in  the software, computer and Internet area.  From its inception in
1992,  Plantech  had  no  revenues.  Under  the  terms  of the merger agreement,
Plantech  shareholders received one share of the Company's common stock for each
outstanding  share  of  Plantech  stock.  Plantech's  results  of operations are
included  in  the  Company's  statement  of  operations  from the date of merger
forward.  The  Company  currently  is  a  development  stage  enterprise  in the
computer  software,  hardware  and  Internet  areas.

RECENT  TRANSACTIONS

Ultimate  Franchise  Systems,  Inc.

     On  July  27, 2001 the Company and Ultimate Franchise Systems Inc. ("UFSI")
completed  their commitment to a long-term corporate alliance.  The terms of the
alliance  include  the  following:

                                        3
<PAGE>

-     UFSI  will  order  a  minimum  of  one Dragonfly 6 in 1 unit for each UFSI
franchise  location  and  office  to  be delivered over a twenty-four (24) month
period,  beginning  the  first  date  of  production;

-     A  home delivery interface website which will be developed and operated by
E-Tech  Design  (the Web design and hosting division of the Company), which will
service  the  home  delivery  restaurants  in  the  UFSI  chain;

-     Subject to franchise restrictions, UFSI intends to position all current or
future restaurants offering home delivery to participate in the website delivery
program.  Content and functionality are to be developed in conjunction with UFSI
management;

-     The  Company  and UFSI will enter into a data sharing agreement to include
the  following  conditions:

a.     Access  to  the  client  base  of  UFSI  at  the website level or through
promotions  utilized in the restaurants operated by UFSI for the joint promotion
of  the  Company  products  to  be  sold  to  that  client  base;

b.     Operational  income  from  the website project is expected to generate in
excess  of  $300,000  per  year  income  to  the  Company.

Swartz  Private  Equity,  LLC

     On  December 22, 2000 the Company entered into an Investment Agreement with
Swartz  Private Equity, LLC.  Under the Swartz agreement, also referred to as an
equity  line, the Company has the option to sell, or "put," up to $15 million of
its  common  stock  to  Swartz,  subject  to  a formula based on stock price and
trading  volume,  over  a three year period beginning on the effective date of a
registration  statement,  which is expected to be filed shortly after the filing
of  this  Form  10-K.  The Swartz agreement was amended and restated on March 8,
2001,  in  order  to  address  certain  comments  received by the Securities and
Exchange  Commission  in  response to a previous registration statement filed by
the Company.  The Company withdrew its Form SB-2 registration statement on March
5,  2001.

Webulate,  LLC

     On  June  8,  2001,  the Company completed the acquisition of the assets of
Webulate, LLC.  These assets include an Internet Service Provider located at the
Denver  Technology  Center,  Denver, Colorado, a suite of proprietary e-commerce
and Business-to-Business application software systems, rights to a developmental
stage  peripheral computer device, and the ongoing client base of Webulate, LLC.

PRODUCTS

     The  Company  intends  to  market the Dragonfly, a portable, multi-function
color  printer,  copier,  fax and scanner with Internet and e-mail capabilities.
The  unit  features  a touch screen and is designed to operate with the ease and
simplicity  of a copy machine for all functions.  The Dragonfly incorporates Sun
Microsystems  Java  and  Jini  technology  and  represents  the  Company's first
generation  of  "smart"  products  combining  the  Internet with new technology,
competitive  pricing  and  shorter  production time.  By building on the network
connectivity  provided  by  the  Java technology, the product supports a diverse
range  of  connectivity  options,  ranging from satellite uplink to ordinary and
cellular modems and Ethernet networks.  Pricing of this product has not yet been
determined.  The  Company  is presently completing the initial prototypes of the
Dragonfly, after two Dragonfly mock-up prototypes were successfully demonstrated
at  the  Java  One  conference  held  in  San  Francisco  in November, 1999, and
sponsored  by  Sun MicroSystems.  It is anticipated that following completion of
the  prototype  that  production could begin within four months of obtaining the
necessary  capital  and/or  entering into an OEM relationship for manufacturing.
The company is currently negotiating with interested financial parties to secure
the  necessary capital for commencement of production operations. As soon as the
initial  prototypes  are  fully  operational,  demonstrations  with  major  OEM
corporations  will  be  arranged.

                                        4
<PAGE>

MARKETING  AND  SALES

     The  target  customer  profile  centers on an existing base of non-computer
users  and  current  laptop  users  that require access to several communication
mechanisms in a mobile environment.  It is expected that experienced users, such
as  business  executives and others, will purchase the unit for its portability,
ease  of  use,  convenience,  and  power.

     This  base  will  also  be joined by a growing demographic profile of older
users  who desire a range of functions without the necessity and complication of
using  a  fully  functional  computer,  and  the  associated  peripheral devices
currently  needed  to  perform  the  functionality  offered  in  the  Dragonfly.

     An  enhanced communication center can be achieved by integration with other
information  appliances  and computers including digital cameras, photo-printers
and  network  servers.  When  bundled  with  these items, the product provides a
complete  solution  for  the  small,  home  or  mobile  office  market.

     A  flexible  architecture,  in  both  software  and  hardware,  provides  a
mechanism  for  future enhancements and add-on products that branch into related
markets.  For  example, a software enhancement for drawing and handwriting could
permit  stored  documents  to  be  annotated on-screen using a pen.  These would
appeal  to  students, and homemakers. The addition of a card reader could permit
the unit to act as a point of sale terminal that manages purchases in a portable
kiosk.  This would appeal to artists and others at weekend craft festivals, etc.
It  is  expected  that  these  customers would prefer a more contemporary design
(i.e.,  the  appeal  of  the  iMac's  design  to  these  groups).

     The  flexible  hardware  architecture  will  enable  the addition of larger
screens,  the  inclusion  of  a  microphone  and  speaker, larger keyboards, and
buttons.  Each  of  these  items  would  be  required  for  individuals  with
exceptionalities.

     The  Company  initially  intends  to market the Dragonfly within the United
States  and  Canada.  Current  and future products will be sold directly through
the  Internet  by utilizing marketing strategies aimed at interested parties and
marketing  databases of partners.  The Company also intends to offer the product
through electronics distributors and OEM relationships, as well as through other
avenues,  such  as trade shows, affiliate websites and eventually expanding into
other  countries.

                                        5
<PAGE>

MANUFACTURING  AND  SOURCE  OF  SUPPLY

     A  number  of  reputable  manufacturers  produce the components used in the
Dragonfly,  including  Intel,  Microsoft,  Fujitsu  and  Cannon.  Currently, the
Company  does  not  intend  to  establish  its  own  manufacturing  plant.  The
production  plan  entails  coordination  with existing manufacturing facilities.
The  Company  intends  to  install  its  own  quality control personnel at these
plants,  and  also  intends  to  maintain research and development facilities in
North  America.

RESEARCH  AND  DEVELOPMENT

     The  Company utilized the fully equipped mechanical and electrical research
and  testing  facilities  at British Columbia Institute of Technology to produce
its  prototype.  The  development  of  the  Dragonfly  production  prototype and
associated  software  and  hardware  engineering and Research and Development is
being  conducted  under  contract  by  Valcom,  Ltd., of Guelph Ontario, Canada.

     The  Guelph, Ontario facility of Valcom, Ltd. is an ISO 9001 approved, ICSD
security  cleared  facility  with  modern,  fully  equipped,  electronic,
electromechanical  systems  and  equipment  engineering and manufacturing plant.
This  state-of-the-art  plant contains 65,000 square feet of floor space, with a
staff  of  approximately  100  full-time  employees  performing  the  principal
functions  of the plant, including: Research and Development; Systems and Custom
Design;  Manufacturing; Repair and Overhaul; and Quality Control Testing.  These
functions  encompass  a  broad  range  of  communications  and  electronics,
meteorological,  data acquisition and electro-mechanical, systems, equipment and
components.

COMPETITION

     There  is  significant  competition  in  the computer peripheral, software,
hardware  and  Internet industries. Computer peripheral and print-scan equipment
manufacturers  such as Hewlett-Packard, Cannon, Xerox, Epson, Palm Computing and
others  have  the  engineering, manufacturing and marketing expertise to produce
similar  devices  and the financial resources to design and distribute a product
similar  in  functionality  to  the  Dragonfly.  At  present these manufacturers
produce  products  that  offer  some  but  not  all  of the functionality of the
Dragonfly,  but  with  appropriate  engineering  and  licensing  could produce a
similar  product.  Any  new  developments  in  printing,  scanning  or  document
handling  technology  could  cause  the  obsolescence  of  the  product  to  be
accelerated.  Almost  all  of  the companies with which the Company will compete
are  substantially  larger,  have  more  substantial  histories,  backgrounds,
experience  and  records of successful operations, greater financial, technical,
marketing and other resources, more employees and more extensive facilities than
the  Company now has, or will have in the foreseeable future.  It is also likely
that other competitors offering similar products will emerge in the near future.
There  is  no  assurance  that  the Company will compete successfully with other
established  computer  software  and Internet companies.  The Company intends to
compete  on the basis of functionality, quality and price.  Inability to compete
successfully  might  result  in  increased  costs, reduced yields and additional
risks  to  the  investors.

INTELLECTUAL  PROPERTIES

     At  present  the  company  is engaged in a patent study on the hardware and
operating  system  functionality for the Dragonfly.  It is anticipated that some
or  the  entire  device  may  be able to be protected by patents.  The operating
system  and  circuit  boards  and control systems as well as the website hosting
interface  are  proprietary  to  the  Company.

                                        6
<PAGE>

EMPLOYEES

     The  Company  currently has five full-time and one part-time employee.  The
Company  intends  to  employ  individuals  as  required.  The  Company currently
subcontracts  research  and  development  as  required  for  production  of  the
Dragonfly  prototype.  The  Company intends to add full-time executives in sales
and  marketing, finance and distribution as it moves closer to production of the
Dragonfly.  In the E-tech design division there is one full time employee and it
is  anticipated  that  several  staff  will be added in the coming months in the
areas  of  project  management,  sales  and  web  site  design  and programming.

ITEM  2  -  DESCRIPTION  OF  PROPERTY

     The  Company  currently  leases  office  space  located  at  11645 Biscayne
Boulevard,  Suite  210,  Miami,  Florida  33181-3138.  This  space  covers
approximately 1,050 square feet and is leased on under an agreement that expires
January  1, 2003 and requires us to pay $1,441.00 per month in rent.  We believe
that  the  current  facilities are adequate to meet our needs into the immediate
future.

ITEM  3  -  LEGAL  PROCEEDINGS

     On  August  4,  2000 Crusader Capital Group, Inc. filed a complaint against
the  Company  in  civil  action  number CV-N-00-411-DWH-RAM in the United States
District  Court  for  the  District of Nevada.  The Company was served with this
complaint  on  or  about  August  10, 2000.  This complaint alleges undetermined
damages  for  misrepresentations,  omissions,  breach  of  contract  and  unjust
enrichment  related  to  Crusader's  purchase of restricted stock in the company
during  the  first  quarter  of  2000.  The  case  is  in the Discovery phase of
litigation,  however,  a  settlement  agreement  has  been reached in principal,
subject  to  the  execution  of  final  settlement documents.  If finalized, the
Company  will issue to Crusader Capital Group, Inc. a total of 166,667 shares of
restricted  common  stock.

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

     No  matters  were  submitted  to  a vote of the security holders during the
fiscal  year.

                                        7
<PAGE>

                                     PART II

ITEM  5  -  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

MARKET  INFORMATION

     Our common stock is traded on the OTC Bulletin Board under the symbol EREX.
Our common stock is only traded on a limited or sporadic basis and should not be
deemed  to  constitute  an  established  public  trading  market.  There  is  no
assurance  that  there  will  be  liquidity  in  the  common  stock.

     Below is a table indicating the range of high and low transaction price for
the  common  stock  for  each quarterly period within the most recent two fiscal
years.  The  information  reflects  inter-dealer prices, without retail, markup,
markdown  or  commission  and  may  not  represent  actual  transactions.

                                                      PRICES
     YEAR     PERIOD                              HIGH      LOW
     ----     ------                              ----     ----
     2001     First  Quarter                      0.53     0.16

     2000     First  Quarter                      2.44     0.15
              Second  Quarter                     1.56     0.38
              Third  Quarter                      1.25     0.34
              Fourth  Quarter                     0.91     0.25

     1999     First  Quarter                      1.00     0.25
              Second  Quarter                     1.69     0.69
              Third  Quarter                      1.06     0.44
              Fourth  Quarter                     1.00     0.14

HOLDERS

     As  of December 31, 2000, there were approximately 845 holders of record of
the  common  stock.

DIVIDEND  POLICY

     We  have  never  declared  or  paid  cash dividends on the common stock and
anticipate  that  all  future  earnings  will be retained as working capital and
business  expansion.  The  payment  of  any future dividends will be at the sole
discretion  of  the board of directors and will depend upon, among other things,
future  earnings,  capital  requirements,  our  financial  condition and general
business conditions.  Therefore, there can be no assurance that any dividends on
the  common  stock  will  be  paid  in  the  future.

                                        8
<PAGE>

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     In  February  2000,  the  Company  issued an aggregate of 170,000 shares of
common  stock, restricted in accordance with Rule 144, to nine individuals, each
at a price of $0.10 per share for total consideration to the Company of $17,000.
The  issuances  were  exempt  from registration pursuant to Rule 504 promulgated
under  Regulation  D  of  the  Securities  Act  of  1933.

     In  March  2000, the Company issued 60,000 shares of common stock to Brenda
Hamilton and 6,000,000 shares to Stockbroker Presentations, Inc., all restricted
in  accordance  with  Rule  144,  for  services  rendered  to  the Company.  The
issuances  were  exempt  from  registration  pursuant  to  Section  4(2)  of the
Securities  Act  of  1933  and  the  shareholders  were  accredited.

     In  March  2000,  the  Company  issued  2,000,000 shares of common stock to
Donald  A.  Mitchell without restrictive legend in accordance with Regulation S,
for  services  rendered  to  the  Company.

     In  April  2000,  the  Company  issued  an aggregate of 3,290,000 shares of
common  stock,  restricted in accordance with Rule 144, to nineteen individuals,
each  at  a  price  of $0.10 per share for total consideration to the Company of
$329,000.  The  issuances  were  exempt  from  registration pursuant to Rule 506
promulgated under Regulation D of the Securities Act of 1933.  In November 2000,
the Company issued an aggregate of 930,003 shares of common stock, restricted in
accordance  with Rule 144, and options to acquire a total of 2,790,000 shares of
common  stock  at  an  exercise price of $1.00 per share which expire on July 1,
2002,  to  eighteen  of  these  individuals.  The  issuances  were  exempt  from
registration  pursuant  to  Rule  506  promulgated  under  Regulation  D  of the
Securities Act of 1933.  The issuances were made as additional consideration for
delays related to misunderstandings and representations made to the investors by
prior  management.

     In  July  2000 the Company issued a convertible debenture to Dale Sawyer in
the  face amount of $20,000.  The debenture is convertible into 32,000 shares of
common  stock  of  the Company until July 1, 2002.  The issuance was exempt from
registration  pursuant  to  Rule  506  promulgated  under  Regulation  D  of the
Securities  Act  of  1933.

     From  July  to November 2000, the Company issued options to acquire 790,000
shares  of  common  stock  at  an  exercise  price  of $1.00 per share to twelve
individuals  in exchange for services rendered to the Company.   The options all
expire on July 1, 2001.  The issuances were exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933 and the shareholders were accredited.

     In August and September 2000, the Company issued 1,000,000 shares of common
stock  to  Corporate Service Providers, 100,000 shares to Ben Grocock, and 6,667
shares  to  K.  Soderstrom,  all  restricted  in  accordance  with Rule 144, for
services  rendered  to the Company.  The issuances were exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933 and the shareholders were
accredited.

     In  August  and  November  2000, the Company issued 20,000 shares of common
stock  to  Jeffrey  M.  Harvey  and  200,000  to  Carl  E. Dilley, restricted in
accordance  with  Rule 144, for services rendered to the Company.  The issuances
were  exempt from registration pursuant to Section 4(2) of the Securities Act of
1933  and  the  shareholders  were  accredited.

                                        9
<PAGE>

     In  November 2000, the Company issued 76,786 shares of common stock to Carl
E.  Dilley for services rendered to the Company.  The issuance was registered on
Form  S-8.

     In  November  2000, the Company issued 75,893 shares of common stock to Ben
Grocock, 32,923 shares to Byron Rambo, 12,582 shares to J. Walker, 15,000 shares
to  S.  Owlett,  and  18,079 shares to R. Patterson for services rendered to the
Company.  The  issuances  were  registered  on  Form  S-8.

     In  August  2000, the Company issued options to acquire 3,000,000 shares of
common stock to Ultimate Franchise Systems, Inc.  The options expire on July 27,
2002.  The issuance was exempt from registration pursuant to Section 4(2) of the
Securities  Act  of  1933  and  the  shareholder  was  accredited.

     In  September  2000, the Company issued 1,000,000 shares of common stock to
Ultimate  Franchise  Systems,  Inc.,  restricted in accordance with Rule 144, as
part of a stock exchange.  The issuance was exempt from registration pursuant to
Section  4(2)  of the Securities Act of 1933 and the shareholder was accredited.

     In  September  2000 the Company issued a convertible debenture to Webulate,
LLC  in  the face amount of $200,000.  The debenture is convertible into 400,000
shares  of  common  stock  of  the Company until July 1, 2002.  The issuance was
exempt  from registration pursuant to Rule 506 promulgated under Regulation D of
the  Securities  Act  of  1933.

     In  November  2000,  the  Company  issued  80,000 shares of common stock to
Jeffrey  M.  Harvey  for  services  rendered  to  the Company.  The issuance was
registered  on  Form  S-8.

     In  November  2000,  the  Company  issued  166,667  shares of common stock,
restricted in accordance with Rule 144, to Crusader Capital as consideration for
the settlement of a lawsuit.  The issuance was exempt from registration pursuant
to  Section  4(2)  of  the  Securities  Act  of  1933  and  the  shareholder was
accredited.

     In  November 2000, the Company issued options to acquire a total of 650,000
shares of common stock to Donald A. Mitchell, Jeffrey M. Harvey, Carl E. Dilley,
and  Janet  Williams in exchange for services rendered to the Company.  One-half
of  the  options  have  an exercise price of $0.40 per share, and the other half
have  an  exercise price of $0.75 per share.  All options expire on November 21,
2002.  The  issuances  were exempt from registration pursuant to Section 4(2) of
the  Securities  Act  of  1933  and  the  shareholders  were  accredited.

     In  November 2000 the Company issued a convertible debenture to Ruth Beiler
in  the face amount of $20,000.  The debenture is convertible into 40,000 shares
of common stock of the Company until July 1, 2002.  The issuance was exempt from
registration  pursuant  to  Rule  506  promulgated  under  Regulation  D  of the
Securities  Act  of  1933.

     In  December 2000 the Company issued options to acquire 2,700,000 shares of
common  stock to Swartz Private Equity, LLC as consideration for the equity line
of  credit  provided by Swartz.  The exercise price on the options is determined
in  accordance  with  a  formula,  and  expire  on  September  22,  2007.

                                       10
<PAGE>

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

SELECTED  FINANCIAL  DATA

     The  fiscal  year  is  the calendar year.  Included in the document are the
audited  financial  statements for the twelve-month period ending December 2000.

QUALIFIED  REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS

     Our  independent  accountant has qualified his report.  They state that the
audited  financial  statements of E-Rex, Inc. for the period ending December 31,
2000  have  been prepared assuming the company will continue as a going concern.
They  note  that  the  significant losses of our company as of December 31, 2000
raise  substantial  doubt  about  our  ability  to  continue  in  business.

RESULTS  OF  OPERATIONS

     We  had  significant  losses of  $8,492,853 for the year ended December 31,
2000.  We  have  funded  losses  by  the  sale  of additional securities and the
issuance  of  stock  for  services.  We  expect  losses to continue.  We have no
sources  of  long-term capital.  To the extent losses continue and we are unable
to  fund  them,  we  may  have  to  curtail  aspects  of our operations or cease
operations  altogether.

     The  Company  intends  to  pursue  its business plan and meet its reporting
requirements  utilizing  cash  made available from the private and future public
sale of its securities as well as income for the web site design division of the
Company.  The  Company's  management  is aggressively pursuing relationships and
markets  for this division and is of the opinion that revenues from the sales of
its  securities  will  be  sufficient  to  pay  its  expenses until its business
operations  create  positive  cash  flow.  The  Company  does not currently have
sufficient  capital  to  continue operations for the next twelve months and will
have to raise additional capital to meet its business objectives as well as 1934
Act  reporting  requirements.

     On  a  long-term  basis,  the  Company's  liquidity is dependent on revenue
generation,  additional  infusions  of  capital  and  potential  debt financing.
Company  management  believes  that additional capital and debt financing in the
short  term  will allow it to pursue it's business plan and thereafter result in
revenue  and  greater  liquidity  in  the  long  term.  However, there can be no
assurance  that  the Company will be able to obtain the needed additional equity
or  debt  financing  in  the  future.

     The  Company  is  presently  completing  the  initial  prototypes  of  the
"Dragonfly"  after  two  "Dragonfly"  mock-up  prototypes  were  successfully
demonstrated  at  the Java One conference at the Moscone Centre in San Francisco
sponsored  by  Sun MicroSystems.  There have been unexpected delays in producing
the  prototypes  and  although  the  technology  has  been  tested and is proven
operational  it is anticipated that the approximate time frame for completion of
the prototypes including testing will be 90 to 120 days.  As soon as the initial
prototypes  are  fully  operational,  demonstrations with major OEM corporations
will  be  arranged.

     The  Company  will  not  establish its own manufacturing plant, however, it
will  provide  quality  control personnel at these plants and will also maintain
research  and  development  programs  through  the  Canadian engineering firm of
Valcom,  Ltd. to secure development of products presently in the planning stage.
The  Company  does  not  expect  to  purchase any significant plant or equipment
within  the  next  twelve  months.

                                       11
<PAGE>

     Other than described above, the Company does not expect significant changes
in  the  number  of  employees  during  the  next  twelve months and anticipates
expansion  of  the  web  site  design  division by utilizing sub contractors and
independent  commission-based  sales  personnel.

Revenue

     The  Company's  total  revenue  for  the  year  ended December 31, 2000 was
$35,976,  all  of which were earned from web site design and consulting services
rendered  by  the  Company.  The  cost  of  sales  for  this period was $10,607,
resulting in gross profit of $25,369 for the year.  The Company did not have any
revenues  for  the  years  ended  December  31,  1999  and  1998.

General  and  Administrative

     The  Company's  general  and administrative expenses totaled $8,350,075 for
the year ended December 31, 2000, as compared to $464,436 for the previous year,
an  increase  of  over seventeen times.  Of the total general and administrative
expenses,  $7,398,467, or 88.6%, is attributable to stock issued for services to
various  consultants, advisors, employees, and service providers to the Company.
Because  the  Company does not have sufficient revenues or current assets to pay
these  providers  in  cash, it has continued to issue common stock for services,
and  anticipates  that  this  pattern will continue during the coming year.  The
Company  also  recorded $151,729 in research and development expenses related to
its  Dragonfly  product.

Net  Losses

     Net  losses  for  the  year  ended  December  31,  2000 were $8,492,853, as
compared  to  $464,436  for  the  prior  year, an increase of over 17 times.  As
described in General and Administrative, above, the primary component of the net
loss  was  stock  issued for services ($7,398,467).  The Company expects that it
will  continue  to  incur  large  operating  and  net  losses as a result of its
insufficient  revenue  and  continued  issuance  of  stock  for  services.

     The  loss  per  share,  based  on  a  weighted  average number of shares of
18,841,966, was $0.45 per share, an increase of over ten times from the loss per
share  of  $0.04  for  the  previous  year.

Liquidity  and  Capital  Requirements

     The  Company  requires  substantial  capital  in  order to meet its ongoing
corporate  obligations  and  in  order  to  continue  and expand its current and
strategic  business  plans.  Working capital has been primarily obtained through
advances from the Company's Investment Banker, International Investment Banking,
Inc.  and  the  private  placement  of common stock.  The web design and hosting
business  of  the  Company  is in its infancy and is a minor part of the overall
business.  It  is not expected that revenues from this area of the business will
be  sufficient  in  the near term to fund ongoing operations and development and
the  bringing  to  market  of  the  Dragonfly.

     The  company's  plans  for  manufacturing,  sales  and  distribution of the
Dragonfly  are  focused  on  establishing an OEM licensing agreement with one or
more  electronics  manufacturers  who have the available resources and wholesale
and  retail distribution channels to satisfactorily bring the product to market.
The  company  will  therefore  need  available capital to complete the Dragonfly
prototypes  estimated  at  approximately  $150,000  and  an estimated additional
$300,000  for  product  testing,  packaging  and  consumer  research  prior  to
manufacturing.  Capital  to  promote  the  product  and accomplish the sales and
marketing  to  the  OEM  entities  is  estimated  at $1,000,000 over the next 12
months.  Head  office  and  corporate  operations  including  salaries,  rent,
miscellaneous  office expenses, investor relations, legal and accounting for the
next  12  months  is  estimated  at  $650,000.  The total capital requirement is
therefore  estimated  at  $2,100,000.

                                       12
<PAGE>

     It is anticipated that the short-term credit line extended by International
Investment  Banking,  Inc.,  in  addition  to an equity line from Swartz Private
Equity,  LLC,  will  be sufficient to meet those needs, however, there can be no
assurance  that  the Company will be able to obtain the needed additional equity
or  debt  financing  in  the future.  In addition, the Swartz line of credit can
only  be  utilized  by  the  Company  upon  the  effectiveness of a registration
statement  with the SEC, and then only if certain conditions are met and certain
conditions  precedent exist.  The Company does not currently have a registration
statement  on  file.  It  is  possible  that the company may not have sufficient
capital to meet its short term requirements prior to the funding from the Swartz
equity  line  becoming  available  and  there  is  the  potential  due to market
conditions  that  the  amount  of  funding  available under the Swartz financing
agreement  may  be  limited and not necessarily cover all operating and Research
and  Development  expenses.  The  company  may  also  raise additional operating
capital  through  other  equity  and/or debt offerings.  However there can be no
assurances  that  it  will  be  successful  in  its  endeavors.

     The  Company received proceeds from the sale of common stock of $329,000.00
for the year ended December 31, 2000 resulting in net cash provided by financing
activities  of  $517,654.00.  The  Company  received  proceeds  from the sale of
common stock of $80,833.00 for the year ended December 31, 1999 resulting in net
cash  provided  by  financing  activities  of  $80,833.00.

     In  an  exchange  of  stock  and services agreement with Ultimate Franchise
Systems,  Inc.,  the  Company  acquired securities valued at $400,000.00 for the
twelve  months  ended  December  31,  2000.

     The  Company  purchased  fixed  assets  of  $43,647.00  and  as part of the
acquisition  of  assets  from  Webulate, LLC for cash of $40,000 and $200,000 in
convertible debentures the company acquired an investment in DiveDepot.Com, Inc.
valued  at  $150,000.00  during  the twelve months ended December 31, 2000.  The
President  of the Company, Mr. Dilley, and a director, Mr. Mitchell, are also on
the  Board  of  Directors  of  DiveDepot.Com,  Inc.

                                       13
<PAGE>

ITEM  7  -  FINANCIAL  STATEMENTS

     Index  to  Consolidated  Financial  Statements

     E-Rex,  Inc.

     Report  of  Gately  &  Associates,  LLC                             F-1

     Consolidated  Balance  Sheets  as  of  December  31,  2000          F-2

     Consolidated  Statements  of  Operations  for  the years
     ended December 31, 1998,  1999,  and  2000                          F-3

     Consolidated  Statements  of  Stockholder's  Equity  for
     the  years  ended December  31,  1998,  1999  and  2000             F-4

     Consolidated  Statements  of  Cash  Flows  for  the  years
     ended December  31,  1998,  1999  and  2000                         F-5

     Notes  to  the  Consolidated  Financial  Statements             F-6 to F-13

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

     None.

                                       14
<PAGE>
                                    PART III

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

Directors  and  Executive  Officers
-----------------------------------

     The  following table sets forth the names and ages of the current directors
and  executive officers of the Company, the principal offices and positions with
the  Company  held  by each person and the date such person became a director or
executive  officer  of  the  Company.  The executive officers of the Company are
elected  annually by the Board of Directors.  The directors serve one year terms
until  their  successors are elected.  The executive officers serve terms of one
year  or  until  their  death, resignation or removal by the Board of Directors.
Unless  described  below,  there  are  no  family relationships among any of the
directors  and  officers.

<TABLE>
<CAPTION>


<S>                  <C>  <C>

Name. . . . . . . .  Age  Position(s)
-------------------  ---  -----------------------------------------------------------------

Donald A.  Mitchell   67  Chairman of the Board  (2000)

Carl E. Dilley. . .   45  Chief Executive Officer, President, Secretary and Director (2000)

Jeffrey M.  Harvey.   29  Treasurer and Director  (2000)
</TABLE>



     DONALD  A.  MITCHELL  has  served  as Chairman of the Board since March 15,
2000.  Mr.  Mitchell  has  served as the Chairman and President of International
Investment  Banking,  Inc.  since  its inception in June 1999.  Mr.  Mitchell is
also  the Chairman of the Board and CEO of Grant Douglas Acquisition Corp, Inc.,
an Idaho corporation engaged in the publication of various print media.  For the
past  25  years,  Mr.  Mitchell  has  been  engaged  as  a private consultant to
numerous  companies  in  the  areas  of  corporate  finance  and marketing.  Mr.
Mitchell  attended  Bridgewater  College  in  Bridgewater, Virginia and advanced
study  programs  at  New  York  University  and  Columbia  University.

     CARL  E.  DILLEY  has  served as CEO and as a director of the Company since
April 1, 2000, and has been with the Company since 1999.  From 1997 to 1999, Mr.
Dilley  served  as  President  and CEO of DiveDepot.com, Inc.  Prior to that Mr.
Dilley  served  in  management  positions  with the Canadian Investment Firm RBC
Dominion  Securities,  and a variety of other executive and consulting positions
in several industries including Chemical, Timber,  Transportation, Trust Co. and
Dot.Com  enterprises.  Mr.  Dilley  attended  college in Canada at  DITTO Fraser
Valley  College  and  College  of  New  Caledonia,  specializing  in finance and
business  management.  He  is  a fellow of the Canadian Securities Institute and
has  completed  the  first  year  CFA  program.

     JEFFREY  M.  HARVEY  was  appointed  as  the  Company's  Treasurer and as a
Director  on October 10, 2000.  Mr.  Harvey is currently the President and owner
of  the J. Michael Consulting Group, where he has been engaged since March 2001.
From  August  2000  to March 2001, Mr. Harvey was Vice Chairman of International
Investment  Banking,  Inc.  From  May  1997  to  August 2000, Mr.  Harvey was an
attorney  with the firm of Stutzman & Bromberg in Dallas, Texas.  Mr.  Harvey is
a graduate of the Wake Forest University School of Law (J.D.  1997) and Graduate
School  of  Business  Administration (M.B.A.  1997), and of Texas A&M University
(B.S.E.E.  1993).

                                       15
<PAGE>

Compliance  with  Section  16(a)  of  the  Securities  Exchange  Act  of  1934
------------------------------------------------------------------------------

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors  and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports  of  ownership  and  reports of changes in ownership of Common Stock and
other  equity  securities  of the Company.  Officers, directors and greater than
ten  percent shareholders are required by SEC regulations to furnish the Company
with  copies  of  all  Section  16(a)  forms  they  file.

     To  the Company's knowledge, none of the required parties are delinquent in
their  16(a)  filings.

Board  Meetings  and  Committees
--------------------------------

     During  the fiscal year ended December 31, 2000, the Board of Directors met
on  7  occasions  and  took written action on numerous other occasions.  All the
members  of  the  Board  attended  the  meetings.  The  written  actions were by
unanimous  consent.

     There  are  no  committees  of  the  Board  of  Directors.

ITEM  10  - EXECUTIVE  COMPENSATION

Executive  Officers  and  Directors
-----------------------------------

     For the year ended December 31, 2000, the executive officers of the Company
received salaries, in aggregate, equal to approximately $204,867.00 and received
the  benefit  of  automobile  allowances  for  an  aggregate  $4,500.00.

     As  of  December 31, 2000, Donald A. Mitchell was compensated pursuant to a
management  engagement  agreement dated January 21, 2000 between the Company and
International  Investment  Banking,  Inc., a company controlled by Mr. Mitchell.
Total  amounts payable to International Investment Banking, Inc. during the year
2000  are  $126,850.00.  Pursuant  to  the  agreement, IIBI receives $10,000 per
month  in  addition  to  other  miscellaneous  fees  for  services.  The  annual
compensation  of  IIBI shall increase at a rate of 20% per year.  In addition to
monthly  compensation, IIBI or Mr. Mitchell may be entitled to receive an annual
bonus  as determined by the Company's Board of Directors payable in common stock
or  cash.  Mr.  Mitchell  shall  be  granted common stock representing 1,000,000
common  shares for each year of IIBI's engagement.  The agreement has an initial
term  of  two  years unless further extended by mutual agreement of the parties.

     Jeffrey  M. Harvey was hired as General Counsel for the Company on March 1,
2001,  at  an  annual  salary  of  $60,000.

     All  officers  and directors are reimbursed for expenses incurred on behalf
of  Company.

     Members  of  the  Board  of  Directors  may  receive  an  amount  yet to be
determined  annually  for  their  participation and will be required to attend a
minimum  of  four meetings per fiscal year.  All expenses for meeting attendance
or  out  of  pocket  expenses connected directly with their Board representation
will  be  reimbursed  by  the  Corporation.  Director liability insurance may be
provided  to  all members of the Board of Directors.  No differentiation is made
in the compensation of "outside directors" and those officers of the Corporation
serving  in  that  capacity.

                                       16
<PAGE>

     There  is  no  plan or arrangement with respect to compensation received or
that  may  be  received by the executive officers in the event of termination of
employment or in the event of a change in responsibilities following a change in
control.

Summary  Compensation  Table
----------------------------

     The  Summary  Compensation Table shows certain compensation information for
services rendered in all capacities for the fiscal years ended December 31, 2000
and  1999.  Other  than  as  set forth herein, no executive officer's salary and
bonus  exceeded  $100,000  in  any  of  the  applicable  years.  The  following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.


<TABLE>
<CAPTION>

                                                  SUMMARY COMPENSATION TABLE

                             Annual  Compensation                       Long  Term  Compensation
                            --------------------------------   ------------------------------------
                                                                         Awards              Payouts
                                                               --------------------------------------

                                                OTHER ANNUAL   RESTRICTED   SECURITIES         LTIP          ALL OTHER
NAME AND PRINCIPAL              SALARY   BONUS  COMPENSATION   STOCK        UNDERLYING        Payouts     COMPENSATION
POSITION                YEAR     ($)      ($)       ($)        AWARDS($)    OPTIONS SARS(#)    ($)             ($)

<S>                     <C>      <C>      <C>       <C>          <C>          <C>              <C>             <C>
Donald A. Mitchell
(Chairman) . . . . . .  2000     -0-      -0-     $126,850     2,000,000      200,000          -0-             -0-

Carl E. Dilley
(CEO, Director). . . .  2000  $51,017  $27,000       4,500       276,786      200,000          -0-             -0-

Kenneth Blake
(President, Director,.  2000     -0-      -0-        -0-         -0-            -0-            -0-             -0-
Resigned April 2000) .  1999     -0-      -0-        -0-         -0-            -0-            -0-             -0-

Jeffrey M.  Harvey
(Treasurer, Director).  2000     -0-      -0-        -0-         80,000       200,000          -0-             -0-

Ronald K. Gooding
(Director, . . . . . .  2000     -0-      -0-        -0-         -0-            -0-            -0-             -0-
Resigned April 2000)    1999     -0-      -0-        -0-         -0-            -0-            -0-             -0-
</TABLE>

                                       17
<PAGE>

<TABLE>
<CAPTION>

                                    OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                              (INDIVIDUAL GRANTS)


                NUMBER OF SECURITIES       PERCENT OF TOTAL
                    UNDERLYING           OPTIONS/SAR'S GRANTED
                OPTIONS/SAR'S GRANTED    TO EMPLOYEES IN FISCAL     EXERCISE OF
                      (#)                      YEAR                 BASE PRICE
                                                                       ($/SH)           EXPIRATION DATE

NAME
<S>                   <C>                       <C>                     <C>                 <C>

Donald A. Mitchell  100,000                    15.4                    $0.40              11/21/02

                    100,000                    15.4                    $0.75              11/21/02

Carl E. Dilley . .  100,000                    15.4                    $0.40              11/21/02

                    100,000                    15.4                    $0.75              11/21/02

Kenneth Blake. . .    -0-                       -0-                     -0-                 -0-

Jeffrey M. Harvey.  100,000                    15.4                    $0.40              11/21/02

                    100,000                    15.4                    $0.75              11/21/02

Ronald K. Gooding.    -0-                       -0-                     -0-                 -0-
</TABLE>



<TABLE>
<CAPTION>

                                      AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                              AND FY-END OPTION/SAR VALUES

                                                              NUMBER OF UNEXERCISED            VALUE OF UNEXERCISED IN-THE-
                                                              SECURITIES UNDERLYING                  MONEY OPTION/SARs
             SHARES ACQUIRED ON                              OPTIONS/SARS AT FY-END(#)                  AT FY-END ($)
NAME            EXERCISE(#)        VALUE REALIZED($)         EXERCISABLE/UNEXERCISABLE           EXERCISABLE/UNEXERCISABLE

<S>                 <C>                  <C>                           <C>                                  <C>

Donald A. Mitchell  -0-                  -0-                           -0-                                  -0-

Carl E. Dilley . .  -0-                  -0-                           -0-                                  -0-

Kenneth Blake. . .  -0-                  -0-                           -0-                                  -0-

Jeffrey M. Harvey.  -0-                  -0-                           -0-                                  -0-

Ronald K. Gooding.  -0-                  -0-                           -0-                                  -0-

</TABLE>

                                       18
<PAGE>

ITEM  11  - SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT

     The  following  table sets forth, as of April 10, 2001, certain information
with  respect to the Company's equity securities owned of record or beneficially
by  (i)  each  Officer  and  Director  of the Company; (ii) each person who owns
beneficially  more  than  5%  of  each class of the Company's outstanding equity
securities;  and  (iii)  all  Directors  and  Executive  Officers  as  a  group.

<TABLE>
<CAPTION>


<S>             <C>                                 <C>                    <C>

                Name and Address of                 Amount and Nature of   Percent
                                                                           ------------
Title of Class  Beneficial Owner                    Beneficial Ownership   of Class (1)
--------------  ----------------------------------  ---------------------  ------------

                Chris Ford (2)
Common . . . .  9564 Karmont Avenue
Stock. . . . .  Southgate, CA  90280                           2,168,680           8.7%

                Paul Daoust
Common . . . .  8772 Hudson Street
Stock. . . . .  Vancouver, BC  Canada                          2,040,000           8.1%

Common . . . .  Mistral International, Limited
Stock. . . . .  Address Unknown                                2,040,000           8.1%

                Donald A. Mitchell
Common . . . .  2101 W. State Road 434, Suite 207
Stock. . . . .  Longwood, FL  32779                            2,124,700 (3)       8.4%

                Corporate Service Providers, Inc.
Common . . . .  207 Jasmine Lane                               1,400,000
Stock. . . . .  Longwood, FL  32779                                                5.6%

                Carl E. Dilley
Common . . . .  279 Atlantic Avenue                                                2.1%
Stock. . . . .  Sunnyisles Beach, FL  33160                      542,500 (3)

                Jeffrey M. Harvey
Common . . . .  5505 Bryan Street
Stock. . . . .  Dallas, TX  75206                                355,000 (3)       1.4%

                All Officers and Directors
                as a Group (5 Persons)                         3,022,200          11.8%
</TABLE>


(1)     Based  on  25,069,331  shares  outstanding  as  of  May  8,  2001.

(2)     Chris  Ford  is  executor for and controls the voting for shares held by
the  Carol  J.  Gamble trust and those of other family members that comprise the
total  shares  under  his  control.

(3)     Includes  options to acquire 100,000 shares of common stock at $0.40 and
100,000  shares  at  $0.75  per  share.

                                       19
<PAGE>

ITEM  12  - CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

Certain  Relationships  and  Related  Transactions
--------------------------------------------------

     The  Company  entered  into  an  agreement  on  January  21,  2000  with
International  Investment  Banking,  Inc.  ("IIBI")  whereby  IIBI,  among other
things,  was to serve as senior management of the Company for an initial term of
two years unless further extended by mutual agreement of the parties (management
is  now  the  responsibility  of  Carl  E. Dilley, President and Chief Executive
Officer  of  the Company).  Donald A. Mitchell, who currently serves as Chairman
of the Company, controls IIBI.  Pursuant to the agreement, IIBI receives $10,000
per month and reimbursement of normal business expenses that it incurs on behalf
of  the Company and certain expenses of individual consultants that IIBI assigns
to  carry  out  the  duties and responsibilities of IIBI.  Thereafter the annual
compensation  shall  increase at a rate of 20% per year.  In addition to monthly
compensation, IIBI or Mr. Mitchell may be entitled to receive an annual bonus as
determined  by the Company's Board of Directors payable in common stock or cash.
Mr. Mitchell was granted 2,000,000 shares of common stock representing 1,000,000
common  shares  for  each  year  of  IIBI's  engagement.

     In  March  2000,  the  Company  issued  2,000,000 shares of common stock to
Donald  A.  Mitchell without restrictive legend in accordance with Regulation S,
for  services  rendered  to  the  Company.

     In  August  and  November  2000, the Company issued 20,000 shares of common
stock  to  Jeffrey  M.  Harvey  and  200,000  to  Carl  E. Dilley, restricted in
accordance  with  Rule 144, for services rendered to the Company.  The issuances
were  exempt from registration pursuant to Section 4(2) of the Securities Act of
1933  and  the  shareholders  were  accredited.

     In  November 2000, the Company issued 76,786 shares of common stock to Carl
E.  Dilley for services rendered to the Company.  The issuance was registered on
Form  S-8.

     In  August  2000, the Company issued options to acquire 3,000,000 shares of
common stock to Ultimate Franchise Systems, Inc.  The options expire on July 27,
2002.  The issuance was exempt from registration pursuant to Section 4(2) of the
Securities  Act  of  1933  and  the  shareholder  was  accredited.

     In  September  2000, the Company issued 1,000,000 shares of common stock to
Ultimate  Franchise  Systems,  Inc.,  restricted in accordance with Rule 144, as
part of a stock exchange.  The issuance was exempt from registration pursuant to
Section  4(2)  of the Securities Act of 1933 and the shareholder was accredited.

     In  November  2000,  the  Company  issued  80,000 shares of common stock to
Jeffrey  M.  Harvey  for  services  rendered  to  the Company.  The issuance was
registered  on  Form  S-8.

     In  November 2000, the Company issued options to acquire a total of 650,000
shares of common stock to Donald A. Mitchell, Jeffrey M. Harvey, Carl E. Dilley,
and  Janet  Williams in exchange for services rendered to the Company.  One-half
of  the  options  have  an exercise price of $0.40 per share, and the other half
have  an  exercise price of $0.75 per share.  All options expire on November 21,
2002.  The  issuances  were exempt from registration pursuant to Section 4(2) of
the  Securities  Act  of  1933  and  the  shareholders  were  accredited.


                                       20
<PAGE>

ITEM  13  - EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (A)    EXHIBITS


     EXHIBIT  NO.           DESCRIPTION
     ------------           -----------

     3.1  (1)               Certificate  of Incorporation, as amended, of E-Rex,
                            Inc.

     3.2  (1)               By-laws  of  the  Registrant

     4.1  (1)               Form  of  common  stock  certificate  of E-Rex, Inc.

     10.1 (2)               Amended and Restated Investment  Agreement  made  as
                            of the 8th  day  of  March,  2001,  by  and  between
                            E-Rex, Inc. and Swartz Private Equity,  LLC,   which
                            amends and restates the Investment Agreement between
                            the parties dated on  or  about  December  22, 2000.

__________
(1)     Incorporated  by  reference  from Registrant's Registration Statement on
        Form 10-SB  filed  on  September  13,  1999.

(2)     Incorporated by reference from Registrant's Annual Report on Form 10-KSB
        filed  on  May  18,  2001.

     (B)    REPORTS  ON  FORM  8-K

     No  reports  on  Form  8-K were filed by the Company for the fiscal quarter
ended  December  31,  2000.

                                       21
<PAGE>

                                   SIGNATURES

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



Dated:  March  22,  2002          E-Rex,
Inc.


                                  /s/  Carl  E.  Dilley
                                  ______________________________

                                  By:   Carl  E.  Dilley

                                  Its:  President and Chief Financial Officer

                                       22
<PAGE>


               INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENTS


To  the  Board  of  Directors  and  Stockholders
E-REX,  INC.


We have audited the accompanying balance sheet of E-REX, Inc. as of December 31,
2000,  and  the  related statement of operations, stockholders' equity, and cash
flows for the two years ended December 31, 2000.  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  audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those  standards require that we plan and perform the audit 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  audit  provides  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 E-Rex, Inc., as of December 31,
2000  and  the  results of its operations and its cash flows for each of the two
years  in  the  period  ended  December  31,  2000  in conformity with generally
accepted  accounting  principles.

The  accompanying  financial  statements  have  been  prepared assuming that the
company  will  continue  as  a  going concern.  As discussed in the notes to the
financial  statements,  the  Company  has  experienced  a  loss.  The  Company's
financial  position  and  operating  results  raise  substantial doubt about its
ability to continue as a going concern.  The financial statements do not include
any  adjustments  that  might  result  from  the  outcome  of  this uncertainty.


/s/Gately  &  Associates,  LLC
Gately  &  Associates,  LLC
Certified  Public  Accountants
Orlando,  Florida
May  11,  2001

                                      F-1
<PAGE>


<TABLE>
<CAPTION>
                                                E-REX, INC.
                                               BALANCE SHEET
                               AS OF DECEMBER 30, 1999 AND DECEMBER 31, 2000
                                       (A Development Stage Company)

                                                   ASSETS
                                                   ------

CURRENT  ASSETS                                                 DEC 31          DEC 31
---------------                                                  2000            1999
                                                                -------         -------
<S>                                                               <C>             <C>
  Cash. . . . . . . . . . . . . . . . . . . . . . . . . .  $    19,948      $    22,006
  Accounts receivable . . . . . . . . . . . . . . . . . .       22,757
  Employee advance. . . . . . . . . . . . . . . . . . . .          298
                                                           ------------     ------------

    Total Current Assets. . . . . . . . . . . . . . . . .       43,003      $    22,006


PROPERTY AND EQUIPMENT
----------------------

  Furniture, equipment and software . . . . . . . . . . .       92,792            4,937
  Less: accumulated depreciation. . . . . . . . . . . . .       (7,800)          (2,896)
                                                           ------------     ------------
    Total Other Assets. . . . . . . . . . . . . . . . . .       84,992            2,041
                                                           ------------     ------------

OTHER ASSETS
------------

  Investments . . . . . . . . . . . . . . . . . . . . . .       62,600                -
                                                           ------------     ------------
      TOTAL ASSETS. . . . . . . . . . . . . . . . . . . .  $   190,595           24,047
                                                           ============     ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY
                           --------------------------------------------

CURRENT LIABILITIES
-------------------

  Accounts payable. . . . . . . . . . . . . . . . . . . .  $    95,440      $    82,075
  Accrued liabilities . . . . . . . . . . . . . . . . . .       10,838                -
  Accrued interest on bonds . . . . . . . . . . . . . . .        7,460                -
  Stock Payable           . . . . . . . . . . . . . . . .      450,000                -
  Payable - related party . . . . . . . . . . . . . . . .      155,467                -
  Demand Loan - Related party . . . . . . . . . . . . . .      298,654            6,450
                                                           ------------     ------------

    Total current liabilities . . . . . . . . . . . . . .    1,017,859           88,525

LONG TERM LIABILITIES
---------------------

  Convertible debenture bonds . . . . . . . . . . . . . .      240,000                -
                                                           ------------     ------------
    Total long term liabilities . . . . . . . . . . . . .      240,000                -
                                                           ------------     ------------

  TOTAL LIABILITIES . . . . . . . . . . . . . . . . .        1,257,859           88,525

                                    STOCKHOLDERS' EQUITY
                                    ---------------------


STOCKHOLDERS' EQUITY (DEFICIT)
------------------------------

  Common stock, $.0001 par value, 100,000,000 authorized
  15,663,164 shares issued and outstanding                                       15,539
  23,808,816 shares issued and outstanding. . . .               23,809
  Additional paid in capital. . . . . . . . . . . . . . .    9,936,204          708,962
  Accrued Stock Compensation                . . . . . . .   (1,258,045)               -
  Deficit accumulated during the development stage. . . .   (9,281,832)        (788,979)
  Accumulated Other Losses . . . . . . . . . . . . . .        (487,400)               -
                                                           ------------     ------------

    Total stockholders' equity. . . . . . . . . . . . . .   (1,067,264)         (64,478)
                                                           ------------     ------------

  TOTAL LIABILITIES AND EQUITY (DEFICIT). . . . . .        $   190,595      $    24,047
                                                           ============     ============

                    See accompanying notes to the financial statements

</TABLE>


                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                                                      E-REX, INC.
                                               STATEMENT OF OPERATIONS
                                          FOR THE PERIODS ENDED DECEMBER 31,
                                            (A Development Stage Company)

                                                                                                   FROM
                                                         2000           1999          1998       INCEPTION
                                                     -----------   ------------  ------------  --------------

<S>                                                       <C>          <C>           <C>           <C>

REVENUE                                              $    35,976   $         -   $         -   $     35,976
-------

COST OF SALES                                             10,607             -             -         10,607
-------------

GROSS PROFIT                                              25,369             -             -         25,369
-------------

EXPENSES
--------

  General and administrative                           8,350,075       464,436        27,703      9,261,219
  Research and development                               151,729             -             -        151,729
                                                     ------------  ------------  ------------  --------------

  Total expenses                                       8,501,804       464,436        27,703      9,412,948


LOSS FROM OPERATIONS                                  (8,476,435)     (464,436)      (27,703)    (9,387,579)
--------------------                                 ------------  ------------  ------------  --------------

OTHER INCOME
------------

  Interest income                                              -             -         1,210          1,439
  Interest Expense                                       (16,418)            -             -        (16,418)
  Recovery from lawsuit                                                                             120,726


INCOME (LOSS) BEFORE INCOME TAXES                    $(8,492,853)  $  (464,436)  $   (26,493)   $(9,281,832)
---------------------------------
  Income Taxes                                                 -             -             -              -
                                                     ------------  ------------  ------------  --------------

NET INCOME (LOSS)                                    $(8,492,853)  $  (464,436)  $   (26,493)   $(9,281,832)
-----------------                                    ============  ============  ============  ==============

  Weighted average
  Number of shares                                    18,841,966    13,439,674     1,178,841

Basic EPS                                            $     (0.45)  $     (0.04)  $     (0.02)
</TABLE>
                             See accompanying notes to the financial statements
                                      F-3
<PAGE>


<TABLE>
<CAPTION>

                                                          E-REX, INC.
                                       STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM INCEPTION (AUGUST 26, 1986) TO DECEMBER 31, 2000
                                                (A Development Stage Company)

                                                                                                      DEFECIT
                                                                         ACCRUED       ADDITIONAL    ACCUMULATED
                                                COMMON       STOCK        STOCK         PAID-IN        DURING
                                                SHARES       AMOUNT    COMPENSATION     CAPITAL      DEV. STAGE      TOTAL
                                             -----------    --------   ------------   -----------   -----------   -----------

<S>                                          <C>            <C>        <C>            <C>           <C>           <C>
Issuance of shares of common
stock on Aug. 1986, for
$.044 per share                                 250,000        $250                      $10,750             -        11,000

Net (loss) from inception on
Aug. 26, 1986, through Dec.
31, 1986                                                                                               (15,354)      (15,354)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance December 31, 1986                       250,000         250             -         10,750       (15,354)       (4,354)

Issuance of shares of common
stock to the public for
$1.00 per share                                  93,215          93                       93,122                      93,215

Deferred offering cost offset
against additional paid-in capital                                                        (7,663)                     (7,663)

Net (loss) for the year ended
Dec. 31, 1987                                                                                          (80,103)      (80,103)
                                             -----------    --------   ------------   -----------   -----------   -----------
Balance, December 31, 1987                      343,215         343             -         96,209       (95,457)        1,095

Net (loss) for the four year period
ended Dec. 31, 1991                                                                                     (4,072)       (4,072)
                                             -----------    --------   ------------   -----------   -----------   -----------
Balance, December 31, 1991                      343,215         343             -         96,209       (99,529)       (2,977)

Issuance of shares of stock on
Feb. 4, 1992 for $1.00 per share                166,716         167                      166,549                     166,716

Deferred offering cost offset
against additional paid-in capital                                                       (26,125)                    (26,125)

Common stock issued on
Feb. 4, 1992 for services                       136,785         137                       27,220                      27,357

Net (loss) for the year ended
Dec. 31, 1992                                                                                         (179,027)     (179,027)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1992                      646,716         647               -      263,853      (278,556)      (14,056)


Issuance of shares of common
stock to the public on Feb. 3,
1933 for $4.00 per share                         32,000          32                      127,968                     128,000

Deferred offering cost offset
against additional paid-in capital                                                       (74,239)                    (74,239)

Common stock issued for legal
services on April 29, 1993                      110,000         110                       21,890                      22,000

Net (loss) for the year ended
Dec. 31, 1993                                                                                          (39,703)      (39,703)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1993                      788,716         789               -      339,472      (318,259)       22,002

Net (loss) for the year ended
Dec. 31, 1994                                                                                           (8,357)       (8,357)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1994                      788,716         789               -      339,472      (326,616)       13,645

Net (loss) for the year ended
Dec. 31, 1995                                                                                          (19,185)      (19,185)
                                             -----------    --------   ------------   -----------   -----------   -----------
Balance, December 31, 1995                      788,716         789               -      339,472      (345,801)       (5,540)

Balance, December 31, 1995                      788,716         789               -      339,472      (345,801)       (5,540)

Net (loss) for the year ended
Dec. 31, 1996                                                                                           (4,500)       (4,500)
                                             -----------    --------   ------------   -----------   -----------   -----------
Balance, December 31, 1996                      788,716         789               -      339,472      (350,301)      (10,040)

Common stock issued for
services Sep. , 1997                             30,000          30                                                       30

Net income for the year
ended Dec. 31, 1997                                                                                     52,251        52,251
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1997                      818,716         819               -      339,472      (298,050)       42,241

Common stock issued for
services Sep. , 1998                          1,682,000       1,682                        1,000                       2,682

Common shares issued
in Reg D-504 exempt offering
Nov. and Dec., 1998                           1,539,500       1,539                      152,410                     153,949

Common stock issued for
services Dec., 1998                             100,000         100                        9,900                      10,000

Net (loss) for the year
ended Dec. 31, 1998                                                                                    (26,493)      (26,493)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1998                    4,140,216       4,140              -       502,782      (324,543)       182,379

Common shares issued
for cash                                        424,000         424                      113,076                     113,500

Common shares issued
for acquisition                               8,137,616       8,138                                                    8,138

Common shares issued
for services                                  3,000,000       3,000                       92,941                      95,941

Net loss for the period                                                                               (464,436)     (464,436)
                                             -----------    --------   ------------   -----------   -----------   -----------

Balance, December 31, 1999                   15,701,832      15,702              -       708,799      (788,979)      (64,478)

Common shares issued
for cash                                      3,290,000       3,290                      325,710                     329,000

Common shares issued
for services and compensation                 9,386,667       9,387                    8,069,873                   8,079,260

Common shares issued
for consulting services                         311,263         311                      127,307                     127,618

Common shares issued
as Settlement Agreement                       1,096,670       1,097                      448,537                     449,634

Accrued
stock compensation                                                      (1,258,045)                               (1,258,045)

Common shares issued in
exchange of shares as
an investment                                 1,000,000       1,000                      399,000                     400,000

Common share purchased
as treasury stock and retired                (6,977,616)     (6,978)                    (143,022)                   (150,000)

Accumulated Other Comprehensive losses, net of tax
Net unrealized gains (losses) on marketable equity securities                                                       (487,400)

Net loss for the period                                                                             (8,492,853)   (8,492,853)
                                             -----------    --------   ------------   -----------   -----------   -----------
Balance, December 31, 2000                   23,808,816    $ 23,809     (1,258,045)    9,936,204    (9,281,832)   (1,067,264)
                                             ===========    ========   ============   ===========   ===========   ===========

                                        See accompanying notes to the financial statements

</TABLE>

                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                                                      E-REX, INC.
                                               STATEMENT OF CASH FLOWS
                                       FOR THE PERIODS ENDING DECEMBER 31, 2000
                                            (A Development Stage Company)

                                                                                                   FROM
                                                                                                 INCEPTION
                                                                                                    TO
                                                         2000           1999          1998         DATE
                                                     -----------   ------------  ------------  --------------

<S>                                                       <C>          <C>           <C>           <C>
CASH FLOWS FROM (FOR)
OPERATING ACTIVITIES
---------------------

Net income (Loss)                                   $ (8,492,853)     (464,436)      (26,493)    (9,281,832)

Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:

Stock issued for Services                              7,273,872       128,608        12,682      7,464,548
Stock issued for Research and Development                124,595             -             -        124,595
Warrants issued for Services                             450,000             -             -        450,000
Depreciation expense                                       4,904             -             -          7,800
(Increase) Decrease in Accounts receivable               (22,757)            -             -        (22,757)
(Increase) Decrease in Employee advance                     (298)            -             -           (298)
(Increase) Decrease in Accounts payable                  162,382        71,940          (366)       250,907
(Increase) Decrease in Accrued liabilities                18,298             -             -         18,298
Other                                                          -        29,014       (16,467)             -
                                                     ------------  ------------  ------------  --------------

Total adjustments to net loss                          8,010,996       229,562        (4,151)     8,293,093

Net cash provided by (used in)
operating activities                                    (481,857)     (234,874)      (30,644)      (988,739)
                                                     ------------  ------------  ------------  --------------
CASH FLOWS FROM (FOR)
INVESTING ACTIVITIES
---------------------

Purchase of furniture and equipment                      (37,855)            -             -        (34,654)


Net cash provided by (used in)
investing activities                                     (37,855)            -             -        (34,654)
                                                     ------------  ------------  ------------  --------------




CASH FLOWS FROM (FOR                                                                                 FROM
FINANCING ACTIVITIES                                     2000          1999          1998         INCEPTION
--------------------                                 -----------   ------------  ------------  --------------

Proceeds from loan                                       623,654             -             -        623,654
Proceeds from issuance of stock                          329,000        80,833       153,950        854,687
Payment on loan                                         (325,000)            -             -       (325,000)
Cash paid on treasury stock                             (150,000)            -             -       (150,000)
Proceeds from issuance of Conv Debentures                 40,000             -             -         40,000
                                                     -----------   ------------  ------------  --------------
Net cash provided by (used in)
 financing                                               517,654        80,833       153,950      1,043,341


CASH RECONCILIATION
-------------------

Net increase (decrease) in cash                           (2,058)     (154,041)      123,306         19,948
Cash at beginning of year                                 22,006       176,047        52,741              0
                                                     ------------  ------------  ------------  --------------

CASH BALANCE AT END OF YEAR                          $    19,948   $    22,006   $   176,047   $     19,948
---------------------------------                    ============  ============  ============  ==============
</TABLE>

                           See accompanying notes to the financial statements

                                      F-5
<PAGE>



                                   E-REX,  INC.

                        NOTES  TO  THE  FINANCIAL  STATEMENTS
--------------------------------------------------------------------------------

1.  Summary  of  significant  accounting  policies:

Nature  of  Operations  - E-Rex, Inc. (the "Company"), a Nevada corporation, was
incorporated  on  August 26, 1986 as P.R. Stocks, Inc. On February 26, 1992, the
Company  changed  its  name to National Health & Safety Corporation. On November
12,  1992, the Company changed its name to Medgain International Corporation. On
June  20,  1994 the Company changed its name to E-Rex, Inc. On February 20, 1999
the Company entered into a business combination (see Note 5). Until September of
the  year 2000, the Company had no material revenues and was considered to be in
the  development  stage.  The  Company  now  operates  an  internet  web hosting
service.   The  Company  continues  its  development  of  computer  hardware and
software  products  that  it  intends  to  sell.

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

Earnings  (Loss)  Per  Share  -  Basic earnings per share ("EPS") is computed by
dividing  earnings  available  to  common  shareholders  by the weighted-average
number  of common shares outstanding for the period as required by the Financial
Accounting  Standards  Board  (FASB)  under  Statement  No.  128,  "Earnings per
Shares".  Diluted  EPS  reflects the potential dilution of securities that could
share  in  the  earnings.

Basis  of  Accounting  -  The  Company's  financial  statements  are prepared in
accordance  with  generally  accepted  accounting  principles.

Revenue  Recognition -The Company performs all services or delivers all products
prior  to  recognizing  revenue. Monthly services are considered to be performed
ratably  over  the term of the arrangement. Professional consulting services are
considered  to  be  performed  when  the services are complete. Fees for certain
monthly  services,  including  certain  portions of networking, web hosting, and
e-mail  services,  are variable based on an objectively determinable factor such
as  usage.  Such  factors  are  included  in  the written contract such that the
customer's  fee  is determinable. The customer's fee is negotiated at the outset
of  the arrangement and is not subject to refund or subject to adjustment during
the  initial  term  of  the  arrangement.

The  Company  determines  that  collectibility  is  reasonably  assured prior to
recognizing  revenue. Collectibility is assessed on a customer by customer basis
based  on criteria outlined by management. New customers are subject to a credit
review process, which evaluates the customer's financial position and ultimately
its  ability  to  pay.  The  Company  does  not  enter  into arrangements unless
collectibility  is  reasonably  assured  at  the  outset. Existing customers are
subject  to  ongoing  credit  evaluations  based  on  payment  history and other
factors.  If  it is determined during the arrangement that collectibility is not
reasonably  assured,  revenue  is  recognized  on  a  cash  basis.

Use  of  Estimates  - The preparation of financial statements in conformity with
generally  accepted  accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying  notes.  Actual  results  could  differ  from  those  estimates.

Income  Taxes  - The Company records its income tax provision in accordance with
Statement  of  Financial  Accounting  Standard  No.  109, "Accounting for Income
Taxes."

Functional  Currency  -  All  amounts  in the Company's financial statements and
related  footnotes are stated in US dollars. The Company had no significant gain
or losses from foreign currency conversions.  The Company has closed its foreign
bank  accounts  during  the  year  2000  and  now  operates using U.S. currency.

                                      F-6
<PAGE>

Property  and  Equipment  -  Depreciation  and  amortization  is computed by the
straight  line  method  with  the  following  recovery  periods:

         Office  equipment  and  software                        3-5  Years
         Furniture                                               5-7  Years

Maintenance  and  repairs,  as incurred, are charged to expense; betterments and
renewals  are  capitalized in plant and equipment accounts. Cost and accumulated
depreciation  applicable  to  items  replaced or retired are eliminated from the
related accounts; gain or loss on the disposition thereof is included as income.
No  depreciation  is  recorded  on  property  and  plant  left  idle.

The  Company  accounts for marketable securities in accordance with Statement of
Financial  Accounting  Standards No. 115, "Accounting for Certain Investments in
Debt  and  Equity  Securities."  This  statement  requires  securities which are
available-for-sale  to  be  carried  at  fair  value, with changes in fair value
recognized  as  a  separate  component  of  stockholders'  equity.

Realized  gains  and  losses  are  determined  on  the  basis  of  specific
identification.  Declines  in  the  fair  value of individual available-for-sale
securities  below their cost that are other than temporary result in write-downs
of  the  individual  securities to their fair value. The related write-downs are
included  in  earnings  as  realized  losses.

Non-marketable  securities-The  Company  accounts  for investments for which the
Company does not have the ability to exercise significant influence or for which
there  is  not  a  readily  determinable  market value, under the cost method of
accounting.  Additionally,  certain  securities  are  restricted  and  are  not
transferable.

The  Company  periodically  evaluates  the  carrying  value  of  its investments
accounted  for under the cost method of accounting and as of December  31, 2001,
such  investments were recorded at the lower of cost or estimated net realizable
value.

2.  Basis  of  Presentation  as  a  Going  Concern:

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in  the  normal course of business.  The Company incurred a net
loss  for the period from inception (August 26, 1986) to September 30, 2000 (the
Company's  development stage). The Company continues to operate at a loss.  This
factor,  among  others,  raises substantial doubt as to the Company's ability to
continue  as  a  going  concern.

The  Company's  management  intends  to raise additional operating funds through
equity  and/or debt offerings and revenue from its new operation. However, there
can  be  no  assurance  management  will  be  successful  in  its  endeavors.

E-Rex  has  entered into an investment agreement with Swartz Private Equity, LLC
to  raise  up to $15 million through a series of sales of our common stock.  The
dollar  amount  of  each  sale  is  limited by our common stock's price, trading
volume,  and  a minimum period of time that must elapse between each sale.  Each
sale  will  be to Swartz.  In turn, Swartz will either hold our stock in its own
portfolio,  sell  our  stock  in  the  open  market,  or place our stock through
negotiated transactions with other investors.  This prospectus covers the resale
of  our  stock  by  Swartz either in the open market or to other investors.  The
investment  agreement  provides,  in  summary:

                                      F-7
<PAGE>

From  time  to  time at our request, Swartz will purchase from us that number of
shares  of  our  common stock equal to 15% of the number of shares traded in the
market  in  the  20  business  days immediately before the date of the requested
purchase,  excluding certain block trades, or 15% of the number of shares traded
in  the  20  business  days  preceding the date of our advance notice of our put
right,  excluding  certain  block  trades,  whichever  is  less;

The  purchase  price  per  share  is the lesser of 91% of the lowest closing bid
price  per  share during the 20 Business days after our request, or that closing
bid price minus $0.075, but in no event will the purchase price be less than the
minimum  price  we  select  in  our  sole  discretion;
Swartz will not be required to purchase at any one time shares having a value in
excess  of  $2,000,000;

We  may  make  additional  requests  at intervals of approximately 30 days; as a
commitment  fee,  we granted to Swartz commitment warrants to purchase 2,700,000
shares  of our common stock, which warrants can be exercised at $0.041 per share
(subject  to  potential  future  adjustment)  through  September  22,  2007.

The  commitment  warrants exercise price is reset to the lowest closing price of
our  common  stock  during  the  five  trading  days  ending  on  the  six month
anniversary  of the warrant issuance date, if the lowest price is lower than the
then-current  exercise  price;

Swartz  can  only  exercise  its  commitment  warrants to the extent that, after
exercise,  Swartz  does  not  own  more  than  4.99%  of our outstanding shares;

the  commitment  warrants are subject to antidilution provisions, in the case of
stock  splits.

Our  agreement with Swartz is not a convertible debenture, convertible preferred
stock,  or  similar  type  of  investment  instrument.  In  addition, we are not
borrowing  from  Swartz  as  with  a  conventional cash line of credit.  Rather,
subject to the limitations set forth above, our agreement with Swartz permits us
to  decide,  in  our sole discretion (subject to penalties for non-use), whether
and  the  extent  to  which  we  wish to require that Swartz purchase our stock.
Until our registration statement is declared effective, we have no plans to sell
shares  to  Swartz,  and  we  are  currently in compliance with the terms of the
investment  agreement.

3.  Income  Taxes:

The  Company  records  its  income tax provision in accordance with Statement of
Financial  Accounting  Standards  No.  109,  "Accounting for Income Taxes" which
requires  the  use  of  the  liability  method of accounting for deferred income
taxes.

Since  the  Company has not generated cumulative taxable income since inception,
no  provision  for  income  taxes  has  been provided. At December 31, 2000, the
Company  did  not  have  significant  tax net operating loss carry forwards (tax
benefits  resulting from losses for tax purposes have been fully reserved due to
the  uncertainty  of  a going concern). At December 31, 2000 the Company did not
have  any  significant  deferred  tax  liabilities  or  deferred  tax  assets.

4.  Development  Stage  Company:

A  development  stage  company  is  one  for which principal operations have not
commenced  or  principal  operations  have  generated an insignificant amount of
revenue.  Management  of  a  development  stage  company  devotes  most  of  its
activities  to  establishing a new business. Operating losses have been incurred
through  September  30,  2000,  and  the  company  continues to use, rather than
provide,  working capital for the development of computer hardware and software.
Although  management  believes  that it is pursuing a course of action that will
provide  successful  future  operations,  the  outcome  of  these  matters  is
uncertain.  The  Company  continues  this  development  and  has  now  started
operations  in  the  internet  web  hosting  industry.

5.  Business  Combination:

                                      F-8
<PAGE>

On  February  20, 1999 the Company entered into a merger agreement with Plantech
Communications  Systems,  Inc.  ("Plantech"), a privately held British Columbia,
Canada, Corporation. Plantech is a development stage enterprise in the software,
computer  and  internet area. From inception in 1992 to date Plantech has had no
revenues.

Under  the  terms  of  the  merger agreement, Plantech shareholders received one
share  of  the  Company's  common  stock  for each outstanding share of Plantech
stock.  The  Company issued 8,137,616 shares of its common stock in exchange for
all  the  Plantech  common  shares  outstanding  as  of  February  20,  1999.

The  above  business  combination  was  accounted for under the purchase method.
There was no significant difference between the purchase cost and the fair value
of  net  assets/liabilities  acquired, thus no goodwill was recorded. Plantech's
results of operations are included in the Company's statement of operations from
the  date  of  merger, February 20, 1999, until the Company survived during that
year  as  the  surviving  corporation.  The  following  table sets forth certain
results  of  operations  for  the  periods presented as if the Plantech business
combination  had been consummated on the same terms at the Plantech inception in
1992.

                                                                     Inception
                                  Jan.  1,  1999                    (8/26/86)
                                   To  Feb.  20,                   To  Dec. 31,
                                      1999                             1999
                                 -------------                   -------------

     Revenues                  $         --                      $        --
     Net  (Loss)               $   (230,954)                     $   (616,086)


6.  Litigation:

On  August  4,  2000, Crusader Capital Group, Inc. filed a complaint against the
company  in  civil  action number CV-N-411-DWH-RAM in the United States District
Court for the district of Nevada.  The company was served with this complaint on
or  about  August  10,  2000.  This  complaint  alleges undetermined damages for
misrepresentations,  omissions, breach of contract and unjust enrichment related
to  Crusaders  purchase  of  restricted  stock  in  the company during the first
quarter  of  2000.

In  January,  2000  the Board of Directors resolved to settle a British Columbia
Supreme  Court  action brought against the Company for an unpaid vendor bill for
$25,000.00.  The  Company  also accepted from the same vendor a return of 50,000
shares  of  the  Company  stock  that  the  vendor  held.

In  1993  the  Company initiated legal action against a former merger candidate,
and  several of its principals, primarily to the Company when the merger was not
consummated.

In October, 1997 a settlement agreement relating to the above action was entered
into.  In  November,  1997  the  Company  received,  net  of  attorney's  fees,
$120,726.00  to  settle  this  matter.

                                      F-9
<PAGE>

The  company  believes  the  claims  made in the complaint are without merit and
intends  to  defend  itself  vigorously  in  this  matter.

In  February  2002,  the Company was served with a lawsuit brought by a group of
ten  (10)  plaintiffs,  namely Carol Gamble Trust 86, June L. Blackwell, June L.
Blackwell and Christopher Ford, as joint tenants, Terry Shores, Steve Rigg, Karl
Weinacker,  Ressoyia  Anderson,  Mel  Goodman,  Slawomir  Kownacki,  and  John
Bussjeager,  in  the  United  States  District  Court,  District of Nevada.  The
defendants  in  the  action  are  the  Company, its Board of Directors, a former
Director,  the  Company's  legal  counsel,  and  two  corporate  entities.

The  Complaint alleges, among other things, that the plaintiffs are shareholders
of  the  Company,  that  they  acquired  stock  of  the  Company  based  on
misrepresentations, that management of the Company misappropriated assets of the
Company,  and  further  alleges violations of the Securities Act of 1933 and the
Securities  Exchange  Act of 1934.  The Complaint requests an unspecified amount
of  damages, that the Board of Directors and officers of the Company be removed,
and  that  a receiver or custodian be appointed to operate the business, as well
as  a judicial determination that the action be maintained as a class action.  A
hearing has been set for March 7, 2002, on plaintiff's motion for appointment of
a receiver and/or custodian, or in the alternative for call of a special meeting
of  shareholders.

The  Company  is vigorously defending this lawsuit although the Company believes
that the action lacks merit.  The case is at a stage where no discovery has been
taken  and  no  prediction  can  be  made  as  to  the  outcome  of  this  case.

7.  Related  Party  Transactions:

The  Company made two investments during the period. The first investment was in
Ultimate  Franchise  Systems,  Inc.  in  an  exchange of 1,000,000 shares of the
Company's  stock  valued  at  $400,000.  The second investment was a purchase of
software,  equipment  and  100,000  shares  of  DiveDepot.com,  Inc.  stock from
Webulate LLC. The transaction was completed with cash of $40,000 and convertible
notes  payable valued at $200,000. The President of the Company, Mr. Dilley, and
the  director Mr. Mitchell, are also on the Board of Directors of DiveDepot.Com,
Inc.

The  company  has written down the value of the investment in Ultimate Franchise
Systems,  Inc. to $62,500.00 reflecting the closing market price of the stock at
as  of  Dec  31,  2000.

DiveDepot.Com,  Inc  has  restated  it's  earnings  for this period reflecting a
substantial  write off of it's investment in internet related projects resulting
in  negative  shareholders equity as of Sept 30, 2000. DiveDepot.com, Inc is not
publicly  traded  and  therefore  the  company has written down the value of the
investment  in  DiveDepot.Com,  Inc.  to $100.00 reflecting the par value of the
stock  at  as  of  Sept  30,  2000.

The  write-downs  in  investments  in  DiveDepot.Com, Inc and Ultimate Franchise
Systems,  Inc.  resulted  in a decline in the book value of investment assets of
$487,400.00  for the year ended Dec 31, 2000. These write-downs are deemed to be
temporary  in  nature as investments in both entities have substantial operating
revenues  and  it is anticipated that their respective share values may increase
in  the  future.

The  Company  entered  into  an agreement on January 21, 2000 with International
Investment  Banking,  Inc. ("IIBI") whereby IIBI will serve as senior management
of  the  Company  for  an  initial  term of two years unless further extended by
mutual  agreement  of  the  parties.  The  Chief  Executive  Officer,  Donald A.
Mitchell,  of  the  Company  also controls IIBI. Pursuant to the agreement, IIBI
receives $10,000 per month and reimbursement of normal business expenses that it
incurs  on  behalf of the Company and certain expenses of individual consultants
that  IIBI  assigns  to  carry  out  the  duties  and  responsibilities of IIBI.
Thereafter  the  annual  compensation  shall increase at a rate of 20% per year.
In  addition  to  monthly  compensation, IIBI OR Mr. Mitchell may be entitled to
receive  an  annual  bonus  as  determined  by  the Company's Board of Directors
payable  in  common  stock or cash. Mr. Mitchell was granted 2,000,000 shares of
common  stock  representing  1,000,000  common  shares  for  each year of IIBI's
engagement. As an addendum of this agreement, IIBI was directed on the Company's
behalf  the  following:  Purchase  8,237,616  shares  of  stock  from two of the
Company's  former  directors  for  $250,000;  issue 6,000,000 shares of stock to
Stockholder  Presentations,  Inc.  per an investor relations contract; and issue
IIBI  1,000,000  shares  of  restricted  common  stock.

                                      F-10
<PAGE>

The  Company  assumed a promissory note payable to Valcom Ltd, a West Vancouver,
British  Columbia  Company, dated March 15, 1997 in the amount of $6,450 with no
interest  stated.  This  note  was  assumed  by  the  Company from the merger as
described  in  footnote  5.  The  Company has also entered into an agreement for
design  and  integration  work  with  Valcom  Ltd,  an  entity  controlled  by a
shareholder  of  the  Company,  Paul  R.  Macpherson, that was a director of the
Company  at  the  time  the  agreement  was  entered  into.

The  Company  continues  an  ongoing  relationship  with Valcom Ltd. in that the
Company  uses  Valcom  Ltd.  as its resource for research and development of its
computer  hardware  and software product development along with a company by the
name  of  Riotech.

8.  Convertible  Debenture  Bonds:

Refer  to  Footnote  7  with  regard  to  bonds  issued  to  related  parties.

9.  Stockholders'  Equity:

Refer  to  Footnote  7  with  regard  to  equity  changes  with related parties.

On  November  20,  2000,  the  board  of directors declared 1,096,670 restricted
common  shares  to  be  issued, a value of $449,537, for the purpose of settling
with  shareholders  that had asserted that the Company had originally issued the
shareholders  stock  that was stated to be free trading shares.  The shares were
issued  under  a  Regulation  D  section  144 filing.  In addition to the shares
issued  were  3,290,000 options to purchase shares of the Company's common stock
at  an excercies price at $1.00 that expire on November 21, 2002.  The Company's
management  disagreed  with  the  assertion,  but  decided  to  settle  with the
agreement.  As  noted  in  Footnote  6, Crusader Capital Group, Inc., one of the
shareholders  representing  about  15%  of all shareholders which has asserted a
claim  against  the  Company,  has  not  accepted  the  settlement at this time,
however,  the  shares  have  been accounted for as issued.  There is uncertainty
regarding  the  outcome  of  the  Crusader  Capital  Group,  Inc.  claim.

Stock options have been granted by the Company to directors and officers with an
expiration  date  of  November 21, 2002.  The stock options were issued November
21, 2000 with 325,000 options excercisable at $.40 per share and 325,000 options
excercisable  at  $.75  per  share.

Stock  options  have  been  granted by the Company to Ultimate Franchise Systems
Inc.,  to  purchase  3,000,000 shares of E-Rex common stock at an exercise price
equal  to  the average of the closing ask price plus $.01, as quoted on the NASD
over-the  counter bulletin board for the five trading days immediately preceding
the  closing.

                                      F-11
<PAGE>

700,000  options were issued to Corporate Service Providers Inc. for the purpose
of providing investment banking services to the company.  Terms as per corporate
resolution  dated  8/1/00  as  follows:

     Exercisable  at  $1.00  during  the  1st  12  months  from  date  of issue.
     Exercisable  at  $1.50  during  the  2nd  12  months  from  date  of issue.
     Options are callable with a 21 day notification by the company if the stock
     trades for 20 consecutive business days at a 50% premium  to  the  exercise
     price.

E-Rex  has also offered $1,000,000 in units of the company's securities pursuant
to  its  Memorandum of terms dated June 21, 2000.  The units consist of either a
Series  A  10%  Convertible  Debenture  or  a Series B 10% Convertible Debenture
together  with  50,000 attached warrants to purchase common stock at an exercise
price  of  $1.00  per  share  and a two year expiration.  The Company has issued
$240,000 of these bonds, $200,000 of which were in exchange for assets purchased
in  the  Webulate  LLC transaction.  The transaction is not a public offering as
defined  in  section  4(2)  of  the Securities Act of 1933, and accordingly, the
units  will  not  be registered under the Act or laws of any state but are being
offered  pursuant  to  exemptions  from  registration.

E-Rex  has  entered  into  an investment financing agreement with Swartz private
equity  LLC.  The  agreement  is  subject  to  SEC  approval and as part of this
agreement the company has issued 900,000 warrants to acquire the common stock of
E-Rex  at  the exercisable for seven (7) years at a price of $.50 per share. The
agreement also provides for the repricing of these warrants as per the following
formula:

The  Exercise  Price  per  share  ("Exercise  Price") shall initially equal (the
"Initial Exercise Price") the lowest Closing Price for the five (5) trading days
immediately preceding September 22, 2000, which is $0.50.  If the lowest Closing
                                                   -----
Price  of  the  Company's Common Stock for the five (5) trading days immediately
preceding  the  date,  if  any,  that  Swartz  Private  Equity,  LLC executes an
Investment  Agreement  pursuant  to the Letter of Agreement (the "Closing Market
Price")  is  less  than  the Initial Exercise Price, the Exercise Price shall be
reset  to  equal  the  Closing Market Price, or, if the Date of Exercise is more
than  six  (6)  months  after  the Date of Issuance, the Exercise Price shall be
reset  to equal the lesser of (i) the Exercise Price then in effect, or (ii) the
"Lowest  Reset  Price,"  as  that  term  is  defined  below.  The  Company shall
calculate  a  "Reset  Price"  on  each six-month anniversary date of the Date of
Issuance  which  shall  equal  the  lowest Closing Price of the Company's Common
Stock for the five (5) trading days ending on such six-month anniversary date of
the  Date  of  Issuance.  The  "Lowest Reset Price" shall equal the lowest Reset
Price  determined  on  any  six-month  anniversary  date of the Date of Issuance
preceding  the  Date  of  Exercise,  taking  into  account,  as appropriate, any
adjustments made pursuant to Section 5 hereof.  Notwithstanding the above if all
of  the  following are true on the date of an Exercise of this Warrant, then the
Exercise  Price with respect to that Exercise only shall be $.50 (subject to any
adjustments required under Section 5 of this Warrant), notwithstanding any price
resets  that  would  otherwise apply pursuant to this Section 3: (A) the Company
has  not  completed  a  reverse  stock  split anytime after the Date of Issuance
through and including the date of such Exercise, (B) the lowest Closing Price of
the  Company's  Common Stock for the five (5) trading days immediately preceding
the  date  of  such  Exercise  is  $3.00  or  greater.

For  purposes  hereof,  the term "Closing Price" shall mean the closing price on
the  Nasdaq  Small  Cap Market, the National Market System ("NMS"), the New York
Stock  Exchange,  or  the  O.T.C.  Bulletin Board, or if no longer traded on the
Nasdaq  Small Cap Market, the National Market System ("NMS"), the New York Stock
Exchange,  or  the  O.T.C.  Bulletin  Board, the "Closing Price" shall equal the
closing  price  on  the  principal  national  securities  exchange  or  the
over-the-counter  system  on  which  the  Common  Stock is so traded and, if not
available,  the  mean  of  the  high  and  low  prices on the principal national
securities  exchange  on  which  the  Common  Stock  is  so  traded.

                                      F-12
<PAGE>

10.  Concentrations  of  risk:

The  Company relies on operating revenue from one service, internet web hosting.
Development  of  computer  hardware  and software products continues, but is not
funded  by  the  Company's  current  operation.

11.  Required  Cash  Flow  Disclosure:

The  Company  had  no  interest  and income taxes paid for the year. The Company
entered  into  agreements with non-cash exchanges of stock and bonds as detailed
in  Footnote  7.

12.  Significant  Equity  Investments:

As  of  December  31,  2000 the company held an investment in Ultimate Franchise
Systems  Inc.  comprising  in  excess  of  20%  of  the  company's total assets.

The condensed Balance Sheet and Earnings Statement for the period ended December
31,  2000  for  Ultimate  Franchise  Systems,  Inc.  follows:

<TABLE>
<CAPTION>


<S>                                             <C>                                    <C>            <C>           <C>
Ultimate Franchise Systems, Inc.
For the period Ending Dec 31-2000
BALANCE SHEET
Assets
                                                Cash                                        150,578
                                                Other Current Assets                        867,846
                                                Total Current Assets                   $  1,018,424
                                                                                       -------------

                                                Other Assets                              9,272,122
Total assets                                                                            $10,290,546
                                                                                       ------------

Liabilities
                                                Current Liabilities                       2,008,649
                                                Other Liabilities                         3,320,209
                                                Total Liabilities                       $ 5,328,858
                                                                                       ------------

                                                Redeemable common stock                     293,000

Stockholders Equity
                                                Preferred Stock                             120,000
                                                Common Stock                             29,321,022
                                                Accumulated Deficit                     (23,742,113)
                                                Less: Stock sub receivable                 (687,500)
                                                Accumulated Other Comp Income (loss)       (342,721)
                                                Total Stockholders Equity                 4,668,688
                                                                                       -------------

Total Liabilities and Stockholders Equity. . .                                         $ 10,290,546

INCOME STATEMENT

Revenue                                                                                   1,460,820

Operating Costs                                                                           1,903,745
Loss from Operations                                                                       (442,925)
                                                                                       -------------

Other Income (Expense)                                                                     -393,156
Net Loss                                                                                  ($856,439)

Weighted Average of common shares outstanding.                                           33,036,716
Net Loss per common share. . . . . . . . . . .                                               ($0.03)

</TABLE>

                                      F-13
<PAGE>