Securities  and  Exchange  Commission

                               Washington  DC  20549

                                   Form  10-KSB

GENERAL  FORM  FOR  REGISTRATION  OF  SECURITIES  OF  SMALL  BUSINESS  ISSUERS

[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____________

                      Magellan  Filmed  Entertainment,  Inc.

                 (Name  of  Small  Business  Issuer  in  its  charter)


            Nevada                                 52-2048394
            ------                                 ----------

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

                      8756  122nd  Ave.,  N.E.,  Kirkland,  WA  98033

                    (Address  of  principal  executive  offices)

                                   425-827-7817

                            Issuer's  telephone  number

        Securities  registered  under  Section  12(b)  of  the  Act:  NONE

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

          $0.001  Par  Value Voting Common Shares             OTC Bulletin Board

                  (Title  of Class)                        (Registered Exchange)

Check whether the issuer (1) filed all reports  required to be filed by Sections
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.  [X]Yes [ ]No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  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.  [  ]

The  issuers  revenues  for  the  year  ended  December  31,  2000.  None


                                        1
<PAGE>


The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  based on the average bid and asked price of such common  equity,
as  of  February  28,  2001  was  $1,940,000.

The number of shares  outstanding of each of the issuer's classes of such common
equity,  as  of  February  28,  2001  was  193,687,275  shares.

Transitional  Small  Business  Disclosure  Format  (check  one):  Yes___;  No_X_


                                     PART  I

ITEM  1.  DESCRIPTION  OF  BUSINESS.

        Organization  and  General  History

The  following  is  a  summary  of  the  organization and general history of the
Company  from  its  inception  in  December,  1999,  through  December, 2000, in
chronological  order:

December,  1999  -  The  founders  formed  North Coast Productions Inc., ("North
Coast")  a  privately  owned  corporation,  and  began  its business development
activity.

January  28, 2000 - North Coast entered into a Stock Purchase Agreement with The
Storm  High  Performance  Sound  Corporation,  ("Storm")  a  publicly  traded
non-reporting  company.

March  31,  2000  -  The  stock Purchase Agreement between North Coast and Storm
became effective.  A related Share Exchange and Plan of Merger between Storm and
North  Coast was entered into dated as of April 4, 2000, and became effective as
of  April  5, 2000.  North Coast shareholders became the holders of the majority
of  the issued and outstanding common stock of Storm.  Consequently, North Coast
became  a  successor  to Storm and the plan of operations of North Coast and the
financial history and reports of North Coast are those of the successor company.

Pursuant  to  a  separate  Stock  Exchange Agreement dated as of March 31, 2000,
between  Storm  and MRC Legal Services LLC ("MRC"), a majority shareholder of Hi
Liner  Group  Inc.  ("Hi  Liner")  and, pursuant to Rule 12g-3(a) of the General
Rules  and  Regulations  of the Securities and Exchange Commission, Storm became
the  successor  issuer  to  Hi Liner for reporting purposes under the Securities
Exchange  Act  of  1934  and elected to report under the Act effective March 31,
2000.

The  aforementioned  reverse  merger  transactions  were disclosed previously in
Storm's  Form  8-K  filings  on  April  3,  2000,  and  April  24,  2000.

September  7, 2000 - As disclosed previously in Storm's schedule 14C Preliminary
Information  Statement  filed on August 7, 2000, amended 14C on August 14, 2000,
and Schedule 14C definitive Information Statement filed on September 7, 2000, in
an  action  by  consent  in  writing  on September 7, 2000, in lieu of a special
meeting  of  the  shareholders,  the  Company:

   a)  Redomiciled  from  the  state  of  Florida  to  the  state  of  Nevada.
   b)  Adopted  restated  By-Laws and an Amendment of the Articles Incorporation
       of changing  the  corporate  name  to Magellan Filmed Entertainment, Inc.
   c)  Adopted  an  Amendment  to  the  Articles of Incorporation increasing the
       authorized capital stock to 200,000,000 shares of $0.001 par value voting
       common  stock  and 50,000,000 shares of $0.001 par value preferred stock.

September  25,  2000, - the  Name  change to Magellan Filmed Entertainment, Inc.
("Magellan")  became  effective.

September 26, 2000,  -  Magellan, in a Stock Exchange Agreement, acquired all of
the outstanding shares of The Nickel Palace, Inc., a Nevada Corporation, (holder
of  50%  of  the  interest  in Rennie's Landing, LLC, owner of the rights to the
movie  Rennie's  Landing) and on September 29, 2000 The Nickel Palace was merged
into  Magellan.

On  November 22,  2000, Magellan, in a Stock Exchange Agreement, acquired all of
the  outstanding  shares  of True Fiction Inc., a Nevada corporation, (holder of
another  50%  interest  in  Rennie's  Landing,  LLC in addition to the rights to
several  other  screen  plays).



     BUSINESS  OF  ISSUER
     --------------------

In  December 1999, as North Coast Productions, Inc., Magellan adopted a business
plan  to actively pursue production  and distribution of film properties and the
purchase  of  scripts  that  management had become aware of.  Magellan's overall
business  goal  is  to  become  a  full service film production and distribution
company  whose  productions  may  be  completed  and brought to market generally
within  a  budget  of  no greater  than  $5  million  per  project.

                                        2
<PAGE>


Distribution  channels  such  as video, television cable and foreign venues that
are available  to  the Company should provide the Company with receptive markets
for its film productions. Magellan's major upside potential could be realized if
and  when one of  its  productions  is  accepted  for  wide  spread  USA theater
distribution.
Magellan  is  targeting  films  that  do  not require USA theatrical showings to
return  a  profit  to  the  Company.

The  Company  plans  to  be active in feature length movie productions, selected
short   subject  production  as  well  as  producing  projects  and  series  for
Television.

Typically,  the  domestic  broadcaster  of  a  made-for-television  movie pays a
license  fee  which entitles it to a limited number of airings of the movie over
a designated  period of time  (generally 2-5 years).  The initial  network/cable
license  fees  generally  range  from  $2.5  -$3.5  million  dependent  upon the
broadcaster  and  the nature and content of the programming.  In cases where the
Producer  of  such  programming  has expended in excess of the license fee, such
amounts  are  generally recovered through sales of the made-for-television movie
in media and territories other than domestic network/cable broadcasting, such as
international  free  television,  domestic  syndication (post initial  broadcast
license),   domestic   and   international  pay  television,  and  domestic  and
international  home  video.

Feature  length movie productions are normally licensed to both a domestic and a
foreign  distributor.  Such  distributors  generally pay for all advertising and
other  costs  of  distribution,  including,  in  the  case  of  foreign markets,
translations  and  dubbing,  with  such  costs recovered prior to the production
company  receiving revenue.  In addition, Magellan expects to sell the rights to
such  productions  to  television  and  video  distribution.

The  Company announced in the second quarter of 2000 the start of production for
its  first  full  length  feature film, "Rennie's Landing."  Actual  filming was
Completed  in  August,  2000,  with  post  production  editing and  finalization
completed  in  February, 2001.  The first screening of the film  to distributors
was  held  on February 20, 2001, followed by several additional screenings after
that  date.  Currently the Company is negotiating for the release of the film in
the  US  with  several distributors, and has entered an agreement with Franchise
Pictures,  LLC  for  international  distribution  of  the film.  Other announced
projects  including,  "All  About Steve," "Tuesday's Letters," "10:17," and "Dog
Eat  Dog,"  are  being  evaluated as to casting, timing and other pre-production
planning.

The  motion  picture  industry  is extremely competitive.  The competition comes
from   both   companies   within  the  same  business  and  companies  in  other
entertainment media which create alternative forms of leisure entertainment. The
Company  competes  with several  "major" film studios  which are dominant in the
motion picture industry, as well as with numerous independent motion picture and
television production companies, television networks, and pay television systems
for the acquisition of literary properties,  the services of performing artists,
directors, producers, and other creative and technical personnel, and production
financing.  Many of the  organizations  with  which the  Company  competes  have
significantly greater financial and other resources.  In addition, the Company's
films  compete  for  audience  acceptance  with  motion  pictures  produced  and
distributed  by other  companies.  As a result,  the  success  of the  Company's
productions  is  also  heavily  dependent  on  public   taste,   which  is  both
unpredictable  and  susceptible  to  change  without  warning.

A  limited  number  of  independent  production  companies are actively involved
in  the  production  of  both  feature  films and television movies.  Management
believes that the  established track record of this management team will attract
some  of  the  best  writing,  directing,  and  acting  talent  in the industry.

The  Company  has  no  significant  dependence  on  any  raw  materials.

The  Company's  revenue  is  expected  to  be  derived  from the production of a
relatively  small  number of film projects and the licensing revenues therefrom.
There   are  relatively  few  distributors,  domestically  and  internationally.
Consequently,  the  company will be dependent on this small pool of distributors
for  the  development  of  its  future  revenues.

Distribution  rights  to motion  pictures are granted legal protection under the
copyright  laws  of  the  United  States and most foreign countries.  These laws
provide  substantial  civil  and criminal penalties for unauthorized duplication
and  exhibition  of  motion  pictures.  Motion  pictures,  musical works,  sound
recordings,  art work,  still photography,  and  motion  picture  properties are
separate works subject to copyright under most copyright laws. The Company plans
to  take  appropriate  and reasonable measures to secure,  protect, and maintain
copyright  protection  for  all  such  Company  properties  under  the  laws  of
applicable  jurisdictions.

                                        3
<PAGE>


The Code and Ratings Administration of the Motion Picture Association of America
(MPAA)   assigns   ratings   indicating  age-group  suitability  for  theatrical
distribution  of  motion  pictures.  The Company plans to follow the practice of
submitting  its  pictures  for  such  ratings.

United  States television stations and networks, as well as foreign governments,
impose  additional  restrictions  on  the  content  of motion pictures which may
restrict in whole or in part  theatrical or  television exhibition in particular
territories.  Management  currently  plans  to produce motion pictures for which
there  will  be no material restrictions on exhibition in any major territory or
media.  This  policy  could  require  production  of  "cover" shots or different
photography  and  recording  of  certain  scenes  for insertion in versions of a
motion  picture  exhibited on television or theatrically in certain territories.

There can be no assurance that current and future restrictions on the content of
the  Company's  films  may  not limit or affect the Company's ability to exhibit
certain  of  its  films  in  certain  territories  and  media.

A  substantial  portion  of the Company's expenditures are for or related to the
acquisition  of  and  production  of  its motion picture projects.  To date, its
customers, i.e. its distributors  have  not  participated  in  the  costs of the
company's projects. However,  the  Company plans to seek future agreements which
will  call  for  the Company's distributors to participate in some of its future
projects.

The  Company  has  not  incurred  any  significant  cost  in compliance with any
environmental  laws

The  Company currently employs 8 individuals and relies on Coast Northwest Inc.,
a  company  controlled by Patrick F. Charles and Terrence K. Picken, officers of
Magellan,  to  provide additional administrative personnel.  The Company expects
a  significant  increase  in the number of its employees in order to produce the
film  opportunities  it is pursuing under its plan of operations.  The number of
personnel  varies  depending upon the needs of the particular script undertaken.
The  hiring  of  additional  employees  is  dependent  upon  and  subject to the
Company's  ability  to  raise additional financing, or the receipt of funds from
the  distribution  of  "Rennie's  Landing."


Item  2  DESCRIPTION  OF  PROPERTY.
        -----------------------
Magellan does not own any real property. Magellan's executive and administrative
offices  are  located in Kirkland Washington in 1300 square feet of office space
provided  to it under a month-to-month administrative support services agreement
with  Coast  Northwest  Inc.,  a  company  controlled  by Patrick F. Charles and
Terrence  K.  Picken,  officers  of  Magellan.  Administrative  support services
include  use  of  office  space,  office  equipment,  clerical  services,  data
processing,  local  and  long distance telephone service and other miscellaneous
administrative support services for which the Company currently pays $12,000 per
month.

Magellan has a month-to-month lease on approximately 800 sq. ft. of office space
located  in  West  Hollywood, California at the rate of approximately $2,500 per
month.  Magellan  believes  the  office space will be adequate for its needs for
the  foreseeable  future.


Item  3  LEGAL  PROCEEDINGS.
        -----------------

The  Company  is  not  a  party  to  any  pending  legal  proceedings.


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

No  matters  were  submitted  to  a  vote  of  security  holders.


                                     PART  II

ITEM 5.  MARKET  PRICE  AND  DIVIDENDS  ON  MAGELLAN'S  COMMON  EQUITY AND OTHER
         -----------------------------------------------------------------------
STOCKHOLDER  MATTERS.
-------------------

Magellan's Common Stock was traded on the OTC Bulleting Board under the name The
Storm  High  Performance  Sound  Corporation  and the symbol "SHPE" from August,
1998  until  September  25,  2000  when  the name was changed to Magellan Filmed
Entertainment,  Inc.  and  the  symbol  was  changed  to  MFLE.

                                        4
<PAGE>

The  high and low sales prices for each quarter for the years ended December 31,
1999  and  2000  were  as  follows:

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

03/31/1999     No  trades  this  quarter
06/30/1999      4  trades  this  quarter           $1.2500             $2.0000
09/30/1999      1  trade  this  quarter            $0.5625             $0.5625
12/31/1999     No  trades  this  quarter

03/31/2000                                         $0.1250             $1.5310
06/30/2000                                         $0.0400             $1.3750
09/30/2000                                         $0.0380             $0.0980
12/31/2000                                         $0.0081             $0.0680

Quotations  for Magellan's  common  stock  came  from  Financial Web and reflect
inter-dealer  prices,  without  retail markups, markdowns or commissions and may
not  represent  actual  transactions


-     HOLDERS
      -------
The  number  of  holders  of  the Company's common stock as of Dec. 31, 2000 was
approximately  2,500.
These  numbers  do  not  include  an  indeterminate number of stockholders whose
shares  may  be  held  by  brokers  in  street  name.


-     DIVIDENDS
      ---------

No cash dividends have been declared on any stock of the Company in the last two
fiscal  years.
Magellan  does  not  plan  to  pay dividends on common equity in the foreseeable
future.


     RECENT  SALES  OF  UNREGISTERED  SECURITIES
     ---------------------------------------

In October, 2000, Magellan issued 100,000 shares of common stock valued at $.069
per share to a non-profit school as a donation.  Such shares were issued without
registration  pursuant  to  an exemption from registration under Section 4(2) of
the  Securities  Act  of  1933.

In October, 2000, Magellan issued 500,000 shares of common stock valued at $.069
per  share  to  a  corporation for consulting services.  Such shares were issued
without  registration  pursuant  to an exemption from registration under Section
4(2)  of  the  Securities  Act  of  1933.

In  November,  2000,  Magellan  issued  800,000 shares of common stock valued at
$.0156  per  share  to  a corporation for consulting services.  Such shares were
issued without  registration  pursuant  to  an exemption from registration under
Section  4(2)  of  the  Securities  Act  of  1933.

In  November,  2000,  Magellan issued 1,150,000 shares of common stock valued at
$.012  per  share to various employees of Coast Northwest Inc. and Magellan as a
bonus  for  services,  and  2,750,00  shares of common stock valued at $.012 per
share  to  consultants  for  past services.  All such shares were issued without
registration  pursuant  to an exemption from registration under Section  4(2) of
the  Securities  Act  of  1933.

In  November,  2000,  Magellan issued 6,000,000 shares of common stock valued at
$0.30  per  shares  to  two  individuals  in exchange for all of the outstanding
shares  of  True  Fiction  Inc.

Prior to its reverse merger with Storm in April, 2000,  North Coast Productions,
Inc.  issued  $929,000  principal  amount  of an 8% Series A Senior Subordinated
Convertible  Redeemable  Debenture  due  March  28,  2002,  to three non-related
parties  in  a  private  placement.  Magellan  assumed  the  obligation  for the
Debenture  as  well  as  the  proceeds from the Debenture as part of the reverse
merger with Storm. The Series A Debenture and the shares into which it was to be
converted were exempt from registration in reliance on Rule 504 of Regulation  D
of  the  Securities  Act  of  1933.  The  Series A Debenture is convertible into
Magellan  common stock at a conversion price of 70% of the closing  bid price of
the  common  stock  based  on  the average of the three trading days immediately
preceding  the  date of receipt of the conversion notice.  At December 31, 2000,
all  of  this  Debenture  had been collected.  At December 31, 2000, all of this
Debenture  had  been  converted  into  29,794,455  shares  of common stock at an
average  price  of  $.0312  per  share. In connection with the assumption of the
Debenture, Magellan recorded $428,571 of additional paid-in capital representing
the  beneficial  conversion  feature  value  of  the  conversion  price discount
relating  to  the amount collected at December 31, 2000.  This amount is charged
to  interest expense when the Debenture first becomes convertible, which is when
the  funds  are  received.  For  the  year ended December 31, 2000, $428,571 was
charged  to  interest  expense  in  connection  with  this  Debenture.

                                        5
<PAGE>

Prior to its acquisition by Magellan in September, 2000, The Nickel Palace, Inc.
issued  $1,000,000  principal  amount  of  an  8%  Series  A Senior Subordinated
Convertible  Redeemable  Debenture  due September 22, 2002, to three non-related
parties  in  a  private  placement.  Magellan assumed all of The Nickel Palace's
obligations  under  the  Debenture as well as the proceeds from the Debenture as
part  of  the purchase of The Nickel Palace, Inc. The Series A Debenture and the
shares  into  which  it  was  to  be  converted were exempt from registration in
reliance on Rule 504 of Regulation D of the Securities Act of 1933. The Series A
Debenture is convertible into Magellan common stock at a conversion price of 62%
of  the  average  lowest  closing bid price of the common stock for any of the 5
consecutive  trading  days  immediately  preceding  the  date  of receipt of the
conversion  notice.  At  December  31,  2000,  all  of  this  Debenture had been
collected.  At  December 31, 2000, $430,000 of this Debenture had been converted
into  35,401,639 shares of common stock at an average price of $.0121 per share,
and  as of February 19, 2001 all of the Debenture had been converted for a total
of 117,517,778 shares of common stock at an average price of $0.00851 per share.
In  connection  with the assumption of the Debenture, Magellan recorded $612,903
of  additional  paid-in  capital  representing the beneficial conversion feature
value  of  the  conversion  price  discount  relating to the amount collected at
December 31, 2000. This amount is charged to interest expense when the Debenture
first  becomes  convertible,  which is when the funds are received. For the year
ended  December 31, 2000, $612,903 was charged to interest expense in connection
with  this  Debenture.

Prior  to  its  acquisition  by  Magellan  in November, 2000, True Fiction, Inc.
issued  $1,000,000  principal  amount  of  an  8%  Series  A Senior Subordinated
Convertible  Redeemable  Debenture  due  November  1, 2002, to three non-related
parties  in  a  private  placement.  Magellan  assumed  all  of  True  Fiction's
obligations  under  the  Debenture as well as the proceeds from the Debenture as
part of the purchase of True Fiction, Inc. The Series A Debenture and the shares
into  which  it was to be converted were exempt from registration in reliance on
Rule  504  of Regulation D of the Securities Act of 1933. The Series A Debenture
is  convertible  into  Magellan common stock at a conversion price of 62% of the
average  lowest  closing  bid  price  of  the  common  stock  for  any  of the 5
consecutive  trading  days  immediately  preceding  the  date  of receipt of the
conversion  notice.  At  December  31, 2000, $150,000 of this Debenture had been
collected and $300,000 of the remaining $850,000 was collected by March 1, 2001.
At  December  31,  2000,  none  of this Debenture had been converted into common
stock.  In  connection  with  the assumption of the Debenture, Magellan recorded
$91,935  of  additional  paid-in  capital representing the beneficial conversion
feature  value of the conversion price discount relating to the amount collected
at  December  31,  2000.  This  amount  is  charged to interest expense when the
Debenture  first  becomes convertible, which is when the funds are received. For
the  year  ended  December  31, 2000, $91,935 was charged to interest expense in
connection  with  this  debenture.

Magellan  believes that each of the foregoing persons or entities to whom shares
of common stock were issued were either "accredited investors" or "sophisticated
investors"  as defined  in the  Securities  Act of 1933.  Each had access to all
material  information  regarding Magellan,  its business and financial condition
prior  to  the  offer  and  sale  of  the  securities  in  question.

Magellan took into  consideration  a number of factors in determining  the price
per share of its common stock in the described transactions.  These consisted of
(1) the  "restricted"  nature of the securities  (except for those  transactions
under Regulation D Rule 504); (2) the limited market for Magellan's common stock
on the OTC Bulletin Board;  (3) the low book value per share; and (4) Magellan's
history  of  limited  revenues.

For common stock issued in  non-monetary  transactions  involving  marketability
discounts  Magellan's  policy  is to  account  for  marketability  discounts  in
accordance with guidelines provided by published empirical studies and financial
research  on  marketability  discounts.

Item  6  PLAN  OF  OPERATION
       -------------------

The  following  discussion  should  be  read  in  conjunction with the Financial
Statements  and  notes  thereto  included  herein.

Magellan generated no revenues during the twelve month period ended December 30,
2000.  The  Company's  current  plan  is to concentrate its business development
efforts  on  opportunities  available in the film production business, including
made  for  TV  projects.

The  Company  completed  the filming of its first feature length film, "Rennie's
Landing,"  prior  to  December,  31,  2000,  and  completed  the process of post
production  editing  of  the movie in February, 2001.  The first showings of the
completed  film  to  potential  distributors  were  held in February, 2001.  The
Company  is  currently  in  negotiations  with a number of U.S. distributors for
release  of  this film in the U.S., and is in the process of finalizing contract
details with the previously announced agreement with Franchise Pictures, LLC for
distribution  of  the film in foreign markets.  The Company anticipates revenues
from distribution contracts for this film to be recognized in the second quarter
of 2001.  The  Company plans to start production of a second film, in the second

                                        6
<PAGE>

quarter  of  2001.  The  Company believes that it will have sufficient operating
capital  from the proceeds of convertible debenture subscriptions receivable for
the  first  four  (4)  to  six  (6) months  of 2001.  Revenues from distribution
agreements  for the film production "Rennie's Landing" are not predictable  with
any  degree  of certainty, however, the Company believes that revenues  from the
distribution  of  "Rennie's  Landing"  should  be  sufficient  to fund operating
expenses, other than new film production projects through to the end of calendar
2001.

The Company is in the process of establishing itself as producer and distributor
of  filmed entertainment products.  Magellan Management believes that foreign or
world  wide  distribution  of  USA produced entertainment projects is one of the
fastest  growing  segments  of  the industry.  It is the intention of management
to  exploit  that  market  as  the  foundation  of  the  Company's  future.

The  Company's  major  marketing  strategy  is  based on selling "within budget"
productions  to  the marketplace at competitive prices.  This includes video and
cable  distribution  outlets  in  addition  to the foreign markets.  The growing
availability  for  viewers  in  countries  outside  the USA to receive USA cable
network productions from HBO, Show Time and others, has increased demand for the
type  of  programming  that  the  Company  is  planning  to  produce.

The   Company   plans  to  establish  distribution  outlets,  through  strategic
alliances,  throughout its market place. A planned strong company representative
network,  coupled with well-chosen, competently produced projects is designed to
provide  a  basis  for  success.

Under  its  marketing  plan,  management  is  also developing relationships with
writers and independent producers to assure that the Company has a constant flow
of projects under review. Included in this stream of projects are feature length
films, made for TV films, mini series for TV and TV feature series.  The Company
has  as one of its missions, the cost efficient production  of  its projects.  A
strategy  of  cost  efficiency  is  to  become a hallmark of the Company and the
source  of  the  Company's  internal  growth.

The  Company plans to formulate an aggressive joint venture acquisition plan for
stimulating  growth.  As  in  most  industries,  the  consolidation  movement is
growing.  Management  believes that growth by strategic acquisition is necessary
for  the  Company  to  reach  its  targeted  goals.

By  acquiring  the  Nickel  Palace  Inc. ("Nickel") and True Fiction Inc. ("True
Fiction")  during  the year 2000, Magellan's first year of entry into the filmed
entertainment  industry,  the  Company achieved its initial business development
goals  including:

   The  acquisition  of  the  rights  to "Rennie's  Landing," a full length film
   feature,  production  of  which  was  completed  by  Magellan

   Assemblance  of  a  management  team  experienced in the filmed entertainment
   industry.  The Nickel Palace team,  which directed the production of Rennie's
   Landing,  gained  their  experience  on  bigger  budget  films  with  notable
   production companies  including  Dream  Works  and  Constantine  Films.  They
   bring  the  X&Y  generation  vision  to  the  company  and  the capability of
   recognizing what the viewing public, the 18 to 34 year old wants to see.  The
   industry  experience  of  the True Fiction team  spans  over a 20 year period
   including  acting,  film  distribution  and  producing.

In  addition  to  the  goals accomplished by the above acquisitions, to date the
company's  business  activities  have  consisted  of developing a business plan,
assembling  a  general  management  team,  pursuing  additional  film production
opportunities  and  financing.

The  Company's operating plan for 2001 includes achieving the following business
goals:

   The   generation   of  revenue  and  cash  flow  from  foreign  and  domestic
   distribution  and sales of Rennie's Landing and other film features scheduled
   for  production  completion  in  2001.

   The  production  of  two  or  three  additional  film  features.

   The   pursuit  of  other  revenue  generating  opportunities  in  the  filmed
   production  industry,  including  additional  acquisitions.

   The   addition   of   other  qualified  executive  management  team  members.
   The  pursuit  of  additional  financing.

The Company has no plans for any product research and development outside of the
acquisition  of  and  development  of film projects, and no expected purchase or
sale  of  plant  and  significant  equipment  over  the  next  12  months.

The  Company  expects  a  significant increase in the number of its employees in
order  to  produce  the  film  opportunities  it  is  pursuing under its plan of
operations.  The  number  of  personnel  varies  depending upon the needs of the

                                        7
<PAGE>

particular  script  undertaken.  The hiring of additional employees is dependent
upon  and subject to the Company's ability to raise additional financing, or the
receipt  of  funds  from  the  distribution  of  Rennie's  Landing.


FORWARD  LOOKING  STATEMENTS

In  connection  with,  and  because  it  desires to take advantage of, the "safe
harbor"  provisions  of the Private  Securities  Litigation  Reform Act of 1995,
the Company cautions readers regarding certain forward looking statements in the
previous  discussion  and  elsewhere  in  this report and in any other statement
made  by, or on behalf of the Company, whether or not in future filings with the
Securities  and  Exchange Commission.  Forward looking statements are statements
not  based  on  historical  information  and  which relate to future operations,
strategies, financial results or other developments.  Forward looking statements
are necessarily based upon estimates and assumptions that are inherently subject
to   significant   business,   economic   and   competitive   uncertainties  and
contingencies,  many  of  which  are  beyond  the Company's  control and many of
which,  with respect to future business decisions, are subject to change.  These
uncertainties and contingencies can affect actual results and could cause actual
results  to  differ  materially  from  those  expressed  in  any forward looking
statements  made  by,  or  on behalf of, the Company.  The Company disclaims any
obligation  to  update  forward  looking  statements.


ITEM  7.  FINANCIAL  STATEMENTS.




                                        8
<PAGE>











                       MAGELLAN FILMED ENTERTAINMENT, INC.
                       (A DEVELOPMENTAL STAGE ENTERPRISE)
                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


















                              WILLIAMS & WEBSTER PS
                          CERTIFIED PUBLIC ACCOUNTANTS
                            SEAFIRST FINANCIAL CENTER
                           W 601 RIVERSIDE, SUITE 1940
                                SPOKANE, WA 99201
                                 (509) 838-5111



                                        9
<PAGE>


                       MAGELLAN FILMED ENTERTAINMENT, INC.
                       (A DEVELOPMENTAL STAGE ENTERPRISE)
                        CONSOLIDATED FINANCIAL STATEMENTS


                                 C O N T E N T S








Independent  Auditor's  Report                                    F-1
Consolidated  Balance  Sheets                                     F-2
Consolidated  Statements  of  Operations                          F-3
Consolidated  Statement  of  Stockholders'  Equity                F-4
Consolidated  Statements  of  Cash  Flows                         F-5
Notes  to  the  Consolidated  Financial  Statements               F-6



                                       10
<PAGE>
Williams & Webster, P.S.
------------------------
Certified Public Accounts & Business Consultants
Bank of America Financial Center
601 W. Riverside, Suite 1940
Spokane, WA 99201-0611
509-838-5111  Fax: 509-838-5114 - E-mail wwpcpas@Williams-webster.com

Board  of  Directors
Magellan  Filmed  Entertainment,  Inc.
Kirkland,  WA

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------

We  have audited the accompanying consolidated balance sheets of Magellan Filmed
Entertainment,  Inc.  (a  development stage enterprise) at December 31, 2000 and
1999,  and  the  related  consolidated  statements  of operations, stockholders'
equity  and cash flows for the years then ended and for the period from December
29,  1999 (inception) through 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 U.S. 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 Magellan Filmed Entertainment,
Inc.  (a  development  stage  enterprise) at December 31, 2000 and 1999, and the
results  of  its  operations and its cash flows for the period from December 29,
1999  (inception)  to  December  31,  2000,  in  conformity  with U.S. generally
accepted  accounting  principles.

The  accompanying  financial  statements  have  been prepared in conformity with
accounting  principles generally accepted in the United States of America, which
contemplate  continuation  of  the  Company as a going concern.  As discussed in
Note  2,  the  Company  has  been  in the development stage since inception, has
negative working capital and an accumulated deficit, and has no revenues.  These
factors  raise  substantial  doubt  about the Company's ability to continue as a
going concern.  Management's plans regarding those matters also are described in
Note  2.  The  financial  statements  do  not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.

__S/Williams & Webster, P.S.__
Williams  &  Webster,  P.S.
Certified  Public  Accountants
Spokane,  Washington

April  6,  2001


                                                                             F-1
                                       11
<PAGE>
<TABLE>
<CAPTION>

                               MAGELLAN  FILMED  ENTERTAINMENT,  INC.
                                (A  Development  Stage  Enterprise)
                                   CONSOLIDATED  BALANCE  SHEETS



A S S E T S                                                                       December 31,    December 31,
                                                                                      2000            1999
                                                                                --------------  --------------
<S>                                                                            <C>             <C>             <C>
       CURRENT ASSETS
              Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      36,846   $           -
              Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . .          2,000               -
                                                                               --------------  --------------
                     Total Current Assets . . . . . . . . . . . . . . . . . .         38,846               -
                                                                               --------------  --------------

       OTHER ASSETS
              Screenplay inventory. . . . . . . . . . . . . . . . . . . . . .        232,629               -
              Deferred project costs. . . . . . . . . . . . . . . . . . . . .      2,225,088               -
              Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . .          1,001               -
                                                                               --------------  --------------
                     Total Other Assets . . . . . . . . . . . . . . . . . . .      2,458,718               -
                                                                               --------------  --------------

                     TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . .  $   2,497,564   $           -
                                                                               ==============  ==============

L I A B I L I T I E S   &   S T O C K H O L D E R S '   E Q U I T Y

       CURRENT LIABILITIES
              Accounts payable. . . . . . . . . . . . . . . . . . . . . . . .  $      64,781   $           -
              Accrued interest. . . . . . . . . . . . . . . . . . . . . . . .         34,117               -
              Accrued compensation to related parties . . . . . . . . . . . .        241,500               -
              Notes payable to related parties. . . . . . . . . . . . . . . .         71,700               -
              Note payable. . . . . . . . . . . . . . . . . . . . . . . . . .        165,000               -
                                                                               --------------  --------------
                     Total Current Liabilities. . . . . . . . . . . . . . . .        577,098               -
                                                                               --------------  --------------

       LONG-TERM DEBT
              Debentures payable. . . . . . . . . . . . . . . . . . . . . . .        720,000               -
                                                                               --------------  --------------
                     Total Long-Term Debt . . . . . . . . . . . . . . . . . .        720,000               -
                                                                               --------------  --------------

       COMMITMENTS AND CONTINGENCIES. . . . . . . . . . . . . . . . . . . . .              -               -
                                                                               --------------  --------------
              TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . .      1,297,098               -
                                                                               --------------  --------------

       STOCKHOLDERS' EQUITY
              Preferred stock $0.001 par value; 50,000,000 shares authorized,
                     no shares issued and outstanding . . . . . . . . . . . .              -               -
              Common stock $0.001 par value;  200,000,000 shares
                     authorized,  109,840,717 and 25,000,000 shares
                     issued and outstanding, respectively . . . . . . . . . .        109,840          25,000
              Additional paid-in-capital. . . . . . . . . . . . . . . . . . .      2,369,746         (20,000)
              Deficit accumulated during development stage. . . . . . . . . .     (1,279,120)         (5,000)
                                                                               --------------  --------------

              TOTAL STOCKHOLDER'S EQUITY. . . . . . . . . . . . . . . . . .$       1,200,466                -
                                                                              --------------  ---------------

              TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . . . . .  $   2,497,564   $           -
                                                                               ==============  ==============

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

</TABLE>
                                                                             F-2


                                       12
<PAGE>

<TABLE>
<CAPTION>

                                     MAGELLAN  FILMED  ENTERTAINMENT,  INC.
                                       (A  Development  Stage  Enterprise)
                                    CONSOLIDATED  STATEMENTS  OF  OPERATIONS


                                                                                             From                 From
                                                                        Year           December 29, 1999    December 29, 1999
                                                                        Ended           (Inception) to       (Inception) to
                                                                  December 31, 2000    December 31, 1999    December 31, 2000
                                                                 -------------------  -------------------  -------------------
<S>                                                              <C>                  <C>                  <C>
REVENUES. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                -   $                -   $                -

E X P E N S E S
       General and administrative . . . . . . . . . . . . . . .              30,427                5,000               35,427
       Consulting fees. . . . . . . . . . . . . . . . . . . . .              87,009                    -               87,009
       Professional fees. . . . . . . . . . . . . . . . . . . .              23,825                    -               23,825
                                                                 -------------------  -------------------  -------------------
             TOTAL EXPENSES . . . . . . . . . . . . . . . . . .             141,261                5,000              146,261
                                                                 -------------------  -------------------  -------------------

LOSS FROM OPERATIONS. . . . . . . . . . . . . . . . . . . . . .            (141,261)              (5,000)            (146,261)

OTHER INCOME (EXPENSE)
       Interest income. . . . . . . . . . . . . . . . . . . . .                 550                    -                  550
       Interest expense . . . . . . . . . . . . . . . . . . . .          (1,133,409)                   -           (1,133,409)
                                                                 -------------------  -------------------  -------------------
              TOTAL OTHER INCOME (EXPENSE). . . . . . . . . . .          (1,132,859)                   -           (1,132,859)

LOSS BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . . .          (1,274,120)              (5,000)          (1,279,120)

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

NET LOSS. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       (1,274,120)  $           (5,000)  $       (1,279,120)
                                                                 ===================  ===================  ===================


NET LOSS PER COMMON SHARE, BASIC AND DILUTED. . . . . . . . . .  $            (0.02)  $                -   $            (0.02)
                                                                 ===================  ===================  ===================

WEIGHTED AVERAGE NUMBER OF BASIC AND
       DILUTED COMMON STOCK SHARES OUTSTANDING. . . . . . . . .          66,762,639           25,000,000           66,423,105
                                                                 ===================  ===================  ===================


                            The accompanying notes are an integral part of these financial statements
</TABLE>

                                                                             F-3

                                       13
<PAGE>
<TABLE>
<CAPTION>

                                                MAGELLAN FILMED ENTERTAINMENT, INC.
                                                 (A DEVELOPMENT STAGE ENTERPRISE)
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY




                                                                                                    Deficit
                                                                                                  Accumulated
                                                      Common Stock                 Additional      During the       Total
                                                         Number                     Paid-in        Development    Stockholders'
                                                        of Shares       Amount      Capital          Stage          Equity
                                                       -----------  -----------  -------------  ---------------  --------------
<S>                                                    <C>          <C>          <C>            <C>              <C>           <C>

BALANCE DECEMBER 29, 1999 (INCEPTION)
Initial issuance of shares. . . . . . . . . . . . . .   25,000,000  $    25,000  $    (20,000)     $         -   $     5,000
Net loss at December 31, 1999 . . . . . . . . . . . .            -            -             -           (5,000)       (5,000)
                                                       -----------  -----------  -------------  ---------------  ------------

BALANCE DECEMBER 31, 1999 . . . . . . . . . . . . . .   25,000,000       25,000       (20,000)          (5,000)            -
Recapitalization and reverse merger . . . . . . . . .    5,317,622        5,317      (428,382)               -      (423,065)
Beneficial conversion feature of debentures . . . . .            -            -     1,133,409                -     1,133,409
Shares issued for conversion of debentures. . . . . .   62,723,095       62,723     1,296,775                -     1,359,498
Shares issued for interest on debentures. . . . . . .    2,473,000        2,473        13,971                -        16,444
Shares issued for services. . . . . . . . . . . . . .    4,077,000        4,077        77,713                -        81,790
Shares issued as bonus to employees . . . . . . . . .    1,150,000        1,150        12,650                -        13,800
Shares issued as donation . . . . . . . . . . . . . .      100,000          100         6,800                -         6,900
Shares issued for acquisition of Nickel Palace, Inc..    3,000,000        3,000       177,810                -       180,810
Shares issued for acquisition of True Fiction, Inc. .    6,000,000        6,000        99,000                -       105,000
Net loss year ended December 31, 2000 . . . . . . . .            -            -             -       (1,274,120)   (1,274,120)
                                                       -----------  -----------  -------------  ---------------  ------------

BALANCE DECEMBER 31, 2000 . . . . . . . . . . . . . .  109,840,717  $   109,840  $  2,369,746      $(1,279,120)   $1,200,466
                                                       ===========  ===========  =============     ============  ============

                            The accompanying notes are an integral part of these financial statements
</TABLE>

                                                                             F-4

                                       14
<PAGE>
<TABLE>
<CAPTION>

                                              MAGELLAN FILMED ENTERTAINMENT, INC.
                                                (A DEVELOPMENT STAGE ENTERPRISE)
                                              CONSOLIDATED STATEMENT OF CASH FLOWS


                                                                                                                   From
                                                                                              Year           December 29, 1999
                                                                                              Ended           (Inception) to
                                                                                        December 31, 2000    December 31, 1999
                                                                                       -------------------  -------------------
<S>                                                                                    <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       (1,274,120)  $           (5,000)
   Adjustments to reconcile net loss to cash provided (used) by operating activities:
         Non-cash expenses paid by debentures for services. . . . . . . . . . . . . .              54,500                    -
         Non-cash expenses paid by common stock . . . . . . . . . . . . . . . . . . .              10,000                    -
         Interest charged for beneficial conversion feature of debentures payable . .           1,133,409                    -
         Stock issued for services. . . . . . . . . . . . . . . . . . . . . . . . . .                   -                5,000
         Stock issued for donation. . . . . . . . . . . . . . . . . . . . . . . . . .               6,900                    -
         Stock issued as bonus for services . . . . . . . . . . . . . . . . . . . . .              95,590                    -
         Stock issued as payment of interest. . . . . . . . . . . . . . . . . . . . .              16,444                    -
         Increase  in prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . .              (2,000)                   -
         Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . .               8,611                    -
         Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              34,117                    -
         Increase  in notes payable . . . . . . . . . . . . . . . . . . . . . . . . .             165,000                    -
                                                                                       -------------------  -------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . .             248,451                    -
                                                                                       -------------------  -------------------

CASH FLOW FROM INVESTING ACTIVITIES
   Deposits paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (1,001)                   -
   Payments for screen play inventory . . . . . . . . . . . . . . . . . . . . . . . .            (127,629)                   -
   Cash paid for acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (422,832)                   -
   Cash paid for project costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .          (1,756,843)                   -
                                                                                       -------------------  -------------------
CASH USED IN INVESTING ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . .          (2,308,305)                   -
                                                                                       -------------------  -------------------

CASH FLOW FROM FINANCING ACTIVITIES
   Debentures sold for cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,025,000                    -
   Cash loans from officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              71,700                    -
                                                                                       -------------------  -------------------
CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . .           2,096,700                    -
                                                                                       -------------------  -------------------

NET INCREASE IN CASH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              36,846                    -
CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   -                    -
                                                                                       -------------------  -------------------
CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           36,846   $                -
                                                                                       ===================  ===================

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period:
   Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                -   $                -
                                                                                       ===================  ===================
   Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                -   $                -
                                                                                       ===================  ===================

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
   Issuance of common stock related to reverse acquisition. . . . . . . . . . . . . .  $            2,991   $                -
                                                                                       ==================   ===================
   Conversion of debentures to common stock . . . . . . . . . . . . . . . . . . . . .  $        1,359,498   $                -
                                                                                       ==================   ===================
   Conversion of loans payable to debentures payable. . . . . . . . . . . . . . . . .  $           20,000   $                -
                                                                                       ==================   ===================
   Common stock issued for acquisitions . . . . . . . . . . . . . . . . . . . . . . .  $          285,810   $                -
                                                                                       ==================   ===================
                                                                             F-5

                                       15
<PAGE>


                                                                                              From
                                                                                        December 29, 1999
                                                                                         (Inception) to
                                                                                        December 31, 2000
                                                                                       -------------------
<S>                                                                                    <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       (1,279,120)
   Adjustments to reconcile net loss to cash provided (used) by operating activities:
         Non-cash expenses paid by debentures for services. . . . . . . . . . . . . .              54,500
         Non-cash expenses paid by common stock . . . . . . . . . . . . . . . . . . .              10,000
         Interest charged for beneficial conversion feature of debentures payable . .           1,133,409
         Stock issued for services. . . . . . . . . . . . . . . . . . . . . . . . . .               5,000
         Stock issued for donation. . . . . . . . . . . . . . . . . . . . . . . . . .               6,900
         Stock issued as bonus for services . . . . . . . . . . . . . . . . . . . . .              95,590
         Stock issued as payment of interest. . . . . . . . . . . . . . . . . . . . .              16,444
         Increase  in prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . .              (2,000)
         Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . .               8,611
         Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              34,117
         Increase  in notes payable . . . . . . . . . . . . . . . . . . . . . . . . .             165,000
                                                                                       -------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . .             248,451
                                                                                       -------------------

CASH FLOW FROM INVESTING ACTIVITIES
   Deposits paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (1,001)
   Payments for screen play inventory . . . . . . . . . . . . . . . . . . . . . . . .            (127,629)
   Cash paid for acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (422,832)
   Cash paid for project costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .          (1,756,843)
                                                                                       -------------------
CASH USED IN INVESTING ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . .          (2,308,305)
                                                                                       -------------------

CASH FLOW FROM FINANCING ACTIVITIES
   Debentures sold for cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,025,000
   Cash loans from officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              71,700
                                                                                       -------------------
CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . .           2,096,700
                                                                                       -------------------

NET INCREASE IN CASH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              36,846
CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   -
                                                                                       -------------------
CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           36,846
                                                                                       ==================-

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period:
   Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                -
                                                                                       ===================
   Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                -
                                                                                       ===================

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
   Issuance of common stock related to reverse acquisition. . . . . . . . . . . . . .  $            2,991
                                                                                       ===================
   Conversion of debentures to common stock . . . . . . . . . . . . . . . . . . . . .  $        1,359,498
                                                                                       ===================
   Conversion of loans payable to debentures payable. . . . . . . . . . . . . . . . .  $           20,000
                                                                                       ===================
   Common stock issued for acquisitions . . . . . . . . . . . . . . . . . . . . . . .  $          285,810
                                                                                       ===================

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

</TABLE>
                                                                             F-5

                                       16
<PAGE>

                       MAGELLAN FILMED ENTERTAINMENT, INC
                        (A DEVELOPMENT STAGE ENTERPRISE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

9

NOTE  1  -  ORGANIZATION  AND  HISTORY

North  Coast  Productions,  Inc.,  a  privately owned corporation, was formed in
December  1999.  On  or  about  March 31, 2000, North Coast, completed a reverse
merger  and  recapitalization  with  Storm  High  Performance  Sound Corporation
("Storm"),  a public non-reporting company and concurrently with Hi Liner Group,
Inc.  ("Hi Liner"), a public reporting company.  Through application of SEC Rule
12g-3,  the  Company,  as  successor,  became  a  public  reporting company.  In
September  2000,  the Company redomiciled from the state of Florida to the state
of  Nevada and changed its corporate name to Magellan Filmed Entertainment, Inc.
("Magellan"  or  "the  Company").

Also  in  September 2000, Magellan acquired The Nickel Palace, Inc. (holder of a
50%  interest  in Rennie's Landing, LLC).  Following the acquisition, The Nickel
Palace,  Inc.  was  dissolved  and its assets absorbed by Magellan.  In November
2000,  True  Fiction, Inc. (whose primary assets were film scripts and the other
50%  interest  in Rennie's Landing, LLC) was acquired by Magellan.  See Note 10.

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Basis  of  Presentation
-----------------------
The  accompanying  financial statements have been prepared on the basis that the
Company  will  continue  as  a  going  concern.  Magellan,  since  its inception
(December  29,  1999) through December 31, 2000, has incurred accumulated losses
of  $1,279,120  and  has  negative  working  capital,  and has not generated any
revenues.  These  conditions raise substantial doubt about the Company's ability
to  continue  as  a  going  concern.

Although  the  Company raised cash through the sale of convertible debentures of
$2,025,000,  management  expects  to incur additional losses until revenues from
its  recently  completed movie, Rennie's Landing, are received.  It is projected
that  revenues  will  be received during the second quarter 2001, however, there
can be no assurance that such revenues will be received, that such revenues will
be  sufficient  to fund future operations, or that other sources of capital will
be  available  in  sufficient  amounts or at acceptable costs.  The accompanying
financial  statements  do  not  include  any  adjustments  relating  to  the
recoverability  and  classification of recorded asset amounts or the amounts and
classification  of liabilities that might be necessary should Magellan be unable
to  continue  in  existence.

The financial statements reflect retroactive effect at December 31, 1999, of the
issuance  of  25,000,000  shares of Storm common stock in exchange for 5,000,000
shares of common stock of North Coast actually outstanding at December 31, 1999.


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  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
revenues  and expenses during the reporting period.  Actual results could differ
from  those  estimates

Principles  of  Consolidation
-----------------------------
The  consolidated  financial statements include the accounts of Magellan and its
wholly  owned subsidiaries, True Fiction, Inc. and Magellan Film Sails, Inc. and
Rennie's  Landing,  LLC  which  is  owned  50% by True Fiction, Inc., and 50% by
Magellan.  All  material  intercompany  transactions  and  balances  have  been
eliminated.

                                                                             F-6

                                       17
<PAGE>


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income  Taxes
-------------
The  Company  utilizes  the  asset and liability method of accounting for income
taxes  as  set  forth in FASB Statement No.  109, "Accounting for Income Taxes."
Under  the  asset  and  liability  method,  deferred  taxes  are  determined
based  on the difference between the financial statement and tax bases of assets
and  liabilities  using  enacted  tax  rates in effect in the years in which the
differences  are  expected  to  reverse.

Fair  Value  of  Financial  Instruments
---------------------------------------
Magellan's financial instruments consist primarily of cash, accrued expenses and
payables,  and loans and debentures payable which approximate fair value because
of  their  short  maturities.  Magellan's  notes  payable and debentures payable
approximate  the  fair  value  of  such instruments based upon management's best
estimate  of  interest  rates  that would be available to Magellan for a similar
financial  arrangement  at  December  31,  2000.

Derivative  Instruments
-----------------------
In  June  1998,  the  Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS")  No.  133, "Accounting for Derivative
Instruments  and  Hedging Activities".  This standard establishes accounting and
reporting  standards  for  derivative  instruments, including certain derivative
instruments  embedded  in  other  contracts,  and  for  hedging  activities.  It
requires  that  an  entity  recognize  all  derivatives  as  either  assets  or
liabilities  in  the  balance sheet and measure those instruments at fair value.

At December 31, 2000, the Company has not engaged in any transactions that would
be  considered  derivative  instruments  or  hedging  activities.

Stock  Options  and  Stock  Based  Compensation
Magellan  accounts  for  all  transactions  under  which employees, officers and
directors  receive options to purchase shares of stock in Magellan in accordance
with  the provisions of Accounting Principles Board Opinion No.  25, "Accounting
for  Stock  Issued  to  Employees".  In  accordance  with Statement of Financial
Accounting  Standards  No.  123  ("SFAS  123"),  "Accounting  for  Stock-Based
Compensation,"  Magellan  adopted  the pro forma disclosure requirements of SFAS
123.  Accordingly,  no  compensation  has  been  recognized  in  the  results of
operations  for  the  employees,  officers and directors stock option plan other
than  for  options  issued  to  non-employees for consulting services, which are
valued  based  at  their fair market value.  In accordance with these standards,
the  Company  values  stock  issued  to  employees,  officers,  directors  and
consultants  at  its  fair  market  value  at  date  of  grant.  See  Note  9.

Loss  Per  Share
----------------
The  Company  has  adopted  the provisions of Financial Accounting Standards No.
128,  "Earnings  Per  Share".  This  statement  requires that the Company report
basic and diluted earnings (loss) per share for all periods reported.  Basic net
income  (loss)  per share is computed by dividing net income (loss) available to
common  shareholders by the weighted average number of common shares outstanding
for  the  period.

Diluted net income (loss) per share is computed by dividing net income (loss) by
the  weighted  average  number  of  common  shares  outstanding  for the period,
adjusted  for  the  dilutive  effect  of common stock equivalents, consisting of
stock  options  and  warrants  at  December  31,  2000.

                                                                             F-7

                                       18
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The  weighted  average  number of shares outstanding for the period December 29,
1999  (inception)  to  March  31, 2000, the effective date of the reverse merger
with  Storm  (See  Note  1),  was  the 25,000,000 shares issued to North Coast's
shareholders  in  accordance  with  accounting  principles applicable to reverse
mergers.  Subsequent  to  the  merger,  the  weighted  average  number of shares
outstanding  used  to  calculate the net loss per share was the actual number of
shares  outstanding  of  the  surviving  entity.

For  all periods presented, diluted net loss per share was the same as basic net
loss per share since the inclusion of stock options and warrants would have been
anti-dilutive.

Film  Production  Costs
-----------------------
Production  costs  of  film  projects  will  be  capitalized  in accordance with
Statement  of  Position 00-2, whereby costs incurred in the production of a film
are  amortized  over  the  useful  life of the project based on projected future
revenues,  not to exceed 10 years.  In the event discounted estimated future net
revenues  are  less  than  the  balance  of  capitalized  costs,  the  excess of
capitalized  costs  over the discounted estimated net future revenues is charged
to  expense  in  the  period  in  which  the  impairment  is  determined.

Recent  Accounting  Pronouncements
----------------------------------
In  December  1999,  the  Securities  and  Exchange  Commission  released  Staff
Accounting  Bulletin  (SAB)  No.  101,  "Revenue  Recognition  in  Financial
Statements".  SAB  101  provides  interpretative  guidance  on  the recognition,
presentation  and  disclosure  of revenue.  SAB 101 must be applied to financial
statements  no  later than the fourth quarter of fiscal 2001.  We do not believe
that  the  application  of  SAB 101 will have a material effect on the Company's
financial  position  or  results  of  its  operations.

In  March  2000,  the FASB issued Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation - An Interpretation of APB Opinion No.
25".  The  interpretation  clarifies  the  application  of Accounting Principles
Board  (APB)  Opinion  No.  25  in  certain  situations,  as  defined.  The
interpretation  is  effective  July 1, 2000, but covers certain events occurring
during the period after December 15, 1998, but before the effective date.  We do
not  anticipate  that  the  adoption of this interpretation will have a material
effect  on  the  Company's  financial  position  or  results  of  operations.

Cash  and  Cash  Equivalents
----------------------------
For  purposes  of the statements of cash flows, the Company considers all highly
liquid  investments  with original maturities of three months or less to be cash
equivalents.

Reclassifications
-----------------
Certain  amounts  from  prior periods have been reclassified to conform with the
current  period presentation.  This reclassification has resulted in no material
changes  to  the  Company's  accumulated  deficit  or  net  losses  presented.

                                                                             F-8

                                       19
<PAGE>

NOTE  3  -  RELATED  PARTY  TRANSACTIONS

At  December  31,  2000,  the  following  amounts  were  owed  to  shareholders:

                                             Payable to
                                             ----------
                                Patrick F. Charles          Terrence K. Picken
                              Loans to      Accrued      Loans to     Accrued
 Interest Rate   Maturity     Company    Compensation    Company    Compensation
 ------------    --------    ---------   ------------    -------    ------------

      10%     Upon  Demand    $68,700      $120,750       $3,000     $120,750

The  loans  payable  result  from  cash  advances  made  to  Magellan  and  are
uncollateralized. The loans bear interest at a 10% rate and are due upon demand.
Interest  accrual  is  immaterial  at  year-end due to interim period payment of
interest  and principal, followed by shareholder loans at year-end. In addition,
non-interest  bearing  accrued  fees for services are due to Messrs. Charles and
Picken,  who  are  officers  and  directors  of  the  Company.

The  Company  has  accrued  $241,500  in  compensation  payable to officers.

Magellan's  executive  and  administrative  offices  are  located  in  Kirkland,
Washington,  in 1300 square feet of office space provided to it under a month to
month  administrative  support  services agreement with Coast Northwest, Inc., a
company  controlled  by  Messrs.  Charles  and Picken, officers and directors of
Magellan.  Administrative  support  services  provided  under a verbal agreement
include  use  of  office  space,  office  equipment,  bookkeeping  and  clerical
services,  data  processing, local and long distance telephone service and other
miscellaneous  administrative  support  services for which the Company currently
pays  $10,000 per month.  For the year ended December 31, 2000, Coast Northwest,
Inc.  charged  Magellan  $83,000  for  administrative  services.

NOTE  4  -  DEFERRED  PROJECT  COSTS

In accordance with SOP 00-2, "Accounting by Producers or Distributors of Films,"
the  Company  has  capitalized  all costs, excluding advertising, related to the
production of a film.  The Company will amortize film costs and accrue (expense)
participation costs using the individual-film-forecast-computation method, which
amortizes or accrues (expenses) such costs in the same ratio that current period
actual  revenue bears to estimated remaining unrecognized ultimate revenue as of
the  beginning  of  the  current  fiscal  year.  The  Company  will  commence
amortization  of  capitalized  film  costs when a film is released and begins to
generate  revenue.

At  the end of each quarter, the Company assesses whether the film's fair value,
determined using a discounted cash flow model, is less than its unamortized film
costs,  and  in  such  instances  the  Company  expenses the amount by which the
unamortized  capitalized  costs  exceeds  the  film's  fair  value.

The  Company  expenses  all  advertising  costs  in  the  period  incurred.

                                                                             F-9

                                       20
<PAGE>


NOTE  5  -  SCREENPLAY  INVENTORY

Screenplay  inventory  consists of eleven scripts acquired in the acquisition of
True  Fiction,  Inc.  The value of the scripts was determined by the fair market
value  of  the  common stock shares exchanged and the liabilities assumed in the
acquisition.

NOTE  6  -  NOTE  PAYABLE

Note  payable  represents  an  unsecured  obligation  to  an individual which is
payable upon demand with interest at 12%.  The note was repaid in January, 2001,
at  which  time the Company executed another unsecured loan at 12% with the same
individual.  The  new  loan contains a loan fee of 5%, and matures 60 days after
the  first  $173,250 of revenue is received by the Company.  Accrued interest at
December  31,  2000  for  the  note  is  $8,242.

NOTE  7  -  DEBENTURES  PAYABLE

In  September 2000, Magellan acquired The Nickel Palace, Inc. and assumed the 8%
Series  A  senior  subordinated  convertible redeemable debentures issued by The
Nickel  Palace.  At December 31, 2000, all of the funding for this debenture had
been  received  by Magellan and $430,000 had been converted into common stock of
Magellan,  leaving  a  debenture payable balance of $570,000.  In November 2000,
Magellan  acquired  True  Fiction, Inc. and assumed the True Fiction 8% Series A
senior  subordinated  convertible  redeemable debentures issued by True Fiction.
The  debenture  was  subscribed  to  in November 2000, and at December 31, 2000,
$150,000  of  this  debenture's proceeds had been received by Magellan with none
converted  into Magellan common stock.  Accrued interest at December 31, 2000 is
$25,875  on  the  debentures  payable.

NOTE  8  -  INCOME  TAXES

As  of  December 31, 2000, Magellan has an unused federal tax net operating loss
carryforward  of approximately $1,250,000 which expires in 2020 and which may be
applied  against  future  taxable  income.  The  Company  has established a 100%
valuation  allowance  with  respect  to  the available unused tax benefit of the
federal  net  operating loss carryforwards because the likelihood of realization
of  this  benefit  cannot  be  presently  determined.

NOTE  9  -  STOCKHOLDERS'  EQUITY

Magellan  has  two classes of authorized securities which consist of 200,000,000
shares  of  common  stock  with  a  par value of $0.001 per share and 50,000,000
shares  of preferred stock with a par value of $0.001 per share. At December 31,
2000,  109,840,717  shares  of  the  Company's  common  stock  were  issued  and
outstanding  while  no  shares  of  the Company's preferred stock were issued or
outstanding.

                                                                            F-10

                                       21
<PAGE>

NOTE  9  -  STOCKHOLDERS'  EQUITY (Continued)

Common Stock Issuances
----------------------
Shares  of  common  stock  of Magellan issued during the year ended December 31,
2000  are  summarized  as  follows:

<TABLE>
<CAPTION>


Effective Date        Description                      Transaction          Average Per          Number of
                                                          Value             Share Price        Shares Issued
--------------  --------------------------------       ------------         -------------      -------------
<C>                 <S>                               <C>                  <C>                 <C>


         12/99      Original shares of North
                     Coast Production, Inc. *          $      5,000        $     0.0002           25,000,000

          3/00      Reverse merger and
                     recapitalization  *                   (423,065)             (0.017)           5,317,622

    5/00-12/00      Conversion of debentures
                     and accrued interest . .             1,375,942              0.0210           65,196,095

          9/00      Acquisition of The Nickel
                     Palace, Inc.                           180,810              0.0603            3,000,000

         10/00      Donation                                  6,900              0.0690              100,000

      10&11/00      Consulting services                      81,790              0.0200            4,077,000

         11/00      Bonuses for services
                     employees and related                   13,800              0.0120            1,150,000

         11/00      Acquisition of True
                     Fiction, Inc.                          105,000              0.0175            6,000,000
                                                          ---------                              -----------
                    Sub-totals                            1,473,736                              109,840,717

                  Beneficial conversion feature
                   of debentures                          1,133,409                                       -
                                                          ---------                              -----------
                  Total                                $  2,479,586                              109,840,717
                                                       ============                             ============

</TABLE>

NOTE  9  -  STOCKHOLDERS'  EQUITY  (CONTINUED)

*  Effective March 31, 2000, as part of the reverse merger and recapitalization,
1,491,222  shares of common stock remained with the original Storm shareholders,
and  1,500,000 shares were issued to the former Hi Liner shareholders. 2,326,400
shares were issued for consulting services in connection with the reverse merger
and  recapitalization  and 25,000,000 shares of common stock were distributed to
the  shareholders  of  North  Coast  in  exchange  for  the 5,000,000 issued and
outstanding  common  shares  of  North  Coast  which  were  then  cancelled.

                                                                            F-11

                                       22
<PAGE>

Debentures  Converted  to  Common  Stock
----------------------------------------
On  March 31, 2000, the Company assumed the liabilities of North Coast including
8%  series  A  senior  subordinated  convertible redeemable debentures issued by
North  Coast  in March, 2000 in the aggregate principal amount of $929,500.  The
Series A debentures were subsequently converted into 29,794,455 shares of common
stock  at  an average conversion price of $0.0312 per share, equal to 70% of the
average  closing  bid  price  of  the common stock for the five (5) trading days
immediately  preceding  the  date  of  receipt  of  the  conversion  notice.

On September 26, 2000, the Company assumed the liabilities of The Nickel Palace,
Inc.,  including  8%  Series  A  senior  subordinated  convertible  redeemable
debentures  issued  by  The  Nickel  Palace  in  September 2000 in the aggregate
principal  amount  of  $1,000,000.  The Series A debentures are convertible into
Magellan common stock at a conversion price of 62% of the average lowest closing
bid  price  of  the  common  stock  for any of the five consecutive trading days
immediately  preceding the date of receipt of the conversion notice. At December
31,  2000,  all  of  these  debentures  were  funded and outstanding, except for
$430,000  of  the  debentures,  which  were  converted into 35,401,639 shares of
common  stock  at  an  average  price  of  $0.0121  per  share.

In  an  Emerging Issues Task Force meeting sponsored by the Financial Accounting
Standards  Board, held on March 13, 1997, the Securities and Exchange Commission
("SEC")  announced  their  position  on  the  accounting  for  the  issuance  of
convertible  debt  securities  with  a  nondetachable conversion feature that is
"in-the-money"  at  the date of issue.  Those securities are usually convertible
into  common  stock at the lower of a conversion rate fixed at the date of issue
or  a  fixed  discount  to  the  common  stock's  market  price  at  the date of
conversion,  creating  a "beneficial conversion feature".  The SEC's position is
that  the  beneficial  conversion  feature  should be recognized and measured by
allocating  a  portion  of  the  proceeds  equal  to the intrinsic value of that
feature  to additional paid-in capital.  The amount is calculated at the date of
issuance  as  the  difference between the conversion price and the fair value of
the  common  stock  into  which  the  security is convertible, multiplied by the
number of shares into which the security is convertible.  The discount resulting
from  the  allocation of proceeds, in effect, increases the interest rate of the
security and should be amortized as a charge to interest expense over the period
from  the  date the security is issued to the date it first becomes convertible.

The  beneficial  conversion  feature  of  the  debentures  was  accounted for as
additional  interest  expense at the date the debenture first became convertible
and, as a result, such interest expense charged to operations for the year ended
December  31,  2000  amounted  to  approximately  $1,133,000.

NOTE  9  -  STOCKHOLDERS'  EQUITY  (CONTINUED)

Stock  Options  and  Warrants
-----------------------------
In October, 2000, the Company granted its officers options to purchase 2,000,000
shares  of  Magellan  stock  at  an  exercise  price  of  $0.10 per share. Still
outstanding  at  December  31,  2000,  the  options  are exercisable at any time

prior  to October 1, 2005.  No other options or warrants were granted during the
year  ended  December  31,  2000.  The  Company  has adopted the disclosure only
provisions  of  SFAS  123.

For  disclosure of stock option compensation to employees and officers, the fair
value  of  options  is  estimated  on  the date of grant using the Black-Scholes
option  pricing  model  with the following weighted average assumptions used for
stock  options  granted  during  fiscal  2000:  no  annual  dividends,  expected
volatility of 50%; risk-free interest rate of 6%; and expected lives of 5 years.

                                                                            F-12
                                       23
<PAGE>

NOTE  9  -  STOCKHOLDERS'  EQUITY  (CONTINUED)

Stock  Options  and  Warrants (Continued)
The  weighted  average  fair  value  of  stock  options granted to employees and
officers  during  the  fiscal year 2000 was approximately $47,000.  Accordingly,
Magellan's  pro  forma  loss  and net loss per share would have been as follows:

                                                    Year Ended
                                                 December 31, 2000

Net  loss  applicable  to  common  shares:

                          As reported          $     (1,274,120)
                                               =================

                          Pro forma            $     (1,321,120)
                                               =================

Net  loss  per  common  share:

                          As reported          $          (0.02)
                                               =================


                          Pro forma            $          (0.02)
                                               =================


NOTE  10  -  MERGERS  AND  ACQUISITIONS

In December 1999, the Company's founders formed North Coast Productions, Inc., a
privately  owned corporation, and began its business development activity. North
Coast  became  a  publicly  traded  reporting  company as a result of concurrent
transactions  with  Storm and Hi Liner which are best characterized as a reverse
merger  and recapitalization. Storm was a publicly traded non-reporting company,
while  Hi Liner was a public reporting company. Under a Stock Purchase Agreement
effective  March  31,  2000,  between  North Coast and Storm and a related Share
Exchange  and  Plan  of  Merger  Agreement  effective April 5, 2000, North Coast
shareholders  became  the  holders of the majority of the common stock of Storm.
Consequently, North Coast became a successor to Storm and the plan of operations
of North Coast and the financial history and reports of North Coast are those of
the  successor  company.

NOTE  10  -  MERGERS  AND  ACQUISITIONS  (CONTINUED)

As  part of the recapitalization and pursuant to a March 31, 2000 Stock Exchange
Agreement between Storm and MRC Legal Services LLC, a majority shareholder of Hi
Liner,  Storm  became  the  successor  issuer to Hi Liner for reporting purposes
under  the  Securities  Exchange Act of 1934 and elected to report under the Act
effective  March  31,  2000.  Under  the  Storm  and  Hi  Liner  reverse  merger
transaction, 1,500,000 shares of Storm were issued to the former shareholders of
Hi  Liner  and  2,326,400 shares of Storm were issued for consulting services in
connection  with  the  reverse  merger  and  recapitalization  transaction.

In  September  2000,  the  Company  redomiciled from the state of Florida to the
state of Nevada and changed its corporate name to Magellan Filmed Entertainment,
Inc. Also in September 2000, Magellan issued 3,000,000 shares of common stock in
exchange for all of the outstanding shares of The Nickel Palace, Inc. (holder of
50%  of  the interest in Rennie's Landing, LLC, owner of the rights to the movie
Rennie's  Landing).  On  November  22, 2000, Magellan issued 6,000,000 shares of

                                                                            F-13
                                       24
<PAGE>



common stock in exchange for all of the outstanding shares of True Fiction, Inc.
(holder  of  the  remaining 50% interest in Rennie's Landing, LLC in addition to
the  rights  to  several  other  screen  plays).

Magellan  has  been  in the development stage since its inception, in accordance
with  Statement  of  Financial  Accounting  Standards  No.  7.

NOTE  11  -  CHANGE  IN  ACCOUNTING  PRINCIPLE

The  Company  previously  reported  its  cost  of acquiring Storm as a loss from
discontinued  operations  of  $297,832.  These expenses actually represented the
Company's  costs  of  acquiring  Storm  and included paying outstanding accounts
payable  of  $267,742 and payments to prior shareholders of $30,090. These costs
have  been  reclassified  as  part of the basis of the recapitalization of North
Coast in acquiring the Storm and Hi Liner. The Company previously disclosed that
consultants  were  paid $125,000 in cash and 2,326,400 shares of common stock in
conjunction  with  the  recapitalization  of  the Company. These costs have been
determined  to  be  costs  of  the  recapitalizing  and  have  been reclassified
appropriately.

NOTE   12  -  SUBSEQUENT EVENTS

As  of  March  1,  2001,  there  were  insufficient  authorized  shares to allow
conversion  into  common stock of all of the outstanding debentures based on the
current  price  of  the  Company's  common  stock.  The  Company  is  currently
negotiating  with  the  debenture holders regarding alternatives available to it
which  could  include repayment of the notes as allowed by the debentures, or an
increase  in  the  number  of  authorized  shares.

                                                                            F-14
                                       25
<PAGE>


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS.
        ---------------------------------------------

Magellan's  independent accountant  accepted  a  full  time  position with a new
employer,  and consequently, is discontinuing providing accountant services as a
sole  practitioner.  Therefore,  effective  November  10,  2000,  the  Board  of
Directors  accepted  his resignation as the Company's accountant.  Magellan does
not  have  an  audit  or  similar  committee  of  the  Board  of  Directors.

The  Accountant's  report on the financial statement of North Coast Productions,
Inc.  for  the  year  ended December 31, 1999 was modified with a "going concern
qualification"  having to do with uncertainties about the ability of the Company
to  continue as a going concern.  North Coast became the successor Registrant in
April,  2000,  as  the result of a reverse merger transaction with and under the
corporate  name  The  Storm  High  Performance Sound Corporation, which name was
changed  to  Magellan  Filmed  Entertainment,  Inc.  effective  September, 2000.

There  have  been no disagreements with the accountant that were not resolved on
any  matter   of   accounting   principles  or  practices,  financial  statement
disclosures,  or  auditing  scope  or  procedure.

The  Board  of  Directors  of  Magellan  has  approved  the appointment of a new
independent  accountant,  Williams  and Webster, effective November 14, 2000, to
audit  Magellan's  financial  statements.  Magellan  did  not  consult the newly
engaged  accountant  in  either  of  the  two  most  recent  fiscal  years,


                                    PART  III

ITEM  9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS,  AND  CONTROL  PERSONS.
         --------------------------------------------------------------

This  table  describes  Magellan's  current  Directors  and  Executive Officers.


                  NAME                       AGE                TITLE
Patrick  F. Charles                           59     President,  Chief Executive
                                                       Officer  and  Director
Terrence  K.  Picken                          62     Executive Vice-President,
                                                       Chief  Operating Officer
                                                       and  Director
James G. Brewer                               58     Vice President Finance, and
                                                       Chief  Financial  Officer


Patrick F. Charles has been Magellan's  Chief Executive  Officer and Chairman of
the Board of Directors  since the inception of Magellan . Mr.  Charles is also a
founder,  President  and Chief  Executive  Officer of Coast  Northwest  Inc.,  a
privately  owned  Washington  Corporation,  since its  inception in 1981.  Coast
Northwest Inc. provides financial and management  consulting services to various
clients,  including Magellan.  Mr. Charles has also served as National  Director
of Legislative consulting  services for PriceWaterhouseCoopers, an international
accounting  firm.  Mr.  Charles also currently serves as a Director for Saratoga
International Holdings  Corp.  ("Saratoga"), a publicly traded company listed on
the  OTC  Bulletin  Board.  Saratoga  is  a  provider  of  prepaid long distance
telephone calling service as a reseller for long distance suppliers. Mr. Charles
holds  a  Bachelor of Science degree in marketing from Seattle University and an
MBA  from  the  University  of  Arizona.

Terrence K. Picken has served Magellan as Executive  Vice-President and Director
since its inception. Mr. Picken is also Executive Vice President and Director of
Coast  Northwest Inc.  since 1992.  Coast  Northwest  Inc. is a privately  owned
company which provides business management and financial  consulting services to
various clients, including Magellan.  Mr. Picken was also a general partner with
PriceWaterhouseCoopers,  an  international  accounting  firm.  Mr.  Picken  also
currently  serves  as  a  Director  for  Saratoga  International  Holdings Corp.
("Saratoga"),  a  publicly  traded  company  listed  on the OTC Bulletin  Board.
Saratoga  is  a provider of prepaid long distance telephone calling service as a
reseller  for  long  distance  suppliers.  Mr.  Picken  has  over  20  years  of
international  accounting  experience  and  was  licensed as a CPA in California
and  Washington  as well as a Chartered Accountant in Canada. He graduated  with
a  Chartered  Accountant  degree  from  the  University  of  Manitoba,  Canada.

James  G.  Brewer  has  served  Magellan  as  Vice-President  Finance  and Chief
Financial Officer since September, 2000. Mr. Brewer has served as Vice President
and  Chief  Financial  Officer  for  a  number of publicly traded Bulletin Board
companies  over  the  past 20 years, including Wright Energy Corporation, United
Casino  Corporation and NetBet, Inc.  He also served as Controller for McCulloch
Oil Corporation, a public American Stock Exchange corporation.  Mr. Brewer holds
a Bachelor of Science  degree in Administrative Management from California State
University  at Los Angels and an MBA from United States International University
in  San  Diego  California.

                                       26
<PAGE>


The  Directors  serve in  their  positions  until  the next  annual  meeting  of
stockholders or until the Directors' successors have been elected and qualified.
The executive  officers are appointed by the Board of Directors and serve at the
discretion  of  the  Board.

There are no family relationships among any of Magellan's officers or directors.
No director, executive officer, promoter or control person of the Company during
the  past  five  years  has  had  any  involvement  in  any legal proceedings as
described  in  Item  401  (d)  of  Regulation  S-B.

Significant  Employees  of  Magellan  include  the  following  individuals:

Marc Fusco - Age 30 project manager, Mr. Fusco directed numerous short films and
documentaries  prior  to moving to Los Angeles in 1994 where he joined the staff
of  Amblin  Entertainment  as assistant to Academy Award winning director Steven
Spielberg.  He  worked  with Mr. Spielberg on the feature films "The Lost World"
and  "Saving  Private  Ryan."  Mr. Fusco co-wrote and directed Rennie's Landing,
his  feature  film  debut.

Michael Garrity - Age  31 project manager, Graduated with a degree in Journalism
from the University of Oregon, Mr. Garrity worked as a news segment producer for
NBC.  In  1996,  he  moved  to  Los Angeles and worked as an assistant to Steven
Spielberg  on  "The  Lost World" and Amistad."  Mr. Garrity then joined director
Mimi  Leder,  working  closely  with  her on the feature films "The Peacemaker,"
"Deep  Impact" and "Pay it Forward."  Mr. Garrity co-wrote and produced Rennie's
Landing.

Michael  Gabrawy - Age 32 project  manager, Since moving to Los Angeles in 1993,
Mr. Gabrawy has produced over 10 short films and several lo-budget features. Mr.
Gabrawy  held  varied posts on a number of major film releases, including "Naked
Gun 33 1/3," "Stargate," Waterworld" and "Independence Day." Equally experienced
in  both  physical film production and development, he served as an executive at
the  international  production  and distribution company Constantine Films.  Mr.
Gabrawy  also  produced  Rennie's  Landing.

Michel  Shane - Age 45 Vice-President - Business Affairs - for Magellan's wholly
owned  subsidiary, Magellan Productions Corp. - Mr. Shane was educated at McGill
University  in Canada and then went on to attend law school for two years before
deciding  on  a  career  in the entertainment business.  Mr. Shane was and is an
entrepreneur.  In  the early 1980's Mr. Shane's company was the first company to
put  advertising on video cassettes. Later that decade, Mr. Shane helped perfect
Event  "Television"  by  handling distribution and production duties on two very
highly  successfully syndicated television shows.  Living in Canada at the time,
there  was  a  natural  progress  to producing and using Canadian Government tax
incentives  to  produce  programming.


SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE
-------------------------------------------------------

Due to an oversight,  the following  individuals  did not file on a timely basis
Forms  4  or  5  reporting  changes  in  beneficial ownership:  Patrick Charles,
Terrence  Picken  and  James Brewer.  The aforementioned reports have been filed
prior  to  the  filing  of  this  Form  10-KSB.

Schedule  of  non-compliance  with  section  16(a)  of  the  exchange  Act

                                                     Number  of
     Name                     Number  of             Transactions
                             Late  Reports           Not  Reported

Patrick  Charles                  2                        0
Terrence  Picken                  2                        0
James  Brewer                     2                        0

                                       27
<PAGE>


ITEM.  10  EXECUTIVE  COMPENSATION
          ----------------------
The  following  tables  set  forth  the compensation due to or paid to the named
executive  officers  for  the  periods  indicated:



<TABLE>
<CAPTION>
               SUMMARY  COMPENSATION  TABLE

               -------Annual  Compensation-------               -----Long-term  Compensation-----

                                            Other                 Securities
                                           Annual     Restricted   Underlying               All Other
Name and                                   Compen-      Stock      Options/      LTIP       Compen-
Principal               Salary    Bonus    sation     Award(s)       SAR's      Payouts     sations
Position       Year       $         $         $           $            #           $           $
(a)            (b)       (c)       (d)       (e)         (f)          (g)         (h)         (I)
                       (Note 1)            (Note 1)                (Note 2)
-----------  --------  --------  -------  ---------  -----------  -----------  ---------  -----------
<S>          <C>       <C>       <C>      <C>        <C>          <C>          <C>        <C>
Patrick F.
Charles
President/
CEO & Director   1999         0        0          0            0            0          0            0
                 2000  $117,000        0      2,750            0    1,000,000          0            0
-----------  --------  --------  -------  ---------  -----------  -----------  ---------  -----------
Terrence
Picken
Vice President/
COO/ Director    1999         0        0          0            0            0          0            0
                 2000  $117,000        0      2,750            0    1,000,000          0            0
-----------  --------  --------  -------  ---------  -----------  -----------  ---------  -----------

</TABLE>


(1)  Salary  and  other  Annual Compensation  for  Mr.  Charles  and  Mr. Picken
    reported  in  columns  (c)  and  (e)  was  earned  but  not  paid  as  of
    December  31,  2000.

(2)  The stock options  listed in column (g) above were all  exercisable at date
     of  grant.


                             Option/SAR  Grants  in  Last  Fiscal  Year
                                     Individual  Grants

<TABLE>
<CAPTION>

                Number of Securities        % of Total Options/SARs          Exercise or
              Underlying Options/SARS       Granted to Employees in          Base Price    Expiration
Name               Granted (#)                   Fiscal Year
<S>         <C>                           <C>                              <C>             <C>
------------    ---------------------       -----------------------        -------------    ----------
Patrick F.
   Charles, CEO
   and Director      1,000,000                     50%                          $0.10         10-01-05

Terrence K.
   Picken Exec. V.P.
   and Director      1,000,000                     50%                          $0.10         10-01-05

</TABLE>




Effective  October  1,  2000,   Magellan  signed  Corporate  Officer  Employment
Agreements  (the  "Agreements")  with Patrick F. Charles and Terrence K. Picken.
All significant  provisions of the Agreements are identical.  The Agreements are
for a three year term and  provide  basic  salary of $120,000 in the first year,
$150,000 in the second year and $180,000 in the final year. The Agreements  also
provide for incentive  bonuses based on pre-tax  operating cash flow. A bonus of
5.0% will be paid on the first $250,000;  4.0% on the next $250,000; 3.0% on the
next $250,000; 2.0% on the next $250,000 and 1.0% on pre-tax operating cash flow
amounts over  $1,000,000.  The Agreements also provide that at the discretion of
the officer, monthly amounts over $10,000 or any amount not paid when due may be
paid in common shares of Magellan based on the closing bid price at the time the
officer gives notice.  In the event  Magellan  issues  restricted  common shares
under this provision, the officer is entitled to receive additional shares based
on a factor of up to a 40%  discount  of the  closing  bid price at the time the
officer  gives  notice.

                                       28
<PAGE>


For common stock issued in  non-monetary  transactions  involving  marketability
discounts  Magellan's  policy  is to  account  for  marketability  discounts  in
accordance with guidelines provided by published empirical studies and financial
research  on  marketability  discounts.

The  Agreements  provide  that,  other  than  for  cause, Patrick F. Charles and
Terrence K. Picken may not be terminated for any reason unless  Magellan  offers
in  writing  to  purchase all of their shares directly or  beneficially owned at
market price, as defined in the Agreements;  pays  in cash all amounts  owing to
the  officer  and;  pays in cash an amount for a buy-out of the remainder of the
Agreement  at  the  rate  of  50%  of  the  remaining  regular  salary.

The Agreements also require Magellan to provide death and disability benefits to
Patrick F. Charles and Terrence K. Picken or their estates equivalent to six (6)
months pay at the time of the death or disability.  Magellan is also required to
pay  an  automobile  allowance  of $750 per month each plus automobile operating
expenses,  and  for  a  membership  in  a  social/athletic  club.


-     COMPENSATION  OF  DIRECTORS
      -------------------------

Directors  may be paid their expenses of attendance at each meeting of the Board
of  Directors  and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director, however there are no standard
arrangements  in place pursuant to which the Company's directors are compensated
for  any services provided as director.  No compensation for director's fees was
paid  during  the  year  2000.


ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.
          ----------------------------------------------------------------------

This  table describes the ownership of the Company's outstanding common stock by
(i) each of the Company's Officers and Directors;  (ii) each person who is known
by  the  Company  to own more than 5% of the Company's outstanding common stock;
and  (iii)all  of  the  Company's  Officers  and  Directors  as  a  group:


<TABLE>
<CAPTION>
TITLE OF         NAME AND ADDRESS OF          AMOUNT AND NATURE OF    PERCENT OF
CLASS             BENEFICIAL OWNER            BENEFICIAL OWNERSHIP       CLASS
<S>       <C>                                <C>                      <C>
                                                     (Common Shares)
          ---------------------------------
Common    Patrick F. Charles                 10,250,000 (a)              9.3%
Stock     8756 122nd Ave. N.E.
          Kirkland, WA 98033
          ---------------------------------
Common    Terrence K. Picken                 10,250,000 (b)              9.3%
Stock     8756 122nd Ave. N.E.
          Kirkland, WA 98033
          ---------------------------------
Common    James G. Brewer                     1,500,000                  1.4%
Stock     8756 122nd Ave. N.E.
          Kirkland, WA 98033
          ---------------------------------  ----------                  ----
          All Officers and Directors
          as a group (3 persons)             22,000,000                 20.0%

</TABLE>



(a)   Includes  4,000,000 shares held by PDDE, LLC a State of Washington limited
      liability  company  formed in February 1998 of which Patrick F. Charles is
      Managing Member and owns controlling interest and 2,500,000 shares held by
      Coast Northwest  Management,  LLC a State of Washington  Limited Liability
      Company  formed  in  February  1998  of  which  Patrick  F.  Charles  is a
      co-Managing  Member  and  owns  a  50%  interest.

(b)   Includes  2,500,000  shares held by United West  Holdings  LLC, a State of
      Washington  limited  liability  company  formed in February  1998 of which
      Terrence  K.  Picken is  Managing  Member and owns  controlling  interest,
      1,500,000  shares held by TKY Holdings LLC, a State of Washington  limited
      liability  company  formed in February 1998 of which Terrence K. Picken is
      Managing Member and owns controlling  interest,  and 5,500,000 shares held
      by Coast Northwest Management LLC, a State of Washington limited liability
      company  formed  in  February  1998  of  which  Terrence  K.  Picken  is a
      co-Managing  Member  and  owns  a  50%  interest.

                                       29
<PAGE>

Item  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
          ----------------------------------------------


Coast  Northwest  Inc.  provided   substantially  all  of  Magellan's  corporate
administrative  services  including  use  of  office,  data processing and other
office  equipment, telephone and other telecommunications services, clerical and
financial  record  keeping, employee services and other corporate administrative
support  services since inception of Magellan's development stage activities for
which Magellan paid to Coast Northwest Inc.  $83,000 for the year ended December
31, 2000. Magellan's President, Patrick F. Charles and Executive Vice-President,
Terrence  K.  Picken,  collectively  own controlling interest in Coast Northwest
Inc.


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

a)  Exhibits


Exhibit
Number                                                        Description  **
------                                                        --------------


     3.1*                             Articles  of  Incorporation,  as  restated
                                      for  Magellan  Filmed  Entertainment, Inc.

     3.2                              Articles  of  Incorporation,  as  restated
                                      for  True  Fiction,  Inc.

     3.3                              Articles  of  Incorporation,  as  restated
                                      for  Magellan  Film  Sails,  Inc.

     3.4                              Articles  of  Incorporation,  as  restated
                                      for  Magellan  Productions  Corp.

     3.5*                             By-Laws  as  restated  for Magellan Filmed
                                      Entertainment,  Inc.

     3.5                              By-Laws  as  for  True  Fiction,  Inc.

     3.6                              By-Laws  for  Magellan  Film  Sails,  Inc.

     3.7                              By-Laws  for  Magellan  Productions  Corp.

     4.1*                             Specimen  Stock  Certificate  For Magellan
                                      Filmed  Entertainment,  Inc.

     4.2                              8%  Subordinated  Debenture  of The Nickel
                                      Palace,  Inc.

     4.3                              Assignment  and  Assumption  Agreement
                                      re: The Nickel Palace Inc. 8% subordinated
                                      Debentures

     4.4                              8%  Subordinated Debenture of True Fiction
                                      Inc.

     4.5                              Assignment  and  Assumption  Agreement
                                      re: True Fiction, Inc. 8% subordinated
                                      Debentures

     10.1*                            Stock  Exchange  Agreement  dated  as  of
                                      September 26, 2000 by and between Magellan
                                      Filmed  Entertainment, Inc. and The Nickel
                                      Palace,  Inc.

     10.2                             Share  Exchange  Agreement  dated November
                                      22,  2000,  between  Magellan  Filmed
                                      Entertainment, Inc. and True Fiction, Inc.

     10.3                             Corporate  Officer Agreement with Terrence
                                      K. Picken dated October 1, 2000

     10.4                             Corporate  Officer  Agreement with Patrick
                                      F. Charles dated October 1, 2000

     10.5                             Agreement with Franchise Pictures, LLC for
                                      for distribution of "Rennie's Landing" in
                                      foreign markets

     21                               Subsidiaries  of  the  Registrant

** Summaries of all Exhibits  contained within this  Registration  Statement are
modified  in  their  entirety  by  reference  to  these  Exhibits.

*  Exhibits  were  previously  filed.

                                       30
<PAGE>



(b)  REPORTS  ON  FORM  8-K

Reports  on  Form  8-K  -

October  12,  2000  -  Share Exchange Agreement between The Nickel Palace, Inc.,
and  Magellan  Filmed  Entertainment,  Inc.  dated as of September 26, 2000, and
effective  as  of  September  26,  2000.


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act  of  1934,  Magellan  Filmed Entertainment, Inc. has duly caused this annual
report on Form  10-KSB to be signed on its behalf by the  undersigned,  hereunto
duly  authorized.

Dated:  March  __,  2001.

Magellan  Filmed  Entertainment,  Inc.

By:  /s/  Patrick  F.  Charles

------------------------------------------
Patrick.  F.  Charles
CEO,  President  and  Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in  the  capacities  and  on  the  dates  indicated.

Name                                  Title                            Date

-----------------------
 /s/  Patrick  F.  Charles      CEO,  President and Director      April 16, 2001


-----------------------
/s/  Terrence  K.  Picken       Executive  Vice President         April 16, 2001
                                 and  Director


-----------------------
/s/  James  G.  Brewer          Vice President                    April 16, 2001
                                 Principal  Financial  Officer
                                 Principal  Accounting  Officer

                                       31
<PAGE>