UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10-KSB/A

(Mark One)

         [X] Annual report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 (Fee required).

         For the fiscal year June 30, 1997

         Transition report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 (No fee required).

                 For the Transition period from:         to:

         Commission File Number. 0-24138

                             DIAMOND EQUITIES, INC.
                    (Formerly United Payphone Services, Inc.)
                    ----------------------------------------- 
                 (Name of Small Business Issuer in its Charter)

<TABLE>
<S>                                                              <C>       
                    Nevada                                       88-0232816
                    ------                                       ----------
         State or Other Jurisdiction of                          (I.R.S. Employer Identification No.)
         Incorporation or Organization


         2010 E. University Drive, Ste. # 3 - Tempe, Arizona     85281
         ---------------------------------------------------     -----
         (Address of Principal Executive Offices)                (Zip Code)
</TABLE>

                                 (602) 921-2760
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

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

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

                     Common Stock, par value $.001 per share
                     ---------------------------------------
                                Class A Warrants
                                ---------------- 
                                Class B Warrants
                                ----------------

         Check whether the issuer:  (1) filed all Reports to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

         Yes [X]     No
<PAGE>
         Check here if there is no disclosure  of delinquent  filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure  will be
contained,  to  the  best  of  registrant's  knowledge,  in  definite  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         The Issuer's revenues for the year ended June 30, 1997, were $ none .

         The aggregate  market value of the voting stock held by  non-affiliates
(approximately 1,775,034 shares as of September 27, 1997) based upon the average
of the bid and asked prices of such stock as of September  27, 1997, as reported
on the Electronic Bulletin Board, was $0.13.

         The number of shares of Common  Stock of the issuer  outstanding  as of
September 27, 1997, was 4,666,099.

         Transitional Small Business Disclosure Format (check one): Yes   No [X]

                      Documents incorporated by Reference:

         Certain  exhibits  required to be filed  herewith are  incorporated  by
reference  from the issuer's  registration  statement on Form 10-SB  (Commission
file No. 0-24138) filed with the Commission on May 13, 1994.  Also  incorporated
by reference into this Form 10-KSB are certain exhibits filed the Company's 1996
Annual Report on Form 10-KSB, the exhibits filed with the Company's Registration
Statement  on Form  SB-2  (Commission  File  number  33-85884)  filed  with  the
Commission  on October  24,  1994,  and the  exhibits  filed with the  Company's
Current Report on Form S8-K filed with the Commission on December 1, 1996.
                                       1
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
   PART I                                                                                      Page No.

<S>          <C>                                                                                 <C>
Item 1.      Description of Business ........................................................     3
Item 2.      Description of Property ........................................................     7
Item 3.      Legal Proceedings ..............................................................     7
Item 4.      Submission of Matters to a Vote of Security Holders ............................     8


PART II

Item 5.      Market Price of and Dividends on the Registrant's Common Equity and Other 
             Stockholder Matters ............................................................     8
Item 6.      Management's Discussion and Analysis or Plan of Operation ......................     9
Item 7.      Financial Statements ...........................................................    11
Item 8.      Changes in and Disagreements With Accountants ..................................    11


PART III

Item 9.      Directors, Executive Officers, Promoters and Control Persons ...................    12
Item 10.     Executive Compensation .........................................................    12
Item 11.     Security Ownership of Certain Beneficial Owners and Management .................    13
Item 12.     Certain Relationships and Related Transactions .................................    15
Item 13.     Exhibits List and Reports on Form 8-K ..........................................    16
</TABLE>
                                       2
<PAGE>
                                     PART I

         Item 1. Description of Business.

         History.  The  Company  was  organized  under  the laws of the State of
Nevada on July 24, 1987,  under the name of KTA  Corporation.  On September  25,
1989, the Company  changed its name to United  Payphone  Services,  Inc. At that
time, the Company was in the business of operating,  servicing and maintaining a
system of privately-owned  public pay telephones in Nevada. In January, 1990 the
Company  expanded its operations  into Arizona.  In December,  1994, the Company
sold all of its pay telephone location  contracts in Las Vegas,  Nevada, but did
not include the pay telephone  equipment.  All of the Nevada  equipment was then
relocated  to  Arizona  where the  Company  did  business  under the name  "U.S.
Payphone,  Inc." The Company  generated  revenues,  after the sale of its Nevada
contracts,  from coin and non-coin calls made from  approximately 865 telephones
located and installed throughout the State of Arizona.

         On November 15, 1996, the Company sold  substantially  all of its fixed
assets (the "Asset Sale") to Tru-Tel  Communications,  L.L.C.,  a Nevada limited
liability  company  ("Tru-Tel").  Under an asset purchase  agreement (the "Asset
Purchase  Agreement")  for $1,711,250 in cash and a secured  promissory  note of
$811,250  (the "Tru-Tel  Note").  The Tru-Tel Note is payable on a monthly basis
commencing on February 15, 1997, and bears interest at the rate of 8% per annum.
The final payment of all accrued and unpaid interest and  outstanding  principal
is due on or before  January 15, 2002.  The Tru-Tel Note is secured by a lien on
all assets  transferred  in the Asset Sale and is  further  secured by  personal
guarantees  of the  principals of Tru-Tel.  The Company  effected the Asset Sale
because the directors  determined that the changing  regulatory  environment and
business  prospects  would  have  a  negative  effect  on the  Company's  future
operations.

         The Asset  Purchase  Agreement  prohibits the Company from engaging in,
either directly or indirectly,  in any business which operates public or private
pay phones within the State of Arizona. In addition, the Company may not install
or maintain any phone equipment,  or provide related services,  for any party to
its existing contracts, which were sold to Tru-Tel. As a result, the Company has
had no business operations since the Asset Sale and had no income in fiscal year
1997. On June 20, 1997, the company changed its name to Diamond Equities, Inc.

         General.  The  Company  intends  to use  its  working  capital  to take
advantage  of  business  opportunities  which  may  arise  from  time  to  time.
Management  anticipates  that such  opportunities  will become  available to the
Company due primarily to its status as a small, publicly-held entity with liquid
assets and to its  flexibility  in  structuring  and  participating  in business
opportunities.  Decisions as to which business  opportunities to acquire will be
made by management of the Company, which will in all probability act without the
consent, vote or approval of the Company's  shareholders.  The Company presently
has no agreement,  understanding or arrangement to acquire or participate in any
specific  business  opportunity,  nor has it identified  any  opportunities  for
investigation.

         Plan of Operation.  The Company will seek corporate opportunities which
it finds or which are presented to it by persons or firms who or which desire to
employ  the  Company's  funds in their  business  and/or  obtain  the  perceived
advantages of a  publicly-held  corporation.  The Company's  principal  business
objective  will be to seek  long-term  growth  potential  in a business  venture
rather  than to seek  immediate,  short-term  earnings.  The  Company  will  not
restrict its search to any specific business, industry or geographical location,
and the Company may  participate in a business  venture of virtually any kind or
nature.  The  discussion  of  the  proposed  business  under  this  caption  and
throughout  this Form  10-KSB  is  purposefully  general  and is not meant to be
restrictive of the Company's  virtually  unlimited  discretion to search for and
enter into potential business opportunities.

         The Company's working capital will be used generally for the purpose of
identifying,  investigating, analyzing and acquiring business opportunities. The
Company's  proposed business is sometimes  referred to as a "blind pool" because
shareholders  will entrust their investment  monies to the Company's  management
before they have a chance to analyze any  ultimate  use to which their money may
be applied.  Consequently,  the Company's potential success is heavily dependent
on the Company's  management,  which will have virtually unlimited discretion in
searching for and entering into business opportunities.
                                       3
<PAGE>
         Management  anticipates  that it may be able to participate in only one
potential business venture, due primarily to the Company's limited capital. This
lack of  diversification  is a  substantial  risk in  investing  in the  Company
because it will not  permit the  Company  to offset  potential  losses  from one
venture  against  gains  from  another  and  will  expose  the  Company  to  the
cyclicality of any business in which it invests.

         The  Company  may  seek a  business  opportunity  in firms  which  have
recently commenced  operations,  are developing  companies in need of additional
funds for expansion  into new products or markets,  are seeking to develop a new
product or service,  or are  established  businesses  which may be  experiencing
financial or operating  difficulties and are in need of additional  capital.  In
some instances, a business opportunity may involve the acquisition of, or merger
with a corporation  which does not need  substantial  additional  cash but which
desires to establish a public trading  market for its common stock.  The Company
may  purchase  assets  and  establish   wholly-owned   subsidiaries  in  various
businesses or purchase existing businesses as subsidiaries.

         The Company anticipates that the selection of a business opportunity in
which to  participate  will be  complex.  However,  because of general  economic
conditions,  rapid  technological  advances being made in some  industries,  and
shortages of available  capital,  the Company  believes  that there are numerous
firms seeking even the limited  additional  capital which the Company has and/or
the  benefits of a  publicly-traded  corporation.  The  perceived  benefits of a
publicly-traded  corporation may include  facilitating or improving the terms on
which  additional  equity financing may be sought,  providing  liquidity for the
principals of a business, creating a means for providing incentive stock options
or  similar  benefits  to  key  employees,   providing   liquidity  (subject  to
restrictions of applicable  statutes) for all  shareholders,  and other factors.
Business  opportunities  may occur in many  different  industries and at various
stages  of  development,  all  of  which  will  make  the  task  of  comparative
investigation and analysis of such business  opportunities  extremely  difficult
and complex.

         The Company  may have  insufficient  capital  with which to provide the
owners of business opportunities with sufficient cash or other assets.  However,
the Company plans to offer owners of business  opportunities  the possibility of
acquiring a controlling  ownership interest in a public company at substantially
less cost than is required to conduct an initial public offering.  The owners of
the business  opportunities  will,  however,  incur  significant  post-merger or
acquisition  registration  costs if they wish to  register  a  portion  of their
shares for subsequent  sale. The Company will also incur  significant  legal and
accounting  costs in connection with the  acquisition of a business  opportunity
including the costs of preparing registration statements if required, Forms 8-K,
agreements and related reports and documents.

         In connection with the acquisition of or merger with another  business,
the Company may use a portion of its working  capital to make  short-term  (less
than one year) loans to a target  business.  The Company  will attempt to assure
that the borrower will have the ability to repay the loan within its stated term
and that the loan is either fully  secured or personally  guaranteed,  but there
can be no assurance in this regard. The Company may make unsecured loans as well
as secured loans and, in either event, could lose its entire principal in such a
loan.

         Evaluation of Opportunities. The analysis of new business opportunities
will be undertaken by or under the  supervision of the officers and directors of
the  Company,  none of whom is a  professional  business  analyst.  In analyzing
prospective business opportunities, management will consider such matters as the
available technical,  financial,  and managerial resources;  working capital and
other financial  requirements;  history of operation,  if any; prospects for the
future; nature of present and expected  competition;  the quality and experience
of management  services which may be available and the depth of such management;
the potential for further research,  development, or exploration;  specific risk
factors  not now  foreseeable  but which then may be  anticipated  to impact the
proposed activities of the Company;  the potential for growth or expansion;  the
potential  for  profit;  the  perceived  public  recognition  or  acceptance  of
products, services, or trades; name identification;  and other relevant factors.
Officers and directors of the Company will meet  personally  with management and
key  personnel  of the target  business as part of their  investigation.  To the
extent  possible,  the Company  intends to utilize  written reports and personal
investigation  to evaluate the above  factors.  The Company may allocate a minor
portion of its working capital for the retention of outside consultants,  if the
Board deems it necessary, to aid in the analysis of a business opportunity.
                                       4
<PAGE>
         Since the Company is subject to Section 13 of the Exchange Act, it will
be required  to furnish  certain  information  about  significant  acquisitions,
including audited  financial  statements for the company(s)  acquired,  covering
one, two or three years  depending  upon the relative  size of the  acquisition.
Consequently, acquisition prospects that do not have or are unable to obtain the
required  audited  statements may not be appropriate  for acquisition so long as
the reporting requirements of the Exchange Act are applicable.

         It  is   anticipated   that  any   opportunity  in  which  the  Company
participates  will  present  certain  risks.  Many  of  these  risks  cannot  be
adequately  identified prior to selection of the specific  opportunity,  and the
Company  must,  therefore,  depend on the ability of  management to identify and
evaluate such risks.  Certain of the opportunities  available to the Company may
have been unable to develop a going  concern or may be in  development  stage in
that they have not generated  significant revenues from their principal business
activities  prior to the Company's  participation.  In such cases,  the combined
enterprises  may not become  going  concerns or advance  beyond the  development
stage even after the  Company's  participation  in the  activity and the related
expenditure of the Company's findings. Many of the opportunities may involve new
and untested  products,  processes,  or market strategies which may not succeed.
Such risks will be assumed by the Company and, therefore, its shareholders.

         The Company will not restrict its search to any specific kind of firms,
but  may  acquire  a  venture  which  is in any  stage  of its  corporate  life,
including,  but not limited to,  companies  in the  development  stage and those
already in  operation.  It is  impossible  to predict at this time the status or
maturity  of any  business  in which the  Company  may  become  engaged  through
acquisition or otherwise.

         Acquisition of Opportunities.  In acquiring a particular business,  the
Company  may  become  party to a merger,  consolidation,  reorganization,  joint
venture,  or licensing agreement with another corporation or entity. It may also
purchase the stock or assets of an existing  business.  On the consummation of a
transaction,  it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the  Company's   directors  may,  as  part  of  the  terms  of  the  acquisition
transaction,  resign  and be  replaced  by new  directors  without a vote of the
Company's shareholders.

         It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions  from  registration  under  applicable
federal  and  state  securities  laws.  In  some  circumstances,  however,  as a
negotiated  element of this transaction,  the Company may agree to register such
securities  either at the time the  transaction  is  consummated,  under certain
conditions,  or at  specified  times  thereafter.  The  issuance of  substantial
additional securities and their potential sale into any trading market which may
develop in the Company's  Common Stock may adversely  affect the market for such
securities.

         While the actual terms of a  transaction  to which the Company may be a
party  cannot be  predicted,  it is expected  that the  parties to the  business
transaction  will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a "tax free"  reorganization under Sections
368(a)(1) or 351 of the Internal  Revenue Code of 1954, as amended (the "Code").
In order to obtain tax free  treatment  under the Code,  it may be necessary for
the owners of the  acquired  business to own 80% or more of all classes of stock
of the surviving entity.  In such event, the shareholders of the Company,  would
retain  less than 20% of the  issued  and  outstanding  shares of the  surviving
entity,  which could result in significant  dilution in the percent ownership of
such shareholders.

         As part of the Company's  investigation,  officers and directors of the
Company may meet with  management  and key  personnel of a target  company,  may
visit and inspect  facilities,  obtain  independent  analysis or verification of
certain information provided by such Company, check references of management and
key personnel,  and take other reasonable  investigative measures, to the extent
that the Company's limited financial resources and management expertise allow.

         The manner in which the Company  participates  in an  opportunity  will
depend on the nature of the opportunity, the respective needs and desires of the
Company  and other  parties,  the  management  of the  target  company,  and the
relative negotiating strength of the Company and such other management.
                                       5
<PAGE>
         With respect to any mergers or acquisitions,  negotiations  with target
company  management  will be expected to focus on the  percentage of the Company
which  target  company   shareholders   would  acquire  in  exchange  for  their
shareholdings  in the target company.  Depending upon,  among other things,  the
target company's assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the Company following
any  merger  or  acquisition.   Such  dilution  of  ownership  interest  may  be
significant in the event the Company  acquires a target company with substantial
assets.  Any merger or  acquisition  effected  by the Company can be expected to
have a  significant  dilutive  effect on the  percentage  of shares  held by the
Company's   shareholders,   including  those   Unitholders  who  continue  their
investment.

         It is  possible  that the  Company  will not  have  sufficient  working
capital to undertake any significant development, marketing, or manufacturing of
any product which may be acquired. Accordingly, following the acquisition of any
such  product,  the Company may be  required to either seek  additional  debt or
equity financing or obtain funding from third parties, in exchange for which the
Company may be required to give up a substantial  portion of its interest in any
acquired  product.  There can be no  assurance  that the Company will be able to
obtain  additional  financing or to interest third parties in providing  funding
for the  further  development,  marketing,  and  manufacturing  of any  products
acquired.

         The Company will  participate in a business  opportunity only after the
negotiation and execution of appropriate written agreements.  Although the terms
of such agreements  cannot be predicted,  generally such agreements will require
specific  representations  and  warranties by all of the parties  thereto,  will
specify  certain  events of  default,  will  detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to such closing,
will outline the manner of bearing costs if the transaction is not closed,  will
set  forth  remedies  on  default,  and will  include  other  terms  typical  in
transactions of such nature.

         It  is  anticipated  that  the   investigation  of  specific   business
opportunities  and  the  negotiation,   drafting,   and  execution  of  relevant
agreements, disclosure documents, and other instruments will require substantial
management time and attention and substantial costs for accountants,  attorneys,
and others,.  If a decision is made not to  participate  in a specific  business
opportunity,  the  costs  incurred  in the  related  investigation  would not be
recoverable.  Furthermore, even if an agreement is reached for the participation
in a specific business  opportunity,  the failure to consummate that transaction
may result in the loss to the Company of the related costs incurred.

         As is customary in the industry, the Company may pay a finder's fee for
locating  a merger or  acquisition  candidate  and for  location  of  additional
financing.  If any such fee is paid, it will be approved by the Company's  board
of directors and will be in accordance with industry standards. This type of fee
would not be paid to any employee, officer, director or a 5% or more shareholder
of the Company.

         The  foregoing  is a  forward-looking  statement  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended,  and is subject to the safe harbors
created thereby. Actual results could differ materially because of the following
factors:  the  inability  to  secure  business  operations;  losses  due  to  an
unprofitable new line of business; the continued employment of key management; a
change in control of the Company due to the conversion by Dingaan Holdings, S.A.
of its Series A 6% Preferred Stock or other events.

         Competition. The Company will be an insignificant participant among the
firms which engage in the acquisition of business opportunities.  There are many
established  venture  capital and financial  concerns  which have  significantly
greater  financial and personnel  resources  and  technical  expertise  than the
Company. In view of the Company's limited financial resources,  the Company will
continue  to  be at a  significant  competitive  disadvantage  compared  to  the
Company's  competitors.  Also, the Company will be competing with a large number
of other  small,  blind-pool,  public  companies  located in the  Southwest  and
elsewhere.

         Regulation and Taxation. In view of the Sales of Assets, the Company is
no longer  engaged  in the  telecommunications  business  and  therefore  is not
subject to  regulations  of such  activity by the FCC and state  public  service
conversions.
                                       6
<PAGE>
         The  Company  might,  in  certain  circumstances,  be  deemed  to be an
investment  company  under the  provisions  of Section  3(a)(3) of the 1940 Act,
which could have substantial adverse impact on its operations.  This could occur
if a significant  proportion of its working  capital were invested in short-term
debt  instruments  for longer  than a one-year  period  and the  Company  had no
significant  operations.  The Company  intends to take all  reasonable  steps to
avoid such classification.

         The  Company  intends to  structure a merger or  acquisition  in such a
manner as to minimize  federal and state tax consequences to the Company and any
target  company.  Management  of the  Company  will also  review any  mergers or
acquisitions  in an  effort  to  minimize  the  possibility  that any  merger or
acquisition  will be  classified  as a  taxable  event by the  Internal  Revenue
Service.

         Employees.  The Company  presently has three employees.  All engaged in
management,  administrative or clerical functions. The Company will also engage,
from time to time, services of outside consultants to assist it in evaluation of
prospective  target  companies.  The Company may allocate a minor portion of its
working capital for part-time secretarial services required by the Company.

         Item 2. Description of Property.

         Until September,  1997 the Company  maintained its offices rent-free in
office space provided by the Company's  President in his home. The President did
not  receive  any  rent,  but was  reimbursed  for  out-of-pocket  expenses  for
telephone use, etc., not to exceed $500.00 per month.

         On September 1, 1997,  the Company  leased  approximately  1,725 square
feet of office space,  located at 2010 E.  University  Drive,  Suite # 3, Tempe,
Arizona  85281.  The term, of the lease is from September 1, 1997 through August
31, 1999. The rent for the first year is $1036.80 plus tax per month and for the
second year, $1071.36 plus tax per month.

         Item 3. Legal Proceedings.

         Neither  the  Company  nor  any of its  properties  is a  party  to any
material  pending legal  proceedings or government  actions (except as set forth
below), including any material bankruptcy, receivership, or similar proceedings.
Except as set forth below, management of the Company does not believe that there
are any material  proceedings  to which any officer or affiliate of the Company,
any owner of record of  beneficially  of more than 5% of the Common Stock of the
Company,  or any  associate  of any such  director,  officer,  affiliate  of the
Company,  or security holder is a party adverse to the Company or has a material
interest adverse to the Company.

         Sales Tax Appeal.  In March,  1993,  the Arizona  Department of Revenue
issued an Arizona transaction privilege (sales) tax deficiency assessment in the
amount of $73,680 against the Company with respect to coin revenues  received in
operating  private pay telephones in the State of Arizona during the period from
January 1, 1990 through  January 31,  1993. A timely  protest was filed with the
Department seeking the abatement of the entire  assessment.  The principal issue
in the Company's  controversy  is the  taxability of its coin revenues under the
telecommunications  classification.  The  Company  does  not  believe  that  the
operation of private pay telephones constitutes  telecommunications  because pay
telephones do not transmit signals.  At the first  administrative  hearing,  the
hearing  officer for the Department  ruled in favor of the Company,  determining
that  the   operation  of  pay   telephones   did  not   constitute   intrastate
telecommunications  services.  Upon  review,  the  Director  of  the  Department
reversed  that  decision  and upheld the  assessments.  The case is now  pending
before the Arizona  State Board of Tax  Appeals.  Management  believes  that the
Company will incur a tax liability of approximately $130,000 upon the resolution
of this case.  The Company has previously  reserved an amount  sufficient to pay
this tax liability.

         Federal  Grand Jury  Indictments.  On November 6, 1996, a true bill was
returned by the Grand Jury in the United States District Court in Nevada against
certain  former  directors and officers of the Company and other  non-affiliated
individuals, who were accused of racketeering, RICO violations, securities fraud
and wire fraud.  All of the 
                                       7
<PAGE>
charges  against  the  former  directors  and  officers  arose  out  of  alleged
activities  the  individuals  while  serving as  directors  and  officers of the
Company.  The Company is not a party of and was not named as a defendant  in the
indictments.  However,  because the indictments  relate to activities alleged to
have been  perpetrated by then officers and directors of the Company,  there can
be no assurance that the indictments ultimately will not have a material adverse
effect on the Company.

         The persons  named in the  indictments  as  discussed  in prior  10-KSB
filings, are no longer officers, directors or control persons of the Company.

         The  government  informed  the  Company on August 21, 1996 that Mr. and
Mrs.   Westfere,   the  Company's  then  current  Chief  Executive  Officer  and
Secretary/Treasurer,  were  neither  subjects  or  targets  of  the  grand  jury
investigation,  and the  government  did not  contact  any  other  then  current
officers or employees  concerning  the  investigation.  The  government  has not
informed  the  Company  as to the  relief,  if any,  to be sought.  The  Company
complied  with  the  subpoena  duces  tecum  (to  produce  Company  records  and
documents) it received and cooperated with the government's  investigation.  The
Company is presently  unable to assess the potential  liability,  if any, to the
Company  as  a  result  of  activities  which  are  the  subject  of  the  above
investigation.

         Breach  of  Contract  Litigation.  In  connection  with the sale of its
pay-telephone  operations,  the  Company  received  a  promissory  note  in  the
principal  sum of  $811,250.  Monthly  payments  of  $14,000 on the note were to
commence on February 15, 1997.  No payments on the note have been  received.  On
March 18,  199'/ a complaint  for breach of  contract  was filed with the Eighth
Judicial  District  Court of Clark  County,  Nevada.  The  complaint  alleges an
anticipatory breach by the defendant, Tru-Tel Communications, LLC, issuer of the
promissory note. The complaint also names as party defendants, the principals of
Tru-Tel  Communications,  LLC and Finova  Capital  Corporation  (provider of the
financing used to purchase the assets.)

         The   defendants   have   responded  by  issuing   counterclaims.   The
counterclaims  allege  that the  revenues  of the  Company  reported  to Tru-Tel
Communications,  LLC and Finova Capital Corporation were purportedly  overstated
at the time of the asset purchase  agreement.  The Company intends to vigorously
contest  the  counterclaims  and pursue the  original  claims  against all party
defendants.  While it is not feasible at this time to predict or  determine  the
ultimate  financial  outcome of the complaint,  management does not believe that
the Company will be party to any unfavorable judgments.

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

         No matter was submitted  during the fiscal year ended June 30, 1997, to
a vote of the Company's security holders.

                                     PART II

         Item 5. Market for Common Equity and Related Stockholder Matters.

         The Company's Common Stock is currently traded in the  over-the-counter
market  and is  quoted  on the OTC  Bulletin  Board.  According  to  information
provided  to the  Company,  during the fiscal  year  ended June 30,  1997,  only
112,000 shares of the Company's  Common Stock were traded on the Bulletin Board.
The Company  therefore  believes  that there is no  established  public  trading
market for the Company's  Common Stock. The Company also believes that there are
only five market makers which  currently  make a market in the Company's  Common
Stock.  These quotations  reflect  inter-dealer  prices,  without retail markup,
markdown, or commission and may not necessarily represent actual transactions.
                                       8
<PAGE>

                                Quarter          High           Low

     Fiscal Year ended          First           $0.75          $0.50
       June 30, 1996            Second          $0.63          $0.50
                                Third           $0.69          $0.50
                                Fourth          $0.82          $0.50

     Fiscal Year ended          First           $0.50          $0.25
       June 30, 1997            Second          $0.25          $0.19
                                Third           $0.19          $0.13
                                Fourth          $0.13          $0.13

         As of  September  27,  1997,  there were  approximately  580 holders of
record of the Company's  Common Stock as reported to the Company by its transfer
agent.

         No cash  dividends  have been declared or paid to date on the Company's
Common Stock.  As of September 27, 1996, the Company had  outstanding 727 shares
of its Series A 6% Preferred  Stock which had preference on any dividends  paid.
The Company paid no  dividends on its Series A 6% Preferred  Stock in the fiscal
year ended June 30,  1997,  and the Company  has  $194,023 in accrued but unpaid
dividends  on such  Preferred  Stock for the fiscal  year  ended June 30,  1997.
Nevada law  restricts the funds from which  dividends  may legally be paid.  The
Company  anticipates that dividends for the foreseeable  future, if any, will be
limited to dividends  necessary to satisfy the Company's  obligations  under the
issued and outstanding  shares of the Company's  Series A 6% Preferred Stock and
that no dividends will be paid on Company's Common Stock.

         Item 6. Management's Discussion and Analysis or Plan of Operation.

Results of Operations

         Results of operations for the years ended June 30, 1997 and 1996

         On November  15,  1996,  the  Company  sold its  payphone  base and all
related equipment, contracts, automobiles and nearly all furniture & fixtures to
Tru-Tel  Communications,  L.L.C. for $1,711,250 in cash and a note receivable of
$811,250.  The Company  assigned the office and warehouse lease to the buyer and
moved its operations to another location in Tempe,  Arizona.  Since November 15,
1996,  the Company has been  winding  down  operations  relative to the payphone
business  and has been  involved in  searching  for new  business  ventures  and
operations to acquire in different industries.  Because the Company discontinued
its operations in the pay telephone industry in fiscal year 1997, the results of
operations will greatly differ from that of fiscal year 1996.

         The Company had net income of  $1,362,863 in the fiscal year ended June
30,  1997,  compared  to a net loss of $92,529 in the fiscal year ended June 30,
1996. The Company had net income  attributable  to its Common Stock (which gives
effect to dividends  accrued during such fiscal year on the Company's issued and
outstanding  Series A 6% Preferred  Stock) of $1,253,807  during the fiscal year
ended June 30, 1997,  compared to a net loss attributable to its Common Stock of
$201,585 in the fiscal year ended June 30, 1996.  The  difference  in net income
for the year ended June 30,  1997 is largely due to the gain  recognized  on the
sale of the operations of $1,688,750.

         The Company's gross revenues from the discontinued operations decreased
to $835,857 in the fiscal year ended June 30, 1997,  compared to  $2,127,574  in
the comparable  prior period,  a decrease of 61%.  Interest income  increased to
$98,076  in the  fiscal  year ended  June 30,  1997,  compared  to $2,995 in the
comparable prior period,  due to the increase in cash and notes receivable.  The
Company's cost of sales decreased by 65%, or to $346,775 for the year ended June
30,  1997 from  $988,876  for the year ended June 3 0, 1996.  As a result of the
foregoing, the Company's gross profit margins were 58.5% and 53.5% for the years
ended June 30, 1997 and 1996, respectively.  Management 
                                       9
<PAGE>
believes the increase in gross profit margin resulted  largely from the decrease
in coin  operated pay telephone  (copt) bills by  converting  phone bills to the
flat rate program.

         The Company's selling, general and administrative expenses decreased by
42% to $744,442 for the fiscal year ended June 30, 1997  compared to  $1,286,296
in the fiscal  year ended June 30,  1996.  The  decrease is due to the change of
operations  as well as a  large  decrease  in  depreciation  due to the  sale of
assets.  The  Company had a gain on the sale of  equipment  of  $1,860,019,  and
$3,625 in the fiscal  years ended June 30,  1997,  and 1996,  respectively.  The
difference was due to the sale of  approximately  99% of the fixed assets of the
Company.

         The  Company  issued 727 shares of its Series A 6%  Preferred  Stock to
Teletek in June 1994 in  consideration  for cash advances and the  settlement of
certain  litigation  involving the Company.  In 1997,  these shares were sold by
Teletek to Dingaan Holdings,  S.A., a major  shareholder of the Company,  during
the fiscal year ended June 30, 1997. The above shares require the Company to pay
a  cumulative  annual  dividend  equal to 6% of the face value of the  Preferred
Stock  ($1,817,591),  plus  accrued  and unpaid  dividends,  until  redeemed  or
converted. The Company accrued $109,056 in preferred dividends during the fiscal
year ended June 30, 1997, and paid  dividends of $24,088 and accrued  $84,468 in
preferred  dividends in the fiscal year June 30, 1996. During the year 1997, the
Company  paid the note  payable of  $113,760  for the 1995 and 1994  fiscal year
dividends that were unpaid.

         The Company's future results of operations will be materially  affected
due to the change of operations  and lack of significant  revenues.  The Company
anticipates  that in the fiscal year ending June 30, 1998,  that new  operations
will be secured to generate sufficient revenues to cover its operating expenses.
However,  no such  operations  have  yet  been  identified,  and  management  is
continuing  its search for a viable merger  candidate or business  operations to
begin.  The  foregoing  is a  forward-looking  statement  within the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended,  and is subject to the safe harbors
created thereby. Actual results could differ materially because of the following
factors:  the  inability  to  secure  business  operations;  losses  due  to  an
unprofitable new line of business; the continued employment of key management; a
change in control of the  Company  due to the  conversion  by Dingaan  Holdings,
S.A., of its Series A 6% Preferred Stock or other events.

         Results of Operations for the Years Ended June 30, 1996 and 1995

         The Company had a net loss of $92,529 in the fiscal year ended June 30,
1996, compared to a net loss of $190,163 in the fiscal year ended June 30, 1995.
The Company had a net loss  attributable to its Common Stock (which gives effect
to  dividends  accrued  during  such  fiscal  year on the  Company's  issued and
outstanding  Series A 6%  Preferred  Stock) of  $201,585  during the fiscal year
ended June 30, 1996, compared to a net loss attributable to its Conimon Stock of
$299,441 in the fiscal year ended June 30, 1995.

        The Company's gross revenues  increased to $2,127,574 in the fiscal year
ended June 30, 1996,  compared to $2,074,244 in the comparable prior period,  an
increase of 2.5% over the comparable  prior period.  The Company's cost of sales
increased  by 3.6%,  or to  $988,876,  for the year  ended  June 30,  1996  from
$954,385 for the year ended June 30,  1995.  As a result of the  foregoing,  the
Company's gross profit margins were 53.5% and 54.0% for the years ended June 30,
1996 and 1995, respectively.  The Company believes that this slight reduction in
gross  profit and gross  profit  margin  resulted  largely  from the decrease in
operator service revenues.  The Company had  miscellaneous  income of $48,499 in
the year ended  June 30,  1996,  compared  to $12,095 in the year ended June 30,
1995.  The Company's  Miscellaneous  income  includes  approximately  $42,000 in
income  recognized from a reserve  previously  taken to cover potential  charges
owed to AT&T.

         The Company's selling, general and administrative expenses decreased by
7. 1% to  $1,286,296  for the  fiscal  year  ended June 30,  1996,  compared  to
$1,384,225  in  the  fiscal  year  ended  June  30,  1995.   This  decrease  was
attributable to a reduction in depreciation and amortization charges to $319,518
in the current year from $438,331 in the comparable  prior period as a result of
the full  depreciation  and  amortization  of a portion of the  Company's  fixed
assets.  This Was offset by an  increase  of 2.2% in the  Company's  general and
administrative  expenses to $966,778  int he current  year from  $945,894 in the
comparable prior period as a result of expenses  incurred in connection with the
Company's SB-2 stock  offering.  The Company had a gain on the sale of equipment
of  $3,625  and  $58,117  in the  fiscal  
                                       10
<PAGE>
years ended June 30,  1996 and 1995,  respectively.  The gain in the  comparable
prior period  resulted  from the sale of the  Company's  Las Vegas pay telephone
location contracts in December 1994.

         Liquidity and Capital Resources

         The Company requires capital to support the general and  administrative
expenses of the Company in its search for viable operations.

         At June  30,  1997,  the  Company  had cash  and  cash  equivalents  of
$1,586,983,  compared to cash and cash equivalents of $694,293 at June 30, 1996.
This  increase  of $892,690  resulted  primarily  from the sale of the  payphone
operations,  from which the Company received $1,688,750.  The foregoing increase
in cash was offset by a net  decrease in cash of $118,228  from  continuing  and
discontinued operations, the return of the SB-2 offering of $458,250, the payoff
of long term debt of  $173,971,  and the  purchase of  property &  equipment  of
$45,611.

         The  funding  sources  currently   available  to  the  Company  include
potential public  offerings,  however,  the Company has no current plans to sell
additional shares of capital stock and has no third party financing arrangements
in place.  Therefore,  the  Company's  sole source of operating  capital for the
foreseeable future is likely to be from current cash reserves. Principal uses of
working capital will include payment of the Company's general and administrative
expenses and the Company's  liabilities for accrued and unpaid  dividends on its
outstanding shares of Series A 6% Preferred Stock.

         The Company believes that its existing cash balances and net cash flows
from  operations  (if  any)  will be  sufficient  to  meet  the  Company's  cash
requirements  for the next 12 months.  However,  the foregoing and the Company's
ability to operate  profitably are subject to material  uncertainties due to the
lack of signficant  revenues and  operations.  See Item 6 "Results of Operations
for the Fiscal  Years  Ended June 30, 1997 and 1996".  The Company is  exploring
various business  combinations,  in various industries which might result in the
acquisition of one or more  subsidiaries.  This may  materially  change the cash
requirements  of the  Company,  however the  Company  has not  entered  into any
agreement  concerning the foregoing,  and there may be no assurance that such an
agreement will be entered into by the Company.

         Item 7. Financial Statements.

         The following financial statements are attached hereto and incorporated
herein:

<TABLE>
<CAPTION>
                                 Heading                                                     Page
                                 -------                                                     ----
<S>                                                                                          <C>
Independent Auditor's Report                                                                 F-3

Balance Sheets for the Years Ended June 30, 1997 and 1996                                    F-4

Statements of Operations for the Years Ended June 30, 1997 and 1996                          F-5

Statements of Stockholder's Equity for the years ended June 30, 1997, 1996 and 1995          F-7

Statements of Cash Flows for the years ended June 30, 1997, 1996 and 1995                    F-8

Notes to Financial Statements                                                                F-9
</TABLE>

         Item 8. Changes in and Disagreements With Accountants.

         None.
                                       11
<PAGE>
                                    PART III

         Item 9. Directors, Executive Officers, Promoters and Control Persons.

         General.

         The  following  information  is  provided  for  each  of the  executive
officers and directors of the Company:

         David  Westfere,  age 31,  has been a  director,  president  and  chief
executive  and  operating  officer of the Company  since April 6, 1995,  and was
General  Manager of Operations  from January 1991 to April 1995. From 1988 until
1990 he was the route  supervisor  for the Company's pay telephone  operation in
Bakersfield, California, and from 1990 until 1991 he was the route supervisor of
the Company's pay telephone operation in Phoenix,  Arizona.  From September 1984
to June 1987 Mr. Westfere attended the University of Akron.

         Todd D. Chisholm, age 34, has been a director of the Company since June
27,  1995.  From June  1990  until  September  1992 he was  employed  as a staff
accountant by Orton & Company, Certified Public Accountants,  and from September
1992 until June 1994 he was employed as audit manager by Jones,  Jensen, Orton &
Company, Certified Public Accountants. Since June 1994 he has been self-employed
as a  certified  public  accountant.  Since  April  1995 he has  also  been  the
vice-president  and chief financial  officer of The Solarium,  Inc., a privately
held tanning salon. Mr. Chisholm  received a bachelor of arts degree in business
from the  University of Utah. He has been a certified  public  accountant  since
1992.

         Mr.  Westfere and Mrs.  Ramona  Westfere were appointed as directors of
the company on April 6, 1995 by the Company's  sole  remaining  directors at the
time.  Mr.  Chisholm  was  appointed  as a  director  on  June  27,  1995 by the
directors.  Mrs.  Westfere  resigned as a director and officer of the Company on
February 1, 1997.

         Compliance  with Section 16(a) of the Exchange Act.  Beginning with the
fiscal year ended June 30,  1995,  Teletek  Inc.,  a 10% owner of the  Company's
Common Stock during such fiscal year, failed to file a Form 3 on a timely basis.
Said party failed to file a Form 3 upon the Company registering its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, on or
about July 12,  1994.  Teletek also failed to file a Form 5 for such fiscal year
and for the fiscal year ended June 30, 1996. Teletek sold its holdings of Common
Stock of the Company on December 1, 1996 to Dingaan Holdings, S.A..

         Item 10. Executive Compensation.

         The  following  table set forth the  aggregate  executive  compensation
earned by or paid to current management of the Company for the fiscal year ended
June 30, 1997, 1996 and 1995.

<TABLE>
<CAPTION>
                                                            Annual Compensation
Name and Principal Positions          Year       Salary        Bonus        Other Annual Compensation

<S>                                   <C>       <C>            <C>                <C>           
David Westfere, President (1) (2)     1997      $36,800       $  0.00             $42,429.81 (3)
                                      1996      $32,400       $16,000             $46,972.00 (4)
                                      1995      $32,400       $16,000             $35,031.00 (5)
</TABLE>
-------------

(1) Mr. Westfere has been Chief Executive  Officer and a director of the Company
since April 6, 1995. He was the Company's  general manager of operations  during
the fiscal  year ended June 30,  1994 and during the  portion of the fiscal year
ended June 30,  1995 prior to being  appointed  Chief  Executive  Officer of the
Company.
                                       12
<PAGE>
(2) The Company did not pay any long-term  compensation  to Mr.  Westfere during
the above periods.

(3) During the fiscal year 1997, the Company paid (i) health insurance  premiums
of  $6,429.81  and (ii),  $36,000  to C&N,  Inc.,  a company  controlled  by Mr.
Westfere,  for management  services.  See "Item 12 - Certain  Relationships  and
Related Transactions.

(4) The Company paid health  insurance  premiums of $5,972 for Mr.  Westfere and
his family during the fiscal year 1996. The Company also paid a total of $36,000
to C&N, Inc., a company  controlled by Mr.  Westfere,  for  management  services
during such period.

(5) During the fiscal year 1995, the Company paid (i) health insurance  premiums
for Mr.  Westfere and his family of $ 8,331;  (ii) a car  allowance of $8,700 to
Mr.  Westfere;  (iii)  fees for  property  management  services  related  to the
Company's  leased office and warehouse  facilities of $6,000 to Mr. Westfere and
$12,000 to C&N, Inc., a corporation controlled by Mr. Westfere.

         No other  executive  officer of the Company  received any  compensation
exceeding $100,000 for the fiscal years ended June 1997, 1996, 1995.

         Compensation  of  Directors.  Directors  are permitted to receive fixed
fees and other  compensation  for their services as directors,  as determined by
the Board of Directors.  No such fees were paid to the  Company's  directors for
the fiscal year 1997.

         Item  11.  Security   Ownership  of  Certain   Beneficial   Owners  and
         Management.

         The  following  table sets forth  certain  information  concerning  the
Common Stock ownership as of September 27, 1997, of (i) each person who is known
to the  Company  to be the  beneficial  owner of more than five  percent  of the
Company's  Common  Stock;  (ii)  all  directors;  (iii)  each  of the  Company's
executive officers;  and (iv) directors and executive officers of the Company as
a group:

<TABLE>
<CAPTION>
Name and Address of Beneficial Owner           Amount and Nature of Beneficial        Percent of Class(8)
------------------------------------           --------------------------------       ----------------
                                                          Ownership
                                                          ---------
<S>                                                     <C>                                <C>
         Oak Holdings, Inc.                             2,500,000 (1)                      53.6%
           Apartado 63685
     Panama, Republic of Panama

       Grafton Holdings S.A.                            2,500,000 (2)                      53.6%
           Apartado 63685
     Panama, Republic of Panama

         Peter Robin Baily                              2,500,000 (3)                      53.6%
          Apartado 6-4569
  Panama City, Republic of Panama

           Pedro Coronado                               2,500,000 (4)                      53.6%
          Apartado 6-2495
  Panama City, Republic of Panama

       Dingaan Holdings, S.A.                             992,065 (5)                      21.3%(5)
        Enro Canadian Center
            First Floor
         Marlborough Street
          P.O. Box N-3802
          Nassau, Bahamas
</TABLE>
                                       13
<PAGE>
<TABLE>
<S>                                                     <C>                                <C>
          Todd D. Chisholm                                    0                             N/A
          50 West Broadway
             Suite 1130
     Salt Lake City, Utah 84101

           David Westfere                                  20,000 (6)                       (7)
       1725 West Third Street
          Tempe, AZ 85281

Directors and Executive Officers as a Group                20,000 (7)                       (7)
            (2 persons)
</TABLE>
----------------

(1) These shares are held directly and of record by Oak Holdings, Inc.

(2) These shares are held and of record by Oak Holdings, Inc., Grafton Holdings,
S.A.  ("Grafton") has indicated that it has direct beneficial  ownership of such
shares.  However,  the Company  believes that Grafton has indirect  ownership of
such shares as the sole  corporate  director of Oak Holdings,  Inc.. As the sole
corporate director of Oak Holdings, Inc., Grafton has represented to the Company
that it is responsible for the management of Oak Holdings, Inc..

(3) These shares are held by and of record by Oak Holdings,  Inc.. Mr. Baily has
indicated  to the Company  that he has  indirect  beneficial  ownership  of such
shares by virtue of being a controlling shareholder of Oak Holdings, Inc.
with Pedro Coronado.

(4) These shares are held  directly  and of record by Oak  Holdings,  Inc..  Mr.
Coronado has indicated to the Company that he has indirect beneficial  ownership
of such shares by virtue of being a  controlling  shareholder  of Oak  Holdings,
Inc..

(5) These shares were previously held by Teletek,  Inc., Las Vegas,  Nevada, and
were sold to Dingaan  Holdings,  S.A.  under a Stock  Purchase  Agreement  dated
December 1, 1996, the  consideration  for the transfer of the securities was the
forgiveness  of debt in the amount of two million  dollars  representing  a loan
made by Dingaan Holdings, S.A., to Teletek on August 22, 1996.

Of the shares sold, a total of 992,065  shares are now held of record by Dingaan
Holdings,  S.A.  ("Dingaan").  Based solely upon the foregoing  shares,  Dingaan
currently owns approximately 21.3% of the total issued and outstanding shares of
Common Stock of the Company (4,666,099  shares).  In addition,  Dingaan owns 727
shares of the Company's Series A 6% Preferred Stock. These shares of Series A 6%
Preferred  Stock are  convertible at 75% of the average bid prices of the Common
Stock for the ten trading days  immediately  prior to conversion  based upon the
cash amount attributable to such shares and any unpaid interest. The cash amount
of such preferred  shares,  plus unpaid interest,  as of September 27, 1997, was
approximately $2,011,614. The average bid price of the Company's Common Stock on
the 10 trading days immediately prior to September 27, 1997 was $0.13 per share.
Therefore,  based upon the  conversion  price of $.10 per  share,  the shares of
Series A 6% Preferred  Stock owned by Dingaan would be convertible  into a total
of 20,116,140  shares of the Company's Common Stock. In that event Dingaan would
own a total of  21,108,205  shares of Common  Stock,  or 85.2% of the total then
issued and outstanding shares of Common Stock of the Company.

(6) These shares are owned jointly by Mr. and Mrs. Westfere, husband and wife.

(7) Less than 1%.

(8) Percentages reflect the  beneficial  ownership of related parties. See above
footnotes.  The  above  table and  footnotes  reflects  the  removal  of certain
entities which no longer own 5% or more of the outstanding common stock.
                                       14
<PAGE>
As of September 27, 1997, the Company had  outstanding 727 shares of Series A 6%
Preferred Stock,  all of which shares were owned of record by Dingaan  Holdings,
S.A..

There are no arrangements known to the Company,  the operation of which may at a
subsequent date result in a change of control of the Company. However, if at any
time Dingaan  should elect to convert its shares of Series A 6% Preferred  Stock
into shares of Common Stock,  control of the Company would change to that entity
upon such conversion. See Footnote 5 to the Table immediately above. 

         Item 12. Certain Relationships and Related Transactions.

         The Company  pays  $3,000 per month to C&N,  Inc.  ("C&N"),  an Arizona
corporation,  for management  services.  The Company paid C&N a total of $36,000
under this agreement  during the fiscal year ended June 30, 1997. Mr.  Westfere,
an officer  and  director  of the  Company,  is the  president  of C&N,  and Mr.
Westfere and his wife and their minor children are C&N's sole shareholders.  The
agreement  between  the  Company and C&N  commenced  on January 1, 1995,  and is
renewable from year to year. The agreement was negotiated  between Mr.  Westfere
and former management of the Company as part of the total  compensation  package
for Mr. and Mrs.  Westfere.  It is believed  that the terms of the agreement are
more  favorable to Mr. and Mrs.  Westfere  than the Company  could obtain with a
non-affiliated party.

         Mr. Chisholm,  a director of the Company,  performs accounting services
for the  Company.  He is paid a flat fee of $890 per month for  compilation  and
payroll  services  and is paid an  hourly  fee for any  additional  work.  It is
believed  that the terms of the  arrangement  are at least as  favorable  as the
terms that could be obtained with a non-affiliated party.

         On October 3, 1996,  the Company and Mr. Michael G. Swan entered into a
Severance  Agreement,  pursuant to which (a) a prior  consulting  agreement  was
terminated;  (b) Mr. Swan is expressly  prohibited  from performing any services
for the company,  or from representing  himself to be an agent or representative
of the  Company,  without  the prior  written  consent  of the  Company's  Chief
Executive  Officer;  and (c) the Company agreed to pay Mr. Swan $5,000 per month
through April 1998.  The Company may  terminate  the Severance  Agreement in the
event Mr. Swan (i)  breaches  the  Severance  Agreement,  (ii) is convicted of a
felony  involving  or related to his  previous  employment  with the  Company or
services provided by him for the benefit of or related to the Company;  or (iii)
dies.
                                       15
<PAGE>
         Item 13. Exhibits List and Reports on Form 8-K.

         (a) The following  exhibits are furnished with this Report  pursuant to
Item 601 of Regulation S-B.

<TABLE>
<CAPTION>
Exhibit No.                              Description of Exhibit                                      Page
<S>             <C>                                                                                  <C>      
  3(i)          Articles of Incorporation as amended                                                 *

  3(ii)         By-Laws of the Company, as currently in effect                                       *

  3(iii)        Certificate regarding Series A 6% Preferred Stock                                    ***

  3(iv)         Certificate of Amendment of Articles of Incorporation, dated June 20, 1997           E-1

  4(a)          Form of certificate evidencing shares of Common Stock                                *

  4(b)          Form of certificate evidencing shares of Series A 6% Preferred Stock                 ***

  10.1          Assignment and Assumption of Liabilities Agreement                                   **

  10.2          Stock Purchase Agreement dated April 3, 1995 between Oak Holdings and                ****
                Teletek, Inc.

  10.3          Consulting Agreement dated April 6, 1995, between the Company and 
                Michael Swan                                                                         ****

  10.4          Consulting Agreement dated January 1, 1995, between the Company and 
                C&N, Inc.                                                                            ***

  10.5          Severance Agreement dated October 3, 1996 between the Company and 
                Michael Swan                                                                         *2

  10.6          Form 12b-25 dated September 27, 1997                                                 *****

  10.7          Stock Purchase Agreement between Teletek, Inc. and Dingaan  Holdings, S.A.           ******
                dated December 1, 1996 (change in control of registrant)

   27           Financial Data Schedule                                                              *3  
</TABLE>
-------------

*  Incorporated  by reference to the exhibits  with the  Company's  registration
statement on Form 10-SB  (Commission File No. 0-24138) filed with the Securities
and Exchange Commission on May 13, 1994.

**  Incorporated  by  reference to the exhibits  filed with the  Company's  1994
annual  report on Form  10-KSB  (Commission  File No.  0-24138)  filed  with the
Securities and Exchange Commission on October 13, 1994.

***  Incorporated  by  reference  to  the  exhibits  filed  with  the  Company's
registration statement on Form SB-2 (Commission File No. 33-85884).

****  Incorporated by reference to the exhibits filed with the Company's Current
Report on form 8-K  (Commission  File No. 0-24138) filed with the Securities and
Exchange Commission on December 1, 1996.

***** Incorporated by reference to the Company's Form 12b-25 dated September 27,
1997.
                                       16
<PAGE>
*2  Incorporated  by  reference to the exhibits  filed with the  Company's  1996
Annual  Report on Form  10-KSB  (Commission  file No.  0-24138)  filed  with the
Securities and Exchange Commission on October 11, 1996.

******  Incorporated by reference to the Company's current Report is on Form 8-K
(Commission File No. 0-24138) filed with the Securities and Exchange  Commission
on March 15, 1997.

         (b) A Form 8-K was filed  electronically by the Company on November 19,
1997 disclosing a change in security ownership by certain beneficial owners.

*3 Filed herewith and previously filed on Form 10-KSB/A on 1-20-98


                                   SIGNATURES

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


DIAMOND EQUITIES, INC.
----------------------
Registrant

By: /s/ David D. Westfere
    ---------------------
David D. Westfere, President


Date: January 26, 1998


By: /s/ Todd D. Chisholm
    --------------------
Todd D. Chisholm, Chief Financial Officer


Date: January 26, 1998

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.


By: /s/ David D. Westfere
    ---------------------
David D. Westfere, Director


Date: January 26, 1998


By: /s/ Todd D. Chisholm
    --------------------
Todd D. Chisholm, Director


Date: January 26, 1998
                                       17
<PAGE>
                                  FORM 10-KSB/A

                             DIAMOND EQUITIES, INC.
                    (Formerly United Payphone Services, Inc.)

                                    EXHIBITS


           3(iv) Certificate of Amendment of Articles of Incorporation
                               dated June 20, 1997

                           27 Financial Data Schedule
                                       18