================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                                       OR

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                        Commission file number: 000-23291

                               DigiTEC 2000, Inc.
             (Exact name of registrant as specified in its charter)

           Nevada                                       54-1287957
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                         99 Madison Avenue, Third Floor
                            New York, New York 10016
               (Address of Principal Executive Offices) (Zip Code)


       Registrant's Telephone Number, Including Area Code: (212) 944-8888

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No |_|

The number of outstanding  shares of the  Registrant's  Common Stock,  par value
$.001 per share (the "Common Stock") as of May 15, 2002 was 7,058,998.

================================================================================



<PAGE>
<TABLE>
<CAPTION>


                               DigiTEC 2000, INC.
                              INDEX TO FORM 10-QSB




                                                                                Page(s)
                                                                                -------
<S>                                                                              <C>

PART I -- FINANCIAL INFORMATION


ITEM 1 -- Financial Statements

Condensed Balance Sheet as of March 31, 2002 (Unaudited)........................    3

Condensed Statements of Loss for the Three Months and Nine
Months Ended March 31, 2002 and March 31, 2001 (Unaudited)......................    4

Condensed Statement of Stockholders' Deficit for the Nine Months
Ended March 31, 2002 (Unaudited)................................................    5

Condensed Statements of Cash Flows for the Nine Months Ended
March 31, 2002 and the Nine Months Ended March 31, 2001 (Unaudited).............  6 - 7

Notes to Condensed Financial Statements (Unaudited).............................  8 - 11


ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................. 12 - 16


ITEM 3--Quantitative and Qualitative Disclosures About Market Risk..............    16

Signatures......................................................................    17



</TABLE>




                                       2
<PAGE>



                                                              DigiTEC 2000, Inc.
                                             Condensed Balance Sheet (Unaudited)
================================================================================

                                                                  March 31, 2002
--------------------------------------------------------------------------------

Assets:
Current:
 Cash and cash equivalents                                          $    66,086
 Accounts receivable, net of allowance for bad
  debts of $2,496,496                                                 3,589,530
 Inventory, net of allowance for obsolescence of $30,037                691,890
 Prepaid expenses and other                                              44,592
-------------------------------------------------------------------------------

Total Current Assets                                                  4,392,098

Property and equipment, net of accumulated
 depreciation of $273,812                                               117,714
Other assets                                                            145,182
-------------------------------------------------------------------------------

Total Assets                                                        $ 4,654,994
===============================================================================

Liabilities and Stockholders' Deficit
Current Liabilities:
 Notes and accounts payable to TecNet, Inc.                         $19,069,706
 Accounts payable - trade                                             1,064,800
 Accrued taxes and penalties                                          2,716,836
 Accounts payable and accrued expenses                                  704,947
 Accrued legal expenses                                                 833,593
 Allowance for sales returns                                          1,293,663
-------------------------------------------------------------------------------

Total Current Liabilities                                            25,683,545
-------------------------------------------------------------------------------

Commitments and Contingencies                                                 -
-------------------------------------------------------------------------------

Stockholders' Deficit
 Series A Convertible  Preferred Stock,  $.001 par value,
   1,000,000 shares authorized; 61,050 shares issued
   and outstanding; $100 per share liquidation preference                    61
 Common Stock, $.001 par value, 100,000,000 shares
   authorized; 7,058,998 shares issued and outstanding                    7,059
 Additional paid-in-capital                                          18,782,651
 Accumulated deficit                                                (39,818,322)
-------------------------------------------------------------------------------

Total Stockholders' Deficit                                         (21,028,551)
-------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                         $ 4,654,994
===============================================================================


            See accompanying notes to Condensed Financial Statements.


                                       3
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<TABLE>
<CAPTION>


                                                                                     DigiTEC 2000, Inc.
                                                               Condensed Statements of Loss (Unaudited)
=======================================================================================================

                                          Three Months Ended March 31,       Nine Months Ended March 31,

                                             2002             2001              2002           2001

-------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>             <C>              <C>
Net sales                                   $4,900,257     $14,980,322     $11,162,003      $38,350,997
Cost of sales, primarily TecNet              4,135,659      13,043,487       9,967,151       33,322,781
-------------------------------------------------------------------------------------------------------

      Gross profit                             764,598       1,936,835       1,194,852        5,028,216

Selling, general and administrative
    expenses                                 1,027,150       2,168,566       3,218,897        6,524,554
-------------------------------------------------------------------------------------------------------

      Loss before other income
        (expenses)                            (262,552)       (231,731)     (2,024,045)      (1,496,338)
-------------------------------------------------------------------------------------------------------
Other income (expenses):
    Interest expense                          (259,708)       (323,953)       (803,240)        (748,996)
    Other income (expense)                          30         397,535          (8,254)         777,252
-------------------------------------------------------------------------------------------------------

         Other income (expenses), net         (259,678)         73,582        (811,494)          28,256
-------------------------------------------------------------------------------------------------------

Net loss                                    $ (522,230)    $  (158,149)    $(2,835,539)     $(1,468,082)
=======================================================================================================
Net loss per common share-basic
    and diluted                             $    (0.07)    $     (0.02)    $     (0.40)     $     (0.21)
=======================================================================================================
Weighted average number of common and
  common equivalent shares outstanding
  used in basic and diluted computations     7,058,998       7,058,998       7,058,998        7,058,998
=======================================================================================================


</TABLE>

                      See accompanying notes to Condensed Financial Statements.



                                                4
<PAGE>
<TABLE>
<CAPTION>

                                                                                                              DigiTEC 2000, Inc.
                                                                        Condensed Statement of Stockholders' Deficit (Unaudited)
================================================================================================================================

                                                      Nine Months Ended March 31, 2002
--------------------------------------------------------------------------------------------------------------------------------
                                   Preferred Stock        Common Stock                                                 Total
                                   ---------------     -----------------         Additional        Accumulated     stockholders'
                                   Shares   Amount     Shares      Amount      paid-in capital       deficit          deficit
--------------------------------------------------------------------------------------------------------------------------------

<S>                                <C>       <C>     <C>           <C>          <C>               <C>             <C>
Balance, July 1, 2001              61,050   $ 61     7,058,998     $7,059       $17,152,818       $(36,982,783)   $(19,822,845)

Contributed Capital                                                                  94,500                             94,500

Disposition of subsidiary                                                         1,535,333                          1,535,333

Net loss                               --     --            --         --                --         (2,835,539)     (2,835,539)

------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2002            61,050   $ 61     7,058,998     $7,059       $18,782,651       $(39,818,322)   $(21,028,551)
==============================================================================================================================






                                See accompanying notes to Condensed Financial Statements.


</TABLE>


                                                           5
<PAGE>
<TABLE>
<CAPTION>


                                                                  DigiTEC 2000, Inc.
                                      Condensed Statements of Cash Flows (Unaudited)
====================================================================================

                                                        Nine Months Ended March 31,
                                                           2002          2001
------------------------------------------------------------------------------------
<S>                                                   <C>                <C>
Cash flows from operating activities:
  Net loss                                            $(2,835,539)       $(1,468,082)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
   Provision for bad debts - net                          215,233            118,900
   Sales returns                                         (113,437)                 -
   Provision for inventory obsolescence                    36,248                  -
   Depreciation                                            65,370             60,928
   Amortization of intangible assets                       34,354             71,205
   Deferred rent                                                -             (6,006)
   Loss on disposal of assets                              19,600                  -
   Services provided by shareholder                        94,500             90,000
 Changes in operating assets and liabilities;
   net of the effects from acquisitions and
     divestitures:
   (Increase) decrease in:
     Accounts receivable - net                           (773,018)        (4,818,128)
     Inventory                                           (112,690)          (477,053)
     Prepaid expenses and other                           (79,892)          (235,057)
   Increase (decrease) in:
     Accrued taxes and penalties                          (47,578)         2,671,240
     Accounts payable and accrued expenses
       including TecNet                                 1,638,129            944,234
------------------------------------------------------------------------------------
       Net cash used in operating activities           (1,858,720)        (3,047,819)
------------------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                                   (115,205)          (122,105)
  Cash of divested subsidiary                            (110,635)                 -
------------------------------------------------------------------------------------
       Net cash used in investing activities             (225,840)          (122,105)
------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from short term loans                        1,144,031                  -
  Proceeds from TecNet notes                                    -          3,864,487
  Repayment of notes payable                                    -           (917,000)
------------------------------------------------------------------------------------
       Net cash provided by financing activities        1,144,031          2,947,487
------------------------------------------------------------------------------------

       Net decrease in cash and cash equivalents         (940,529)          (222,437)

Cash and cash equivalents beginning of period           1,006,615          1,165,854
------------------------------------------------------------------------------------
Cash and cash equivalents end of period                $   66,086        $   943,417
====================================================================================


</TABLE>

            See accompanying notes to Condensed Financial Statements.



                                       6
<PAGE>


                                                              DigiTEC 2000, Inc.
                                  Condensed Statements of Cash Flows (Continued)
                                  Supplemental Cash Flow Information (Unaudited)
================================================================================

                                                    Nine Months Ended March 31,
                                                       2002             2001
-------------------------------------------------------------------------------


Detail of divestitures:
   Current assets (other than cash)                $  719,570        $         -
   Property and equipment - net of depreciation       205,383                  -
   Intangibles and other noncurrent assets             14,373                  -
   Current liabilities                             (1,673,867)                 -
   Gain on disposition of subsidiary                  623,906                  -
--------------------------------------------------------------------------------
Cash of divested subsidiary                        $(110,635)        $         -
================================================================================



            See accompanying notes to Condensed Financial Statements.







                                        7
<PAGE>

                        DigiTEC 2000, Inc. and Subsidiary
               Notes to Condensed Financial Statements (Unaudited)


1.   The Company and Significant Accounting Policies:

     (a)   Organization of Business

     The Company was  organized  as a Nevada  corporation  in May 1987 under the
     name Yacht Havens  International  Corp, which was  subsequently  changed in
     July of 1995 to Promo Tel, Inc.  ("Promo  Tel-Nevada").  In August of 1995,
     Promo  Tel-Nevada  merged with Promo Tel, Inc.  ("Promo  Tel-Delaware"),  a
     Delaware   corporation,   exchanging  1,333,334  shares  of  the  Company's
     previously   unissued  and  unregistered   common  stock  for  all  of  the
     outstanding  shares of common  stock of Promo  Tel-Delaware.  In October of
     1996, the Company  formally amended its Articles of Incorporation to change
     the legal name of the Company to DigiTEC 2000, Inc. ("DigiTEC").

     (b)   Nature of Operations

     DigiTEC is primarily engaged in the creation, distribution and marketing of
     consumer  prepaid  telephone  calling  cards.  The Company's  prepaid cards
     provide  consumers  with  a  competitive  alternative  to  the  traditional
     pre-subscribed long-distance  telecommunications  services,  credit/calling
     cards and  conventional  coin and  other  operator  assisted  long-distance
     services.  It currently  markets its prepaid  products  throughout  the New
     York/New Jersey  metropolitan area. The Company sells its prepaid telephone
     cards in approximately 100 cities in twenty-nine U.S. states.

     In  November  of 1998 the  Company  initiated a strategy of focusing on the
     sales,  marketing and distribution of prepaid  telephone  calling cards. In
     connection with the initiation of such strategy,  TecNet,  Inc.  ("TecNet")
     began to provide significant telecommunications services to the Company and
     to finance its current  operations.  In February of 1999, the Company began
     to receive  semi-monthly  operating  cash inflows  from TecNet  through the
     issuance of 10% demand promissory  notes.  Although TecNet has not made any
     formal  demands  for the  repayment  of the  advances,  no  formal  written
     agreement  exists  between  the  Company  and  TecNet to  support  TecNet's
     continuing  deferral of repayment on such notes.  As of March 31, 2002 (and
     through the issuance date of this filing), the Company is totally dependent
     on TecNet to provide consulting services,  financing and telecommunications
     support until it has achieved profitable operations.  However, there can be
     no assurance that TecNet can or will continue to provide such services,  to
     finance the current  operations  or to provide  the  Company  with  bundled
     prepaid calling cards at comparable rates in future periods.

     (c)   Basis of Presentation

     The financial  statements  have been prepared in accordance with accounting
     principles  generally  accepted in the United States of America for interim
     financial  information and with the instructions to Form 10-QSB and Article
     10 of Regulation S-X. Accordingly,  they do not include all the information
     and footnotes required by accounting  principles  generally accepted in the
     United States of America for complete  financial  statements.  Although the
     Company  believes that the disclosures  included on the face of the interim
     Condensed  Financial  Statements  and in  the  accompanying  footnotes  are
     adequate  to  ensure  that the  information  presented  is not  misleading,
     certain key information  and  disclosures  have been condensed or otherwise
     omitted  pursuant  to the  SEC  rules  and  regulations  noted  above.  The
     presentation  of such  financial  statements  requires  management  to make
     estimates  and  judgments  that  affect  the  reported  amounts  of assets,
     liabilities,  revenues and expenses. Actual results could differ from those
     estimates.

     The  financial  information  presented  for both the three  months and nine
     months  ended March 31, 2002 and 2001 has not been  audited by  independent
     auditors;   however,   in  the  opinion  of  management,   all  adjustments
     (consisting of normal recurring accruals)  considered  necessary for a fair
     presentation  have been  included in  operating  results for both the three
     month and nine  month  period  ended  March  31,  2002 and 2001 and are not
     necessarily  indicative  of the  results  that may be  expected  for a full
     fiscal year. The information outlined in this Form 10-QSB should be read in
     conjunction  with  the  audited   consolidated   financial  statements  and
     footnotes  thereto  included in the Company's  Annual Report on Form 10-KSB
     for the fiscal year ended June 30, 2001.


                                       8
<PAGE>


                        DigiTEC 2000, Inc. and Subsidiary
               Notes to Condensed Financial Statements (Unaudited)

     The  accompanying   unaudited  Condensed  Financial  Statements  have  been
     prepared  on  the  basis  that  the  Company  is  a  going  concern,  which
     contemplates  the realization of assets and the satisfaction of liabilities
     in the  normal  course  of  business.  However,  because  of the  Company's
     recurring losses from  operations,  accumulated  deficit,  negative working
     capital  and  significant  arrearages  on trade  and other  payables,  such
     realization  of assets  and  satisfaction  of  liabilities  are  subject to
     significant  uncertainty.  The unaudited Condensed Financial  Statements do
     not  include  any  adjustments  that might  result from the outcome of this
     uncertainty.

     The Company's ability to continue as a going concern is highly dependent in
     the near term on both the  willingness and ability of TecNet to finance the
     Company's  telecommunications  products and  services  and working  capital
     shortfalls,  and the ability of the Company and TecNet to provide  reliable
     and competitive prepaid telephone cards. However, there can be no assurance
     that TecNet can or will continue to provide such  services,  to finance the
     current operations,  or to provide the Company with bundled prepaid calling
     cards at  comparable  rates in future  periods.  TecNet  is a wholly  owned
     subsidiary of Telephone Electronics  Corporation ("TEC") and is a holder of
     approximately 21% of DigiTEC's outstanding common stock. Additionally,  the
     Company's  overall  stability is highly dependent upon its ability to raise
     working capital, to increase market share while developing existing markets
     and improving overall customer retention,  to achieve profitable operations
     and  to  generate  sufficient  cash  flows  from  operating  and  financing
     activities to meet its obligations as they become due.

     As more fully  described in footnote 1(i), the Company's Board of Directors
     approved  a series of  transactions  resulting  in the  reorganization  and
     dilution of ownership of its subsidiary  POS TEC Systems,  LLC ("POS TEC"),
     due to the Company's  inability to provide the requisite  financing for POS
     TEC's current and future operations. As a result of the reorganization, POS
     TEC is no longer included within the consolidated  financial  statements of
     the Company effective October 2, 2001.

     Investments in  nonconsolidated  companies in which the Company has a 20 to
     50 percent  interest or otherwise  has the ability to exercise  significant
     influence over the operating and financial policies are accounted for using
     the  equity  method.  Under the equity  method,  original  investments  are
     recorded  at cost and  adjusted  by the  Company's  proportionate  share of
     undistributed earnings or losses of such companies. Investment ownership of
     less than 20 percent is accounted for under the cost method.

     (d)   Revenue Recognition

     Sales of bundled prepaid calling cards from third-party providers for which
     the Company acts solely as a distributor are recorded at the sales price of
     the card and are  recognized  as revenue  upon  delivery  to the  Company's
     customers.  The  related  costs are  simultaneously  charged to the cost of
     sales accounts upon such delivery. These costs primarily include the charge
     for  related  telecommunications  services  from TecNet  which  amounted to
     approximately 85% of the sales price of the cards, net of discounts and the
     printing costs of the underlying calling cards.

     The Company  provides  appropriate  provisions for prepaid phone card sales
     returns in the same period as the related revenues.

     (e)   Deferred Income Taxes

     Deferred  tax  assets and  liabilities  are  recognized  for the future tax
     consequences attributable to temporary differences between the consolidated
     financial statement carrying amounts of existing assets and liabilities and
     their  respective  tax bases and any  operating  loss or tax  credit  carry
     forwards.  Deferred tax assets and  liabilities  are measured using enacted
     tax rates  expected to apply to taxable  income in the years in which those
     temporary  differences are expected to be recovered or settled.  The effect
     on  deferred  tax  assets  and  liabilities  of a  change  in tax  rates is
     recognized in income in the period that includes the enactment date of such
     change. The Company has established a full valuation  allowance against its
     entire net deferred tax asset due to uncertainty  of realizing  certain tax
     credits and loss carry forwards.


                                       9
<PAGE>


                        DigiTEC 2000, Inc. and Subsidiary
               Notes to Condensed Financial Statements (Unaudited)

     (f)   Recent Accounting Pronouncements

     In June 2001, the FASB issued SFAS No. 141 "Business Combinations" and SFAS
     No. 142, "Goodwill and Other Intangible  Assets." SFAS No. 141 is effective
     for all business  combinations  initiated after June 30, 2001. SFAS No. 141
     will require companies to recognize acquired identifiable intangible assets
     separately  from goodwill if control over the future  economic  benefits of
     the asset results from  contractual or other legal rights or the intangible
     asset is  capable of being  separated  or  divided  and sold,  transferred,
     licensed,  rented or exchanged.  The Standards  will require the value of a
     separately  identifiable intangible asset meeting any of the above criteria
     to be measured  at fair value.  SFAS No. 142  requires  companies  to cease
     amortizing goodwill acquired through business  combinations.  However, SFAS
     No. 142 requires that  companies  assess  acquired  goodwill for impairment
     upon  adoption  of the  statement,  and at least  annually,  at the  lowest
     individual  reporting unit level that can be distinguished,  physically and
     operationally,  for internal reporting purposes, from the other activities,
     operations,  and assets of the entity,  utilizing a two-step approach.  The
     Company  expects to  implement  SFAS No. 142  effective  July 1, 2002,  and
     believes  that  such  adoption  will  not  have a  material  effect  on the
     Company's results of operations or financial position.

     In  August  2001,  the FASB  issued  SFAS No.  143  "Accounting  for  Asset
     Retirement  Obligations".  SFAS No. 143 addresses financial  accounting and
     reporting  for  obligations  and costs  associated  with the  retirement of
     tangible  long-lived  assets. The Company is required to implement SFAS No.
     143 on July 1,  2002,  and has not yet  determined  the  impact  that  this
     statement will have on its results of operations or financial position.

     In  October  2001,  the  FASB  issued  SFAS  No.  144  "Accounting  for the
     Impairment  or Disposal of Long-Lived  Assets".  SFAS No. 144 replaces SFAS
     No.  121  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
     Long-Lived  Assets  to be  Disposed  of"  and  establishes  accounting  and
     reporting  standards for long-lived  assets to be disposed of by sale. This
     standard  applies  to  all  long-lived   assets,   including   discontinued
     operations.  SFAS No. 144  requires  that those  assets be  measured at the
     lower of carrying amount or fair value less cost to sell. SFAS No. 144 also
     broadens the reporting of discontinued operations to include all components
     of an entity with operations that can be distinguished from the rest of the
     entity that will be eliminated from the ongoing operations of the entity in
     a disposal  transaction.  The Company is required to implement SFAS No. 144
     on July 1, 2002,  and has not yet determined the impact that this statement
     will have on its results of operations or financial position.

     In September 2000, the Emerging Issues Task Force ("EITF")  reached a final
     consensus on Issue No.  00-10,  "Accounting  for Shipping and Handling Fees
     and Costs".  EITF 00-10 is effective for fiscal year 2001 and addresses the
     income  statement  classification  of  amounts  charged  to  customers  for
     shipping and handling,  as well as costs  incurred  related to shipping and
     handling.  The Company  classifies  shipping and  handling  costs billed to
     customers as revenues and costs incurred  relating to shipping and handling
     as costs of sales, which is in accordance with the consensus in EITF 00-10.

     (g)   Segment Disclosures

     The  Company  adopted  SFAS No.  131,  "Disclosures  about  Segments  of an
     Enterprise  and Related  Information"  in the prior fiscal  year.  SFAS 131
     established  standards for the way that public business  enterprises report
     financial  information on operating business  segments.  As the Company has
     only one reportable business segment, prepaid telecommunications  services,
     the  adoption  and   implementation   of  the   disclosure   and  reporting
     requirements did not  significantly  affect the presentation of the results
     of operation or financial position of the Company.

     (h)   Related Party Transactions

     On January 11, 2002, the Company's Board of Directors  accepted an informal
     verbal  offer from TecNet  and/or a group of its  associates  to loan up to
     $1,200,000  to the  Company.  The terms of the  proposed  loan call for the
     payment of interest only for 12 months with  amortization  of the loan over

                                       10
<PAGE>

                        DigiTEC 2000, Inc. and Subsidiary
               Notes to Condensed Financial Statements (Unaudited)


     the following 36 months to be secured by the Company's accounts  receivable
     and such  other  terms  as are  negotiated  between  the  parties.  Pending
     completion  of the loan,  the  Company  will  have to rely upon  additional
     advances from the joint customer deposit account.

     TecNet   continues   to  provide   consulting   services,   financing   and
     telecommunications  support to the  Company on an  on-going  basis.  As the
     primary  provider of bundled  prepaid  calling card services to the Company
     and the sole carrier for carrying  the traffic and  processing  the minutes
     related to the prepaid calling cards,  TecNet provided  approximately  $4.0
     million and $8.0 million in telecommunications services for the three month
     and nine month  periods  ended March 31, 2002,  respectively.  In addition,
     TecNet provided approximately $32,000 and $95,000 of consulting services to
     the Company  during the three  months and nine months ended March 31, 2002,
     respectively, which have been accounted for as a capital contribution.

     However, as there is no formalized agreement between the parties, there can
     be no  assurance  that TecNet will  continue to provide such  services,  to
     finance the current  operations  or to provide  the  Company  with  bundled
     prepaid calling cards at comparable rates in future periods.

     (i)   Reorganization and Dilution of Ownership in POS TEC

     On July 3, 2001,  the Board of Directors of DigiTEC  decided to  reorganize
     POS TEC from an LLC to a Chapter C  corporation  to enable POS TEC to raise
     additional  capital  from  other  investors.  DigiTEC  formed a new  Nevada
     corporation, Everything Prepaid, Inc. ("EP").

     EP was organized with authorized  capital of 10,000,000 of common stock and
     1,000,000 of preferred  stock with all shares having a $.01 par value.  The
     preferred  stock may be issued with such relative  rights,  privileges  and
     qualifications  as  determined  by  EP's  Board  of  Directors.   Upon  its
     organization  EP issued  1,000  shares of its common  stock to DigiTEC  for
     $1,000.  POS TEC was then  merged  into EP with  DigiTEC  receiving  99,000
     shares of EP's common stock. At the time of the merger, DigiTEC and TecNet,
     Inc.,  an  indirect  21% owner of DigiTEC,  each agreed to convert  certain
     intercompany  debt  and  temporary  loans of POS TEC  assumed  by EP in the
     Merger into shares of EP's common stock at $1.00 per share resulting in the
     issuance of 911,427 shares to TecNet, Inc. and 988,573 shares to DigiTEC.

     Short term  loans of  approximately  $1.1  million  were  issued by various
     related  parties to  Everything  Prepaid,  Inc.  during the  quarter  ended
     September   30,   2001,   until   such  time  as  the   reorganization   of
     POSTEC/Everything  Prepaid,  Inc.  could be finalized.  The $1.1 million in
     short  term  loans  were  subsequently   converted  into  common  stock  of
     Everything Prepaid, Inc., as further discussed below.

     On September 27, 2001 and after  unsuccessful  attempts to raise additional
     capital  for EP,  the  Company  concluded  that it was  unable to assist or
     participate  in  the  further  necessary  financing  of EP and  approved  a
     transaction in which an aggregate of 8,000,000  shares of EP's common stock
     were sold on  October  2, 2001 at $.25 per  share  for  total  proceeds  of
     $2,000,000. The purchasers of this stock include: (i) Telephone Electronics
     Corporation (TEC), a principal shareholder of DigiTEC; (ii) persons who are
     principals or associates of TEC or TecNet,  Inc.;  (iii)  affiliates of EP;
     and (iv) the President of DigiTEC. As a result of the additional $2 million
     capitalization,  the  Company's  ownership  percentage in EP was reduced to
     approximately  11%, and  therefore EP will be accounted  for as an investee
     and no longer consolidated  within the financial  statements of the Company
     effective October 2, 2001.

     As a result of the  transactions  noted  above,  the Company  recognized  a
     capital  contribution of approximately  $1.5 million,  primarily related to
     the conversion of certain temporary loans due to TecNet and the infusion of
     cash by TEC,  TecNet  and other  related/non-related  investors  for equity
     ownership in EP.



                                       11
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL

The  following  discussion  should  be read in  conjunction  with the  Unaudited
Condensed Financial Statements,  including the notes thereto, and other detailed
information  regarding  the  Company  included  elsewhere  in this Form  10-QSB.
Certain  statements  set forth below  regarding  matters that are not historical
facts,  such as statements  concerning  the expansion and growth of the Company,
future growth in the demand for prepaid  phone cards and the Company's  plans to
become  a  sales,   marketing  and  distribution   company  are  forward-looking
statements  within the meaning of Section 27A of the  Securities Act and Section
21E of the Exchange Act. Because such  forward-looking  statements include risks
and uncertainties,  actual results may differ materially from those expressed or
implied by such forward-looking statements.

The Company commenced  operations under present management in 1995 to capitalize
upon  opportunities  in the  prepaid  phone  card  sector  of the long  distance
telecommunications   market.   The  Company's   target  markets  include  ethnic
communities with substantial  international long distance calling  requirements.
The  Company's   prepaid  phone  cards  provide  consumers  with  a  competitive
alternative  to  traditional  calling  cards  and  presubscribed  long  distance
telecommunications  services.  Retail rates in the  international  long distance
market have declined in recent years and, as  competition in this segment of the
telecommunications  industry  continues to intensify,  the Company believes that
this  downward  trend in rates is likely to continue.  Although  there can be no
assurance,  the Company  believes  that any reduction in rates will be offset in
whole or in part by efficiencies  attributable  to the planned  expansion of the
Company's  services as well as by lower  transmission costs per minute resulting
from the Company's increased volume of minutes. In addition, the Company expects
to produce favorable operating results in the future by increasing it's existing
retail distribution market, to introduce new products to its target market which
are cost  competitive on a per minute basis and to capitalize  upon economies of
scale within existing markets.

The Company's total revenues were approximately  $50,309,000,  $13,733,000,  and
$10,395,000,  and its net losses were approximately $3,241,000,  $4,500,000, and
$13,567,000   for  the  fiscal  years  ended  June  30,  2001,  2000  and  1999,
respectively.

The Company believes that future growth is dependent on the continued receipt of
operational and financial support from TecNet,  providing  customers with a high
quality  prepaid  product  at a  competitive  price,  and the  ability to obtain
competitive bundled prepaid cards from TecNet on favorable terms. However, there
can be no  assurance  that the Company  will  continue to receive the support of
TecNet or be able to achieve favorable operating results in future periods.

OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

NET SALES:

Sales, net of discount and returns,  decreased approximately $10.1 million (67%)
to approximately $4.9 million for the three month period ended March 31, 2002 as
compared to  approximately  $15.0 million for the three month period ended March
31,  2001.  The  Company  attributes  the  overall  decrease in net sales of its
prepaid  calling  card  products to  increases  in the  per-minute  rates on its
prepaid calling cards, as charged by TecNet for the underlying telecommunication
services.   The  rate   increases   during  2001  and  2002  caused  an  overall
deterioration  in brand  loyalty  and  customer  base within the  Company's  key
markets  allowing  competitors  to absorb a large  percentage  of the  Company's
existing  market share.  The rate  increases were directly  responsible  for the
severe and immediate decline in the Company's net sales (beginning third quarter
of 2001) and the  Company  has been  forced  to offer  deeper  discounts  on its
prepaid calling cards in an attempt to bolster sales.


                                       12
<PAGE>


The  Company  expects to  increase  overall  sales in future  periods by working
directly with TecNet to introduce new products  which are cost  competitive  and
which will focus on the specific needs of its target markets.  In addition,  the
Company  expects to  utilize  its future  cash  flows  from  operations  for the
expansion  of its existing  master  distributor  network and other  distribution
channels and the development of prospective markets for its prepaid products.

COST OF SALES:

The  Company's  cost of sales  decreased  approximately  $8.9  million  (68%) to
approximately  $4.1  million for the three month  period ended March 31, 2002 as
compared to  approximately  $13.0 million for the three month period ended March
31,  2001.  The  overall  cost of sales  decrease  is  directly  related  to the
decreased  volume of prepaid cards sales during the three months ended March 31,
2002,  offset by the increase in the per-minute  rates charged by TecNet for the
underlying telecommunication services, as further discussed above.

GROSS PROFIT:

The Company  realized a gross  profit of  approximately  $765,000  for the three
month period ended March 31, 2002 as compared to a gross profit of approximately
$1.9 million for the three month  period ended March 31, 2001.  The gross profit
decline is due to the overall combined effect of the prepaid card sales and cost
of sales factors noted above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

The  Company's   selling,   general  and   administrative   expenses   decreased
approximately  $1.2 million  (55%) to  approximately  $1.0 million for the three
month period ended March 31, 2002 as compared to approximately  $2.2 million for
the three month period ended March 31, 2001. The overall  decrease is related to
the combined effect of several factors.  Operational factors directly related to
the significant  decrease in net sales of the Company's prepaid cards during the
quarter ended March 31, 2002 include an overall decrease in federal excise taxes
of  approximately  $440,000,  decreased  shipping,  processing  and  fulfillment
charges of  approximately  $81,000,  a decrease  of  approximately  $105,000  in
advertising  and  promotional  expenses,  a decrease in  commissions  expense of
approximately   $9,000,   and  a  decrease  in  telephone  related  expenses  of
approximately  $48,000.  In  addition,  the  Company  experienced  a decrease in
payroll and employee benefit costs of  approximately  $219,000 and a decrease in
contract labor cost of approximately  $78,000 due primarily to a decrease in the
total  number of  employees  of the Company  attributable  to the reduced  sales
volumes noted above. Other contributing  factors include decreased rent and rent
related  expenses of  approximately  $31,000,  an overall decrease in office and
office  related  expenses of  approximately  $24,000,  a decrease  in  insurance
expense  of  approximately  $18,000,  decreased  depreciation  and  amortization
charges of approximately $35,000, a decrease in other miscellaneous expenditures
of approximately $12,000, a decrease in travel and business related expenditures
of  approximately  $49,000,   offset  by  an  overall  increase  in  repair  and
maintenance  expenses  of  approximately  $8,000.  In  addition,  the  Company's
professional  services  expenses  decreased   approximately  $2,000,  offset  by
increased shareholder relations and director's fees of approximately $2,000 from
the prior presented period.

LOSS BEFORE OTHER INCOME (EXPENSES):

The Company's loss before other income (expenses) of approximately  $263,000 for
the three month  period  ended March 31, 2002  increased  approximately  $31,000
(13%) as compared to the loss before other income  (expenses)  of  approximately
$232,000 for the three month period ended March 31, 2001.  The overall  increase
is directly  related to the  combination  of factors  noted above for net sales,
cost of sales and selling, general and administrative expenses.

OTHER INCOME (EXPENSES):

The Company's other income (expenses) changed  approximately  $334,000 (453%) to
approximately  $260,000  (expense,  net), for the three month period ended March
31, 2002 as compared to approximately $74,000 (income, net), for the three month
period ended March 31, 2001. The overall change is primarily due to the combined
effect of the following factors.  The Company  experienced a decrease in current
period  interest  expense  of  approximately  $64,000  related to the 10% demand
promissory notes payable to TecNet, a decrease in current period interest income
of approximately $25,000, and a decrease in penalties and interest attributed to
accrued federal excise tax obligations of approximately  $88,000, and a decrease
in other  miscellaneous  expenses of approximately  $66,000.  Offsetting factors
include a  one-time  non-recurring  credit to income of  approximately  $583,000
during  the  quarter  ended  March  31,  2001  which  related  primarily  to the
settlement of  outstanding  trade  payables with a vendor who  previously  was a
holder of the Company's outstanding preferred stock.



                                       13
<PAGE>


NET LOSS:

The  Company's  net loss of  approximately  $522,000  for the three month period
ended March 31, 2002 increased by  approximately  $364,000 (230%) as compared to
the net loss of  approximately  $158,000  for the three month period ended March
31, 2001. The overall increase is directly related to the factors noted above.

NINE MONTHS ENDED MARCH 31, 2002 COMPARED TO NINE MONTHS ENDED MARCH 31, 2001

NET SALES:

Sales, net of discount and returns,  decreased approximately $27.2 million (71%)
to approximately $11.2 million for the nine month period ended March 31, 2002 as
compared to  approximately  $38.4  million for the nine month period ended March
31,  2001.  The  Company  attributes  the  overall  decrease in net sales of its
prepaid  calling  card  products to  increases  in the  per-minute  rates on its
prepaid calling cards, as charged by TecNet for the underlying telecommunication
services.   The  rate   increases   during  2001  and  2002  caused  an  overall
deterioration  in brand  loyalty  and  customer  base within the  Company's  key
markets  allowing  competitors  to absorb a large  percentage  of the  Company's
existing  market share.  The rate  increases were directly  responsible  for the
severe and immediate decline in the Company's net sales (beginning third quarter
of 2001) and the  Company  has been  forced  to offer  deeper  discounts  on its
prepaid calling cards in an attempt to bolster sales.

The  Company  expects to  increase  overall  sales in future  periods by working
directly with TecNet to introduce new products  which are cost  competitive  and
which will focus on the specific needs of its target markets.  In addition,  the
Company  expects to  utilize  its future  cash  flows  from  operations  for the
expansion  of its existing  master  distributor  network and other  distribution
channels and the development of prospective markets for its prepaid products.

COST OF SALES:

The  Company's  cost of sales  decreased  approximately  $23.3  million (70%) to
approximately  $10.0  million for the nine month  period ended March 31, 2002 as
compared to  approximately  $33.3  million for the nine month period ended March
31,  2001.  The  overall  cost of sales  decrease  is  directly  related  to the
decreased  volume of prepaid  cards sales during the nine months ended March 31,
2002,  offset by the increase in the per-minute  rates charged by TecNet for the
underlying telecommunication services, as further discussed above.

GROSS PROFIT:

The Company realized a gross profit of  approximately  $1.2 million for the nine
month period ended March 31, 2002 as compared to a gross profit of approximately
$5.0 million for the nine month  period  ended March 31, 2001.  The gross profit
decline is due to the overall combined effect of the prepaid card sales and cost
of sales factors noted above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

The  Company's   selling,   general  and   administrative   expenses   decreased
approximately  $3.3  million  (51%) to  approximately  $3.2 million for the nine
month period ended March 31, 2002 as compared to approximately  $6.5 million for
the nine month period ended March 31, 2001.  The overall  decrease is related to
the combined effect of several factors.  Operational factors directly related to
the significant  decrease in net sales of the Company's prepaid cards during the
nine month period  ended March 31, 2002  include an overall  decrease in federal
excise taxes of approximately $1.2 million,  decreased shipping,  processing and
fulfillment  charges of  approximately  $230,000,  a decrease  of  approximately
$287,000 in  advertising  and  promotional  expenses,  a decrease in commissions
expense of approximately  $28,000,  and a decrease in telephone related expenses
of  approximately  $7,500.  In addition,  the Company  experienced a decrease in
payroll and employee benefit costs of  approximately  $751,000 and a decrease in
contract labor cost of approximately $210,000 due primarily to a decrease in the
total  number of  employees  of the Company  attributable  to the reduced  sales
volumes noted above. Other contributing  factors include decreased rent and rent
related  expenses of approximately  $178,000,  an overall decrease in office and
office  related  expenses of  approximately  $55,000,  a decrease  in  insurance
expense  of  approximately  $35,000,  decreased  depreciation  and  amortization
charges of approximately $66,000, a decrease in other miscellaneous expenditures
of approximately  $34,000, an increase in software and other product development
expenses of  approximately  $2,000,  a decrease in travel and  business  related
expenditures of approximately  $81,000,  offset by an overall increase in repair
and maintenance  expenses of approximately  $10,000. In addition,  the Company's
professional  services  expenses  decreased  approximately  $140,000 and overall
shareholder  relations and director's fees decreased  approximately $27,000 from
the prior presented period.



                                       14
<PAGE>



LOSS BEFORE OTHER INCOME (EXPENSES):

The Company's loss before other income (expenses) of approximately  $2.0 million
for the nine month period ended March 31, 2002 increased  approximately $528,000
(35%) as compared to the loss before other income  (expenses)  of  approximately
$1.5  million  for the nine month  period  ended  March 31,  2001.  The  overall
increase is directly  related to the  combination of factors noted above for net
sales, cost of sales and selling, general and administrative expenses.

OTHER INCOME (EXPENSES):

The Company's other income (expenses) changed approximately  $839,000 (2972%) to
approximately $811,000 (expense, net), for the nine month period ended March 31,
2002 as compared to  approximately  $28,000  (income,  net),  for the nine month
period ended March 31, 2001.  The overall change is primarily due to an increase
in current period interest expense of  approximately  $54,000 related to the 10%
demand promissory notes payable to TecNet, offset by a decrease in penalties and
interest  attributed to accrued federal excise tax obligations of  approximately
$231,000, a decrease in current period interest income of approximately $42,000,
and a decrease in other miscellaneous  expenses of approximately  $66,000. Other
offsetting factors include the recognition of two separate non-recurring credits
to income of  approximately  $583,000 and $408,000  related to the settlement of
outstanding  trade  payables with vendors during the nine months ended March 31,
2001.

NET LOSS:

The Company's net loss of  approximately  $2.8 million for the nine month period
ended March 31, 2002 increased by  approximately  $1.3 million (93%) as compared
to the net loss of  approximately  $1.5  million for the nine month period ended
March 31, 2001.  The overall  decrease is directly  related to the factors noted
above.

LIQUIDITY AND CAPITAL RESOURCES

FINANCING REQUIREMENTS

To date, the Company has funded its operations through: (i) two offerings, which
aggregated   $1,000,000  of  proceeds  to  the  Company  (ii)  the  exercise  of
approximately  2,280,000  warrants to purchase shares of the Common Stock of the
Company  at  $1.50  per  share  (the   "$1.50   Warrants"),   which   aggregated
approximately $3,400,000 of proceeds to the Company; (iii) sale of 61,050 shares
of the Company's Series A Preferred Stock,  which resulted in the elimination of
an accounts payable balance to Premiere totaling approximately $6,105,000;  (iv)
sale of  $1,200,000  principal  amount of the  Company's  Notes  with the $2.375
Warrants  (as  subsequently  exchanged,  the "10%  Notes");  (v)  issuance  of a
$100,000 10% promissory note to an officer/director  family member; and (vi) the
infusion  of  approximately  $18.6  million of  operating  capital  through  the
issuance of 10% demand  promissory  notes and the  extension  of trade credit by
TecNet.  All of the above  offerings  were  exempt from  registration  under the
applicable  Securities Act and have been utilized to fund the Company's  current
operations.

The  Company has no existing  bank lines of credit and has not  established  any
sources for such financing.

The Company's major components of cash flow are as follows:


                                                     NINE MONTHS ENDED MARCH 31,
                                                     ---------------------------
                                                         2002           2001
                                                     ------------   ------------
Net cash used in operating activities                $(1,858,720)   $(3,047,819)

Net cash used in investing activities                   (225,840)      (122,105)

Net cash provided by financing activities              1,144,031      2,947,487
                                                     -----------    -----------
Net change in cash and cash equivalents              $  (940,529)   $  (222,437)
                                                     ===========    ===========

The Company's net cash used in operating activities decreased approximately $1.2
million  (39%) to  $(1,858,720)  for the nine  months  ended  March 31,  2002 as
compared to  $(3,047,819)  for the nine months ended March 31, 2001. The overall
decrease in net cash used in  operating  activities  for the nine  months  ended
March 31, 2002 is related to the combined  effect of several key factors.  These


                                       15
<PAGE>


include an increase in the net provision for bad debt of approximately  $96,000,
a decrease in the  allowance  for sales returns of  approximately  $113,000,  an
increase in the collection velocity of accounts receivable of approximately $4.0
million,  an increase in the net loss of approximately $1.4 million, an increase
in the cash flow  effect of  accounts  payable  and other  accrued  expenses  of
approximately  $694,000, a decrease in the cash flow effect of accrued taxes and
penalties of approximately  $2.7 million,  a decrease in the cash flow effect of
prepaid  expenses and other assets of  approximately  $155,000 and a decrease in
the cash flow effect of inventory of approximately $364,000.

Cash used in  investing  activities  for the nine months ended March 31, 2002 is
related to capital  expenditures  of  approximately  $115,000 and  approximately
$111,000 net cash sold in the divestiture of the Company's subsidiary. Cash used
in investing  activities  for the nine months ended March 31, 2001 is related to
capital expenditures of approximately $122,000.

During the nine months  ended  March 31,  2002,  cash  provided  from  financing
activities  related  solely to the  issuance of  approximately  $1.1  million in
short-term debt to a related party of the Company.  During the nine months ended
March 31, 2001, cash provided from financing activities related primarily to the
issuance of approximately  $3.9 million of 10% demand promissory note to TecNet,
the repayment of approximately  $17,000 in principal on an outstanding loan with
a family  member of an  officer/director  of the Company,  and the  repayment of
approximately  $900,000  in  principal  to  the  holders  of  the  $1.2  million
promissory notes.

The Company expects capital  requirements of  approximately  $1.0 million during
fiscal 2002. The foregoing amount includes the necessary  capital to further the
expansion of the Company's prepaid products into additional cities and expanding
the Company's existing master distribution network. As the Company increases the
sales of its bundled prepaid products,  its capital requirements are expected to
progressively decline. If cash needs prove to be greater than contemplated,  the
Company  will need to slow the  expansion  of its prepaid  product  offerings to
additional cities during fiscal year 2002.

Since June 30, 1999, the Company has raised cash primarily  through the issuance
of 10% demand  promissory  notes payable to TecNet.  Since February of 1999, the
Company has been dependent on TecNet  financing its shortfalls in cash flows and
current operations and the provisioning of telecommunication services by TecNet.
The Company  expects to consider other financing  opportunities  during the 2002
fiscal year.  The Company  believes that with the  continued  support of TecNet,
internally  generated cash from  operations in fiscal 2002 will be sufficient to
fund its operations  throughout  the 2002 fiscal year.  Although the Company has
achieved  significant  improvements in cash flows from  operations,  it does not
expect to achieve positive cash flows from operations in the foreseeable future.
Additionally,  there can be no assurance that the foregoing  external sources of
financing  will be available to the Company,  or that the Company's  projections
for internal cash generation from current operations will be realized.

The  Company's  ability  to expand  its  operations  as a sales,  marketing  and
distribution  company and to generate  sufficient  cash flow to begin to address
its  obligations to TecNet and other  suppliers will be dependent upon continued
financing   by  TecNet  of  cash  flow   needs  and   continued   financing   of
telecommunications  services by TecNet.  In  addition,  the Company will need to
raise  long-term  capital.  There can be no assurance  that such  financing will
continue to be available to the Company from TecNet or that long-term  financing
will be obtained,  or if available,  will be available in either a timely manner
or upon terms and conditions acceptable to the Company.

For the nine months ended March 31, 2002,  the Company  experienced an operating
loss of approximately  $2.0 million and used  approximately $1.9 million of cash
in  operating  activities.  The  Company's  cash  position  at  March  31,  2002
approximated $66,000 and its working capital deficit approximated $21.3 million.
The Company  remains  undercapitalized  and to date has not been able to finance
its expansion as quickly as opportunities have arisen.

INFLATION

Management  does not believe that inflation has had, or is expected to have, any
significant  adverse impact on the Company's  financial  condition or results of
operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not hold any  derivatives  or  investments  that are subject to
material  market risk. The carrying values of financial  instruments,  including
cash and notes  payable  at March 31,  2002  approximates  fair value as of such
date, due to the short-term  maturity of such  instruments and the fact that the
underlying interest rates approximates current market rates of interest.

                                       16
<PAGE>


                                   SIGNATURES

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


Date: May 24, 2002                  DigiTEC 2000, Inc.
                                    (Registrant)


                                    By: /s/ Frank C. Magliato
                                        ----------------------------------------
                                        Frank C. Magliato
                                        Chief Executive Officer, President,
                                        Chairman of the Board of Directors and
                                        Chief Financial Officer


      May 24, 2002                  By: /s/ Diego E. Roca
                                        ----------------------------------------
                                        Diego E. Roca
                                        Senior Vice President, Chief
                                        Accounting Officer, Treasurer,
                                             Secretary and Director




                                       17