UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 1997

[_]   TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
      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
--------------------------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   54-1287957
--------------------------------------------------------------------------------
                      (I.R.S. Employer Identification No.)

            8 West 38th Street, Fifth Floor, New York, New York 10018
--------------------------------------------------------------------------------
               (Address of principal executive offices - Zip code)

Registrant's telephone number, including area code: (212) 944-8888

Former name, former address and former fiscal year, if changes since last
report.

Indicate by checkmark 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 __

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by checkmark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.

                                  Yes __    No __

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.

Common Stock, $.001 par value, 5,434,766 outstanding as of February 12,1998.
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                                                           Index
================================================================================

Part I - Financial Information

            Item 1. Consolidated Financial Statements:

                    Balance sheets as of December 31, 1997 and
                      June 30, 1997                                           3

                    Statements of operations for the three and
                      six months ended December 31, 1997 and 1996             4

                    Statement of stockholders' equity (deficit)
                      for the six months ended December 31, 1997              5

                    Statements of cash flows for the six months
                      ended December 31, 1997 and 1996                        6

                    Notes to consolidated financial statements             7-13

            Item 2. Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                   14-22

                    Risk Factors                                          23-24

Part II - Other Information

            Items 1-6                                                     25-26

            Signatures                                                       27


                                                                               2
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                                     Consolidated Balance Sheets

                                                                     (Unaudited)
================================================================================
<TABLE>
<CAPTION>
                                                              December 31, 1997    June 30, 1997
-------------------------------------------------------------------------------------------------
<S>                                                                  <C>              <C>       
Assets
Current:
   Cash                                                              $  176,217       $  727,197
   Accounts receivable, net of allowance for bad debts of $75,000                   
      and $60,000, respectively                                       3,691,771        1,868,227
   Inventory                                                            964,932          218,877
   Prepaid expenses                                                     101,639           11,814
   Net assets of discontinued operations                                 84,398               --
-------------------------------------------------------------------------------------------------
           Total current assets                                       5,018,957        2,826,115
Property and equipment, net                                             118,140           64,397
Intangibles, net                                                        494,445          606,920
Goodwill, net                                                           491,788               --
Other assets                                                            131,287           29,291
-------------------------------------------------------------------------------------------------
                                                                     $6,254,617       $3,526,723
=================================================================================================
Liabilities and Stockholders' Equity (Deficit)                                      
Current:                                                                            
   Accounts payable                                                  $5,950,093       $2,842,891
   Accrued expenses and other current liabilities                       408,706          290,799
   Note payable - current                                               192,521          117,610
   Net liabilities of discontinued operations                                --          211,502
-------------------------------------------------------------------------------------------------
           Total current liabilities                                  6,551,320        3,462,802
Note payable                                                             12,481           64,390
Deferred rent                                                            76,000           71,000
-------------------------------------------------------------------------------------------------
           Total liabilities                                          6,639,801        3,598,192
-------------------------------------------------------------------------------------------------
Commitments and contingencies                                                       
Stockholders' equity (deficit):                                                     
   Preferred stock, $.001 par value, 1,000,000 shares authorized; no                
      shares outstanding                                                     --               --
   Common stock, $.001 par value, 100,000,000 shares authorized;                    
      5,117,433 and 4,858,418 shares issued and outstanding,                        
      respectively                                                        5,117            4,858
   Additional paid-in capital                                         4,411,779        3,602,462
   Accumulated deficit                                               (4,802,080)      (3,678,789)
-------------------------------------------------------------------------------------------------
           Total stockholders' equity (deficit)                        (385,184)         (71,469)
-------------------------------------------------------------------------------------------------
                                                                     $6,254,617       $3,526,723
=================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               3
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                           Consolidated Statements of Operations

                                                                     (Unaudited)
================================================================================
<TABLE>
<CAPTION>
                                                              For the Three Months Ended            For the Six Months Ended
                                                                      December 31,                         December 31,
--------------------------------------------------------------------------------------------------------------------------------
                                                                 1997              1996              1997              1996
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>               <C>               <C>               <C>         
Net sales                                                   $ 11,432,730      $  2,130,845      $ 24,613,043      $  4,663,146
Cost of sales                                                 10,943,831         2,028,600        22,959,045         4,652,319
--------------------------------------------------------------------------------------------------------------------------------
  Gross profit                                                   488,899           102,245         1,653,998            10,827

Selling, general and administrative expenses                   1,222,451           369,584         2,069,674           666,850
--------------------------------------------------------------------------------------------------------------------------------
   Loss from continuing operations                              (733,552)         (267,339)         (415,676)         (656,023)
--------------------------------------------------------------------------------------------------------------------------------
Discontinued operations:
Loss from operations of Cellular division                       (371,380)               --          (527,061)               --
Loss from operations of World Access                                  --                --          (105,554)               --
Loss on disposal of Cellular division                            (75,000)               --           (75,000)               --
--------------------------------------------------------------------------------------------------------------------------------
   Loss from discontinued operations                            (446,380)               --          (707,615)               --
--------------------------------------------------------------------------------------------------------------------------------
Net loss                                                    $ (1,179,932)     $   (267,339)     $ (1,123,291)     $   (656,023)
================================================================================================================================
Net loss per common share-basic and diluted:
   From continuing operations                               $       (.14)     $       (.06)     $       (.08)     $       (.14)
   From discontinued operations                                     (.09)               --              (.15)               --
--------------------------------------------------------------------------------------------------------------------------------
                                                            $       (.23)     $       (.06)     $       (.23)     $       (.14)
================================================================================================================================
Weighted average number of common and                          
   common equivalent shares outstanding                        5,050,649         4,664,427         4,954,649         4,664,427
================================================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                                                               4
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                        Consolidated Statement of Stockholders' Equity (Deficit)
                                                                     (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Six Months Ended December 31, 1997
--------------------------------------------------------------------------------------------------------------------------
                                                    Common Stock
                                                --------------------    Additional      Accumulated   Total stockholders'
                                                  Shares      Amount  paid-in capital     deficit      equity (deficit)
--------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>           <C>        <C>            <C>              <C>         
Balance, July 1, 1997                           4,858,418     $4,858     $3,602,462     $(3,678,789)     $   (71,469)
For the six months ended December 31, 1997:
   Exercise of warrants                           206,383        206        309,370              --          309,576
   Acquisition of Ameridial, Inc.                  52,632         53        499,947              --          500,000
   Net loss                                            --         --             --      (1,123,291)      (1,123,291)
--------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997                      5,117,433     $5,117     $4,411,779     $(4,802,080)     $  (385,184)
==========================================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               5
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                           Consolidated Statements of Cash Flows
                                                                     (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Six Months Ended December 31,                                                            1997      1996
--------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>       
Cash flows from operating activities:
   Net loss                                                                       $(1,123,291)     $(656,023)
   Adjustments to reconcile net loss to net cash used in operating
      activities:
        Amortization                                                                  120,686         26,524
        Depreciation                                                                   18,699          3,828
        Deferred rent                                                                   5,000             --
        Deferred income                                                                    --       (567,136)
        (Increase) decrease in:
           Accounts receivable                                                     (1,823,544)       (39,137)
           Inventory                                                                 (746,055)      (315,853)
           Prepaid expenses and other assets                                         (191,821)       417,565
        Increase (decrease) in:
           Accounts payable and accrued expenses                                    3,225,110        454,448
--------------------------------------------------------------------------------------------------------------
                Net cash used in operating activities of continuing
                   operations                                                        (515,216)      (675,784)
   Net cash used in operating activities of discontinued operations                  (295,900)            --
--------------------------------------------------------------------------------------------------------------
                Net cash used in operating activities                                (811,116)      (675,784)
--------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
   Capital expenditures                                                               (72,442)       (20,727)
   Proceeds from repayment of related party loans                                          --         42,000
   Payment received on note receivable                                                     --        200,000
--------------------------------------------------------------------------------------------------------------
                Net cash (used in) provided by investing activities                   (72,442)       221,273
--------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
   Note payable-auto                                                                   23,002             --
   Proceeds from exercise of warrants                                                 309,576             --
--------------------------------------------------------------------------------------------------------------
                Net cash provided by financing activities                             332,578             --
--------------------------------------------------------------------------------------------------------------
Net decrease in cash                                                                 (550,980)      (454,511)
Cash (including $367,363 of restricted cash at
    June 30, 1996), beginning of period                                               727,197        509,117
--------------------------------------------------------------------------------------------------------------
Cash, end of period                                                               $   176,217      $  54,606
==============================================================================================================
</TABLE>


                                                                               6
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

1. Summary of            (a)  Business
   Significant
   Accounting Policies        DigiTEC 2000, Inc. (formerly Promo Tel, Inc., the
                              "Company") is primarily engaged in the
                              distribution, marketing and management of prepaid
                              telephone calling cards. It currently markets its
                              telephone calling card products throughout the
                              United States, Virgin Islands and Puerto Rico.

                              On October 18, 1996, the Company changed its name
                              to DigiTEC 2000, Inc.

                         (b)  Organization

                              On July 11, 1995, Promo Tel, Inc., a Delaware
                              corporation ("Promo Tel-Delaware"), merged (the
                              "Merger") into Promo Tel, Inc., a Nevada
                              corporation ("Promo Tel-Nevada"). Immediately
                              prior to the Merger, Promo Tel-Nevada changed its
                              name from Yacht Havens International Corp. ("Yacht
                              Havens"). The surviving corporation remained Promo
                              Tel, Inc. Pursuant to the terms of the Merger,
                              Promo Tel-Nevada, which had 59,042 shares of its
                              common stock previously outstanding, exchanged
                              with the sole stockholder of Promo Tel-Delaware an
                              aggregate of 1,333,334 shares of previously
                              unissued $.001 Promo Tel-Nevada common stock for
                              the outstanding shares of Promo Tel-Delaware's
                              outstanding common stock.

                              Since the Merger resulted in voting control by the
                              stockholder of Promo Tel-Delaware and Promo
                              Tel-Delaware had the personnel and owned all the
                              assets to be utilized for its ongoing business,
                              the Merger was treated as a recapitalization of
                              Promo Tel-Delaware and the sale of 59,042 shares
                              of previously issued Promo Tel-Nevada common stock
                              for the net assets of Promo Tel-Nevada ($-0-).

                              Promo Tel-Delaware is the continuing entity for
                              financial reporting purposes, and the financial
                              statements prior to July 11, 1995 represent its
                              financial position and results of operations. The
                              assets, liabilities and results of operations of
                              Promo Tel-Nevada are included as of July 11, 1995.


                                                                               7
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

                              The Company was formed on May 18, 1995 and
                              commenced operations in July 1995.

                              Although Promo Tel-Delaware is deemed to be the
                              acquiring corporation for financial accounting and
                              reporting purposes, the legal status of Promo
                              Tel-Nevada as the surviving corporation will not
                              change. Promo Tel-Nevada had amended its Articles
                              of Incorporation to change its name from Promo
                              Tel, Inc. to the Company's current name (Note
                              1(a)).

                              In September 1996, the Board of Directors of the
                              Company approved a reverse stock split of the
                              Company's common stock ("Common Stock"). Each
                              stockholder of record on October 18, 1996 received
                              one share of new Common Stock for each six shares
                              of Common Stock held.

                              The equity accounts of the Company and all
                              disclosures have been retroactively adjusted to
                              reflect the recapitalization and the one-for-six
                              reverse stock split.

                         (c)  Principles of Consolidation

                              The consolidated financial statements include the
                              accounts of the Company and, from June 1, 1997 and
                              October 31, 1997, respectively, (Notes 2 and 3),
                              its wholly-owned subsidiaries, World Access
                              Solutions, Inc. ("World Access") and Ameridial,
                              Inc.("Ameridial"). All significant intercompany
                              balances and transactions have been eliminated.


                                                                               8
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

                              The consolidated financial statements and related
                              notes thereto as of December 31, 1997 and for the
                              three and six months ended December 31, 1997 and
                              1996 are unaudited but, in the opinion of
                              management, include all adjustments necessary to
                              present fairly the information set forth therein.
                              These adjustments consist solely of normal
                              recurring accruals. The consolidated balance sheet
                              information for June 30, 1997 was derived from the
                              audited consolidated financial statements included
                              in the Company's Form 10. These interim financial
                              statements should be read in conjunction with that
                              report. The interim results are not necessarily
                              indicative of the results for any future periods.

                         (d)  Earnings Per Share

                              In December 1996, the Financial Accounting
                              Standards Board issued Statement of Financial
                              Accounting Standards ("SFAS") No. 128, "Earnings
                              per Share", which is effective for both interim
                              and annual periods ending after December 15, 1997.
                              SFAS No. 128 requires that all prior period
                              earnings per share data be restated to conform to
                              this statement. The adoption of SFAS No. 128 did
                              not have a material effect on the Company's
                              earnings per share.

                              Basic earnings (loss) per share is calculated
                              using the weighted average shares outstanding
                              during the period. Diluted earnings (loss) per
                              share is calculated using the weighted average
                              shares outstanding during the period and dilutive
                              potential common shares. The dilutive earnings
                              (loss) per share has not been presented since the
                              effect of the options and warrants to purchase
                              Common Stock was anti-dilutive. The weighted
                              average shares have been retroactively adjusted to
                              reflect the exchange of the 1,333,334 shares and
                              the one-for-six reverse stock split (Note 1(b)).

                         (e)  Reclassifications

                              Certain amounts as previously reported have been
                              reclassified to conform to the 1997 presentation.


                                                                               9
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

2. Acquisition of             On October 31, 1997, the Company entered into an
   Ameridial, Inc.            agreement for the acquisition of all of the
                              outstanding shares of Ameridial, Inc., in exchange
                              for 52,632 shares of the Company's common stock.
                              The shares were valued based on the closing market
                              price on October 31, 1997 of $9.50 per share. The
                              acquisition was recorded under purchase accounting
                              with the entire value of the transaction being
                              attributed to goodwill to be amortized over 15
                              years.


                                                                              10
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

3. Discontinued          (a)  World Access
   Operations
                              The Company owned 40.3% of the outstanding common
                              stock of TecLink, Inc. ("TecLink"). The Company
                              helped establish TecLink as a Mississippi-based
                              internet service provider by selling to TecLink
                              certain internet service provider assets,
                              intellectual property, computer hardware, software
                              and office equipment (that it had previously
                              purchased from Telephone Electronics Corporation,
                              a related company, and others) as well as an
                              exclusive value added reseller distribution
                              contract from Hughes Corporation ("Hughes"). The
                              Company received in the sale $50,000 cash and a 6%
                              per annum promissory note of $2,405,000 due the
                              earlier of December 31, 1998 or upon the
                              completion of TecLink's initial public offering
                              (the "Note"). The Note was collateralized by the
                              assets of TecLink. $250,000 became due upon the
                              completion of a private placement of TecLink's
                              common stock. The Company accounted for its
                              investment in TecLink's common stock under the
                              equity method. As a result of TecLink's loss for
                              the year ended June 30, 1996, the investment was
                              written down to $-0- as of that date. The Company
                              did not reduce its carrying value of the note at
                              June 30, 1996 since it received the first $250,000
                              upon its due date and believed that its security
                              interest in the assets of TecLink was sufficient
                              at June 30, 1996 to cover the balance of the note.
                              Hughes and TecLink never reached an accord as to
                              Hughes' responsibilities under the distribution
                              contract. As such TecLink, was never able to fully
                              implement its business plan. As a result of this
                              and other factors, TecLink's initial public
                              offering was never consummated and TecLink
                              continued to experience losses. Due to the
                              continuing losses, the Company entered into an
                              agreement to acquire the net assets as partial
                              satisfaction of its outstanding balance of the
                              Note from TecLink ($2,105,000).


                                                                              11
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

                              As a result, the Company recorded a loss of
                              $1,340,230. The Company maintained its right to
                              part of any proceeds that TecLink may receive from
                              its claims against Hughes. The Company established
                              World Access as a wholly-owned subsidiary
                              providing internet access with the net assets
                              re-acquired from TecLink. As of June 30, 1997,
                              management determined that it needed to focus on
                              its core business and would discontinue the
                              operations of World Access by selling its net
                              assets. 

                              On October 1, 1997, the Company entered into an
                              agreement (the "Agreement") to sell the customer
                              base, the hardware related to servicing the
                              customer base and its obligations under World
                              Access' leases for its premises and telephone
                              equipment to Meta3, Inc. ("Meta3"), a Mississippi
                              corporation in a similar line of business. The
                              Agreement calls for Meta3 to pay for the
                              subscribers at $10 per month per customer for ten
                              months. The amount to be paid will be adjusted by
                              the identified customer base's net attrition rate
                              for the first five months of the purchase period.
                              As a result of the Agreement and the Company's
                              plan to dispose of the remaining assets and
                              liabilities, the Company recorded a loss on
                              disposal of $893,347 for the year ended June 30,
                              1997. For the three and six months ended December
                              31, 1997, the Company incurred an additional loss
                              of $0 and $105,554, respectively, on the
                              discontinued operations of World Access. At
                              December 31, 1997, $50,000 remains accrued for the
                              estimated loss related to the operations of World
                              Access for the year ended June 30, 1998. The
                              assets and liabilities of World Access, as of
                              December 31, 1997 are as follows:


                                                                              12
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                       Item 1. Consolidated Financial Statements
                                      Notes To Consolidated Financial Statements
                                                                     (Unaudited)
================================================================================

                              Accounts receivable                  $   23,000

                              Inventory                               123,000

                              Receivable from Meta3                   246,000

                              Other assets                             12,000

                              Accounts payable                       (132,497)

                              Other liabilities                      (230,000)
                              --------------------------------------------------
                              Net assets of World Access           $   41,503
                              ==================================================

                              The Company intends to use the proceeds from the
                              sale of the assets to Meta3, as well as the
                              proceeds from the sale or collection of the
                              remaining assets, to liquidate the liabilities.

                              (b) Cellular division

                              On December 31, 1997, management adopted a formal
                              plan to abandon the operations of its cellular
                              division as a result of the Company's continuing
                              plan to conserve assets to focus on and expand its
                              core business. The Company recorded a loss of
                              $371,380 and $527,061, respectively, for the three
                              and six months ended December 31, 1997. At
                              December 31, 1997, $75,000 is recorded for the
                              estimated additional losses related to the
                              operations of the cellular division for the period
                              subsequent to the six months ended December 31,
                              1997. The Company does not anticipate any
                              additional charges to be recognized related to the
                              operations of its cellular division. The net
                              assets of the cellular division, which consist of
                              accounts receivable, inventory and other
                              liabilities, totaled $42,895 at December 31, 1997.
                              The operations of the cellular division were
                              completely ceased by February 1, 1998.

4. Subsequent Event      On February 2, 1998, warrants to purchase 317,333
                         shares of the Company's common stock were exercised
                         resulting in net proceeds to the Company of
                         approximately $476,000.


                                                                              13
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

The following discussion should be read in conjunction with the consolidated
financial statements included elsewhere in this Form 10-Q.

Forward Looking Statements

The information set forth in this Form 10-Q includes "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "33 Act"), and Section 21E of the Securities Exchange Act of 1934,
as amended. Words "estimated", "intends", "believes", "plans", "planning",
"expects", and "if" are intended to identify forward looking statements.
Although management believes that the assumptions made and expectations
reflected in the forward looking statements are reasonable, it must be
recognized that there is no assurance that the underlying assumptions will, in
fact, prove to be correct, or that actual future results will not be different
from the Company's expectations.

Introduction

The Company was founded in 1995 to exploit the prepaid phone card sector of the
long distance phone service market.

The Company's sales are primarily derived from the resale of bundled prepaid
telephone cards. The Company resells the cards, at a discount off the face value
of the cards, to either master distributors or retail outlets, depending on the
locality of distribution. The Company's cost of sales consists primarily of the
purchase of the prepaid card at a greater discount off the face value than what
they sell it for, thereby receiving its gross margin on the difference of
discounts given to its customers and the discounts the Company receives from its
long distance provider. Since the card is sold to the Company as a bundled
product, the long distance provider is liable to the end user for the time
remaining on the cards. At the point of sale, the Company has no further
obligation towards the cards sold. During fiscal 1996 and the three months ended
September 30, 1996, one of the products sold by the Company was a proprietary
switchless unbundled phone card. Under this arrangement, the Company negotiated
and was responsible to the long distance carriers and platform provider for the
long distance usage and related platform fee charges incurred in connection with
providing service to the end users (unlike the bundled products whereby the
Company is acting as a distributor of phone cards). Since the Company was not
liable for the usage and platform fees on the underlying traffic until it was
consumed by the end user, the Company was required to record deferred revenue
for any unused time on cards sold.

The Company believes that its ability to negotiate competitive rates with its
long distance providers, to create brand awareness and to connect with certain
ethnic markets are the primary reasons for its sales increases in fiscal 1997
and for the three and six months ended December 31, 1997 as compared to the
three and six months ended December 31, 1996. While the Company has been able to
negotiate fair and competitive rates from its long distance providers, the
Company intends to lessen its dependence on such providers to a certain


                                                                              14
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

extent through the construction of its own platforms. As a result of the
deployment of the Company's own platforms, the Company would look to negotiate
more competitive rates with its long distance providers. Based on the Company's
cost analysis, the total cost per call under the platforms is expected to be
less than the bundled card product that it presently purchases. This is expected
to have positive impact on the Company's gross margins as well as its cash
generated from operations. The Company may continue to purchase the cards as a
bundled product. The Company is presently negotiating for the construction of
its platforms; however, it has not yet entered into any definitive agreements
related to the purchase of such equipment to date or the related financing of
such equipment.

Three Months Ended  December 31, 1997 Compared to
  Three Months Ended December 31, 1996

Sales. Sales for the three months ended December 31, 1997 increased by
$9,301,885 or 436.5% over the second quarter of the prior year. For the three
months ended December 31, 1996, the Company's sales were $2,130,845 as the
Company was still introducing its Company branded, bundled products (cards
purchased from a provider) that it commenced during the three months ended
September 30, 1996, and also competing in a highly competitive marketplace.

During the second quarter of fiscal 1997, the Company negotiated an agreement
with Frontier Corporation ("Frontier"). This resulted in the offering of more
reliable and competitively priced products by the Company that, by the end of
the second half of fiscal 1997, became more recognizable by consumers, thereby
increasing brand awareness. As a result of the Company's continuing brand
awareness into fiscal 1998, the Company's sales for the three months ended
December 31, 1997 were $11,432,730. Sales for the second quarter of fiscal 1998
were impacted by the Company altering its relationship with a master distributor
who accounted for 42% and 54% of sales during the three months ended September
30, 1997 and the year ended June 30, 1997, respectively. During September, 1997,
the Company terminated the exclusivity clause in the agreement with this master
distributor. This master distributor accounted for 8% of sales for the three
months ended December 31, 1997. The Company does not anticipate an extended
period of decreased sales as a result of this change since the Company has the
proper infrastructure in place to deliver products directly to the
sub-distributors and retailers. Due to this change and expansion into new areas
of distribution, the Company anticipates that its concentration of sales with
any particular customer will be significantly reduced for fiscal 1998.

Cost of Sales. The Company's cost of sales for the three months ended December
31, 1997 increased to $10,943,831 from $2,028,600 for the three months ended
December 31, 1996. The increase of $8,915,231 or 439.4% was primarily related to
the increase in revenues that the Company experienced in the three months ended
December 31, 1997 as compared to the second quarter in the prior year.

                                                                              15
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

Gross Profit. Gross profit for the three months ended December 31, 1997 was
$488,899 as compared to a gross profit of $102,245 for the three months ended
December 31, 1996. While the Company's gross profit as a percentage of sales was
in line with the three months ended December 31, 1996, it decreased as compared
to the three months ended September 30, 1997. The decrease resulted from the
Company increasing its discounts to sub-distributors to generate sales in order
to try to maintain its market share as it moved away from its significant master
distributor (See Sales above). The Company anticipates that it will increase its
rates to its customers as it evaluates its relationship with its
sub-distributors.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the three months ended December 31, 1997 increased
to $1,222,451 from $369,584 for the three months ended December 31, 1996. This
increase of $852,867 or 230.8% is primarily related to the increase in volume
over the three months ended December 31, 1996 and the Company's plan to increase
its infrastructure in anticipation of moving its existing brands to a
switched-based platform and expansion into other segments of the
telecommunications industry.

Salaries and personnel related expenses increased by $328,851 as the Company's
employees increased to 68 full-time employees by December 31, 1997. The increase
in employees has been fueled by the increase in operations as well as the
commencement of a carrier services division to broker rates between carriers as
well as negotiate rates for the Company as it introduces its current brands
under an unbundled arrangement and introduces new services. In addition, the
Company added personnel in anticipation of the Company's plan for growth in the
later half of fiscal 1998.

The Company's rent expense increased by $40,444 primarily due to rental payments
under the lease for the Company's new distribution and administrative
headquarters which the Company began occupying April 1, 1997. Advertising,
telephone, utilities, travel and entertainment and repairs and maintenance
increased by $152,115, $63,268, $28,864, $24,857, and $23,281, respectively,
primarily related to an increase in the Company's business. The Company's
professional fees also increased by $54,064 primarily due to having increased
needs for accounting and corporate consulting. Amortization related to
intangibles increased by $51,297 primarily due to the acquisition of customer
bases during fiscal 1997. Administrative field expenses increased to $55,752 for
the three months ended December 31, 1997 as the Company expanded its field
routes to retail locations. The Company also incurred $28,366 related to
shareholder relations and filing expenses incurred in connection with complying
with the reporting regulations promulgated by the Securities and Exchange
Commission ("SEC"). During fiscal 1997, the Company was exempt from complying
and therefore, was not required to report with the SEC. The Company anticipates
its overhead expenses to continue to increase during fiscal 1998 as it continues
to add the necessary operational and administrative infrastructure to support
the anticipated growth of the Company.


                                                                              16
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

Loss from Continuing Operations. The increase in loss from continuing operations
of $466,213 for the three months ended December 31, 1997 as compared to December
31, 1996 is primarily related to the Company expanding its infrastructure in
anticipation of expanding its lines of business.

Loss from Discontinued Operations. As of December 31, 1997, management, in
connection with its plan to conserve assets to expand its core business,
resolved that it would discontinue the operations of its conventional cellular
operations division by terminating its operations. The Company recognized a net
loss from the operations of the cellular division of $371,380 for the three
months ended December 31, 1997. At December 31, 1997, the Company recorded
$75,000 for the estimated additional loss of abandoning the cellular operations.
The operations of the cellular division were completely discontinued by February
1, 1998.

Six Months Ended December 31, 1997
Compared to Six Months Ended December 31, 1996

Sales. Sales for the six months ended December 31, 1997 increased by $19,949,897
or 427.8% over the six months ended December 31, 1996. For the six months ended
December 31, 1996, the Company's sales were $4,663,146 primarily due to the
Company introducing its first Company branded, bundled products (cards purchased
from a provider) during the first quarter of fiscal 1997 and also competing in a
highly competitive marketplace. Further, the Company terminated selling its own
switchless unbundled products (platform switching and minutes provided by an
independent third party), which were both unreliable and not competitively
priced, and selling other competitors' cards which it had done during fiscal
1996.

During the second quarter of fiscal 1997, the Company negotiated an agreement
with Frontier. This resulted in the offering of more reliable and competitively
priced products by the Company that, by the end of the second half of fiscal
1997, became more recognizable by consumers, thereby increasing brand awareness.
As a result of the Company's continuing brand awareness into fiscal 1998, the
Company's sales for the six months ended December 31,1997 were $24,613,043.
Sales for the first half of fiscal 1998 were impacted by the Company altering
its relationship with a master distributor who accounted for 42% and 54% of
sales during the three months ended September 30, 1997 and the year ended June
30, 1997, respectively. During September, 1997, the Company terminated the
exclusivity clause in the agreement with this master distributor. This master
distributor accounted for 26% of sales during the six months ended December 31,
1997. The Company does not anticipate an extended period of decreased sales as a
result of this change since the Company has the proper infrastructure in place
to deliver products directly to the sub-distributors and retailers. Due to this
change and expansion into new areas of distribution, the Company anticipates
that its concentration of sales with any particular customer will be
significantly reduced for fiscal 1998.

Cost of Sales. The Company's cost of sales for the six months ended December 31,
1997 increased to $22,959,045 from $4,652,319 for the six months ended December
31, 1996. The increase of $18,306,726


                                                                              17
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

or 393.5% was primarily related to the increase in revenues that the Company
experienced in the three months ended December 31, 1997 as compared to the same
period in the prior year.

Gross Profit. Gross profit for the six months ended December 31, 1997 was
$1,653,998 as compared to a gross profit of $10,827 for the six months ended
December 31, 1996. During the first quarter of fiscal 1997, the Company
terminated its switchless unbundled phone card since it had taken numerous
returns for cards that it had sold in that quarter that were unreliable. In
addition, the Company replaced the returned cards with cards from its new
bundled programs at no charge. Further, the Company introduced its first Company
branded bundled products at very steep discounts in order to gain market share.
As a result, the Company reported a gross loss for the three months ended
September 30, 1997. During the six months ended December 31, 1997, the Company's
gross profit increased over the prior year due to the Company's large increase
in market share and its ability to negotiate competitive rates with its current
providers.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the six months ended December 31, 1997 increased to
$2,069,674 from $666,850 for the six months ended December 31, 1996. This
increase of $1,402,824 or 210.4% is primarily related to the increase in volume
over the six months ended December 31, 1996 and Company's plan to increase its
infrastructure in anticipation of moving its existing brands to a switched-based
platform and expansion into other segments of the telecommunications industry.

Salaries and personnel related expenses increased by $553,153 as the Company's
employees increased to 68 full-time employees by December 31, 1997. The increase
in employees has been fueled by the increase in operations as well as the
commencement of a carrier services division to broker rates between carriers as
well as negotiate rates for the Company as it introduces its current brands
under an unbundled arrangement and introduces new services. In addition, the
Company added personnel in anticipation of the Company's plan for growth in the
later half of fiscal 1998.

The Company's rent expense increased by $85,570 primarily due to rental payments
under the lease for the Company's new distribution and administrative
headquarters which the Company began occupying April 1, 1997. Advertising,
telephone, travel and entertainment, repairs and maintenance, office and
utilities expenses increased by $210,419, $76,711, $55,926, $43,437, $55,466 and
$28,484, respectively, primarily related to an increase in the Company's
business. The Company's professional fees also increased by $135,935 primarily
in connection with the Company's role in the Heritage litigation (See Part II,
Item 1. Legal Proceedings) as well as having increased needs for accounting and
corporate consulting. Administrative field expenses increased to $74,782 for the
six months ended December 31, 1997 as the Company expanded its field routes to
retail locations. Amortization related to intangibles increased by $94,162
primarily due to the acquisition of customer bases during fiscal 1997. The
Company also incurred $28,366 related to shareholder relations and filing
expenses incurred in connection with complying with the reporting regulations
promulgated by the Securities and Exchange Commission ("SEC"). During fiscal
1997, the Company was


                                                                              18
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

exempt from complying and therefore, was not required to report with the SEC.
The Company anticipates its overhead expenses to continue to increase during
fiscal 1998 as it continues to add the necessary operational and administrative
infrastructure to support the anticipated growth of the Company.

Loss from Continuing Operations. The decrease in loss from continuing operations
of $240,347 for the six months ended December 31, 1997 as compared to the same
period in the prior year is primarily related to the Company terminating its
unbundled products and replacing them with the bundled products that it
currently sells offset by the Company increasing its infrastructure in
anticipation of expanding its lines of business.

Loss from Discontinued Operations. As of June 30, 1997, management resolved that
it would discontinue the operations of World Access. The Company recognized a
net loss from the operations of World Access of $105,554 for the six months
ended December 31, 1997. The Company does not anticipate any additional charges
to be recognized related to World Access' operations.

As of December 31, 1997, management, in connection with its plan to conserve
assets to expand its core business, resolved that it would discontinue the
operations of its conventional cellular operations division by terminating its
operations. The Company recognized a net loss from the operations of the
cellular division of $527,061 for the six months ended December 31, 1997. At
December 31, 1997 the Company recorded $75,000 for the estimated additional loss
of abandoning the cellular operations. The operations of the cellular division
were completely discontinued by February 1, 1998.

Liquidity and Capital Resources

The Company has financed its operations through certain equity transactions
completed in fiscal 1996, the exercise of warrants in fiscal 1997 and the six
months ended December 31, 1997 and through operating cash flow. The Company has
plans to expand its lines of business and to put its own switching platforms in
place, however, consummation of those plans will be dependent on its ability to
raise financing.


                                                                              19
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

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

                                                  Six Months Ended December 31,
                                                  -----------------------------
                                                       1997             1996
                                                     =========        =========
Net cash used in operating activities                $(811,116)       $(675,784)
                                                                  
Net cash (used in) provided by investing 
  activities                                           (72,442)         221,273
                                                                  
Net cash provided by financing activities              332,578               --
                                                     ---------        ---------
                                                                  
Net  decrease in cash                                $(550,980)       $(454,511)
                                                     =========        =========

Net cash used by operating activities during the six months ended December 31,
1997 was $811,116 as compared to $675,784 for the six months ended December 31,
e1996. The increase of $135,332 is primarily related to a net loss of $1,123,291
for the six months ended December 31, 1997 as compared to the net loss of
$656,023 for the six months ended December 31, 1996. Further, non-cash charges
had a net increase of $681,169 of which the largest was for the reduction of
deferred income as of December 31, 1996, relating to the Company's unbundled
phone card terminated during the three months ended September 30, 1996. In
addition, the Company had a net increase in amortization of $94,162 relating to
its intangibles. Other significant operating changes, which are primarily
related to the Company's growth during the first six months of fiscal 1998, are
net increases in accounts receivable, inventory and accounts payable and other
liabilities of $1,784,407, $430,202 and $2,770,662, respectively. Prepaid
expenses and other assets had a net increase of $609,386, primarily related to
prepaid minutes the Company had at the end of fiscal 1996 related to the
switchless unbundled product that it terminated during the three months ended
September 30, 1996.

The decrease in cash provided by investing activities for fiscal 1997 of
$293,715 is primarily related to the Company receiving $200,000 in cash related
to the TecLink Note during the six months ended December 31, 1996.

The increase in cash provided by financing activities of $332,578 is primarily
related to the exercise of warrants to purchase 206,383 shares of the Company's
Common Stock at $1.50 per share.

In April of 1996, the Company entered into an agreement whereby it enabled the
Company to issue warrants to purchase an aggregate of 4,203,124 shares of its
Common Stock to four individuals and six corporations in exchange for trade
secrets, customer bases and other intangible property. Warrants to purchase
3,677,082 shares of the Company's Common Stock were actually issued. The
remaining warrants to purchase 526,042 shares of Common Stock were held awaiting
the delivery of certain assets to the Company. Those assets were


                                                                              20
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

never received and the Company never issued the warrants to the three parties.
Of the warrants issued, warrants to purchase 1,333,334 and 1,495,782 shares of
Common Stock are exercisable at $13.20 and $1.50 per share, respectively. The
warrants have a term of five years commencing April 23, 1996 and are callable by
the Company, upon 30 days notice, at a call price of $.10 per warrant to
purchase one share. As of February 10, 1998, 847,966 shares of Common Stock have
been issued related to the exercise of warrants at $1.50 per share.

To date, capital expenditures have not been material. However, if the Company is
capable of obtaining financing to fund the purchase of equipment and software
related to switching platforms, the Company plans to purchase $1,200,000 of such
equipment and software by June 30, 1998, and would look to purchase an
additional $3,000,000 of equipment and software by December 31, 1998.

In connection with the Company's plan to commence a carrier services division,
the Company entered into an agreement for the acquisition of all of the
outstanding shares of Ameridial, Inc., in exchange for 52,632 shares of the
Company's common stock, on October 31, 1997. The objective of the division is to
broker rates between carriers as well as negotiate rates for the Company as it
introduces its current brands under an unbundled arrangement and introduces new
services.

The Company believes that its current cash requirements can be funded by its
operations for the next twelve months. However, its plans to acquire the
switching platforms, which would eventually impact its gross margins in a
positive manner, and to continue to grow its core line of business will be
contingent on its ability to raise additional financing.

Seasonality

The business of the Company does not experience significant seasonality.

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.


                                                                              21
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

Recent Accounting Pronouncements

In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 established a fair value method for
accounting for stock-based compensation plans either through recognition or
disclosure. The Company adopted the employee stock-based compensation provision
of SFAS No. 123 by disclosing the pro forma net income and pro forma net income
per share amounts, assuming the fair value method was adopted July 1, 1995. The
adoption of this standard did not impact the Company's consolidated results of
operations, financial position or cash flow.

In December 1996, the FASB issued SFAS No. 128, "Earnings Per Share", which is
effective for both interim and annual periods ending after December 15, 1997.
SFAS No. 128 requires all prior period earnings per share data to be restated to
conform to the provisions of the statement. The adoption of this standard did
not have a material effect on the Company's earnings per share.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income",
which established standards for reporting and display of comprehensive income,
its components and accumulated balances. Comprehensive income is defined to
include all changes in equity except those resulting from investments by, or
distributions to, owners. Among other disclosures, SFAS No. 130 requires that
all items that are required to be recognized under current accounting standards
as components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements.

SFAS No. 130, effective for all years beginning after December 31, 1997,
requires comparative information for earlier years and early adoption is
permitted. The Company intends to adopt SFAS No. 130 effective July 1, 1998.
Results of operations and financial position will be unaffected by
implementation of this standard.

The Year 2000 Issue

      Many existing computer programs use only two digits to identify a year in
their date fields. These programs were designed and developed without
considering the impact of the upcoming change in the century (the "Year 2000
Issue"). If not corrected, many computer applications could fail or create
erroneous results by or at the year 2000. The Company is not currently utilizing
any integrated software which will be significantly impacted by the Year 2000
Issue. As a result, the Company does not anticipate any significant expense in
ensuring that the Company has adequately provided for any corrections to its
existing hardware or software. Furthermore, the Company is currently evaluating
an upgrade of its financial and accounting software and has obtained
documentation from vendors of such software supporting that the Year 2000 Issue
has been addressed.


                                                                              22
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

Risk Factors

Dependence on Long Distance Provider

The Company currently depends upon Premiere and Frontier to provide the Company
with the bundled prepaid phone cards that it resells to its customers. The
Company's ability to resell the phone cards depends upon whether it can continue
to maintain a favorable relationship with its providers. The Company's long
distance providers may terminate upon breach of certain conditions. Although the
Company believes that the likelihood of such a termination is remote, the
Company does not have a specific contingency arrangement in place to provide for
such termination.

Competition

The prepaid or debit card sector of the long distance market is highly
competitive and is affected by the constant introduction of new cards and
services by industry participants. Competition in the prepaid card sector of the
long distance business is based upon pricing, customer service and perceived
reliability of the prepaid phone cards. Several of the Company's competitors are
substantially larger and have greater financial, technical and marketing
resources than the Company. The ability of the Company to compete effectively in
the prepaid sector of the long distance market will depend upon the Company's
continued ability to provide highly reliable phone cards at prices competitive
with, or lower than, those charged by its competitors.

Financing Requirements

To date, the Company remains undercapitalized and cannot finance its expansion
as quickly as opportunities arise. In order for the Company to be successful in
its current plans for expansion and to continue with its plans to construct its
own switching platforms, the Company will be required to obtain financing. There
can be no assurance that such financing will be available on acceptable terms,
or at all, to the Company.

Litigation

The Company and its Chief Executive Officer have been named as defendants in a
legal action in Mississippi in the case entitled Heritage Graphics,
Inc.("Heritage") vs. Telephone Electronics Corporation (see Part II, Item 1.
Legal Proceedings). The complaint alleges, among other things, that the
defendants breached a contractual agreement and conspired to have Heritage go
out of business. The complaint seeks damages of $500 million. The Company
believes that the case has no merit and intends to vigorously contest the
complaint. The case has been rescheduled to go to trial in August, 1998. There
is no assurance as to the outcome of the litigation. However, in the event of a
decision adverse to the Company, the Company's business, financial condition,
operating results and the Company's stockholders, could be materially adversely


                                                                              23
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

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

affected. While the Company has an indemnification agreement with TEC which
calls for the Company to be indemnified for all claims regarding Heritage which
arose prior to January 20, 1996, it is unknown as of this date what impact it
will have in the event of a decision adverse to the Company.

Outstanding Warrants and Options

As of February 10, 1998, the Company had warrants and options outstanding to
purchase 3,491,616 shares of the Company's Common Stock at exercise prices
ranging from $1.50 to $14.50 per share and an average price of $5.51 per share.
Warrants and options outstanding for 3,113,837 shares of Common Stock are
immediately exercisable. To the extent that the outstanding warrants and options
are exercised, dilution to the interest of the Company's stockholders may occur.
Further, the terms upon which the Company will be able to obtain additional
equity capital may be adversely affected since the holders of the outstanding
warrants and options can be expected to exercise them at a time when the Company
would, in all likelihood, be able to obtain any needed capital on terms more
favorable to the Company than those provided by the outstanding warrants and
options.

Dependence on Key Personnel

The Company is dependent on its ability to retain and motivate high quality
personnel, especially its management and any key technical personnel that may be
needed in connection with the Company's plans to construct its own switching
platform. The loss of services of any of its executive officers or key employees
could have a material adverse effect on the business, operating results or
financial condition of the Company. The Company's future success also depends on
its continuing ability to identify, attract and hire qualified personnel as it
expands its lines of business. There can be no assurance that the Company will
be able to attract and hire qualified technical and managerial personnel in the
future. The inability to attract and retain the necessary personnel could have a
material adverse effect upon the Company's business, operating results or
financial condition.

Market Listing; Volatility of Stock Price

The Company's Common Stock is traded on the OTC Bulletin Board. To date, the
trading of the Company's Common Stock has been relatively illiquid with its
market price being subject to wide fluctuations. There can be no assurance that
an active public market for the Common Stock will develop or be sustained.
Further, the market price of the Company's Common Stock will most likely
continue to be highly volatile based on quarterly results of operations,
announcements of new products or lines of business by the Company or its
competitors or other events or factors.


                                                                              24
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                                     Part II - Other Information
================================================================================

Item 1.     Legal Proceedings

            In June of 1996, the Company became a co-defendant in a legal action
            in the Circuit Court for the First Judicial District of Hinds County
            in Jackson, Mississippi in the case entitled Heritage Graphics Inc.,
            et. al. v. Telephone Electronics Corporation, et. al. Civ. No.
            251-96-000492. The named plaintiffs in the action are: Heritage
            Graphics, Inc.; Thomas L. Gould, Jr.; Suzanne G. Gould; and Rainey
            Scott. The named defendants in the action are: Telephone Electronics
            Corporation d/b/a TecLink; TecLink, Inc.; the Company; Asynchronous
            Technologies, Inc.; Barbara Scott; Ronald D. Anderson, Sr. d/b/a
            Anderson Engineering; Walter Frank; and Frank Magliato. The second
            Amended Compliant filed in the action alleges a wide-spread
            conspiracy on the part of all of the defendants to destroy Heritage
            and to eliminate it as a competitor in the Internet services
            provider market. The heart of the complaint's allegations concerns
            an alleged joint venture. Through the vehicle of this prospective
            joint venture, the Company and others allegedly duped Heritage into
            surrendering its trade secrets, its services, its intellectual
            property, its expertise, etc., to the Company. The complaint alleges
            that, in essence, the deal materialized, Heritage's owners never
            received the stock, and Heritage was never "rolled into" a new
            entity, TecLink, Inc. The complaint's lesser allegations are that
            (i) defendants conspired to slander the business reputations of
            Heritage and Tom Gould; and (ii) TEC and the Company are jointly and
            severally liable to it for $268,245 worth of production work and
            consulting services provided over the September to December 1995
            time period. The plaintiffs seek damages of $500 million.

            The Company is not aware of any evidence to support the plaintiffs'
            claim of a joint venture. The Company believes that the plaintiffs'
            claims are without merit. Further, the Company believes that its
            counterclaims are sufficiently well grounded to offset any judgment
            entered against the Company.

            The case has been rescheduled to go to trial in August, 1998. While
            the Company has an indemnification agreement with TEC which calls
            for the Company to be indemnified for all claims regarding Heritage
            which arose prior to January 20, 1996, it is unknown as of this date
            what impact it will have in the event of a decision adverse to the
            Company.

Item 2.     Changes in Securities

            None.

Item 3.     Defaults Upon Senior Securities

            None.


                                                                              25
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                                     Part II - Other Information
================================================================================

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

            (a)   Not applicable;

            (b)   Not applicable;

            (c)   Not applicable.

Item 5.     Other Information

            None.

Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibits

                  Exhibit 2-Acquisition of Ameridial, Inc.
                  Exhibit 27-Financial Data Schedule.

            (b)   Reports on Form 8-K

                  None.


                                                                              26
<PAGE>

                                                              DigiTEC 2000, Inc.
                                                                and Subsidiaries
                                                      (formerly Promo Tel, Inc.)

                                                     Part II - Other Information
================================================================================

                                   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:  February 12, 1998               DigiTEC 2000, Inc.
                                       -----------------------------------------
                                       (Registrant)
                                    
                                       By: /s/ Frank C. Magliato
                                           -------------------------------------
                                           Frank C. Magliato
                                           Chief Executive Officer, President 
                                           and Director
                                    
                                       By: /s/ Keith A. McGowan
                                           -------------------------------------
                                           Keith A. McGowan
                                           Vice President of Finance
                                    
                                       By: /s/ Diego E. Roca
                                           -------------------------------------
                                           Diego E. Roca
                                           Vice President of Operations
                                           and Secretary
                                    
                                    
                                                                              27