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                                  EXHIBIT 10.4



                           DYNACQ INTERNATIONAL, INC.
                        1995 INCENTIVE STOCK OPTION PLAN

1.    DEFINITIONS

      For purposes of this 1995 Incentive Stock Option Plan, unless otherwise
required by the context:

a.    "Board" shall mean the Board of Directors of the Company.

b.    "Code" shall mean the Internal Revenue Code of 1986, as amended.

c.    "Company" shall mean Dynacq International, Inc., a Nevada corporation.

d.    "Key Employee" shall mean officers, directors (who are also employees) and
      supervisory personnel, as well as other employees of the Company or any
      subsidiary corporation now existing or hereafter acquired or formed by the
      Company.

e.    "Option" shall mean a right to purchase Stock, granted pursuant to the
      Plan.

f.    "Option Price" shall mean the purchase price for Stock under an Option, as
      determined in Section 6 below.

g.    "Optionee" or "Participant" shall mean a Key Employee to whom an Option is
      granted under the Plan.

h.    "Plan" shall mean this Incentive Stock Option Plan.

i.    "Stock" shall mean the Common Stock of the Company.

j.    "Subsidiary" shall mean a subsidiary corporation of the Company, as
      defined in Sections 425(f) and 425(g) of the Code.

2.    PURPOSE OF THE PLAN.

      This Plan is intended to advance the interests of the Company by providing
Key Employees, who have substantial responsibility for the direction and
management of the Company with additional incentive for them to promote the
success of the business by increasing their proprietary interest in the success
of the Company. The above aims will be effectuated through the granting of
certain stock options, It is intended that options issued under the Plan will
qualify as Incentive Stock Options (hereinafter called "ISOs" under Section 422A
of the Internal Revenue Code as enacted by the Economic Recovery Tax Act of
1981, and the terms of the Plan shall be interpreted in accordance with this
intention.

3.    ADMINISTRATION OF THE PLAN.
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      The Board shall administer the Plan. Subject to the provisions of the
Plan, the Board shall have plenary authority, in its discretion: a) to
determine the directors and employees of the Company to whom options shall be
granted; (b) to determine the time or times at which options shall be granted;
(c) to determine the number of shares subject to each option granted; (d) to
determine the option price of the shares subject to each option which price
shall not be less than the minimum specified in Section 6; (e) to determine
(subject to Section 8) the time or times when each option shall become
exercisable and the duration of the exercise period; and (f) to interpret the
Plan and to prescribe, amend, and rescind rules and regulations relating to it.
All action of the Board shall be taken by majority vote of its members. Any
action may be taken by a written instrument signed by all the members of the
Board, and action so taken shall be fully as effective as if it had been taken
by a unanimous vote of the members at a meeting duly called and held.

4.    ELIGIBILITY AND LIMITATIONS ON OPTIONS GRANTED UNDER
      THE PLAN.

(a)   Options will be granted only to persons who are Key Employees of the
      Company or a subsidiary corporation of the Company who agree, in writing,
      to remain in the employ of, and render services to, the Company or a
      subsidiary of the Company for a period of at least one (1) year from the
      date of the granting of the option. No such agreement shall impose upon
      the Company or any of its subsidiaries, however, any obligation to employ
      the Participant for any period of time

(b)   Each option granted under this Plan shall be an ISO. No option granted to
      any Key Employee, who at the time of such grant, owns stock possessing
      more than ten percent (10%) of the total voting power of the Common Stock
      of the Company or of any of its subsidiaries may be an ISO, unless at the
      time of such grant, the option price is fixed at not less than one hundred
      ten percent (110%) of the fair market value of the stock subject to the
      option.

(c)   Exercise of each option is prohibited by its terms until after one (1)
      year from the date of grant and after the expiration of five (5) years
      from the date such option is granted.

(d)   The aggregate fair market value (determined at the time the option is
      granted) of the stock as to which as option is exercisable for the first
      time by any Participant during any calendar year cannot exceed One Hundred
      Thousand Dollars ($100,000).

5.    SHARES OF STOCK SUBJECT TO THE PLAN.

      There will be reserved for use upon the exercise of options to be granted
from time to time under the Plan (subject to the provisions of Section 13) an
aggregate of One Million (1,000,000) shares of the Common Stock of the Company,
which shares may be in whole or in part, as the Board shall from time to time
determine, authorized but unissued shares of the Common Stock or issued shares
of the Common Stock which shall have been reacquired by the Company. Any shares
subject to an option under the Plan, which option for any reason expires or is
terminated unexercised as to such shares, may again be subjected to an option
under the
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Plan.

6.    OPTION PRICE.

      The purchase price under each option issued shall be determined by the
Board at the time the option is granted, but in no event, except as otherwise
set forth in Section 4(b), shall such purchase price be less than one hundred
(100%) of the fair market value of the Company's Common Stock on the date of
grant.

      The term "fair market value" shall be defined as the average of the
closing bid and asked market prices of said Common Stock quoted by the National
Association of Securities Dealers (or if said Common Stock is not quoted by NASD
then as quoted by the major market maker for said Common Stock) on the business
day prior to the date of the grant of the option, or, if there be no sales on
such date, on the most recent date upon which such stock was traded.

7.    DILUTION OR OTHER AGREEMENT.

      In the event that additional shares of Common Stock are issued pursuant to
a stock split or a stock dividend, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be increased
proportionately with no increase in the total purchase price of the shares then
so covered, and the number of shares of Common Stock reserved for the purposes
of the Plan shall be increased by the same proportion. In the event that the
shares of Common Stock of the Company from time to time issued and outstanding
are reduced by a combination of shares, the number of shares of Common Stock
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the shares then so
covered, and the number of shares of Common Stock reserved for the purposes of
the Plan shall be reduced by the same proportion. In the event that the Company
should transfer assets to another corporation and distribute the stock of such
other corporation without the surrender of Common Stock, and if such
distribution is not taxable as a dividend and no gain or loss is recognized by
reason of Section 355 of the Internal Revenue Code of 1954, or some similar
section, then the total purchase price of the shares covered by each outstanding
option shall be reduced by an amount which bears the same ratio to the total
purchase price then in effect as the market value of the stock distributed in
respect of a share of the Common Stock, immediately following the distribution,
bears to the aggregate of the market value at such time of a share of the Common
Stock and the stock distributed in respect thereof. All such adjustments shall
be made by the Board, whose determination upon the same shall be final and
binding upon the Optionees. No fractional shares shall be issued, and any
fractional shares resulting from the computations pursuant to this Section 6
shall be eliminated from the respective option. No adjustment shall be made for
cash dividends or the issuance to stockholders of rights to subscribe for
additional Common Stock or other securities.

8.    PERIOD OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO
      EXERCISE.

(a)   All Options issued under the Plan shall be for such period as the Board
      shall determine, but not for more than five (5) Years from the date of
      grant thereof.
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(b)   The period of the option, once it is granted, may be reduced only as
      provided for in Section 10.

(c)   Each option granted under this Plan shall become exercisable only after
      one (1) year continued employment of the Optionee with the Company or a
      subsidiary corporation of the Company immediately following the date the
      option is granted. Any option granted shall be exercisable only to the
      extent of one-third of the total number of optioned shares after the
      expiration of one (1) year following the date the option is granted, only
      to the extent of two-thirds of the total number of optioned shares after
      the expiration of two (2) years following the date the option is granted,
      and in full only after the expiration of three (3) years following the
      date the option is granted, such limitations being calculated, in the case
      of any resulting fraction, to the nearest lower whole number of shares.
      Except as provided in Section 10, no option may be exercised unless the
      Optionee is at the time of such exercise in the employ of the Company or
      of a subsidiary corporation of the Company and shall have been
      continuously so employed since the grant of his option. Absence or leave
      approved by the management of the Company shall not be considered an
      interruption of employment for any purpose under the Plan.

(d)   The exercise of any option shall be contingent upon receipt by the Company
      of cash or a certified bank check to its order in an amount equal to he
      full option PRICE OF THE shares being purchased. However, in order to
      facilitate the accumulation of funds to enable employees to exercise their
      option, they will have the right, if they so elect, to direct the Company
      to withhold from their compensation regular amounts to be applied toward
      the exercise of the options. Funds credited to the stock option accounts
      will be under the control of the Company until applied to the payment of
      the option price at the direction of the employee or returned to the
      employee in the event the amount is not used for purchase of shares under
      the option. And all funds received or held by the Company under the Plan
      may be used for any corporate purpose, and no interest shall be payable to
      a participant on account of any amounts so held. Such amounts may be
      withdrawn by the employee at any time, in whole or in part, for any
      reason.

(e)   No Optionee or his legal representative, legatees, or distributees, as the
      case may be, or will be deemed to be, a holder of any share subject to an
      option unless and until certificate for such shares are issued to him or
      them under the terms of the Plan. No adjustment shall be made for
      dividends or other rights for which the record date is prior to the date
      such stock certificate is issued.

(f)   In no event may an option be exercised after the expiration of its term.

(g)   Exercise of an option shall result in a decrease in the number of shares
      of Common Stock which thereafter may be available under the Plan by the
      number of shares as to which the option is exercised.

9.    ASSIGNABILITY.

      Each option granted under this Plan shall be transferable only by will or
the laws of
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descent and distribution and shall be exercisable, during his lifetime, only by
the director or employee to whom the option is granted. Except as permitted by
the preceding sentence, no option granted under the Plan or any of the rights
and privileges thereby conferred shall be transferred, assigned, pledged, or
hypothecated in any way (whether by operation of law or otherwise), and no such
option, right, or privilege shall be subject to execution, attachment, or
similar process. Upon any attempt so to transfer, assign, pledge, hypothecate,
or otherwise dispose of the option, or of any right or privilege conferred
thereby, contrary to the provisions hereof, or upon the levy of any attachment
or similar process upon such option, right or privilege, the option and such
rights and privileges shall immediately become null and void.

10.   EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY.

(a)   In the event of the termination of employment of an Optionee during the
      one (1) year period after the date of issuance of an option to him either
      by reason of (i) discharge for cause or (ii) voluntary separation on the
      part of the Optionee and without consent of his employing company or
      companies, any option or options theretofore granted to him under this
      Plan to the extent not theretofore exercised by him shall forthwith
      terminate

(b)   In the event of the termination of employment of an Optionee (otherwise
      than by reason of death or retirement of the Optionee) after expiration of
      the one year period referenced in subsection (a) above, or within the one
      year period if termination was by action of the Company and without cause,
      any option or options granted to him under the Plan to the extent not
      theretofore exercised shall be deemed canceled and terminated forthwith,
      except that such Optionee may exercise any options theretofore granted to
      him, which have not then expired and which are otherwise exercisable
      within the provisions of Section 8(c) hereof, within three (3) months
      after such termination. If the employment of an Optionee shall be
      terminates by reason of the Optionee's retirement, the Optionee shall have
      the right to exercise such option or options held by him to the extent
      that such options have not expired, at any time within three (3) months
      after such retirement.

(c)   In the event that an Optionee shall die while employed by the Company or
      shall die within (3) months after retirement, any option or options
      granted to him under this Plan and not theretofore exercised by him or
      expired shall be exercisable by the estate of the Optionee or by any
      person who acquired such option by bequest or inheritance from the
      Optionee in full, notwithstanding Section 8(c), at any time within one (1)
      year after the death of the Optionee. References hereinabove to the
      Optionee shall be deemed to include any person entitled to exercise the
      option after the death of the Optionee under the terms of this Section.

(d)   In the event of the termination of employment of an Optionee by reason of
      the Optionee's disability, the Optionee shall have the right,
      notwithstanding the provisions of Section 8(c) hereof, to exercise all
      options held by him, to the extent that options have not previously
      expired or been exercised, at any time within one (1) year after such
      termination, The term "disability" shall, for the purposes of this Plan,
      be defined in the
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      same manner as such term is defined in Section 105(d)(4) of the Internal
      Revenue Code of 1954.

(e)   For the purposes of this Plan, an employee's retirement shall mean any
      date an employee is otherwise entitles to retire under the Company's
      retirement plans and shall include normal retirement at age 65, early
      retirement at age 62, and retirement at age 60 after 30 years of service.

11.   LISTING AND REGISTRATION OF SHARES.

      Each option shall be subject to the requirement that if at any time the
Board of Directors shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such option or the issue or purchase of shares
thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the Board.

12.   RESTRICTIONS ON TRANSFER OF SHARES RECEIVED ON EXERCISE OF OPTIONS

      In order to qualify as Incentive Stock Options under Section 422 of the
Internal Revenue Code, as amended, the shares received by an Optionee upon
exercise of an option may not be sold, transferred or otherwise disposed of
before the expiration of the two-year period immediately following the grant of
such option and the one-year period immediately following the exercise of such
option. Nothing stated herein, however, shall require the Optionee to comply
with such post-exercise holding periods.

13.   EXPIRATION AND TERMINATION OF THE PLAN.

      Options may be granted under the Plan at any time or from time to time as
long as the total number of shares optioned or purchased under this Plan does
not exceed One Million (1,000,000) shares of Common Stock. The Plan may be
abandoned or terminated at any time by the Board of Directors of the Company
except with respect to any options then outstanding under the Plan. No option
shall be granted pursuant to the Plan after a date ten (10) years from the
effective date of the Plan.

14.   AMENDMENT OF PLAN.

      The Board of Directors may at any time and from time to time modify and
amend the Plan in any respect; Provided, however, that no such amendment shall:
(a) increase (except in accordance with Section 6) the maximum number of shares
for which options may be granted under the Plan either in the aggregate or to
any Individual Participant; or (b)) reduce (except in accordance with Section 6)
the minimum option prices which may be established under the
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Plan; or (c) extend the period or periods during which options may be granted or
exercised; or (d) change the provisions relating to the determination of the Key
Employees to whom options shall be granted and the number of shares to be
covered by such options; or (e) change the provisions relating to adjustments to
be made upon changes in capitalizations. The termination or any modification or
amendment of the Plan shall not, without the consent of a Key Employee, affect
his rights under an option theretofore granted to him.

15.   APPLICABILITY OF PLAN TO OUTSTANDING STOCK OPTIONS.

      This Plan shall not affect the terms and conditions of any non-qualified
stock options heretofore granted to any Key Employee of the Company under any
other plan relating to non qualified stock options; nor shall it affect any of
the rights of any Key Employee to whom such a non-qualified stock option was
granted.

16.   EFFECTIVE DATE OF PLAN.

      This Plan shall become effective on the later of the date of its adoption
by the Board of Directors of the Company or its approval by vote of the holders
of a majority of the outstanding shares of the Company's Common Stock. This Plan
shall not become effective unless such shareholder approval shall be obtained
within twelve (12) months before or after the adoption of the Plan by the Board
of Directors.