SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                 AMENDMENT NO. 2
                                       TO
                                    FORM 10-K
                                  ANNUAL REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended                                 Commission File Number
     June 30, 2001                                                0-20706

                                 DATA RACE, Inc.
             (Exact name of registrant as specified in its charter)

     Texas                                                      74-2272363
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                         6509 Windcrest Drive, Suite 120
                               Plano, Texas 75024
                            Telephone (972) 378-9677
                        (Address, including zip code, and
                    telephone number, including area code, of
                    registrant's principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par
value per share

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
          ---

On February 8, 2002,  the  aggregate  market  price of the voting  stock held by
non-affiliates of the Company was approximately $1,770,000 (For purposes hereof,
directors,  executive officers and 10% or greater  shareholders have been deemed
affiliates.)

On January 31, 2002, there were 35,373,477  outstanding  shares of Common Stock,
no par value.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None.


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<PAGE>

     The registrant  hereby files this report on Form 10-K/A to amend its Annual
Report on Form 10-K, as amended on February 15, 2002 for the year ended June 30,
2001,  to amend (i) Part 1,  Item 3 "Legal  Proceedings,"  (ii) Part II,  Item 7
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operation" and (iii) Part IV, Item 14 to include  exhibit 10.31 and all exhibits
and  schedules to such exhibit and to add exhibit  10.34.  No other items in the
registrant's  Annual  Report on Form 10-K for the year ended  June 30,  2001 are
amended.

                                     PART I.

ITEM 3.  LEGAL PROCEEDINGS

     On May 18,  2001,  the  Company,  executive  officers,  Michael  McDonnell,
previously the President and Chief  Executive  Officer  (resigned in July 2001),
James Scogin,  Acting President and Chief Financial Officer,  and John Liviakis,
one of our  significant  shareholders,  were sued in the United States  District
Court  for the  Northern  District  of  Illinois,  Eastern  Division,  by Robert
Plotkin, a Chicago-based  attorney,  and several of Mr. Plotkin's  relatives and
family  trusts,  who are all  shareholders  of the  Company.  The  amount of the
monetary  damages being sought is  $20,000,000.  The complaint  alleges that the
plaintiffs  were  induced  to  purchase  shares of our common  stock  based upon
alleged  misrepresentations  and omissions of material  fact. The proceeding has
been moved to the United  States  District  Court for the  Eastern  District  of
Texas, Sherman Division in October 11, 2001. Discovery has not commenced, but we
believe the lawsuit is without merit and intend to vigorously defend the Company
against  these  allegations.  At this  time,  we do not know  whether  or not an
outcome of the lawsuit  unfavorable to us will have a materially  adverse effect
on our results of operations and financial condition.

                                    PART II.

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


Results of Operations

     From its  inception in 1983,  the Company has designed,  manufactured,  and
marketed advanced technology  communication  products. The Company's strategy is
to provide innovative,  first-to-market,  high-value-added solutions to meet the
needs of knowledge workers who are remote from their headquarters office.

     During  fiscal year 2001,  the Company  completed  the  development  of the
VocalWare IP integrated server by integrating the dial up remote access solution
of the formerly marketed Be There! product line with the broadband remote access
solution of the  VocalWare  product line.  This solution  allows users to access
their office voice,  e-mail,  data and fax resources over any access medium with
all of the leading manufacturers of voice and data products. The Company entered
into  beta  program  agreements  with a major  global  carrier,  a  major  cable
provider,  a major  airline  and an agency  of the  federal  government  for the
VocalWare IP integrated server.  From the beta agreements the Company shipped 35
VocalWare servers and 840 VocalWare user licenses for approximately $701,000 and
entered into an exclusive licensing rights agreement for approximately  $365,000
with LYNUX.

     In January  2001,  these servers were returned  based on  non-payment  from
LYNUX  and the  Company  notified  LYNUX  that the  exclusive  licensing  rights
agreement had been  terminated.  The Company in the quarter  ended  December 31,
2000 reversed the accounts  receivable  and deferred  revenue for  approximately
$365,000. During the second quarter of fiscal 2001, the Company shipped $625,000
of servers and user licenses to a reseller. This transaction was not recorded as
revenue as the  transaction  did not meet the  Company's  criteria  for  revenue
recognition.  The


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<PAGE>

reseller was given extended terms over normal reseller agreements. In July 2001,
the reseller returned the servers and user licenses back to the Company based on
the uncertainty of the Company continuing as a going concern.

     The Company was  disappointed  in its revenue for the fiscal year. This was
based  on the  following  factors.  (i) A longer  sales  cycle  than  originally
planned.  The Company  originally planned for a sales cycle of 30 days where the
potential  customer would place an order after a 30-day trial period. In reality
the  sales  cycle  can be as long as one year.  (ii) A  decline  in the  general
economic conditions in the telecommunications industry and decreases in spending
for information technology.  (iii) The Company's inability to show its viability
as a going  concern.  Potential  customers  have  concerns  about the  Company's
ability as a going  concern.  The  VocalWare  IP product  line is  considered  a
strategic  asset of the customer and questions  concerning  the viability of the
Company can delay or terminate potential orders.

     The  Company's  goal of returning to  profitability  and  developing a more
dependable revenue base depends on the success of the VocalWare IP product line.
Although  the Company has not  recorded  significant  revenue  from sales of the
VocalWare IP product line, the Company has expended substantial resources on its
development and market introduction.

Fiscal 2001 Compared to Fiscal 2000 for Continuing Operations

     Total revenue from continuing  operations in fiscal 2001 decreased 80.2% to
approximately  to $63,000  from  approximately  $316,000  in fiscal  2000.  This
decrease is attributable to the following conditions: 1) the financial condition
of the Company as a viable ongoing  business,  2) the longer than expected sales
cycle of placing the product with a potential  customer and  receiving an order,
and 3) the changes in general economic conditions and specific market conditions
in the  communications  industries  and  the  overall  decrease  in  information
technology spending.

     Total gross  losses from  continuing  operations  in fiscal 2001  increased
187.7% to approximately  $1,282,000 from approximately  $446,000 in fiscal 2001.
This  increase  was  primarily  the result of a 27%  increase  in  material  and
overhead  production  cost  coupled with the Company  recording a provision  for
potential inventory  obsolescence in the amount of approximately  $422,000.  The
additional  material costs where necessary to insure product supply from its key
component   supplier  and  material   purchased   by  the   Company's   contract
manufacturing  integrator.  Materials  held  on  behalf  of the  Company  at the
manufacturing  integrator's  facility  are  recorded as inventory as well as any
associated  accounts payable for unpaid balances.  See note 5 "Inventory" in the
accompanying notes to the financial statements.

     Engineering  and product  development  expenses have  increased by 51.7% to
approximately  $5.0  million in fiscal 2001 from  approximately  $3.3 million in
fiscal 2000.  This increase was primarily  due to outside  contract  engineering
expenditures and workforce increases for continued  development and enhancements
of the VocalWare IP products.

     Sales  and  marketing  expenses  increased  81.7%  during  fiscal  2001  to
approximately  $4.8 million from approximately $2.6 million in fiscal 2000. This
increase was  primarily  due to increased  headcount in the sales and  marketing
staff and the associated  travel which were both  necessary to properly  market,
coordinate, distribute, train and service VocalWare IP products.

     General and  administrative  expenses increased 67.1% during fiscal 2001 to
approximately  $5.2 million from approximately $3.1 million in fiscal 2000. This
increase reflected  increased staffing that management believed was necessary to
support  recent  organizational  growth as well as  impairment  adjustments  for
assets no longer deemed viable by the Company.

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<PAGE>

     Income  tax  benefits  related  to  losses  for  fiscal  year  2001 are not
recognized   because  the  utilization  of  such  benefits  cannot  be  assured.
Accordingly,  a 100% valuation allowance has been recorded against the Company's
deferred  income tax asset.  As of June 30,  2001,  the  Company had federal and
state tax net operating loss  carryforwards  of  approximately  $70,980,000 that
expire  beginning  in 2008.  The  Internal  Revenue  code section 382 limits NOL
carryforwards when an ownership change of more than 50% of the value of stock in
a loss corporation occurs within a three-year period.  Accordingly,  due to such
ownership  change,  the ability to utilize  remaining NOL  carryforwards  may be
significantly restricted.

Fiscal 2000 Compared to Fiscal 1999 for Continuing Operations

     In  March  2000,  the  Company  sold  its  network  multiplexer  line to HT
Communications.  Also during the second  quarter of fiscal 1999, the Company did
not bid on additional custom modem business. Therefore, the following discussion
is limited to the Company's  continuing  operations of its VocalWare IP business
segment. Discontinued operations are separately discussed below.

     Total revenue from continuing  operations in fiscal 2000 decreased 62.2% to
$316,000  from  $836,000  in fiscal  1999.  The  decrease  is  primarily  due to
decreased  shipments to Sabratek Inc, as a result of that customer's  bankruptcy
filing and declines in custom modem  revenue  from fiscal 1999.  Also  impacting
revenue is the Company's  decision to discontinue the first generation Be There!
remote access  system in favor of the  Company's new  generation of VocalWare IP
products which were scheduled to be released throughout fiscal 2001.

     Gross  losses  from  continuing  operations  for fiscal 2000  decreased  to
approximately $446,000 from approximately $697,000 for fiscal 1999. The decrease
in gross  losses from  continuing  operations  is directly  related to decreased
shipments to Sabratek Inc. and  manufacturing  variances caused by the decreased
volumes. Due to financial difficulties and eventual bankruptcy,  Sabratek,  Inc.
unexpectedly  cancelled  its purchase  agreement  with the Company in the second
quarter of fiscal year 2000.  The Company was not able to adjust its  production
overhead  until after the third  quarter of the fiscal  year 2000 and  therefore
incurred manufacturing variances associated with decreased volumes.

     Engineering and product development expenses had increased by 38.1% to $3.3
million in fiscal  2000 from $2.4  million in fiscal  1999.  This  increase  was
primarily due to workforce increases and outside project  development  contracts
associated  with  development  expenditures  necessary  for  the  Company's  new
VocalWare IP product line.

     Sales and  marketing  expenses  increased  35.8% during fiscal 2000 to $2.6
million from $1.9 million in fiscal 1999. This increase was primarily due to the
Company ramping up its sales and marketing  forces in anticipation of delivering
its new VocalWare IP product line to the market in early fiscal 2001.

     General and  administrative  expenses decreased 27.3% during fiscal 2000 to
$3.1 million from $4.3 million in fiscal 1999. This decrease was attributable to
decreases  in non-cash  expenses  associated  with a  consulting  agreement  and
non-cash legal  expenses  associated  with a patent  infringement  lawsuit.  The
decrease is offset in part by severance and retirement packages for two officers
totaling approximately $480,000.

     Income  tax  benefits  related  to  losses  for  fiscal  year  2000 are not
recognized   because  the  utilization  of  such  benefits  cannot  be  assured.
Accordingly,  a 100%  valuation  allowance  was recorded  against the  Company's
deferred  income tax asset.  As of June 30,  2000,  the  Company had federal and
state tax net operating loss carryforwards of approximately  $53,664,000,  which
expire


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<PAGE>

beginning  in  2009.   The   Internal   Revenue  code  section  382  limits  NOL
carryforwards when an ownership change of more than 50% of the value of stock in
a loss corporation occurs within a three-year period.  Accordingly,  due to such
ownership  changes,  the ability to utilize  remaining NOL  carryforwards may be
significantly restricted.

Discontinued Operations and HT Communications Receivable

     The  majority  of the  Company's  revenue in fiscal 1999 and in prior years
resulted  from  operations  that  the  Company  has now  exited.  Revenues  from
discontinued  operations  decreased  64.0%  in  fiscal  2000  to  $720,000  from
$1,999,000  in fiscal  1999 as a result of the  Company's  decision to exit that
market. The Company sold its network  multiplexer  business to HT Communications
in March  2000 for  $350,000.  The  Company to date has  received  approximately
$6,000 in principal  payments and $4,500 in royalty payments.  The Company is in
the process of filing suit against HT  Communications  demanding  payment on the
past due balances. Due to defaults upon the agreement between the Company and HT
communications,  the Company  removed the  unrecognized  portion of the deferred
gain in the amount of  $331,601  from its books along with the  associated  note
receivable

Liquidity and Capital Resources

     Operating  losses  have had and  continue  to have a  substantial  negative
effect  on the  Company's  cash  balance.  At June 30,  2001,  the  Company  had
approximately  $9,000 in cash and cash  equivalents,  compared to  approximately
$11,059,000 at June 30, 2000.

     At the beginning of fiscal 2001, the company  recorded a note receivable of
$350,000 due from HT Communications  resulting from the sale by the Company of a
discontinued  segment in March 2000.  Subsequent  to the end of fiscal year 2001
this note became  uncollectable due to HT Communications  filing bankruptcy.  As
such, the Company wrote off the receivable in September 2001.

     During fiscal year 2001, the Company increased its inventory in response to
business  opportunities  forecasted  and the  lead-time  required to receive the
material  components.  The Company's inventory at retail is valued at $4,000,000
to $7,000,000 depending on the size and type of server configuration.

     The build up in inventory  was the result of the Company  having to procure
unique key  components  essential  for the  deployment of the Vocal Ware server.
Approximately  400 units of a unique  component  board where procured during the
fiscal  year along with  nearly  210  chassis  units that make up the Vocal Ware
server.  The Company  anticipates that the number of units on hand at the end of
the fiscal year will be  sufficient  for the  immediate  future to meet any need
that current potential  customers would required during fiscal 2002. The general
slow down in the  economy and the longer than  anticipated  sales cycle  however
make it  difficult  for the Company to  estimate  additional  requirements.  The
inventory  value at year ending  June  30,2001 is net of  inventory  reserves of
approximately $1.0M.

     During the first half of fiscal year 2001,  in  anticipation  of  projected
sales, the Company  increased its staff by over 50% by adding 31 people to field
key  positions  to assure its  growth.  To support  its  business  model and the
additional  staff,  the Company invested  approximately  $1,000,000 in equipment
purchases in fiscal 2001. Approximately $434,000 of those purchases pertained to
a new e-business platform in which the Company was unifying its sales,  customer
service,  MRP and  accounting  systems.  Implementation  of the system had to be
abandoned during May of 2001 due to the Company's financial difficulties and the
loss of key personnel  responsible for implementation of the system. The Company
recorded  as  an  asset  impairment,  approximately  $403,000  relating  to  the
e-business platform. In addition the Company recorded  approximately


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<PAGE>

$778,000  as  an  asset  impairment  on  non-amortized   leasehold  improvements
pertaining  to the early  termination  of the San Antonio  facilities  in August
2001. The Company anticipated this action as it was consolidating its facilities
prior to the close of the fiscal year ending June 30, 2001. The Company believes
its  facilities  are more than  adequate to meet the  current  and future  needs
during fiscal 2002 without modification or further expense. Further, the Company
feels  that  capital  expenditures  in fiscal  2001 for  capital  equipment  are
adequate to support foreseeable needs throughout fiscal 2002.

     Accounts  payable  during  fiscal  2001  increased  by 85%  compared to the
increase  reflected in the cash flow statement for fiscal 2000. This increase is
directly attributable to inventory purchases as discussed above.

     An increase in notes payable of approximately $1,072,000 during fiscal 2001
reflect the Company's reliance upon outside financing to continue its operations
until  such time  revenues  are  sufficient  to  sustain  the  Company's  future
operations.

     The Company does not believe that current cash will be  sufficient  to meet
the Company's  current and ongoing operating  expenses and capital  requirements
and it is continuing to explore financing alternatives.

Going Concern Uncertainty

     The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America,  which
contemplates  continuation  of the Company as a going  concern.  As shown in the
financial statements, the Company incurred a substantial loss of $16,775,750 for
the year ended June 30, 2001 and has incurred losses for each of the preceding 2
years.  At  June  30,  2001,  current   liabilities  exceed  current  assets  by
$1,274,179,   total  liabilities   exceed  total  assets  by  $561,814  and  the
accumulated   deficit  aggregated   $72,527,944.   In  view  of  these  matters,
realization of a major portion of the assets in the  accompanying  balance sheet
is dependent upon the Company's ability to meet its financing requirements,  and
the success of its future  operations.  See "ITEM 1 BUSINESS - Certain  Business
Risks - We Will Need  Additional  Capital to Sustain  Operations" and "Financing
Activities - Equity Line of Credit" below as part of this ITEM 7.

     In  addition,  effective  July 11,  2001,  the  Company's  common stock was
delisted by The Nasdaq  National  Market due to a failure to pay overdue  annual
and  additional  listing fees in the amount of $44,125 and the inability to meet
the minimum bid price requirements for continued listing.  Effective November 6,
2001,  our common  stock was  dropped  from the OTCBB for failure to timely file
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934. Our common stock  continues to be traded in the "pink sheets" under
the symbol "RACE".

     Operating  losses  have had and  continue  to have a  substantial  negative
effect on the  Company's  cash  balance.  The  Company's  goal of  returning  to
profitability  and  developing  a more  dependable  revenue  base  relies on the
success of the VocalWare IP product line. To  successfully  penetrate the target
markets, the Company expects that significant  additional resources will need to
be  expended  in order to  expand  its sales and  marketing  infrastructure  and
operation systems, and to finance inventory and receivables.

     The Company has historically  funded  operations with the proceeds from the
sale of  equity  securities  and has not  generated  positive  cash  flows  from
operations  for the past three years.  The Company will need to raise more money
to continue to finance its operations  and may not be able to obtain  additional
financing  on  acceptable  terms,  or at all.  Any  failure to raise  additional
financing will likely place the Company in significant financial jeopardy.


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<PAGE>

     During  July 2001  (subsequent  to the  balance  sheet  date)  the  Company
decreased its overhead  through  payroll  reductions  and related  benefit costs
(reducing  its workforce  from 77 employees to 6 employees).  Management is also
currently  consolidating  operations into one location thereby effecting savings
on rent and  associated  facility  costs.  The Company  believes that these cost
reductions  and the raising of additional  financing will allow them to continue
in existence.

Financing Activities

March 2001

     In  March  2001,  the  Company   received  net  proceeds  of  approximately
$2,000,000  for issuance of common stock and warrants.  (See Note 10 of Notes to
the Financial Statements)

May 2001

     In May 2001, the Company issued 10% secured  convertible  promissory  notes
and common stock  purchase  warrants for  $700,000.  (See Note 9 of Notes to the
Financial Statements)

6% Convertible Debentures

     On June 12, 2001 the Company  signed an agreement to place up to $1 million
in 6%  convertible  debentures  and warrants to two  accredited  investors.  The
parties  amended  the  agreement  on July 17, 2001 and  October  18,  2001.  The
convertible  debentures have an interest rate of 6% per annum and mature 3 years
from their date of issuance. Under the terms of the convertible debentures,  the
holders  can  elect at any  time  prior  to  maturity  to  convert  the  balance
outstanding on the debentures  into shares of Company common stock at the lesser
of a fixed  price that  represents  a 10%  premium to the  closing  bid price of
common  stock at the time the  debentures  were issued and 50% of the average of
the 5 lowest  closing bid prices of Company  common stock during the 25 business
days  immediately  preceding  the  conversion  date.  Under the  agreements,  as
amended, and pursuant to Section 4(2) of the Securities Act of 1933, as amended,
the Company  issued to the investors  $500,000  principal  amount of convertible
debentures on June 18, 2001, $240,000 principal amount of convertible debentures
on July 30,  2001,  $130,000  principal  amount  of  convertible  debentures  on
September 6, 2001 and $277,499  principal  amount of  convertible  debentures on
October 18,  2001.  On June 18, 2001,  the Company also issued to the  investors
common  stock  purchase  warrants to purchase up to  1,000,000  shares of common
stock at an exercise price of $0.14. On October 18, 2001 the parties amended the
agreement to increase the investment  amount by $147,499 and the Company granted
to the  investors  a  security  interest  in all of the  assets  of the  Company
covering all prior and future  indebtedness of the Company to the investors.  We
have received  proceeds  from the sale of the  convertible  debentures  equal to
$1,147,499 less $80,000 to Hadrian Investments Limited for placement agent fees,
or 8% of the proceeds  received  for the first  $1,000,000  principal  amount of
convertible  debentures  issued to the investors,  and less $25,000 to cover the
legal expenses of the investors. We currently owe Hadrian Investments Limited an
additional  $11,799.92  in  connection  with this  financing,  or 8% of the last
$147,499  convertible  debentures issued to the investors.  The Company used the
proceeds from the private placement  primarily for general  corporate  purposes.
The  Company  is  obligated  to file a  registration  statement  for the  shares
issuable upon  conversion of the  convertible  debentures  and warrants with the
SEC. The Company was also  obligated to cause the  registration  statement to be
declared  effective  by October  2, 2001 and is  currently  accruing  liquidated
damages at the rate of 2% of the outstanding principal amount of the convertible
debentures per month.  These penalties may be paid in cash or, at the investors'
option, in common stock. In addition, if the Company issues additional shares of
common  stock,  then  antidilution   provisions  contained  in  the  convertible


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<PAGE>

debentures may reduce the conversion price of the shares issued to the investors
so as to prevent dilution of the their investment in the Company.

Equity Line of Credit

On July 26, 2001 the Company  signed what is sometimes  termed an equity line of
credit or an equity draw down facility with an  accredited  investor,  Grenville
Finance Ltd. In general,  Grenville  has committed up to $30 million to purchase
our common stock over a 36 month period  beginning after and during the period a
resale registration  statement  registering the shares purchased pursuant to the
equity line of credit is effective.  During the periods the resale  registration
statement  is  effective,  the Company may request a draw of up to $1 million of
that  money,  subject to a formula  based on average  stock  prices and  average
trading  volumes,  setting the maximum amount of any request for any given draw.
The amount of money that  Grenville  will provide and the number of shares to be
issued to  Grenville  in return for that money is settled  twice during a 22 day
trading period following the draw down request based on the formula in the stock
purchase  agreement.  Grenville receives a 17.5% discount to the market price of
Company  common  stock  during the 22-day  period and the Company  receives  the
settled amount of the draw down,  less 8% of such amount to Hadrian  Investments
Limited for placement  agent fees.  Additionally,  we issued to Hadrian  500,000
shares in lieu of a cash payment of $25,000 for services rendered to the Company
by Hadrian.  In addition,  the Company issued a warrant to Grenville to purchase
up to 16,366,612 shares of Company common stock at an exercise price of $0.07027
and  paid  Grenville  $20,000  for its  legal  fees  and  expenses  incurred  in
connection  with the equity line of credit.  The issuances of the  securities to
the  accredited  investors are made  pursuant to Section 4(2) of the  Securities
Act.  The  Company  will use the  proceeds  from  the  equity  line for  general
corporate purposes.


                                    PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

          Independent Auditors' Reports

          Balance Sheets as of June 30, 2001 and 2000

          Statements  of  Operations  for the fiscal  years ended June 30, 2001,
          2000, and 1999

          Statements of Shareholders' Equity for the fiscal years ended June 30,
          2001, 2000, and 1999

          Statements  of Cash Flows for the fiscal  years  ended June 30,  2001,
          2000, and 1999

          Notes to Financial Statements

     2. Financial Statement Schedules

          Schedules  are either not  required or the  necessary  information  is
          included in the financial statements or notes thereto.


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<PAGE>

     3. Exhibits

      3.1   Articles  of  Amendment  to  and  Restatement  of  the  Articles  of
            Incorporation of the Company, filed December 27, 1991. (a)

      3.2   Articles of Correction  to Articles of Amendment to and  Restatement
            of the Articles of  Incorporation  of the Company,  filed August 13,
            1992. (a)

      3.3   Articles  of  Amendment  to the  Articles  of  Incorporation  of the
            Company, filed August 21, 1992. (a)

      3.4   Bylaws of the Company and Amendment to Bylaws. (a)(b)

      3.5   Statement  of  Resolution   Establishing   Series  B   Participating
            Cumulative Preferred Stock. (f)

      3.6   Articles  of  Amendment  to the  Articles  of  Incorporation  of the
            Company, filed January 21,1999 (i)

      4.1   Specimen Common Stock Certificate. (a)

      10.1  *401(k) Profit Sharing Plan, effective March 1, 1992. (a)

      10.2  Form of  Indemnification  Agreement  between  the  Company  and each
            director. (c)

      10.3  *Amended  and  Restated  Employee  Stock  Purchase  Plan  adopted in
            February 1996. (e)

      10.4  *1994 Stock Option Plan. (d)

      10.5  *1995 Stock Option Plan. (e)

      10.6  *1997 Stock Option Plan. (g)

      10.7  *1998 Stock Option Plan. (h)

      10.8  *1999 Stock Option Plan (i)

      10.9  *2000 Stock Option Plan (j)

      10.10 Securities Purchase Agreement dated June 25, 1999, by and among DATA
            RACE, Inc. and Cranshire Capital, L.P., Keyway Investments Ltd., and
            Lionhart Investments Ltd., as the Investors. (k)

      10.11 Registration Rights Agreement dated June 25, 1999, by and among DATA
            RACE, Inc. and Cranshire Capital, L.P., Keyway Investments Ltd., and
            Lionhart Investments Ltd., as the Investors. (k)

      10.12 Warrant Agreements dated June 25, 1999, issued to Cranshire Capital,
            L.P., Keyway Investments Ltd., and Lionhart Investments Ltd. (k)

      10.13 Securities Purchase Agreement,  dated December 10, 1999, between the
            Company,  Cranshire  Capital,  L.P.,  Keyway  Investments  Ltd., and
            Lionhart Investments Ltd. (l)

      10.14 Registration Rights Agreement,  dated December 10, 1999, between the
            Company,  Cranshire  Capital,  L.P.,  Keyway  Investments  Ltd., and
            Lionhart Investments Ltd. (l)


                                       9
<PAGE>

      10.15 Warrant  Agreement  dated  December  10,  1999  issued to  Cranshire
            Capital,  L.P., Keyway  Investments  Ltd., and Lionhart  Investments
            Ltd. (l)

      10.16 Securities  Purchase  Agreement  dated June 12,  2000,  between  the
            Company,  Cranshire Capital, L.P., Keyway Investments Ltd., Lionhart
            Investments  Ltd.,  EURAM Cap Strat.  "A" Fund Limited,  ICN Capital
            Ltd., and G-Bar Limited Partnership (m)

      10.17 Registration  Rights  Agreement  dated June 12,  2000,  between  the
            Company,  Cranshire Capital, L.P., Keyway Investments Ltd., Lionhart
            Investments  Ltd.,  EURAM Cap Strat.  "A" Fund Limited,  ICN Capital
            Ltd., and G-Bar Limited Partnership (m)

      10.18 Warrant  Agreement,  dated  June  12,  2000,  between  the  Company,
            Cranshire   Capital,   L.P.,  Keyway   Investments  Ltd.,   Lionhart
            Investments  Ltd.,  EURAM Cap Strat.  "A" Fund Limited,  ICN Capital
            Ltd., and G-Bar Limited Partnership (m)

      10.19 Securities  Purchase  Agreement  dated  March 2, 2001,  between  the
            Company,  Protius Overseas  Limited,  Keyway  Investments  Ltd., and
            Lionhart Investments Ltd (n)

      10.20 Registration  Rights  Agreement  dated  March 2, 2001,  between  the
            Company,  Protius Overseas  Limited,  Keyway  Investments  Ltd., and
            Lionhart Investments Ltd (n)

      10.21 Warrant Agreement, dated March 2, 2001, between the Company, Protius
            Overseas Limited,  Keyway Investments Ltd., and Lionhart Investments
            Ltd. (n)

      10.22 Consultant and Advisor Stock Plan (l)

      10.23 *Description of Transaction Bonus Plan (l)

      10.24 Convertible  Debentures and Warrants Purchase Agreement,  dated June
            12, 2001,  between the Company,  Alpha  Capital AG and  Stonestreet,
            L.P. (r)

      10.25 Registration  Rights  Agreement,  dated June 12,  2001,  between the
            Company, Alpha Capital AG and Stonestreet, L.P. (r)

      10.26 Form of 6%  Convertible  Debentures  issued  to  Alpha  Capital  and
            Stonestreet (r)

      10.27 Form of Warrants issued to Alpha Capital and Stonestreet (r)

      10.28 Letter Agreement between the Company, Alpha Capital and Stonestreet,
            dated July 19, 2001 (r)

      10.29 Letter Agreement between the Company, Alpha Capital and Stonestreet,
            dated October 18, 2001 (q)

      10.30 Security   Agreement   between  the  Company,   Alpha   Capital  and
            Stonestreet, dated October 18, 2001 (q)

      10.31 Common Stock  Purchase  Agreement  between the Company and Grenville
            Finance Ltd. dated July 26, 2001 (s)

      10.32 Registration  Rights  Agreement  between the  Company and  Grenville
            Finance Ltd. dated July 26, 2001 (q)


                                       10
<PAGE>

      10.33 Stock Purchase Warrant issued to Grenville Finance Ltd. (q)

      10.34 Finder's agreement entered into with Hadrian Investments Limited (s)

      16    Change in certifying accountant (p)

      23.1  Consent of KPMG LLP (q)

      23.2  Consent of Lazar, Levine & Felix, LLP (q)

      24    Powers of Attorney to sign  amendments to this report.  Reference is
            made to the Signature page of this report.

-------------

(a)  Filed  as an  exhibit  to Form S-1  Registration  Statement  No.  33-51170,
effective October 7, 1992.

(b) Filed as an exhibit to Form 10-Q for the quarter ended December 31, 1996.

(c) Filed as an exhibit to Form 10-K  Annual  Report for fiscal  year ended June
30, 1993.

(d) Filed as an exhibit to Form 10-K  Annual  Report for fiscal  year ended June
30, 1995.

(e) Filed as an exhibit to Form 10-K  Annual  Report for fiscal  year ended June
30, 1996.

(f) Filed as an exhibit to Form 10-K  Annual  Report for fiscal  year ended June
30, 1997.

(g)  Incorporated by reference to appendix A of the Company's  Definitive  Proxy
Statement dated December 12, 1997.

(h)  Incorporated by reference to appendix A of the Company's  Definitive  Proxy
Statement dated October 14, 1998.

(i)  Incorporated by reference to appendix A of the Company's  Definitive  Proxy
Statement dated October 12, 1999.

(j)  Incorporated by reference to appendix A of the Company's  Definitive  Proxy
Statement dated September 20, 2000.

(k) Filed as an exhibit to Form 8-K filed on June 25, 1999.

(l) Filed as an exhibit to Form 8-K filed on December 17, 1999.

(m) Filed as an exhibit to Form 8-K filed on June 21, 2000.

(n) Filed as an exhibit to Form 8-K on March 7, 2001.

(o) Filed as an exhibit to Form 8-K on December 4, 2001.

(p) Filed as an exhibit on Form 8-K on November 20, 2000.


                                       11
<PAGE>

(q) Filed as an exhibit on Form 10-K/A filed on February 15, 2002.

(r) Filed as an exhibit on Form 8-K on July 24, 2001.

(s) Filed herewith.

* Management contract or compensatory plan, contract or arrangement

(b) Reports on Form 8-K

A report on Form 8-K was filed on July 24,  2001 to report the  completion  of a
private placement.


                                       12
<PAGE>


SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended the  Registrant  has duly caused this report to
be signed on behalf of the undersigned, thereunto duly authorized.

                                      DATA RACE, INC., DBA IP AXESS


                                      By:   /s/ JAMES G. SCOGIN
                                            -------------------
                                              James G. Scogin
                                            President, Chief Financial Officer
                                            and Principal Accounting Officer

                                      Date: March 11, 2002


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