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

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                    000-29743
                            (Commission file number)

                        INTERNAL HYDRO INTERNATIONAL INC.
                   (Formerly Home Services International Inc)

           Nevada                                         88-0409143
--------------------------------------------------------------------------------
(State or other jurisdiction                            (IRS Employer
of incorporation or organization)                    Identification No.)

            607 W. MARTIN LUTHER KING Jr. Blvd., TAMPA, FLORIDA 33603
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                  813-231-7122
                           --------------------------
                           (Issuer's telephone number)


        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                               TITLE OF EACH CLASS
                          COMMON STOCK, $.001 PAR VALUE

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

Indicate  by check  mark if there  is no  disclosure  of  delinquent  filers  in
response to Item 405 of  Regulation  S-B is not  contained in this form,  and no
disclosure  will  be  contained,  to the  best  of  registrant's  knowledge,  in
definitive  proxy or information  statements  incorporated by referenced in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Revenue for the year ended December 31, 2004:  $0.00

There is a limited trading market for the registrant's  Common Stock. There were
18,218,127  shares of Common Stock, and 28,530,750 shares of class "A" preferred
stock issued and outstanding as of December 31, 2004.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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

TABLE OF CONTENTS




Item Number and Caption
Page



PART I


Item 1. Description of Business

Item 2. Description of Property

Item 3. Legal Proceedings

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


PART II

Item 5. Market for Common Equity and Related Stockholder Matters

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

Item 7. Financial Statements

Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act

Item 10. Executive Compensation.

Item 11. Security Ownership of Certain Beneficial Owners and Management

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits and Reports on Form 8-K.

Item 14. Controls and Procedures.

Item 15. Principal Accountant Fees and Services





<PAGE>



                                     PART I



Item 1. Description of Business

Background

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  was  incorporated  under  the laws of the State of Nevada on
April 19, 1999. On June 30, 2000,  Smartdotcom  became a wholly owned subsidiary
of Tel-Voice through a reverse merger.  Tel-Voice issued 4,376,895 shares of its
common  stock all of the issued and  outstanding  common  stock of  Smartdotcom.
Prior to the merger, Tel-Voice had no business activity and therefore, pro forma
operating  results as if the acquisition had taken place at the beginning of the
periods  presented have not been presented.  Smartdotcom has been treated as the
acquirer and accordingly, Smartdotcom is presented as the continuing entity, and
the historical financial statements are those of Smartdotcom.

Overview of Discontinued Business

In December  2002,  the Company  determined  it would abandon its efforts of its
only operating business segment.

The Company was an all-inclusive  telecom,  video,  Internet,  entertainment and
security  provider.  It  was in the  business  of  enhancing  the  lives  of our
subscribers,  who benefit  from the added value of  high-quality  services and a
fully  integrated  system made available by a single company.  Subscribers  were
afforded  the  luxury  of  accessing  these  services  using  state-of   the-art
technology that included hardware, software and network connectivity.

The Company was also a content provider.  Once logged off the community network,
subscribers  could  access the Internet  and a host of special  offerings,  over
multi-speed  connections.  Subscribers  could  enjoy the  benefit  of  exclusive
network content and global Internet service.

1-866-UNIONET

1-866-Unionet  was a  private  network,  customized  for  more  than 17  million
potential  labor  union  subscribers.   Once  deployed,  this  multipurpose  and
interactive  network would  generate  on-going  revenue for our partners and us.
This network also incorporated sponsor  participation with a potential of over 3
billion advertising dollars.  This model is representative of all our solutions,
including  our  integrated   communities,   business  networks,  and  all  other
subscriber groups.

The  Company  intended  to develop  the  subscriber  base from  within the union
membership.  It would  utilize the SmartFone  and other  interactive  devices to
connect  subscribers to a private and secure Intranet.  Offering members both an
exclusive Intranet, and a gateway for Internet access,  establishes a market for
our current and future technologies.  The unique technical infrastructure allows
simple "plug & play"  flexibility.  1-866-Unionet's  network design offered cost
effective  scalable  services.  Unions  and labor  organizations  were to have a
financial stake in their own technology solution.



Overview of New Business

The Company determined that it would exit the  telecommunications  business.  It
developed a new business plan to become a provider of services to homebuyers.

Home Services International Inc. (HSVI) intended to act as a holding company for
service  businesses  related to the home  building  and home buying that want to
expand into  national  markets.  HSVI  intended to  acquire,  joint  venture and
develop such businesses. Businesses that were intended targets included mortgage
broking,  mortgage  originations  and  lending,  construction  lending and other
services that would benefit propsective home buyers.

HSVI expected to have 2 roles in the joint ventures or aquisitions:

     1.   To act as the financing  intermediary between the business's that have
          adpoted the HSVI program.

     2.   To distribute the interest earnings and profits to the shareholder who
          have provided the financing.

The  corporate  offices  of HSVI  would not  require a large  infrastructure  or
overhead to operate  this  business:  o each  business  unit would be trained to
operate independently, except for the financing o the JV partners would have the
responsibility to manage and coordinate the business unit relationship

This feature of the business meant most of the revenues  generated  would result
in high  profit  margins  and cash  flow  that can be  distributed  back the the
shareholders.  The first phase of this would be to pay dividends directly on the
preferred shares we intend to issue in raising capital.

As of December 29, 2003 the above Business Plan was abandoned. An opportunity to
merge with INTERNAL COMMAND  INTERNATIONAL INC. was negotiated with an effective
date  of  January  2,  2004.  The  merged   companies   became   INTERNAL  HYDRO
INTERNATIONAL INC.

Subject  to  the  terms  and  conditions  of  the  Merger   Agreement  (Plan  of
Reorganization)  and pursuant to Section  368(a)(1)(B)  of the Internal  Revenue
Code of 1986,  as amended,  the parties to the  Agreement  shall effect a Type B
reorganization (the  "Reorganization")  whereby all of the outstanding shares of
ICI common  stock will be  exchanged  for  5,000,000  shares of the HSVI Class A
Preferred Stock.

INTERNAL HYDRO  INTERNATIONAL  INC. owns an alternative power system. The Energy
Commander IV (EC IV) is a patented technology,  utilizing  wastewater,  fluid or
gas flow from any source  where flow  pressure  is present,  and yet wasted,  to
create electricity.  The system takes in the wasted pressure flow, where it goes
through the heart of the system, and into pistons that create massive mechanical
forces,  all of which is transferred to a generator  creating both  electricity,
and optional air  pressure,  both being for direct use or storage.  The water or
gas then moves out of the unit,  to it's  original  destination,  without  added
waste. The system is noiseless and emission free

IHI has  prepared a business  model that will market the EC IV system  through a
distributor's  network  around the  world.  Numerous  municipalities,  counties,
manufacturing, textile, petroleum, residential development, and other industries
have  entered into  agreements  and intents  with IHI for  application  of these
units.

The  first  goal  of the  new  management  of IHDR  was  the  perfection  of the
technology  to prove  the  large  scale of the  power  potential  of the  Energy
Commander technology. This entailed the intricacy of design and engineering of a
new  style of unit on a much  larger  scale.  It  required  the  acquisition  of
materials,  fabrication of machined parts never before made; the manufacture and
design of a valve system so unique that it would  qualify as a new  intellectual
asset;  the  assembly of the unit;  and the  testing of the unit under  pressure
simulation. This work resulted in the final production of a unit in late August,
2004 (the  Energy  Commander  IV - A Model).  The EC IV (A) was a four  cylinder
unit,  designed  for a four inch  feed of water at 65  p.s.i.  The EC IV (A) was
shown to produce energy via its 25 kilowatt  generator,  successfully under real
world  conditions.  With the successful  completion of the EC IV (A) the company
proceeded  to design a smaller  sized unit which would  produce even more power.
The planning and design of the variant model EC IV (B) has now begun.  The EC IV
(B) will be an eight  cylinder  unit 50% the size of the (A) model  producing 30
kilowatts at 55 p.s.i. The new design will call for new parts, a new engineering
firm, new plans and new equipment to make it smaller and  standardized  for mass
production.


The Company's  management  sought to further its business plan by acquisition of
further similar  technologies and by execution of contracts for future units and
rights to distribution of the technology.

KINETIC ENERGY:

On July 8, 2004,  Internal Hydro  International made an announcement that it had
entered into an  agreement  with  KINETIC  ENERGY  SYSTEMS,  INC.  (KINETIC),  a
privately held Florida Corporation, for a strategic partnership.  Internal Hydro
received  20% of the shares of the private  company,  with access to license and
develop  the  technology  Kinetic  held  for  underwater  and over  water  power
generation.  Internal Hydro  International  issued  1,250,000 shares of treasury
stock for this  interest.  Internal  Hydro agreed to help develop the technology
and market it within its resources.

ETIG

On  November  3,  2004,  the  Company  entered  into  agreement  with  El  Tigre
Development (ETIG), a Nevada Corporation,  for the purchase of one hundred units
of the  Company's  Energy  Commander  IV units.  The  purchase  price of the one
hundred units was $2,250,000, with the first ten units to cost $50,000 each. The
agreement  itself had a three year term and called for the  Company  and ETIG to
share in revenue  generated  from each unit beyond the purchase  price.  For the
first ten units,  revenue is 20% for the  Company  from any source on the units.
Additional units include 50% revenue to the Company. In exchange for the initial
ten-unit  purchase,  the Company  granted  rights for  placement  to ETIG in the
states of Washington,  North  Carolina,  Oregon and Utah.  Upon execution of the
first  ten-unit  purchase,  two  lines of  credit  to the  Company  will  become
effective. Each line of credit shall be for $5,000,000 to the Company's benefit.
The first line of credit will entitle ETIG to place units in Idaho and Asia. The
second line of credit  will  entitle  ETIG to place  units in South  America and
Scotland.

On December 15, 2004,  the Company had not received the initial  payment for the
ten-unit  order and ETIG,  which  had  renamed  itself  McGregor  Energy,  Inc.,
requested a thirty (30) day  extension for the payment of the initial ten units.
The extension was granted. As of December 31, 2004, the Company has not received
payment on the initial ten-units.

NEW IMPACT

On November 2, 2004 Internal Hydro  International and New Impact, LLC, a private
Arizona based Company,  entered into a contract for the purchase of energy units
from IHDR, with follow on rights for distribution and use of IHDR's  technology.
The  initial  phase of the  contract  calls  for IHDR to  supply  ten units at a
purchase  price of $500,000 for use in New Impact's water  treatment  facilities
and other areas in the Southwest. This contract has not been funded to date.

LETTERS OF INTENT

Throughout the year, the company released news on a limited number of letters of
intent from potential users of the production units when they are available.  To
date,  all such  potential  users and parties of interest  still want to acquire
units for use once production units of the new version of the unit is available.

Employees
As of December 31, 2004, the company employed 3 full time employees.


Item 2. Description of Property

The Company leases its principal executive office,  which is located in a shared
office  facility  in Tampa,  Florida at a monthly  rent of $ 981.  This lease is
month to month.


Item 3. Legal Proceedings

A former  employee and director has  suggested he and several  shareholders  are
threatening  to sue  the  Company  over  breach  of  agreement  relating  to the
company's  refusal to forward certain share  certificates that are alleged to be
owed to them.

The Company has been advised a judgment is pending from a creditor for
non-payment of a debt of approximately $43,000.

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

No matter was submitted to a vote of security holders during the year ended
December 31, 2004.


                                     PART II


Item 5.  Market for Common Equity and Related Stockholder Matters

The Company's common stock under the registered name of Internal Hydro
International, Inc. was first quoted in June of 2002, and now trades on the
Over-the-Counter ("OTC") Bulletin Board under the symbol "IHDR".

Set forth below are the high and low closing prices for the Company's common
stock as reported on the OTC Bulletin Board for the last four quarters
(accounting for share split):

        Quarter Ended                                  High            Low
        ------------------------------                 ----------      --------
        December 31, 2004                              $0.26           $0.12
        September 30, 2004                             $1.30           $0.15
        June 30, 2004                                  $2.10           $0.90
        March 31, 2004                                 $2.00           $1.10


The above quotations  represent  inter-dealer  quotations without retail markup,
markdown or commissions and may not represent actual transactions.


Record Holders

As of December 31, 2004 the Company had 184 shareholders of record.

Dividends

The Company has never  declared or paid any cash  dividends on our common stock.
Any  future  determination  relating  to  dividend  policy  will  be made at the
discretion  of our Board of  Directors  and will  depend on a number of factors,
including the future earnings,  capital  requirements,  financial  condition and
future  prospects  and such  other  factors as the Board of  Directors  may deem
relevant.

RECENT  SALES OF  UNREGISTERED  SECURITIES;  USE OF PROCEEDS  FROM  UNREGISTERED
SECURITIES

Sale of Common Stock.

There were no  underwriting  discounts or  commissions  in  connection  with the
Private Placements.

The  proceeds  from Private  Placements  were used by the Company for funding of
general corporate purposes.

On July 27, 2004,  the Board of  Directors  approved a 5 to 1 stock split of the
Company's  common and preferred stock,  effective  September 10, 2004. The stock
split  increased  the number of  outstanding  common  shares from  2,875,279  to
14,376,395  and the number of  outstanding  preferred  shares from  5,750,000 to
28,750,000 as of September  10, 2004.  All  references  to the Company's  common
stock in the financial statements have been restated to reflect the stock split.


Item 6.  Management's Discussions and Analysis or Plan of Operations


General

The following discussion and analysis should be read in conjunction with the our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2004 included in this Annual Report on Form 10-KSB.  The discussion
of results,  causes and trends  should not be construed to imply any  conclusion
that such results or trends will necessarily continue in the future.

Background and Overview

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  ("Smartdotcom") was incorporated under the laws of the State
of Nevada on April 19, 1999. On June 30, 2000, Smartdotcom became a wholly owned
subsidiary of Tel-Voice  through a reverse merger.  Tel-Voice  issued  4,376,895
shares of its common stock for all of the issued and outstanding common stock of
Smartdotcom.  Prior  to the  merger,  Tel-Voice  had no  business  activity  and
therefore,  pro forma operating results as if the acquisition had taken place at
the beginning of the periods presented have not been presented.  Smartdotcom has
been treated as the acquirer and  accordingly,  Smartdotcom  is presented as the
continuing entity. The historical financial statements are those of Smartdotcom.

In December of 2002, the Company  determined  that its business plan of becoming
an all-inclusive  telecom,  messaging and  communications  provider would not be
successful.  The  Company  therefore  wound  down  those  operations  and  began
searching  for new  business  ventures.  The Company has  incurred net losses of
$2,364,460 since inception.

In December of 2002, TVCM reorganized,  to become a "home services  provider" to
attract  investors and customers.  The Company  intended to become a provider of
services  to  homebuyers.  The  services  would  include  design,   construction
management and financing for  individuals  building their own custom homes.  The
Company  intended to raise capital in order to broker and originate  residential
mortgage loans.

The  Company  issued   "stock-for-debt"  and  rolled  back  the  share  issuance
outstanding 28.9 to 1.

Tel-Voice Communications,  Inc., changed its name to Home Services International
Inc., and postured to grow and attract  investment  thus allowing the company to
meet its obligations and provide increased shareholder value.

Plan of Operation

Because  the  Company  determined  that it  would  exit  the  telecommunications
business,  it developed a new business  plan to become a provider of services to
homebuyers.

The  Company   intended  to  assemble  a  management  team  that  would  include
experienced  managers  in the  fields of  telecommunications,  technology,  home
building and  construction,  franchise  sales and  marketing,  and finance.  The
Company was seeking  acquisition targets that would provide synergies within the
complete process of acquiring land, construction and financing of new homes.

The company intended to duplicate these in a franchise-type manner, so that HSVI
could create EBU's  (Entrepreneurial  Business Units) in several other cities or
communities. Any acquisition target was to have been in the "home service" field
and provide a product or service to a homeowner.

As of December 29, 2003 the above Business Plan was abandoned. An opportunity to
merge with INTERNAL COMMAND  INTERNATIONAL INC. was negotiated with an effective
date  of  January  2,  2004.  The  merged   companies   became   INTERNAL  HYDRO
INTERNATIONAL INC.



Results of Operations

Year ended December 31, 2004 vs. December 31, 2003

Liquidity and capital resources

The  Company  has  incurred  additional  deficits  in cash flow  from  operating
activities.   As  a  part  of  the  Merger   Agreement  with  INTERNAL   COMMAND
INTERNATIONAL  INC., the then Chief Executive Officer of HSVI, Jay Budd, has and
does affirm that the outstanding debts of HSVI have been properly structured for
management  of the debt  post-merger;  namely,  that the debt is in the hands of
suitable professional debt management team, including Fletcher & Associates, and
Harry J.  Miller,  PLLC,  that  there has been set  aside as part of the  issued
common stock for obligation and  satisfaction of the debt, and that the incoming
principals of ICI will be held harmless for this debt.

Critical Accounting Estimates

The  preparation  of our  financial  statements in  conformity  with  accounting
principles  generally  accepted  in the United  States of America  requires  our
management to make certain  estimates and  assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  As such, in accordance with
the use of  accounting  principles  generally  accepted in the United  States of
America,  our actual  realized  results  may differ  from  management's  initial
estimates  as  reported.  A summary of our  significant  accounting  policies is
detailed  in the  notes  to the  financial  statements,  which  are an  integral
component of this filing.

Management  evaluates the  probability of the utilization of the deferred income
tax asset  related to the net  operating  loss carry  forwards.  The Company has
estimated a $1,201,000  deferred  income tax asset related to net operating loss
carry  forwards at December 31,  2004.  Management  determined  that because the
Company has yet to generate  taxable  income and that the  generation of taxable
income in the short term is uncertain, it was appropriate to provide a valuation
allowance for the total deferred income tax asset.


Forward looking statements

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of us develop our  technology  and execute our business
plan.  Although  we  believe  the  assumptions  underlying  the  forward-looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the  forward-looking
statements contained in the report will prove to be accurate.

Off balance sheet arrangements

The Company's  liquidity has not dependent upon off balance sheet  transactions.
For the year ended  December  31,  2004,  the  Company did not engage in any off
balance sheet transactions.

Item 7.  Financial Statements



                                     <PAGE>




                INTERNAL HYDRO INTERNATIONAL, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                TABLE OF CONTENTS
                                                                       PAGE (S)

INDEPENDENT AUDITORS' REPORT 11

CONSOLIDATED BALANCE SHEETS 12

CONSOLIDATED STATEMENTS OF OPERATIONS 13

CONSOLIDATED STATEMENTS OF CASH FLOWS 14

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY 15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16-22







<PAGE>


           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the  Stockholders  and Board of  Directors of Internal  Hydro  International,
Inc.:


We have audited the balance  sheet of Internal  Hydro  International,  Inc. (the
Company),  a development stage company, as of December 31, 2004, and the related
statements of operations, stockholders' deficit and cash flows for the year then
ended and January 21, 2003 (date of  inception)  to  December  31,  2003.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We believe our audits  provide a reasonable
basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Internal Hydro  International,
Inc. as of December 31, 2004,  and the results of its  operations and cash flows
for year then ended and  January 21, 2003 (date of  inception)  to December  31,
2003, in conformity with accounting  standards  generally accepted in the United
States of America.

As disclosed in Note 1, the accompanying financial statements have been prepared
assuming  that the Company  will  continue as a going  concern.  The Company has
experienced  material  operating losses and had a net working capital deficiency
of $1,035,842 at December 31, 2004.  Management is seeking equity capital and is
implementing  a  business  plan  that it  believes  will  result  in  profitable
operations.  There can be no assurances that the Company will obtain  sufficient
capital or that operations will become  profitable.  These and other  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The accompanying  financial  statements do not include any adjustments
that might be  necessary  should the  Company be unable to  continue  as a going
concern.



/s/  EPSTEIN, WEBER & CONOVER, PLC
     Scottsdale, Arizona
     May 12, 2005




                                    PART III

ITEM 9. DIRECTORS EXECUTIVE OFFICERS,  PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT


EXECUTIVE OFFICERS AND DIRECTORS

     The members of the Board of Directors  of the Company  serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers  serve at the  pleasure of the Board of  Directors.  On January 2, 2004
when then Home Services  International  Inc. acquired the shares of the Internal
Command  International  Inc. the  Directors  were Jay H. Budd and Robert E. Lee.
After this  transaction,  Robert E. Lee  resigned  and Mark Pena and Wade Kenyon
were  appointed  as  Directors.  On  January  2, 2004  when  then Home  Services
International  Inc.  acquired the shares of the Internal  Command  International
Inc. Jay H. Budd was the CEO of the Company. After this transaction,  Jay H Budd
resigned and was  re-appointed as Executive Vice President and Craig Huffman was
appointed as President  and CEO. Jay H. Budd  resigned  both his position on the
Board of Directors and Executive Vice President on August 23, 2004.

The  following  table sets forth the name,  age, and position of each  executive
officer and director of the Company:

DIRECTOR'S   NAME       AGE        OFFICE                TERM EXPIRES
-------------------------------------------------------------------------------

Mark Pena              41     Chairman/Director      next annual meeting
Wade Kenyon           65          Director            next annual meeting

EXECUTIVE OFFICER'S   NAME                  AGE                     OFFICE
--------------------------------------------------------------------------------

Craig Huffman                               39            President/CEO





     Set forth below is certain biographical information, present occupation and
business  experience  for the past five  years of each  director  and  executive
officer of the  Company.  Officers  of the  Company  are elected by the Board of
Directors and hold office until their successors are chosen and qualified, until
their death or until they resign or have been removed from office. All corporate
officers serve at the discretion of the Board of Directors.


Mark Pena
Board of Directors

Member Board of Directors of Sun Rayz Beverages, Inc., Florida.
Corporate General Counsel/ Bevsystems International, Inc.,

Stetson  University  College of Law, Honor Roll, John O. Weihl Award Scholarship
Recipient  representing  top  student  of class in Trial  Advocacy/  Mann  Award
Scholarship Recipient  representing  Character and Leadership in the practice of
law, Student Bar Association President/ American Bar Association Young Lawyer as
Division Leutenant Governor.

Rutgers College, New Brunswick,  NJ, Union College,  Cranford, NJ, University of
South Florida, Tampa, Florida. Honors included: Dean's List, Member: Pi Gamma Mu
International Honor Society.

Teen Court  Judge,  Hillsborough  County  Bar  Association  Troubled  Teen Youth
Program.

Attorney/Solo  Practioner,  Law Office of Mark E.  Pena,  P.A.,  Tampa,  Florida
Admitted to Practice:  July, 1994. Member,  Florida Bar, Federal Middle District
of Florida, 11th Federal Circuit Court of Appeals.,  American Bar Assoc./ Member
International Law and Business Law Divisions.  Primary areas of practice include
general   corporate   transactions,   structure   and   litigation,   commercial
transactions,  civil  litigation,  international  law.  Past  practice  includes
insurance defense, first party contracts, and employment. Former Senior Partner/
Law  Office of Pena & Thomas,  P.A.,  Tampa  Florida  Former  Special  Assistant
Florida State Attorneys Office,  Prosecution Clinic,  Pinellas County,  Florida.
Corporate  representation  included:  Armor Insurance Co., Progressive Insurance
Co.,  Bevsystems  International,  Inc., Staff Suppliers Inc.,  Corrosion Control
Specialists,  Inc.,  Nextrade Inc., Gulf South Income Properties Inc. d/b/a Best
Western,  Southeastern  Income Properties Inc., d/b/a Howard  Johnsons/Orlando.,
DTNet Technologies,  Inc. DTNet International,  Inc., St. Mary's Parish,  Polish
Catholic Church, St. Petersburg, Florida., Gulf West Property Development LLC, N
B Financial LLC. Counsel of record in over 400 civil litigation cases throughout
the State of Florida and Federal Districts.

Wade Kenyon
Board of Directors
BA Degree University of South Florida - Major Chemistry, Minor Zoology.
Co-founder of Internal Command Industries,

2000 to Current - Baring Industries,  Inc. a division of Electrolux Professional
Sales Manager - Manages the Orlando branch office of Baring Industries.  Oversee
the activities of two other project  management teams,  participate in the daily
sales activities, negotiate pricing for the projects and project manage selected
projects and  coordinate  branch  office  operation  with the rest of the Baring
management team.

1997 to 2000  Johnson  Lancaster  Project  Manager - Solicited  and managed high
profile Food Service projects some of which include Universal Studios,  Orlando,
and Disney World, Orlando, along with University of North Carolina,  Lenoir Hall
in Greensboro,  NC. 1991 to 1997 Kenyon and Kenyon,  Inc. - Food  Facilities and
Laundry  Design and  Consulting  - major  projects  and  customers  included the
Georgia Department of Corrections, and other major contracts.

1991 to 1997  Sherman  Robinson  Associates,  Atlanta - Partner  with Kenyon and
Kenyon,  Inc. - Food Facilities  Design and Consulting - designed  numerous food
service  facilities  including  the  Olympic  Stadium  concessions  for the 1996
Olympic  games and the food service  facilities  for the Atlanta  Braves  Turner
Stadium.

1990  to  1991  Judy  Ford  Stokes  and  Associates   -Contracted  Consultant  -
responsibilities  included  participation  in design and project  management  of
several major food services in the southeast and Washington, D.C.

1985 to 1990  Greitzer,  Inc.,  Vice  President - responsible  for revamping the
manufacturing  processes,  participating  in the design and  development  of the
product  lines,  reorganizing  the sales and  marketing  efforts and  personally
closing  sales.  1986 to 1990  Greitzer,  Inc.,  President  - as  president  was
responsible for overseeing and guiding each company department, reporting to the
Board of Directors,  negotiating labor contracts,  reviewing manufacturing costs
and  continuing  personal  contact with the company key clients.  Increased  the
sales of the firm  fivefold  from 1985 to 1990.  1981 to 1984  Internal  Command
Industries, Tampa, FL - co founder and vice president.

Craig Huffman
Chief Executive Officer and President

President  and  co-founder,  Internal  Command  International,   Tampa,  Florida
2001-2004.  Oversaw the  development  of the Energy  Commander  technology,  all
corporate operations,  patent protection, and all other aspects of the corporate
build up. Author of the business plan for Internal Hydro, and the revenue stream
plan.

BA, University of Tampa, 1989. President Student Political Organization,  member
Sigma Phi Epsilon Juris  Doctor,  cum laude (2nd in class),  Stetson  University
College of Law, 1997; recipient West?s Corpus Juris Secundum Award for Torts and
Civil Procedure.

Solo  Practitioner:  Craig A.  Huffman,  P.A.  primary  areas of practice  being
criminal  law,  civil tort  practice,  and  appellate  work.  Tried over 50 jury
trials,  in both State and Federal  Court;  authored over 40 appeals.  Army ROTC
four  year   scholarship   recipient.   Major,   United   States  Army  Reserve,
1989-Present; commissioned as a Field Artillery Officer presently the JAG Corps.

United States Army Field  Artillery  Officer  Basic  Course;  United States Army
Judge Advocate Officers Basic Course, Judge Advocate Officers Advanced Course.

Deputy Sheriff in  Hillsborough  County  Florida as an  Enforcement  Deputy from
1990-1995.  Graduate Tampa Police Academy;  Hillsborough County Sheriff?s Office
Academy; Sex Crimes Investigations:  Hostage Negotiations;  Kinesic Interviewing
Techniques; Interviews and Interrogations.



CONFLICTS OF INTEREST

     Certain conflicts of interest existed at December 31, 2004 and may continue
to exist between the Company and its officers and directors due to the fact that
each has other business  interests to which they devote their primary attention.
Each officer and director  may continue to do so  notwithstanding  the fact that
management time should be devoted to the business of the Company.

     Certain  conflicts  of  interest  may exist  between  the  Company  and its
management,  and  conflicts  may  develop in the  future.  The  Company  has not
established  policies or procedures  for the  resolution of current or potential
conflicts of  interests  between the  Company,  its  officers  and  directors or
affiliated entities.  There can be no assurance that management will resolve all
conflicts  of interest in favor of the  Company,  and failure by  management  to
conduct the  Company's  business in the  Company's  best  interest may result in
liability to the  management.  The officers and directors are accountable to the
Company as fiduciaries  which mean that they are required to exercise good faith
and integrity in handling the Company's  affairs.  Shareholders who believe that
the   Company  has  been  harmed  by  failure  of  an  officer  or  director  to
appropriately  resolve any conflict of interest may,  subject to applicable rule
of  civil  procedure,  be able to bring a class  action  or  derivative  suit to
enforce their rights and the Company's rights.

BOARD MEETINGS AND COMMITTEES

     The Directors and Officers will not receive  remuneration  from the Company
until a subsequent offering has been successfully  completed,  or cash flow from
operating  permits,  all in the discretion of the Board of Directors.  Directors
may be paid their  expenses,  if any, of attendance at such meeting of the Board
of Directors,  and may be paid a fixed sum for attendance at each meeting of the
Board of  Directors  or a stated  salary  as  Director.  No such  payment  shall
preclude any Director  from serving the  Corporation  in any other  capacity and
receiving compensation therefor. No compensation has been paid to the Directors.
The Board of  Directors  may  designate  from  among its  members  an  executive
committee  and one or  more  other  committees.  No such  committees  have  been
appointed.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Based  solely  upon a review of forms 3, 4, and 5 and  amendments  thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.


AUDIT COMMITTEE FINANCIAL EXPERT

     The  Company's  board  of  directors  does  not  have an  "audit  committee
financial   expert,"  within  the  meaning  of  such  phrase  under   applicable
regulations  of the  Securities  and Exchange  Commission,  serving on its audit
committee.  The  board of  directors  believes  that all  members  of its  audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (i)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our  financial   statements,   (iv)  understanding  our  internal  controls  and
procedures  for  financial  reporting;  and (v)  understanding  audit  committee
functions,  all of which are attributes of an audit committee  financial expert.
However,  the board of directors  believes that there is not any audit committee
member who has obtained these attributes through the experience specified in the
SEC's definition of "audit committee financial expert." Further, like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit  committee  financial  experts," and competition for these
individuals is significant.  The board believes that its current audit committee
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."

ITEM 10. EXECUTIVE COMPENSATION

     None of the executive  officer's salary and bonus exceeded  $100,000 during
any of the Company's last two fiscal years.


ITEM 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS; MANAGEMENT SHARE HOLDINGS

     Beneficial  Ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to  securities.  The following  table sets forth Common Stock
ownership  information  as of the Record  Date with  respect to (i) each  person
known  to us to be the  beneficial  owner  of  more  than 5% of our  issued  and
outstanding  Common Stock and  Preferred  Stock;  (ii) each of our directors and
executive  officers;  and (iii) all of our directors and executive officers as a
group. Unless otherwise indicated, the business address of each person listed is
Internal Hydro International,  Inc., 607 W. MARTIN LUTHER KING Jr. Blvd., TAMPA,
FLORIDA 33603

   Name and Address of       Title of   Amount and Nature of  Percent of
   Beneficial Owner            Class      Beneficial Owner       Class
-  ---------------------------------------------------------------------
-  Craig Huffman            Preferred       6,509,020           22.8%
-  Rianey Nelson            Preferred       7,739,760           27.1%
-  Mark Pena                Preferred       1,213,280            4.3%
-  James A. Thomas          Preferred       6,051,140           21.2%


-  Mark Pena                Common            362,154            2.0%
-  Craig Huffman            Common          1,129,630            6.2%
-  Wade Kenyon              Common            136,135             .7%
-  ---------------------------------------------------------------------
All officers and directors
     as a group (1 person)  Preferred       7,722,300            27.1%
                            Common          1,411,412             8.9%




ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


     Shareholders of the Company have advanced the Company money in order to pay
general  and  administrative  expenses.  As of December  31, 2004 and 2003,  the
Company owed $55,000 and $128,963, respectively, relating to these loans.


     None of our  directors,  executive  officers or key employees is related to
any other of our directors, executive officers or key employees.


ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS OF THE COMPANY

During the year ended  December 31, 2004, the Board of Directors met 2 times and
held 1 meeting via unanimous consent in lieu of a special meeting. A majority of
the  directors  was  present at each  meeting,  all  constituting  a quorum.  In
addition to regularly scheduled meetings, a number of Directors were involved in
numerous informal  discussions with management,  offering advice and suggestions
on a broad range of corporate matters.



Item 13.  Exhibits and Reports on Form 8-K

                                                          EXHIBIT INDEX

     The  following  exhibits  are filed as part of this  Annual  Report on Form
10-KSB or are incorporated herein by reference:

   Exhibit                                        Description
3.1.1           Articles of Incorporation (1)
3.1.2           Amended Articles of Incorporation (1)
3.2             Bylaws (1)
10.1            Lock-up agreement with Hagit Bernstein (1)
10.2            Lock-up agreement with Raphi Shram (1)
10.3            Lock-up agreement with Naomi Shram (1)
10.4            Stock Purchase Agreement and Plan of Reorganization (2)
21.1            Subsidiaries of Registrant (F)


(1)  Incorporated  by reference to the  Exhibits to the  Registration  Statement
     filed by the Registrant on Form 10SB dated March 1, 2000.

(2)  Incorporated  by reference  to the Exhibits to the Current  Report filed by
     the Registrant on Form 8-K/A dated December 11, 2000.

F Filed herewith

Reports filed on Form 8-K




Item 14  - Controls and Procedures
--------------------------------------

     As required by Rule 13a-14 under the Exchange Act,  within 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of the Company's  management,  including the Company's Chief
Executive  Officer.  Based upon that  evaluation,  the Company's Chief Executive
Officer  concluded  that the Company's  controls and  procedures  are effective.
There have been no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date the Company carried out this evaluation.

     Disclosure  controls and procedures are controls and other  procedures that
are  designed  to  ensure  that  information  required  to be  disclosed  in the
Company's  reports  filed or  submitted  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules and forms.  Disclosure  controls and
procedures  include controls and procedures  designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive   Officer  as  appropriate,   to  allow  timely  decisions   regarding
disclosures.

     The Company has confidence in its internal  controls and procedures and has
expanded  its efforts to develop and improve  its  controls.  Nevertheless,  the
Company's  management,  including the Chief Executive  Officer,  does not expect
that the Company's disclosure procedures and controls, or its internal controls,
will  necessarily  prevent all error or intentional  fraud. An internal  control
system, no matter how well conceived and operated,  can provide only reasonable,
but not absolute,  assurance that the  objectives of such internal  controls are
met.  Further,  the design of an internal  control  system must reflect the fact
that the  Company  is subject  to  resource  constraints,  and the  benefits  of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all internal  control  systems,  no  evaluation  of controls can
provide  absolute  assurance  that all internal  control  issues or instances of
fraud, if any, within the Company be detected.

ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to us by EPSTEIN, WEBER & CONOVER,
PLC for professional services rendered for the years ended December 31, 2004 and
2003:

Service                                                 2004             2003
------------------------------------------------------------------------------
Audit Fees                                              $18,103        $14,565
All Other Fees                                               -              -
------------------------------------------------------------------------------
Total                                                   $18,103        $14,565
================================================

AUDIT FEES - Consists of fees billed for professional  services rendered for the
audits of our financial statements,  reviews of our interim financial statements
included in quarterly  reports,  services  performed in connection  with filings
with the Securities & Exchange  Commission and related comfort letters and other
services  that  are  normally  provided  by  EPSTEIN,  WEBER &  CONOVER,  PLC in
connection with statutory and regulatory filings or engagements.

TAX FEES - Consists of fees billed for professional services for tax compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions and acquisitions.



AUDIT  COMMITTEE  PRE-APPROVAL OF AUDIT AND  PERMISSIBLE  NON-AUDIT  SERVICES OF
INDEPENDENT AUDITORS

     The Audit  Committee is to  pre-approve  all audit and  non-audit  services
provided by the independent auditors. These services may include audit services,
audit  related  services,  tax services and other  services as allowed by law or
regulation.  Pre-approval  is  generally  provided  for up to one  year  and any
pre-approval  is detailed as to the  particular  service or category of services
and is generally  subject to a specifically  approved  amount.  The  independent
auditors  and  management  are  required  to  periodically  report  to the Audit
Committee regarding the extent of services provided by the independent  auditors
in accordance  with this  pre-approval  and the fees incurred to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.

                                  CERTIFICATION
                                  -------------


                                                           SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Action of 1934,  as amended,  the  registrant  has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                               INTERNAL HYDRO INTERNATIONAL INC.




By:   /s/ CRAIG A. HUFFMAN
 ---------------------------
          Craig A. Huffman


CHIEF EXECUTIVE OFFICER


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  Report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.




       Signature                   Title                   Date

    /s/ CRAIG A. HUFFMAN
--------------------------
        Craig A. Huffman, Chief Executive Officer     May 12, 2005


Exhibit 99.1 CERTIFICATIONS

I, Craig A. Huffman,  certify, pursuant to Rule 13a-4 of the Securities Exchange
Act of 1934,  as adopted  pursuant to Section 302 of the  Sarbanes-Oxley  Act of
2002,  with respect to the Annual Report of Internal Hydro  International,  Inc.
("IHDR") on Form 10-KSB for the year ended December 31, 2004 ("Report") that:

(1) I have reviewed this Report;

(2) based on my knowledge,  this Report does not contain any untrue statement of
a  material  fact  or omit  to  state a  material  fact  necessary  to make  the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this Report;

(3)  based  on my  knowledge,  the  financial  statements  and  other  financial
information included in this Report, fairly present in all material respects the
financial condition, results of operations and cash flows of IHDR as of, and for
the periods presented in this Report;

(4) I am responsible for  establishing and maintaining  disclosure  controls and
procedures  (as defined in Exchange  Act Rules 13a-14 and 15d-14) for IHDR and I
have:  (a)  designed  such  disclosure  controls and  procedures  to ensure that
material   information  relating  to  IHDR  is  made  known  to  me  by  others,
particularly  during  the  period in which this  Report is being  prepared;  (b)
evaluated the effectiveness of IHDR's disclosure controls and procedures as of a
date within 90 days prior to the filing  date of this  Report  (the  "Evaluation
Date");  and (c) presented in this Report my conclusions about the effectiveness
of the  disclosure  controls and  procedures  based on my  evaluation  as of the
Evaluation Date;

(5) I have disclosed,  based on my most recent  evaluation,  to our auditors and
the audit  committee  of our  board of  directors  (or  persons  performing  the
equivalent  function):  (a)  all  significant  deficiencies  in  the  design  or
operation  of  internal  controls  which could  adversely  affect our ability to
record, process, summarize and report financial data and have identified for our
auditors  any  material  weaknesses  in  internal  controls;  and (b) any fraud,
whether or not material,  that involves management or other employees who have a
significant role in our internal controls; and

(6) I have  indicated  in this  Report  whether  or not there  were  significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.





By:      /s/ Craig A. Huffman
      ---------------------------
            Craig A. Huffman
        Chief Executive Officer





                        INTERNAL HYDRO INTERNATIONAL INC.
                                CERTIFICATION OF
                             CHIEF EXECUTIVE OFFICER
                       PURSUANT TO18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002

I, Craig  Huffman,  solely for the purpose of complying  with 18 U.S.C.  Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
hereby   certify  that  to  my  knowledge   Annual  Report  of  Internal   Hydro
International, Inc. ("IHDR") on Form 10-KSB for the year ended December 31, 2004
("Report") fully complies with the requirements of Section 13(a) or 15(d) of the
Securities  Exchange  Act of 1934 and that  information  contained  in such Form
10-QSB  fairly  presents in all material  respects the  financial  condition and
results of operations of Internal Hydro International, Inc.





/s/ Craig A. Huffman
------------------------
    Craig A. Huffman
Chief Executive Officer